Segment Information

6 Months Ended

Jun. 30, 2022

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.

Dealer Financial Services

Dealer Financial Services comprises our Automotive Finance and Insurance 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 and retailers, 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, refinancing and recapitalizations, mergers and acquisitions, growth, turnarounds, and debtor-in-possession financings. 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

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—as well as other strategic investments—and 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 digital brokerage and wealth management offering, Ally Lending, our point-of-sale financing business, Ally Credit Card, and CRA loans and related investments 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 June 30, ($ in millions)	Automotive Finance operations		Insurance operations		Mortgage Finance operations		Corporate Finance operations		Corporate and Other		Consolidated (a)
2022
Net financing revenue and other interest income	$	1,301	$	20	$	56	$	77	$	310	$	1,764
Other revenue	72		158		4		19		59		312
Total net revenue	1,373		178		60		96		369		2,076
Provision for credit losses	228		—		—		8		68		304
Total noninterest expense	545		300		54		28		211		1,138
Income (loss) from continuing operations before income tax expense	$	600	$	(122)	$	6	$	60	$	90	$	634
Total assets	$	107,178	$	8,819	$	19,126	$	8,890	$	41,690	$	185,703
2021
Net financing revenue and other interest income	$	1,333	$	15	$	23	$	77	$	99	$	1,547
Other revenue	61		344		22		33		78		538
Total net revenue	1,394		359		45		110		177		2,085
Provision for credit losses	(23)		—		—		(13)		4		(32)
Total noninterest expense	500		272		45		28		230		1,075
Income (loss) from continuing operations before income tax expense	$	917	$	87	$	—	$	95	$	(57)	$	1,042
Total assets	$	100,162	$	9,394	$	13,865	$	6,246	$	50,803	$	180,470

(a)Net financing revenue and other interest income after the provision for credit losses totaled $1.5 billion and $1.6 billion for the three months ended June 30, 2022, and June 30, 2021, respectively.

Six months ended June 30, ($ in millions)	Automotive Finance operations		Insurance operations		Mortgage Finance operations		Corporate Finance operations		Corporate and Other		Consolidated (a)
2022
Net financing revenue and other interest income	$	2,596	$	37	$	109	$	160	$	555	$	3,457
Other revenue	140		428		18		43		125		754
Total net revenue	2,736		465		127		203		680		4,211
Provision for credit losses	332		—		—		14		125		471
Total noninterest expense	1,079		574		110		65		432		2,260
Income (loss) from continuing operations before income tax expense	$	1,325	$	(109)	$	17	$	124	$	123	$	1,480
Total assets	$	107,178	$	8,819	$	19,126	$	8,890	$	41,690	$	185,703
2021
Net financing revenue and other interest income	$	2,539	$	30	$	46	$	148	$	156	$	2,919
Other revenue	123		723		62		59		136		1,103
Total net revenue	2,662		753		108		207		292		4,022
Provision for credit losses	(45)		—		(4)		—		4		(45)
Total noninterest expense	987		525		89		59		358		2,018
Income (loss) from continuing operations before income tax expense	$	1,720	$	228	$	23	$	148	$	(70)	$	2,049
Total assets	$	100,162	$	9,394	$	13,865	$	6,246	$	50,803	$	180,470

(a)Net financing revenue and other interest income after the provision for credit losses totaled $3.0 billion for both the six months ended June 30, 2022, and June 30, 2021.