Ally Financial released its quarterly and annual earnings report on Thursday, reporting a net loss of $250 million in the fourth quarter of 2011. The bank attributed the losses to an estimated $270 million in penalties it expects to be charged by regulators in the multistate foreclosure settlement, which is nearing completion. Ally also reported a net loss of $201 million for the full year 2011, significantly worse than its net gain of $1.1 billion the year before.

Despite these setbacks, Ally reported strong deposit growth, possibly reflecting increased consumer comfort with online banking.

Ally’s retail deposit growth in 2011 grew by $5.9 billion, representing 27% year-over-year growth. Deposits grew by just $700 million in the last quarter, making it the slowest for deposit growth last year. Though retail accounts grew by $1.4 billion in the last quarter, total deposits did not because of what Ally calls the “typical year end drop in escrow deposits” — escrow accounts connected to mortgages are typically emptied at the end of the year to pay property taxes.

Ally attributes its deposit growth to a successful marketing campaign — the “No Nonsense” ads — and long-term trends driving consumers towards direct banking models. In 2007 branch and ATM banking was preferred by 59 percent of consumers, according to the American Bankers Association. In 2011 that figure dropped to 28%. In the meantime, online banking has quickly gained in popularity. In 2007, internet banking was substantially less popular than branch banking according to the same ABA survey. In 2011, it was far and away the most popular — 62% prefer to handle their finances on the computer.

Ally plans to continue to expand both their auto finance and direct banking businesses, while managing and reducing their exposure to mortgage risk (they nearly had their mortgage subsidiary, ResCap, file for bankruptcy in November of last year). Last on the list of priorities was: “work toward continued repayment of the U.S. Treasury’s investment.” Ally still owes the government $12 billion in Troubled Asset Relief Program (TARP) funds, reports the Atlanta Journal-Constitution. The bank has paid back approximately $5 billion of their debt.

Despite all this, Ally’s low fees and competitive rates likely helped them gain customers in the second half of last year, which, between Occupy Wall Street and Bank Transfer Day, was defined by popular outcry over big banks’ perceived avarice. While the ongoing problems in the housing market pose serious problems to Ally’s profitability, it appears that trends in consumer preferences towards online banking experience is putting the wind in their sails.

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