NEW YORK -

With the financial penalty associated with the Consumer Financial Protection Bureau and U.S. Department of Justice settlement leaving a significant impact on the company's fourth-quarter performance, Ally Financial chief executive officer Michael Carpenter outlined a three-point plan to achieve success throughout its business ventures.

This morning, Carpenter described Ally's navigation through bankruptcy proceedings and a painful exit from the mortgage business as a "significant transformation".

"A lot of it has been a slog, and we're very pleased to have all of that in the rear-view mirror," he said. "We can say that the major transformation of the company is indeed complete," he continued during Ally's quarter conference call with investment analysts. "So now the question from an investor point of view is, ‘What are you going to do for an encore?'"

Ally is entering that encore phase a bit bruised.

The company reported net income of $104 million for the fourth quarter of 2013, compared to net income of $91 million in the prior quarter and net income of $1.4 billion for the fourth quarter of 2012.

Ally generated core pre-tax income of $142 million in the fourth quarter, compared to core pre-tax income of $269 million in the prior quarter and core pre-tax income of $103 million in the comparable prior year period.

As mentioned, Ally emphasized that its Q4 results were impacted by the $98 million charge taken related to the CFPB and U.S. Department of Justice settlement over alleged discriminatory auto financing practices, penalties revealed in late December.

In addition, when excluding repositioning items, the company reported core pre-tax income of $161 million for the quarter. Core pre-tax income reflects income from continuing operations before taxes and original issue discount (OID) amortization expense primarily from legacy bond exchanges.

Ally highlighted that its fourth results for the quarter were driven by continued significant improvement to its cost of funds, which declined 17 basis points from the prior quarter and 50 basis points from the prior year as a result of deposit growth and continued execution of its liability management strategy.

As a result, Ally's full-year net financing revenue improved 36 percent year-over-year.

Additionally, Ally's auto earning assets grew 8 percent compared to the prior-year period.

For the full year, Ally reported net income of $361 million, compared to net income of $1.2 billion in 2012. Core pre-tax income in 2013 totaled $606 million, compared to core pre-tax income of $850 million in the prior year.

Excluding repositioning items, Ally reported core pre-tax income of $850 million for 2013.

The company pointed out that full-year results were also impacted by the $1.4 billion charge related to the ResCap bankruptcy settlement recorded in the second quarter and lower income from the mortgage operations, following the exit of the mortgage origination and servicing business in the second quarter of last year.

With those figures in mind, Carpenter spelled out Ally's three main priorities as 2014 unfolds further.

First, Carpenter indicated that "at the top" of the priority list is Ally wrapping up its repayment to Treasury's Troubled Asset Relief Program (TARP).

"We are at the point now where we have repaid the government 89 percent of the money they put into the company that saved the company and the auto industry, as well, by the way," Carpenter said.

"We're at the point where Treasury's ownership has been reduced just in the last several months from 74 percent to 37 percent," he continued. "We believe that it is certainly possible to exit that program certainly before the end of the year and possibly before that."

Next, Carpenter acknowledged that Ally must improve shareholder value over time. To make a move toward that objective, Carpenter is looking for an element of Ally's cost of doing business to improve.

"As a general observation, our cost of funds has been high relative to the market, and what we need to be competitive in the marketplace. We've made a tremendous amount of progress in that regard and will continue to do so in the months and years to come," he said.

With Ally no longer originating mortgages, rather focusing on auto financing, direct banking as well as auto insurance, Carpenter contends the company can improve shareholder value because it is "a lot simpler now than what it was."

Finally, Carpenter touched on the element that was most connected to the settlement reached with the CFPB and DOJ.

"As a result of being owned by the government, we've really not been on a level playing field with regard to our regulators," Carpenter said. "They've held us to a higher standard. We believe that over time that relationship will normalize as the government exits its ownership position."

In wrapping up his prepared comments, Carpenter projected that Ally could generated a double-digit return on equity during the next couple of years. He highlighted that there is a significant change in attitude within Ally.

"We've very much moving from defense, cleaning up the sins of the past if you will and the structural problems associated with mortgage industry, and we're very much moving to offense at this point," Carpenter said. "I have a great management team. This team has gotten a lot done over the last several years. We usually get done what we say we will. We're very optimistic about the future."