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Fair Value (Tables)
 6 Months Ended
Jun. 30, 2020
Fair Value Disclosures [Abstract]  
Schedule of Fair Value, Assets and Liabilities Measured on a Recurring Basis
The following tables display the assets and liabilities measured at fair value on a recurring basis including financial instruments elected for the fair value option. We often economically hedge the fair value change of our assets or liabilities with derivatives and other financial instruments. The tables below display the hedges separately from the hedged items; therefore, they do not directly display the impact of our risk-management activities.
 
 
Recurring fair value measurements
June 30, 2020 ($ in millions)
 
Level 1
 
Level 2
 
Level 3
 
Total
Assets
 
 
 
 
 
 
 
 
Investment securities
 
 
 
 
 
 
 

Equity securities (a)
 
$
608

 
$
—

 
$
5

 
$
613

Available-for-sale securities
 
 
 
 
 
 
 
 
Debt securities
 
 
 
 
 
 
 
 
U.S. Treasury and federal agencies
 
807

 
—

 
—

 
807

U.S. States and political subdivisions
 
—

 
908

 
5

 
913

Foreign government
 
15

 
147

 
—

 
162

Agency mortgage-backed residential
 
—

 
19,884

 
—

 
19,884

Mortgage-backed residential
 
—

 
3,425

 
—

 
3,425

Agency mortgage-backed commercial
 
—

 
1,786

 
—

 
1,786

Mortgage-backed commercial
 
—

 
38

 
—

 
38

Asset-backed
 
—

 
356

 
—

 
356

Corporate debt
 
—

 
1,854

 
—

 
1,854

Total available-for-sale securities
 
822

 
28,398

 
5

 
29,225

Mortgage loans held-for-sale (b)
 
—

 
—

 
91

 
91

Finance receivables and loans, net
 
 
 
 
 
 
 
 
Consumer other (b)
 
—

 
—

 
8

 
8

Interests retained in financial asset sales
 
—

 
—

 
1

 
1

Derivative contracts in a receivable position
 
 
 
 
 
 
 
 
Interest rate
 
—

 
—

 
12

 
12

Other
 
2

 
—

 
—

 
2

Total derivative contracts in a receivable position
 
2

 
—

 
12

 
14

Total assets
 
$
1,432

 
$
28,398

 
$
122

 
$
29,952

Liabilities
 
 
 
 
 
 
 
 
Accrued expenses and other liabilities
 
 
 
 
 
 
 
 
Derivative contracts in a payable position
 
 
 
 
 
 
 
 
Other
 
$
2

 
—

 
—

 
$
2

Total derivative contracts in a payable position
 
2

 
—

 
—

 
2

Total liabilities
 
$
2

 
$
—

 
$
—

 
$
2


(a)
Our direct investment in any one industry did not exceed 11%.
(b)
Carried at fair value due to fair value option elections.
 
 
Recurring fair value measurements
December 31, 2019 ($ in millions)
 
Level 1
 
Level 2
 
Level 3
 
Total
Assets
 
 
 
 
 
 
 
 
Investment securities
 
 
 
 
 
 
 
 
Equity securities (a)
 
$
608

 
$
—

 
$
8

 
$
616

Available-for-sale securities
 
 
 
 
 
 
 
 
Debt securities
 
 
 
 
 
 
 
 
U.S. Treasury and federal agencies
 
2,047

 
1

 
—

 
2,048

U.S. States and political subdivisions
 
—

 
639

 
2

 
641

Foreign government
 
15

 
171

 
—

 
186

Agency mortgage-backed residential
 
—

 
21,404

 
—

 
21,404

Mortgage-backed residential
 
—

 
2,850

 
—

 
2,850

Agency mortgage-backed commercial
 
—

 
1,382

 
—

 
1,382

Mortgage-backed commercial
 
—

 
42

 
—

 
42

Asset-backed
 
—

 
368

 
—

 
368

Corporate debt
 
—

 
1,363

 
—

 
1,363

Total available-for-sale securities
 
2,062

 
28,220

 
2

 
30,284

Mortgage loans held-for-sale (b)
 
—

 
—

 
30

 
30

Finance receivables and loans, net
 
 
 
 
 
 
 
 
Consumer other (b)
 
—

 
—

 
11

 
11

Interests retained in financial asset sales
 
—

 
—

 
2

 
2

Derivative contracts in a receivable position
 
 
 
 
 
 
 
 
Interest rate
 
—

 
62

 
2

 
64

Total derivative contracts in a receivable position
 
—

 
62

 
2

 
64

Total assets
 
$
2,670

 
$
28,282

 
$
55

 
$
31,007

Liabilities
 
 
 
 
 
 
 
 
Accrued expenses and other liabilities
 
 
 
 
 
 
 
 
Derivative contracts in a payable position
 
 
 
 
 
 
 
 
Foreign currency
 
$
—

 
$
5

 
$
—

 
$
5

Total derivative contracts in a payable position
 
—

 
5

 
—

 
5

Total liabilities
 
$
—

 
$
5

 
$
—

 
$
5

(a)
Our investment in any one industry did not exceed 13%.
(b)
Carried at fair value due to fair value option elections.
Fair Value, Assets Measured on a Recurring Basis, Unobservable Input Reconciliation
The following tables present the reconciliation for all Level 3 assets and liabilities measured at fair value on a recurring basis. There were no transfers into or out of Level 3 in the periods presented. We often economically hedge the fair value change of our assets or liabilities with derivatives and other financial instruments. The Level 3 items presented below may be hedged by derivatives and other financial instruments that are classified as Level 1 or Level 2. Thus, the following tables do not fully reflect the impact of our risk-management activities.
 
Level 3 recurring fair value measurements
 
 
Net realized/unrealized gains
 
 
 
 
Fair value at June 30, 2020
Net unrealized gains still held at June 30, 2020
($ in millions)
Fair value at April 1, 2020
included in earnings
 
included in OCI
Purchases
Sales
Issuances
Settlements
included in earnings
included in OCI
Assets
 
 
 
 
 
 
 
 
 
 
 
Investment securities
 
 
 
 
 
 
 
 
 
 
 
Equity securities
$
4

$
1

(a)
$
—

$
—

$
—

$
—

$
—

$
5

$
1

$
—

Available-for-sale securities
3

—

 
—

2

—

—

—

5

—

—

Mortgage loans held-for-sale (b)
68

8

(c)
—

676

(661
)
—

—

91

1

—

Finance receivables and loans, net (b)
10

1

(d)
—

3

—

—

(6
)
8

—

—

Other assets
 
 
 
 
 
 
 
 
 
 
 
Interests retained in financial asset sales
1

—

 
—

—

—

—

—

1

—

—

Derivative assets
8

4

(c)
—

—

—

—

—

12

4

—

Total assets
$
94

$
14

 
$
—

$
681

$
(661
)
$
—

$
(6
)
$
122

$
6

$
—

(a)
Reported as other gain on investments, net, in the Condensed Consolidated Statement of Comprehensive Income.
(b)
Carried at fair value due to fair value option elections.
(c)
Reported as gain on mortgage and automotive loans, net, in the Condensed Consolidated Statement of Comprehensive Income.
(d)
Reported as interest and fees on finance receivables and loans and other income, net of losses in the Condensed Consolidated Statement of Comprehensive Income.
 
Level 3 recurring fair value measurements
 
 
Net realized/unrealized gains
 
 
 
 
Fair value at June 30, 2019
Net unrealized gains still held at June 30, 2019
($ in millions)
Fair value at April 1, 2019
included in earnings
 
included in OCI
Purchases
Sales
Issuances
Settlements
included in earnings
included in OCI
Assets
 
 
 
 
 
 
 
 
 
 
 
Equity securities
$
11

$
2

(a)
$
—

$
—

$
—

$
—

$
(4
)
$
9

$
2

$
—

Mortgage loans held-for-sale (b)
15

3

(c)
—

156

(152
)
—

—

22

—

—

Other assets
 
 
 
 
 
 
 
 
 
 
 
Interests retained in financial asset sales
4

—

 
—

—

—

—

(1
)
3

—

—

Derivative assets
2

—

 
—

—

—

—

—

2

—

—

Total assets
$
32

$
5

 
$
—

$
156

$
(152
)
$
—

$
(5
)
$
36

$
2

$
—

(a)
Reported as other gain on investments, net, in the Condensed Consolidated Statement of Comprehensive Income.
(b)
Carried at fair value due to fair value option elections.
(c)
Reported as gain on mortgage and automotive loans, net, in the Condensed Consolidated Statement of Comprehensive Income.
 
Level 3 recurring fair value measurements
 
 
Net realized/unrealized (losses) gains
 
 
 
 
Fair value at June 30, 2020
Net unrealized (losses) gains still held at June 30, 2020
($ in millions)
Fair value at Jan. 1, 2020
included in earnings
 
included in OCI
Purchases
Sales
Issuances
Settlements
included in earnings
included in OCI
Assets
 
 
 
 
 
 
 
 
 
 
 
Investment securities
 
 
 
 
 
 
 
 
 
 
 
Equity securities
$
8

$
(3
)
(a)
$
—

$
—

$
—

$
—

$
—

$
5

$
(3
)
$
—

Available-for-sale securities
2

—

 
—

3

—

—

—

5

—

—

Mortgage loans held-for-sale (b)
30

13

(c)
—

978

(930
)
—

—

91

2

—

Finance receivables and loans, net (b)
11

—

 
—

9

—

—

(12
)
8

—

—

Other assets
 
 
 
 
 
 
 
 
 
 
 
Interests retained in financial asset sales
2

—

 
—

—

—

—

(1
)
1

—

—

Derivative assets
2

10

(c)
—

—

—

—

—

12

10

—

Total assets
$
55

$
20

 
$
—

$
990

$
(930
)
$
—

$
(13
)
$
122

$
9

$
—

(a)
Reported as other gain on investments, net, in the Condensed Consolidated Statement of Comprehensive Income.
(b)
Carried at fair value due to fair value option elections.
(c)
Reported as gain on mortgage and automotive loans, net, in the Condensed Consolidated Statement of Comprehensive Income.
 
Level 3 recurring fair value measurements
 
 
Net realized/unrealized gains
 
 
 
 
Fair value at June 30, 2019
Net unrealized gains still held at June 30, 2019
($ in millions)
Fair value at Jan. 1, 2019
included in earnings
 
included in OCI
Purchases
Sales
Issuances
Settlements
included in earnings
included in OCI
Assets
 
 
 
 
 
 
 
 
 
 
 
Equity securities
$
7

$
6

(a)
$
—

$
—

$
—

$
—

$
(4
)
$
9

$
6

$
—

Mortgage loans held-for-sale (b)
8

4

(c)
—

246

(236
)
—

—

22

—

—

Other assets
 
 
 
 
 
 
 
 
 
 
 
Interests retained in financial asset sales
4

—

 
—

—

—

—

(1
)
3

—

—

Derivative assets
—

2

(c)
—

—

—

—

—

2

2

—

Total assets
$
19

$
12

 
$
—

$
246

$
(236
)
$
—

$
(5
)
$
36

$
8

$
—


(a)
Reported as other gain on investments, net, in the Condensed Consolidated Statement of Comprehensive Income.
(b)
Carried at fair value due to fair value option elections.
(c)
Reported as gain on mortgage and automotive loans, net, in the Condensed Consolidated Statement of Comprehensive Income.
Fair Value Measurements - Nonrecurring Basis
The following tables display assets and liabilities measured at fair value on a nonrecurring basis and still held at June 30, 2020, and December 31, 2019, respectively. The amounts are generally as of the end of each period presented, which approximate the fair value measurements that occurred during each period.
 
 
Nonrecurring fair value measurements
 
Lower-of-cost or fair value reserve, valuation reserve, or cumulative adjustments
 
Total gain (loss) included in earnings
 
June 30, 2020 ($ in millions)
 
Level 1
 
Level 2
 
Level 3
 
Total
 
Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans held-for-sale, net
 
$
—

 
$
—

 
$
313

 
$
313

 
$
—

 
n/m
(a)
Commercial finance receivables and loans, net (b)
 
 
 
 
 
 
 
 
 
 
 
 
 
Automotive
 
—

 
—

 
53

 
53

 
(17
)
 
n/m
(a)
Other
 
—

 
—

 
44

 
44

 
(10
)
 
n/m
(a)
Total commercial finance receivables and loans, net
 
—

 
—

 
97

 
97

 
(27
)
 
n/m
(a)
Other assets
 
 
 
 
 
 
 
 
 
 
 
 
 
Nonmarketable equity investments
 
—

 
—

 
5

 
5

 
(4
)
 
n/m
(a)
Goodwill (c)
 
—

 
—

 
143

 
143

 
(50
)
 
n/m
(a)
Repossessed and foreclosed assets (d)
 
—

 
—

 
8

 
8

 
—

 
n/m
(a)
Total assets
 
$
—

 
$
—

 
$
566

 
$
566

 
$
(81
)
 
n/m
 
n/m = not meaningful
(a)
We consider the applicable valuation allowance, loan loss allowance, or cumulative impairment to be the most relevant indicator of the impact on earnings caused by the fair value measurement. Accordingly, the table above excludes total gains and losses included in earnings for these items. The carrying values are inclusive of the respective valuation allowance, loan loss allowance, or cumulative impairment.
(b)
Represents the portion of the portfolio specifically impaired during 2020. The related valuation allowance represents the cumulative adjustment to fair value of those specific receivables.
(c)
On April 30, 2020, we recognized a $50 million impairment of goodwill at Ally Invest. Refer to Note 11 for further discussion.
(d)
The allowance provided for repossessed and foreclosed assets represents any cumulative valuation adjustment recognized to adjust the assets to fair value.
 
 
Nonrecurring fair value measurements
 
Lower-of-cost or fair value reserve, valuation reserve, or cumulative adjustments
 
Total gain (loss) included in earnings
 
December 31, 2019 ($ in millions)
 
Level 1
 
Level 2
 
Level 3
 
Total
 
Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans held-for-sale, net
 
$
—

 
$
—

 
$
128

 
$
128

 
$
—

 
n/m
(a)
Commercial finance receivables and loans, net (b)
 
 
 
 
 
 
 
 
 
 
 
 
 
Automotive
 
—

 
—

 
64

 
64

 
(12
)
 
n/m
(a)
Other
 
—

 
—

 
45

 
45

 
(21
)
 
n/m
(a)
Total commercial finance receivables and loans, net
 
—

 
—

 
109

 
109

 
(33
)
 
n/m
(a)
Other assets
 
 
 
 
 
 
 
 
 
 
 
 
 
Nonmarketable equity investments
 
—

 
5

 
7

 
12

 
—

 
n/m
(a)
Equity-method investments
 
—

 
—

 
4

 
4

 
(6
)
 
n/m
(a)
Repossessed and foreclosed assets (c)
 
—

 
—

 
12

 
12

 
(1
)
 
n/m
(a)
Total assets
 
$
—

 
$
5

 
$
260

 
$
265

 
$
(40
)
 
n/m
 
n/m = not meaningful
(a)
We consider the applicable valuation allowance, loan loss allowance, or cumulative impairment to be the most relevant indicator of the impact on earnings caused by the fair value measurement. Accordingly, the table above excludes total gains and losses included in earnings for these items. The carrying values are inclusive of the respective valuation allowance, loan loss allowance, or cumulative impairment.
(b)
Represents the portion of the portfolio specifically impaired during 2019. The related valuation allowance represents the cumulative adjustment to fair value of those specific receivables.
(c)
The allowance provided for repossessed and foreclosed assets represents any cumulative valuation adjustment recognized to adjust the assets to fair value.
Financial Instruments Disclosure
The following table presents the carrying and estimated fair value of financial instruments, except for those recorded at fair value on a recurring basis presented in the previous section of this note titled Recurring Fair Value. When possible, we use quoted market prices to determine fair value. Where quoted market prices are not available, the fair value is internally derived based on appropriate valuation methodologies with respect to the amount and timing of future cash flows and estimated discount rates. However, considerable judgment is required in interpreting current market data to develop the market assumptions and inputs necessary to estimate fair value. As such, the actual amount received to sell an asset or the amount paid to settle a liability could differ from our estimates. Fair value information presented herein was based on information available at June 30, 2020, and December 31, 2019.
 
 
 
Estimated fair value
($ in millions)
Carrying value
 
Level 1
 
Level 2
 
Level 3
 
Total
June 30, 2020
 
 
 
 
 
 
 
 
 
Financial assets
 
 
 
 
 
 
 
 
 
Held-to-maturity securities
$
1,390

 
$
—

 
$
1,476

 
$
—

 
$
1,476

Loans held-for-sale, net
313

 
—

 
—

 
313

 
313

Finance receivables and loans, net
114,872

 
—

 
—

 
120,845

 
120,845

FHLB/FRB stock (a)
1,000

 
—

 
1,000

 
—

 
1,000

Financial liabilities
 
 
 
 
 
 
 
 
 
Deposit liabilities
$
60,340

 
$
—

 
$
—

 
$
61,429

 
$
61,429

Short-term borrowings
3,689

 
—

 
—

 
3,692

 
3,692

Long-term debt
29,176

 
—

 
19,462

 
12,223

 
31,685

December 31, 2019
 
 
 
 
 
 
 
 
 
Financial assets
 
 
 
 
 
 
 
 
 
Held-to-maturity securities
$
1,568

 
$
—

 
$
1,600

 
$
—

 
$
1,600

Loans held-for-sale, net
128

 
—

 
—

 
128

 
128

Finance receivables and loans, net
126,957

 
—

 
—

 
130,837

 
130,837

FHLB/FRB stock (a)
1,150

 
—

 
1,150

 
—

 
1,150

Financial liabilities
 
 
 
 
 
 
 
 
 
Deposit liabilities
$
60,146

 
$
—

 
$
—

 
$
60,678

 
$
60,678

Short-term borrowings
5,531

 
—

 
—

 
5,532

 
5,532

Long-term debt
34,027

 
—

 
22,789

 
14,138

 
36,927


(a)
Included in other assets on our Condensed Consolidated Balance Sheet.