NEW YORK (CNNMoney.com) -- GMAC Financial Services, the auto and mortgage lender that took three government bailouts to the tune of $16.3 billion last year, posted its first quarterly profit on Monday since receiving Troubled Asset Relief Program, or TARP, funds.
And that's not all: Now the company, which was once wholly owned by General Motors, wants to change its brand, distancing itself further from the struggling automaker -- at least in name. On May 10, GMAC will rebrand itself Ally Financial Inc. to reflect one of its most successful businesses, Ally Bank.
The online bank reported $231 million in income in the latest quarter. After factoring in losses from other divisions of the company, GMAC as a whole, reported first quarter earnings of $162 million, compared with a loss of $675 million in the year-ago quarter.
"We achieved profitability, our premier auto finance franchise continued to expand, the capital markets reopened to GMAC debt, we have reduced expenses, and we took several additional steps to contain and reduce risk in the mortgage business," GMAC Chief Executive Officer Michael Carpenter said in a press release.
GMAC, which finances GM and Chrysler dealers as well as car buyers and home loans, currently has a contract with General Motors to use the "GMAC" trademark until 2016.
But GMAC's board of directors decided to scrap the name sooner.
It's a smart move, said branding expert Jack Trout, because it solves two problems. First, it distances the company from its negative association with government bailout money, and second, it expands the name to reflect the company's retail banking operations outside the scope of auto loans.
"GMAC was always confusing. It was a good name if you're leasing GM cars, but once you get beyond the automobile world, it's not good," Trout said. "If you can take advantage of what the word 'ally' means, you can use that word to certainly help drive a new idea in."
GMAC shares are not publicly traded, and the government holds a majority stake in it since the company took bailout money.
As of Monday, GMAC has not repaid its TARP funds, a Treasury Department spokeswoman said.