Segment Information

12 Months Ended

Dec. 31, 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 define our CODM as the Chief Executive Officer. The CODM uses pretax income to evaluate income generated from segment assets, and to assess a segment’s performance by comparing the results, relative to other segments. Additionally, the budgeting and forecasting process monitors budget versus actual results with emphasis on pretax income, which are also used in assessing the performance of a segment.

Change in Allocation of Costs to Reportable Segments

During the fourth quarter of 2024, we changed our COH methodology to eliminate the allocation of funding costs associated with our deposits business, which will now reside within Corporate and Other. This change reflects our reportable operating segments under a market-funding approach and aligns the costs of deposit funding with the related benefits received from deposit funding, which also resides with Corporate and Other. Additionally, our COH methodology was changed to allocate additional overhead expenses related to centralized support functions and marketing sponsorships to our reportable operating segments as a result of a change in how our CODM assesses our performance. These expenses were previously included within Corporate and Other. The manner in which our CODM views our COH methodologies changed after our current CEO joined Ally during 2024 and completed a review of the strategy of the business. Also, during the fourth quarter of 2024, we changed our FTP methodology by aligning the capital credit and charge calculations with the FTP rate charged to each business line. Capital credits reduce the business lines’ overall FTP charge, recognizing that a portion of a business line’s assets is funded with allocated regulatory capital. Capital charges impact business lines not subject to FTP funding allocations and are applied to the amount of excess equity that the business line holds, relative to its regulatory capital. Amounts for 2023 and 2022 have been recast to conform to the current COH and FTP methodologies.

Change in Reportable Segments

As a result of a change in how our CODM views and operates our business, during the fourth quarter of 2024, we made changes in the composition of our operating segments. The manner in which our CODM views and assesses performance changed after our current CEO joined Ally during 2024 and completed a review of the strategy of the business. Furthermore, consumer mortgage originations will cease during the second quarter of 2025, which will result in a gradual run-off of our remaining consumer mortgage loan portfolio. Financial information related to our Mortgage Finance business is now included in Corporate and Other. Previously, all such activity was presented as a separate reportable segment. Our other operating segments, Automotive Finance operations, Insurance operations, and Corporate Finance operations remained reportable operating segments. We allocate costs to our reportable segments in a manner consistent with the methodology updated during the fourth quarter of 2024. Amounts for 2023 and 2022 have been recast to conform to the current CODM view.

We report our results of operations on a business-line basis through three operating segments: Automotive Finance operations, Insurance 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 our CODM and 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.

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, primarily 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 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, the management of our consumer mortgage portfolio, and CRA loans and investments are also included within Corporate and Other. On January 20, 2025, we entered into a definitive agreement to divest our credit card business, Ally Credit Card. The transaction is expected to close during the second quarter of 2025, subject to the completion of customary closing conditions. 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 the business line’s allocated cost of funding. 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, marketing expenses, and marketing sponsorships. Generally, costs that remain within Corporate and Other that are not allocated to our reportable operating segments include operating costs of deposits, treasury activities, and other corporate activities.

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

Year ended December 31, 2024 ($ in millions)	Automotive Finance operations		Insurance operations		Corporate Finance operations		Corporate and Other		Consolidated (a)
Net financing revenue and other interest income
Total financing revenue and other interest income	$	10,473	$	168	$	1,006	$	2,575	$	14,222
Total interest expense	4,266		54		550		2,602		7,472
Net depreciation expense on operating lease assets	736		—		—		—		736
Net financing revenue and other interest income	5,471		114		456		(27)		6,014
Other revenue	363		1,507		123		174		2,167
Total net revenue	5,834		1,621		579		147		8,181
Provision for credit losses	1,905		—		8		253		2,166
Noninterest expense
Compensation and benefits expense	668		108		80		986		1,842
Insurance losses and loss adjustment expenses	—		544		—		—		544
Goodwill impairment (b)	—		—		—		118		118
Other operating expenses
Technology and communications expenses	129		19		5		285		438
Other (c)	1,316		782		52		87		2,237
Total other operating expenses	1,445		801		57		372		2,675
Total noninterest expense	2,113		1,453		137		1,476		5,179
Income (loss) from continuing operations before income tax expense	$	1,816	$	168	$	434	$	(1,582)	$	836
Total assets	$	113,057	$	9,325	$	9,704	$	59,750	$	191,836

(a)Net financing revenue and other interest income after the provision for credit losses totaled $3.8 billion for the year ended December 31, 2024.

(b)Impairment of goodwill related to Ally Credit Card for the year ended December 31, 2024. Refer to Note 13 for additional information.

(c)Primarily consists of insurance commissions, advertising and marketing, and property and equipment depreciation expenses. Refer to Note 7 for additional information.

Year ended December 31, 2023 ($ in millions)	Automotive Finance operations		Insurance operations		Corporate Finance operations		Corporate and Other		Consolidated (a)
Net financing revenue and other interest income
Total financing revenue and other interest income	$	9,721	$	149	$	980	$	3,108	$	13,958
Total interest expense	3,364		45		550		2,938		6,897
Net depreciation expense on operating lease assets	840		—		—		—		840
Net financing revenue and other interest income	5,517		104		430		170		6,221
Other revenue	321		1,428		104		160		2,013
Total net revenue	5,838		1,532		534		330		8,234
Provision for credit losses	1,618		—		52		298		1,968
Noninterest expense
Compensation and benefits expense	668		108		78		1,047		1,901
Insurance losses and loss adjustment expenses	—		422		—		—		422
Goodwill impairment (b)	—		—		—		149		149
Other operating expenses
Technology and communications expenses	126		18		5		287		436
Other (c)	1,212		768		45		230		2,255
Total other operating expenses	1,338		786		50		517		2,691
Total noninterest expense	2,006		1,316		128		1,713		5,163
Income (loss) from continuing operations before income tax expense	$	2,214	$	216	$	354	$	(1,681)	$	1,103
Total assets	$	115,301	$	9,081	$	11,212	$	60,735	$	196,329

(a)Net financing revenue and other interest income after the provision for credit losses totaled $4.3 billion for the year ended December 31, 2023.

(b)Impairment of goodwill related to Ally Lending for the year ended December 31, 2023. Refer to Note 13 for additional information.

(c)Primarily consists of insurance commissions expense, advertising and marketing expense, and lease and loan administration expense. Refer to Note 7 for additional information.

Year ended December 31, 2022 ($ in millions)	Automotive Finance operations		Insurance operations		Corporate Finance operations		Corporate and Other		Consolidated (a)
Net financing revenue and other interest income
Total financing revenue and other interest income	$	7,990	$	126	$	546	$	1,959	$	10,621
Total interest expense	1,838		42		206		771		2,857
Net depreciation expense on operating lease assets	914		—		—		—		914
Net financing revenue and other interest income	5,238		84		340		1,188		6,850
Other revenue	306		1,023		122		127		1,578
Total net revenue	5,544		1,107		462		1,315		8,428
Provision for credit losses	1,036		—		43		320		1,399
Noninterest expense
Compensation and benefits expense	629		101		75		1,095		1,900
Insurance losses and loss adjustment expenses	—		280		—		—		280
Other operating expenses
Technology and communications expenses	117		17		4		268		406
Other (b)	1,104		735		46		216		2,101
Total other operating expenses	1,221		752		50		484		2,507
Total noninterest expense	1,850		1,133		125		1,579		4,687
Income (loss) from continuing operations before income tax expense	$	2,658	$	(26)	$	294	$	(584)	$	2,342
Total assets	$	111,463	$	8,659	$	10,544	$	61,160	$	191,826

(a)Net financing revenue and other interest income after the provision for credit losses totaled $5.5 billion for the year ended December 31, 2022.

(b)Primarily consists of insurance commissions expense, advertising and marketing expense, and lease and loan administration expense. Refer to Note 7 for additional information.