Ally Financial Inc. [ALLY] Filings

10-Q 1 ally-20210930.htm 10-Q ally-20210930

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 September 30, 2021, 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 October 29, 2021, the number of shares outstanding of the Registrant’s common stock was 346,444,000 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 Income (unaudited) for the Three Months and Nine Months Ended September 30, 2021, and 2020	5
	Condensed Consolidated Balance Sheet (unaudited) at September 30, 2021, and December 31, 2020	7
	Condensed Consolidated Statement of Changes in Equity (unaudited) for the Three Months and Nine Months Ended September 30, 2021, and 2020	9
	Condensed Consolidated Statement of Cash Flows (unaudited) for the Nine Months Ended September 30, 2021, and 2020	11
	Notes to Condensed Consolidated Financial Statements (unaudited)	13
	Note 1. Description of Business, Basis of Presentation, and Changes in Significant Accounting Policies	13
	Note 2. Revenue from Contracts with Customers	13
	Note 3. Other Income, Net of Losses	15
	Note 4. Reserves for Insurance Losses and Loss Adjustment Expenses	16
	Note 5. Other Operating Expenses	16
	Note 6. Investment Securities	17
	Note 7. Finance Receivables and Loans, Net	21
	Note 8. Leasing	29
	Note 9. Securitizations and Variable Interest Entities	32
	Note 10. Other Assets	34
	Note 11. Deposit Liabilities	35
	Note 12. Debt	35
	Note 13. Accrued Expenses and Other Liabilities	37
	Note 14. Preferred Stock	37
	Note 15. Accumulated Other Comprehensive Income	39
	Note 16. Earnings per Common Share	42
	Note 17. Regulatory Capital and Other Regulatory Matters	42
	Note 18. Derivative Instruments and Hedging Activities	46
	Note 19. Income Taxes	52
	Note 20. Fair Value	53
	Note 21. Offsetting Assets and Liabilities	61
	Note 22. Segment Information	62
	Note 23. Contingencies and Other Risks	65
	Note 24. Subsequent Events	66
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	67
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	120
Item 4.	Controls and Procedures	121
Part II — Other Information		122
Item 1.	Legal Proceedings	122
Item 1A.	Risk Factors	122
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	122
Item 3.	Defaults Upon Senior Securities	122
Item 4.	Mine Safety Disclosures	122
Item 5.	Other Information	122
Item 6.	Exhibits	123
Signatures		124

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
ABS						Asset-backed securities
ALCO						Asset-Liability Committee
ALM						Asset Liability Management
ASC						Accounting Standards Codification
ASU						Accounting Standards Update
BHC						Bank holding company
BHC Act						Bank Holding Company Act of 1956 as amended
BMC						Better Mortgage Company
Board						Ally Board of Directors
CCAR						Comprehensive Capital Analysis and Review
CD						Certificate of deposit
CECL						Accounting Standards Update 2016-13 (and related Accounting Standards Updates), or current expected credit loss
COVID-19						Coronavirus disease 2019
CRA						Community Reinvestment Act of 1977 as amended
CSG						Commercial Services Group
CVA						Credit valuation adjustment
Dodd-Frank Act						Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 as amended
EGRRCP Act						Economic Growth, Regulatory Relief, and Consumer Protection Act as amended
ERMC						Enterprise Risk Management Committee
ESG						Environmental, social, and governance
F&I						Finance and insurance
FASB						Financial Accounting Standards Board
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
IB Finance						IB Finance Holding Company, LLC
IRA						Individual retirement account
LCR						Liquidity coverage ratio
LIBOR						London Interbank Offered Rate
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
OTC						Over-the-counter
P&C						Property and casualty
PCA						Prompt corrective action
RC						Risk Committee of the Ally Board of Directors

Table of Contents

Index of Defined Terms

Ally Financial Inc. • Form 10-Q


Term						Definition
ROU						Right-of-use
RV						Recreational vehicle
RWA						Risk-weighted asset
SEC						U.S. Securities and Exchange Commission
Series 2 TRUPS						8.125% Fixed Rate/Floating Rate Trust Preferred Securities, Series 2 of GMAC Capital Trust I
SOFR						Secured Overnight Financing Rate
SPE						Special-purpose entity
Stellantis						Stellantis N.V.
TDR						Troubled debt restructuring
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 Income (unaudited)

Ally Financial Inc. • Form 10-Q


	Three months ended September 30,				Nine months ended September 30,
($ in millions)	2021		2020		2021		2020
Financing revenue and other interest income
Interest and fees on finance receivables and loans	$	1,619	$	1,602	$	4,789	$	4,974
Interest on loans held-for-sale	5		5		14		11
Interest and dividends on investment securities and other earning assets	155		173		433		596
Interest on cash and cash equivalents	5		5		13		23
Operating leases	393		360		1,147		1,070
Total financing revenue and other interest income	2,177		2,145		6,396		6,674
Interest expense
Interest on deposits	245		452		819		1,585
Interest on short-term borrowings	—		9		1		39
Interest on long-term debt	191		309		671		975
Interest on other	8		—		8		—
Total interest expense	444		770		1,499		2,599
Net depreciation expense on operating lease assets	139		175		384		675
Net financing revenue and other interest income	1,594		1,200		4,513		3,400
Other revenue
Insurance premiums and service revenue earned	279		276		837		816
Gain on mortgage and automotive loans, net	18		33		73		35
Loss on extinguishment of debt	(52)		(49)		(126)		(50)
Other gain on investments, net	24		64		212		173
Other income, net of losses	122		160		498		331
Total other revenue	391		484		1,494		1,305
Total net revenue	1,985		1,684		6,007		4,705
Provision for credit losses	76		147		31		1,337
Noninterest expense
Compensation and benefits expense	389		342		1,230		1,036
Insurance losses and loss adjustment expenses	69		85		206		301
Goodwill impairment	—		—		—		50
Other operating expenses	544		478		1,584		1,423
Total noninterest expense	1,002		905		3,020		2,810
Income from continuing operations before income tax expense	907		632		2,956		558
Income tax expense from continuing operations	195		156		549		159
Net income from continuing operations	712		476		2,407		399
Income (loss) from discontinued operations, net of tax

Ally Financial Inc. [ALLY] Filings
10-Q	[2021-11-02]
10-Q	[2021-08-02]
10-Q	[2021-05-03]
10-K	[2021-02-24]
10-Q	[2020-11-03]
10-Q	[2020-07-30]
10-Q	[2020-04-28]
10-K	[2020-02-25]
10-Q	[2019-11-05]
10-Q	[2019-08-01]
10-Q	[2019-05-06]
10-K	[2019-02-20]
10-Q	[2018-11-01]
10-Q	[2018-08-01]
10-Q	[2018-05-07]
10-K	[2018-02-21]
10-Q	[2017-10-31]
10-Q	[2017-07-31]
10-Q	[2017-05-04]
10-K	[2017-02-27]
10-Q	[2016-11-02]
10-Q	[2016-08-04]
10-Q	[2016-05-05]
10-K	[2016-02-24]
10-Q	[2015-10-29]
10-Q	[2015-07-30]
10-Q	[2015-05-01]
10-K	[2015-02-27]
10-Q	[2014-10-31]
10-Q	[2014-08-01]
10-Q	[2014-05-01]
10-K	[2014-03-03]
10-Q	[2013-11-05]
10-Q	[2013-08-02]
10-Q	[2013-05-01]
10-K	[2013-03-01]
10-Q	[2012-11-02]
10-Q	[2012-08-03]
10-Q	[2012-04-27]
10-K	[2012-02-28]