Ally Financial’s adjusted first-quarter earnings missed analysts’ estimates as the auto lender continues to adjust to the loss of its exclusive lease agreement with General Motors.
Ally, the former financing arm of GM previously known as GMAC, reported a profit of $250 million, or 49 cents a share, down from $576 million, or $1.06 a share, in the year-ago period, which was boosted by a $397 million one-time gain stemming from the company’s sale of its Chinese auto finance joint venture.
Excluding that impact and others, earnings per share were flat from a year earlier at 52 cents. Analysts had estimated 54 cents, according to Thomson Reuters.
As The Wall Street Journal reports, the bank has been trying to regain its financial strength since the 2008 crisis caused it to be bailed out by the U.S. government.
“It’s not easy turning the Titanic,” CEO Jeffrey Brown said in an earnings call. “It takes five, six years to get there. But I’d say we’re kind of in year four [or] five.”
The stock debuted in an April 2014 initial public offering at $25 a share. On Tuesday, it closed almost unchanged at $18.47.
Ally lost its contract with GM last year but according to the WSJ, it has been working to recoup much of that lost business. “In some respects, it was a great thing that happened,” Brown told the Charlotte Observer, “because it really allowed the universe of dealers as well as other [automakers] to finally view Ally as truly independent.”
In the latest quarter, auto originations slipped to $9 billion from $9.8 billion a year earlier. Excluding GM, originations rose 10% from a year ago.
The lender is also seeking to expand its online-only bank. Retail deposits jumped 17% from a year earlier to $59 billion as Ally added 1.1 million deposit customers in the quarter.