Segment Information

9 Months Ended

Sep. 30, 2024

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 CODM 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 asset-based and leveraged 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 advisory offering, Ally Lending, Ally Credit Card, and CRA loans and investments are also included within Corporate and Other. On December 31, 2023, we committed to sell Ally Lending. We closed the sale of Ally Lending on March 1, 2024. Refer to Note 2 for additional information.

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, utilizing a benchmark rate curve plus an assumed credit spread. The assumed credit spread is calculated based on a composite investment grade unsecured yield curve or based on advance rates published by the FHLB for any asset that is eligible to be pledged as collateral to the FHLB. While the baseline FTP components at Ally assume 100% debt funding, the methodology also incorporates a credit on the allocated capital for each business line based on a historical average of benchmark rates. For business lines not subject to an FTP funding allocation, the FTP methodology applies a capital charge to the amount of excess equity that the business line holds, relative to its regulatory capital and other adjustments. 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)
2024
Net financing revenue and other interest income	$	1,285	$	31	$	52	$	101	$	19	$	1,488
Other revenue	85		437		6		37		50		615
Total net revenue	1,370		468		58		138		69		2,103
Provision for credit losses	579		—		—		11		55		645
Total noninterest expense	616		366		31		32		180		1,225
Income (loss) from continuing operations before income tax (benefit) expense	$	175	$	102	$	27	$	95	$	(166)	$	233
Total assets	$	113,934	$	9,455	$	17,594	$	10,398	$	41,600	$	192,981
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

(a)Net financing revenue and other interest income after the provision for credit losses totaled $843 million and $1.0 billion for the three months ended September 30, 2024, and 2023, respectively.

Nine months ended September 30, ($ in millions)	Automotive Finance operations		Insurance operations		Mortgage Finance operations		Corporate Finance operations		Corporate and Other		Consolidated (a)
2024
Net financing revenue and other interest income	$	3,913	$	90	$	157	$	316	$	(37)	$	4,439
Other revenue	275		1,159		17		90		109		1,650
Total net revenue	4,188		1,249		174		406		72		6,089
Provision for credit losses	1,410		—		(1)		13		187		1,609
Total noninterest expense	1,874		1,119		96		110		620		3,819
Income (loss) from continuing operations before income tax (benefit) expense	$	904	$	130	$	79	$	283	$	(735)	$	661
Total assets	$	113,934	$	9,455	$	17,594	$	10,398	$	41,600	$	192,981
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

(a)Net financing revenue and other interest income after the provision for credit losses totaled $2.8 billion and $3.3 billion for the nine months ended September 30, 2024, and 2023, respectively.