Segment Information

9 Months Ended

Sep. 30, 2023

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 the following two 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. 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

Our Corporate Finance operations provide senior secured leveraged asset-based and cash flow 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, currently focused on lending to skilled nursing facilities, senior housing, and medical office buildings.

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 equity investments through Ally Ventures, our strategic investment business—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 personal advice (formerly known as wealth management) offering, Ally Lending, our point-of-sale financing business, Ally Credit Card, and CRA loans and 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 on a match funded basis, aligned with the expected duration and the benchmark rate curve plus an assumed credit spread. Match funding 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 and methodologies, including a COH methodology, which involves management judgment. COH methodology is used for measuring the profit and loss of our reportable operating segments. We have various enterprise functions, such as technology, marketing, finance, compliance, internal audit, and risk. Operating expenses from the enterprise functions are either directly allocated to the reportable operating segment, indirectly allocated to the reportable operating segment utilizing the COH methodology, or remain in Corporate and Other. COH methodology considers the reportable operating segment expense base and enterprise function expenses. The reportable operating segment expense base is used to determine the allocation mix. This mix is applied to the allocable expenses in Corporate and Other to determine the COH for the respective reportable operating segment. Allocable enterprise function costs are primarily technology and marketing expenses. Generally, costs that remain within Corporate and Other that are not allocated to our reportable operating segments include marketing sponsorships, treasury and other corporate activities, and charitable contributions.

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)
2023
Net financing revenue and other interest income	$	1,360	$	29	$	53	$	97	$	(6)	$	1,533
Other revenue	79		293		4		24		35		435
Total net revenue	1,439		322		57		121		29		1,968
Provision for credit losses	444		—		(2)		5		61		508
Total noninterest expense	618		338		33		32		211		1,232
Income (loss) from continuing operations before income tax (benefit) expense	$	377	$	(16)	$	26	$	84	$	(243)	$	228
Total assets	$	114,742	$	8,736	$	18,745	$	10,749	$	42,732	$	195,704
2022
Net financing revenue and other interest income	$	1,303	$	24	$	57	$	80	$	255	$	1,719
Other revenue (loss)	74		236		7		54		(74)		297
Total net revenue	1,377		260		64		134		181		2,016
Provision for credit losses	328		—		2		13		95		438
Total noninterest expense	561		290		43		30		237		1,161
Income (loss) from continuing operations before income tax (benefit) expense	$	488	$	(30)	$	19	$	91	$	(151)	$	417
Total assets	$	109,114	$	8,533	$	19,862	$	9,840	$	41,291	$	188,640

(a)Net financing revenue and other interest income after the provision for credit losses totaled $1.0 billion and $1.3 billion for the three months ended September 30, 2023, and 2022, respectively.

Nine months ended September 30, ($ in millions)	Automotive Finance operations		Insurance operations		Mortgage Finance operations		Corporate Finance operations		Corporate and Other		Consolidated (a)
2023
Net financing revenue and other interest income	$	4,031	$	84	$	160	$	292	$	141	$	4,708
Other revenue	239		1,011		13		81		95		1,439
Total net revenue	4,270		1,095		173		373		236		6,147
Provision for credit losses	1,126		—		(3)		35		223		1,381
Total noninterest expense	1,824		1,011		108		110		694		3,747
Income (loss) from continuing operations before income tax (benefit) expense	$	1,320	$	84	$	68	$	228	$	(681)	$	1,019
Total assets	$	114,742	$	8,736	$	18,745	$	10,749	$	42,732	$	195,704
2022
Net financing revenue and other interest income	$	3,899	$	61	$	166	$	240	$	810	$	5,176
Other revenue	214		664		25		97		51		1,051
Total net revenue	4,113		725		191		337		861		6,227
Provision for credit losses	660		—		2		27		220		909
Total noninterest expense	1,640		864		153		95		669		3,421
Income (loss) from continuing operations before income tax (benefit) expense	$	1,813	$	(139)	$	36	$	215	$	(28)	$	1,897
Total assets	$	109,114	$	8,533	$	19,862	$	9,840	$	41,291	$	188,640

(a)Net financing revenue and other interest income after the provision for credit losses totaled $3.3 billion and $4.3 billion for the nine months ended September 30, 2023, and 2022, respectively.