When new Ally Financial Chief Executive Jeff Brown used that word as in untapped potential in describing the company's banking unit last month, it should have been a clue that change was afoot.
After all, his job since taking the helm from former CEO Michael Carpenter in February has been to shake up a company that exited government control and went public last year, but worries investors that it lacks a clear growth plan. Concerns mounted after it announced it would lose a major source of business from General Motors this year.
When Brown took over, he said that the bank needed to do more to reach its potential. Ally is "an incredibly powerful franchise, both on the auto side and on the bank side," he said on a conference call with analysts shortly after being named CEO. "Particularly in [the] bank, it's sort of untapped at this point."
His plans started to come into view this week, when Barbara Yastine announced she will resign this summer from her post as CEO of the banking unit. Ally expects to name a successor for Yastine in the coming days, a company spokeswoman said Friday.
An even bigger question than who takes over for Yastine is: what changes will her successor be asked to make?
The company is not saying yet, and it did not make Yastine or another executive available for comment on the possibilities. Yastine, 55, will stay with Ally until June.
Under the circumstances, her resignation could signal changes to come in the branchless, marketing-heavy and retail-customer-friendly formula that many once wondered if other bankers should imitate.
Under Yastine's leadership, Ally Bank has focused on rapidly gathering deposits. It offered higher rates and ran ads that made fun of traditional banks as stodgy and unhelpful and portrayed Ally as a fair, friendly and low-cost alternative. The deposits are a crucial funding source for Ally Financial, the bank's parent, which is the largest auto lender in the country.
Other financial firms, including American Express, Discover and Capital One, use a similar direct-banking strategy to diversify their funding, and have also been able to rapidly expand deposits by offering high rates. However, this approach could be stressed in the coming year by rising interest rates, which could make it harder or at least more expensive to attract and retain deposits.
Analysts give Ally kudos for managing to build its retail brand more or less from scratch while managing the bankruptcy of its mortgage unit and ending its government ties from a U.S. bailout. Since the launch of the new Ally in 2009, the deposit base has seen strong annual growth, rising to $58.2 billion at the end of 2014, 8% higher than the end of 2013 and nearly double the figure at the launch.
But the intensive focus on marketing has waned as the bank has grown: advertising and marketing costs fell from $145 million to $111 million in the past three years.
With its brand established, Ally is shuffling its management for the next step. Yastine, who joined Ally in 2010 and was named CEO in 2012, was closely associated with Carpenter, former CEO of the parent company, who unexpectedly retired in February and was replaced by Brown, the former head of Ally's auto-finance and insurance operations. Yastine had worked under Carpenter in the early 2000s at Citigroup, and she later served as an adviser to Southgate Alternative Investments, a firm founded by Carpenter.
Since going public last April, Ally's stock price has dipped as the company, formerly the captive lender for G.M., has seen its privileged position in the auto-lending erode slightly in the face of heavy competition. The company's main challenge now is replacing the business it expects to lose following GM's announcement earlier this year that it plans to use an in-house financing arm for subsidized leases.
Brown said he wants to do more lending to non-prime borrowers, expand the parent company's used-car business and rely more heavily on the bank for funding.
He also said the bank has to offer a wider range of products a goal that Yastine had shared. In an interview last August, Yastine said she wanted to expand the business model to new product offerings.
"Two years looking ahead, I think the bank has carved out a very powerful position as a direct bank that has a very distinctive voice and is in tune with a lot of the desires of depositors today," she said. "The real question is where do we want to take that?"
Yastine raised the possibility of expanding the online-only delivery model into other asset spaces, perhaps different categories of consumer loans or small-business financing.
The bank may have room to grow, but not all observers are convinced that an immediate shock is necessary. While most of the attention has been paid to the tumult of its bailout and challenges on Ally's auto-finance side, the bank has quietly become a decent performer, making $1.1 billion last year, 26% more than 2013, and earning a return on equity of 7.23%.
That profitability, and the continuing deposit growth, belie calls for an immediate overhaul at least on the bank side, according to Chris Donat of Sandler O'Neill.
"I don't think that there's any major changes that need to be made at Ally Bank in terms of its strategy or operations," he said. "Clearly there's been success at attracting deposits."