Upon completion of the transaction, Ally will provide over 11 million customers in all 50 states with compelling secured and unsecured banking products.ĬardWorks is a privately held company headquartered in Woodbury, NY with facilities in Florida, Utah and Pennsylvania. These additional capabilities immediately enhance Ally's award-winning direct bank deposit and consumer product platform and complement the company's market-leading auto finance, insurance, and commercial product lines. The acquisition of CardWorks will further diversify Ally's product offerings, adding an established credit card platform, full-spectrum servicing and recovery operation and a nationwide merchant acquiring business. Under the terms of the agreement, Merrick Bank, a wholly owned subsidiary of CardWorks, Inc., will merge into Ally Bank. ![]() Cardworks is a privately held company with $4.7 billion in assets and $2.9 billion in deposits 1. (NYSE: ALLY) announced today that it has entered into a definitive agreement to acquire CardWorks in a transaction valued at approximately $2.65 billion. 18, 2020 /PRNewswire/ - Ally Financial Inc. And as an online bank, it may have an advantage over its brick-and-mortar competitors during this time of social distancing.CHARLOTTE, N.C., Feb. The bank has exhibited strong earnings and revenue growth over the last few years, outpacing the industry average. The stock is trading at about seven times earnings and the price-to-book ratio is down to just 0.54 - both below industry averages. There are a few reasons why Ally stock looks like a buy, despite the difficult environment for banks. Several analysts raised Ally's earnings and price targets on the news. The termination was well received by analysts, who questioned the cost and the risk involved with the acquisition. "Given the unprecedented economic and market conditions resulting from the COVID-19 global pandemic," Ally CEO Jeffrey Brown said, " Don Berman and I, along with our boards of directors, believe it is in the best interests of our customers and stakeholders to terminate the agreement." Neither company will pay a termination fee as it was a mutual decision. The stress test results did not factor in Ally's June 24 move to terminate its planned acquisition of Cardholder Management Services, a credit card and consumer finance provider. Ally passed the Federal Reserve's 2020 stress test and announced that it is maintaining its quarterly dividend of $0.19 per share. Total liquidity at quarter's end was $30.1 billion, up slightly from $29.9 billion the end of 2019. CET ratios represent the bank's ratio of high-risk assets and provide some indication of a bank's ability to manage in a recession. The company remains adequately capitalized with a Common Equity Tier 1 (CET1) ratio of 9.3%, down from 9.5% in the first quarter of 2019, but well over the government-mandated minimum of 4.5%. That provision was three times more than the previous year's quarterly provision. But the big hit came from setting aside $903 million for credit loan loss provisions in anticipation of an impact from the coronavirus pandemic. Revenue was $1.41 billion for the quarter, down 12% from a year ago. Its earnings per share was negative $0.85, down from $0.92 per share the prior year. The first quarter was brutal for Ally as the company suffered a net loss of $319 million, down from a net profit of $374 million for the first quarter of 2019. The company rebranded as Ally Financial in 2010 and went public in 2014. It soon expanded its services into car insurance, mortgage lending, and banking. ![]() It was the former GMAC, or General Motors Acceptance Corp., which started as an auto financing company launched by General Motors. Ally Financial is the nation's 17th largest bank with about $170 billion in assets. Deal or no deal?įirst, a little background on this company is needed. While Ally hasn't fared any better than its peers through the crisis (its stock is down about 36% year to date), there are still some good reasons to consider adding it to your portfolio. One of them is Ally Financial ( ALLY 2.74%). The outlook for banks is pretty "interesting" too, given the state of the economy.īut there are definitely some silver linings in the passing clouds if you know where to look. You certainly don't have to tell investors in bank stocks how "interesting" these times have been, as bank stocks are down about 36% through the first two quarters of 2020. These are interesting times, which is not always a good thing.
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