Ally Financial Inc. [ALLY] Filings

10-Q 1 ally-20220930.htm 10-Q ally-20220930

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, 2022, 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 31, 2022, the number of shares outstanding of the Registrant’s common stock was 298,646,900 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, 2022, and 2021	5
	Condensed Consolidated Balance Sheet (unaudited) at September 30, 2022, and December 31, 2021	7
	Condensed Consolidated Statement of Changes in Equity (unaudited) for the Three Months and Nine Months Ended September 30, 2022, and 2021	9
	Condensed Consolidated Statement of Cash Flows (unaudited) for the Nine Months Ended September 30, 2022, and 2021	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. Acquisitions	14
	Note 3. Revenue from Contracts with Customers	15
	Note 4. Other Income, Net of Losses	16
	Note 5. Reserves for Insurance Losses and Loss Adjustment Expenses	17
	Note 6. Other Operating Expenses	17
	Note 7. Investment Securities	18
	Note 8. Finance Receivables and Loans, Net	22
	Note 9. Leasing	31
	Note 10. Securitizations and Variable Interest Entities	34
	Note 11. Other Assets	37
	Note 12. Deposit Liabilities	39
	Note 13. Debt	39
	Note 14. Accrued Expenses and Other Liabilities	40
	Note 15. Preferred Stock	40
	Note 16. Accumulated Other Comprehensive Loss	42
	Note 17. Earnings per Common Share	45
	Note 18. Regulatory Capital and Other Regulatory Matters	46
	Note 19. Derivative Instruments and Hedging Activities	49
	Note 20. Income Taxes	55
	Note 21. Fair Value	56
	Note 22. Offsetting Assets and Liabilities	63
	Note 23. Segment Information	65
	Note 24. Contingencies and Other Risks	67
	Note 25. Subsequent Events	68
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	69
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	121
Item 4.	Controls and Procedures	122
Part II — Other Information		123
Item 1.	Legal Proceedings	123
Item 1A.	Risk Factors	123
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	123
Item 3.	Defaults Upon Senior Securities	123
Item 4.	Mine Safety Disclosures	123
Item 5.	Other Information	123
Item 6.	Exhibits	124
Signatures		125

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
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


CFE						Cities for Financial Empowerment
COH						Corporate overhead
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
Fair Square						Fair Square Financial Holdings LLC and its subsidiaries
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
LGD						Loss given default
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

Table of Contents

Index of Defined Terms

Ally Financial Inc. • Form 10-Q


Term						Definition
P&C						Property and casualty
PCA						Prompt corrective action
PCD						Purchased credit deteriorated


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
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)	2022		2021		2022		2021
Financing revenue and other interest income
Interest and fees on finance receivables and loans	$	2,120	$	1,619	$	5,676	$	4,789
Interest on loans held-for-sale	10		5		18		14
Interest and dividends on investment securities and other earning assets	218		155		609		433
Interest on cash and cash equivalents	16		5		23		13
Operating leases	397		393		1,196		1,147
Total financing revenue and other interest income	2,761		2,177		7,522		6,396
Interest expense
Interest on deposits	567		245		1,041		819
Interest on short-term borrowings	43		—		67		1
Interest on long-term debt	194		191		563		671
Interest on other	—		8		1		8
Total interest expense	804		444		1,672		1,499
Net depreciation expense on operating lease assets	238		139		674		384
Net financing revenue and other interest income	1,719		1,594		5,176		4,513
Other revenue
Insurance premiums and service revenue earned	289		279		849		837
Gain on mortgage and automotive loans, net	10		18		28		73
Loss on extinguishment of debt	—		(52)		—		(126)
Other (loss) gain on investments, net	(54)		24		(173)		212
Other income, net of losses	52		122		347		498
Total other revenue	297		391		1,051		1,494
Total net revenue	2,016		1,985		6,227		6,007
Provision for credit losses	438		76		909		31
Noninterest expense
Compensation and benefits expense	467		389		1,397		1,230
Insurance losses and loss adjustment expenses	70		69		217		206

Other operating expenses	624		544		1,807		1,584
Total noninterest expense	1,161		1,002		3,421		3,020
Income from continuing operations before income tax expense	417		907		1,897		2,956
Income tax expense from continuing operations	117		195		460		549
Net income from continuing operations	300		712		1,437		2,407
(Loss) income from discontinued operations, net of tax	(1)		—		(1)		1
Net income	299

Ally Financial Inc. [ALLY] Filings
10-Q	[2022-11-02]
10-Q	[2022-08-01]
10-Q	[2022-05-02]
10-K	[2022-02-25]
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]