0000040729us-gaap:~~ConsumerPortfolioSegmentMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:LoansAndFinanceReceivablesMember2022-12-31~~ForeignExchangeContractMemberus-gaap:NetInvestmentHedgingMember2023-01-012023-03-31

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, ~~2023,~~2024, or


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 1-3754

Ally Financial Inc.

(Exact name of registrant as specified in its charter)


Delaware						38-0572512
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

Ally Detroit Center

500 Woodward Avenue, Floor 10

Detroit, Michigan 48226

(Address of principal executive offices)

(Zip Code)

(866) 710-4623

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbols

Name of each exchange on which registered

Common Stock, par value $0.01 per share

ALLY

NYSE

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☑

At ~~April 28, 2023,~~May 2, 2024, the number of shares outstanding of the Registrant’s common stock was ~~300,820,617~~303,981,222 shares.

Table of Contents

Index

Ally Financial Inc. • Form 10-Q


		Page
	Glossary of Abbreviations and Acronyms	3
Part I — Financial Information
Item 1.	Financial Statements	5
	Condensed Consolidated Statement of Comprehensive (Loss) Income (unaudited) for the Three Months Ended March 31, ~~2023,~~2024, and ~~2022~~2023	5
	Condensed Consolidated Balance Sheet (unaudited) at March 31,, ~~2023,~~ 2024, and December 31, ~~2022~~2023	7
	Condensed Consolidated Statement of Changes in Equity (unaudited) for the Three Months Ended March 31, ~~2023,~~2024, and ~~2022~~2023	9
	Condensed Consolidated Statement of Cash Flows (unaudited) for the Three Months Ended March 31, ~~2023,~~2024, and ~~2022~~2023	10
	Notes to Condensed Consolidated Financial Statements (unaudited)	12
	Note 1. Description of Business, Basis of Presentation, and Changes in Significant Accounting Policies	12
	Note 2 . Held-for-sale O perations	13
	Note 3 . Revenue from ~~Contracts~~Co ntracts with Customers	1415
	Note 34 . Other Income, Net of Losses	16
	Note 45 . Reserves for Insurance Losses and Loss Adjustment Expenses	16
	Note 56 . Other Operating Expenses	1617
	Note 67 . Investment Securities	1718
	Note 78 . Finance Receivables and Loans, Net	2122
	Note 89 . Leasing	3133
	Note 910 . Securitizations and Variable Interest Entities	3436
	~~Note 1~~0 ~~. Other Assets~~	37
	Note 1 1 . ~~Deposit Liabilities~~Other Assets	3839
	Note 1 2 . ~~Debt~~Deposit Liabilities	3941
	Note 1 3 . Debt	41
	Note 1 4 . Accrued Expenses and Other Liabilities	4043
	Note 1 45 . Preferred Stock	4143
	Note 1 56 . Accumulated Other Comprehensive Loss	4144
	Note 1 67 . Earnings per Common Share	4345
	Note 1 78 . Regulatory Capital and Other Regulatory Matters	4346
	Note 1 89 . Derivative Instruments and Hedging Activities	4649
	Note 1920 . Income Taxes	5154
	Note 2 01 . Fair Value	5154
	Note 2 12 . Offsetting Assets and Liabilities	5760
	Note 2 23 . Segment Information	5961
	Note 2 34 . Contingencies and Other Risks	6163
	Note 2 45 . Subsequent Events	6264
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	6365
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	~~111~~116
Item 4.	Controls and Procedures	~~112~~117
Part II — Other Information		~~113~~118
Item 1.	Legal Proceedings	~~113~~118
Item 1A.	Risk Factors	~~113~~118
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	~~113~~118
Item 3.	Defaults Upon Senior Securities	~~113~~118
Item 4.	Mine Safety Disclosures	~~113~~118
Item 5.	Other Information	~~113~~118
Item 6.	Exhibits	~~114~~119
Signatures		~~115~~120

Table of Contents

Index of Defined Terms

Ally Financial Inc. • Form 10-Q

Glossary of Abbreviations and Acronyms

The following is a list of abbreviations and acronyms that are used in this Quarterly Report on Form 10-Q.


Term						Definition


ALCO						Asset-Liability Committee
ALM						Asset Liability Management


AOCI						Accumulated other comprehensive income
ASC						Accounting Standards Codification
ASU						Accounting Standards Update

Basel Committee						Basel Committee on Banking Supervision


BHC						Bank holding company
BHC Act						Bank Holding Company Act of 1956, as amended

BMC						Better Mortgage Company

Board						Ally Board of Directors
BTFP						Bank Term Funding Program


CD						Certificate of deposit

CECL						Accounting Standards Update 2016-13 (and related Accounting Standards Updates), or current expected credit loss






CODM						Chief Operating Decision Maker
COH						Corporate overhead
~~COVID-19~~						~~Coronavirus disease 2019~~
CRA						Community Reinvestment Act of 1977, as amended
CSG						Commercial Services Group

CVA						Credit valuation adjustment

DIF						Deposit Insurance Fund
Dodd-Frank Act						Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, as amended

DVA						Debit valuation adjustment

EGRRCP Act						Economic Growth, Regulatory Relief, and Consumer Protection Act, as amended

ERMC						Enterprise Risk Management Committee
ESG						Environmental, social, and governance
ETF						Exchange-traded fund

Exchange Act						Securities Exchange Act of 1934, as amended
F&I						Finance and insurance

FASB						Financial Accounting Standards Board
FDI Act						Federal Deposit Insurance Act, as amended
FDIC						Federal Deposit Insurance Corporation
FDICIA						Federal Deposit Insurance Corporation Improvement Act of 1991, as amended
FHC						Financial holding company
FHLB						Federal Home Loan Bank



FRB						Federal Reserve Bank, or Board of Governors of the Federal Reserve System, as the context requires

FTP						Funds-transfer pricing
GAP						Guaranteed asset protection
GDP						Gross domestic product of the United States of America
GLB Act						Gramm-Leach-Bliley Act of 1999, as amended
GM						General Motors Company

HTC						Historic tax credit

IB Finance						IB Finance Holding Company, LLC


IDI						Insured Depository Institution
IRA						Individual retirement account


LCR						Liquidity coverage ratio
~~LGD~~						~~Loss given default~~
~~LIBOR~~						~~London Interbank Offered Rate~~
~~LIBOR Act~~						~~Adjustable Interest Rate (LIBOR) Act~~
~~LIHTC~~						~~Low-income housing tax credit~~
~~LMI~~						~~Low-to-moderate income~~
~~LTV~~						~~Loan-to-value~~

~~MD&A~~						~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~


~~NYSE~~						~~New York Stock Exchange~~

Table of Contents

Index of Defined Terms

Ally Financial Inc. • Form 10-Q


Term						Definition
LGD						Loss given default


LIHTC						Low-income housing tax credit
LMI						Low-to-moderate income
LTV						Loan-to-value


MD&A						Management’s Discussion and Analysis of Financial Condition and Results of Operations


NMTC						New market tax credit


NYSE						New York Stock Exchange
OCI						Other comprehensive income
OEM						Automotive original equipment manufacturer
OTC						Over-the-counter
P&C						Property and casualty
PCA						Prompt corrective action



RC						Risk Committee of the Ally Board of Directors
ROU						Right-of-use

RV						Recreational vehicle
RWA						Risk-weighted asset
SEC						U.S. Securities and Exchange Commission

Signature						Signature Bank

~~SOFR~~						~~Secured Overnight Financing Rate~~
SPE						Special-purpose entity

Stellantis						Stellantis N.V.

SVB						Silicon Valley Bank
Tailoring Rules						The rules implementing Title IV of the EGRRCP Act

~~TDR~~TCFD						~~Troubled debt restructuring~~Task Force on Climate-related Financial Disclosures

TLAC						Total loss-absorbing capacity




UPB						Unpaid principal balance
U.S. Basel III						The rules implementing the 2010 Basel III capital framework in the United States as well as related provisions of the Dodd-Frank Act, as amended from time to time
U.S. GAAP						Accounting Principles Generally Accepted in the United States of America
VIE						Variable interest entity
VMC						Vehicle maintenance contract
VSC						Vehicle service contract
WAC						Weighted-average coupon
wSTWF						Weighted short-term wholesale funding

Table of Contents

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

Condensed Consolidated Statement of Comprehensive (Loss) Income (unaudited)

Ally Financial Inc. • Form 10-Q

Three months ended March 31,

($ in millions)

2023

2022

Financing revenue and other interest income

Interest and fees on finance receivables and loans

2,575

1,714

Interest on loans held-for-sale

Interest and dividends on investment securities and other earning assets

238

188

Interest on cash and cash equivalents

Operating leases

402

403

Total financing revenue and other interest income

3,286

2,311

Total financing revenue and other interest income

Interest expense

Interest on deposits

1,217

211

Interest on deposits

Interest on short-term borrowings

Interest on long-term debt

227

185

Interest on long-term debt

Interest on other

—

Total interest expense

1,458

401

Total interest expense

Net depreciation expense on operating lease assets

226

217

Net financing revenue and other interest income

1,602

1,693

Net financing revenue and other interest income

Other revenue

Insurance premiums and service revenue earned

306

280

Insurance premiums and service revenue earned

Gain on mortgage and automotive loans, net

Other gain on investments, net

Other income, net of losses

114

143

Total other revenue

498

442

Total other revenue

Total net revenue

2,100

2,135

Provision for credit losses

446

167

Provision for credit losses

Noninterest expense

Compensation and benefits expense

537

493

Compensation and benefits expense

Insurance losses and loss adjustment expenses

Other operating expenses

641

571

Other operating expenses

Total noninterest expense

1,266

1,122

Income from continuing operations before income tax expense

388

846

Income from continuing operations before income tax expense

Income tax expense from continuing operations

191

Net income from continuing operations

320

655

Net income from continuing operations

Loss from discontinued operations, net of tax

(1)

—

Net income

319

655

Other comprehensive income (loss), net of tax

283

(1,633)

Comprehensive income (loss)

602

(978)

Net income

Other comprehensive (loss) income, net of tax

Comprehensive (loss) income

Statement continues on the next page.

The Notes to the Condensed Consolidated Financial Statements (unaudited) are an integral part of these statements.

Table of Contents

Condensed Consolidated Statement of Comprehensive (Loss) Income (unaudited)

Ally Financial Inc. • Form 10-Q

Three months ended March 31,

($ in millions, except per share data; shares in thousands) (a)

2023

2022

Net income from continuing operations attributable to common stockholders

292

627

Net income from continuing operations attributable to common stockholders

Loss from discontinued operations, net of tax

(1)

—

Net income attributable to common stockholders

291

627

Net income attributable to common stockholders

Basic weighted-average common shares outstanding (b)

302,657

335,678

Diluted weighted-average common shares outstanding (b)

303,448

337,812

Diluted weighted-average common shares outstanding (b)

Basic earnings per common share

Net income from continuing operations

0.97

1.87

Net income

0.96

1.87

Net income

Diluted earnings per common share

Net income from continuing operations

0.96

1.86

Net income

0.96

1.86

Net income

Cash dividends declared per common share

0.30

Cash dividends declared per common share

(a)Figures in the table may not recalculate exactly due to rounding. Earnings per share is calculated based on unrounded numbers.

(b)Includes shares related to share-based compensation that vested but were not yet issued.

Refer to Note 1617 for additional earnings per share information. The Notes to the Condensed Consolidated Financial Statements (unaudited) are an integral part of these statements.

Table of Contents

Condensed Consolidated Balance Sheet (unaudited)

Ally Financial Inc. • Form 10-Q


($ in millions, except share data)	($ in millions, except share data)	March 31, 2023		December 31, 2022
($ in millions, except share data)
($ in millions, except share data)							March 31, 2024	December 31, 2023
Assets	Assets
Cash and cash equivalents	Cash and cash equivalents
Cash and cash equivalents
Cash and cash equivalents
Noninterest-bearing
Noninterest-bearing
Noninterest-bearing	Noninterest-bearing	$	554	$	542
Interest-bearing	Interest-bearing	9,226		5,029
Total cash and cash equivalents	Total cash and cash equivalents	9,780		5,571
Equity securities	Equity securities	718		681
Available-for-sale securities (amortized cost of $34,272 and $34,863)		29,450		29,541
Held-to-maturity securities (fair value of $891 and $884)		1,047		1,062
Available-for-sale securities (amortized cost of $28,114 and $28,416)
Held-to-maturity securities (fair value of $4,633 and $4,729)
Loans held-for-sale, net	Loans held-for-sale, net	524		654
Finance receivables and loans, net	Finance receivables and loans, net
Finance receivables and loans, net of unearned income
Finance receivables and loans, net of unearned income
Finance receivables and loans, net of unearned income	Finance receivables and loans, net of unearned income	136,304		135,748
Allowance for loan losses	Allowance for loan losses	(3,751)		(3,711)
Total finance receivables and loans, net	Total finance receivables and loans, net	132,553		132,037
Investment in operating leases, net	Investment in operating leases, net	10,236		10,444
Premiums receivable and other insurance assets	Premiums receivable and other insurance assets	2,713		2,698
Other assets	Other assets	9,144		9,138
Assets of operations held-for-sale
Total assets	Total assets	$	196,165	$	191,826
Liabilities	Liabilities
Deposit liabilities	Deposit liabilities
Deposit liabilities
Deposit liabilities
Noninterest-bearing
Noninterest-bearing
Noninterest-bearing	Noninterest-bearing	$	174	$	185
Interest-bearing	Interest-bearing	153,839		152,112
Total deposit liabilities	Total deposit liabilities	154,013		152,297
Short-term borrowings	Short-term borrowings	1,455		2,399
Long-term debt	Long-term debt	20,480		17,762
Interest payable	Interest payable	759		408
Unearned insurance premiums and service revenue	Unearned insurance premiums and service revenue	3,455		3,453
Accrued expenses and other liabilities	Accrued expenses and other liabilities	2,625		2,648
Liabilities of operations held-for-sale
Total liabilities	Total liabilities	182,787		178,967
Contingencies (refer to Note 23)
Contingencies (refer to Note 24)						Contingencies (refer to Note 24)
Equity	Equity					Equity
Common stock and paid-in capital ($0.01 par value, shares authorized 1,100,000,000; issued 510,014,869 and 507,682,838; and outstanding 300,820,617 and 299,324,357)		21,880		21,816
Common stock and paid-in capital ($0.01 par value, shares authorized 1,100,000,000; issued 514,161,006 and 511,861,447; and outstanding 303,977,972 and 302,459,258)
Preferred stock	Preferred stock	2,324		2,324
Accumulated deficit		(185)		(384)
Retained earnings
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(3,776)		(4,059)
Treasury stock, at cost (209,194,252 and 208,358,481 shares)		(6,865)		(6,838)
Treasury stock, at cost (210,183,034 and 209,402,189 shares)
Total equity	Total equity	13,378		12,859
Total liabilities and equity	Total liabilities and equity	$	196,165	$	191,826

Statement continues on the next page.

The Notes to the Condensed Consolidated Financial Statements (unaudited) are an integral part of these statements.

Table of Contents

Condensed Consolidated Balance Sheet (unaudited)

Ally Financial Inc. • Form 10-Q

The assets of consolidated variable interest entities that can be used only to settle obligations of the consolidated variable interest entities and the liabilities of these entities for which creditors (or beneficial interest holders) do not have recourse to our general credit were as follows.

($ in millions)

March 31, 2023

December 31, 2022

($ in millions)

March 31, 2024

December 31, 2023

Assets

Finance receivables and loans, net

Consumer automotive

11,354

9,547

Allowance for loan losses

(412)

(336)

Total finance receivables and loans, net

10,942

9,211

Other assets

810

645

Other assets

Total assets

11,752

9,856

Liabilities

Long-term debt

3,043

2,436

Long-term debt

Accrued expenses and other liabilities

Total liabilities

3,051

2,441

The Notes to the Condensed Consolidated Financial Statements (unaudited) are an integral part of these statements.

Table of Contents

Condensed Consolidated Statement of Changes in Equity (unaudited)

Ally Financial Inc. • Form 10-Q


($ in millions)
($ in millions)
($ in millions)	($ in millions)	Common stock and paid-in capital		Preferred stock		Accumulated deficit		Accumulated other comprehensive loss		Treasury stock		Total equity		Common stock and paid-in capital	Preferred stock	Retained earnings (accumulated deficit)	Accumulated other comprehensive loss	Treasury stock	Total equity

Balance at January 1, 2022		$	21,671	$	2,324	$	(1,599)	$	(158)	$	(5,188)	$	17,050
Balance at January 1, 2023

Balance at January 1, 2023

Balance at January 1, 2023
Net income	Net income					655						655

Preferred stock dividends — Series B	Preferred stock dividends — Series B					(16)						(16)
Preferred stock dividends — Series C						(12)						(12)
Share-based compensation		57										57
Other comprehensive loss								(1,633)				(1,633)
Common stock repurchases										(584)		(584)
Common stock dividends ($0.30 per share)						(104)						(104)
Balance at March 31, 2022		$	21,728	$	2,324	$	(1,076)	$	(1,791)	$	(5,772)	$	15,413
Balance at January 1, 2023		$	21,816	$	2,324	$	(384)	$	(4,059)	$	(6,838)	$	12,859
Net income						319						319

Preferred stock dividends — Series B

Preferred stock dividends — Series B	Preferred stock dividends — Series B					(16)						(16)
Preferred stock dividends — Series C	Preferred stock dividends — Series C					(12)						(12)
Share-based compensation	Share-based compensation	64										64
Other comprehensive income	Other comprehensive income							283				283
Common stock repurchases	Common stock repurchases									(27)		(27)
Common stock dividends ($0.30 per share)	Common stock dividends ($0.30 per share)					(92)						(92)
Balance at March 31, 2023	Balance at March 31, 2023	$	21,880	$	2,324	$	(185)	$	(3,776)	$	(6,865)	$	13,378
Balance at December 31, 2023
Cumulative effect of changes in accounting principles, net of tax (a)
Adoption of Accounting Standards Update 2023-02
Adoption of Accounting Standards Update 2023-02
Adoption of Accounting Standards Update 2023-02
Balance at January 1, 2024
Net income

Preferred stock dividends — Series B

Preferred stock dividends — Series B

Preferred stock dividends — Series B
Preferred stock dividends — Series C
Share-based compensation
Other comprehensive loss
Common stock repurchases
Common stock dividends ($0.30 per share)
Balance at March 31, 2024

(a)Refer to the section titled Recently Adopted Accounting Standards in Note 1 for additional information.

The Notes to the Condensed Consolidated Financial Statements (unaudited) are an integral part of these statements.

Table of Contents

Condensed Consolidated Statement of Cash Flows (unaudited)

Ally Financial Inc. • Form 10-Q

Three months ended March 31, ($ in millions)

2023

2022

Three months ended March 31, ($ in millions)

Operating activities

Net income

319

655

Net income

Reconciliation of net income to net cash provided by operating activities

Depreciation and amortization

317

339

Provision for credit losses

446

167

Provision for credit losses

Gain on mortgage and automotive loans, net

(4)

(14)

Gain on mortgage and automotive loans, net

Other gain on investments, net

(74)

(5)

Originations and purchases of loans held-for-sale

(844)

(1,355)

Originations and purchases of loans held-for-sale

Proceeds from sales and repayments of loans held-for-sale

1,068

1,465

Net change in

Deferred income taxes

183

Interest payable

351

Interest payable

Other assets

(43)

214

Other liabilities

(208)

(122)

Other liabilities

Other, net

Net cash provided by operating activities

1,432

1,641

Net cash provided by operating activities

Investing activities

Purchases of equity securities

(45)

(349)

Purchases of equity securities

Proceeds from sales of equity securities

548

Purchases of available-for-sale securities

(152)

(3,962)

Purchases of available-for-sale securities

Proceeds from sales of available-for-sale securities

307

474

Proceeds from sales of available-for-sale securities

Proceeds from repayments of available-for-sale securities

477

1,508

Proceeds from repayments of held-to-maturity securities

Purchases of finance receivables and loans held-for-investment

(818)

(1,364)

Proceeds from sales of finance receivables and loans initially held-for-investment

Originations and repayments of finance receivables and loans held-for-investment and other, net

(103)

(2,240)

Purchases of operating lease assets

(741)

(946)

Purchases of operating lease assets

Disposals of operating lease assets

706

865

Disposals of operating lease assets

Proceeds from sale of a business unit, net

Net change in nonmarketable equity investments

(2)

(116)

Other, net

(117)

(163)

Net cash used in investing activities

(382)

(5,685)

Other, net

Net cash provided by (used in) investing activities

Statement continues on the next page.

The Notes to the Condensed Consolidated Financial Statements (unaudited) are an integral part of these statements.

Table of Contents

Condensed Consolidated Statement of Cash Flows (unaudited)

Ally Financial Inc. • Form 10-Q

Three months ended March 31, ($ in millions)

2023

2022

Three months ended March 31, ($ in millions)

Financing activities

Net change in short-term borrowings

(944)

3,950

Net change in short-term borrowings

Net increase in deposits

1,715

916

Proceeds from issuance of long-term debt

3,129

1,059

Proceeds from issuance of long-term debt

Repayments of long-term debt

(426)

(2,222)

Repurchases of common stock

(27)

(584)

Common stock dividends paid

(96)

(104)

Common stock dividends paid

Preferred stock dividends paid

(28)

Net cash provided by financing activities

3,323

2,987

Preferred stock dividends paid

Net cash (used in) provided by financing activities

Effect of exchange-rate changes on cash and cash equivalents and restricted cash

—

Net increase (decrease) in cash and cash equivalents and restricted cash

4,373

(1,055)

Effect of exchange-rate changes on cash and cash equivalents and restricted cash

Net increase in cash and cash equivalents and restricted cash

Cash and cash equivalents and restricted cash at beginning of year

6,222

5,670

Cash and cash equivalents and restricted cash at March 31,

10,595

4,615

Cash and cash equivalents and restricted cash at March 31,

Supplemental disclosures

Cash paid (received) for

Interest

1,085

292

Income taxes

(150)

Income taxes

Noncash items

Held-to-maturity securities received in consideration for loans sold

Loans held-for-sale transferred to finance receivables and loans held-for-investment

Finance receivables and loans held-for-investment transferred to loans held-for-sale

The following table provides a reconciliation of cash and cash equivalents and restricted cash from the Condensed Consolidated Balance Sheet to the Condensed Consolidated Statement of Cash Flows.


March 31, ($ in millions)	March 31, ($ in millions)	2023		2022		March 31, ($ in millions)	2024	2023
Cash and cash equivalents on the Condensed Consolidated Balance Sheet	Cash and cash equivalents on the Condensed Consolidated Balance Sheet	$	9,780	$	3,932
Restricted cash included in other assets on the Condensed Consolidated Balance Sheet (a)	Restricted cash included in other assets on the Condensed Consolidated Balance Sheet (a)	815		683
Total cash and cash equivalents and restricted cash in the Condensed Consolidated Statement of Cash Flows	Total cash and cash equivalents and restricted cash in the Condensed Consolidated Statement of Cash Flows	$	10,595	$	4,615

(a)Restricted cash balances relate primarily to our securitization arrangements. Refer to Note 1011 for additional details describing the nature of restricted cash balances.

The Notes to the Condensed Consolidated Financial Statements (unaudited) are an integral part of these statements.

Table of Contents

Notes to Condensed Consolidated Financial Statements (unaudited)

Ally Financial Inc. • Form 10-Q

1. Description of Business, Basis of Presentation, and Changes in Significant Accounting Policies

Ally Financial Inc. (together with its consolidated subsidiaries unless the context otherwise requires, Ally, the Company, we, us, or our) is a financial-services company with the nation’s largest all-digital bank and an industry-leading automotive financing and insurance business, driven by a mission to “Do It Right” and be a relentless ally for customers and communities. The Company serves customers through a full range of online banking services (including deposits, mortgage, ~~lending, point-of-sale personal lending~~ and ~~credit-card~~credit card products) and securities brokerage and investment advisory services. The Company also includes a corporate finance business that offers capital for equity sponsors and middle-market companies. Ally is a Delaware corporation and is registered as a BHC under the BHC Act and an FHC under the GLB Act.

Our accounting and reporting policies conform to U.S. GAAP. Additionally, where applicable, the policies conform to the accounting and reporting guidelines prescribed by bank regulatory authorities. Certain reclassifications may have been made to the prior periods’ financial statements and notes to conform to the current period’s presentation, which did not have a material impact on our Condensed Consolidated Financial Statements. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and that affect income and expenses during the reporting period and related disclosures. In developing the estimates and assumptions, management uses all available evidence; however, actual results could differ because of uncertainties associated with estimating the amounts, timing, and likelihood of possible outcomes. Our most significant estimates pertain to the allowance for loan losses, valuations of automotive lease assets and residuals, fair value of financial instruments, and the determination of the provision for income taxes.

The Condensed Consolidated Financial Statements at March 31, ~~2023,~~2024, and for the three months ended March 31, ~~2023,~~2024, and ~~2022,~~2023, are unaudited but reflect all adjustments that are, in management’s opinion, necessary for the fair presentation of the results for the interim periods presented. All such adjustments are of a normal recurring nature. These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements (and the related Notes) included in our Annual Report on Form 10-K for the year ended December 31, ~~2022,~~2023, as filed on February ~~24, 2023,~~20, 2024, with the SEC.

Significant Accounting Policies

~~Finance Receivables~~Equity-Method Investments and ~~Loans~~Proportional Amortization Investments

~~On January 1, 2023, we implemented ASU 2022-02,~~ ~~Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures~~. This guidance eliminates the concept of TDRs and adds new disclosure requirements related to loan modifications to borrowers experiencing financial difficulty and gross charge-offs. We implemented the ASU on a prospective basis, which results in certain aspects of our accounting policies changing for the current year. For significant accounting policy informationOur equity-method investments primarily include equity investments related to the CRA, which do not have a readily determinable fair value. The majority of these investments are accounted for using the equity method of accounting and ~~reporting of TDRs,~~are included in equity-method investments within other assets on our Condensed Consolidated Balance Sheet.

Our proportional amortization investments include tax equity investments related to the CRA, for which ~~comparative period information~~the primary return to us is ~~presented, refer~~the tax credits and other tax benefits we receive. We have elected to ~~Note 1~~apply the proportional amortization method to qualifying tax equity investments within our LIHTC, NMTC, and HTC programs. Under the proportional amortization method, the costs of qualifying tax equity investments are amortized in proportion to the ~~Consolidated Financial Statements~~allocation of tax credits and other tax benefits in ~~our 2022 Annual Report on Form 10-K.~~

~~Modifications of Loans with Borrowers Experiencing Financial Difficulty~~

We may provide a modification to a borrower who is experiencing financial difficulty if we believe they have the ability and are willing to repay their loan. The type of modification granted will vary depending on our credit risk management practices, as well as the borrower’s financial condition and the characteristics of the loan, including the unpaid balance, the underlying collateral, and the number or types of previous modifications granted. Modifications that we make subject to these requirements include payment extensions, principal forgiveness, and/or interest rate concessions. These modifications generally reduce the borrower’s periodic payment amount. The following is a description of each ~~of these types of modifications.~~

•~~Payment extensions~~ — Payment extensions include both payment deferrals and contractual maturity extensions. Deferral arrangements allow borrowers to delay a scheduled loan payment to a later date. Deferred loan payments do not affect the original contractual terms of the loan and the contractual maturity date of the loan remains unchanged. Deferrals also include certain forbearance agreements. Within the commercial loan portfolio, deferrals primarily reflect a deferral of interest payments. Under a contractual maturity extension agreement, the last payment date is extended to a future date, contractually lengthening the remaining term of the original loan.

•~~Principal forgiveness~~ — Under principal forgiveness, the outstanding principal balance of a loan is reduced by a specified amount. Principal forgiveness may occur voluntarily as part of a negotiated agreement with a borrower, or involuntarily through a bankruptcy proceeding. Under these involuntary instances, the bankruptcy court in a Chapter 11 or 13 proceeding may order us to reduce the outstanding principal balance of the loan to a specified amount.

•~~Interest rate concessions~~ ~~— Interest rate concessions adjust the contractual interest rate of the loan to a rate that is not consistent with a market rate for a customer with similar credit risk.~~

•~~Combination~~ — Combination includes loans that have undergone multiple of the above loan modification types. This primarily includes rewritten loans where we grant an interest rate concession and a contractual maturity extension.

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~~Ally Financial Inc. • Form 10-Q~~

Significant judgment is required to determine if a borrower is experiencing financial difficulty. These considerations vary by portfolio class. In all cases, the cumulative impacts of all modifications made within the 12-month period ~~before the current modification are considered at the time of the most recent modification.~~

~~For consumer loans of all classes, various qualitative factors are used for assessing the financial difficulty of the borrower. These factors include, but are not limited~~ to the borrower’s default status on any of its debts, bankruptcy, and recent changes in financial circumstances (for instance, loss of employment). For commercial loans of all classes, similar qualitative factors are considered when assessing the financial difficulty of the borrower. In addition to the previously noted factors, consideration is also given to the borrower’s forecasted ability to service the debt in accordance with the contractual terms, possible regulatory actions, and other potential business disruptions (for example, the loss of a significant customer or other revenue stream).

~~In our consumer automotive portfolio class of loans, we also provide extensions or deferrals of payments to borrowers whom we deem~~total tax benefits expected to be experiencing only temporary financial difficulty. In these cases, there are limits within our operational policies to minimize the number of times a loan can be extended, as well as limits to the length of each extension, including a cumulative capobtained over the life of the ~~loan. If these limits~~investment, and the investment amortization and tax credits are ~~breached, the modification may require disclosure~~presented on a net basis as ~~noted~~a component of income tax expense. Our proportional amortization investments are included within other assets on our Condensed Consolidated Balance Sheet. Our obligations related to unfunded commitments for our proportional amortization investments are included in ~~the following paragraph. Before offering an extension or deferral, we evaluate the capacity~~accrued expenses and other liabilities on our Condensed Consolidated Balance Sheet. Tax credits and other tax benefits received are recorded in income tax expense of the ~~customer to make the scheduled payments after the deferral period. During the deferral period, we continue to accrue interest on the loan~~Condensed Consolidated Statement of Comprehensive (Loss) Income and in net income and as ~~part~~a component of operating activities within deferred income taxes, other assets, and other liabilities of the ~~deferral agreement. We grant these extensions or deferrals when we expect~~Condensed Consolidated Statement of Cash Flows.

This update to ~~collect all amounts due including interest accrued at the original contract rate.~~

~~We do not disclose modifications that result in only an insignificant payment delay. In order to assess whether a payment delay is insignificant, we consider the amount~~our accounting policy resulted from our adoption of the modified payments subject to delay in conjunction with the unpaid principal balance or the collateral value of the loan, whether or not the delay is significant with respect to the frequency of payments under the original contract, or the loan’s original expected duration. In the cases where payment extensions cumulatively extend beyond 90 days and are more than 10% of the original contractual term, or where the cumulative payment extensionASU 2023-02 on January 1, 2024, as further described within the ~~12-month period immediately preceding the current modification is beyond 180 days, we deem the delay in payment to be more than insignificant.~~

The financial impacts of modifications that meet the definition of a modification to borrowers experiencing financial difficulty are reported in the period in which they are identified. Additionally, if such a loan defaults within 12 months of the modification, we are required to disclose the instances of redefault. For the purpose of this disclosure, we have determined that a loan is considered to have redefaulted when the loan meets the requirements for evaluation under our charge-off policy, except for commercial loans where redefault is defined as 90 days past due.

~~Nonaccrual Loans~~

Generally, we recognize loans of all classes as past due when they are 30 days delinquent on making a contractually required payment, and loans are placed on nonaccrual status when principal or interest has been delinquent for at least 90 days, or when full collection is not expected. Interest income recognition is suspended when finance receivables and loans are placed on nonaccrual status. Additionally, amortization of premiums and discounts and deferred fees and costs ceases when finance receivables and loans are placed on nonaccrual status. Exceptions include commercial real estate loans that are placed on nonaccrual status when delinquent for 60 days or when full collection is not probable, if sooner. Additionally, a loan can be returned to accrual status when the loan has been brought fully current, the collection of contractual principal and interest is reasonably assured, and six consecutive months of repayment performance is achieved. In certain cases, if a borrower has been current up to the time of the modification and repayment of the debt subsequent to the modification is reasonably assured, we may choose to continue to accrue interest on the loan.section below titled Recently Adopted Accounting Standards.

Income Taxes

In calculating the provision for interim income taxes, in accordance with ASC 740, Income Taxes, we apply an estimated annual effective tax rate to year-to-date ordinary income. At the end of each interim period, we estimate the effective tax rate expected to be applicable for the full fiscal year. This method differs from that described in Note 1 to the Consolidated Financial Statements in our ~~2022~~2023 Annual Report on Form 10-K, which describes our annual significant income tax accounting policy and related methodology.

Refer to Note 1 to the Consolidated Financial Statements in our ~~2022~~2023 Annual Report on Form 10-K regarding additional significant accounting policies.

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Notes to Condensed Consolidated Financial Statements (unaudited)

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Recently Adopted ~~Accounting Standards~~

~~Troubled Debt Restructurings and Vintage Disclosures (ASU 2022-02)~~

~~In March 2022, the FASB issued ASU 2022-02,~~ ~~Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures~~. The purpose of this guidance is twofold. First, the guidance eliminates TDR recognition and measurement guidance that has been deemed no longer necessary under CECL. The guidance also adds a requirement to incorporate current year gross charge-offs by origination year into the vintage tables. With respect to the TDR impacts, under CECL, credit losses for financial assets measured at amortized cost are determined based on the total current expected credit losses over the life of the financial asset or group of financial assets. Therefore, credit losses on financial assets that have been modified as TDRs would have largely been incorporated in the allowance upon initial recognition. Under ASU 2022-02, we will evaluate whether loan modifications previously characterized as TDRs represent a new loan or a continuation of an existing loan in accordance with ASC Topic 310, ~~Receivables~~. The guidance also added new disclosures that require an entity to provide information related to loan modifications that are made to borrowers that are deemed to be in financial difficulty. We adopted the ASU on January 1, 2023, on a prospective basis. The impact of these amendments was not material.

~~Recently Issued~~ Accounting Standards

Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (ASU 2022-03)

In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. The purpose of this guidance is to clarify that a contractual restriction on the ability to sell an equity security is not considered part of the unit of account of the equity security, and therefore should not be considered when measuring the equity security’s fair value. Additionally, an entity cannot separately recognize and measure a contractual-sale restriction. This guidance also adds specific disclosures related to equity securities that are subject to contractual-sale restrictions, including (1) the fair value of equity securities subject to contractual sale restrictions reflected in the balance sheet, (2) the nature and remaining duration of the restrictions, and (3) the circumstances that could cause a lapse in the restrictions. ~~The~~We adopted the amendments ~~are effective~~ on January 1, 2024, ~~with early adoption permitted.~~using the prospective approach. The ~~amendments must be applied using a prospective approach with any adjustments from the adoption of the amendments recognized in earnings and disclosed upon adoption. Management does not expect the~~ impact of these amendments ~~to be~~was not material.

Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method (ASU 2023-02)

In March 2023, the FASB issued ASU 2023-02, Investments—Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method. The purpose of this guidance is to expand the use of the proportional amortization method to certain tax equity investments made primarily for the purpose of receiving income tax credits and other income tax benefits. In order to qualify for the proportional amortization method, the following five conditions must be met: (1) it is probable that the income tax credits allocable to the tax equity investor will be available, (2) the tax equity investor does not have the ability to exercise significant influence over the operating and financial policies of the underlying project, (3) substantially all of the projected benefits are from income tax credits and other income tax benefits, (4) the tax equity investor’s projected yield is based solely on the cash flows from the income tax credits and other income tax benefits is positive, and (5) the tax equity investor is a limited liability investor in the limited liability entity for both legal and tax purposes, and the tax equity investor’s liability is limited to its capital investment. Selecting the proportional amortization method ~~will be~~is an accounting policy election that must be applied on a tax-credit-program-by-tax-credit-program basis rather than at the entity level or to individual investments. Additionally, in order to apply the proportional amortization method to qualifying investments, an entity must use the flow-through method when accounting for the receipt of the investment tax credits. This guidance also adds disclosure requirements related to tax credit programs where the proportional amortization method has been elected. We adopted the amendments on January 1, 2024, using the modified retrospective approach. The adoption of the amendments resulted in a reduction to our opening retained earnings of approximately $2 million, net of income taxes.

Recently Issued Accounting Standards and Disclosure Rules

Improvements to Reportable Segment Disclosures (ASU 2023-07)

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The purpose of this guidance is to improve reportable segment disclosure, primarily through enhanced disclosures about significant segment expenses. This ASU requires that an entity disclose, on an interim and annual basis, significant segment expenses that are regularly provided to the CODM and are included within the reported measure of segment profit or loss. This ASU also requires an entity to disclose, on an interim and annual basis, other segment items by reportable segment, including a qualitative description of the composition of those items. This “other” category is defined as the difference between segment profit or loss and segment revenue less significant segment expenses. Entities are also required to disclose the title and position of the individual, or the name of the group or committee, identified as the CODM. The amendments are effective on January 1, 2024, for annual reporting, and January 1, 2025, for interim reporting, with early adoption permitted. The amendments must be applied using a retrospective approach. Management does not expect the impact of these amendments to be material.

Improvements to Income Tax Disclosures (ASU 2023-09)

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The purpose of this guidance is to enhance the rate reconciliation and income taxes paid disclosures. This ASU requires that an entity disclose, on an annual basis, specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. For the state and local income tax category of the rate reconciliation, entities must disclose a qualitative description of the states and local jurisdictions that make up the majority (greater than 50 percent) of the category. For the income taxes paid disclosures, entities will be required to disclose, on an annual basis, the amount of income taxes paid (net of refunds received) disaggregated by federal, state, and foreign taxes. The amendments are effective on January 1, 2025, with early adoption permitted. The amendments must be applied using either a ~~modified retrospective~~prospective or retrospective approach with any adjustments from the adoption of the amendments recognized in retained earnings and disclosed upon adoption. In the event that we elect to apply the proportional amortization method to any qualifying programs upon adoption, management is still assessing the total impacts of these amendments, butapproach. Management does not expect the impact of these amendments to be material.

The Enhancement and Standardization of Climate-Related Disclosures for Investors (SEC Release No. 33-11275)

In March 2024, the SEC adopted the final rule under SEC Release No. 33-11275, The Enhancement and Standardization of Climate-Related Disclosures for Investors. This final rule requires registrants to disclose certain climate-related information in registration statements and annual reports for the fiscal year beginning January 1, 2025. On April 4, 2024, the SEC ordered that the final rule is stayed pending the completion of judicial review in the U.S. Court of Appeals for the Eighth Circuit. Management is still assessing the final rule and monitoring legal developments to determine its impact on us.

2. Held-for-sale Operations

On December 31, 2023, we committed to sell Ally Lending, a component of our Corporate and Other segment. We closed the sale of Ally Lending on March 1, 2024. For all periods presented, the operating results for our held-for-sale operations are presented within

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Notes to Condensed Consolidated Financial Statements (unaudited)

Ally Financial Inc. • Form 10-Q

continuing operations in the Condensed Consolidated Statement of Comprehensive (Loss) Income. Additionally, the assets and liabilities of our held-for-sale operations are presented separately on the Condensed Consolidated Balance Sheet as of December 31, 2023.

In connection with the classification of the operations as held-for-sale, the disposal group was measured at lower-of-cost or fair value. First, the finance receivables and loans were classified as held-for-sale and measured at the lower-of-cost or fair value, which resulted in a benefit of $16 million to our provision for credit losses during the year ended December 31, 2023. Next, the remaining assets and liabilities of the disposal group were measured at the lower-of-cost or fair value. The fair value was determined based on the sales agreement with the third-party purchaser, which is a Level 2 fair value input. The carrying value exceeded the fair value of the assets and liabilities of the disposal group, which resulted in a goodwill impairment charge of $149 million during the year ended December 31, 2023. In total, we recognized a net pretax loss of $133 million for the year ended December 31, 2023, in connection with classification of the operations as held-for-sale. During the three months ended March 31, 2024, we recognized an additional pretax loss of $7 million in connection with the sale of Ally Lending. This pretax loss relates to activity from January 1, 2024, through the March 1, 2024, closing date.

The assets and liabilities of operations held-for-sale are summarized below.


($ in millions)	December 31, 2023
Assets
Loans held-for-sale, net	$	1,940
Other assets (a)	35
Total assets	$	1,975
Liabilities
Accrued expenses and other liabilities (b)	$	17
Total liabilities	$	17

(a)Primarily includes accrued interest and fees of $25 million, goodwill of $4 million, and property and equipment of $4 million at December 31, 2023.

(b)Includes $5 million for reserves for unfunded lending commitments at December 31, 2023.

Nonrecurring Fair Value

The following table displays assets and liabilities of our held-for-sale operations measured at fair value on a nonrecurring basis and held at December 31, 2023. The disposal group was sold on March 1, 2024. Refer to Note 21 for descriptions of valuation methodologies used to measure material assets at fair value and details of the valuation models, key inputs to these models, and significant assumptions used.


	Nonrecurring fair value measurements								Lower-of-cost-or-fair-value reserve, valuation reserve, or cumulative adjustments		Total gain (loss) included in earnings
December 31, 2023 ($ in millions)	Level 1		Level 2		Level 3		Total
Assets




Loans held-for-sale, net	$	—	$	1,940	$	—	$	1,940	$	—	n/m	(a)







Other assets (b)	—		35		—		35		(149)		n/m	(a)
Total assets	$	—	$	1,975	$	—	$	1,975	$	(149)	n/m
Liabilities
Accrued expenses and other liabilities	$	—	$	17	$	—	$	17	$	—	n/m	(a)
Total liabilities	$	—	$	17	$	—	$	17	$	—	n/m

n/m = not meaningful

(a)We consider the applicable valuation allowance, allowance for loan losses, or cumulative adjustments to be the most relevant indicator of the impact on earnings caused by the fair value measurement. Accordingly, the table above excludes total gains and losses included in earnings for these items.

(b)Includes a $149 million impairment of goodwill at Ally Lending. At the time of impairment, the fair value of goodwill at Ally Lending was classified as Level 2 under the fair value hierarchy.

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Notes to Condensed Consolidated Financial Statements (unaudited)

Ally Financial Inc. • Form 10-Q

3. Revenue from Contracts with Customers

Our primary revenue sources, which include financing revenue and other interest income, are addressed by other U.S. GAAP topics and are not in the scope of ASC Topic 606, Revenue from Contracts with Customers. As part of our Insurance operations, we recognize revenue from insurance contracts, which are addressed by other U.S. GAAP topics and are not included in the scope of this standard. Certain noninsurance contracts within our Insurance operations, including VSCs, GAP contracts, and VMCs, are included in the scope of this standard. All revenue associated with noninsurance contracts is recognized over the contract term on a basis proportionate to the anticipated cost emergence. Further, commissions and sales expense incurred to obtain these contracts are amortized over the terms of the related policies and service contracts on the same basis as premiums and service revenue are earned, and all advertising costs are recognized as expense when incurred.

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~~Notes to Condensed Consolidated Financial Statements (unaudited)~~

~~Ally Financial Inc. • Form 10-Q~~

The following table presents a disaggregated view of our revenue from contracts with customers. For further information regarding our revenue recognition policies and details about the nature of our respective revenue streams, refer to Note 1 and Note 3 to the Consolidated Financial Statements in our ~~2022~~2023 Annual Report on Form 10-K.


Three months ended March 31, ($ in millions)	Three months ended March 31, ($ in millions)	Automotive Finance operations		Insurance operations		Mortgage Finance operations		Corporate Finance operations		Corporate and Other		Consolidated
2023
Three months ended March 31, ($ in millions)
Three months ended March 31, ($ in millions)														Automotive Finance operations	Insurance operations	Mortgage Finance operations	Corporate Finance operations	Corporate and Other	Consolidated
2024
Revenue from contracts with customers	Revenue from contracts with customers
Revenue from contracts with customers
Revenue from contracts with customers
Noninsurance contracts (a) (b) (c)
Noninsurance contracts (a) (b) (c)
Noninsurance contracts (a) (b) (c)	Noninsurance contracts (a) (b) (c)	$	—	$	169	$	—	$	—	$	—	$	169
Remarketing fee income	Remarketing fee income	33		—		—		—		—		33
Brokerage commissions and other revenue	Brokerage commissions and other revenue	—		—		—		—		23		23
Banking fees and interchange income (d)	Banking fees and interchange income (d)	—		—		—		—		10		10
Brokered/agent commissions	Brokered/agent commissions	—		3		—		—		—		3
Other	Other	5		—		—		—		—		5
Total revenue from contracts with customers	Total revenue from contracts with customers	38		172		—		—		33		243
All other revenue	All other revenue	39		209		4		29		(26)		255
Total other revenue (e)	Total other revenue (e)	$	77	$	381	$	4	$	29	$	7	$	498
2022
2023
Revenue from contracts with customers	Revenue from contracts with customers
Revenue from contracts with customers
Revenue from contracts with customers
Noninsurance contracts (a) (b) (c)
Noninsurance contracts (a) (b) (c)
Noninsurance contracts (a) (b) (c)	Noninsurance contracts (a) (b) (c)	$	—	$	162	$	—	$	—	$	—	$	162
Remarketing fee income	Remarketing fee income	27		—		—		—		—		27
Brokerage commissions and other revenue	Brokerage commissions and other revenue	—		—		—		—		11		11
Banking fees and interchange income (d)	Banking fees and interchange income (d)	—		—		—		—		11		11
Brokered/agent commissions	Brokered/agent commissions	—		4		—		—		—		4
Other	Other	5		—		—		—		1		6
Total revenue from contracts with customers	Total revenue from contracts with customers	32		166		—		—		23		221
All other revenue	All other revenue	36		104		14		24		43		221
Total other revenue (e)	Total other revenue (e)	$	68	$	270	$	14	$	24	$	66	$	442

(a)We had opening balances of $3.0 billion ~~and $3.1 billion~~ in unearned revenue associated with outstanding contracts at both January 1, 2024, and 2023, and ~~2022, respectively,~~$248 million and $241 ~~million and $231~~ million of these balances were recognized as insurance premiums and service revenue earned in our Condensed Consolidated Statement of Comprehensive (Loss) Income during the three months ended March 31, ~~2023,~~2024, and ~~2022,~~2023, respectively.

(b)At March 31, ~~2023,~~2024, we had unearned revenue of ~~$3.0~~$2.9 billion associated with outstanding contracts, and with respect to this balance we expect to recognize revenue of ~~$680~~$670 million during the remainder of ~~2023, $779 million in~~ 2024, ~~$604~~$751 million in 2025, ~~$423~~$594 million in 2026, $422 millionin2027, and ~~$481~~$510 million thereafter. At March 31, ~~2022,~~2023, we had unearned revenue of $3.0 billion associated with outstanding contracts.

(c)We had deferred insurance assets of $1.8 billion at both March 31, 2024, and December 31,2023, and recognized $147 million of expense during the three months ended March 31, 2024. We had deferred insurance assets of $1.8 billion at both March 31, 2023, and December 31, 2022, and recognized $144 million of expense during the three months ended March 31, 2023. We had deferred insurance assets of $1.8 billion and $1.9 billion at March 31, 2022, and December 31, 2021, respectively, and recognized $137 million of expense during the three months ended March 31, 2022.

(d)Interchange income is reported net of customer rewards. Customer rewards expense was $4$6 million and $3$4 million for the three months ended March 31, ~~2023,~~2024, and ~~2022,~~2023, respectively.

(e)Represents a component of total net revenue. Refer to Note 2223 for further information on our reportable operating segments.

In addition to the components of other revenue presented above, as part of our Automotive Finance operations, we recognized net remarketing gains of ~~$47~~$46 million and ~~$50~~$47 million for the three months ended March 31, ~~2023,~~2024, and ~~2022,~~ 2023, respectively, on the sale of off-lease vehicles. These gains are included in depreciation expense on operating lease assets in our Condensed Consolidated Statement of Comprehensive (Loss) Income.

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Notes to Condensed Consolidated Financial Statements (unaudited)

Ally Financial Inc. • Form 10-Q

3.4. Other Income, Net of Losses

Details of other income, net of losses, were as follows.

Three months ended March 31,

($ in millions)

2023

2022

Late charges and other administrative fees

Remarketing fees

Loss on nonmarketable equity investments, net (a)

(11)

(1)

(Loss) income from equity-method investments (a)

(18)

Remarketing fees

Income (loss) on nonmarketable equity investments, net (a)

Loss from equity-method investments (a)

Other, net

Total other income, net of losses

114

143

Total other income, net of losses

(a)Refer to Note 1011 for further information on our nonmarketable equity investments and equity-method investments.

4.5. Reserves for Insurance Losses and Loss Adjustment Expenses

The following table shows a rollforward of our reserves for insurance losses and loss adjustment expenses.


($ in millions)	($ in millions)	2023		2022		($ in millions)	2024	2023
Total gross reserves for insurance losses and loss adjustment expenses at January 1,	Total gross reserves for insurance losses and loss adjustment expenses at January 1,	$	119	$	122
Less: Reinsurance recoverable	Less: Reinsurance recoverable	72		81
Net reserves for insurance losses and loss adjustment expenses at January 1,	Net reserves for insurance losses and loss adjustment expenses at January 1,	47		41
Net insurance losses and loss adjustment expenses incurred related to:	Net insurance losses and loss adjustment expenses incurred related to:
Current year	Current year	87		61
Current year
Current year
Prior years (a)	Prior years (a)	1		(3)
Total net insurance losses and loss adjustment expenses incurred	Total net insurance losses and loss adjustment expenses incurred	88		58
Net insurance losses and loss adjustment expenses paid or payable related to:	Net insurance losses and loss adjustment expenses paid or payable related to:
Current year
Current year
Current year	Current year	(49)		(36)
Prior years	Prior years	(28)		(20)
Total net insurance losses and loss adjustment expenses paid or payable	Total net insurance losses and loss adjustment expenses paid or payable	(77)		(56)

Net reserves for insurance losses and loss adjustment expenses at March 31,	Net reserves for insurance losses and loss adjustment expenses at March 31,	58		43
Net reserves for insurance losses and loss adjustment expenses at March 31,
Net reserves for insurance losses and loss adjustment expenses at March 31,
Plus: Reinsurance recoverable	Plus: Reinsurance recoverable	75		80
Total gross reserves for insurance losses and loss adjustment expenses at March 31,	Total gross reserves for insurance losses and loss adjustment expenses at March 31,	$	133	$	123

(a)There have been no material adverse changes to the reserve for prior years.

~~5. Other Operating Expenses~~

~~Details of other operating expenses were as follows.~~

Three months ended March 31,
($ in millions) 2023 2022
Insurance commissions $ 157 $ 149
Technology and communications 108 97
Advertising and marketing 78 72
Lease and loan administration 48 51
Property and equipment depreciation 47 39
Regulatory and licensing fees 35 26
Professional services 32 43
Vehicle remarketing and repossession 27 20
Amortization of intangible assets (a) 7 8
Other 102 66
Total other operating expenses $ 641 $ 571

~~(a)Refer to Note 10 for further information on our intangible assets.~~

Table of Contents

Notes to Condensed Consolidated Financial Statements (unaudited)

Ally Financial Inc. • Form 10-Q

6. Other Operating Expenses

Details of other operating expenses were as follows.


	Three months ended March 31,
($ in millions)		2024		2023
Insurance commissions		$	161	$	157
Technology and communications		106		108
Advertising and marketing		73		78
Property and equipment depreciation		57		47
Regulatory and licensing fees		54		35
Lease and loan administration		48		48
Vehicle remarketing and repossession		33		27
Professional services		31		32
Amortization of intangible assets (a)		6		7



Other		108		102
Total other operating expenses		$	677	$	641

(a)Refer to Note 11 for further information on our intangible assets.

Table of Contents

Notes to Condensed Consolidated Financial Statements (unaudited)

Ally Financial Inc. • Form 10-Q

7. Investment Securities

Our investment portfolio includes various debt and equity securities. Our debt securities, which are classified as available-for-sale or held-to-maturity, include government securities, corporate bonds, asset-backed securities, and mortgage-backed securities. The cost, fair value, and gross unrealized gains and losses on available-for-sale and held-to-maturity securities were as follows.


			March 31, 2023										December 31, 2022
			Amortized cost		Gross unrealized				Fair value				Amortized cost					Gross unrealized										Fair value
					March 31, 2024
			March 31, 2024
			March 31, 2024																																		December 31, 2023
		Amortized cost																																	Amortized cost	Gross unrealized		Fair value	Amortized cost	Gross unrealized	Fair value
($ in millions)	($ in millions)			Amortized cost		gains		losses				Fair value			Amortized cost					gains					losses							Fair value
Available-for-sale securities	Available-for-sale securities
Available-for-sale securities
Available-for-sale securities
Debt securities	Debt securities
Debt securities
Debt securities
U.S. Treasury and federal agencies
U.S. Treasury and federal agencies
U.S. Treasury and federal agencies	U.S. Treasury and federal agencies		$			2,274	$	—		$	(210)					$	2,064				$	2,272				$	—			$	(256)		$	2,016
U.S. States and political subdivisions	U.S. States and political subdivisions		783		2		(72)		713				841					1					(82)					760
Foreign government	Foreign government		173		—		(9)		164				158					—					(12)					146
Agency mortgage-backed residential (a)	Agency mortgage-backed residential (a)		19,161		—		(2,741)		16,420				19,668					3					(3,038)					16,633
Mortgage-backed residential	Mortgage-backed residential		5,069		1		(788)		4,282				5,154					—					(855)					4,299
Agency mortgage-backed commercial (a)	Agency mortgage-backed commercial (a)		4,451		—		(799)		3,652				4,380					—					(845)					3,535

Asset-backed	Asset-backed		440		—		(21)		419				459					—					(26)					433
Asset-backed
Asset-backed
Corporate debt	Corporate debt		1,921		1		(186)		1,736				1,931					1					(213)					1,719
Total available-for-sale securities (b) (c) (d) (e) (f)	Total available-for-sale securities (b) (c) (d) (e) (f)		$	34,272	$	4	$	(4,826)	$	29,450			$	34,863				$	5				$	(5,327)				$	29,541

Held-to-maturity securities	Held-to-maturity securities

Held-to-maturity securities

Held-to-maturity securities
Debt securities
Debt securities
Debt securities	Debt securities
Agency mortgage-backed residential	Agency mortgage-backed residential		$	1,047	$	—	$	(156)	$	891			$	1,062				$	—				$	(178)				$	884

Total held-to-maturity securities (f) (g)			$	1,047	$	—	$	(156)	$	891			$	1,062				$	—				$	(178)				$	884
Agency mortgage-backed residential
Agency mortgage-backed residential
Mortgage-backed residential
Asset-backed retained notes
Total held-to-maturity securities (d) (f) (g)

(a)Fair value includes ~~a $46 million asset and a $12 million liability for agency mortgage-backed residential securities and a $70 million and $15 million asset for agency mortgage-backed commercial securities related to~~ basis adjustments for securities in closed portfolios with active hedges under the portfolio layer ~~method~~method. This includes a $77 million liability and a $46 million asset for agency mortgage-backed residential securities at March 31, ~~2023,~~2024, and December 31, ~~2022, respectively.~~2023, respectively, and a $32 million liability and $29 million asset for agency mortgage-backed commercial securities at March 31, 2024, and December 31, 2023. These basis adjustments would be allocated to the amortized cost of specific securities within the pool if the hedge was dedesignated. Refer to Note 1819 for additional information.

(b)Certain available-for-sale securities are included in fair value hedging relationships. Refer to Note 1819 for additional information.

(c)Certain entities related to our Insurance operations are required to deposit securities with state regulatory authorities. These deposited securities totaled $12 million at both March 31, ~~2023,~~2024, and December 31, ~~2022.~~2023.

(d)~~Available-for-sale~~Investment securities with a fair value of ~~$4.9~~$3.7 billion and ~~$3.9~~$4.7 billion were pledged as collateral at March 31, ~~2023,~~2024, and December 31, ~~2022,~~2023, respectively. This primarily included ~~$3.4~~$3.2 billion and ~~$3.0~~$3.3 billion pledged to secure advances from the FHLB at March 31, ~~2023,~~2024, and December 31, ~~2022,~~2023, respectively. This also included securities pledged for other purposes as required by contractual obligations or law, under which agreements we granted the counterparty the right to sell or pledge ~~$1.5~~$569 million and $1.4 billion ~~and $899 million~~ of the underlying available-for-sale securities at March 31, ~~2023,~~2024, and December 31, ~~2022,~~2023, respectively.

(e)Totals do not include accrued interest receivable, which was ~~$87~~$75 million and ~~$91~~$76 million at March 31, ~~2023,~~2024, and December 31, ~~2022,~~2023, respectively. Accrued interest receivable is included in other assets on our Condensed Consolidated Balance Sheet.

(f)There was no allowance for credit losses recorded at both March 31, ~~2023,~~2024, or December 31, ~~2022,~~2023, as management determined that there were no expected credit losses in our portfolio of available-for-sale and held-to-maturity securities.

(g)Totals do not include accrued interest receivable, which was $2$13 million at both March 31, ~~2023,~~2024, and December 31, ~~2022.~~2023. Accrued interest receivable is included in other assets on our Condensed Consolidated Balance Sheet.

In the fourth quarter of 2023, non-agency mortgage-backed residential securities with a fair value of $3.6 billion were transferred from available-for-sale to held-to-maturity. At the time of the transfer, $911 million of unrealized losses were retained in accumulated other comprehensive loss on our Condensed Consolidated Balance Sheet. The transfer of these securities to held-to-maturity reduces our exposure to fluctuations in accumulated other comprehensive loss on our Condensed Consolidated Balance Sheet that can result from unrealized losses on available-for-sale securities due to changes in market interest rates. The unrealized loss at the time of transfer is amortized over the remaining life of the security, offsetting the amortization of the security’s premium or discount, and resulting in no impact to the Condensed Consolidated Statement of Comprehensive (Loss) Income. Refer to Note 16 for additional information.

Table of Contents

Notes to Condensed Consolidated Financial Statements (unaudited)

Ally Financial Inc. • Form 10-Q

The maturity distribution of debt securities outstanding is summarized in the following tables based upon contractual maturities. Call or prepayment options may cause actual maturities to differ from contractual maturities.


			Total				Due in one year or less				Due after one year through five years				Due after five years through ten years				Due after ten years
		Total																															Total						Due in one year or less					Due after one year through five years								Due after five years through ten years						Due after ten years
($ in millions)	($ in millions)		Amount		Yield		Amount		Yield		Amount		Yield		Amount		Yield		Amount		Yield		($ in millions)			Amount				Yield					Amount			Yield			Amount				Yield				Amount					Yield			Amount					Yield
March 31, 2023
March 31, 2024
Fair value of available-for-sale securities (a)	Fair value of available-for-sale securities (a)
Fair value of available-for-sale securities (a)
Fair value of available-for-sale securities (a)
U.S. Treasury and federal agencies
U.S. Treasury and federal agencies
U.S. Treasury and federal agencies	U.S. Treasury and federal agencies		$	2,064	1.6	%	$	—	—	%	$	946	1.3	%	$	1,118	1.8	%	$	—	—	%		$	2,057			1.6	1.6		%			$	218		0.9	0.9		%	$	1,112	1.5			1.5		%		$	727		1.9		1.9	%			$	—	—			—	%
U.S. States and political subdivisions	U.S. States and political subdivisions		713		3.1		17		2.8		55		2.6		104		3.3		537		3.2
Foreign government	Foreign government		164		1.9		14		0.9		79		2.0		71		2.1		—		—
Agency mortgage-backed residential (b)	Agency mortgage-backed residential (b)		16,420		2.6		—		—		—		—		51		2.3		16,369		2.6
Mortgage-backed residential	Mortgage-backed residential		4,282		2.8		—		—		—		—		14		2.9		4,268		2.8
Agency mortgage-backed commercial (b)	Agency mortgage-backed commercial (b)		3,652		2.2		—		—		96		3.1		1,355		2.2		2,201		2.2

Asset-backed	Asset-backed		419		1.8		—		—		405		1.7		12		5.0		2		2.8
Asset-backed
Asset-backed
Corporate debt	Corporate debt		1,736		2.5		96		2.2		969		2.4		656		2.6		15		5.6
Total available-for-sale securities	Total available-for-sale securities		$	29,450	2.5		$	127	2.1		$	2,550	1.9		$	3,381	2.2		$	23,392	2.6
Amortized cost of available-for-sale securities	Amortized cost of available-for-sale securities		$	34,272			$	130			$	2,729			$	3,874			$	27,539
Amortized cost of held-to-maturity securities	Amortized cost of held-to-maturity securities
Amortized cost of held-to-maturity securities
Amortized cost of held-to-maturity securities
Agency mortgage-backed residential	Agency mortgage-backed residential		$	1,047	2.8	%	$	—	—	%	$	—	—	%	$	—	—	%	$	1,047	2.8	%

Agency mortgage-backed residential
Agency mortgage-backed residential																										$	984			2.8		%			$	—		—		%	$	—			—		%		$	—				—	%		$	984				2.8	%
Mortgage-backed residential
Asset-backed retained notes
Total held-to-maturity securities	Total held-to-maturity securities		$	1,047	2.8		$	—	—		$	—	—		$	—	—		$	1,047	2.8
December 31, 2022
December 31, 2023
Fair value of available-for-sale securities (a)	Fair value of available-for-sale securities (a)
Fair value of available-for-sale securities (a)
Fair value of available-for-sale securities (a)
U.S. Treasury and federal agencies
U.S. Treasury and federal agencies
U.S. Treasury and federal agencies	U.S. Treasury and federal agencies		$	2,016	1.6	%	$	—	—	%	$	716	1.3	%	$	1,300	1.7	%	$	—	—	%		$	2,075			1.6	1.6		%			$	215		0.9	0.9		%	$	1,120	1.5			1.5		%		$	740		1.9		1.9	%			$	—	—			—	%
U.S. States and political subdivisions	U.S. States and political subdivisions		760		3.2		26		2.7		60		2.7		112		3.3		562		3.2
Foreign government	Foreign government		146		1.8		13		0.8		74		1.8		59		1.9		—		—
Agency mortgage-backed residential (b)	Agency mortgage-backed residential (b)		16,633		2.6		—		—		—		—		27		2.0		16,606		2.6
Mortgage-backed residential	Mortgage-backed residential		4,299		2.8		—		—		—		—		14		2.9		4,285		2.8
Agency mortgage-backed commercial (b)	Agency mortgage-backed commercial (b)		3,535		2.2		—		—		66		3.1		1,234		2.1		2,235		2.1

Asset-backed	Asset-backed		433		1.7		—		—		401		1.7		25		1.8		7		3.5
Asset-backed
Asset-backed
Corporate debt	Corporate debt		1,719		2.4		86		2.4		912		2.3		705		2.6		16		4.9
Total available-for-sale securities	Total available-for-sale securities		$	29,541	2.5		$	125	2.3		$	2,229	1.9		$	3,476	2.1		$	23,711	2.6
Amortized cost of available-for-sale securities	Amortized cost of available-for-sale securities		$	34,863			$	126			$	2,403			$	4,048			$	28,286
Amortized cost of held-to-maturity securities	Amortized cost of held-to-maturity securities
Amortized cost of held-to-maturity securities
Amortized cost of held-to-maturity securities
Agency mortgage-backed residential	Agency mortgage-backed residential		$	1,062	2.8	%	$	—	—	%	$	—	—	%	$	—	—	%	$	1,062	2.8	%

Agency mortgage-backed residential
Agency mortgage-backed residential																										$	999			2.8		%			$	—		—		%	$	—			—		%		$	—				—	%		$	999				2.8	%
Mortgage-backed residential
Asset-backed retained notes
Total held-to-maturity securities	Total held-to-maturity securities		$	1,062	2.8		$	—	—		$	—	—		$	—	—		$	1,062	2.8

(a)Yield is calculated using the effective yield of each security at the end of the period, weighted based on the market value. The effective yield considers the contractual coupon and amortized cost, and excludes expected capital gains and losses.

(b)Fair value includes ~~a $46 million asset and a $12 million liability for agency mortgage-backed residential securities and a $70 million and $15 million asset for agency mortgage-backed commercial securities related to~~ basis adjustments for securities in closed portfolios with active hedges under the portfolio layer ~~method~~method. This includes a $77 million liability and a $46 million asset for agency mortgage-backed residential securities at March 31, ~~2023,~~2024, and December 31, ~~2022, respectively.~~2023, respectively, and a $32 million liability and $29 million asset for agency mortgage-backed commercial securities at March 31, 2024, and December 31, 2023. These basis adjustments would be allocated to the amortized cost of specific securities within the pool if the hedge was dedesignated. Refer to Note 1819 for additional information.

The balances of cash equivalents were ~~$17~~$386 million and ~~$18~~$36 million at March 31, ~~2023,~~2024, and December 31, ~~2022,~~2023, respectively, and were composed primarily of money-market funds and short-term ~~securities, including U.S. Treasury bills.~~securities.

1819

Table of Contents

Notes to Condensed Consolidated Financial Statements (unaudited)

Ally Financial Inc. • Form 10-Q

The following table presents interest and dividends on investment securities.

Three months ended March 31,

($ in millions)

2023

2022

Taxable interest

217

174

Taxable interest

Taxable dividends

Interest and dividends exempt from U.S. federal income tax

Interest and dividends on investment securities

226

183

Interest and dividends on investment securities

The following table presents gross gains and losses realized upon the sales of available-for-sale securities, and net gains or losses on equity securities held during the period.

Three months ended March 31,

($ in millions)

2023

2022

Available-for-sale securities

Gross realized gains

Net realized gain on available-for-sale securities

Net realized gain on equity securities

Net unrealized gain (loss) on equity securities

(65)

Net realized gain on equity securities

Net unrealized gain on equity securities

Other gain on investments, net

The following table presents the credit quality of our held-to-maturity securities, based on the latest available information as of March 31, ~~2023,~~2024, and December 31, ~~2022.~~2023. The credit ratings are sourced from nationally recognized statistical rating organizations, which include S&P, Moody’s, and Fitch. The ratings presented are a composite of the ratings sourced from the agencies or, if the ratings cannot be sourced from the agencies, are based on the asset type of the particular security. All our held-to-maturity securities were current in their payment of principal and interest as of both March 31, ~~2023,~~2024, and December 31, ~~2022.~~2023. We have not recorded any interest income reversals on our held-to-maturity securities during the three months ended March 31, ~~2023,~~2024, or ~~2022.~~2023.

March 31, 2023

December 31, 2022

($ in millions)

Total (a)

($ in millions)

AAA

BBB

Total (a)

March 31, 2024

Debt securities

Agency mortgage-backed residential

1,047

1,062

Agency mortgage-backed residential

Mortgage-backed residential

Asset-backed retained notes

Total held-to-maturity securities

1,047

1,062

December 31, 2023

Debt securities

Agency mortgage-backed residential

Mortgage-backed residential

Asset-backed retained notes

Total held-to-maturity securities

(a)Rating agencies indicate that they base their ratings on many quantitative and qualitative factors, which may include capital adequacy, liquidity, asset quality, business mix, level and quality of earnings, and the current operating, legislative, and regulatory environment. A credit rating is not a recommendation to buy, sell, or hold securities, and the ratings are subject to revision or withdrawal at any time by the assigning rating agency.

1920

Table of Contents

Notes to Condensed Consolidated Financial Statements (unaudited)

Ally Financial Inc. • Form 10-Q

The following table summarizes available-for-sale securities in an unrealized loss position, which we evaluated to determine if a credit loss exists requiring the recognition of an allowance for credit losses. For additional information on our methodology, refer to Note 1 to the Consolidated Financial Statements in our ~~2022~~2023 Annual Report on Form 10-K. As of March 31, ~~2023,~~2024, and December 31, ~~2022,~~2023, we did not have the intent to sell the available-for-sale securities with an unrealized loss position and we do not believe it is more likely than not that we will be required to sell these securities before recovery of their amortized cost basis. We have not recorded any interest income reversals on our available-for-sale securities during the three months ended March 31, ~~2023,~~2024, or ~~2022.~~2023.


		March 31, 2024																						March 31, 2024					December 31, 2023
			March 31, 2023								December 31, 2022

			Less than 12 months				12 months or longer				Less than 12 months				12 months or longer
			Less than 12 months
			Less than 12 months
			Less than 12 months																			12 months or longer			Less than 12 months		12 months or longer
($ in millions)	($ in millions)		Fair value		Unrealized loss		Fair value		Unrealized loss		Fair value		Unrealized loss		Fair value		Unrealized loss		($ in millions)	Fair value	Unrealized loss		Fair value		Unrealized loss	Fair value		Unrealized loss		Fair value	Unrealized loss
Available-for-sale securities	Available-for-sale securities
Debt securities	Debt securities
Debt securities
Debt securities
U.S. Treasury and federal agencies
U.S. Treasury and federal agencies
U.S. Treasury and federal agencies	U.S. Treasury and federal agencies		$	10	$	—	$	2,054	$	(210)	$	529	$	(68)	$	1,487	$	(188)
U.S. States and political subdivisions	U.S. States and political subdivisions		164		(2)		439		(70)		547		(55)		135		(27)
Foreign government	Foreign government		16		—		137		(9)		75		(4)		71		(8)
Agency mortgage-backed residential (a)	Agency mortgage-backed residential (a)		1,998		(95)		14,364		(2,646)		7,472		(892)		8,978		(2,146)
Mortgage-backed residential	Mortgage-backed residential		512		(29)		3,726		(759)		1,985		(289)		2,287		(566)
Agency mortgage-backed commercial (a)	Agency mortgage-backed commercial (a)		507		(24)		3,089		(775)		996		(124)		2,535		(721)

Asset-backed	Asset-backed		50		(1)		362		(20)		162		(4)		272		(22)
Asset-backed
Asset-backed
Corporate debt	Corporate debt		262		(9)		1,406		(177)		782		(67)		895		(146)
Total available-for-sale securities	Total available-for-sale securities		$	3,519	$	(160)	$	25,577	$	(4,666)	$	12,548	$	(1,503)	$	16,660	$	(3,824)

(a)Includes basis adjustments for certain securities that are included in closed portfolios with active hedges under the portfolio layer method at March 31, ~~2023,~~2024, and December 31, ~~2022.~~2023. The basis adjustments would be allocated to the amortized cost of specific securities within the pool if the hedge was dedesignated. Refer to Note 1819 for additional information.

During the three months ended March 31, ~~2023,~~2024, and ~~2022,~~2023, management determined that there were no expected credit losses for securities in an unrealized loss position. This analysis considered a variety of factors including, but not limited to, performance indicators of the issuer, default rates, industry analyst reports, credit ratings, and other relevant information, which indicated that contractual cash flows are expected to occur. As a result of this evaluation, management determined that no credit reserves were required at March 31, ~~2023,~~2024, or December 31, ~~2022.~~2023.

2021

Table of Contents

Notes to Condensed Consolidated Financial Statements (unaudited)

Ally Financial Inc. • Form 10-Q

7.8. Finance Receivables and Loans, Net

The composition of finance receivables and loans reported at amortized cost basis was as follows.

($ in millions)

March 31, 2023

December 31, 2022

($ in millions)

March 31, 2024

December 31, 2023

Consumer automotive (a)

83,640

83,286

Consumer automotive (a)

Consumer mortgage

Mortgage Finance (b)

19,189

19,445

Mortgage — Legacy (c)

272

290

Total consumer mortgage

19,461

19,735

Consumer other

Personal Lending (d)

2,074

1,990

Credit Card

1,640

1,599

Total consumer other

3,714

3,589

Total consumer

106,815

106,610

Commercial

Commercial and industrial

Automotive

14,905

14,595

Other

9,075

9,154

Commercial real estate

5,509

5,389

Total commercial

29,489

29,138

Total finance receivables and loans (e) (f)

136,304

135,748

Total finance receivables and loans (d) (e)

(a)Certain finance receivables and loans are included in fair value hedging relationships. Refer to Note 1819 for additional information.

(b)Includes loans originated as interest-only mortgage loans of $2 million ~~and $3 million~~ at both March 31, ~~2023,~~2024, and December 31, ~~2022, respectively,~~2023, of which all have exited the interest-only period.

(c)Includes loans originated as interest-only mortgage loans of ~~$16~~$12 million and ~~$17~~$13 million at March 31, ~~2023,~~2024, and December 31, ~~2022,~~2023, respectively, of which all have exited the interest-only period.

(d)~~Includes $2 million and $3 million of finance receivables at March 31, 2023, and December 31, 2022, respectively, for which we have elected the fair value option.~~

~~(e)~~Totals include net unearned income, unamortized premiums and discounts, and deferred fees and costs of $2.3 billionat both March 31, ~~2023,~~2024, and December 31, ~~2022.~~2023.

~~(f)~~(e)Totals do not include accrued interest receivable, which was ~~$726~~$856 million and ~~$707~~$853 million at March 31, ~~2023,~~2024, and December 31, ~~2022,~~2023, respectively. Accrued interest receivable is included in other assets on our Condensed Consolidated Balance Sheet. Billed interest on our credit card loans is included within finance receivables and loans, net.

Table of Contents

Notes to Condensed Consolidated Financial Statements (unaudited)

Ally Financial Inc. • Form 10-Q

The following tables present an analysis of the activity in the allowance for loan losses on finance receivables and loans for the three months ended March 31, ~~2023,~~2024, and ~~2022,~~2023, respectively.

Three months ended March 31, 2023 ($ in millions)
Consumer automotive Consumer mortgage Consumer other (a) Commercial Total
Allowance at January 1, 2023 $ 3,020 $ 27 $ 426 $ 238 $ 3,711
Charge-offs (b) (536) (1) (64) — (601)
Recoveries 185 2 5 — 192
Net charge-offs (351) 1 (59) — (409)
Provision for credit losses (c) 353 (4) 88 12 449
Other — (1) — 1 —
Allowance at March 31, 2023 $ 3,022 $ 23 $ 455 $ 251 $ 3,751


Three months ended March 31, 2024 ($ in millions)	Consumer automotive		Consumer mortgage		Consumer other		Commercial		Total
Allowance at January 1, 2024	$	3,083	$	21	$	293	$	190	$	3,587
Charge-offs (a)	(688)		(1)		(68)		(1)		(758)
Recoveries	211		1		6		1		219
Net charge-offs	(477)		—		(62)		—		(539)
Write-downs from transfers to held-for-sale (b)	(5)		—		—		—		(5)
Provision for credit losses	449		—		60		(2)		507

Allowance at March 31, 2024	$	3,050	$	21	$	291	$	188	$	3,550

(a)Refer to Note 1 to the Consolidated Financial Statements in our 2023 Annual Report on Form 10-K for information regarding our charge-off policies.

(b)Consumer automotive includes a $5 million reduction of allowance from the completion of a retail securitization transaction during the three months ended March 31, 2024, resulting in the deconsolidation of the assets and liabilities from our Condensed Consolidated Balance Sheet. Refer to Note 10 for further information.


Three months ended March 31, 2023 ($ in millions)	Consumer automotive		Consumer mortgage		Consumer other (a)		Commercial		Total


Allowance at January 1, 2023	$	3,020	$	27	$	426	$	238	$	3,711
Charge-offs (b)	(536)		(1)		(64)		—		(601)
Recoveries	185		2		5		—		192
Net charge-offs	(351)		1		(59)		—		(409)
Provision for credit losses (c)	353		(4)		88		12		449
Other	—		(1)		—		1		—
Allowance at March 31, 2023	$	3,022	$	23	$	455	$	251	$	3,751

(a)Excludes$3 $3 million and $2 million of finance receivables and loans at January 1, 2023, and March 31, 2023, respectively, for which we have elected the fair value option and incorporate no allowance for loan losses.

(b)Refer to Note 1 to the Consolidated Financial Statements in our ~~2022~~2023 Annual Report on Form 10-K for information regarding our charge-off policies.

(c)Excludes $3 million of benefit for credit losses related to our reserve for unfunded commitments. The liability related to the reserve for unfunded commitments is included in accrued expenses and other liabilities on our Condensed Consolidated Balance Sheet.

~~Table of Contents~~

~~Notes to Condensed Consolidated Financial Statements (unaudited)~~

~~Ally Financial Inc. • Form 10-Q~~

Three months ended March 31, 2022 ($ in millions)
Consumer automotive Consumer mortgage Consumer other (a) Commercial Total
Allowance at January 1, 2022 $ 2,769 $ 27 $ 221 $ 250 $ 3,267
Charge-offs (b) (276) (1) (24) — (301)
Recoveries 163 3 1 1 168
Net charge-offs (113) 2 (23) 1 (133)
Provision for credit losses 107 (3) 59 4 167
Other — — 1 (1) —
Allowance at March 31, 2022 $ 2,763 $ 26 $ 258 $ 254 $ 3,301

~~(a)Excludes $7 million of finance receivables and loans at both January 1, 2022, and March 31, 2022, for which we have elected the fair value option and incorporate no allowance for loan losses.~~

~~(b)Refer to Note 1 to the Consolidated Financial Statements in our 2022 Annual Report on Form 10-K for information regarding our charge-off policies.~~

The following table presents sales of finance receivables and loans and transfers of finance receivables and loans from held-for-investment to held-for-sale based on net carrying value.

Three months ended March 31,

($ in millions)

2023

2022

($ in millions)

Consumer automotive

Consumer mortgage

—

Commercial

Total sales and transfers

—

Total sales and transfers

The following table presents purchases of finance receivables and loans based on unpaid principal balance at the time of purchase.

Three months ended March 31,
($ in millions) 2023 2022
Consumer automotive $ 758 $ 493
Consumer mortgage 2 825
Commercial 7 —
Total purchases of finance receivables and loans (a) $ 767 $ 1,318

~~(a)Excludes $4 million of finance receivables and loans purchased during the three months ended March 31, 2022, for which we have elected the fair value option.~~


	Three months ended March 31,
($ in millions)	2024		2023
Consumer automotive	$	981	$	758
Consumer mortgage	4		2

Commercial	—		7
Total purchases of finance receivables and loans	$	985	$	767

2223

Table of Contents

Notes to Condensed Consolidated Financial Statements (unaudited)

Ally Financial Inc. • Form 10-Q

Nonaccrual Loans

The following ~~tables present~~table presents the amortized cost of our finance receivables and loans on nonaccrual status. All consumer or commercial finance receivables and loans that were 90 days or more past due were on nonaccrual status as of March 31, ~~2023,~~2024, and December 31, ~~2022.~~2023. Refer to Note 1 to the Consolidated Financial Statements in our 2023 Annual Report on Form 10-K for additional information on our accounting policy for finance receivables and loans on nonaccrual status.


				March 31, 2023						December 31, 2022
				March 31, 2024
				March 31, 2024
				March 31, 2024															December 31, 2023
($ in millions)	($ in millions)	Nonaccrual status at Jan. 1, 2023		Nonaccrual status		Nonaccrual with no allowance (a)		Nonaccrual status at Jan. 1, 2022		Nonaccrual status		Nonaccrual with no allowance (a)		($ in millions)	Nonaccrual status at Jan. 1, 2024	Nonaccrual status	Nonaccrual with no allowance (a)	Nonaccrual status at Jan. 1, 2023		Nonaccrual status	Nonaccrual with no allowance (a)
Consumer automotive	Consumer automotive	$	1,187	$	1,110	$	473	$	1,078	$	1,187	$	445
Consumer mortgage	Consumer mortgage
Mortgage Finance	Mortgage Finance	34		34		21		59		34		25
Mortgage Finance
Mortgage Finance
Mortgage — Legacy	Mortgage — Legacy	15		15		13		26		15		14
Total consumer mortgage	Total consumer mortgage	49		49		34		85		49		39
Consumer other	Consumer other
Personal Lending		13		12		—		5		13		—
Personal Lending (b)
Personal Lending (b)
Personal Lending (b)
Credit Card	Credit Card	43		54		—		11		43		—
Total consumer other	Total consumer other	56		66		—		16		56		—
Total consumer	Total consumer	1,292		1,225		507		1,179		1,292		484
Commercial	Commercial
Commercial and industrial	Commercial and industrial
Commercial and industrial
Commercial and industrial
Automotive
Automotive
Automotive	Automotive	5		—		—		33		5		2
Other	Other	157		159		4		221		157		33
Commercial real estate	Commercial real estate	—		—		—		3		—		—
Total commercial	Total commercial	162		159		4		257		162		35
Total finance receivables and loans (b)		$	1,454	$	1,384	$	511	$	1,436	$	1,454	$	519
Total finance receivables and loans (c)

(a)Represents a component of nonaccrual status at end of period.

(b)Personal Lending finance receivables and loans were transferred to loans held-for-sale, and were included in assets of operations held-for-sale on our Condensed Consolidated Balance Sheet at December 31, 2023. We closed the sale of Ally Lending during the three months ended March 31, 2024. Refer to Note 2 for additional information.

(c)We recorded interest income from cash payments associated with finance receivables and loans on nonaccrual status of $5 million and $3 million for ~~both~~ the three months ended March 31, 2024, and 2023, ~~and 2022.~~respectively.

2324

Table of Contents

Notes to Condensed Consolidated Financial Statements (unaudited)

Ally Financial Inc. • Form 10-Q

Credit Quality Indicators

We evaluate the credit quality of our consumer loan portfolio based on the aging status of the loan and by payment activity. Loan delinquency reporting is generally based upon borrower payment activity, relative to the contractual terms of the loan.

The following tables present the amortized cost basis of our consumer finance receivables and loans by credit quality indicator based on delinquency status and origination year.


		Origination year														Revolving loans converted to term
March 31, 2023 ($ in millions)		2023		2022		2021		2020		2019		2018 and prior		Revolving loans				Total
	Origination year
March 31, 2024 ($ in millions)
March 31, 2024 ($ in millions)
March 31, 2024 ($ in millions)																				2024	2023	2022	2021	2020	2019 and prior	Revolving loans	Total
Consumer automotive	Consumer automotive
Current
Current
Current	Current	$	7,801	$	33,822	$	20,093	$	9,232	$	5,604	$	4,098	$	—	$	—	$	80,650
30–59 days past due	30–59 days past due	23		769		756		308		226		210		—		—		2,292
60–89 days past due	60–89 days past due	1		244		273		108		74		65		—		—		765
90 or more days past due	90 or more days past due	—		88		96		38		31		35		—		—		288
Total consumer automotive (a)	Total consumer automotive (a)	7,825		34,923		21,218		9,686		5,935		4,408		—		—		83,995
Consumer mortgage	Consumer mortgage
Mortgage Finance	Mortgage Finance
Mortgage Finance
Mortgage Finance
Current
Current
Current	Current	21		2,271		10,797		1,917		794		3,316		—		—		19,116
30–59 days past due	30–59 days past due	—		5		9		4		4		16		—		—		38
60–89 days past due	60–89 days past due	—		1		2		1		—		8		—		—		12
90 or more days past due	90 or more days past due	—		2		4		—		1		16		—		—		23
Total Mortgage Finance	Total Mortgage Finance	21		2,279		10,812		1,922		799		3,356		—		—		19,189
Mortgage — Legacy	Mortgage — Legacy
Current	Current	—		—		—		—		—		59		177		18		254
Current
Current
30–59 days past due	30–59 days past due	—		—		—		—		—		2		1		—		3
60–89 days past due		—		—		—		—		—		2		1		—		3

90 or more days past due
90 or more days past due
90 or more days past due	90 or more days past due	—		—		—		—		—		8		2		2		12
Total Mortgage — Legacy	Total Mortgage — Legacy	—		—		—		—		—		71		181		20		272
Total consumer mortgage	Total consumer mortgage	21		2,279		10,812		1,922		799		3,427		181		20		19,461
Consumer other	Consumer other
Personal Lending

Credit Card

Credit Card

Credit Card
Current	Current	384		1,272		327		39		4		1		—		—		2,027
30–59 days past due		1		12		5		—		—		—		—		—		18
60–89 days past due		—		11		4		—		—		—		—		—		15
90 or more days past due		—		8		4		—		—		—		—		—		12
Total Personal Lending (b)		385		1,303		340		39		4		1		—		—		2,072
Credit Card
Current
Current	Current	—		—		—		—		—		—		1,548		—		1,548
30–59 days past due	30–59 days past due	—		—		—		—		—		—		22		—		22
60–89 days past due	60–89 days past due	—		—		—		—		—		—		19		—		19
90 or more days past due	90 or more days past due	—		—		—		—		—		—		51		—		51
Total Credit Card	Total Credit Card	—		—		—		—		—		—		1,640		—		1,640
Total consumer other	Total consumer other	385		1,303		340		39		4		1		1,640		—		3,712
Total consumer	Total consumer	$	8,231	$	38,505	$	32,370	$	11,647	$	6,738	$	7,836	$	1,821	$	20	$	107,168

(a)Certain consumer automotive loans are included in fair value hedging relationships. The amortized cost excludes a liability of ~~$355~~$160 million related to basis adjustments for loans in closed portfolios with active hedges under the portfolio layer method at March 31, 2024. These basis adjustments would be allocated to the amortized cost of specific loans within the pool if the hedge was dedesignated. Refer to Note 19 for additional information.

Table of Contents

Notes to Condensed Consolidated Financial Statements (unaudited)

Ally Financial Inc. • Form 10-Q


	Origination year														Revolving loans converted to term
December 31, 2023 ($ in millions)	2023		2022		2021		2020		2019		2018 and prior		Revolving loans				Total
Consumer automotive
Current	$	30,677	$	23,699	$	14,209	$	6,132	$	3,306	$	1,876	$	—	$	—	$	79,899
30–59 days past due	539		1,041		739		270		181		122		—		—		2,892
60–89 days past due	170		443		303		109		68		45		—		—		1,138
90 or more days past due	64		167		122		44		32		28		—		—		457
Total consumer automotive (a)	31,450		25,350		15,373		6,555		3,587		2,071		—		—		84,386
Consumer mortgage
Mortgage Finance
Current	152		2,170		10,374		1,836		747		3,073		—		—		18,352
30–59 days past due	1		8		14		3		3		20		—		—		49
60–89 days past due	—		2		4		3		—		5		—		—		14
90 or more days past due	—		1		4		1		2		19		—		—		27
Total Mortgage Finance	153		2,181		10,396		1,843		752		3,117		—		—		18,442
Mortgage — Legacy
Current	—		—		—		—		—		51		142		17		210
30–59 days past due	—		—		—		—		—		3		—		1		4
60–89 days past due	—		—		—		—		—		1		1		—		2
90 or more days past due	—		—		—		—		—		6		2		1		9
Total Mortgage — Legacy	—		—		—		—		—		61		145		19		225
Total consumer mortgage	153		2,181		10,396		1,843		752		3,178		145		19		18,667
Consumer other






Credit Card
Current	—		—		—		—		—		—		1,828		—		1,828
30–59 days past due	—		—		—		—		—		—		39		—		39
60–89 days past due	—		—		—		—		—		—		34		—		34
90 or more days past due	—		—		—		—		—		—		89		—		89
Total Credit Card	—		—		—		—		—		—		1,990		—		1,990
Total consumer other (b)	—		—		—		—		—		—		1,990		—		1,990
Total consumer	$	31,603	$	27,531	$	25,769	$	8,398	$	4,339	$	5,249	$	2,135	$	19	$	105,043

(a)Certain consumer automotive loans are included in fair value hedging relationships. The amortized cost excludes a liability of $66 million related to basis adjustments for loans in closed portfolios with active hedges under the portfolio layer method at December 31, 2023. These basis adjustments would be allocated to the amortized cost of specific loans within the pool if the hedge was dedesignated. Refer to Note 1819 for additional information.

(b)Excludes ~~$2 million of finance receivables at March 31, 2023, for which we have elected the fair value option.~~

~~Table of Contents~~

~~Notes to Condensed Consolidated Financial Statements (unaudited)~~

~~Ally Financial Inc. • Form 10-Q~~

Origination year Revolving loans converted to term
December 31, 2022 ($ in millions)
2022 2021 2020 2019 2018 2017 and prior Revolving loans Total
Consumer automotive
Current $ 36,127 $ 22,102 $ 10,341 $ 6,451 $ 3,237 $ 1,890 $ — $ — $ 80,148
30–59 days past due 707 878 370 284 165 120 — — 2,524
60–89 days past due 207 324 135 99 55 38 — — 858
90 or more days past due 73 111 47 38 23 24 — — 316
Total consumer automotive (a) 37,114 23,415 10,893 6,872 3,480 2,072 — — 83,846
Consumer mortgage
Mortgage Finance
Current 2,292 10,893 1,946 815 577 2,805 — — 19,328
30–59 days past due 15 29 4 3 4 26 — — 81
60–89 days past due 2 4 — 1 1 3 — — 11
90 or more days past due — 1 — 2 8 14 — — 25
Total Mortgage Finance 2,309 10,927 1,950 821 590 2,848 — — 19,445
Mortgage — Legacy
Current — — — — — 62 191 18 271
30–59 days past due — — — — — 4 1 — 5
60–89 days past due — — — — — — — 1 1
90 or more days past due — — — — — 8 3 2 13
Total Mortgage — Legacy — — — — — 74 195 21 290
Total consumer mortgage 2,309 10,927 1,950 821 590 2,922 195 21 19,735
Consumer other
Personal Lending
Current 1,492 392 48 5 1 — — — 1,938
30–59 days past due 14 6 1 — — — — — 21
60–89 days past due 9 5 1 — — — — — 15
90 or more days past due 8 5 — — — — — — 13
Total Personal Lending (b) 1,523 408 50 5 1 — — — 1,987
Credit Card
Current — — — — — — 1,518 — 1,518
30–59 days past due — — — — — — 22 — 22
60–89 days past due — — — — — — 18 — 18
90 or more days past due — — — — — — 41 — 41
Total Credit Card — — — — — — 1,599 — 1,599
Total consumer other 1,523 408 50 5 1 — 1,599 — 3,586
Total consumer $ 40,946 $ 34,750 $ 12,893 $ 7,698 $ 4,071 $ 4,994 $ 1,794 $ 21 $ 107,167

~~(a)~~Certain consumer automotive loans are included in fair value hedging relationships. The amortized cost excludes a liability of $560 million related to basis adjustments for loans in closed portfolios with active hedges under the portfolio layer method at December 31, 2022. These basis adjustments would be allocated to the amortized cost of specific loans within the pool if the hedge was dedesignated. Refer to Note 18 for additional information.

~~(b)Excludes $3 million of finance receivables at December 31, 2022, for which we have elected the fair value option.~~

~~Table of Contents~~

~~Notes to Condensed Consolidated Financial Statements (unaudited)~~

~~Ally Financial Inc. • Form 10-Q~~

~~The following table presents gross charge-offs of our~~Personal Lending finance receivables and loans, ~~for each portfolio class by origination year that occurred~~which were transferred to loans held-for-sale, and were included in assets of operations held-for-sale on our Condensed Consolidated Balance Sheet at December 31, 2023. We closed the sale of Ally Lending during the three months ended March 31, ~~2023.~~2024. Refer to Note ~~1 to the Consolidated Financial Statements in our 2022 Annual Report on Form 10-K~~2 for additional ~~information on our charge-off policy.~~information.
Origination year Revolving loans converted to term
Three months ended March 31, 2023 ($ in millions)
2023 2022 2021 2020 2019 2018 and prior Revolving loans Total
Consumer automotive $ 2 $ 220 $ 178 $ 56 $ 42 $ 38 $ — $ — $ 536
Consumer mortgage
Mortgage — Legacy — — — — — 1 — — 1
Total consumer mortgage — — — — — 1 — — 1
Consumer other
Personal Lending — 21 9 1 — — — — 31
Credit Card — — — — — — 32 1 33
Total consumer other — 21 9 1 — — 32 1 64
Total consumer 2 241 187 57 42 39 32 1 601
Total finance receivables and loans $ 2 $ 241 $ 187 $ 57 $ 42 $ 39 $ 32 $ 1 $ 601

We evaluate the credit quality of our commercial loan portfolio using regulatory risk ratings, which are based on relevant information about the borrower’s financial condition, including current financial information, historical payment experience, credit documentation, and current economic trends, among other factors. We use the following definitions for risk ~~rankings~~ratings below Pass.

•Special mention — Loans that have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or the institution’s credit position at some future date.

•Substandard — Loans that are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. These loans have a well-defined weakness or weakness that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Table of Contents

Notes to Condensed Consolidated Financial Statements (unaudited)

Ally Financial Inc. • Form 10-Q

•Doubtful — Loans that have all the weaknesses inherent in those classified as substandard, with the additional characteristic that the weaknesses make collection or liquidation in full, based on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

•Loss — Loans that are considered uncollectible and of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the asset has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off this basically worthless asset even though partial recovery may be effected in the future.

~~Table of Contents~~

~~Notes to Condensed Consolidated Financial Statements (unaudited)~~

~~Ally Financial Inc. • Form 10-Q~~

The regulatory risk classification utilized is influenced by internal credit risk ratings, which are based on a variety of factors. A borrower’s internal credit risk rating is updated at least annually, and more frequently when a borrower’s credit profile changes, including when we become aware of potential credit deterioration. The following tables present the amortized cost basis of our commercial finance receivables and loans by credit quality indicator based on risk rating and origination year.


		Origination year														Revolving loans converted to term
March 31, 2023 ($ in millions)		2023		2022		2021		2020		2019		2018 and prior		Revolving loans				Total
	Origination year
March 31, 2024 ($ in millions)
March 31, 2024 ($ in millions)
March 31, 2024 ($ in millions)																				2024	2023	2022	2021	2020	2019 and prior	Revolving loans	Total
Commercial	Commercial
Commercial and industrial	Commercial and industrial
Commercial and industrial
Commercial and industrial
Automotive	Automotive
Automotive
Automotive
Pass
Pass
Pass
Special mention
Substandard
Doubtful

Total automotive
Total automotive
Total automotive
Other
Pass
Pass
Pass
Special mention
Substandard
Doubtful
Loss
Total other
Commercial real estate
Pass
Pass
Pass	Pass	$	129	$	598	$	198	$	122	$	72	$	50	$	12,654	$	—	$	13,823
Special mention	Special mention	1		22		46		—		—		27		926		—		1,022
Substandard	Substandard	—		—		—		—		—		—		60		—		60

Total automotive		130		620		244		122		72		77		13,640		—		14,905
Other
Pass		82		640		436		329		319		170		5,513		93		7,582
Special mention		—		177		187		196		95		209		260		38		1,162
Substandard		—		—		—		4		50		118		55		13		240
Doubtful		—		—		—		—		63		26		2		—		91
Total commercial real estate

Total other		82		817		623		529		527		523		5,830		144		9,075
Commercial real estate
Pass		263		1,519		1,090		941		672		937		9		22		5,453
Special mention		—		2		32		2		19		1		—		—		56

Total commercial real estate

Total commercial real estate	Total commercial real estate	263		1,521		1,122		943		691		938		9		22		5,509
Total commercial	Total commercial	$	475	$	2,958	$	1,989	$	1,594	$	1,290	$	1,538	$	19,479	$	166	$	29,489

Table of Contents

Notes to Condensed Consolidated Financial Statements (unaudited)

Ally Financial Inc. • Form 10-Q


		Origination year														Revolving loans converted to term
December 31, 2022 ($ in millions)		2022		2021		2020		2019		2018		2017 and prior		Revolving loans				Total
	Origination year
December 31, 2023 ($ in millions)
December 31, 2023 ($ in millions)
December 31, 2023 ($ in millions)																				2023	2022	2021	2020	2019	2018 and prior	Revolving loans	Total
Commercial	Commercial
Commercial and industrial	Commercial and industrial
Commercial and industrial
Commercial and industrial
Automotive	Automotive
Automotive
Automotive
Pass
Pass
Pass	Pass	$	640	$	211	$	132	$	78	$	28	$	34	$	12,327	$	—	$	13,450
Special mention	Special mention	23		47		—		—		10		21		1,016		—		1,117
Substandard	Substandard	—		—		—		1		—		—		27		—		28

Doubtful

Total automotive	Total automotive	663		258		132		79		38		55		13,370		—		14,595
Total automotive
Total automotive
Other	Other
Pass
Pass
Pass	Pass	594		469		607		419		54		133		5,344		89		7,709
Special mention	Special mention	177		158		175		95		47		128		278		35		1,093
Substandard	Substandard	—		—		4		51		—		139		55		13		262
Doubtful	Doubtful	—		—		—		64		—		25		—		—		89
Loss	Loss	—		—		—		—		—		—		1		—		1
Total other	Total other	771		627		786		629		101		425		5,678		137		9,154
Commercial real estate	Commercial real estate
Pass	Pass	1,481		1,118		951		679		369		716		9		13		5,336
Pass
Pass
Special mention	Special mention	—		32		2		19		—		—		—		—		53

Substandard

Total commercial real estate	Total commercial real estate	1,481		1,150		953		698		369		716		9		13		5,389

Total commercial real estate

Total commercial real estate
Total commercial	Total commercial	$	2,915	$	2,035	$	1,871	$	1,406	$	508	$	1,196	$	19,057	$	150	$	29,138

The following table presents an analysis of our past-due commercial finance receivables and loans recorded at amortized cost basis.


($ in millions)	($ in millions)	30–59 days past due		60–89 days past due		90 days or more past due		Total past due		Current		Total finance receivables and loans
($ in millions)
($ in millions)														30–59 days past due	60–89 days past due	90 days or more past due	Total past due	Current	Total finance receivables and loans

March 31, 2023
March 31, 2024
March 31, 2024
March 31, 2024
Commercial
Commercial
Commercial	Commercial
Commercial and industrial	Commercial and industrial
Commercial and industrial
Commercial and industrial
Automotive
Automotive
Automotive	Automotive	$	—	$	—	$	—	$	—	$	14,905	$	14,905
Other	Other	1		—		3		4		9,071		9,075
Commercial real estate	Commercial real estate	—		—		—		—		5,509		5,509
Total commercial	Total commercial	$	1	$	—	$	3	$	4	$	29,485	$	29,489
December 31, 2022
December 31, 2023
Commercial
Commercial
Commercial	Commercial
Commercial and industrial	Commercial and industrial
Commercial and industrial
Commercial and industrial
Automotive
Automotive
Automotive	Automotive	$	—	$	—	$	—	$	—	$	14,595	$	14,595
Other	Other	—		1		2		3		9,151		9,154
Commercial real estate	Commercial real estate	—		—		—		—		5,389		5,389
Total commercial	Total commercial	$	—	$	1	$	2	$	3	$	29,135	$	29,138

Table of Contents

Notes to Condensed Consolidated Financial Statements (unaudited)

Ally Financial Inc. • Form 10-Q

The following tables present gross charge-offs of our finance receivables and loans for each portfolio class by origination year during the three months ended March 31, 2024, and during the year ended December 31, 2023, respectively. Refer to Note 1 to the Consolidated Financial Statements in our 2023 Annual Report on Form 10-K for additional information on our charge-off policy.


	Origination year														Revolving loans converted to term
March 31, 2024 ($ in millions)	2024		2023		2022		2021		2020		2019 and prior		Revolving loans				Total
Consumer automotive (a)	$	1	$	182	$	263	$	152	$	41	$	49	$	—	$	—	$	688
Consumer mortgage
Mortgage Finance	—		—		—		1		—		—		—		—		1

Total consumer mortgage	—		—		—		1		—		—		—		—		1
Consumer other

Credit Card	—		—		—		—		—		—		64		4		68
Total consumer other	—		—		—		—		—		—		64		4		68
Total consumer	1		182		263		153		41		49		64		4		757
Commercial
Commercial and industrial
Automotive	—		—		—		—		—		—		1		—		1


Total commercial	—		—		—		—		—		—		1		—		1
Total finance receivables and loans	$	1	$	182	$	263	$	153	$	41	$	49	$	65	$	4	$	758

(a)Excludes $5 million of write-downs from transfers to held-for-sale from the completion of a retail securitization transaction during the three months ended March 31, 2024, resulting in the deconsolidation of the assets and liabilities from our Condensed Consolidated Balance Sheet. Refer to Note 10 for additional information.


	Origination year														Revolving loans converted to term
December 31, 2023 ($ in millions)	2023		2022		2021		2020		2019		2018 and prior		Revolving loans				Total
Consumer automotive (a)	$	225	$	952	$	651	$	194	$	142	$	120	$	—	$	—	$	2,284
Consumer mortgage
Mortgage Finance	—		—		—		—		—		1		—		—		1
Mortgage — Legacy	—		—		—		—		—		2		—		—		2
Total consumer mortgage	—		—		—		—		—		3		—		—		3
Consumer other
Personal Lending (b)	14		82		29		3		—		—		—		—		128
Credit Card	—		—		—		—		—		—		165		10		175
Total consumer other	14		82		29		3		—		—		165		10		303
Total consumer	239		1,034		680		197		142		123		165		10		2,590
Commercial
Commercial and industrial
Automotive	—		—		—		—		—		5		19		—		24
Other	—		—		—		—		79		23		4		—		106

Total commercial	—		—		—		—		79		28		23		—		130
Total finance receivables and loans	$	239	$	1,034	$	680	$	197	$	221	$	151	$	188	$	10	$	2,720

(a)Excludes $41 million of write-downs from transfers to held-for-sale from the sales of retained interests related to securitizations during 2023, resulting in the deconsolidation of the assets and liabilities from our Condensed Consolidated Balance Sheet. Refer to Note 11 to the Consolidated Financial Statements in our 2023 Annual Report on Form 10-K for additional information.

(b)Excludes $174 million of write-downs from the transfer to held-for-sale related to Personal Lending. Refer to Note 2 for additional information.

Table of Contents

Notes to Condensed Consolidated Financial Statements (unaudited)

Ally Financial Inc. • Form 10-Q

Loan Modifications

The following ~~table presents~~tables present the amortized cost basis of loans that were modified subsequent to origination during the three months ended March 31, 2024, and 2023, respectively, for each portfolio segment, by modification type. For additional information on loan modification types in scope of this disclosure, refer to Note 1.1 to the Consolidated Financial Statements in our 2023 Annual Report on Form 10-K. The below tables exclude consumer mortgage finance receivables and loans currently enrolled in a trial modification program. Trial modifications generally represent a three-month period during which the borrower makes monthly payments under the anticipated modified payment terms. If the borrower successfully completes the trial loan modification program, the contractual terms of the loan are updated and the modification is considered permanent. As of March 31, 2024, and December 31, 2023, there were $2 million and $5 million of consumer mortgage finance receivables and loans in a trial modification program, respectively.


		Payment extensions
March 31, 2023 ($ in millions)		Payment deferrals		Contractual maturity extensions		Principal forgiveness		Interest rate concessions		Combination		Total (a)
		Payment extensions
		Payment extensions
		Payment extensions
Three months ended March 31, 2024 ($ in millions)
Three months ended March 31, 2024 ($ in millions)
Three months ended March 31, 2024 ($ in millions)
Consumer automotive
Consumer automotive
Consumer automotive	Consumer automotive	$	—	$	14	$	2	$	—	$	39	$	55
Consumer mortgage	Consumer mortgage
Mortgage Finance		—		2		—		—		2		4
Consumer mortgage
Consumer mortgage

Mortgage — Legacy

Mortgage — Legacy

Mortgage — Legacy
Total consumer mortgage	Total consumer mortgage	—		2		—		—		2		4
Total consumer mortgage
Total consumer mortgage
Consumer other
Consumer other
Consumer other	Consumer other

Credit Card	Credit Card	—		—		—		3		—		3

Credit Card

Credit Card
Total consumer other
Total consumer other
Total consumer other	Total consumer other	—		—		—		3		—		3
Total consumer	Total consumer	—		16		2		3		41		62
Total consumer
Total consumer
Commercial
Commercial
Commercial	Commercial
Commercial and industrial	Commercial and industrial

Commercial and industrial
Commercial and industrial
Automotive
Automotive
Automotive
Other
Other
Other	Other	62		7		—		—		—		69

Total commercial	Total commercial	62		7		—		—		—		69

Total commercial

Total commercial
Total finance receivables and loans	Total finance receivables and loans	$	62	$	23	$	2	$	3	$	41	$	131
Total finance receivables and loans
Total finance receivables and loans

(a)Represents 0.2% of total finance receivables and loans outstanding as of March 31, 2024.


	Payment extensions
Three months ended March 31, 2023 ($ in millions)	Payment deferrals		Contractual maturity extensions		Principal forgiveness		Interest rate concessions		Combination		Total (a)
Consumer automotive	$	—	$	14	$	2	$	—	$	39	$	55
Consumer mortgage
Mortgage Finance	—		2		—		—		2		4

Total consumer mortgage	—		2		—		—		2		4
Consumer other

Credit Card	—		—		—		3		—		3
Total consumer other	—		—		—		3		—		3
Total consumer	—		16		2		3		41		62
Commercial
Commercial and industrial

Other	62		7		—		—		—		69

Total commercial	62		7		—		—		—		69
Total finance receivables and loans	$	62	$	23	$	2	$	3	$	41	$	131

(a)Represents 0.1% of total finance receivables and loans outstanding as of March 31, 2023.

Table of Contents

Notes to Condensed Consolidated Financial Statements (unaudited)

Ally Financial Inc. • Form 10-Q

The following ~~table presents~~tables present the financial effect of loan modifications that occurred during the three months ended March 31, ~~2023.~~2024, and 2023, respectively.


		Payment extensions (a)	Principal forgiveness		Interest rate concessions (a)				Combination (a) (b)
March 31, 2023 ($ in millions)		Number of months extended/deferred	Amount forgiven		Initial rate		Revised rate		Remaining term	Revised remaining term	Initial rate		Revised rate
	Payment extensions (a)																Payment extensions (a)				Principal forgiveness					Interest rate concessions (a)						Combination (a) (b)
Three months ended March 31, 2024 ($ in millions)															Three months ended March 31, 2024 ($ in millions)	Number of months extended/deferred		Amount forgiven				Initial rate					Revised rate				Remaining term				Revised remaining term				Initial rate				Revised rate
Consumer automotive	Consumer automotive	26	$	1	—	%	—	%	74	85	10.4	%	9.7	%	Consumer automotive	29		$	—	—			—		%			—		%				—			—		%		—		%
Consumer mortgage	Consumer mortgage
Mortgage Finance		159	—		—		—		314	467	4.9		3.9

Mortgage — Legacy

Mortgage — Legacy

Mortgage — Legacy
Total consumer mortgage	Total consumer mortgage	159	—		—		—		314	467	4.9		3.9
Consumer other	Consumer other

Credit Card

Credit Card

Credit Card	Credit Card	—	—		29.6		10.6		—	—	—		—
Total consumer other	Total consumer other	—	—		29.6		10.6		—	—	—		—
Commercial	Commercial
Commercial and industrial	Commercial and industrial

Commercial and industrial
Commercial and industrial
Automotive
Automotive
Automotive																—		$	—			12.9		%			11.5		%				—			—		%		—		%
Other	Other	12	—		—		—		—	—	—		—

Total commercial	Total commercial	12	$	—	—		—		—	—	—		—
Total commercial
Total commercial

(a)Calculated using a weighted-average balance for each portfolio class.

(b)Term is presented in number of months.


	Payment extensions (a)	Principal forgiveness		Interest rate concessions (a)				Combination (a) (b)
Three months ended March 31, 2023 ($ in millions)	Number of months extended/deferred	Amount forgiven		Initial rate		Revised rate		Remaining term	Revised remaining term	Initial rate		Revised rate
Consumer automotive	26	$	1	—	%	—	%	74	85	10.4	%	9.7	%
Consumer mortgage
Mortgage Finance	159	—		—		—		314	467	4.9		3.9

Total consumer mortgage	159	—		—		—		314	467	4.9		3.9
Consumer other

Credit Card	—	—		29.6		10.6		—	—	—		—
Total consumer other	—	$	—	29.6		10.6		—	—	—		—
Commercial
Commercial and industrial

Other	12	$	—	—	%	—	%	—	—	—	%	—	%

Total commercial	12	$	—	—		—		—	—	—		—

(a)Calculated using a weighted-average balance for each portfolio class.

(b)Term is presented in number of months.

2931

Table of Contents

Notes to Condensed Consolidated Financial Statements (unaudited)

Ally Financial Inc. • Form 10-Q

The following tables present the subsequent performance of loans recorded at amortized cost, by portfolio segment and credit quality indicator, that ~~have been~~were modified ~~during~~within the ~~three~~12 months ~~ended~~prior to March 31, ~~2023.~~2024.


Three months ended March 31, 2023 ($ in millions)		Current		30–59 days past due		60–89 days past due		90 or more days past due		Total
March 31, 2024 ($ in millions)
March 31, 2024 ($ in millions)
March 31, 2024 ($ in millions)
Consumer automotive
Consumer automotive
Consumer automotive	Consumer automotive

Contractual maturity extensions	Contractual maturity extensions	$	13	$	1	$	—	$	—	$	14

Contractual maturity extensions

Contractual maturity extensions
Principal forgiveness
Principal forgiveness
Principal forgiveness	Principal forgiveness	—		—		—		2		2

Combination		37		2		—		—		39
Total consumer automotive (a)		50		3		—		2		55

Total consumer automotive

Total consumer automotive

Total consumer automotive
Consumer mortgage
Consumer mortgage
Consumer mortgage	Consumer mortgage
Mortgage Finance	Mortgage Finance
Mortgage Finance
Mortgage Finance

Contractual maturity extensions

Contractual maturity extensions

Contractual maturity extensions	Contractual maturity extensions	2		—		—		—		2

Combination	Combination	—		—		2		—		2

Combination

Combination
Total Mortgage Finance	Total Mortgage Finance	2		—		2		—		4
Total Mortgage Finance
Total Mortgage Finance
Mortgage — Legacy
Mortgage — Legacy
Mortgage — Legacy

Contractual maturity extensions

Contractual maturity extensions

Contractual maturity extensions

Combination

Combination

Combination
Total Mortgage — Legacy
Total Mortgage — Legacy
Total Mortgage — Legacy
Total consumer mortgage
Total consumer mortgage
Total consumer mortgage
Consumer other
Consumer other
Consumer other

Total consumer mortgage		2		—		2		—		4
Consumer other
Credit Card

Credit Card

Credit Card	Credit Card

Interest rate concessions	Interest rate concessions	1		1		—		1		3

Interest rate concessions

Interest rate concessions

Total consumer other

Total consumer other

Total consumer other	Total consumer other	1		1		—		1		3
Total consumer	Total consumer	$	53	$	4	$	2	$	3	$	62
Total consumer
Total consumer

~~(a)During the three months ended~~


March 31, 2024 ($ in millions)	Pass		Special mention		Substandard		Doubtful		Total
Commercial and industrial
Automotive


Interest rate concessions	$	—	$	—	$	4	$	—	$	4
Other

Contractual maturity extensions	107		—		60		—		167




Total commercial	$	107	$	—	$	64	$	—	$	171

As of March 31, ~~2023, 12~~2024, 481 consumer automotive loans with a total amortized cost of $1$11 million ~~have redefaulted.~~

Three months ended March 31, 2023 ($ in millions)
Special mention Substandard Doubtful Total
Commercial and industrial
Other
Payment deferrals $ — $ 34 $ 28 $ 62
Contractual maturity extensions 7 — — 7
Total commercial $ 7 $ 34 $ 28 $ 69

~~Troubled Debt Restructuring Disclosures Prior to the Adoption~~redefaulted within 12 months of ~~ASU 2022-02~~

The adoption of ASU 2022-02 eliminated TDR recognition and measurement guidance, as well as all TDR-related disclosures. Refer to Note 1 for additional information. TDRs were loan modifications where concessions were granted to borrowers experiencing financial difficulties. Total TDRs recorded at amortized cost were $2.4 billion at December 31, 2022.modification.

3032

Table of Contents

Notes to Condensed Consolidated Financial Statements (unaudited)

Ally Financial Inc. • Form 10-Q

The following ~~table presents information related to finance receivables and~~tables present the subsequent performance of loans recorded at amortized cost, by portfolio segment and credit quality indicator, that were modified ~~in connection~~during the three months ended March 31, 2023.


March 31, 2023 ($ in millions)	Current		30–59 days past due		60–89 days past due		90 or more days past due		Total
Consumer automotive

Contractual maturity extensions	$	13	$	1	$	—	$	—	$	14
Principal forgiveness	—		—		—		2		2

Combination	37		2		—		—		39
Total consumer automotive	50		3		—		2		55
Consumer mortgage
Mortgage Finance

Contractual maturity extensions	2		—		—		—		2


Combination	—		—		2		—		2
Total Mortgage Finance	2		—		2		—		4







Total consumer mortgage	2		—		2		—		4
Consumer other







Credit Card



Interest rate concessions	1		1		—		1		3


Total consumer other	1		1		—		1		3
Total consumer	$	53	$	4	$	2	$	3	$	62


March 31, 2023 ($ in millions)	Special mention		Substandard		Doubtful		Total
Commercial and industrial



Other
Payment deferrals	$	—	$	34	$	28	$	62
Contractual maturity extensions	7		—		—		7



Total commercial	$	7	$	34	$	28	$	69

During the three months ended March 31, 2023, 12 consumer automotive loans with a ~~TDR during the period.~~

2022
Three months ended March 31, ($ in millions)
Number of loans Pre-modification amortized cost basis Post-modification amortized cost basis
Consumer automotive 13,451 $ 231 $ 227
Consumer mortgage
Mortgage Finance 6 5 5
Mortgage — Legacy 4 1 1
Total consumer mortgage 10 6 6
Consumer other
Credit Card 351 1 1
Total consumer other 351 1 1
Total consumer 13,812 238 234
Commercial
Commercial and industrial
Other 1 34 34
Total commercial 1 34 34
Total finance receivables and loans 13,813 $ 272 $ 268

~~The following table presents information about finance receivables and loans recorded at~~total amortized cost ~~that have redefaulted during the reporting period and were within 12 months or less~~ of being modified as a TDR. Redefault is when finance receivables and loans meet the requirements for evaluation under our charge-off policy except for commercial finance receivables and loans, where redefault is defined as 90 days past due.

2022
Three months ended March 31, ($ in millions)
Number of loans Amortized cost Charge-off amount
Consumer automotive 2,111 $ 31 $ 13
Consumer mortgage
Mortgage Finance 2 2 —
Total consumer mortgage 2 2 —
Total consumer finance receivables and loans 2,113 33 13
Total finance receivables and loans 2,113 $ 33 $ 13
$1 million redefaulted.

8.9. Leasing

Ally as the Lessee

We have operating leases for certain of our corporate facilities, which have remaining lease terms of 52 months to 87 years. Most of the property leases have fixed payment terms with annual fixed-escalation clauses and include options to extend or terminate the lease. We do not include these term extensions or termination provisions in our estimates of the lease term if we do not consider it reasonably certain that the options will be exercised.

We also have operating leases for a fleet of vehicles that is used by our sales force for business purposes, with noncancelable lease terms of 367 days. Thereafter, the leases are month-to-month, up to a maximum of 48 months from inception.

During both the three months ended March 31, ~~2023,~~2024, and March 31, ~~2022,~~2023, we paid $8 million ~~and $10 million, respectively,~~ in cash for amounts included in the measurement of lease liabilities. These amounts are included in net cash provided by operating activities in the Condensed Consolidated Statement of Cash Flows. During the three months ended March 31, ~~2022,~~2024, we obtained ~~$12~~$16 million of ROU assets in exchange for new lease liabilities. As of March 31, ~~2023,~~2024, the weighted-average remaining lease term of our operating lease portfolio was 54 years, and the weighted-average discount rate was ~~2.59%~~3.12%, compared to 54 years and ~~2.57%~~2.85% as of December 31, ~~2022.~~2023.

3133

Table of Contents

Notes to Condensed Consolidated Financial Statements (unaudited)

Ally Financial Inc. • Form 10-Q

The following table presents future minimum rental payments we are required to make under operating leases that have commenced as of March 31, ~~2023,~~2024, and that have noncancelable lease terms expiring after March 31, ~~2023.~~2024.

($ in millions)
2023 $ 26
2024 32
2025 26
2026 20
2027 16
2028 and thereafter 18
Total undiscounted cash flows 138
Difference between undiscounted cash flows and discounted cash flows (8)
Total lease liability $ 130

In June 2022, we purchased an operations center in Lewisville, Texas, which consisted of a previously leased facility. Upon closing the transaction, the lease ROU asset and liability were derecognized and new fixed assets totaling approximately $44 million were recognized as property and equipment at cost within other assets of the Condensed Consolidated Balance Sheet.


($ in millions)
2024	$	28
2025	34
2026	27
2027	21
2028	15
2029 and thereafter	3
Total undiscounted cash flows	128
Difference between undiscounted cash flows and discounted cash flows	(8)
Total lease liability	$	120

The following table details the components of total net operating lease expense.

Three months ended March 31,

($ in millions)

2023

2022

($ in millions)

Operating lease expense

Variable lease expense

Total lease expense, net (a)

(a)Included in other operating expenses in our Condensed Consolidated Statement of Comprehensive (Loss) Income.

Ally as the Lessor

Investment in Operating Leases

We purchase consumer operating lease contracts and the associated vehicles from automotive dealerships or manufacturers after those contracts are ~~executed by the dealers and the consumers.~~executed. The amount we pay ~~a dealer~~ for an operating lease contract is based on the negotiated price for the vehicle less vehicle trade-in, down payment from the consumer, tax credits, and available automotive manufacturer incentives. Under the operating lease, the consumer is obligated to make payments in amounts equal to the amount by which the negotiated purchase price of the vehicle (less any trade-in value, down payment, tax credits, or available manufacturer incentives) exceeds the contract residual value (including residual support) of the vehicle at lease termination, plus operating lease rental charges. The customer can terminate the lease at any point after commencement, subject to additional charges and fees. ~~Both the~~The consumer, ~~and the~~ dealership, or automotive manufacturer may have the option to purchase the vehicle at the end of the lease term, which generally range from 24 to 60 months, at the residual value of the vehicle, however it is not reasonably certain this option will be exercised and accordingly our consumer leases are classified as operating leases. In addition to the charges described above, the consumer is generally responsible for certain charges related to excess mileage or excessive wear and tear on the vehicle. These charges are deemed variable lease payments and, as these payments are not based on a rate or index, they are recognized as net depreciation expense on operating lease assets in our Condensed Consolidated Statement of Comprehensive (Loss) Income as incurred.

When we acquire a consumer operating lease, we assume ownership of the ~~vehicle from the dealer.~~vehicle. We require that property damage, bodily injury, collision, and comprehensive insurance be obtained by the lessee on all consumer operating leases. Neither the consumer, dealer, nor ~~the dealer~~automotive manufacturer is responsible for the value of the vehicle at the time of lease termination. When vehicles are not purchased by customers, or the receiving dealer, or automotive manufacturer at scheduled lease termination, the vehicle is returned to us for remarketing. We generally bear the risk of loss to the extent the value of a leased vehicle upon remarketing is below the expected residual value. At termination, our actual sales proceeds from remarketing the vehicle may be higher or lower than the estimated residual value resulting in a gain or loss on remarketing, which is included in net depreciation expense on operating lease assets in our Condensed Consolidated Statement of Comprehensive (Loss) Income. Excessive mileage or excessive wear and tear on the vehicle during the lease may impact the sales proceeds received upon remarketing. As of March 31, ~~2023,~~2024, and December 31, ~~2022,~~2023, consumer operating leases with a carrying value, net of accumulated depreciation, of ~~$43~~$272 million and ~~$56~~$12 million, respectively, were covered by residual value guarantees. The increase is primarily driven by a new automotive manufacturer relationship added during the three months ended March 31, 2024. As of March 31, 2024, $8 million is under a residual value guarantee of 15% of the automotive manufacturer’s suggested retail price and $264 million is under a residual value guarantee of approximately 50% of the vehicles’ contract residual value. As of December 31, 2023, $12 million was under a residual value guarantee of 15% of the automotive manufacturer’s suggested retail price.

3234

Table of Contents

Notes to Condensed Consolidated Financial Statements (unaudited)

Ally Financial Inc. • Form 10-Q

The following table details our investment in operating leases.


($ in millions)	($ in millions)	March 31, 2023		December 31, 2022

($ in millions)
($ in millions)						March 31, 2024	December 31, 2023
Vehicles	Vehicles	$	12,148	$	12,304
Accumulated depreciation	Accumulated depreciation	(1,912)		(1,860)
Investment in operating leases, net	Investment in operating leases, net	$	10,236	$	10,444

The following table presents future minimum rental payments we have the right to receive under operating leases with noncancelable lease terms expiring after March 31, ~~2023.~~2024.


($ in millions)	($ in millions)
2023		$	1,179
2024
2024
2024	2024	1,058
2025	2025	533
2026	2026	152
2027	2027	13
2028

Total lease payments from operating leases	Total lease payments from operating leases	$	2,935
Total lease payments from operating leases
Total lease payments from operating leases

We recognized operating lease revenue of $356 million for the three months ended March 31, 2024, and $402 million for the three months ended March 31, ~~2023, and $403 million for the three months ended March 31, 2022.~~2023. Depreciation expense on operating lease assets includes net remarketing gains recognized on the sale of operating lease assets. The following table summarizes the components of depreciation expense on operating lease assets.

Three months ended March 31,

($ in millions)

2023

2022

Depreciation expense on operating lease assets (excluding remarketing gains) (a)

273

267

Depreciation expense on operating lease assets (excluding remarketing gains) (a)

Remarketing gains, net

(47)

(50)

Net depreciation expense on operating lease assets

226

217

Net depreciation expense on operating lease assets

(a)Includes variable lease payments related to excess mileage and excessive wear and tear on vehicles of $2$4 million during ~~both~~ the three months ended March 31, ~~2023,~~2024, and ~~2022.~~$2 million during the three months ended March 31, 2023.

Finance Leases

In our Automotive Finance operations, we also hold automotive leases that require finance lease treatment as prescribed by ASC Topic 842, Leases. Our total gross investment in finance leases, which is included in finance receivables and loans, net, on our Condensed Consolidated Balance Sheet was ~~$499~~$539 million and ~~$481~~$537 million as of March 31, ~~2023,~~2024, and December 31, ~~2022,~~2023, respectively. This includes lease payment receivables of ~~$487~~$533 million and ~~$468~~$531 million at March 31, ~~2023,~~2024, and December 31, ~~2022,~~2023, respectively, and unguaranteed residual assets of ~~$12~~$6 million at both March 31, ~~2023,~~2024, and ~~$13 million at~~ December 31, ~~2022.~~2023. Interest income on finance lease receivables was $11 million for the three months ended March 31, 2024, and $9 million for the three months ended March 31, 2023, ~~and $7 million for the three months ended March 31, 2022,~~ and is included in interest and fees on finance receivables and loans in our Condensed Consolidated Statement of Comprehensive (Loss) Income.

The following table presents future minimum rental payments we have the right to receive under finance leases with noncancelable lease terms expiring after March 31, ~~2023.~~2024.


($ in millions)	($ in millions)
2023		$	130
2024
2024
2024	2024	148
2025	2025	129
2026	2026	80
2027	2027	40
2028 and thereafter		15
2028
2029 and thereafter
Total undiscounted cash flows	Total undiscounted cash flows	542
Difference between undiscounted cash flows and discounted cash flows	Difference between undiscounted cash flows and discounted cash flows	(56)
Present value of lease payments recorded as lease receivable	Present value of lease payments recorded as lease receivable	$	486

3335

Table of Contents

Notes to Condensed Consolidated Financial Statements (unaudited)

Ally Financial Inc. • Form 10-Q

9.10. Securitizations and Variable Interest Entities

We securitize, transfer, and service consumer automotive loans. We often securitize these loans (also referred to as financial assets) using SPEs. An SPE is a legal entity that is designed to fulfill a specified limited need of the sponsor. Our principal use of SPEs is to obtain liquidity by securitizing certain of our financial assets. SPEs are often VIEs and may or may not be included on our Condensed Consolidated Balance Sheet. Additionally, we opportunistically sell consumer automotive and credit card whole-loans to SPEs where we have a continuing involvement.

VIEs are legal entities that either have an insufficient amount of equity at risk for the entity to finance its activities without additional subordinated financial support or, as a group, the holders of the equity investment at risk lack the ability to control the entity’s activities that most significantly impact economic performance through voting or similar rights, or do not have the obligation to absorb the expected losses or the right to receive expected residual returns of the entity.

The VIEs included on the Condensed Consolidated Balance Sheet represent SPEs where we are deemed to be the primary beneficiary, primarily due to our servicing activities and our beneficial interests in the VIE that could be potentially significant.

The nature, purpose, and activities of nonconsolidated SPEs are similar to those of our consolidated SPEs with the primary difference being the nature and extent of our continuing involvement. For nonconsolidated SPEs, the transferred financial assets are removed from our balance sheet provided the conditions for sale accounting are met. The financial assets obtained from the sale are primarily reported as cash or retained interests (if applicable). Liabilities incurred as part of these sales, are recorded at fair value at the time of sale and are reported as accrued expenses and other liabilities on our Condensed Consolidated Balance Sheet. Upon the sale of the loans, we recognize a gain or loss on sale for the difference between the assets recognized, the assets derecognized, and the liabilities recognized as part of the transaction. With respect to our ongoing right to service the assets we sell, the servicing fee we receive represents adequate compensation, and consequently, we do not recognize a servicing asset or ~~liability.~~liability

~~The pretax gain on sales of financial assets into nonconsolidated VIEs was $1 million for the three months ended March 31, 2023.~~ We had no pretax gains or losses on sales of financial assets into nonconsolidated VIEs during the three months ended March 31, ~~2022.~~2024. The pretax gain on sales of financial assets into nonconsolidated VIEs was $1 million for the three months ended March 31, 2023.

We provide long-term guarantee contracts to investors in certain nonconsolidated affordable housing entities and have extended a line of credit to provide liquidity. Since we do not have control over the entities or the power to make decisions, we do not consolidate the entities and our involvement is limited to the guarantee and the line of credit.

We are involved with various other nonconsolidated equity investments, including affordable housing entities and venture capital funds and loan funds. We do not consolidate these entities and our involvement is limited to our outstanding investment, additional capital committed to these funds plus any previously recognized low-income housing tax credits that are subject to recapture.

Refer to Note 1 and Note 11 to the Consolidated Financial Statements in our ~~2022~~2023 Annual Report on Form 10-K for further description of our securitization activities and our involvement with VIEs.

3436

Table of Contents

Notes to Condensed Consolidated Financial Statements (unaudited)

Ally Financial Inc. • Form 10-Q

The following table presents our involvement in consolidated and nonconsolidated VIEs in which we hold variable interests. We have excluded certain transactions with nonconsolidated entities from the balances presented in the table below, where our only continuing involvement relates to financial interests obtained through the ordinary course of business, primarily from lending and investing arrangements. For additional detail related to the assets and liabilities of consolidated variable interest entities refer to the Condensed Consolidated Balance Sheet.


($ in millions)	($ in millions)	Carrying value of total assets			Carrying value of total liabilities			Assets sold to nonconsolidated VIEs (a)		Maximum exposure to loss in nonconsolidated VIEs			($ in millions)		Carrying value of total assets					Carrying value of total liabilities				Assets sold to nonconsolidated VIEs (a)				Maximum exposure to loss in nonconsolidated VIEs
March 31, 2023
March 31, 2024
On-balance sheet variable interest entities	On-balance sheet variable interest entities
On-balance sheet variable interest entities
On-balance sheet variable interest entities
Consumer automotive
Consumer automotive
Consumer automotive	Consumer automotive	$	22,126	(b)	$	3,162	(c)	$	—	$	—

Off-balance sheet variable interest entities	Off-balance sheet variable interest entities
Consumer automotive		—			—			461		461		(d)
Consumer other (e)		—			—			118		118

Off-balance sheet variable interest entities

Off-balance sheet variable interest entities
Consumer automotive (d) (e)
Consumer automotive (d) (e)
Consumer automotive (d) (e)															133			(f)		—						3,509				3,642	(g)
Consumer other (h)
Commercial other
Commercial other
Commercial other	Commercial other	2,203		(f)	864		(g)	—		2,767		(h)		2,510		(i)	(i)		918		(j)	(j)	—		3,066		3,066		(k)	(k)
Total	Total	$	24,329		$	4,026		$	579	$	3,346
December 31, 2022
December 31, 2023
December 31, 2023
December 31, 2023
On-balance sheet variable interest entities	On-balance sheet variable interest entities
On-balance sheet variable interest entities
On-balance sheet variable interest entities
Consumer automotive
Consumer automotive
Consumer automotive	Consumer automotive	$	20,415	(b)	$	2,553	(c)	$	—	$	—

Off-balance sheet variable interest entities	Off-balance sheet variable interest entities
Consumer automotive		—			—			$	227	$	227	(d)
Consumer other (e)		—			—			103		103

Off-balance sheet variable interest entities

Off-balance sheet variable interest entities
Consumer automotive (e)
Consumer automotive (e)
Consumer automotive (e)															81			(f)		—						2,514				2,595	(g)
Consumer other (h)
Commercial other
Commercial other
Commercial other	Commercial other	2,199		(f)	873		(g)	—		2,767		(h)		2,516		(i)	(i)		974		(j)	(j)	—		2,738		2,738		(k)	(k)
Total	Total	$	22,614		$	3,426		$	330	$	3,097

(a)Asset values represent the current unpaid principal balance of outstanding consumer automotive and credit card finance receivables and loans within the VIEs.

(b)Includes ~~$10.4~~$8.9 billion and ~~$10.6~~$9.3 billion of assets that were not encumbered by VIE beneficial interests held by third parties at March 31, ~~2023,~~2024, and December 31, ~~2022,~~2023, respectively. Ally or consolidated affiliates hold the interests in these assets.

(c)Includes ~~$111 million and $113~~$100 million of liabilities that were not obligations to third-party beneficial interest holders at both March 31, ~~2023,~~2024, and December 31, ~~2022, respectively.~~2023.

(d)In March 2024, we completed a retail securitization transaction. As a result of this sale, we are not the primary beneficiary of the VIE, and as such have deconsolidated $1.1 billion of consumer automotive loans from our Condensed Consolidated Balance Sheet. We received cash proceeds of $1.1 billion related to this sale, and recognized no gain or loss. We will continue to service the assets transferred to the VIE.

(e)Includes activity where we sell loans through a pass through program to a third-party.

(f)Represents retained notes and certificated residual interests, of which $127 million and $78 million were classified as held-to-maturity securities at March 31, 2024, and December 31, 2023, respectively, and $6 million and $3 million were classified as other assets at March 31, 2024, and December 31, 2023. These assets represent our compliance with the risk retention rules under the Dodd-Frank Act, requiring us to retain at least five percent of the credit risk of the assets underlying asset-backed securitizations.

(g)Maximum exposure to loss represents the current unpaid principal balance of outstanding loans based on our customary representation and warranty provisions. This measure is based on the unlikely event that all the loans have underwriting defects or other defects that trigger a representation and warranty provision and the collateral supporting the loans are worthless. This required disclosure is not an indication of our expected loss.

~~(e)~~(h)Represents balances from Ally Credit Card.

~~(f)~~(i)Amounts are classified as other assets except for ~~$41~~$46 million and ~~$38~~$44 million classified as equity securities at March 31, ~~2023,~~2024, and December 31, ~~2022,~~2023, respectively.

~~(g)~~(j)Amounts are classified as accrued expenses and other liabilities.

~~(h)~~(k)For certain nonconsolidated affordable housing entities, maximum exposure to loss represents the yield we guaranteed investors through long-term guarantee contracts. The amount disclosed is based on the unlikely event that the yield delivered to investors in the form of low-income tax housing credits is recaptured. For nonconsolidated equity investments, maximum exposure to loss represents our outstanding investment, additional committed capital, and low-income housing tax credits subject to recapture. The amount disclosed is based on the unlikely event that our committed capital is funded, our investments become worthless, and the tax credits previously delivered to us are recaptured. This required disclosure is not an indication of our expected loss.

3537

Table of Contents

Notes to Condensed Consolidated Financial Statements (unaudited)

Ally Financial Inc. • Form 10-Q

Cash Flows with Nonconsolidated Special-Purpose Entities

The following table summarizes cash flows received and paid related to SPEs and asset-backed financings where the transfer is accounted for as a sale and we have a continuing involvement with the transferred consumer automotive and credit card assets (for example, servicing) that were outstanding during the three months ended March 31, ~~2023,~~2024, and ~~2022.~~2023. Additionally, this table contains information regarding cash flows received from and paid to nonconsolidated SPEs that existed during each period.

Three months ended March 31,

($ in millions)

2023

2022

Consumer automotive

Cash proceeds from transfers completed during the period

252

—

Cash proceeds from transfers completed during the period

Servicing fees

Cash flows received on retained interests in securitization entities

Servicing fees

—

Other cash flows

Consumer other (a)

Cash proceeds from transfers completed during the period

Servicing fees

Total

296

(a)Represents activity from Ally Credit Card.

Delinquencies and Net Credit Losses

The following tables present quantitative information about off-balance sheet securitizations and whole-loan sales where we have continuing involvement.


			Total amount				Amount 60 days or more past due
		Total amount												Total amount			Amount 60 days or more past due
($ in millions)	($ in millions)		March 31, 2023		December 31, 2022		March 31, 2023		December 31, 2022		($ in millions)	March 31, 2024	December 31, 2023		March 31, 2024	December 31, 2023
Off-balance-sheet securitization entities
Consumer automotive
Consumer automotive
Consumer automotive
Whole-loan sales (a)	Whole-loan sales (a)
Consumer automotive
Consumer automotive
Consumer automotive	Consumer automotive		$	461	$	227	$	5	$	2
Consumer other	Consumer other		118		103		11		8
Total	Total		$	579	$	330	$	16	$	10

(a)Whole-loan sales are not part of a securitization transaction, but represent consumer automotive and credit card pools of loans sold to third-party investors.

Net credit losses

Three months ended March 31,

Net credit losses

Three months ended March 31,

($ in millions)

2023

2022

($ in millions)

2024

2023

Off-balance-sheet securitization entities

Consumer automotive

Whole-loan sales (a)

Consumer automotive

—

Consumer other

—

Total

—

(a)Whole-loan sales are not part of a securitization transaction, but represent consumer automotive and credit card pools of loans sold to third-party investors.

3638

Table of Contents

Notes to Condensed Consolidated Financial Statements (unaudited)

Ally Financial Inc. • Form 10-Q

~~10.~~11. Other Assets

The components of other assets were as follows.


($ in millions)	($ in millions)	March 31, 2023		December 31, 2022		($ in millions)	March 31, 2024	December 31, 2023

Property and equipment at cost		$	2,390	$	2,352
Accumulated depreciation		(1,116)		(1,076)
Property and equipment at cost (a)
Property and equipment at cost (a)
Property and equipment at cost (a)
Accumulated depreciation (a)
Net property and equipment	Net property and equipment	1,274		1,276
Investment in qualified affordable housing projects		1,616		1,596
Proportional amortization investments (b) (c)
Net deferred tax assets	Net deferred tax assets	1,030		1,087
Accrued interest, fees, and rent receivables (d)
Nonmarketable equity investments	Nonmarketable equity investments	833		842
Goodwill	Goodwill	822		822
Accrued interest, fees, and rent receivables		807		786
Restricted cash held for securitization trusts (a)		740		585
Equity-method investments (b)		595		608
Equity-method investments (b) (e)
Restricted cash held for securitization trusts (f)

Other accounts receivable	Other accounts receivable	153		164
Other accounts receivable
Other accounts receivable
Operating lease right-of-use assets	Operating lease right-of-use assets	105		111
Restricted cash and cash equivalents (g)
Net intangible assets	Net intangible assets	91		98
Restricted cash and cash equivalents (c)		75		66

Other assets	Other assets	1,003		1,097
Total other assets		$	9,144	$	9,138
Other assets
Other assets
Total other assets (h)

(a)During the year ended December 31, 2023, we retired software with a cost basis of $295 million with an accumulated depreciation of $295 million.

(b)Proportional amortization investments includes qualifying LIHTC, NMTC, and HTC investments as of March 31, 2024. Prior to the adoption of ASU 2023-02 on January 1, 2024, NMTC and HTC investments were included in equity-method investments. Refer to Note 1 to the Condensed Consolidated Financial Statements for additional information.

(c)Presented gross of the associated unfunded commitment. Refer to Note 14 for further information.

(d)Primarily relates to accrued interest, fees, and rent receivables related to our consumer automotive and commercial automotive finance receivables and loans.

(e)Primarily relates to investments made in connection with our CRA program.

(f)Includes restricted cash collected from customer payments on securitized receivables, which are distributed by us to investors as payments on the related secured debt, and cash reserve deposits utilized as a form of credit enhancement for various securitization transactions.

~~(b)Primarily relates to investments made in connection with our CRA program.~~

~~(c)~~(g)Primarily represents a number of arrangements with third parties where certain restrictions are placed on balances we hold due to collateral agreements associated with operational processes with a third-party bank, or letter of credit arrangements and corresponding collateral requirements.

~~The total carrying value~~(h)Excludes Ally Lending other assets which were transferred to assets of operations held-for-sale as of December 31, 2023. We closed the ~~nonmarketable~~sale of Ally Lending on March 1, 2024. Refer to Note 2 for additional information.

We elected to apply the proportional amortization method to qualifying tax equity investments ~~held at March 31, 2023,~~within our LIHTC, NMTC, and ~~December 31, 2022, including cumulative unrealized gains~~HTC programs upon adoption of ASU 2023-02 on January 1, 2024. Prior to adoption, the proportional amortization method applied to our qualifying LIHTC investments only. Refer to Note 1 for additional information.

The following table summarizes information about our proportional amortization investments.


	Three months ended March 31,
($ in millions)	2024		2023
Tax credits and other tax benefits from proportional amortization investments (a) (b)	$	39	$	47
Investment amortization expense recognized as a component of income tax expense (a)	32		38
Net benefit from proportional amortization investments (a)	$	7	$	9

(a)Amounts are included within income tax expense from continued operations on our Condensed Consolidated Statement of Comprehensive (Loss) Income and as a component of operating activities within deferred income taxes, other assets, and other liabilities on our Condensed Consolidated Statement of Cash Flows.

(b)There were no impairment losses ~~was as follows.~~

($ in millions) March 31, 2023 December 31, 2022
FRB stock $ 396 $ 401
FHLB stock 324 318
Equity investments without a readily determinable fair value
Cost basis at acquisition 90 89
Adjustments
Upward adjustments 183 177
Downward adjustments (including impairment) (160) (143)
Carrying amount, equity investments without a readily determinable fair value 113 123
Nonmarketable equity investments $ 833 $ 842

~~During~~recognized during both the three months ended March 31, 2024, and 2023, resulting from the forfeiture or ineligibility of tax credits or other circumstances.

Our proportional amortization investments were $1.9 billion at both March 31, 2024, and ~~2022, unrealized gains and losses included in the carrying value of the nonmarketable equity investments still held as of March~~December 31, 2023, and ~~2022,~~are included within other assets on our Condensed Consolidated Balance Sheet. Additionally, unfunded commitments to provide additional capital to proportional amortization investments were ~~as follows.~~

Three months ended March 31,
($ in millions) 2023 2022
Upward adjustments $ 5 $ 1
Downward adjustments (including impairment) (a) (17) (2)

~~(a)No impairment on FHLB~~$917 million and ~~FRB stock was recognized during the three months ended~~$973 million at March 31, 2024, and December 31, 2023, respectively, and ~~2022.~~

~~Total loss~~are included within accrued expenses and other liabilities on ~~nonmarketable equity investments, net, which includes both realized and unrealized gains and losses, were losses~~our Condensed Consolidated Balance Sheet. Substantially all of ~~$11 million and $1 million for~~ the ~~three months ended~~unfunded commitments at March 31, ~~2023, andMarch 31, 2022, respectively.~~2024, are expected to be paid out within the next five years.

3739

Table of Contents

Notes to Condensed Consolidated Financial Statements (unaudited)

Ally Financial Inc. • Form 10-Q

The total carrying value of the nonmarketable equity investments held at March 31, 2024, and December 31, 2023, including cumulative unrealized gains and losses, was as follows.


($ in millions)	March 31, 2024		December 31, 2023
FRB stock	$	411	$	392
FHLB stock	230		392
Equity investments without a readily determinable fair value
Cost basis at acquisition	76		74
Adjustments
Upward adjustments	53		51
Downward adjustments (including impairment)	(23)		(23)
Carrying amount, equity investments without a readily determinable fair value	106		102
Nonmarketable equity investments	$	747	$	886

During the three months ended March 31, 2024, and 2023, unrealized gains and losses included in the carrying value of the nonmarketable equity investments still held as of March 31, 2024, and 2023, were as follows.


	Three months ended March 31,
($ in millions)		2024		2023
Upward adjustments		$	1	$	5
Downward adjustments (including impairment) (a)		$	—	$	(17)

(a)No impairment on FHLB and FRB stock was recognized during the three months ended March 31, 2024, and 2023.

Total gain on nonmarketable equity investments, net, which includes both realized and unrealized gains and losses, was a net gain of $2 million for the three months ended March 31, 2024, compared to a net loss of $11 million for the three months ended March 31, 2023.

The carrying balance of goodwill by reportable operating segment was as follows.


($ in millions)	($ in millions)	Automotive Finance operations		Insurance operations		Corporate and Other (a)		Total		($ in millions)	Automotive Finance operations	Insurance operations	Corporate and Other (a)	Total
Goodwill at December 31, 2021		$	20	$	27	$	775	$	822
Goodwill acquired		—		—		—		—

Goodwill at December 31, 2022	Goodwill at December 31, 2022	$	20	$	27	$	775	$	822
Goodwill impairment
Transfer to assets of operations held-for-sale
Goodwill at December 31, 2023
Goodwill acquired	Goodwill acquired	—		—		—		—

Goodwill at March 31, 2023		$	20	$	27	$	775	$	822
Goodwill at March 31, 2024

Goodwill at March 31, 2024

Goodwill at March 31, 2024

(a)Includes $479 million of goodwill associated with Ally Credit Card at both March 31, ~~2023,~~2024, and December 31, ~~2022, $153 million of goodwill associated with Ally Lending at both March 31,~~ 2023, ~~and December 31, 2022,~~ and $143 million of goodwill associated with Ally Invest at both March 31, ~~2023,~~2024, and December 31, ~~2022.~~2023.

~~The net carrying value of intangible assets by class was as follows.~~

March 31, 2023 (a) December 31, 2022
($ in millions) Gross intangible assets Accumulated amortization Net carrying value Gross intangible assets Accumulated amortization Net carrying value
Technology $ 122 $ (57) $ 65 $ 122 $ (53) $ 69
Customer lists 58 (53) 5 58 (51) 7
Purchased credit card relationships 25 (5) 20 25 (4) 21
Trademarks 2 (1) 1 2 (1) 1
Total intangible assets $ 207 $ (116) $ 91 $ 207 $ (109) $ 98

~~(a)We expect to recognize amortization expense of $20 million during~~During the ~~remainder of 2023, $19 million in 2024, and $14 million in each of 2025, 2026, and 2027.~~

~~11. Deposit Liabilities~~

~~Deposit liabilities consisted of the following.~~

($ in millions) March 31, 2023 December 31, 2022
Noninterest-bearing deposits $ 174 $ 185
Interest-bearing deposits
Savings, money market, and checking accounts 101,528 110,776
Certificates of deposit 52,311 41,336
Total deposit liabilities $ 154,013 $ 152,297

~~At March~~year ended December 31, 2023, we recognized a $149 million impairment of goodwill at Corporate and ~~December 31, 2022, certificates~~Other related to the transfer of ~~deposit included $6.7 billion and $5.6 billion, respectively,~~Ally Lending to held-for-sale. Subsequent to the impairment charge, the goodwill balance of ~~those in denominations in excess~~$4 million was transferred to assets of ~~$250 thousand.~~operations held-for-sale on the Condensed Consolidated Balance Sheet. We closed the sale of Ally Lending on March 1, 2024. For additional information, refer to Note 2.

3840

Table of Contents

Notes to Condensed Consolidated Financial Statements (unaudited)

Ally Financial Inc. • Form 10-Q

The net carrying value of intangible assets by class was as follows.


	March 31, 2024						December 31, 2023
($ in millions)	Gross intangible assets		Accumulated amortization		Net carrying value		Gross intangible assets		Accumulated amortization		Net carrying value
Technology	$	117	$	(68)	$	49	$	117	$	(64)	$	53
Customer lists	41		(40)		1		41		(39)		2
Purchased credit card relationships	25		(8)		17		25		(7)		18

Trademarks	2		(2)		—		2		(2)		—

Total intangible assets (a)	$	185	$	(118)	$	67	$	185	$	(112)	$	73

(a)Excludes $22 million of gross intangible assets and $22 million of accumulated amortization that were transferred to assets of operations held-for-sale related to Ally Lending as of December 31, 2023. The sale was closed on March 1, 2024. Refer to Note 2 for additional information.

Estimated future amortization expense of intangible assets are as follows.


($ in millions)
2024	$	13
2025	14
2026	14
2027	13
2028	13
Total estimated future amortization expense	$	67

12. Deposit Liabilities

Deposit liabilities consisted of the following.


($ in millions)	March 31, 2024		December 31, 2023

Noninterest-bearing deposits	$	137	$	139
Interest-bearing deposits
Savings, money market, and spending accounts	103,852		99,340
Certificates of deposit	51,095		55,187

Total deposit liabilities	$	155,084	$	154,666

At March 31, 2024, and December 31, 2023, certificates of deposit included $7.2 billion and $7.7 billion, respectively, of those in denominations in excess of $250 thousand.

13. Debt

Short-Term Borrowings

The following table presents the composition of our short-term borrowings portfolio.


		March 31, 2023						December 31, 2022
		March 31, 2024
		March 31, 2024
		March 31, 2024															December 31, 2023
($ in millions)	($ in millions)	Unsecured		Secured (a)		Total		Unsecured		Secured (a)		Total		($ in millions)	Unsecured	Secured (a)	Total	Unsecured	Secured (a)	Total

Federal Home Loan Bank	Federal Home Loan Bank	$	—	$	700	$	700	$	—	$	1,900	$	1,900
Federal Home Loan Bank
Federal Home Loan Bank

Securities sold under agreements to repurchase
Securities sold under agreements to repurchase
Securities sold under agreements to repurchase	Securities sold under agreements to repurchase	—		755		755		—		499		499

Total short-term borrowings	Total short-term borrowings	$	—	$	1,455	$	1,455	$	—	$	2,399	$	2,399
Total short-term borrowings
Total short-term borrowings

(a)Refer to the section below titled Long-Term Debt for further details on assets restricted as collateral for payment of the related debt.

We periodically enter into term repurchase agreements—short-term borrowing agreements in which we sell securities to one or more investors while simultaneously committing to repurchase them at a specified future date, at the stated price plus accrued interest. ~~As of March 31, 2023, the~~We had no securities sold under agreements to repurchase ~~consisted~~as of ~~$755 million of agency mortgage-backed residential debt securities, of which $493 million are set to mature within 30 days, and $262 million are set to mature within~~March 31, ~~to 60 days.~~2024. Refer to Note 67 and Note 2122 for further details.

Table of Contents

Notes to Condensed Consolidated Financial Statements (unaudited)

Ally Financial Inc. • Form 10-Q

The primary risk associated with these repurchase agreements is that the counterparty will be unable to perform under the terms of the contract. As the borrower, we are exposed to the excess market value of the securities pledged over the amount borrowed. Daily mark-to-market collateral management is designed to limit this risk to the initial margin. However, should a counterparty declare bankruptcy or become insolvent, we may incur additional delays and costs. In some instances, we may place or receive cash collateral with counterparties under collateral arrangements associated with our repurchase agreements. At March 31, 2024, we did not place or receive any collateral related to repurchase agreements. At December 31, 2023, we ~~placed~~received cash collateral of $4$6 million ~~subsequent to the execution of the repurchase agreements,~~ and ~~we did not receive any collateral. At December 31, 2022, we placed cash~~non-cash collateral of $1 million ~~subsequent~~related to ~~the execution of the~~ repurchase ~~agreements, and we did not receive any collateral.~~agreements.

Long-Term Debt

The following ~~tables present~~table presents the composition of our long-term debt portfolio.


		March 31, 2024																March 31, 2024			December 31, 2023
			March 31, 2023						December 31, 2022

($ in millions)
($ in millions)
($ in millions)	($ in millions)		Unsecured		Secured		Total		Unsecured		Secured		Total		Unsecured	Secured	Total		Unsecured	Secured		Total
Long-term debt (a)	Long-term debt (a)
Due within one year	Due within one year		$	2,015	$	2,902	$	4,917	$	2,023	$	2,395	$	4,418
Due within one year
Due within one year
Due after one year	Due after one year		8,634		6,929		15,563		8,014		5,330		13,344
Total long-term debt (b)	Total long-term debt (b)		$	10,649	$	9,831	$	20,480	$	10,037	$	7,725	$	17,762

(a)Includes basis adjustments related to the application of hedge accounting. Refer to Note 1819 for additional information.

(b)Includes advances ~~net of hedge basis adjustments,~~ from the FHLB of Pittsburgh of ~~$6.8~~$5.1 billion and ~~$5.3~~$5.6 billion at March 31, ~~2023,~~2024, and December 31, ~~2022,~~2023, respectively.

The following table presents the scheduled remaining maturity of long-term debt at March 31, ~~2023,~~2024, assuming no early redemptions will occur. The amounts below include adjustments to the carrying value resulting from the application of hedge accounting. The actual payment of secured debt may vary based on the payment activity of the related pledged assets.

($ in millions) 2023 2024 2025 2026 2027 2028 and thereafter Total
Unsecured
Long-term debt $ 2,077 $ 1,480 $ 2,470 $ 107 $ 1,538 $ 3,855 $ 11,527
Original issue discount (46) (68) (74) (82) (95) (513) (878)
Total unsecured 2,031 1,412 2,396 25 1,443 3,342 10,649
Secured
Long-term debt 2,134 3,124 2,060 1,806 473 234 9,831
Total long-term debt $ 4,165 $ 4,536 $ 4,456 $ 1,831 $ 1,916 $ 3,576 $ 20,480

~~Table of Contents~~

~~Notes to Condensed Consolidated Financial Statements (unaudited)~~

~~Ally Financial Inc. • Form 10-Q~~


($ in millions)	2024		2025		2026		2027		2028		2029 and thereafter		Total
Unsecured
Long-term debt	$	1,477	$	2,483	$	152	$	1,536	$	867	$	4,861	$	11,376
Original issue discount	(52)		(74)		(82)		(94)		(107)		(405)		(814)
Total unsecured	1,425		2,409		70		1,442		760		4,456		10,562
Secured
Long-term debt	2,220		1,907		1,731		357		225		9		6,449
Total long-term debt	$	3,645	$	4,316	$	1,801	$	1,799	$	985	$	4,465	$	17,011

The following table summarizes assets restricted as collateral for the payment of the related debt obligation.

($ in millions)

March 31, 2023

December 31, 2022

Consumer automotive finance receivables

Consumer mortgage finance receivables

19,499

19,771

Consumer automotive finance receivables

13,505

11,759

Consumer mortgage finance receivables

Commercial finance receivables

5,413

4,210

Investment securities (amortized cost of $5,008 and $4,288) (a)

4,241

3,525

Commercial finance receivables

Investment securities (amortized cost of $3,017 and $4,030) (a)

Total assets restricted as collateral (b) (c) (d)

42,658

39,265

Secured debt (e)

11,286

10,124

Secured debt (e)

(a)A portion of the restricted investment securities at ~~March~~December 31, 2023, ~~and December 31, 2022,~~ was restricted under repurchase agreements. Refer to the section above titled Short-Term Borrowings for information on the repurchase agreements.

(b)All restricted assets are those of Ally Bank.

(c)Ally Bank has an advance agreement with the FHLB, and had assets pledged to secure borrowings that were restricted as collateral to the FHLB totaling ~~$28.4~~$27.6 billion and ~~$27.0~~$27.9 billion at March 31, ~~2023,~~2024, and December 31, ~~2022,~~2023, respectively. These assets were primarily composed of consumer mortgage finance receivables and loans as well as ~~real-estate-backed loans within our Automotive Finance and Corporate Finance businesses, and non-agency~~ mortgage-backed securities. Ally Bank has access to the FRB Discount Window and had assets pledged and restricted as collateral to the FRB totaling ~~$2.3~~$33.9 billion and ~~$2.4~~$34.0 billion at March 31, ~~2023,~~2024, and December 31, ~~2022,~~2023, respectively. These assets were composed of consumer automotive finance receivables and loans. Availability under these programs is only for the operations of Ally Bank and cannot be used to fund the operations or liabilities of Ally or its other subsidiaries.

(d)Excludes restricted cash and cash reserves for securitization trusts recorded within other assets on the Condensed Consolidated Balance Sheet. Refer to Note 1011 for additional information.

(e)Includes ~~$1.5 billion and $2.4~~$3.3 billion of short-term borrowings at ~~March 31, 2023, and~~ December 31, ~~2022, respectively.~~2023.

~~13. Accrued Expenses and Other Liabilities~~

~~The components of accrued expenses and other liabilities were as follows.~~

($ in millions) March 31, 2023 December 31, 2022
Unfunded commitments for investment in qualified affordable housing projects $ 861 $ 869
Accounts payable 541 435
Employee compensation and benefits 225 424
Deferred revenue 168 169
Reserves for insurance losses and loss adjustment expenses 133 119
Operating lease liabilities 130 137
Other liabilities 567 495
Total accrued expenses and other liabilities $ 2,625 $ 2,648

4042

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Notes to Condensed Consolidated Financial Statements (unaudited)

Ally Financial Inc. • Form 10-Q

14. Accrued Expenses and Other Liabilities

The components of accrued expenses and other liabilities were as follows.



($ in millions)	March 31, 2024		December 31, 2023
Unfunded commitments for proportional amortization investments (a)	$	917	$	973
Accounts payable	527		509
Employee compensation and benefits	230		409
Reserves for insurance losses and loss adjustment expenses (b)	164		140
Operating lease liabilities	120		113
Deferred revenue	103		103




Other liabilities	466		479
Total accrued expenses and other liabilities (c)	$	2,527	$	2,726

(a)Primarily relates to unfunded commitments for investments in qualified affordable housing projects.

(b)Refer to Note 5 for further information.

(c)Excludes Ally Lending accrued expenses and other liabilities, which were transferred to liabilities of operations held-for-sale as of December 31, 2023. The sale was closed on March 1, 2024. Refer to Note 2 for additional information.

15. Preferred Stock

The following table summarizes information about our preferred stock. For additional information regarding our preferred stock, refer to Note 17 to the Consolidated Financial Statements in our ~~2022~~2023 Annual Report on Form 10-K.


		March 31, 2023		December 31, 2022
	March 31, 2024								March 31, 2024				December 31, 2023
Series B preferred stock (a)	Series B preferred stock (a)
Issuance date
Issuance date
Issuance date	Issuance date	April 22, 2021		April 22, 2021		April 22, 2021				April 22, 2021
Carrying value ($ in millions)	Carrying value ($ in millions)	$	1,335	$	1,335	Carrying value ($ in millions)	$	1,335			$	1,335
Par value (per share)	Par value (per share)	$	0.01	$	0.01	Par value (per share)	$	0.01			$	0.01
Liquidation preference (per share)	Liquidation preference (per share)	$	1,000	$	1,000	Liquidation preference (per share)	$	1,000			$	1,000
Number of shares authorized	Number of shares authorized	1,350,000		1,350,000		Number of shares authorized	1,350,000				1,350,000
Number of shares issued and outstanding	Number of shares issued and outstanding	1,350,000		1,350,000		Number of shares issued and outstanding	1,350,000				1,350,000
Dividend/coupon	Dividend/coupon
Prior to May 15, 2026	Prior to May 15, 2026	4.700%		4.700%
Prior to May 15, 2026
Prior to May 15, 2026							4.700%				4.700%
On and after May 15, 2026	On and after May 15, 2026	Five Year Treasury + 3.868%		Five Year Treasury + 3.868%		On and after May 15, 2026	Five Year Treasury + 3.868%				Five Year Treasury + 3.868%
Series C preferred stock (a)	Series C preferred stock (a)
Issuance date
Issuance date
Issuance date	Issuance date	June 2, 2021		June 2, 2021		June 2, 2021				June 2, 2021
Carrying value ($ in millions)	Carrying value ($ in millions)	$	989	$	989	Carrying value ($ in millions)	$	989			$	989
Par value (per share)	Par value (per share)	$	0.01	$	0.01	Par value (per share)	$	0.01			$	0.01
Liquidation preference (per share)	Liquidation preference (per share)	$	1,000	$	1,000	Liquidation preference (per share)	$	1,000			$	1,000
Number of shares authorized	Number of shares authorized	1,000,000		1,000,000		Number of shares authorized	1,000,000				1,000,000
Number of shares issued and outstanding	Number of shares issued and outstanding	1,000,000		1,000,000		Number of shares issued and outstanding	1,000,000				1,000,000
Dividend/coupon	Dividend/coupon
Prior to May 15, 2028	Prior to May 15, 2028	4.700%		4.700%
Prior to May 15, 2028
Prior to May 15, 2028							4.700%				4.700%
On and after May 15, 2028	On and after May 15, 2028	Seven Year Treasury + 3.481%		Seven Year Treasury + 3.481%		On and after May 15, 2028	Seven Year Treasury + 3.481%				Seven Year Treasury + 3.481%

(a)We may, at our option, redeem the Series B and Series C shares on any dividend payment date on or after May 15, 2026, or May 15, 2028, respectively, or at any time within 90 days following a regulatory event that precludes the instruments from being included in additional Tier 1 capital.

~~15. Accumulated Other Comprehensive Loss~~

~~The following table presents changes, net of tax, in each component of accumulated other comprehensive loss.~~

($ in millions) Unrealized losses on investment securities (a) Translation adjustments and net investment hedges (b) Cash flow hedges (b) Defined benefit pension plans (c) Accumulated other comprehensive loss
Balance at January 1, 2022 $ (95) $ 19 $ 35 $ (117) $ (158)
Net change (1,631) 1 (5) 2 (1,633)
Balance at March 31, 2022 $ (1,726) $ 20 $ 30 $ (115) $ (1,791)
Balance at January 1, 2023 $ (4,095) $ 18 $ 18 $ — $ (4,059)
Net change 284 — (1) — 283
Balance at March 31, 2023 $ (3,811) $ 18 $ 17 $ — $ (3,776)

~~(a)Represents the after-tax difference between the fair value and amortized cost of our available-for-sale securities portfolio. Refer to Note 6 for additional information.~~

~~(b)For additional information on derivative instruments and hedging activities, refer to Note 18.~~

~~(c)During 2022, we settled our qualified defined benefit pension plan. Refer to Note 18 to the Consolidated Financial Statements in our 2022 Annual Report on Form 10-K for additional information.~~

~~Table of Contents~~

~~Notes to Condensed Consolidated Financial Statements (unaudited)~~

~~Ally Financial Inc. • Form 10-Q~~

~~The following tables present the before- and after-tax changes in each component of accumulated other comprehensive loss.~~

Three months ended March 31, 2023 ($ in millions)
Before tax Tax effect After tax
Investment securities
Net unrealized gains arising during the period $ 377 $ (89) $ 288
Less: Net realized gains reclassified to income from continuing operations 5 (a) (1) (b) 4
Net change 372 (88) 284
Cash flow hedges (c)
Net unrealized gains arising during the period 4 (1) 3
Less: Net realized gains reclassified to income from continuing operations 5 (d) (1) (b) 4
Net change (1) — (1)
Other comprehensive income $ 371 $ (88) $ 283

~~(a)Includes gains reclassified to other gain on investments, net in our Condensed Consolidated Statement of Comprehensive Income.~~

~~(b)Includes amounts reclassified to income tax expense from continuing operations in our Condensed Consolidated Statement of Comprehensive Income.~~

~~(c)For additional information on derivative instruments and hedging activities, refer to Note 18.~~

~~(d)Includes gains reclassified to interest and fees on finance receivables and loans in our Condensed Consolidated Statement of Comprehensive Income.~~

Three months ended March 31, 2022 ($ in millions)
Before tax Tax effect After tax
Investment securities
Net unrealized losses arising during the period $ (2,120) $ 503 $ (1,617)
Less: Net realized gains reclassified to income from continuing operations 18 (a) (4) (b) 14
Net change (2,138) 507 (1,631)
Translation adjustments
Net unrealized gains arising during the period 3 — 3
Net investment hedges (c)
Net unrealized losses arising during the period (3) 1 (2)
Cash flow hedges (c)
Less: Net realized gains reclassified to income from continuing operations 6 (d) (1) (b) 5
Defined benefit pension plans
Net unrealized gains arising during the period 2 — 2
Other comprehensive loss $ (2,142) $ 509 $ (1,633)

~~(a)Includes gains reclassified to other gain on investments, net in our Condensed Consolidated Statement of Comprehensive Income.~~

~~(b)Includes amounts reclassified to income tax expense from continuing operations in our Condensed Consolidated Statement of Comprehensive Income.~~

~~(c)For additional information on derivative instruments and hedging activities, refer to Note 18.~~

~~(d)Includes gains reclassified to interest and fees on finance receivables and loans in our Condensed Consolidated Statement of Comprehensive Income.~~

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Notes to Condensed Consolidated Financial Statements (unaudited)

Ally Financial Inc. • Form 10-Q

16. Accumulated Other Comprehensive Loss

The following table presents changes, net of tax, in each component of accumulated other comprehensive loss.



	Investment securities (a)
($ in millions)	Available- for-sale securities (b)		Held-to-maturity securities		Translation adjustments and net investment hedges (c)		Cash flow hedges (c)		Accumulated other comprehensive loss



Balance at January 1, 2023	$	(4,095)	$	—	$	18	$	18	$	(4,059)
Net change	284		—		—		(1)		283
Balance at March 31, 2023	$	(3,811)	$	—	$	18	$	17	$	(3,776)
Balance at January 1, 2024	$	(3,146)	$	(682)	$	21	$	(9)	$	(3,816)
Net change	(171)		15		(1)		(16)		(173)
Balance at March 31, 2024	$	(3,317)	$	(667)	$	20	$	(25)	$	(3,989)

(a)For additional information on the securities transferred from available-for-sale to held-to-maturity during 2023, refer to Note 7.

(b)Represents the after-tax difference between the fair value and amortized cost of our available-for-sale securities portfolio. Refer to Note 7 for additional information.

(c)For additional information on derivative instruments and hedging activities, refer to Note 19.

The following tables present the before- and after-tax changes in each component of accumulated other comprehensive loss.


Three months ended March 31, 2024 ($ in millions)	Before tax			Tax effect			After tax
Investment securities
Available-for-sale securities
Net unrealized losses arising during the period	$	(223)		$	53		$	(170)

Less: Net realized gains reclassified to income from continuing operations	1		(a)	—		(b)	1

Net change	(224)			53			(171)
Held-to-maturity securities

Less: Amortization of amounts previously recorded upon transfer from available-for-sale (c)	(20)		(d)	5		(b)	(15)

Translation adjustments
Net unrealized losses arising during the period	(5)			1			(4)



Net investment hedges (e)
Net unrealized gains arising during the period	4			(1)			3



Cash flow hedges (e)
Net unrealized losses arising during the period	(22)			5			(17)
Less: Net realized losses reclassified to income from continuing operations	(1)		(f)	—		(b)	(1)

Net change	(21)			5			(16)





Other comprehensive loss	$	(226)		$	53		$	(173)

(a)Includes gains reclassified to other gain on investments, net in our Condensed Consolidated Statement of Comprehensive (Loss) Income.

(b)Includes amounts reclassified to income tax expense from continuing operations in our Condensed Consolidated Statement of Comprehensive (Loss) Income.

(c)For additional information on the securities transferred from available-for-sale to held-to-maturity, refer to Note 7.

(d)Includes amounts reclassified to interest and dividends on investment securities and other earning assets in our Condensed Consolidated Statement of Comprehensive (Loss) Income.

(e)For additional information on derivative instruments and hedging activities, refer to Note 19.

(f)Includes losses reclassified to interest and fees on finance receivables and loans in our Condensed Consolidated Statement of Comprehensive (Loss) Income.

Table of Contents

Notes to Condensed Consolidated Financial Statements (unaudited)

Ally Financial Inc. • Form 10-Q


Three months ended March 31, 2023 ($ in millions)	Before tax			Tax effect			After tax
Investment securities
Available-for-sale securities
Net unrealized gains arising during the period	$	377		$	(89)		$	288
Less: Net realized gains reclassified to income from continuing operations	5		(a)	(1)		(b)	4
Net change	372			(88)			284




Cash flow hedges (c)
Net unrealized gains arising during the period	4			(1)			3
Less: Net realized gains reclassified to income from continuing operations	5		(d)	(1)		(b)	4
Net change	(1)			—			(1)




Other comprehensive income	$	371		$	(88)		$	283

(a)Includes gains reclassified to other gain on investments, net in our Condensed Consolidated Statement of Comprehensive (Loss) Income.

(b)Includes amounts reclassified to income tax expense from continuing operations in our Condensed Consolidated Statement of Comprehensive (Loss) Income.

(c)For additional information on derivative instruments and hedging activities, refer to Note 19.

(d)Includes gains reclassified to interest and fees on finance receivables and loans in our Condensed Consolidated Statement of Comprehensive (Loss) Income.

17. Earnings per Common Share

The following table presents the calculation of basic and diluted earnings per common share.

Three months ended March 31,

($ in millions, except per share data; shares in thousands) (a)

2023

2022

Net income from continuing operations

320

655

Net income from continuing operations

Preferred stock dividends — Series B

(16)

Preferred stock dividends — Series C

(12)

Preferred stock dividends — Series C

Net income from continuing operations attributable to common stockholders

292

627

Loss from discontinued operations, net of tax

(1)

—

Loss from discontinued operations, net of tax

Net income attributable to common stockholders

291

627

Basic weighted-average common shares outstanding (b)

302,657

335,678

Basic weighted-average common shares outstanding (b)

Diluted weighted-average common shares outstanding (b)

303,448

337,812

Basic earnings per common share

Net income from continuing operations

0.97

1.87

Net income

0.96

1.87

Net income

Diluted earnings per common share

Net income from continuing operations

0.96

1.86

Net income

0.96

1.86

Net income

(a)Figures in the table may not recalculate exactly due to rounding. Earnings per share is calculated based on unrounded numbers.

(b)Includes shares related to share-based compensation that vested but were not yet issued.

~~17.~~

Table of Contents

Notes to Condensed Consolidated Financial Statements (unaudited)

Ally Financial Inc. • Form 10-Q

18. Regulatory Capital and Other Regulatory Matters

Ally is subject to enhanced prudential standards that have been established by the FRB under the Dodd-Frank Act, as amended by the EGRRCP Act and as applied to Category IV firms under the Tailoring Rules. AsRefer to the discussion below, however, about rules proposed by the U.S. banking agencies in 2023 that would significantly alter the Tailoring Rules. Currently, as a Category IV firm, Ally is (1) subject to supervisory stress testing on a two-year cycle, (2) required to submit an annual capital plan to the FRB, (3) exempted from company-run capital stress testing requirements, (4) required to maintain a buffer of unencumbered highly liquid assets to meet projected net stressed cash outflows over a 30-day planning horizon, (5) exempted from the requirements of the LCR and the net stable funding ratio (provided that our average wSTWF continues to remain under $50 billion), and (6) exempted from the requirements of the supplementary leverage ratio, the countercyclical capital buffer, and single-counterparty credit limits. Even so, we are subject to rules enabling the FRB to conduct supervisory stress testing on a more or less frequent basis based on our financial condition, size, complexity, risk profile, scope of operations, or activities or based on risks to the U.S. economy. Further, we are subject to rules requiring the resubmission of our capital plan if we determine that there has been or will be a material change in our risk profile, financial condition, or corporate structure since we last submitted the capital plan or if the FRB determines that (a) our capital plan is incomplete or our capital plan or internal capital adequacy process contains material weaknesses, (b) there has been, or will likely be, a material change in our risk profile (including a material change in our business strategy or any risk exposure), financial condition, or corporate structure, or (c) the BHC stress scenario(s) are not appropriate for our business model and portfolios, or changes in the financial markets or the macroeconomic outlook that could have a material impact on our risk profile and financial condition require the use of updated scenarios. While a resubmission is pending, without prior approval of the FRB, we would generally be prohibited from paying dividends, repurchasing our common stock, or making other capital distributions. In addition, to satisfy the FRB in its review of our capital plan, we may be required to further cease or limit these capital distributions or to issue capital instruments that could be dilutive to stockholders. The FRB also may prevent us from maintaining or expanding lending or other business activities.

Basel Capital Framework

The FRB and other U.S. banking agencies have adopted risk-based and leverage capital rules that establish minimum capital-to-asset ratios for BHCs, like Ally, and depository institutions, like Ally Bank.

The risk-based capital ratios are based on a banking organization’s RWAs, which are generally determined under the standardized approach applicable to Ally and Ally Bank by (1) assigning on-balance-sheet exposures to broad risk-weight categories according to the counterparty or, if relevant, the guarantor or collateral (with higher risk weights assigned to categories of exposures perceived as representing greater risk), and (2) multiplying off-balance-sheet exposures by specified credit conversion factors to calculate credit equivalent amounts and assigning those credit equivalent amounts to the relevant risk-weight categories. The leverage ratio, in contrast, is based on an institution’s average unweighted on-balance-sheet exposures.

Under U.S. Basel III, Ally and Ally Bank must maintain a minimum Common Equity Tier 1 risk-based capital ratio of 4.5%, a minimum Tier 1 risk-based capital ratio of 6%, and a minimum total risk-based capital ratio of 8%. On top of the minimum risk-based capital ratios, Ally and Ally Bank are subject to a capital conservation buffer requirement, which must be satisfied entirely with capital that qualifies as

~~Table of Contents~~

~~Notes to Condensed Consolidated Financial Statements (unaudited)~~

~~Ally Financial Inc. • Form 10-Q~~

Common Equity Tier 1 capital. Failure to maintain more than the full amount of the capital conservation buffer requirement would result in automatic restrictions on the ability of Ally and Ally Bank to make capital distributions, including dividend payments and stock repurchases and redemptions, and to pay discretionary bonuses to executive officers. U.S. Basel III also subjects Ally and Ally Bank to a minimum Tier 1 leverage ratio of 4%. While the capital conservation buffer requirement for Ally Bank is fixed at 2.5% of RWAs, the capital conservation buffer requirement for a Category IV firm, like Ally, is equal to its stress capital buffer requirement. The stress capital buffer requirement for Ally, in turn, is the greater of 2.5% and the result of the following calculation: (1) the difference between Ally’s starting and minimum projected Common Equity Tier 1 capital ratios under the severely adverse scenario in the supervisory stress test, plus (2) the sum of the dollar amount of Ally’s planned common stock dividends for each of the fourth through seventh quarters of its nine-quarter capital planning horizon, as a percentage of RWAs. As of March 31, ~~2023,~~2024, the stress capital buffer requirement for Ally was 2.5%.

Ally and Ally Bank are currently subject to the U.S. Basel III standardized approach for counterparty credit risk but not to the U.S. Basel III advanced approaches for credit risk or operational risk. Ally is also not currently subject to the U.S. market-risk capital rule, which applies only to banking organizations with significant trading assets and liabilities. Since Ally and Ally Bank are currently not subject to the advanced approaches risk-based capital rules, we elected to apply a one-time option to exclude most components of accumulated other comprehensive income and loss from regulatory capital. As of March 31, ~~2023,~~2024, and December 31, ~~2022,~~2023, Ally had $4.0 billion and $3.8 billion, ~~and $4.1 billion~~respectively, of accumulated other comprehensive ~~losses,~~loss, net of applicable income taxes, that ~~were~~was excluded from Common Equity Tier 1 capital. Refer to the discussion below about rules proposed by the U.S. banking agencies in 2023 that would require us to recognize all components of accumulated other comprehensive income and loss in regulatory capital, except gains and losses on cash-flow hedges where the hedged items are not recognized on our balance sheet at fair value. Refer also to Note 1516 for additional details about our accumulated other comprehensive loss.

Failure to satisfy regulatory-capital requirements could result in significant sanctions—such as bars or other limits on capital distributions and discretionary bonuses to executive officers, limitations on acquisitions and new activities, restrictions on our acceptance of brokered deposits, a loss of our status as an FHC, or informal or formal enforcement and other supervisory actions—and could have a significant adverse effect on the Consolidated Financial Statements or the business, results of operations, financial condition, or prospects of Ally and Ally Bank.

Table of Contents

Notes to Condensed Consolidated Financial Statements (unaudited)

Ally Financial Inc. • Form 10-Q

The risk-based capital ratios and the Tier 1 leverage ratio play a central role in PCA, which is an enforcement framework used by the U.S. banking agencies to constrain the activities of depository institutions based on their levels of regulatory capital. Five categories have been established using thresholds for the Common Equity Tier 1 risk-based capital ratio, the Tier 1 risk-based capital ratio, the total risk-based capital ratio, and the Tier 1 leverage ratio: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized. FDICIA generally prohibits a depository institution from making any capital distribution, including any payment of a cash dividend or a management fee to its BHC, if the depository institution would become undercapitalized after the distribution. An undercapitalized institution is also subject to growth limitations and must submit and fulfill a capital restoration plan. Although BHCs are not subject to the PCA framework, the FRB is empowered to compel a BHC to take measures—such as the execution of financial or performance guarantees—when PCA is required in connection with one of its depository-institution subsidiaries. At both March 31, ~~2023,~~2024, and December 31, ~~2022,~~2023, Ally Bank met the capital ratios required to be well capitalized under the PCA framework.

Under FDICIA and the PCA framework, insured depository institutions such as Ally Bank must be well capitalized or, with a waiver from the FDIC, adequately capitalized in order to accept brokered deposits, and even adequately capitalized institutions are subject to some restrictions on the rates they may offer for brokered deposits. ~~Brokered~~Our brokered deposits totaled ~~$13.8~~$8.5 billion at March 31, ~~2023,~~2024, which represented ~~9.0%~~5.5% of ~~Ally Bank’s~~ total ~~deposits.~~

~~Table of Contents~~

~~Notes to Condensed Consolidated Financial Statements (unaudited)~~

~~Ally Financial Inc. • Form 10-Q~~

deposit liabilities.

The following table summarizes our capital ratios under U.S. Basel III.


			March 31, 2023				December 31, 2022				Required minimum (a)		Well-capitalized minimum
		March 31, 2024																			March 31, 2024								December 31, 2023							Required minimum (a)				Well-capitalized minimum
($ in millions)	($ in millions)		Amount		Ratio		Amount		Ratio						Required minimum (a)	Well-capitalized minimum
Capital ratios	Capital ratios
Capital ratios
Capital ratios
Common Equity Tier 1 (to risk-weighted assets)	Common Equity Tier 1 (to risk-weighted assets)
Common Equity Tier 1 (to risk-weighted assets)
Common Equity Tier 1 (to risk-weighted assets)
Ally Financial Inc.
Ally Financial Inc.
Ally Financial Inc.	Ally Financial Inc.		$	14,540	9.23	%	$	14,592	9.27	%	4.50	%	(b)			$	14,905			9.41		9.41		%			$	15,129			9.36		9.36	%			4.50	%				(b)
Ally Bank	Ally Bank		17,121		11.43		17,011		11.38		4.50		6.50	%	Ally Bank			17,290			11.53			11.53		17,217				17,217		11.24			11.24	4.50			4.50		6.50			6.50	%
Tier 1 (to risk-weighted assets)	Tier 1 (to risk-weighted assets)
Ally Financial Inc.	Ally Financial Inc.		$	16,803	10.66	%	$	16,867	10.72	%	6.00	%	6.00	%
Ally Financial Inc.
Ally Financial Inc.																		$	17,171				10.84		%			$	17,392				10.76	%			6.00	%				6.00	%
Ally Bank	Ally Bank		17,121		11.43		17,011		11.38		6.00		8.00
Total (to risk-weighted assets)	Total (to risk-weighted assets)
Ally Financial Inc.
Ally Financial Inc.
Ally Financial Inc.	Ally Financial Inc.		$	19,626	12.46	%	$	19,209	12.21	%	8.00	%	10.00	%		$	19,802			12.51		12.51		%			$	20,055			12.41		12.41	%			8.00	%				10.00	%
Ally Bank	Ally Bank		19,007		12.69		18,888		12.64		8.00		10.00
Tier 1 leverage (to adjusted quarterly average assets) (c)	Tier 1 leverage (to adjusted quarterly average assets) (c)
Ally Financial Inc.	Ally Financial Inc.		$	16,803	8.54	%	$	16,867	8.65	%	4.00	%	(b)
Ally Financial Inc.
Ally Financial Inc.																		$	17,171				8.63		%			$	17,392				8.67	%			4.00	%				(b)
Ally Bank	Ally Bank		17,121		9.18		17,011		9.23		4.00		5.00	%	Ally Bank			17,290			9.19			9.19		17,217				17,217		9.07			9.07	4.00			4.00		5.00			5.00	%

(a)In addition to the minimum risk-based capital requirements for the Common Equity Tier 1 capital, Tier 1 capital, and total capital ratios, Ally and Ally Bank were required to maintain a minimum capital conservation buffer of 2.5% at both March 31, ~~2023,~~2024, and December 31, ~~2022.~~2023.

(b)Currently, there is no ratio component for determining whether a BHC is “well-capitalized.”

(c)Federal regulatory reporting guidelines require the calculation of adjusted quarterly average assets using a daily average methodology.

On January 1, 2020, we adopted CECL. Refer to Note 1 to the Consolidated Financial Statements in our ~~2022~~2023 Annual Report on Form 10-K for additional information about our allowance for loan losses accounting policy. Under a rule finalized by the FRB and other U.S. banking agencies in 2020, we delayed recognizing the estimated impact of CECL on regulatory capital until after a two-year deferral period, which for us extended through December 31, 2021. Beginning on January 1, 2022, we were required to phase in 25% of the previously deferred estimated capital impact of CECL, with an additional 25% to be phased in at the beginning of each subsequent year until fully phased in by the first quarter of 2025. The estimated impact of CECL on regulatory capital that we deferred and began phasing in on January 1, 2022, is generally calculated as the entire day-one impact at adoption plus 25% of the subsequent change in allowance during the two-year deferral period. As of March 31, ~~2023,~~2024, the total deferred impact on Common Equity Tier 1 capital related to our adoption of CECL was ~~$591~~$296 million.

In December 2017, the Basel Committee approved revisions to the global Basel III capital framework (commonly known as the Basel III endgame or as Basel IV), many of which—if adopted in the United States—could heighten regulatory capital standards. While these revisions were planned for implementation by member countries by January 1, 2023, the U.S. banking agencies have yet to propose rules to do so. At this time, how the revisions will be harmonized and finalized in the United States remains unclear, although officials of the U.S. banking agencies have indicated that regulatory capital standards are expected to become more exacting. In addition, in the wake of the failures of SVB and Signature, President Biden on March 30, 2023, urged the U.S. banking agencies to roll back many of the Tailoring Rules for Category IV firms like Ally, including by (1) imposing regulatory capital standards currently applicable to the largest banking organizations, such as the minimum total-loss absorbing capacity (TLAC) requirement and the inclusion of accumulated other comprehensive income and loss in regulatory capital, (2) reinstating the LCR and requiring more rigorous liquidity stress testing, (3) returning to supervisory stress testing on an annual cycle, and (4) resuming resolution planning for Ally and its significant legal entities under the U.S. Bankruptcy Code and other applicable insolvency laws. On April ~~28,~~ 2023, in a statement accompanying the review of the FRB’s supervision and regulation of SVB, FRB Vice Chair for Supervision Barr highlighted a plan to revisit the Tailoring Rules and develop stronger capital, liquidity, stress-testing, and other standards for Category IV firms like Ally. In July 2023, the U.S. banking agencies issued a proposed rule to customize and implement revisions to the global Basel III capital framework that were approved by the Basel Committee in December 2017 (commonly known as the Basel III endgame or as Basel IV). For regulatory capital, the proposed rule would eliminate the effect of the Tailoring Rules by requiring the recognition of most elements of accumulated other comprehensive income and loss and the application of deductions, limitations, and criteria for specified capital investments, minority interests, and TLAC holdings. For each of the risk-based capital ratios, a large banking organization, like Ally, would calculate and be bound by the lower of two alternatives: one version of the ratio based on an expanded risk-based approach prescribed in the proposed rule and one version of the ratio based on the standardized approach as modified by the proposed rule. All capital buffer requirements, including the stress capital buffer requirement, would apply regardless of whether the expanded risk-based approach or the

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Notes to Condensed Consolidated Financial Statements (unaudited)

Ally Financial Inc. • Form 10-Q

standardized approach produces the lower ratio. Under the expanded risk-based approach, total RWAs would equal the sum of the RWAs for credit risk, equity risk, operational risk, market risk, and CVA risk as set forth in the proposed rule minus any amount of the banking organization’s adjusted allowance for credit losses that is not included in Tier 2 capital and any amount of allocated transfer risk reserves. Under the standardized approach, total RWAs would be calculated using the existing rules with a revised methodology for determining RWAs for market risk, and a required application of the standardized approach for counterparty credit risk for derivative exposures. Category IV firms would be further required under the proposed rule to project their risk-based capital ratios under baseline conditions in their capital plans and related reports using the RWA-calculation approach that results in their binding risk-based capital ratios as of the start of the projection horizon. The proposed rule also would roll back additional elements of the Tailoring Rules by applying to Category IV firms the supplementary leverage ratio, the countercyclical capital buffer, and enhanced public disclosure and reporting requirements. Under the proposed rule, a three-year transition period from July 1, 2025, to June 30, 2028, would apply to the recognition of accumulated other comprehensive income and loss in regulatory capital and the use of the expanded risk-based approach. The phase-in of accumulated other comprehensive income and loss is expected to significantly affect our levels of regulatory capital. While we believe that this would be manageable, we also anticipate that our levels of regulatory capital would need to be gradually increased in advance of and during the proposed transition period. As for the proposed changes to RWAs, while we continue to evaluate the effects of individual provisions and the interplay among them as well as potential management actions in response, the impact is not currently expected to be significant in the aggregate if the proposed rule were adopted in its existing form. Since the proposed rule was issued, we have been engaged with research and advocacy groups to inform the rulemaking process and better understand the impacts of the proposed rule on banking organizations of various sizes and complexities—as well as the competitive environment more broadly—and likewise encourage the U.S. banking agencies to closely study these impacts and their wider implications.

In August 2023, the U.S. banking agencies issued two proposed rules to improve the resolvability of Category IV firms, like Ally. The first proposed rule would require Category II, III, and IV firms, their large consolidated banks, and other institutions to issue and maintain minimum amounts of eligible long-term debt in an amount that is the greater of (i) 6 percent of total RWAs, (ii) 3.5 percent of average total consolidated assets, and (iii) 2.5 percent of total leverage exposure. Covered insured depository institutions, like Ally Bank, that are consolidated subsidiaries of covered entities, like Ally, would be required to issue eligible long-term debt internally to a company that consolidates the covered insured depository institution, which would in turn be required to purchase that long-term debt. Only long-term debt instruments that are most readily able to absorb losses in a resolution proceeding would qualify, and the operations of covered entities would be subject to clean-holding-company requirements such as prohibitions and limitations on their liabilities to unaffiliated entities. Under the proposed rule, a transition period would apply with 25, 50, and 100 percent of the long-term-debt requirements coming into effect by the end of the first, second, and third years, respectively, after finalization of the rule. The second proposed rule, which was issued solely by the FDIC, would require each insured depository institution with $100 billion or more in total assets, like Ally Bank, to submit a full resolution plan with an identified strategy for ensuring timely access to insured deposits, maximizing value from the disposition of assets, minimizing any losses realized by creditors, and addressing potential financial-stability risks. Each resolution plan also would be subject to more stringent standards on its assumptions, content, and reviews. Covered insured depository institutions would need to submit a full resolution plan every two years with interim supplements in non-submission years. We are still assessing the impact of these two proposed rules but, due to the current structure and amount of debt instruments issued by Ally and Ally Bank, expect the long-term-debt rule in particular to significantly affect us.

Whether and when final rules related to these proposals may be adopted and take effect, as well as what changes to the proposed rules may be reflected in any final rules after the comment periods, remain unclear. Also, beyond these proposed rules, more stringent and less tailored liquidity, stress-testing, and other standards for Category IV firms, like Ally, may be forthcoming, including those that may reinstate the LCR, require more rigorous liquidity stress testing, and return Ally to supervisory stress testing on an annual cycle.

Capital Planning and Stress Tests

Under the Tailoring Rules, we are generally subject to supervisory stress testing on a two-year cycle and exempted from mandated company-run capital stress testing requirements. We are also required to submit an annual capital plan to the FRB. Our annual capital plan must include an assessment of our expected uses and sources of capital and a description of all planned capital actions over a nine-quarter planning horizon, including any issuance of a debt or equity capital instrument, any dividend or other capital distribution, and any similar action that the FRB determines could have an impact on our capital. The plan must also include a detailed description of our process for assessing capital adequacy, including a discussion of how we, under expected and stressful conditions, will maintain capital commensurate with our risks and above the minimum regulatory capital ratios, will serve as a source of strength to Ally Bank, and will maintain sufficient capital to continue our operations by maintaining ready access to funding, meeting our obligations to creditors and other counterparties, and continuing to serve as a credit intermediary.

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~~Notes to Condensed Consolidated Financial Statements (unaudited)~~

~~Ally Financial Inc. • Form 10-Q~~

The Tailoring Rules align capital planning, supervisory stress testing, and stress capital buffer requirements for large banking organizations, like Ally. As a Category IV firm, Ally is expected to have the ability to elect to participate in the supervisory stress test—and receive a correspondingly updated stress capital buffer requirement—in a year in which Ally would not generally be subject to the supervisory stress test. Refer to the section titled Basel Capital Framework above for further discussion about our stress capital buffer requirements. During a year in which Ally does not undergo a supervisory stress test, we would receive an updated stress capital buffer requirement only to reflect our updated planned common-stock dividends. Ally was subject to the 2022 supervisory stress test and did not elect to participate in the 2023 supervisory stress test.

~~On January 10, 2022, our Board authorized a stock-repurchase program, permitting us~~

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Notes to repurchase up to $2.0 billion of our common stock from time to time from the first quarter of 2022 through the fourth quarter of 2022 subject to restrictions imposed by the FRB, and an increase in our cash dividend on common stock from $0.25 per share for the fourth quarter of 2021 to $0.30 per share for the first quarter of 2022. During the year ended December 31, 2022, we repurchased $1.65 billion of common stock under our stock-repurchase program. Since the commencement of our initial stock-repurchase program in the third quarter of 2016, we have reduced the number of outstanding shares of our common stock by 38%, from 484 million as of June 30, 2016, to 301 million as of March 31, 2023. At this time, the Board has not authorized a stock-repurchase program for 2023.Condensed Consolidated Financial Statements (unaudited)

Ally Financial Inc. • Form 10-Q

We ~~submitted our 2022 capital plan to the FRB on April 5, 2022. Ally~~ received an updated preliminary stress capital buffer requirement based on our 2022 capital plan submission from the FRB in June 2022, which was determined to be 2.5% and reflected a decline of 100 basis points relative to our prior requirement. The updated 2.5% stress capital buffer requirement was finalized in August 2022 and became effective on October 1, 2022. In February 2023, we accessed the unsecured debt capital markets and issued $500 million of additional subordinated notes, which qualify as Tier 2 capital for Ally under U.S. Basel III. We submitted our 2023 capital plan to the FRB on April 5, 2023, and received an updated preliminary stress capital buffer requirement in June 2023 that remained unchanged at 2.5%. The 2.5% stress capital buffer requirement was finalized in July 2023 and became effective on October 1, 2023. We submitted our 2024 capital plan to the FRB on April 5, 2024.

Our ability to make capital distributions, including our ability to pay dividends or repurchase shares of our common stock, will continue to be subject to the FRB’s review and our internal governance requirements, including approval by our Board. The amount and size of any future dividends and share repurchases also will be subject to various factors, including Ally’s capital and liquidity positions, accounting and regulatory considerations (including any restrictions that may be imposed by the ~~FRB)~~FRB and any changes to capital, liquidity, and other regulatory requirements that may be proposed or adopted by the U.S. banking agencies), the taxation of share repurchases, financial and operational performance, alternative uses of capital, common-stock price, and general market conditions, and may be extended, modified, or discontinued at any time.

The following table presents information related to our common stock and distributions to our common stockholders.


			Common stock repurchased during period (a)			Number of common shares outstanding		Cash dividends declared per common share (b)
		Common stock repurchased during period (a) (b)									Common stock repurchased during period (a) (b)	Number of common shares outstanding	Cash dividends declared per common share (c)
($ in millions, except per share data; shares in thousands)	($ in millions, except per share data; shares in thousands)		Approximate dollar value		Number of shares	Beginning of period	End of period			Cash dividends declared per common share (b)
2022
2023
2023
2023
First quarter
First quarter
First quarter	First quarter		$	584	12,548	337,941	327,306	$	0.30
Second quarter	Second quarter		600		15,031	327,306	312,781	0.30
Third quarter	Third quarter		415		12,468	312,781	300,335	0.30
Fourth quarter	Fourth quarter		51		1,731	300,335	299,324	0.30
2023
2024
First quarter
First quarter
First quarter	First quarter		$	27	836	299,324	300,821	$	0.30

(a)Includes shares of common stock withheld to cover income taxes owed by participants in our share-based incentive plans.

(b)Since the commencement of our initial stock-repurchase program in the third quarter of 2016, we have reduced the number of outstanding shares of our common stock by 37%, from 484 million as of June 30, 2016, to 304 million as of March 31, 2024. Except for repurchases made of shares withheld to cover income taxes owed by participants in our share-based incentive plans, we did not make any common-stock repurchases in 2023 or the first quarter of 2024, and at this time, the Board has not authorized a stock-repurchase program for 2024.

(c)On April ~~14, 2023,~~15, 2024, our Board declared a quarterly cash dividend of $0.30 per share on all common stock, payable on May 15, ~~2023,~~2024, to stockholders of record at the close of business on May 1, ~~2023. Refer to Note 24 for further information regarding this common-stock dividend.~~2024.

~~18.~~19. Derivative Instruments and Hedging Activities

We enter into derivative instruments, which may include interest rate swaps, foreign-currency forwards, equity options, and interest rate options, in connection with our risk-management activities. Our primary objective for using derivative financial instruments is to manage interest rate risk associated with our fixed-rate and variable-rate assets and liabilities, foreign exchange risks related to our net investments in foreign subsidiaries, as well as foreign-currency denominated assets and liabilities, and other market risks related to our investment portfolio.

Interest Rate Risk

We monitor our mix of fixed-rate and variable-rate assets and liabilities and may enter into interest rate swaps, forwards, and options to achieve ~~our~~a more desired mix of fixed-rate and variable-rate assets and liabilities. We execute these trades to modify our exposure to interest rate risk by converting certain fixed-rate instruments to a variable-rate and certain variable-rate instruments to a fixed-rate. We use a mix of both derivatives that qualify for hedge accounting treatment and economic hedges that do not qualify for hedge accounting treatment.

Derivatives qualifying for hedge accounting treatment can include receive-fixed swaps designated as fair value hedges of specific fixed-rate unsecured debt obligations, receive-fixed swaps designated as fair value hedges of specific fixed-rate FHLB advances, pay-fixed swaps designated as fair value hedges of securities within our available-for-sale portfolio, and pay-fixed swaps designated as fair value hedges of

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~~Notes to Condensed Consolidated Financial Statements (unaudited)~~

~~Ally Financial Inc. • Form 10-Q~~

fixed-rate held-for-investment consumer automotive loan assets. Other derivatives qualifying for hedge accounting consist of interest rate floor contracts designated as cash flow hedges of the expected future cash flows in the form of interest receipts on a portion of our dealer floorplan commercial loans.

We have the ability to execute economic hedges, which could consist of interest rate swaps, interest rate caps, forwards, and options to mitigate interest rate risk.

We also enter into interest rate lock commitments and forward commitments that are executed as part of our mortgage business that meet the accounting definition of a derivative.

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Notes to Condensed Consolidated Financial Statements (unaudited)

Ally Financial Inc. • Form 10-Q

Foreign Exchange Risk

We enter into derivative financial instrument contracts to mitigate the risk associated with variability in cash flows related to our various foreign-currency exposures.

We enter into foreign-currency forwards with external counterparties as net investment hedges of foreign exchange exposure on our investment in foreign subsidiaries. Our equity is impacted by the cumulative translation adjustments resulting from the translation of foreign subsidiary results; this impact is reflected in our accumulated other comprehensive income. We also periodically enter into foreign-currency forwards to economically hedge any foreign-denominated debt, centralized lending, and foreign-denominated third-party loans. These foreign-currency forwards used as economic hedges are recorded at fair value with changes recorded as income or expense offsetting the gains and losses on the associated foreign-currency transactions.

Investment Risk

We enter into equity options to mitigate the risk associated with our exposure to the equity markets.

Credit Risk

We enter into various retail automotive-loan purchase agreements with certain counterparties. As part of those agreements, we may ~~withhold a portion of the purchase price from the counterparty and~~ be required to pay the counterparty ~~all or part of the amount withheld~~ at agreed upon measurement dates and determinable amounts if actual credit performance of the acquired loans on the measurement date is better than ~~or equal to~~ what was estimated at the time of acquisition. Based upon these terms, these contracts meet the accounting definition of a derivative.

Counterparty Credit Risk

Derivative financial instruments contain an element of credit risk if counterparties are unable to meet the terms of the agreements. Credit risk associated with derivative financial instruments is measured as the net replacement cost should the counterparties that owe us under the contract completely fail to perform under the terms of those contracts, ~~assuming no recoveries~~with adjustments to reflect the exchange of ~~underlying~~ collateral ~~as measured by the market value of the derivative financial instrument.~~for margined transactions.

We manage our risk to financial counterparties through internal credit analysis, limits, and monitoring. Additionally, derivatives and repurchase agreements are entered into with approved counterparties using industry standard agreements.

We execute certain OTC derivatives, such as interest rate caps and floors, using bilateral agreements with financial counterparties. Bilateral agreements generally require both parties to post collateral in the event the fair values of the derivative financial instruments meet posting thresholds established under the agreements. If either party defaults on the obligation, the secured party may seize the collateral. Payments related to the exchange of collateral for OTC derivatives are recognized as collateral.

We also execute certain derivatives, such as interest rate swaps, with clearinghouses, which require us to post and receive collateral. For these clearinghouse derivatives, these payments are recognized as settlements rather than collateral.

Certain derivative instruments contain provisions that require us to either post additional collateral or immediately settle any outstanding liability balances upon the occurrence of a specified credit-risk-related event. No such specified credit-risk-related events occurred during the three months ended March 31, ~~2023,~~2024, or ~~2022.~~2023.

We placed cash and noncash collateral with counterparties totaling $5$1 million and ~~$674~~$569 million, respectively, supporting our derivative positions at March 31, ~~2023,~~2024, compared to $2$6 million and ~~$384~~$642 million of cash and noncash collateral, respectively, at December 31, ~~2022, in accounts maintained by counterparties.~~2023. These amounts include noncash collateral placed at clearinghouses and exclude cash and noncash collateral pledged under repurchase agreements. The receivables for cash collateral placed are included on our Condensed Consolidated Balance Sheet in other assets. We granted our counterparties the right to sell or pledge the noncash collateral.

We received cash collateral from counterparties totaling ~~$51~~$11 million and ~~$23~~$31 million ~~in accounts maintained by counterparties~~ at March 31, ~~2023,~~2024, and December 31, ~~2022,~~2023, respectively. These amounts exclude cash and noncash collateral pledged under repurchase agreements. The payables for cash collateral received are included on our Condensed Consolidated Balance Sheet in accrued expenses and other liabilities.

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Notes to Condensed Consolidated Financial Statements (unaudited)

Ally Financial Inc. • Form 10-Q

Balance Sheet Presentation

The following table summarizes the amounts of derivative instruments reported on our Condensed Consolidated Balance Sheet. The amounts are presented on a gross basis, are segregated by derivatives that are designated and qualifying as hedging instruments or those that are not, and are further segregated by type of contract within those two categories.

Derivative contracts in a receivable and payable position exclude open trade equity on derivatives cleared through central clearing counterparties. Any associated margin exchanged with our central clearing counterparties are treated as settlements of the derivative exposure, rather than collateral. Such payments are recognized as settlements of the derivatives contracts in a receivable and payable position on our Condensed Consolidated Balance Sheet.

Notional amounts are reference amounts from which contractual obligations are derived and are not recorded on the balance sheet. In our view, derivative notional is not an accurate measure of our derivative exposure when viewed in isolation from other factors, such as market rate fluctuations and counterparty credit risk.


			March 31, 2023						December 31, 2022
			Derivative contracts in a				Notional amount		Derivative contracts in a				Notional amount
		March 31, 2024																						March 31, 2024							December 31, 2023
		Derivative contracts in a																				Derivative contracts in a						Notional amount				Derivative contracts in a					Notional amount
($ in millions)	($ in millions)		receivable position		payable position			Notional amount		receivable position		payable position			Notional amount
Derivatives designated as accounting hedges	Derivatives designated as accounting hedges
Derivatives designated as accounting hedges
Derivatives designated as accounting hedges
Interest rate contracts	Interest rate contracts
Interest rate contracts
Interest rate contracts
Swaps
Swaps
Swaps	Swaps		$	—	$	—	$			39,549	$	—	$	—		$	30,619
Purchased options	Purchased options		47		—		5,000		22		—		2,800

Foreign exchange contracts	Foreign exchange contracts
Foreign exchange contracts
Foreign exchange contracts
Forwards
Forwards
Forwards	Forwards		—		2		154		—		1		151
Total derivatives designated as accounting hedges	Total derivatives designated as accounting hedges		47		2		44,703		22		1		33,570
Derivatives not designated as accounting hedges	Derivatives not designated as accounting hedges
Interest rate contracts	Interest rate contracts

Futures and forwards			—		—		77		—		—		37
Interest rate contracts
Interest rate contracts
Swaps
Swaps
Swaps
Forwards
Written options	Written options		2		—		123		—				79

Total interest rate risk	Total interest rate risk		2		—		200		—		—		116
Total interest rate risk
Total interest rate risk
Foreign exchange contracts	Foreign exchange contracts

Futures and forwards			—		—		52		—		1		147
Forwards

Forwards

Forwards

Total foreign exchange risk

Total foreign exchange risk

Total foreign exchange risk	Total foreign exchange risk		—		—		52		—		1		147
Credit contracts (a)	Credit contracts (a)
Other credit derivatives	Other credit derivatives		—		44		n/a		—		39		n/a
Other credit derivatives
Other credit derivatives																		—		10					n/a		—				10				n/a
Total credit risk	Total credit risk		—		44		n/a		—		39		n/a		Total credit risk			—	10		10		n/a			n/a			—	10			10	n/a		n/a
Equity contracts	Equity contracts

Written options

Written options

Written options	Written options		—		3		1		—		1		—
Purchased options	Purchased options		1		—		1		1		—		—
Total equity risk	Total equity risk		1		3		2		1		1		—
Total derivatives not designated as accounting hedges	Total derivatives not designated as accounting hedges		3		47		254		1		41		263
Total derivatives	Total derivatives		$	50	$	49	$	44,957	$	23	$	42	$	33,833

n/a = not applicable

(a)The maximum potential amount of undiscounted future payments that could be required under these credit derivatives was ~~$76~~$24 million and ~~$82~~$29 million as of March 31, ~~2023,~~2024, and December 31, ~~2022,~~2023, respectively.

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Notes to Condensed Consolidated Financial Statements (unaudited)

Ally Financial Inc. • Form 10-Q

The following table presents amounts recorded on our Condensed Consolidated Balance Sheet related to cumulative basis adjustments for fair value hedges.


		Carrying amount of the hedged items						Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged items
							Total						Discontinued (a)							Carrying amount of the hedged items			Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged items
																						Total			Discontinued (a)
($ in millions)	($ in millions)			March 31, 2023			December 31, 2022			March 31, 2023			December 31, 2022			March 31, 2023			December 31, 2022		($ in millions)	March 31, 2024		December 31, 2023		March 31, 2024	December 31, 2023	March 31, 2024	December 31, 2023
Assets	Assets
Available-for-sale securities (b)	Available-for-sale securities (b)	$	11,493		$	11,265		$	(45)		$	(180)		$	(174)		$	(181)
Available-for-sale securities (b)
Available-for-sale securities (b)
Finance receivables and loans, net (c)	Finance receivables and loans, net (c)	52,785			46,390			(402)			(617)			(47)			(57)
Liabilities	Liabilities

Long-term debt	Long-term debt	$	7,708		$	7,697		$	108		$	112		$	108		$	120

Long-term debt

Long-term debt

(a)Represents the fair value hedging adjustment on qualifying hedges for which the hedging relationship was discontinued. This represents a subset of the amounts reported in the total hedging adjustment.

(b)These amounts include the amortized cost basis and unallocated basis adjustments of closed portfolios of available-for-sale securities used to designate hedging relationships in which the hedged item is the stated amount of assets in the closed portfolios anticipated to be outstanding for the designated hedge period. At ~~both~~ March 31, ~~2023,~~2024, and December 31, ~~2022,~~2023, the amortized cost basis and unallocated basis adjustments of the closed portfolios used in these hedging relationships was ~~$10.0~~$14.5 billion and $14.8 billion, respectively, of which ~~$9.7~~$14.2 billion and $14.6 billion, respectively, represents the amortized cost basis and unallocated basis adjustments of closed portfolios designated in an active hedge relationship. At March 31, ~~2023,~~2024, and December 31, ~~2022,~~2023, the total cumulative basis adjustments associated with these hedging relationships was a ~~$16~~$225 million liability and a ~~$135~~$45 million liability, respectively, of which the portion related to discontinued hedging relationships was a ~~$132~~$116 million liability and a ~~$138~~$120 million liability, respectively. At both March 31, ~~2023,~~2024, and December 31, ~~2022,~~2023, the notional amounts of the designated hedged items were ~~$7.7~~$11.3 billion, ~~and $4.0 billion, respectively,~~ with cumulative basis adjustments of a ~~$116~~$109 million ~~asset~~liability and a $3$75 million asset, respectively, which would be allocated across the entire remaining closed pool upon termination or maturity of the hedge relationship. Refer to Note 67 for a reconciliation of the amortized cost and fair value of available-for-sale securities.

(c)These amounts include the carrying value of closed portfolios of loan receivables used to designate hedging relationships in which the hedged item is the stated amount of assets in the closed portfolios anticipated to be outstanding for the designated hedge period. At March 31, ~~2023,~~2024, and December 31, ~~2022,~~2023, the carrying value of the closed portfolios used in these hedging relationships was ~~$52.8~~$47.5 billion and ~~$46.4~~$54.2 billion, respectively, of which ~~$51.9~~$41.0 billion and ~~$46.1~~$50.0 billion, respectively, represents the carrying value of closed portfolios designated in an active hedge relationship. At March 31, ~~2023,~~2024, and December 31, ~~2022,~~2023, the total cumulative basis adjustments associated with these hedging relationships was a ~~$402~~$181 million liability and a ~~$617~~$93 million liability, respectively, of which the portion related to discontinued hedging relationships was a ~~$47~~$21 million liability and a ~~$57~~$27 million liability, respectively. At March 31, ~~2023,~~2024, and December 31, ~~2022,~~2023, the notional amounts of the designated hedged items were ~~$30.5~~$19.7 billion and ~~$22.8~~$23.2 billion, respectively, with cumulative basis adjustments of a ~~$355~~$160 million liability and a ~~$560~~$66 million liability, respectively, which would be allocated across the entire remaining closed pool upon termination or maturity of the hedge relationship.

Statement of Income Presentation

The following table summarizes the location and amounts of gains and losses on derivative instruments not designated as accounting hedges reported in our Condensed Consolidated Statement of Comprehensive (Loss) Income.

Three months ended March 31,

($ in millions)

2023

2022

Gain (loss) recognized in earnings

Interest rate contracts

Gain (loss) on mortgage and automotive loans, net

(2)

Other income, net of losses

—

Interest rate contracts

Gain on mortgage and automotive loans, net

Total interest rate contracts

Foreign exchange contracts

Other operating expenses

(3)

Other operating expenses

Total foreign exchange contracts

(3)

Total foreign exchange contracts

Credit contracts

Other income, net of losses

(5)

(1)

Other income, net of losses

Total credit contracts

(5)

(1)

Equity contracts

Other income, net of losses

(4)

—

Total equity contracts

(4)

—

Total loss recognized in earnings

(3)

Total equity contracts

Total gain (loss) recognized in earnings

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Notes to Condensed Consolidated Financial Statements (unaudited)

Ally Financial Inc. • Form 10-Q

The following table summarizes the location and amounts of gains and losses on derivative instruments designated as qualifying fair value and cash flow hedges reported in our Condensed Consolidated Statement of Comprehensive (Loss) Income.


		Interest and fees on finance receivables and loans				Interest and dividends on investment securities and other earning assets					Interest on long-term debt
Three months ended March 31, ($ in millions)		2023		2022			2023		2022			2023		2022
		Interest and fees on finance receivables and loans
		Interest and fees on finance receivables and loans
		Interest and fees on finance receivables and loans														Interest and dividends on investment securities and other earning assets	Interest on long-term debt
Three months ended March 31, ($ in millions)
Gain (loss) on fair value hedging relationships
Gain (loss) on fair value hedging relationships
Gain (loss) on fair value hedging relationships	Gain (loss) on fair value hedging relationships
Interest rate contracts	Interest rate contracts
Interest rate contracts
Interest rate contracts
Hedged fixed-rate unsecured debt	Hedged fixed-rate unsecured debt	$	—	$	—		$	—	$	—		$	1	$	(2)
Hedged fixed-rate unsecured debt
Hedged fixed-rate unsecured debt
Derivatives designated as hedging instruments on fixed-rate unsecured debt
Derivatives designated as hedging instruments on fixed-rate unsecured debt
Derivatives designated as hedging instruments on fixed-rate unsecured debt	Derivatives designated as hedging instruments on fixed-rate unsecured debt	—		—			—		—			(1)		2

Hedged available-for-sale securities	Hedged available-for-sale securities	—		—			130		(42)			—		—

Hedged available-for-sale securities

Hedged available-for-sale securities
Derivatives designated as hedging instruments on available-for-sale securities
Derivatives designated as hedging instruments on available-for-sale securities
Derivatives designated as hedging instruments on available-for-sale securities	Derivatives designated as hedging instruments on available-for-sale securities	—		—			(130)		42			—		—
Hedged fixed-rate consumer automotive loans	Hedged fixed-rate consumer automotive loans	205		(304)			—		—			—		—
Hedged fixed-rate consumer automotive loans
Hedged fixed-rate consumer automotive loans
Derivatives designated as hedging instruments on fixed-rate consumer automotive loans
Derivatives designated as hedging instruments on fixed-rate consumer automotive loans
Derivatives designated as hedging instruments on fixed-rate consumer automotive loans	Derivatives designated as hedging instruments on fixed-rate consumer automotive loans	(205)		304			—		—			—		—
Total gain on fair value hedging relationships	Total gain on fair value hedging relationships	—		—			—		—			—		—
Gain on cash flow hedging relationships
Total gain on fair value hedging relationships
Total gain on fair value hedging relationships
(Loss) gain on cash flow hedging relationships
(Loss) gain on cash flow hedging relationships
(Loss) gain on cash flow hedging relationships
Interest rate contracts
Interest rate contracts
Interest rate contracts	Interest rate contracts

Hedged variable-rate commercial loans

Hedged variable-rate commercial loans

Hedged variable-rate commercial loans	Hedged variable-rate commercial loans
Reclassified from accumulated other comprehensive loss into income	Reclassified from accumulated other comprehensive loss into income	5		6			—		—			—		—
Reclassified from accumulated other comprehensive loss into income
Reclassified from accumulated other comprehensive loss into income

Total gain on cash flow hedging relationships		$	5	$	6		$	—	$	—		$	—	$	—
Total amounts presented in the Condensed Consolidated Statement of Income		$	2,575	$	1,714		$	238	$	188		$	227	$	185
Total (loss) gain on cash flow hedging relationships

Total (loss) gain on cash flow hedging relationships

Total (loss) gain on cash flow hedging relationships
Total amounts presented in the Condensed Consolidated Statement of Comprehensive (Loss) Income
Total amounts presented in the Condensed Consolidated Statement of Comprehensive (Loss) Income
Total amounts presented in the Condensed Consolidated Statement of Comprehensive (Loss) Income

During the next 12 months, we estimate $8$18 million of ~~gains~~losses will be reclassified into pretax earnings from derivatives designated as cash flow hedges.

The following table summarizes the location and amounts of gains and losses related to interest and amortization on derivative instruments designated as qualifying fair value and cash flow hedges reported in our Condensed Consolidated Statement of Comprehensive (Loss) Income.


		Interest and fees on finance receivables and loans				Interest and dividends on investment securities and other earning assets					Interest on long-term debt
		Interest and fees on finance receivables and loans
		Interest and fees on finance receivables and loans
		Interest and fees on finance receivables and loans														Interest and dividends on investment securities and other earning assets	Interest on long-term debt
Three months ended March 31, ($ in millions)	Three months ended March 31, ($ in millions)	2023		2022			2023		2022			2023		2022
Gain (loss) on fair value hedging relationships
Gain on fair value hedging relationships
Gain on fair value hedging relationships
Gain on fair value hedging relationships
Interest rate contracts	Interest rate contracts
Interest rate contracts
Interest rate contracts
Amortization of deferred unsecured debt basis adjustments
Amortization of deferred unsecured debt basis adjustments
Amortization of deferred unsecured debt basis adjustments	Amortization of deferred unsecured debt basis adjustments	$	—	$	—		$	—	$	—		$	2	$	1

Amortization of deferred secured debt basis adjustments (FHLB advances)	Amortization of deferred secured debt basis adjustments (FHLB advances)	—		—			—		—			1		(1)

Amortization of deferred secured debt basis adjustments (FHLB advances)

Amortization of deferred secured debt basis adjustments (FHLB advances)

Amortization of deferred basis adjustments of available-for-sale securities

Amortization of deferred basis adjustments of available-for-sale securities

Amortization of deferred basis adjustments of available-for-sale securities	Amortization of deferred basis adjustments of available-for-sale securities	—		—			5		1			—		—
Interest for qualifying accounting hedges of available-for-sale securities	Interest for qualifying accounting hedges of available-for-sale securities	—		—			13		(1)			—		—
Interest for qualifying accounting hedges of available-for-sale securities
Interest for qualifying accounting hedges of available-for-sale securities
Amortization of deferred loan basis adjustments
Amortization of deferred loan basis adjustments
Amortization of deferred loan basis adjustments	Amortization of deferred loan basis adjustments	10		(9)			—		—			—		—
Interest for qualifying accounting hedges of consumer automotive loans held for investment	Interest for qualifying accounting hedges of consumer automotive loans held for investment	162		(18)			—		—			—		—
Total gain (loss) on fair value hedging relationships		$	172	$	(27)		$	18	$	—		$	3	$	—
Interest for qualifying accounting hedges of consumer automotive loans held for investment
Interest for qualifying accounting hedges of consumer automotive loans held for investment
Total gain on fair value hedging relationships
Total gain on fair value hedging relationships
Total gain on fair value hedging relationships

5053

Table of Contents

Notes to Condensed Consolidated Financial Statements (unaudited)

Ally Financial Inc. • Form 10-Q

The following table summarizes the effect of cash flow hedges on accumulated other comprehensive loss.

Three months ended March 31,

($ in millions)

2023

2022

Interest rate contracts

Loss recognized in other comprehensive income (loss)

(1)

(6)

Interest rate contracts

Loss recognized in other comprehensive (loss) income

The following table summarizes the effect of net investment hedges on accumulated other comprehensive loss.

Three months ended March 31,

($ in millions)

2023

2022

Foreign exchange contracts (a) (b)

Loss recognized in other comprehensive income (loss)

—

(3)

Foreign exchange contracts (a) (b)

Gain recognized in other comprehensive (loss) income

(a)There were no amounts excluded from effectiveness testing for the three months ended March 31, ~~2023,~~2024, or ~~2022.~~2023.

(b)Gains and losses reclassified from accumulated other comprehensive loss are reported as other income, net of losses, in the Condensed Consolidated Statement of Comprehensive (Loss) Income. There were no amounts reclassified for the three months ended March 31, ~~2023,~~2024, or ~~2022.~~2023.

~~19.~~20. Income Taxes

We recognized total income tax expense from continuing operations of ~~$68~~$14 million for the three months ended March 31, ~~2023,~~2024, compared to income tax expense of ~~$191~~$68 million for the same period in ~~2022.~~2023. The decrease in income tax expense for the three months ended March 31, ~~2023,~~2024, compared to the same period in ~~2022,~~2023, was primarily due to the tax effects of a decrease in pretax earnings. Additionally, an income tax benefit for qualified clean vehicle tax credits for purchased plug-in electric vehicles or fuel cell vehicles, along with other tax credits, resulted in a significant variation in the customary relationship between pretax income and income tax expense for the three months ended March 31, 2024.

As of each reporting date, we consider existing evidence, both positive and negative, that could impact our view with regard to future realization of deferred tax assets. We continue to believe it is more likely than not that the benefit for certain foreign tax credit carryforwards and state net operating loss carryforwards will not be realized. In recognition of this risk, we continue to provide a partial valuation allowance on the deferred tax assets relating to these carryforwards and it is reasonably possible that the valuation allowance may change in the next 12 months.

~~20.~~21. Fair Value

Fair Value Measurements

For purposes of this disclosure, fair value is defined as the exchange price that would be received to sell an asset or paid to transfer a liability (exit price) in the principal or most advantageous market in an orderly transaction between market participants at the measurement date under current market conditions. Fair value is based on the assumptions we believe market participants would use when pricing an asset or liability. Additionally, entities are required to consider all aspects of nonperformance risk, including the entity’s own credit standing, when measuring the fair value of a liability.

U.S. GAAP specifies a three-level hierarchy that is used when measuring and disclosing fair value. The fair value hierarchy gives the highest priority to quoted prices available in active markets (i.e., observable inputs) and the lowest priority to data lacking transparency (i.e., unobservable inputs). An instrument’s categorization within the fair value hierarchy is based on the lowest level of significant input to its valuation. The following is a description of the three hierarchy levels.

Level 1 Inputs are quoted prices in active markets for identical assets or liabilities at the measurement date. Additionally, the entity must have the ability to access the active market, and the quoted prices cannot be adjusted by the entity.

Level 2 Inputs are other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices in active markets for similar assets or liabilities; quoted prices in inactive markets for identical or similar assets or liabilities; or inputs that are observable or can be corroborated by observable market data by correlation or other means for substantially the full term of the assets or liabilities.

Level 3 Unobservable inputs are supported by little or no market activity. The unobservable inputs represent management’s best assumptions of how market participants would price the assets or liabilities. Generally, Level 3 assets and liabilities are valued using pricing models, discounted cash flow methodologies, or similar techniques that require significant judgment or estimation.

Judgment is used in estimating inputs to our internal valuation models used to estimate our Level 3 fair value measurements. Level 3 inputs such as interest rate movements, prepayment speeds, credit losses, and discount rates are inherently difficult to estimate. Changes to these inputs can have a significant effect on fair value measurements and amounts that could be realized.

Table of Contents

Notes to Condensed Consolidated Financial Statements (unaudited)

Ally Financial Inc. • Form 10-Q

The following are descriptions of the valuation methodologies used to measure material assets and liabilities at fair value and details of the valuation models, key inputs to those models, and significant assumptions utilized.

~~Table of Contents~~

~~Notes to Condensed Consolidated Financial Statements (unaudited)~~

~~Ally Financial Inc. • Form 10-Q~~

•Equity securities — We hold various marketable equity securities measured at fair value with changes in fair value recognized in net income. Measurements based on observable market prices are classified as Level 1.

•Available-for-sale securities — We carry our available-for-sale securities at fair value based on external pricing sources. We classify our securities as Level 1 when fair value is determined using quoted prices available for the same instruments trading in active markets. We classify our securities as Level 2 when fair value is determined using prices for similar instruments trading in active markets. We perform pricing validation procedures for our available-for-sale securities.

•Derivative instruments — We enter into a variety of derivative financial instruments as part of our risk-management strategies. Certain of these derivatives are exchange traded, such as equity options. To determine the fair value of these instruments, we utilize the quoted market prices for those particular derivative contracts; therefore, we classified these contracts as Level 1.

We also execute OTC and centrally cleared derivative contracts, such as interest rate swaps, foreign-currency denominated forward contracts, caps, floors, and agency to-be-announced securities. We utilize third-party-developed valuation models that are widely accepted in the market to value these derivative contracts. The specific terms of the contract and market observable inputs (such as interest rate forward curves, interpolated volatility assumptions, or equity pricing) are used in the model. We classified these derivative contracts as Level 2 because all significant inputs into these models were market observable.

We also enter into interest rate lock commitments and forward commitments that are executed as part of our mortgage business, certain of which meet the accounting definition of a derivative and therefore are recorded as derivatives on our Condensed Consolidated Balance Sheet. Interest rate lock commitments are valued using internal pricing models with unobservable inputs, so they are classified as Level 3.

We purchase automotive finance receivables and loans from third parties as part of forward flow arrangements and, from time-to-time, execute opportunistic ad-hoc bulk purchases. As part of those agreements, we may ~~withhold a portion of the purchase price from the counterparty and~~ be required to pay the counterparty ~~all or part of the amount withheld~~ at agreed upon measurement dates and determinable amounts if actual credit performance of the acquired loans on the measurement date is better than ~~or equal to~~ what was estimated at the time of acquisition. Because these contracts meet the accounting definition of a derivative, we recognize a liability at fair value for these deferred purchase price payments. The fair value of these liabilities is determined using a discounted cash flow method. To estimate cash flows, we utilize various significant assumptions, including market observable inputs (for example, forward interest rates) and internally developed inputs (for example, prepayment speeds, delinquency levels, and expected credit losses). These liabilities are valued using internal loss models with unobservable inputs, and are classified as Level 3.

We are required to consider all aspects of nonperformance risk, including our own credit standing, when measuring fair value of derivative assets and liabilities. We reduce credit risk on the majority of our derivatives by entering into legally enforceable agreements that enable the posting and receiving of collateral associated with the fair value of our derivative positions on an ongoing basis. In the event that we do not enter into legally enforceable agreements that enable the posting and receiving of collateral, we will consider our credit risk in the valuation of derivative liabilities through a DVA and the credit risk of our counterparties in the valuation of derivative assets through a CVA, if warranted. When measuring these valuation adjustments, we generally use credit default swap spreads.

5255

Table of Contents

Notes to Condensed Consolidated Financial Statements (unaudited)

Ally Financial Inc. • Form 10-Q

Recurring Fair Value

The following tables display the assets and liabilities measured at fair value on a recurring basis including financial instruments elected for the fair value option. We often economically hedge the fair value change of our assets or liabilities with derivatives. The tables below display the hedges separately from the hedged items; therefore, they do not directly display the impact of our risk-management activities.


			Recurring fair value measurements
March 31, 2023 ($ in millions)			Level 1		Level 2		Level 3		Total
		Recurring fair value measurements													Recurring fair value measurements
March 31, 2024 ($ in millions)											March 31, 2024 ($ in millions)	Level 1	Level 2	Level 3		Total
Assets	Assets
Investment securities	Investment securities
Investment securities
Investment securities
Equity securities (a) (b)
Equity securities (a) (b)
Equity securities (a) (b)	Equity securities (a) (b)		$	676	$	—	$	1	$	677
Available-for-sale securities	Available-for-sale securities
Debt securities	Debt securities
Debt securities
Debt securities
U.S. Treasury and federal agencies
U.S. Treasury and federal agencies
U.S. Treasury and federal agencies	U.S. Treasury and federal agencies		2,064		—		—		2,064
U.S. States and political subdivisions	U.S. States and political subdivisions		—		709		4		713
Foreign government	Foreign government		47		117		—		164
Agency mortgage-backed residential	Agency mortgage-backed residential		—		16,420		—		16,420
Mortgage-backed residential	Mortgage-backed residential		—		4,282		—		4,282
Agency mortgage-backed commercial	Agency mortgage-backed commercial		—		3,652		—		3,652

Asset-backed	Asset-backed		—		419		—		419
Asset-backed
Asset-backed
Corporate debt	Corporate debt		—		1,736		—		1,736
Total available-for-sale securities	Total available-for-sale securities		2,111		27,335		4		29,450
Mortgage loans held-for-sale (c)	Mortgage loans held-for-sale (c)		—		24		—		24

Finance receivables and loans, net
Consumer other (c)			—		—		2		2

Other assets

Other assets

Other assets	Other assets
Derivative contracts in a receivable position	Derivative contracts in a receivable position
Derivative contracts in a receivable position
Derivative contracts in a receivable position
Interest rate
Interest rate
Interest rate	Interest rate		—		47		2		49

Equity
Equity
Equity	Equity		1		—		—		1
Total derivative contracts in a receivable position	Total derivative contracts in a receivable position		1		47		2		50

Total assets	Total assets		$	2,788	$	27,406	$	9	$	30,203
Total assets
Total assets
Liabilities	Liabilities
Accrued expenses and other liabilities	Accrued expenses and other liabilities
Accrued expenses and other liabilities
Accrued expenses and other liabilities
Derivative contracts in a payable position
Derivative contracts in a payable position
Derivative contracts in a payable position	Derivative contracts in a payable position

Foreign currency			$	—	$	2	$	—	$	2

Credit

Credit

Credit	Credit		—		—		44		44
Equity	Equity		3		—		—		3
Total derivative contracts in a payable position	Total derivative contracts in a payable position		3		2		44		49

Total liabilities	Total liabilities		$	3	$	2	$	44	$	49
Total liabilities
Total liabilities

(a)Our direct investment in any one industry did not exceed ~~16%~~12%. The concentration calculation excludes our investment in mutual funds and ETFs.

(b)Excludes ~~$41~~$47 million of equity securities that are measured at fair value using the net asset value practical expedient and therefore are not classified in the fair value hierarchy.

(c)Carried at fair value due to fair value option elections.

5356

Table of Contents

Notes to Condensed Consolidated Financial Statements (unaudited)

Ally Financial Inc. • Form 10-Q


			Recurring fair value measurements
December 31, 2022 ($ in millions)			Level 1		Level 2		Level 3		Total
		Recurring fair value measurements													Recurring fair value measurements
December 31, 2023 ($ in millions)											December 31, 2023 ($ in millions)	Level 1	Level 2	Level 3		Total
Assets	Assets
Investment securities	Investment securities
Investment securities
Investment securities
Equity securities (a) (b)
Equity securities (a) (b)
Equity securities (a) (b)	Equity securities (a) (b)		$	642	$	—	$	1	$	643
Available-for-sale securities	Available-for-sale securities
Debt securities	Debt securities
Debt securities
Debt securities
U.S. Treasury and federal agencies
U.S. Treasury and federal agencies
U.S. Treasury and federal agencies	U.S. Treasury and federal agencies		2,016		—		—		2,016
U.S. States and political subdivisions	U.S. States and political subdivisions		—		756		4		760
Foreign government	Foreign government		39		107		—		146
Agency mortgage-backed residential	Agency mortgage-backed residential		—		16,633		—		16,633
Mortgage-backed residential	Mortgage-backed residential		—		4,299		—		4,299
Agency mortgage-backed commercial	Agency mortgage-backed commercial		—		3,535		—		3,535

Asset-backed	Asset-backed		—		433		—		433
Asset-backed
Asset-backed
Corporate debt	Corporate debt		—		1,719		—		1,719
Total available-for-sale securities	Total available-for-sale securities		2,055		27,482		4		29,541
Mortgage loans held-for-sale (c)	Mortgage loans held-for-sale (c)		—		13		—		13

Finance receivables and loans, net
Consumer other (c)			—		—		3		3

Other assets

Other assets

Other assets	Other assets
Derivative contracts in a receivable position	Derivative contracts in a receivable position
Derivative contracts in a receivable position
Derivative contracts in a receivable position
Interest rate
Interest rate
Interest rate	Interest rate		—		22		—		22

Equity			1		—		—		1

Total derivative contracts in a receivable position

Total derivative contracts in a receivable position

Total derivative contracts in a receivable position	Total derivative contracts in a receivable position		1		22		—		23

Total assets	Total assets		$	2,698	$	27,517	$	8	$	30,223
Total assets
Total assets
Liabilities	Liabilities
Accrued expenses and other liabilities	Accrued expenses and other liabilities
Accrued expenses and other liabilities
Accrued expenses and other liabilities
Derivative contracts in a payable position
Derivative contracts in a payable position
Derivative contracts in a payable position	Derivative contracts in a payable position

Foreign currency	Foreign currency		$	—	$	2	$	—	$	2

Foreign currency

Foreign currency
Credit	Credit		—		—		39		39
Equity			1		—		—		1

Total derivative contracts in a payable position
Total derivative contracts in a payable position
Total derivative contracts in a payable position	Total derivative contracts in a payable position		1		2		39		42

Total liabilities	Total liabilities		$	1	$	2	$	39	$	42
Total liabilities
Total liabilities

(a)Our direct investment in any one industry did not exceed ~~15%~~11%. The concentration calculation excludes our investment in mutual funds and ETFs.

(b)Excludes ~~$38~~$44 million of equity securities that are measured at fair value using the net asset value practical expedient and therefore are not classified in the fair value hierarchy.

(c)Carried at fair value due to fair value option elections.

5457

Table of Contents

Notes to Condensed Consolidated Financial Statements (unaudited)

Ally Financial Inc. • Form 10-Q

The following tables present the reconciliation for all Level 3 assets and liabilities measured at fair value on a recurring basis. We often economically hedge the fair value change of our assets or liabilities with derivatives and other financial instruments. The Level 3 items presented below may be hedged by derivatives and other financial instruments that are classified as Level 1 or Level 2. Thus, the following tables do not fully reflect the impact of our risk-management activities.


		Equity securities (a)				Available-for-sale securities				Finance receivables and loans, net (b) (c)
		Equity securities
		Equity securities
		Equity securities
($ in millions)
($ in millions)
($ in millions)	($ in millions)	2023		2022		2023		2022			2023		2022
Assets	Assets
Assets
Assets
Fair value at January 1,	Fair value at January 1,	$	1	$	9	$	4	$	9		$	3	$	7
Net realized/unrealized gains (losses)
Fair value at January 1,
Fair value at January 1,
Net realized/unrealized gains
Net realized/unrealized gains
Net realized/unrealized gains
Included in earnings
Included in earnings
Included in earnings	Included in earnings	—		1		—		—			—		(1)
Included in OCI	Included in OCI	—		—		—		—			—		—
Included in OCI
Included in OCI
Purchases
Purchases
Purchases	Purchases	—		—		—		2			—		4
Sales	Sales	—		(9)		—		—			—		—
Sales
Sales
Issuances
Issuances
Issuances	Issuances	—		—		—		—			—		—
Settlements	Settlements	—		—		—		—			(1)		(3)
Settlements
Settlements
Transfers into Level 3
Transfers into Level 3
Transfers into Level 3	Transfers into Level 3	—		—		—		—			—		—
Transfers out of Level 3	Transfers out of Level 3	—		—		—		—			—		—
Transfers out of Level 3
Transfers out of Level 3
Fair value at March 31,	Fair value at March 31,	$	1	$	1	$	4	$	11		$	2	$	7
Net unrealized losses still held at March 31,
Fair value at March 31,
Fair value at March 31,
Net unrealized gains still held at March 31,
Net unrealized gains still held at March 31,
Net unrealized gains still held at March 31,
Included in earnings
Included in earnings
Included in earnings	Included in earnings	$	—	$	—	$	—	$	—		$	—	$	(1)
Included in OCI	Included in OCI	—		—		—		—			—		—
Included in OCI
Included in OCI

(a)~~Net realized/unrealized gains are reported as other gain on investments, net, in the Condensed Consolidated Statement of Comprehensive Income.~~

~~(b)~~Carried at fair value due to fair value option elections.

~~(c)Net realized/unrealized losses are reported as other income, net of losses, in the Condensed Consolidated Statement of Comprehensive Income.~~


		Derivative liabilities, net of derivative assets (a)
	Derivative liabilities, net of derivative assets (a)								Derivative liabilities, net of derivative assets (a)
($ in millions)	($ in millions)	2023		2022		($ in millions)	2024	2023
Liabilities	Liabilities
Fair value at January 1,	Fair value at January 1,	$	39	$	53
Net realized/unrealized losses
Fair value at January 1,
Fair value at January 1,
Net realized/unrealized gains
Included in earnings
Included in earnings
Included in earnings	Included in earnings	—		8
Included in OCI	Included in OCI	—		—
Purchases	Purchases	—		—
Sales	Sales	—		—
Issuances	Issuances	—		—
Settlements	Settlements	—		—
Transfers into Level 3	Transfers into Level 3	—		—
Transfers out of Level 3 (b)	Transfers out of Level 3 (b)	3		—
Fair value at March 31,	Fair value at March 31,	$	42	$	61
Net unrealized losses still held at March 31,
Net unrealized (gains) losses still held at March 31,
Included in earnings
Included in earnings
Included in earnings	Included in earnings	$	3	$	5
Included in OCI	Included in OCI	—		—

(a)Net realized/unrealized ~~losses~~gains are reported as gain on mortgage and automotive loans, net, and other income, net of losses, in the Condensed Consolidated Statement of Comprehensive (Loss) Income.

(b)Represents the settlement value of interest rate derivative assets that are transferred to loans held-for-sale within Level 2 of the fair value hierarchy during the three months ended March 31, 2023. ~~This transfer is~~These transfers are deemed to have occurred at the end of the reporting period.

5558

Table of Contents

Notes to Condensed Consolidated Financial Statements (unaudited)

Ally Financial Inc. • Form 10-Q

Nonrecurring Fair Value

We may be required to measure certain assets and liabilities at fair value from time to time. These periodic fair value measures typically result from the application of lower-of-cost or fair value accounting or certain impairment measures. These items would constitute nonrecurring fair value measures.

The following tables display assets and liabilities measured at fair value on a nonrecurring basis and still held at March 31, ~~2023,~~2024, and December 31, ~~2022,~~2023, respectively. The amounts are generally as of the end of each period presented, which approximate the fair value measurements that occurred during each period. These tables exclude assets of operations held-for-sale, refer to Note 2 for additional information.


		Nonrecurring fair value measurements
March 31, 2024 ($ in millions)
March 31, 2024 ($ in millions)
March 31, 2024 ($ in millions)
Assets
Assets
Assets

			Nonrecurring fair value measurements								Lower-of-cost-or-fair-value reserve, valuation reserve, or cumulative adjustments		Total gain (loss) included in earnings
March 31, 2023 ($ in millions)			Level 1		Level 2		Level 3		Total
Assets

Loans held-for-sale, net

Loans held-for-sale, net

Loans held-for-sale, net	Loans held-for-sale, net		$	—	$	—	$	500	$	500	$	—	n/m	(a)		$	—		$		$	—			$			$	331		$			$	331			$			$	—		n/m				n/m	(a)

Commercial finance receivables and loans, net (b)	Commercial finance receivables and loans, net (b)

Commercial finance receivables and loans, net (b)

Commercial finance receivables and loans, net (b)
Automotive
Automotive
Automotive																		—					—							2						2							—					n/m	(a)
Other	Other		—		—		60		60		(100)		n/m	(a)	Other			—		—				—			49				49		49						49		(43)				(43)		n/m				n/m		(a)
Total commercial finance receivables and loans, net	Total commercial finance receivables and loans, net		—		—		60		60		(100)		n/m	(a)	Total commercial finance receivables and loans, net			—		—				—			51				51		51						51		(43)				(43)		n/m				n/m		(a)
Other assets	Other assets
Nonmarketable equity investments	Nonmarketable equity investments		—		2		28		30		21		n/m	(a)
Nonmarketable equity investments
Nonmarketable equity investments																		—					3							2						5							2					n/m	(a)

Repossessed and foreclosed assets (c)

Repossessed and foreclosed assets (c)

Repossessed and foreclosed assets (c)	Repossessed and foreclosed assets (c)		—		—		6		6		(1)		n/m	(a)		—			—			—				8				8		8					8			(1)				(1)		n/m				n/m		(a)

Total assets	Total assets		$	—	$	2	$	594	$	596	$	(80)	n/m
Total assets
Total assets

n/m = not meaningful

(b)Represents collateral-dependent loans held for investment for which a nonrecurring measurement was made. The related allowance for loan losses represents the cumulative fair value adjustments for those specific receivables.

(c)The allowance provided for repossessed and foreclosed assets represents any cumulative valuation adjustment recognized to adjust the assets to fair value.


		Nonrecurring fair value measurements
December 31, 2023 ($ in millions)
December 31, 2023 ($ in millions)
December 31, 2023 ($ in millions)
Assets
Assets
Assets

			Nonrecurring fair value measurements								Lower-of-cost-or-fair-value reserve, valuation reserve, or cumulative adjustments		Total gain (loss) included in earnings
December 31, 2022 ($ in millions)			Level 1		Level 2		Level 3		Total
Assets

Loans held-for-sale, net

Loans held-for-sale, net

Loans held-for-sale, net	Loans held-for-sale, net		$	—	$	—	$	641	$	641	$	—	n/m	(a)		$	—		$		$	—			$			$	375		$			$	375			$			$	—		n/m				n/m	(a)

Commercial finance receivables and loans, net (b)	Commercial finance receivables and loans, net (b)

Commercial finance receivables and loans, net (b)

Commercial finance receivables and loans, net (b)
Automotive
Automotive
Automotive	Automotive		—		—		3		3		—		n/m	(a)		—			—			—				6				6		6					6			—				—		n/m				n/m		(a)
Other	Other		—		—		39		39		(89)		n/m	(a)	Other			—		—				—			49				49		49						49		(43)				(43)		n/m				n/m		(a)
Total commercial finance receivables and loans, net	Total commercial finance receivables and loans, net		—		—		42		42		(89)		n/m	(a)	Total commercial finance receivables and loans, net			—		—				—			55				55		55						55		(43)				(43)		n/m				n/m		(a)
Other assets	Other assets
Nonmarketable equity investments	Nonmarketable equity investments		—		—		12		12		3		n/m	(a)
Nonmarketable equity investments
Nonmarketable equity investments																		—					—							1						1							1					n/m	(a)

Repossessed and foreclosed assets (c)
Repossessed and foreclosed assets (c)
Repossessed and foreclosed assets (c)	Repossessed and foreclosed assets (c)		—		—		5		5		—		n/m	(a)		—			—			—				10				10		10					10			(1)				(1)		n/m				n/m		(a)

Total assets	Total assets		$	—	$	—	$	700	$	700	$	(86)	n/m
Total assets
Total assets

n/m = not meaningful

(c)The allowance provided for repossessed and foreclosed assets represents any cumulative valuation adjustment recognized to adjust the assets to fair value.

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Notes to Condensed Consolidated Financial Statements (unaudited)

Ally Financial Inc. • Form 10-Q

Fair Value Option for Financial Assets

We elected the fair value option for an insignificant amount of conforming mortgage loans held-for-sale and certain personal lending finance receivables. We elected the fair value option for conforming mortgage loans held-for-sale to mitigate earnings volatility by better matching the accounting for the assets with the related derivatives. We elected the fair value option for certain personal lending finance receivables to mitigate the complexities of recording these loans at amortized cost. Our intent in electing fair value measurement was to mitigate a divergence between accounting gains or losses and economic exposure for certain assets and liabilities.

Fair Value of Financial Instruments

The following table presents the carrying and estimated fair value of financial instruments, except for those recorded at fair value on a recurring basis presented in the previous section of this note titled Recurring Fair Value. This table excludes assets of operations held-for-sale, refer to Note 2 for additional information. When possible, we use quoted market prices to determine fair value. Where quoted market prices are not available, the fair value is internally derived based on appropriate valuation methodologies with respect to the amount and timing of future cash flows and estimated discount rates. However, considerable judgment is required in interpreting current market data to develop the market assumptions and inputs necessary to estimate fair value. As such, the actual amount received to sell an asset or the amount paid to settle a liability could differ from our estimates. Fair value information presented herein was based on information available at March 31, ~~2023,~~2024, and December 31, ~~2022.~~2023.


					Estimated fair value
				Estimated fair value															Estimated fair value
($ in millions)	($ in millions)	Carrying value			Level 1		Level 2		Level 3		Total		($ in millions)	Carrying value	Level 1	Level 2	Level 3	Total
March 31, 2023
March 31, 2024
Financial assets	Financial assets
Financial assets
Financial assets
Held-to-maturity securities
Held-to-maturity securities
Held-to-maturity securities	Held-to-maturity securities	$	1,047		$	—	$	891	$	—	$	891
Loans held-for-sale, net	Loans held-for-sale, net	500			—		—		500		500
Finance receivables and loans, net	Finance receivables and loans, net	132,551			—		—		134,325		134,325
FHLB/FRB stock (a)	FHLB/FRB stock (a)	720			—		720		—		720
Financial liabilities	Financial liabilities
Deposit liabilities	Deposit liabilities	$	52,311		$	—	$	—	$	52,251	$	52,251
Short-term borrowings		1,455			—		—		1,487		1,487
Deposit liabilities
Deposit liabilities

Long-term debt	Long-term debt	20,480			—		14,044		6,890		20,934
December 31, 2022
Long-term debt
Long-term debt
December 31, 2023
Financial assets	Financial assets
Financial assets
Financial assets
Held-to-maturity securities
Held-to-maturity securities
Held-to-maturity securities	Held-to-maturity securities	$	1,062		$	—	$	884	$	—	$	884
Loans held-for-sale, net	Loans held-for-sale, net	641			—		—		641		641
Finance receivables and loans, net	Finance receivables and loans, net	132,034			—		—		133,856		133,856
FHLB/FRB stock (a)	FHLB/FRB stock (a)	719			—		719		—		719
Financial liabilities	Financial liabilities
Deposit liabilities	Deposit liabilities	$	42,336		$	—	$	—	$	41,909	$	41,909
Deposit liabilities
Deposit liabilities
Short-term borrowings	Short-term borrowings	2,399			—		—		2,417		2,417
Long-term debt	Long-term debt	17,762			—		12,989		5,263		18,252

(a)Included in other assets on our Condensed Consolidated Balance Sheet.

In addition to the financial instruments presented in the above table, we have various financial instruments for which the carrying value approximates the fair value due to their short-term nature and limited credit risk. These instruments include cash and cash equivalents, restricted cash, cash collateral, accrued interest receivable, accrued interest payable, trade receivables and payables, and other short-term receivables and payables. Included in cash and cash equivalents are highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value due to interest rate, quoted price, or penalty on withdrawal. Classified as Level 1 under the fair value hierarchy, cash and cash equivalents generally expose us to limited credit risk and are so near maturity that they present insignificant risk of changes in value because of changes in interest rates.

~~21.~~22. Offsetting Assets and Liabilities

Our derivative contracts and repurchase/reverse repurchase transactions are generally supported by qualifying master netting and master repurchase agreements. These agreements are legally enforceable bilateral agreements that (i) create a single legal obligation for all individual transactions covered by the agreement to the nondefaulting entity upon an event of default of the counterparty, including bankruptcy, insolvency, or similar proceeding, and (ii) provide the nondefaulting entity the right to accelerate, terminate, and close-out on a net basis all transactions under the agreement and to liquidate or set off collateral promptly upon an event of default of the counterparty.

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Notes to Condensed Consolidated Financial Statements (unaudited)

Ally Financial Inc. • Form 10-Q

To further mitigate the risk of counterparty default related to derivative instruments, we maintain collateral agreements with certain counterparties. The agreements require both parties to maintain collateral in the event the fair values of the derivative financial instruments meet established thresholds. In the event that either party defaults on the obligation, the secured party may seize the collateral. Generally, our collateral arrangements are bilateral such that we and the counterparty post collateral for the obligation. Contractual terms provide for standard and customary exchange of collateral based on changes in the market value of the outstanding derivatives. A party posts additional collateral when their obligation rises or removes collateral when it falls, such that the net replacement cost of the nondefaulting party is covered in the event of counterparty default.

In certain instances, as it relates to our derivative instruments, we have the option to report derivative assets and liabilities as well as assets and liabilities associated with cash collateral received or delivered that is governed by a master netting agreement on a net basis as long as certain qualifying criteria are met. Similarly, for our repurchase/reverse repurchase transactions, we have the option to report recognized assets and liabilities subject to a master netting agreement on a net basis if certain qualifying criteria are met. At March 31, ~~2023,~~2024, these instruments are reported as gross assets and gross liabilities on the Condensed Consolidated Balance Sheet. For additional information on derivative instruments and hedging activities, refer to Note ~~18.~~

~~Table of Contents~~

~~Notes to Condensed Consolidated Financial Statements (unaudited)~~

~~Ally Financial Inc. • Form 10-Q~~

19.

The composition of offsetting derivative instruments, financial assets, and financial liabilities was as follows.

Gross amounts of recognized assets/liabilities Gross amounts offset on the Condensed Consolidated Balance Sheet Net amounts of assets/liabilities presented on the Condensed Consolidated Balance Sheet Gross amounts not offset on the Condensed Consolidated Balance Sheet
($ in millions) Financial instruments Collateral (a) (b) (c) Net amount
March 31, 2023
Assets
Derivative assets in net asset positions $ 47 $ — $ 47 $ — $ (47) $ —
Derivative assets in net liability positions 1 — 1 (1) — —
Derivative assets with no offsetting arrangements 2 — 2 — — 2
Total assets $ 50 $ — $ 50 $ (1) $ (47) $ 2
Liabilities
Derivative liabilities in net liability positions $ 5 $ — $ 5 $ (1) $ (4) $ —
Derivative liabilities with no offsetting arrangements 44 — 44 — — 44
Securities sold under agreements to repurchase (d) 755 — 755 — (755) —
Total liabilities $ 804 $ — $ 804 $ (1) $ (759) $ 44
December 31, 2022
Assets
Derivative assets in net asset positions $ 23 $ — $ 23 $ (1) $ (22) $ —
Total assets $ 23 $ — $ 23 $ (1) $ (22) $ —
Liabilities
Derivative liabilities in net liability positions $ 2 $ — $ 2 $ — $ (1) $ 1
Derivative liabilities in net asset positions 1 — 1 (1) — —
Derivative liabilities with no offsetting arrangements 39 — 39 — — 39
Securities sold under agreements to repurchase (d) 499 — 499 — (499) —
Total liabilities $ 541 $ — $ 541 $ (1) $ (500) $ 40


	Gross amounts of recognized assets/liabilities		Gross amounts offset on the Condensed Consolidated Balance Sheet		Net amounts of assets/liabilities presented on the Condensed Consolidated Balance Sheet		Gross amounts not offset on the Condensed Consolidated Balance Sheet
($ in millions)							Financial instruments		Collateral (a) (b) (c)		Net amount

March 31, 2024
Assets
Derivative assets (d)	$	12	$	—	$	12	$	—	$	(9)	$	3

Total assets	$	12	$	—	$	12	$	—	$	(9)	$	3
Liabilities
Derivative liabilities (e)	$	11	$	—	$	11	$	—	$	—	$	11

Total liabilities	$	11	$	—	$	11	$	—	$	—	$	11
December 31, 2023

Assets
Derivative assets (d)	$	33	$	—	$	33	$	—	$	(31)	$	2

Total assets	$	33	$	—	$	33	$	—	$	(31)	$	2
Liabilities
Derivative liabilities (e)	$	17	$	—	$	17	$	—	$	(6)	$	11
Securities sold under agreements to repurchase (f)	747		—		747		—		(747)		—
Total liabilities	$	764	$	—	$	764	$	—	$	(753)	$	11

(a)Financial collateral received/pledged shown as a balance based on the sum of all net asset and liability positions between Ally and each individual derivative counterparty.

(b)Amounts disclosed are limited to the financial asset or liability balance and, accordingly, exclude excess collateral received or pledged and noncash collateral received. We do not record noncash collateral received on our Condensed Consolidated Balance Sheet unless certain conditions are met.

(c)Certain agreements grant us the right to sell or pledge the noncash assets we receive as collateral. We have not sold or pledged any of the noncash collateral received under these agreements.

(d)Includes derivative assets with no offsetting arrangements of $2 million for both March 31, 2024, and December 31, 2023.

(e)Includes derivative liabilities with no offsetting arrangements of $10 million for both March 31, 2024, and December 31, 2023.

(f)For additional information on securities sold under agreements to repurchase, refer to Note ~~12.~~13.

~~22.~~23. 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~~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.

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Notes to Condensed Consolidated Financial Statements (unaudited)

Ally Financial Inc. • Form 10-Q

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 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 ~~serve companies, primarily in the healthcare industry.~~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 ~~wealth management~~advisory 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. 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, aligned with the expected duration and the benchmark rate curve plus an assumed credit spread. ~~Match~~The assumed credit spread is calculated based on a composite investment grade unsecured bond 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, ~~allocates interest income and~~the framework also incorporates a credit on the allocated capital for each business line. For business lines not subject to an FTP funding allocation, the FTP methodology applies a capital charge to the amount of excess liquidity that the business line holds, relative to its regulatory capital. This reduces the allocated 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.account for the equity that must be held based on Ally’s internal capital requirement. 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.

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Table of Contents

Notes to Condensed Consolidated Financial Statements (unaudited)

Ally Financial Inc. • Form 10-Q

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


Three months ended March 31, ($ in millions)	Three months ended March 31, ($ in millions)	Automotive Finance operations		Insurance operations		Mortgage Finance operations		Corporate Finance operations		Corporate and Other		Consolidated (a)		Three months ended March 31, ($ in millions)	Automotive Finance operations	Insurance operations	Mortgage Finance operations	Corporate Finance operations	Corporate and Other	Consolidated (a)
2023
2024
Net financing revenue and other interest income
Net financing revenue and other interest income
Net financing revenue and other interest income	Net financing revenue and other interest income	$	1,322	$	26	$	54	$	103	$	97	$	1,602
Other revenue	Other revenue	77		381		4		29		7		498
Total net revenue	Total net revenue	1,399		407		58		132		104		2,100
Provision for credit losses	Provision for credit losses	351		—		(1)		15		81		446
Total noninterest expense	Total noninterest expense	606		315		38		45		262		1,266
Income (loss) from continuing operations before income tax expense	Income (loss) from continuing operations before income tax expense	$	442	$	92	$	21	$	72	$	(239)	$	388
Total assets	Total assets	$	111,960	$	8,867	$	19,290	$	10,226	$	45,822	$	196,165
2022
2023
Net financing revenue and other interest income
Net financing revenue and other interest income
Net financing revenue and other interest income	Net financing revenue and other interest income	$	1,295	$	17	$	53	$	83	$	245	$	1,693
Other revenue	Other revenue	68		270		14		24		66		442
Total net revenue	Total net revenue	1,363		287		67		107		311		2,135
Provision for credit losses	Provision for credit losses	104		—		—		6		57		167
Total noninterest expense	Total noninterest expense	534		274		56		37		221		1,122
Income from continuing operations before income tax expense		$	725	$	13	$	11	$	64	$	33	$	846
Income (loss) from continuing operations before income tax expense
Total assets	Total assets	$	105,754	$	9,220	$	18,596	$	8,086	$	42,641	$	184,297

(a)Net financing revenue and other interest income after the provision for credit losses totaled ~~$1.2 billion~~$949 million and ~~$1.5~~$1.2 billion for the three months ended March 31, ~~2023,~~2024, and ~~2022,~~2023, respectively.

~~23.~~24. Contingencies and Other Risks

As a financial-services company, we are regularly involved in pending or threatened legal proceedings and other matters and are or may be subject to potential liability in connection with them. These legal matters may be formal or informal and include litigation and arbitration with one or more identified claimants, certified or purported class actions with yet-to-be-identified claimants, and regulatory or other governmental information-gathering requests, examinations, investigations, and enforcement proceedings. Our legal matters exist in varying stages of adjudication, arbitration, negotiation, or investigation and span our business lines and operations. Claims may be based in law or equity—such as those arising under contracts or in tort and those involving banking, consumer-protection, securities, tax, employment, and other laws—and some can present novel legal theories and allege substantial or indeterminate damages.

Ally and its subsidiaries, including Ally Bank, also are or may be subject to potential liability under other contingent exposures, including indemnification, tax, self-insurance, and other miscellaneous contingencies.

We accrue for a legal matter or other contingent exposure when a loss becomes probable and the amount of loss can be reasonably estimated. Accruals are evaluated each quarter and may be adjusted, upward or downward, based on our best judgment after consultation with counsel. No assurance exists that our accruals will not need to be adjusted in the future. When a probable or reasonably possible loss on a legal matter or other contingent exposure could be material to our consolidated financial condition, results of operations, or cash flows, we provide disclosure in this note as prescribed by ASC Topic 450, Contingencies. Refer to Note 1 to the Consolidated Financial Statements in our ~~2022~~2023 Annual Report on Form 10-K for additional information related to our policy for establishing accruals.

The course and outcome of legal matters are inherently unpredictable. This is especially so when a matter is still in its early stages, the damages sought are indeterminate or unsupported, significant facts are unclear or disputed, novel questions of law or other meaningful legal uncertainties exist, a request to certify a proceeding as a class action is outstanding or granted, multiple parties are named, or regulatory or other governmental entities are involved. Other contingent exposures and their ultimate resolution are similarly unpredictable for reasons that can vary based on the circumstances.

As a result, we often are unable to determine how or when threatened or pending legal matters and other contingent exposures will be resolved and what losses may be incrementally and ultimately incurred. Actual losses may be higher or lower than any amounts accrued or estimated for those matters and other exposures, possibly to a significant degree.

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Notes to Condensed Consolidated Financial Statements (unaudited)

Ally Financial Inc. • Form 10-Q

Subject to the foregoing, based on our current knowledge and after consultation with counsel, we do not believe that the ultimate outcomes of currently threatened or pending legal matters and other contingent exposures are likely to be material to our consolidated financial condition after taking into account existing accruals. In light of the uncertainties inherent in these matters and other exposures, however, one or more of them could be material to our results of operations or cash flows during a particular reporting period, depending on factors such as the amount of the loss or liability and the level of our income for that period.

~~24.~~25. Subsequent Events

Declaration of Common Dividend

On April ~~14, 2023,~~15, 2024, our Board declared a quarterly cash dividend of $0.30 per share on all common stock. The dividend is payable on May 15, ~~2023,~~2024, to stockholders of record at the close of business on May 1, ~~2023.~~2024.

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Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Cautionary Notice about Forward-Looking Statements and Other Terms

From time to time we have made, and in the future will make, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements often use words such as “believe,” “expect,” “anticipate,” “intend,” “pursue,” “seek,” “continue,” “estimate,” “project,” “outlook,” “forecast,” “potential,” “target,” “objective,” “trend,” “plan,” “goal,” “initiative,” “priorities,” or other words of comparable meaning or future-tense or conditional verbs such as “may,” “will,” “should,” “would,” or “could.” Forward-looking statements convey our expectations, intentions, or forecasts about future events, circumstances, or results.

This report, including any information incorporated by reference in this report, contains forward-looking statements. We also may make forward-looking statements in other documents that are filed or furnished with the SEC. In addition, we may make forward-looking statements orally or in writing to investors, analysts, members of the media, or others.

All forward-looking statements, by their nature, are subject to assumptions, risks, and uncertainties, which may change over time and many of which are beyond our control. You should not rely on any forward-looking statement as a prediction or guarantee about the future. Actual future objectives, strategies, plans, prospects, performance, conditions, or results may differ materially from those set forth in any forward-looking statement. While no list of assumptions, risks, or uncertainties could be complete, some of the factors that may cause actual results or other future events or circumstances to differ from those in forward-looking statements include:

•evolving local, regional, national, or international business, economic, or political conditions;

•changes in laws or the regulatory or supervisory environment, including as a result of financial-services legislation, regulation, or policies or changes in government officials or other personnel;

•changes in monetary, fiscal, or trade laws or policies, including as a result of actions by governmental agencies, central banks, or supranational authorities;

•changes in accounting standards or policies;

•changes in the automotive industry or the markets for new or used vehicles, including the rise of vehicle sharing and ride hailing, the development of autonomous and alternative-energy vehicles, and the impact of demographic shifts on attitudes and behaviors toward vehicle type, ownership, and use;

•any instability or breakdown in the financial system, including as a result of the failure of a financial institution or other ~~participant~~participants in ~~it;~~it (such as the banking failures during 2023);

•disruptions or shifts in investor sentiment or behavior in the securities, capital, or other financial markets, including financial or systemic shocks and volatility or changes in market liquidity, interest or currency rates, or valuations;

•~~the discontinuation of LIBOR and any negative impacts that could result;~~

•changes in business or consumer sentiment, preferences, or behavior, including spending, borrowing, or saving by businesses or households;

•changes in our corporate or business strategies, the composition of our assets, or the way in which we fund those assets;

•our ability to execute our business strategy for Ally Bank, including its digital focus;

•our ability to optimize our automotive finance and insurance businesses and to continue diversifying into and growing other consumer and commercial business lines, including mortgage lending, ~~point-of-sale personal lending,~~ credit cards, corporate finance, brokerage, and ~~wealth management;~~personal advice;

•our ability to develop capital plans acceptable to the FRB and our ability to implement them, including any payment of dividends or share repurchases;

•our ability to conduct appropriate stress tests and effectively plan for and manage capital or liquidity consistent with evolving business or operational needs, risk-management standards, and regulatory or supervisory requirements or expectations;

•our ability to cost-effectively fund our business and operations, including through deposits (which could be subject to sudden withdrawals) and the capital markets;

•changes in any credit rating assigned to Ally, including Ally ~~Bank;~~Bank, or the ratings for our insurance business;

•adverse publicity or other reputational harm to us, our service providers, or our senior officers;

•our ability to develop, maintain, or market our products or services or to absorb unanticipated costs or liabilities associated with those products or services;

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•our ability to innovate, to anticipate the needs of current or future customers, to successfully compete, to increase or hold market share in changing competitive environments, or to deal with pricing or other competitive pressures;

•the continuing profitability and viability of our dealer-centric automotive finance and insurance businesses, especially in the face of competition from captive finance companies and their automotive manufacturing sponsors and challenges to the dealer’s role as intermediary between manufacturers and purchasers;

•our ability to appropriately underwrite loans that we originate or purchase and to otherwise manage credit risk;

•changes in the credit, liquidity, or other financial condition of our customers, counterparties, service providers, or competitors;

•our ability to effectively deal with economic, business, or market slowdowns or disruptions;

•our ability to address heightened scrutiny and expectations from supervisory or other governmental authorities and to timely and credibly remediate related concerns or deficiencies;

•judicial, regulatory, or administrative inquiries, examinations, investigations, proceedings, disputes, or rulings that create uncertainty for, or are adverse to, us or the financial services industry;

•the potential outcomes of judicial, regulatory, or administrative inquiries, examinations, investigations, proceedings, or disputes to which we are or may be subject, and our ability to absorb and address any damages or other remedies that are sought or awarded, and any collateral consequences;

•the performance and availability of third-party service providers on whom we rely in delivering products and services to our customers and otherwise conducting our business and operations;

•our ability to manage and mitigate security risks, including our capacity to withstand cyberattacks;

•our ability to maintain secure and functional financial, accounting, technology, data processing, or other operating systems or infrastructure;

•the adequacy of our corporate governance, risk-management framework, compliance programs, or internal controls over financial reporting, including our ability to control lapses or deficiencies in financial reporting or to effectively mitigate or manage operational risk;

•the efficacy of our methods or models in assessing business strategies or opportunities or in valuing, measuring, estimating, monitoring, or managing positions or risk;

•our ability to keep pace with changes in technology, such as artificial intelligence, that affect us or our customers, counterparties, service providers, or competitors or to maintain rights or interests in associated intellectual property;

•our ability to successfully make ~~and~~acquisitions or divestitures or to integrate ~~acquisitions;~~acquired businesses;

•the adequacy of our succession planning for key executives or other personnel and our ability to attract or retain qualified employees;

•natural or man-made disasters, calamities, or conflicts, including terrorist events, cyber-warfare, and ~~pandemics (such as adverse effects of the COVID-19 pandemic on us and our customers, counterparties, employees, and service providers);~~pandemics;

•our ability to maintain appropriate ESG practices, oversight, and disclosures;

•policies and other actions of governments to manage and mitigate climate and related environmental risks, and the effects of climate change or the transition to a lower-carbon economy on our business, operations, and reputation; or

•other assumptions, risks, or uncertainties described in the Risk Factors (Part II, Item 1A herein), Management’s Discussion and Analysis of Financial Condition and Results of Operations (Part I, Item 2 herein), or the Notes to the Condensed Consolidated Financial Statements (Part I, Item 1 herein) in this Quarterly Report on Form 10-Q or described in any of the Company’s annual, quarterly or current reports.

Any forward-looking statement made by us or on our behalf speaks only as of the date that it was made. We do not undertake to update any forward-looking statement to reflect the impact of events, circumstances, or results that arise after the date that the statement was made, except as required by applicable securities laws. You, however, should consult further disclosures (including disclosures of a forward-looking nature) that we may make in any subsequent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, or Current Report on Form 8-K.

Unless the context otherwise requires, the following definitions apply. The term “loans” means the following consumer and commercial products associated with our direct and indirect financing activities: loans, retail installment sales contracts, lines of credit, and other financing products excluding operating leases. The term “operating leases” means consumer- and commercial-vehicle lease agreements where Ally is the lessor and the lessee is generally not obligated to acquire ownership of the vehicle at lease-end or compensate Ally for the

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vehicle’s residual value. The terms “lend,” “finance,” and “originate” mean our direct extension or origination of loans, our purchase or

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Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-Q

acquisition of loans, or our purchase of operating leases, as applicable. The term “consumer” means all consumer products associated with our loan and operating-lease activities and all commercial retail installment sales contracts. The term “commercial” means all commercial products associated with our loan activities, other than commercial retail installment sales contracts. The term “partnerships” means business arrangements rather than partnerships as defined by law.

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Overview

Primary Business Lines

Dealer Financial Services, which includes our Automotive Finance and Insurance operations, Mortgage Finance, and Corporate Finance are our primary business lines. The remaining activity is reported in Corporate and Other, which primarily consists of centralized treasury activities as well as Ally Invest, our digital brokerage and ~~wealth management~~personal advice offering, Ally Lending, ~~our point-of-sale financing business,~~ Ally Credit Card, CRA loans and ~~related~~ investments, and certain strategic investments. On March 1, 2024, we sold Ally Lending. For further information, refer to Note 2 to the Condensed Consolidated Financial Statements. The following table summarizes the operating results excluding discontinued operations of each business line. Operating results for each of the business lines are more fully described in the MD&A sections that follow.

Three months ended March 31,
($ in millions) 2023 2022 Favorable/(unfavorable) % change
Total net revenue
Dealer Financial Services
Automotive Finance $ 1,399 $ 1,363 3
Insurance 407 287 42
Mortgage Finance 58 67 (13)
Corporate Finance 132 107 23
Corporate and Other 104 311 (67)
Total $ 2,100 $ 2,135 (2)
Income (loss) from continuing operations before income tax expense
Dealer Financial Services
Automotive Finance $ 442 $ 725 (39)
Insurance 92 13 n/m
Mortgage Finance 21 11 91
Corporate Finance 72 64 13
Corporate and Other (239) 33 n/m
Total $ 388 $ 846 (54)

~~n/m = not meaningful~~


	Three months ended March 31,
($ in millions)		2024		2023		Favorable/(unfavorable) % change
Total net revenue
Dealer Financial Services
Automotive Finance		$	1,411	$	1,399	1
Insurance		413		407		1
Mortgage Finance		58		58		—
Corporate Finance		134		132		2
Corporate and Other		(30)		104		(129)
Total		$	1,986	$	2,100	(5)
Income (loss) from continuing operations before income tax expense
Dealer Financial Services
Automotive Finance		$	322	$	442	(27)
Insurance		70		92		(24)
Mortgage Finance		25		21		19
Corporate Finance		90		72		25
Corporate and Other		(336)		(239)		(41)
Total		$	171	$	388	(56)

•Our Dealer Financial Services business is one of the largest full-service automotive finance operations in the country and offers a wide range of financial services and insurance products to automotive dealerships and their customers. Dealer Financial Services comprises our Automotive Finance and Insurance segments.

Our Automotive Finance operations include purchasing retail installment sales contracts and operating leases from dealers and automotive retailers, extending automotive loans directly to consumers, offering term loans to dealers, financing dealer floorplans and providing other lines of credit to dealers, supplying warehouse lines to automotive retailers, offering automotive-fleet financing, providing financing to companies and municipalities for the purchase or lease of vehicles, and supplying vehicle-remarketing services. Our ~~dealer-centric business model, value-added products and services, full-spectrum financing, and business expertise proven over many credit cycles make us a premier automotive finance company. Our~~ success as an ~~automotive finance~~automotive-finance provider is driven by the consistent and broad range of products and services we offer to dealers and automotive retailers. The automotive marketplace is dynamic and evolving, including substantial investments in electrification by automobile manufacturers and suppliers. We ~~remain focused on meeting the needs of both our dealer and consumer customers, and continuing to strengthen and expand upon our approximately 22,700 dealer relationships. We~~ continue to identify and cultivate relationships with automotive retailers, including those with leading ~~eCommerce~~e-commerce platforms. We also operate an online direct-lending platform for consumers seeking direct financing. We believe these actions will enable us to respond to the growing trends for a more streamlined and digital automotive financing process to serve both dealers and consumers. Additionally, we provide comprehensive automotive remarketing services, including the use of SmartAuction, our online auction platform, which efficiently supports dealer-to-dealer

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~~Ally Financial Inc. • Form 10-Q~~

and other commercial wholesale vehicle transactions. SmartAuction provides diversified fee-based revenue and serves as a means of deepening relationships with our dealership customers. Furthermore, our strong and expansive dealer relationships, comprehensive suite of products and services, full-spectrum financing, and depth of experience position us to evolve with future shifts in automobile technologies, including electrification. We have provided and continue to provide automobile financing for ~~hybrid~~battery-electric and ~~battery-electric~~plug-in hybrid vehicles, including brands such as Jeep, Tesla, Ford, and BMW. This positions us to remain a

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Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-Q

leader in automotive financing as we believe the majority of these vehicles will be sold through dealerships and automotive retailers with whom we have an established relationship. Additionally, we continue to partner and build relationships with automotive manufacturers who use a direct-to-consumer model. During the three months ended March 31, 2024, $305 million of our consumer automotive retail loan originations and purchases, and $417 million of our operating lease originations and purchases, were for battery-electric and plug-in hybrid vehicles. As of March 31, 2024, $1.3 billion of our consumer automotive finance receivables and loans had battery-electric or plug-in hybrid vehicles as the underlying collateral, and $1.3 billion of our investment in operating leases were battery-electric or plug-in hybrid vehicles.

We have focused on developing dealer relationships beyond those relationships that primarily were developed through our previous role as a captive finance company for GM and Stellantis. We have established relationships with thousands of automotive dealers through our customer-centric approach and specialized incentive programs designed to drive loyalty amongst dealers to our products and services. ~~Our Growth channel includes~~Outside of GM and Stellantis, our other OEM-franchised dealers include brands such as Ford, Toyota, Hyundai, Kia, Nissan, ~~Kia, Hyundai, Toyota,~~Honda, and ~~Honda, as well as~~others, including automotive manufacturers who use a direct-to-consumer model. Our non-OEM-franchised dealers and automotive retailers include used-vehicle-only retailers with a national presence, ~~and~~as well as online-only automotive ~~retailers. As of March 31, 2023, approximately 68% of our Growth channel dealer relationships were with franchised dealers~~retailers, such as Carvana, CarMax, and ~~dealers with a national presence.~~EchoPark.

Our Insurance operations offer both consumer finance protection and insurance products sold primarily through the automotive dealer channel, and commercial insurance products sold directly to dealers. We serve approximately 2.5 million consumers nationwide across F&I and P&C products. During 2024, we added relationships with Nissan and Toyota to our vehicle inventory insurance program. In addition, we offer F&I products in Canada, where we serve more than 400 thousand consumers and are the preferred VSC and other protection plan provider for GM Canada and VSC provider for Subaru Canada. ~~In 2022, we entered into a long-term commitment~~Our contract to ~~continue~~serve as the preferred VSC and ~~other~~ protection plan provider for GM ~~Canada.~~Canada extends into the third quarter of 2027.

As part of our focus on offering dealers a broad range of consumer F&I products, we offer VSCs, VMCs, and GAP products. Ally Premier Protection is our flagship VSC offering, which provides coverage for new and used vehicles of virtually all makes and models. We also ~~offer~~underwrite ClearGuard on the SmartAuction platform, which is a protection product designed to minimize the risk to dealers from arbitration claims for eligible vehicles sold at auction. ~~We also~~Additionally, we underwrite selected commercial insurance coverages, which primarily insure dealers’ wholesale vehicle inventory, and offer additional products to protect a dealer’s business, including property and liability coverage that is underwritten by a third-party carrier with a portion of the insurance risk assumed through a quota share agreement. On a smaller scale, we also periodically assume other insurance risks through quota share arrangements and perform services as an underwriting carrier for an insurance program managed by a third-party where we cede the majority of such business to external reinsurance markets.

Our dealer-centric business model, value-added products and services, full-spectrum financing, and business expertise proven over many credit cycles, make us a premier automotive finance and insurance company ready to support and strengthen our approximately 21,800 active dealer relationships as of March 31, 2024. A dealer is considered to have an active relationship with us if we provided automotive financing, remarketing, or insurance services during the three months ended March 31, 2024.

•Our Mortgage Finance operations consist of the management of held-for-investment and held-for-sale consumer mortgage loan portfolios. 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. Under our current arrangement, our direct-to-consumer conforming mortgages are originated as held-for-sale and sold, while jumbo and LMI mortgages are originated as held-for-investment and subserviced by a third party. Loans originated in the direct-to-consumer channel are sourced by existing Ally customer marketing, prospect marketing on third-party websites, and email or direct mail campaigns. In April 2019, we announced a strategic partnership with BMC, which delivers an enhanced end-to-end digital mortgage experience for our customers through our direct-to-consumer channel. Through this partnership, BMC conducts the sales, processing, underwriting, and closing for Ally’s digital mortgage offerings in a highly innovative, scalable, and cost-efficient manner, while Ally retains control of all the marketing and advertising strategies and loan pricing. This partnership with BMC limits operational volatility as the mortgage industry continues to evolve in the current interest rate environment. During the three months ended March 31, ~~2023,~~2024, we originated ~~$197~~$233 million of mortgage loans through our direct-to-consumer channel. During 2018, we made a strategic equity investment in the parent of BMC (BMC Holdco) that was subsequently increased in 2019 and 2020. The carrying value of this investment was $19 million as of March 31, 2023. This investment is recognized as a nonmarketable equity investment within other assets of our Condensed Consolidated Balance Sheet and is included in Corporate and Other.

The combination of our direct-to-consumer strategy and bulk portfolio purchase program provides the capacity to expand revenue sources and further grow and diversify our finance receivable portfolio with an attractive asset class while also deepening relationships with existing Ally customers.

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~~equity~~private-equity sponsors with loans typically used for leveraged buyouts, refinancing and recapitalizations, mergers and acquisitions, growth, turnarounds, and debtor-in-possession financings. Additionally, our Lender Finance business provides asset managers with facilities to partially fund their direct-lending activities. We also provide a commercial real estate product, currently focused on lending to skilled nursing facilities, senior housing, and medical office buildings.

•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 activity related to certain equity investments, which primarily consist of FHLB and FRB stock, as well as other equity investments through Ally Ventures, our strategic investment business. Additionally, Corporate and Other includes the management of our legacy mortgage portfolio, which primarily consists of loans originated prior to January 1, 2009, CRA loans and ~~related~~ investments, and reclassifications and eliminations between the reportable operating segments. Costs that are not allocated to our reportable operating segments as part of our COH methodology, which involves management judgment, are also included in Corporate and Other. These costs include marketing sponsorships, treasury and other corporate activities, and charitable contributions.

Corporate and Other includes the results of Ally Invest, our digital brokerage and ~~wealth management~~advisory offering, which enables us to complement our competitive deposit products with low-cost investing. The digital ~~wealth management~~advisory business aligns with our strategy to create a premier digital financial services company and provides additional sources of fee income through asset management and certain other fees, with minimal balance sheet utilization. This business also provides an additional source of low-cost deposits through arrangements with Ally Invest’s clearing broker.

~~Information related to our point-of-sale financing business,~~The sale of Ally Lending is also included within Corporate and Other. Ally Lending primarily serves medical and home improvement service providers by enabling promotional and fixed rate installment-loan products through a digital application process at point-of-sale. The home improvement vertical had originations of $252 million duringclosed on March 1, 2024. For further information, refer to Note 2 to the first quarter of 2023 and now represents approximately 57% of new originations. Point-of-sale lending broadens our capabilities, and expands our product offering into consumer unsecured personal lending, all while helping to further meet the financial needs of our customers.Condensed Consolidated Financial Statements.

Financial information related to our credit card business, Ally Credit Card, is included within Corporate and Other. Ally Credit Card is our scalable, digital-first credit card platform and features leading-edge technology, and a proprietary, analytics-based underwriting model. We believe Ally Credit Card enhances our ability to grow and deepen both new and existing customer relationships. As of March 31, 2024, our credit card business had $2.0 billion of finance receivables and loans and approximately 1.2 million customers.

Corporate and Other includes our CRA loans. On October 24, 2023, the U.S. banking agencies issued a final rule to modernize their regulations related to the CRA. The final rule amends their CRA regulations by introducing new tests to evaluate the CRA performance of banks, which most significantly impacts banks with over $2 billion in assets and imposes additional requirements on banks with over $10 billion in assets. Major changes to the CRA regulations include modifications related to the delineation of assessment areas, the overall evaluation framework including performance standards and metrics, the definition of community development activities, and data collection and reporting. Most provisions of the final rule will become effective on January 1, 2026, and the data reporting requirements will become effective on January 1, 2027. While we are still evaluating the final rule, it could impact Ally including our CRA program, business strategies, allocation of resources, and technology requirements.

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~~Consolidated Results~~Dealer Financial Services

Dealer Financial Services comprises the following two segments.

•Automotive Finance operations— One of ~~Operations~~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.

Mortgage Finance operations

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, aligned with the expected duration and the benchmark rate curve plus an assumed credit spread. The assumed credit spread is calculated based on a composite investment grade unsecured bond 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 framework also incorporates a credit on the allocated capital for each business line. For business lines not subject to an FTP funding allocation, the FTP methodology applies a capital charge to the amount of excess liquidity that the business line holds, relative to its regulatory capital. This reduces the allocated interest expense to account for the equity that must be held based on Ally’s internal capital requirement. The net residual impact of the FTP methodology is included within the results of Corporate and Other.

The ~~following table summarizes~~information presented in our ~~consolidated~~reportable operating ~~results~~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 ~~periods shown. Refer~~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, ~~sections~~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.

Table of ~~the MD&A that follows~~Contents

Notes to Condensed Consolidated Financial Statements (unaudited)

Ally Financial Inc. • Form 10-Q

Financial information for ~~a more complete discussion of~~our reportable operating ~~results by business line.~~segments is summarized as follows.

Three months ended March 31,
($ in millions) 2023 2022 Favorable/(unfavorable) % change
Net financing revenue and other interest income
Total financing revenue and other interest income $ 3,286 $ 2,311 42
Total interest expense 1,458 401 n/m
Net depreciation expense on operating lease assets 226 217 (4)
Net financing revenue and other interest income 1,602 1,693 (5)
Other revenue
Insurance premiums and service revenue earned 306 280 9
Gain on mortgage and automotive loans, net 4 14 (71)
Other gain on investments, net 74 5 n/m
Other income, net of losses 114 143 (20)
Total other revenue 498 442 13
Total net revenue 2,100 2,135 (2)
Provision for credit losses 446 167 (167)
Noninterest expense
Compensation and benefits expense 537 493 (9)
Insurance losses and loss adjustment expenses 88 58 (52)
Other operating expenses 641 571 (12)
Total noninterest expense 1,266 1,122 (13)
Income from continuing operations before income tax expense 388 846 (54)
Income tax expense from continuing operations 68 191 64
Net income from continuing operations $ 320 $ 655 (51)
Financial ratios:
Return on average assets (a) 0.67 % 1.46 % n/m
Return on average equity (a) 9.60 % 16.44 % n/m
Equity to assets (a) 7.01 % 8.88 % n/m
Common dividend payout ratio (b) 31.25 % 16.04 % n/m

~~n/m = not meaningful~~


Three months ended March 31, ($ 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	$	1,314	$	29	$	52	$	111	$	(50)	$	1,456
Other revenue	97		384		6		23		20		530
Total net revenue	1,411		413		58		134		(30)		1,986
Provision for credit losses	448		—		—		(1)		60		507
Total noninterest expense	641		343		33		45		246		1,308
Income (loss) from continuing operations before income tax expense	$	322	$	70	$	25	$	90	$	(336)	$	171
Total assets	$	114,613	$	9,100	$	18,303	$	10,410	$	40,451	$	192,877
2023
Net financing revenue and other interest income	$	1,322	$	26	$	54	$	103	$	97	$	1,602
Other revenue	77		381		4		29		7		498
Total net revenue	1,399		407		58		132		104		2,100
Provision for credit losses	351		—		(1)		15		81		446
Total noninterest expense	606		315		38		45		262		1,266
Income (loss) from continuing operations before income tax expense	$	442	$	92	$	21	$	72	$	(239)	$	388
Total assets	$	111,960	$	8,867	$	19,290	$	10,226	$	45,822	$	196,165

(a)~~The ratios were based on average assets~~Net financing revenue and ~~average total equity using an average daily balance methodology.~~

~~(b)The common dividend payout ratio was calculated using basic earnings per common share.~~

~~We earned net~~other interest income ~~from continuing operations of $320~~after the provision for credit losses totaled $949 million and $1.2 billion for the three months ended March 31, 2024, and 2023, ~~compared~~respectively.

24. Contingencies and Other Risks

As a financial-services company, we are regularly involved in pending or threatened legal proceedings and other matters and are or may be subject to ~~$655 million~~potential liability in connection with them. These legal matters may be formal or informal and include litigation and arbitration with one or more identified claimants, certified or purported class actions with yet-to-be-identified claimants, and regulatory or other governmental information-gathering requests, examinations, investigations, and enforcement proceedings. Our legal matters exist in varying stages of adjudication, arbitration, negotiation, or investigation and span our business lines and operations. Claims may be based in law or equity—such as those arising under contracts or in tort and those involving banking, consumer-protection, securities, tax, employment, and other laws—and some can present novel legal theories and allege substantial or indeterminate damages.

We accrue for a legal matter or other contingent exposure when a loss becomes probable and the amount of loss can be reasonably estimated. Accruals are evaluated each quarter and may be adjusted, upward or downward, based on our best judgment after consultation with counsel. No assurance exists that our accruals will not need to be adjusted in the future. When a probable or reasonably possible loss on a legal matter or other contingent exposure could be material to our consolidated financial condition, results of operations, or cash flows, we provide disclosure in this note as prescribed by ASC Topic 450, Contingencies. Refer to Note 1 to the Consolidated Financial Statements in our 2023 Annual Report on Form 10-K for additional information related to our policy for establishing accruals.

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Notes to Condensed Consolidated Financial Statements (unaudited)

Ally Financial Inc. • Form 10-Q

25. Subsequent Events

Declaration of Common Dividend

On April 15, 2024, our Board declared a quarterly cash dividend of $0.30 per share on all common stock. The dividend is payable on May 15, 2024, to stockholders of record at the close of business on May 1, 2024.

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Management’s Discussion and Analysis

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Cautionary Notice about Forward-Looking Statements and Other Terms

•evolving local, regional, national, or international business, economic, or political conditions;

•changes in monetary, fiscal, or trade laws or policies, including as a result of actions by governmental agencies, central banks, or supranational authorities;

•changes in accounting standards or policies;

•any instability or breakdown in the financial system, including as a result of the failure of a financial institution or other participants in it (such as the banking failures during 2023);

•changes in business or consumer sentiment, preferences, or behavior, including spending, borrowing, or saving by businesses or households;

•changes in our corporate or business strategies, the composition of our assets, or the way in which we fund those assets;

•our ability to execute our business strategy for Ally Bank, including its digital focus;

•our ability to optimize our automotive finance and insurance businesses and to continue diversifying into and growing other consumer and commercial business lines, including mortgage lending, credit cards, corporate finance, brokerage, and personal advice;

•our ability to develop capital plans acceptable to the FRB and our ability to implement them, including any payment of dividends or share repurchases;

•our ability to cost-effectively fund our business and operations, including through deposits (which could be subject to sudden withdrawals) and the capital markets;

•changes in any credit rating assigned to Ally, including Ally Bank, or the ratings for our insurance business;