NEW YORK — Ally Financial Inc. reported net income of $104 million for the fourth quarter of 2013, compared to net income of $91 million in the prior quarter and net income of $1.4 billion for the fourth quarter of 2012.
The company reported core pre-tax income of $142 million in the fourth quarter of 2013, compared to core pre-tax income of $269 million in the prior quarter and core pre-tax income of $103 million in the comparable prior year period.
Results for the current quarter were impacted by the $98 million charge taken related to the Consumer Financial Protection Bureau (CFPB) and U.S. Department of Justice (DOJ) settlement, the company reports.
For the full year 2013, Ally reported net income of $361 million, compared to net income of $1.2 billion in 2012. Core pre-tax income in 2013 totaled $606 million, compared to core pre-tax income of $850 million in the prior year. Excluding repositioning items, Ally reported core pre-tax income of $850 million for 2013.
Ally's full year net financing revenue improved 36% year-over-year. Additionally, auto earning assets grew 8% compared to the prior year period. Results for the auto finance operations were specifically impacted in the fourth quarter by the settlement reached with the CFPB and DOJ.
Ally’s insurance operations strengthened in 2013, while growing its dealer relationships through its full-service, dealer-centric business model. Written premiums remain strong, totaling $225 million for the dealer products and services group, the company reports. Approximately 82% of U.S. dealers with floorplan financing through Ally also carry floorplan insurance with the company.
Ally also received confirmation of its ResCap’s bankruptcy plan, including Ally’s $2.1 billion settlement, which impacted full-year results due to the $1.4 billion charge related to the ResCap bankruptcy settlement recorded in the second quarter and lower income from the mortgage operations, following the exit of the mortgage origination and servicing business in the second quarter of 2013.
"Ally experienced a landmark year in 2013 with the completion of a multi-year strategic transformation that has permanently changed the direction of the company and enhanced its future prospects," said CEO Michael A. Carpenter. "Ally closed the chapter on its legacy mortgage issues, sold substantially all of its international operations, reduced its higher cost unsecured debt and achieved financial holding company status. Today, Ally has a pristine balance sheet and is focused on its strengths with its leading domestic automotive services and direct banking franchises."