Segment Information

9 Months Ended

Sep. 30, 2021

Segment Reporting [Abstract]

Segment Information

Segment Information

Operating segments are defined as components of an enterprise that engage in business activity from which revenues are earned and expenses incurred for which discrete financial information is available that is evaluated regularly by our chief operating decision maker in deciding how to allocate resources and in assessing performance.

We report our results of operations on a business-line basis through four operating segments: Automotive Finance operations, Insurance operations, Mortgage Finance operations, and Corporate Finance operations, with the remaining activity reported in Corporate and Other. The operating segments are determined based on the products and services offered, and reflect the manner in which financial information is currently evaluated by management. The following is a description of each of our reportable operating segments.

Automotive Finance operations — One of the largest full-service automotive finance operations in the United States providing automotive financing services to consumers, automotive dealers, companies, and municipalities. Our automotive finance services include providing retail installment sales contracts, loans and operating leases, offering term loans to dealers, financing dealer floorplans and other lines of credit to dealers, warehouse lines to automotive retailers, fleet financing, providing financing to companies and municipalities for the purchase or lease of vehicles, and vehicle-remarketing services.

Insurance operations — A complementary automotive-focused business offering both consumer finance protection and insurance products sold primarily through the automotive dealer channel, and commercial insurance products sold directly to dealers. As part of our focus on offering dealers a broad range of consumer financial and insurance products, we provide VSCs, VMCs, and GAP products. We also underwrite select commercial insurance coverages, which primarily insure dealers’ vehicle inventory.

Mortgage Finance operations — Our held-for-investment portfolio includes our direct-to-consumer Ally Home mortgage offering and bulk purchases of high-quality jumbo and LMI mortgage loans originated by third parties. Through our direct-to-consumer channel, we offer a variety of competitively priced jumbo and conforming fixed- and adjustable-rate mortgage products through a third-party fulfillment provider. Through the bulk loan channel, we purchase loans from several qualified sellers on a servicing-released basis, allowing us to directly oversee servicing activities and manage refinancing through our direct-to-consumer channel.

Corporate Finance operations — Primarily provides senior secured leveraged cash flow and asset-based loans to mostly U.S.-based middle-market companies, with a focus on businesses owned by private equity sponsors. These loans are typically used for leveraged buyouts, mergers and acquisitions, debt refinancing, restructurings, and working capital. We also provide, through our Lender Finance business, nonbank wholesale-funded managers with partial funding for their direct-lending activities, which is principally leveraged loans. Additionally, we offer a commercial real estate product to serve companies in the healthcare industry.

Corporate and Other primarily consists of centralized corporate treasury activities, such as management of the cash and corporate investment securities and loan portfolios, short- and long-term debt, retail and brokered deposit liabilities, derivative instruments, original issue discount, and the residual impacts of our corporate FTP and treasury ALM activities. Corporate and Other also includes certain equity investments, which primarily consist of FHLB and FRB stock, the management of our legacy mortgage portfolio, which primarily consists of loans originated prior to January 1, 2009, and reclassifications and eliminations between the reportable operating segments. Financial results related to Ally Invest, our online brokerage operations, and Ally Lending, our point-of-sale financing business, are also included within Corporate and Other.

We utilize an FTP methodology for the majority of our business operations. The FTP methodology assigns charge rates and credit rates to classes of assets and liabilities based on expected duration and the benchmark rate curve plus an assumed credit spread. Matching duration allocates interest income and interest expense to these reportable segments so their respective results are insulated from interest rate risk. This methodology is consistent with our ALM practices, which includes managing interest rate risk centrally at a corporate level. The net residual impact of the FTP methodology is included within the results of Corporate and Other.

The information presented in our reportable operating segments is based in part on internal allocations, which involve management judgment.

Financial information for our reportable operating segments is summarized as follows.

Three months ended September 30, ($ in millions)	Automotive Finance operations		Insurance operations		Mortgage Finance operations		Corporate Finance operations		Corporate and Other		Consolidated (a)
2021
Net financing revenue and other interest income	$	1,329	$	14	$	36	$	77	$	138	$	1,594
Other revenue	61		283		19		16		12		391
Total net revenue	1,390		297		55		93		150		1,985
Provision for credit losses	53		—		2		5		16		76
Total noninterest expense	512		273		47		27		143		1,002
Income (loss) from continuing operations before income tax expense	$	825	$	24	$	6	$	61	$	(9)	$	907
Total assets	$	99,617	$	9,354	$	16,328	$	6,729	$	47,156	$	179,184
2020
Net financing revenue and other interest income	$	1,102	$	8	$	30	$	75	$	(15)	$	1,200
Other revenue	61		338		36		9		40		484
Total net revenue	1,163		346		66		84		25		1,684
Provision for credit losses	128		—		—		1		18		147
Total noninterest expense	469		268		40		23		105		905
Income (loss) from continuing operations before income tax expense	$	566	$	78	$	26	$	60	$	(98)	$	632
Total assets	$	103,366	$	8,944	$	15,503	$	5,995	$	51,462	$	185,270

(a)Net financing revenue and other interest income after the provision for credit losses totaled $1.5 billion and $1.1 billion for the three months ended September 30, 2021, and September 30, 2020, respectively.

Nine months ended September 30, ($ in millions)	Automotive Finance operations		Insurance operations		Mortgage Finance operations		Corporate Finance operations		Corporate and Other		Consolidated (a)
2021
Net financing revenue and other interest income	$	3,868	$	44	$	82	$	225	$	294	$	4,513
Other revenue	184		1,006		81		75		148		1,494
Total net revenue	4,052		1,050		163		300		442		6,007
Provision for credit losses	8		—		(2)		5		20		31
Total noninterest expense	1,499		798		136		86		501		3,020
Income (loss) from continuing operations before income tax expense	$	2,545	$	252	$	29	$	209	$	(79)	$	2,956
Total assets	$	99,617	$	9,354	$	16,328	$	6,729	$	47,156	$	179,184
2020
Net financing revenue and other interest income	$	3,131	$	34	$	98	$	220	$	(83)	$	3,400
Other revenue	148		913		65		28		151		1,305
Total net revenue	3,279		947		163		248		68		4,705
Provision for credit losses	1,150		—		4		140		43		1,337
Total noninterest expense	1,407		846		113		84		360		2,810
Income (loss) from continuing operations before income tax expense	$	722	$	101	$	46	$	24	$	(335)	$	558
Total assets	$	103,366	$	8,944	$	15,503	$	5,995	$	51,462	$	185,270

(a)Net financing revenue and other interest income after the provision for credit losses totaled $4.5 billion and $2.1 billion for the nine months ended September 30, 2021, and September 30, 2020, respectively.