|Bid||27.53 x 800|
|Ask||27.54 x 900|
|Day's Range||27.18 - 27.92|
|52 Week Range||25.80 - 35.42|
|Beta (5Y Monthly)||1.11|
|PE Ratio (TTM)||6.34|
|Earnings Date||Apr 15, 2020 - Apr 19, 2020|
|Forward Dividend & Yield||0.76 (2.67%)|
|Ex-Dividend Date||Jan 29, 2020|
|1y Target Est||39.17|
The company's executives are touting its latest acquisition as an opportunity for diversification.
Ally Financial (ALLY) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.
Ally Financial Inc. (NYSE: ALLY) Chief Financial Officer Jennifer LaClair will present at the Credit Suisse Financial Services Forum Thursday, February 27, 2020 at approximately 8:40 a.m. ET.
Moody's Investors Service ("Moody's") has affirmed the Ba1 senior long-term unsecured rating of Ally Financial Inc. All other long-term ratings of Ally Financial and GMAC Capital Trust I were also affirmed. The ratings affirmation reflects Moody's unchanged assessment of the firm's credit profile, following the announcement of the acquisition of CardWorks, Inc. on 18 February 2020, which the company expects to close in the third quarter of 2020.
(Bloomberg) -- The Great Recession a decade ago left the finances of millions of Americans in tatters, but times were good for CardWorks founder Don Berman.“We’ve been able to ride very successfully through the economics swings and really take advantage of opportunities when they present themselves,” he said Wednesday on a conference call after Ally Financial Inc. agreed to buy his firm, a credit-card lender focused on people with patchy credit.Today, more than three decades after founding the company, he’s poised to cash out as a billionaire. Ally, the biggest U.S. auto lender, plans to acquire CardWorks for $2.65 billion, most of which will go to Berman, a New Yorker who owns a 70% stake. The deal boosts his net worth to $2 billion, according to the Bloomberg Billionaires Index.Tremendous wealth can be amassed by catering to lower-income consumers who often lack access to the traditional banking system. Others who have built fortunes through subprime lending include billionaires Ben Navarro, whose Sherman Financial Group owns Credit One Bank, and Capital One Financial Corp.’s Richard Fairbank.Having DisciplineU.S. credit-card issuers have benefited in recent years as consumers loaded up on debt while still managing to keep up with their payments. Write-off rates remain near historic lows even as total card balances climbed to $930 billion at year-end, an increase of about 35% since early 2014, according to Federal Reserve data.About one-third of that debt is held by people whose credit scores are near or below 670, the threshold for being considered subprime, according to Ally. Such borrowers may struggle to obtain financing and often face higher interest rates.Merrick Bank, a CardWorks subsidiary, charges annual percentage rates of as much as 31.95%, compared with the 14.87% national average. The cards also can carry account setup fees of as much as $75.CardWorks has primarily targeted consumers with credit scores ranging from 550 to 700, a segment it estimates encompasses more than 50 million people. Competition for these customers in recent years has become fierce as banks bruised by persistently low interest rates have sought better returns.On Wednesday, Berman was asked how his business manages to navigate economic downturns, when delinquencies and write-offs tend to spike.“It’s one word,” he said. “Discipline.”Read more: Ally sinks most since 2014 after $2.65 billion subprime-card betAlly, the former financing arm of General Motors Co. that received a $17.2 billion bailout from U.S. taxpayers, faced a deluge of questions from analysts who balked at the price of the CardWorks acquisition. Shares of the Detroit-based lender tumbled 11% to $28.41 at 12:47 p.m., the biggest intraday decline in almost six years.Chief Executive Officer Jeffrey Brown defended the deal, which is expected to be completed in the third quarter.“I look at this as acquiring a very mature business that’s done a great job,” Brown said during the conference call.Berman, who was raised in the Bronx, played basketball in college and worked at a credit-card processor before founding CardWorks in 1987. His Woodbury, New York-based firm generates more than $1 billion in revenue and employs 1,700 people. About one-fifth of the staff has worked there for at least a decade, according to Ally.In 2017, Berman sold minority stakes to Pacific Investment Management Co., Parthenon Capital Partners and Reverence Capital Partners for undisclosed amounts. He will remain on Ally’s executive management team and join the board.While Brown and Berman have known each other for years, the two companies started discussions in earnest about 18 months ago, Ally Chief Financial Officer Jennifer LaClair said in a phone interview. The talks became more serious as CardWorks received inquiries from other potential suitors, she said.\--With assistance from Tom Metcalf and Devon Pendleton.To contact the reporters on this story: Anders Melin in New York at firstname.lastname@example.org;Jenny Surane in New York at email@example.comTo contact the editors responsible for this story: Pierre Paulden at firstname.lastname@example.org, Peter Eichenbaum, Steven CrabillFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Ally Financial Inc. fell the most in nearly six years after the company, the largest U.S. auto lender, pushed into the subprime credit-card business with a $2.65 billion acquisition.Ally agreed to buy CardWorks, a closely held lender, in a cash and stock transaction, according to a statement Tuesday after the close of regular trading. CardWorks will add $4.7 billion in assets and $2.9 billion in deposits to Ally’s franchise.“Investors will question the purchase of a non-prime, consumer-finance portfolio this late in the cycle,” analysts at Keefe, Bruyette & Woods said in a note to clients. Still, the deal has merits “in that it diversifies Ally’s business and also enhances” return on equity, KBW said.Chief Executive Officer Jeffrey Brown defended the purchase during a conference call with analysts on Wednesday. He said the two companies have been getting to know each other since 2018, and Ally will maintain a “disciplined approach” to risk management even with the addition of the subprime card portfolio.“This is not a unicorn,” Brown said. “This is a 32-year-old established business that’s been through multiple cycles that is extraordinarily effective at servicing their customers.”Shares of the company slid 10% to $28.75 at 10:16 a.m. in New York, the biggest drop since April 2014. That pared the stock’s gain over the past year to 5.7%, compared with the 21% advance of the Russell 1000 Financial Services Index.“We know the Street is not quite as excited as we are, but we know they’re going to get there as we continue to perform and make this part of a long-term strategy,” Chief Financial Officer Jennifer Laclair said in an interview. Ally, which said the deal could add as much as 100 basis points to adjusted profits by 2022, has been trying to diversify beyond auto lending. Last year it acquired the point-of-sale lender Health Credit Services for $190 million. The firm’s interest in credit cards comes after it abandoned a proprietary cash-back card it offered with Toronto-Dominion Bank.Don Berman, founder and CEO of CardWorks, said his company’s charge-offs rose to more than 20% during the last financial crisis. Still, he said, it’s able to react quickly to changes in consumer credit and competition.“When competition gets somewhat irrational, which we track very carefully, it’s not a time to be very robust, and you pull back a little bit,” Berman said. “And when that competition becomes more rational, you jump back in.”\--With assistance from Felice Maranz and Shahien Nasiripour.To contact the reporter on this story: Jenny Surane in New York at email@example.comTo contact the editors responsible for this story: Michael J. Moore at firstname.lastname@example.org, Steve Dickson, Daniel TaubFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Ally Financial shares are tumbling after the nation's largest auto lender said it would acquire subprime lender CardWorks for $2.65 billion.
Cardholder Management Services, Inc. ("CardWorks"), a leading non-prime credit card and consumer finance lender with a full-spectrum unsecured servicing platform and robust merchant services capabilities, announced today that it has signed a definitive agreement to be acquired by Ally Financial Inc. (NYSE: ALLY) in a transaction valued in excess of $2.65 billion, subject to final closing equity and other adjustments.
Ally Financial Inc. (NYSE: ALLY) announced today that it has entered into a definitive agreement to acquire CardWorks in a transaction valued at approximately $2.65 billion. Cardworks is a privately held company with $4.7 billion in assets and $2.9 billion in deposits1. Under the terms of the agreement, Merrick Bank, a wholly owned subsidiary of CardWorks, Inc., will merge into Ally Bank.
Susan Moffitt of Porsche in Shreveport, La. today was named the 2020 TIME Dealer of the Year by TIME and Ally Financial at the 103rd National Automobile Dealers Association (NADA) Show in Las Vegas.
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