Ally Financial Q4 net income attributable to common shareholders decreased $373 million versus the prior year quarter to $251 million due to higher provision expense from continued credit normalization and higher noninterest expense caused in part by charges related to the termination of a legacy pension plan.
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Net financing revenue increased $20 million versus the prior year quarter, as expanded earning asset yields and accretive balance sheet growth were largely offset by higher funding costs.
Other revenue decreased $18 million versus the prior-year quarter, including a $49 million increase in the fair value of equity securities in the quarter, compared to a $21 million increase in the fair value of equity securities in the prior-year quarter.
Other revenue, excluding the change in fair value of equity securities, decreased $55 million YoY due in part to lower investment gains and mortgage gain on sale given lower industry volume.
Fourth quarter NIM of 3.65%, including Core OIDB of 3 bps, decreased 15 bps YoY. Excluding Core OIDB, NIM was 3.68%, down 14 bps YoY as higher funding costs due to higher interest rates outpaced the expansion of earning asset yields.
Provision for credit losses increased $280 million to $490 million compared to the prior-year quarter due to continued normalization in credit as well as modest reserve build to support asset growth and changes in macroeconomic assumptions.
Noninterest expense increased $176 million YoY due to charges related to the termination of a legacy pension plan as well as prudent spend supporting Ally's brand, technology and business initiatives.
Net income attributable to common shareholders was $1.6 billion in 2022, compared to $3.0 billion in 2021, as higher provision for credit losses, higher noninterest expense and lower other revenue outweighed higher net interest income.
Net financing revenue improved to $6.9 billion, up $0.7 billion from the prior year, driven by accretive balance sheet growth and expanded earning asset yields, partially offset by higher funding costs.
Full year NIM was 3.85%, including Core OIDB of 3 bps, up 31 bps YoY. Excluding Core OIDB, NIM was 3.88%, up 32 bps YoY.
Other revenue was down $461 million YoY, including a $215 million decrease in the fair value of equity securities in the year, compared to a $7 million decrease in the fair value of equity securities in 2021.
Other revenue, excluding the impact of the change in fair value of equity securities, was down $384 million to $1.8 billion, reflecting continued momentum in fee income business like SmartAuction, but lower realized gains given broader market trends.
Provision for credit losses increased $1.2 billion over the prior year, due to higher net charge offs as credit normalizes off historic lows as well as reserve releases in the prior year.
Noninterest expense increased $577 million over the prior year, largely due to continued investments within Ally's growing businesses, brand and technology. ■