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Table of Contents
Management's Discussion and Analysis
Ally Financial Inc. • Form 10-K
57
During the year ended December 31, 2014, the credit performance of the commercial portfolio remained strong, as nonperforming
finance receivables and loans improved and no net charge-offs were realized. For information on our commercial credit risk practices and
policies regarding delinquencies, nonperforming status, and charge-offs, refer to Note 1 to the Consolidated Financial Statements.
The following table includes total commercial finance receivables and loans reported at carrying value before allowance for loan losses.
Outstanding Nonperforming (a)
Accruing past due
90 days or more (b)
December 31, ($ in millions)2014 2013 2014 2013 2014 2013
Commercial and industrial
Automotive $ 30,871 $ 30,948 $32
$ 116 $—
$—
Other (c) 1,882 1,664 46 74 ——
Commercial real estate — Automotive 3,151 2,855 414 ——
Total commercial finance receivables and loans $ 35,904 $ 35,467 $82
$ 204 $—
$—
(a) Includes nonaccrual troubled-debt-restructured loans of $59 million and $75 million at December 31, 2014, and December 31, 2013, respectively.
(b) There were no troubled-debt-restructured loans classified as 90 days past due and still accruing at December 31, 2014 and December 31, 2013.
(c) Other commercial primarily includes senior secured commercial lending.
Total commercial finance receivables and loans outstanding increased $437 million to $35.9 billion at December 31, 2014, from
December 31, 2013. The increase was primarily due to an increase in automotive dealership real estate term loans, as well as continued
growth in the corporate finance portfolio in line with our business strategy.
Total commercial nonperforming finance receivables and loans were $82 million at December 31, 2014, reflecting a decrease of $122
million when compared to December 31, 2013. The decrease was primarily driven by the successful rehabilitation or liquidation of certain
nonperforming accounts and fewer accounts deteriorating into nonperforming status within the commercial automotive portfolio.
Nonperforming commercial finance receivables and loans as a percentage of total outstanding commercial finance receivables and loans were
0.2% and 0.6% at December 31, 2014 and December 31, 2013, respectively.
The following table includes total commercial net charge-offs from finance receivables and loans at historical cost and related ratios
reported at carrying value before allowance for loan losses.
Net charge-offs (recoveries) Net charge-off ratios (a)
Year ended December 31, ($ in millions)2014 2013 2014 2013
Commercial and industrial
Automotive $1
$— —% —%
Other (8) (7) (0.4) (0.3)
Commercial real estate — Automotive —2—0.1
Total commercial finance receivables and loans $ (7) $ (5) —% —%
(a) Net charge-off ratios are calculated as net charge-offs divided by average outstanding finance receivables and loans excluding loans measured at fair value
and loans held-for-sale during the year for each loan category.
Our net charge-offs from commercial finance receivables and loans resulted in recoveries of $7 million for the year ended December 31,
2014, compared to recoveries of $5 million in 2013, primarily due to our continued efforts to resolve previously charged-off exposures.
Commercial Real Estate
The commercial real estate portfolio consists of finance receivables and loans issued primarily to automotive dealers. Commercial real
estate finance receivables and loans were $3.2 billion and $2.9 billion at December 31, 2014, and December 31, 2013, respectively.