Ally Financial (ALLY) reported net income of $423 million, or $0.74 per diluted common share, for the third quarter of 2014 compared to net income of $323 million, or $0.54 per diluted common share, in the prior quarter, and net income of $91 million, or a loss of $0.27 per diluted common share, for the third quarter of 2013.
During the third quarter of 2014, its mortgage operations reported a pre-tax loss of $3 million, compared to a pre-tax loss of $5 million in the prior year period, excluding repositioning items in the prior year.
The mortgage held-for-investment portfolio is approximately $7.6 billion as of Sept. 30, 2014, down $252 million from the prior quarter.
The company reported core pre-tax income of $467 million in the third quarter of 2014, compared to core pre-tax income of $400 million in the prior quarter and $269 million in the comparable prior year period. Adjusted earnings per diluted common share for the quarter were $0.53, compared to $0.42 for the previous quarter and $0.05 for the comparable prior year period.
Affecting the year-over-year comparison was also the non-recurrence of a one-time charge taken in the third quarter of 2013 in discontinued operations, related to settlements with the Federal Housing Finance Agency and the Federal Deposit Insurance Corporation, as receiver for certain failed banks, for all pending litigation and related claims associated with Ally's legacy mortgage operations.
"In the third quarter, Ally's results demonstrated continued strength and marketplace leadership by its Dealer Financial Services operation, as well as steady and efficient deposit growth at Ally Bank," said CEO Michael Carpenter. "We continued to make significant progress on our three-point plan to improve the core return on tangible common equity and in the third quarter achieved additional decreases in our cost of funds and increases in both net interest margin and net financing revenue.
"Operationally, Ally's businesses have performed well in the respective sectors. The auto finance business continued to broaden its dealer network and new and used originations from growth channel dealers increased 54% year-over-year. In addition, Ally Bank's customer-centric philosophy continues to win considerable accolades, supporting the steady expansion of its customer base of purposeful savers and increasing retail deposits, up 12% in the past year to $46.7 billion," Carpenter concluded.