NEW YORK — With used-vehicle origination volume paving the way, Ally Financial leadership praised its fourth-quarter and full-year auto finance performance, as the company revealed its latest balance sheet readings this week.

Officials tabulated that Ally's North American automotive finance operations, which include results for the U.S. and Canada, generated pre-tax income of $478 million in the fourth quarter compared to $589 million in the corresponding prior-year period. They acknowledged that this decline was the result of lower financing revenue, due to decreased lease remarketing gains as termination volumes trended downward in line with expectations; and lower other revenue due to a lack of whole loan sales in the quarter.

Ally also pointed out the fourth-quarter dip was partially offset by a lower loan loss provision due to improved credit performance and a better credit mix.

The company indicated that North American consumer financing originations in the fourth quarter came in at $10.1 billion, compared to $10.2 billion in the corresponding prior-year period.

In the U.S., fourth-quarter consumer financing originations were $9.2 billion compared to $9.3 billion in the fourth quarter of the previous year. Ally determined that fourth-quarter U.S. consumer originations were comprised of $5.5 billion of new retail, $2.3 billion of used and $1.3 billion of leases, with used volume growing 71 percent compared to the corresponding prior-year period.

Officials also shared that U.S. diversified new originations in the fourth quarter totaled $462 million, a 69 percent year-over-year increase.

For the full year, Ally's North American automotive finance consumer financing originations totaled $43.8 billion, compared to $35.4 billion in 2010. Consumer financing originations in the U.S. totaled $40.2 billion in 2011, compared to $31.6 billion a year earlier.

The company broke down its U.S. consumer originations, saying they were comprised of:

—$23.9 billion of new retail originations, growing 4 percent year-over-year.
—$9.0 billion of used, growing 90 percent year-over-year.
—$7.3 billion of leases, growing 88 percent year-over-year.

Officials also mentioned that diversified new originations in the U.S. totaled $1.8 billion in 2011, a 126-percent year-over-year increase.

"Ally's premier auto finance franchise and leading direct banking platform, Ally Bank, continued to post strong performance through the year," stated Ally chief executive officer Michael Carpenter.

"Our efforts to grow used, leasing and diversified automotive originations have been successful despite increased competition with consumer originations in the U.S. up 27 percent," Carpenter continued.

"Ally Bank continued to attract new customers and retain existing ones with a unique consumer value proposition and expanded product offerings that are resonating in the marketplace," he added.

Ally went on to point out that earning assets — which are on-balance sheet assets comprised of consumer receivables, the consumer held-for-sale portfolio, leases and commercial receivables for North American automotive finance — totaled $96.2 billion. That figure was 17 percent higher than the end of 2010.

The company also discovered that consumer earning assets totaled $63.7 billion, up 26 percent year-over-year, as strong originations outpaced the run-off of legacy assets.

And Ally's commercial earning assets grew to $32.5 billion at year-end, compared to $31.2 billion at the close of 2010. Officials contend the year-over-year increase was largely driven by increased floor plan and real estate lending to diversified dealers.

Experian Data Proves Ally Tops U.S. Market

Along with its financial statement, Ally highlighted that Experian Automotive's AutoCount determined the company ranked No. 1 in financing consumer sales for 2011.

Experian discovered that Ally accounted for more than one in every 11 vehicles financed in the U.S last year.

"Ally has grown and diversified its business during the past couple of years, supporting the resurgence of the U.S. auto industry," Ally president Bill Muir said.

"We now have retail financing relationships with more than 14,000 dealers in the U.S., supporting these businesses as they seek to maximize customer sales and serve their communities," Muir continued.

"Our strategy is to offer a full range of financing products and services — from retail financing and leasing, to commercial loans and remarketing services, as well as vehicle service and maintenance contracts," he went on to say. "We finance a broad spectrum of creditworthy customers, and we are committed to supporting the auto industry for the long term."

Experian reports department of motor vehicles registration information from all 50 states. However, four states do not report the financing source: Wyoming, Delaware, Rhode Island and Oklahoma.

Update on International Automotive Finance

Focusing beyond the U.S. and Canada, Ally revealed that its international automotive finance operation reported pre-tax income from continuing operations of $21 million in the fourth quarter, compared to $8 million in the same period last year.

Officials explained that fourth-quarter results improved due to increased net financing revenue resulting from higher consumer asset levels, continued growth in China and a lower loan loss provision due to improved credit performance. They added that the gain was partially offset by higher non-interest expense due to restructuring costs.

The company reiterated that its international auto finance footprint currently consists of 15 countries, including its five core international markets of Germany, U.K., Brazil, Mexico and its joint venture in China.

Ally indicated its international consumer originations from continuing operations, which include a non-consolidated joint venture in China, came in at $2.6 billion during the fourth quarter. This was up from $2.5 billion in the fourth quarter a year earlier, as originations rose 54 percent in the U.K. and 18 percent in Germany.

Officials went on to note that international consumer originations from continuing operations — including the joint venture in China — were $9.4 billion during 2011, compared to $7.6 billion in the previous year.

Last year, each of the company's core international markets had double-digit percentage increases in consumer origination volume compared to 2010.

Ally's Overall Performance

Ally management also shared how the entire company fared during both fourth quarter and full year.

The company sustained a net loss of $250 million for the fourth quarter compared to a net loss of $210 million in the prior quarter and net income of $79 million for the fourth quarter of  last year.

Ally reported a core pre-tax loss of $24 million in the fourth quarter, compared to core pre-tax income of $119 million in the prior quarter and core pre-tax income of $526 million in the comparable prior year period.

Officials explained that the fourth quarter was impacted by a $270 million charge for penalties expected to be imposed by certain regulators and other governmental agencies in connection with foreclosure-related matters. Excluding the impact of this charge, the company's core pre-tax income totaled $246 million in the fourth quarter.

For full-year 2011, Ally saw a net loss of $201 million, compared to net income of $1.1 billion a year earlier.

The company's core pre-tax income totaled $985 million, compared to core pre-tax income of $2.4 billion in the prior year. Excluding the impact of the foreclosure-related charge, Ally's core pre-tax income totaled $1.3 billion in 2011.  

"The charge taken to address foreclosure-related issues offset profitable performance in the global automotive services operation," Carpenter emphasized.

"One of our key priorities remains aggressively addressing the risks related to the mortgage business and taking steps to protect the key franchises at Ally. This will be critical to advance plans to repay the U.S. taxpayer," he concluded.