Ally Financial : Form 8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

May 7, 2019

(Date of report; date of earliest event reported)

Commission file number: 1-3754

ALLY FINANCIAL INC.

(Exact name of registrant as specified in its charter)

Delaware	38-0572512
(State or other jurisdiction	(I.R.S. Employer
of incorporation)	Identification No.)
	Ally Detroit Center
	500 Woodward Ave.
	Floor 10, Detroit, Michigan
	48226
	(Address of principal executive offices)
	(Zip Code)

[phone]

(Registrant's telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐Pre-commencementcommunications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐Pre-commencementcommunications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	ALLY	New York Stock Exchange
8.125% Fixed Rate/Floating Rate Trust Preferred Securities, Series
2 of GMAC Capital Trust I	ALLY PRA	New York Stock Exchange

Item 5.07 Submission of Matters to a Vote of Security Holders.

On May 7, 2019, Ally Financial Inc. ( Ally ) held its annual meeting of stockholders ( Annual Meeting ). The results of voting on matters brought before stockholders are shown below.

Proposal 1 - Election of Directors
							Broker
Franklin W. Hobbs	For		Against		Abstain		Non-Votes
273,452,138		76,172,865		50,635		12,617,559
Kenneth J. Bacon	349,481,574	142,632	51,432	12,617,559
Katryn (Trynka) Shineman Blake	349,539,356	84,354	51,928	12,617,559
Maureen A. Breakiron-Evans	349,548,492	83,177	43,969	12,617,559
William H. Cary	349,551,217	73,404	51,017	12,617,559
Mayree C. Clark	349,549,587	80,438	45,613	12,617,559
Kim S. Fennebresque	344,612,235	5,013,462	49,941	12,617,559
Marjorie Magner	349,554,399	78,450	42,789	12,617,559
Brian H. Sharples	349,112,943	140,766	421,929	12,617,559
John J. Stack	349,531,281	93,486	50,871	12,617,559
Michael F. Steib	349,537,296	87,454	50,888	12,617,559
Jeffrey J. Brown	349,544,566	78,999	52,073	12,617,559

Proposal 2 - Advisory Vote on Executive Compensation

For		Against		Abstain		Broker Non-Votes
330,484,528		19,091,289		99,821		12,617,559

Proposal 3 - Ratification of the Audit Committee's Engagement of Deloitte and Touche LLP as the Company's Independent Registered Public Accounting Firm for 2019

For		Against		Abstain
349,250,378		12,999,609		43,210

Item 7.01 Regulation FD Disclosure.

On May 7, 2019, at the Annual Meeting, Ally's Chief Executive Officer ( CEO ) spoke about Ally's financial and operational performance and strategy. A transcript of the CEO's remarks is attached hereto as Exhibit 99.1. The information in this Item 7.01 and Exhibit 99.1 is being furnished and is not deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section.

Item 9.01	Financial Statements and Exhibits.
Exhibit No.		Description
99.1		CEO's Annual Meeting Script

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: May 8, 2019

Ally Financial Inc.(Registrant)

/s/ Jeffrey A. Belisle Jeffrey A. Belisle Corporate Secretary

Exhibit 99.1

CEO Remarks

Good morning, everyone. I'm Jeff Brown, Chief Executive Officer of Ally Financial. It's a pleasure to speak to you today at our annual stockholders meeting.

Let me start by saying that in 2018, we delivered strong financial and operational results reflecting our disciplined execution across our leading auto and deposit franchises as well as measurable progress from our growth businesses. We continued to efficiently manage capital to drive stockholder returns and further optimized our funding profile by meaningfully growing deposits and reducing capital markets funding. Lastly, we leveraged our exceptional brand, talented associate base, and our position as the leading digital bank to expand and deepen customer relationships. Collectively, these efforts resulted in multiple financial and operational milestones in 2018, which I'm very excited to share with you.

This morning, I'll spend a few minutes highlighting these accomplishments while also providing my thoughts on our strategic priorities.

Financially, we posted the best performance since our IPO across many of our primary financial metrics. With tax reform as a tailwind, our ability to drive deposit growth from new and existing customers, optimize our auto finance business and return significant capital to stockholders helped to deliver strong top-line and bottom-line results:

•Adjusted Total Net Revenue 1,2 exceeded $6.0 billion for the first time since becoming a public company, expanding $175 million versus 2017

•Adjusted EPS 1,3 increased 39% to $3.34 while Core ROTCE 1,4 increased more than 250 basis points to 12.3%, both the highest since our IPO

•We returned $1.2 billion of capital to stockholders through share buybacks and dividends, repurchasing 35 million shares during 2018. In the 2 ½ years since the inception of our buyback program, we've reduced outstanding share count by more than 16% by repurchasing over 86 million shares at an average price of slightly more than $23 per share

•As we've returned significant capital to our stockholders, we've also grown Adjusted Tangible Book Value per Share 1,5 , which increased nearly $2 to just under $30 in 2018; and is up more than $8 since our IPO

Underpinning these financial results was exceptional operational performance across all our businesses. I'll begin with our deposit franchise, which had a banner year, growing balances by $12.9 billion to finish 2018 at over $106 billion of total deposits. Eclipsing the $100 billion mark was an exceptional achievement for our company and a testament to the strength of the franchise and the brand we've built. Our relentless focus on providing a differentiated and seamless digital customer experience helped us to attract 230 thousand new customers last year, ultimately serving 1.65 million retail deposit customers at year-end. Ally was the original disruptor in digital banking and I'm extremely proud of our performance - since becoming a bank holding company, retail deposits have increased by more than ten-fold.

We've efficiently put these deposits to work at our leading auto finance business, which also had an incredible year in 2018. As I've consistently discussed for a few years now, we remain focused on optimizing risk-adjusted returns within the auto business and were very successful on this front. Full year estimated retail auto originated yield 6 increased 83 basis points year-over-year while the retail auto net charge-off rate declined 15 basis points to 1.33%. Importantly, we achieved this while maintaining consistent underwriting trends on the $35.4 billion of originations we sourced from a record 11.6 million applications, a direct reflection of our national scale and success in diversifying into the used auto market while steadily gaining share in the Growth channel 7 .

(1)The following are non-GAAP financial measures which Ally believes are important to the reader of the Consolidated Financial Statements, but which are supplemental to and not a substitute for GAAP measures: Adjusted Total Net Revenue, Adjusted Earnings per Share (Adjusted EPS), Core Return on Tangible Common Equity (Core ROTCE), and Adjusted Tangible Book Value per Share (Adjusted TBVPS). These measures are used by management and we believe are useful to investors in assessing the company's operating performance and capital. See Financial Reconciliations for calculation methodology and details.

(2)Adjusted total net revenue is a non-GAAP financial measure that adjusts GAAP total net revenue for Core OID and for change in the fair value of equity securities due to the implementation of ASU 2016-01 which requires change in the fair value of equity securities to be recognized in current period net income as compared to periods prior to 1/1/18 in which such adjustments were recognized through other comprehensive income, a component of equity. See Financial Reconciliations for calculation methodology and details.

(3)Adjusted earnings per share (Adjusted EPS) is a non-GAAP financial measure that adjusts GAAP EPS for revenue and expense items that are typically strategic in nature or that management otherwise does not view as reflecting the operating performance of the company. Management believes Adjusted EPS can help the reader better understand the operating performance of the core businesses and their ability to generate earnings. See Financial Reconciliations

for calculation methodology and details.

(4 ) Core return on tangible common equity (Core ROTCE) is a non-GAAP financial measure that management believes is helpful for readers to better understand the ongoing ability of the company to generate returns on its equity base that supports core operations. For purposes of this calculation, tangible common equity is adjusted for Core OID balance and the net deferred tax asset. See Financial Reconciliations for calculation methodology and details.

(5)Adjusted tangible book value per share (Adjusted TBVPS) is a non-GAAP financial measure that reflects the book value of equity attributable to shareholders even if tax-effected Core OID balance were accelerated immediately through the financial statements. As a result, management believes Adjusted TBVPS provides the reader with an assessment of value that is more conservative than GAAP common shareholder's equity per share. See Financial Reconciliations for calculation methodology and details.

(6)Estimated Retail Auto Originated Yield is a forward-lookingnon-GAAP financial measure determined by calculating the estimated average annualized yield for loans originated during the period.

(7)Growth channel defined as originations from non-GM/Chrysler dealers and direct-to-consumer loans.

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The auto business has proven its long-term resiliency. We've consistently adapted to the needs of our customers in changing market conditions. We've been successful in this business for 100 years because we adapt and innovate each and every day. We play a critical role within the auto ecosystem and the market position we've established has never been stronger.

I view our auto finance and deposit franchises as the stable foundation around which we continue to expand into new consumer and commercial products. To this point, we made considerable progress last year on our long-term strategy to prudently diversify our business. In 2018, we successfully expanded multi-product customers within Ally Bank, where over 90% of our credit card customers, nearly half of our direct-to-consumer mortgage customers and roughly one-third of our incoming Invest customers are existing deposit accountholders. While these businesses are still young, they provide us access to large addressable markets that continue to experience secular shifts toward digital adoption, representing attractive growth opportunities for us moving forward.

On the commercial side, our corporate finance team had a great year. We began to reap the benefits of investments we made in 2017, including expanding into new industry verticals and hiring key talent. These investments helped to drive 2018 pre-tax income to $144 million, up 26% from 2017, while our HFI portfolio increased 19% to $4.6 billion, all while experiencing a net charge-off rate of only seven basis points.

Overall, I'm very proud of our financial and operational accomplishments in 2018 and excited to build upon our success in 2019. I truly believe that Ally reflects the future of banking. The digitization of financial services is accelerating, and as a digital bank, we're already a step ahead of the competition. More than half of our new deposit customers are millennials, a digitally-savvy demographic segment that is expected to benefit from an intergenerational wealth transfer of $30 trillion 8 , driving financial services for decades. Supported by these strong secular tailwinds, the relationships we're establishing today will continue to grow and deepen as we enhance our new products and digital capabilities, providing a solid runway for growth moving forward.

While our strong results and customer-centric strategy position us favorably for the future, it's our culture that I believe differentiates us from the crowd and remains critical to our long-term success. We strive to create an environment where all backgrounds, experiences, interests and skills are respected, appreciated and encouraged. This focus is essential to our culture - by leveraging unique perspectives and ideas, we can better approach challenges, discover opportunities and drive innovation. I've been overwhelmed by how Ally associates have supported and championed this commitment to diversity and inclusion. Our associates have fully embraced employee resources groups, with ERG participation increasing 70% in 2018 with over 500 ERG events held across the country.

Beyond our commitment to creating an accepting, supportive and diverse workplace, we are equally committed to improving the communities where we live and work. Simply put, supporting our communities is foundational to our culture. While we have historically supported several worthy causes, recently we've focused our efforts on economic mobility. We believe in providing individuals and communities with greater access to services, education and resources they can use to improve their economic circumstances and enrich their lives. This is why, just a few months ago, we partnered with other large financial institutions to make a significant investment in affordable housing in Charlotte, North Carolina, the largest private-public initiative of its kind in the history of the city.

Before wrapping up, I'd like to acknowledge my incredible management team and all the associates with whom I have the honor of working. For a bank with nearly $180 billion of assets, our 8,200 associates punch above their weight. Our mantra at Ally is simple - Do It Right - in everything we do. As we adapt, innovate, and serve our customers at the highest level, I see that mantra reflected in the work you do every day.

I'd also like to thank the board of directors for their dedicated service and continued guidance.

Lastly, I'd like to thank our valued stockholders for their support of Ally. It's a privilege to be CEO of this great company.

Thank you.

(8)Source: Accenture. The "Greater" Wealth Transfer - Capitalizing on the Intergenerational Shift in Wealth, 2015. 2