Ally Financial’s new Charlotte-based CEO addressed investors for the first time Thursday, outlining a strategy to boost the profitability of the lender, whose share price has fallen since the company went public last year.
Jeffrey Brown, 41, was named CEO of the company on Monday, succeeding retiring chief executive Michael Carpenter, 67.
Brown’s appointment comes after Ally’s recent loss of an exclusive lease agreement with General Motors. It also comes at a time when Ally’s share price remains about 4 percent below the level it was at when the company went public in April. The stock closed at $20.01 Thursday, below its April 10 closing price of $23.98.
“Candidly, we’re disappointed with the recent performance of the stock price,” Brown told investors on a conference call. “I think some people are underestimating the power of this franchise.
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“If we deliver, which I fully believe we will, the stock price will take care of itself. I’m much more focused on the future and growing long-term shareholder value.”
He said one of his main goals as CEO will be expanding the “breadth and depth” of the company’s relationships with customers. “There’s clearly more we can get out of the existing engine,” he said.
He also called the company’s Internet-based banking business, Ally Bank, “untapped.”
Brown was already based in Charlotte, where he headed Ally’s auto finance and insurance business.
His promotion to CEO came less than a week after Carpenter reacted angrily on a conference call with analysts to Ally’s loss of the exclusive lease agreement with General Motors. In an email this week, Ally spokeswoman Gina Proia said Carpenter’s departure was voluntary.
“This was a natural time for him to retire and pass the baton,” Proia wrote.
On Thursday, Brown called Ally a key partner to General Motors, and he said he expected “to have a constructive and beneficial relationship with them in the future.” Ally was once the financing arm of General Motors, but is now an independent company.
Brown will be tasked with steering the lender nearly a year after it went public and two months after it exited the U.S. Treasury Department’s Troubled Asset Relief Program, also known as the federal bailout. It accepted $17.2 billion of taxpayer money through TARP during the financial crisis. Treasury made a $2.4 billion profit on its investment in Ally.
Brown joined Ally in 2009 as treasurer. Before that, he was Bank of America’s treasurer for a year, during the period when the Charlotte-based bank was buying Merrill Lynch.
According to court documents, Brown told Bank of America’s then-chief financial officer that Merrill Lynch’s mounting losses should be disclosed to shareholders before they voted on the purchase of the company. Those undisclosed losses have since been the subject of costly settlements for Bank of America.
Brown chairs the board of advisers for the McColl School of Business at Queens University of Charlotte, the business school named after retired Bank of America CEO Hugh McColl Jr. Brown is also a graduate of the McColl school, from which he earned an executive MBA.