ALLY FINANCIAL INC., 10-Q filed on 11/2/2021
Quarterly Report
v3.21.2
Cover Page - shares
9 Months Ended
Sep. 30, 2021
Oct. 29, 2021
Cover [Abstract]    
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Sep. 30, 2021  
Document Transition Report false  
Entity File Number 1-3754  
Entity Registrant Name Ally Financial Inc.  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 38-0572512  
Entity Address, Address Description Ally Detroit Center  
Entity Address, Address Line One 500 Woodward Avenue  
Entity Address, Address Line Two Floor 10  
Entity Address, City or Town Detroit  
Entity Address, State or Province MI  
Entity Address, Postal Zip Code 48226  
City Area Code 866  
Local Phone Number 710-4623  
Title of 12(b) Security Common Stock, par value $0.01 per share  
Trading Symbol ALLY  
Security Exchange Name NYSE  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   346,444,000
Entity Central Index Key 0000040729  
Current Fiscal Year End Date --12-31  
Document Fiscal Year Focus 2021  
Document Fiscal Period Focus Q3  
Amendment Flag false  
v3.21.2
Condensed Consolidated Statement of Comprehensive Income (unaudited) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Sep. 30, 2021
Sep. 30, 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 0 9 1 39
Interest on long-term debt 191 309 671 975
Interest on other 8 0 8 0
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 0 0 0 50
Other operating expenses 544 478 1,584 1,423
Total noninterest expense 1,002 905 3,020 2,810
Income (loss) 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 [1] 712 476 2,407 399
Income (loss) from discontinued operations, net of tax [1] 0 0 1 (1)
Net income 712 476 2,408 398
Other comprehensive (loss) income, net of tax (165) (120) (580) 572
Comprehensive income 547 356 1,828 970
Net income from continuing operations attributable to common stockholders [1] 683 476 2,378 399
Net income attributable to common stockholders [1] $ 683 $ 476 $ 2,379 $ 398
Basic weighted-average common shares outstanding [1],[2] 359,179,000 375,658,000 368,215,000 375,478,000
Diluted weighted-average common shares outstanding [1],[2],[3] 361,855,000 377,011,000 370,745,000 376,659,000
Basic earnings per common share        
Net income (loss) from continuing operations (in dollars per share) [1] $ 1.90 $ 1.27 $ 6.46 $ 1.06
Net income (loss) (in dollars per share) [1] 1.90 1.27 6.46 1.06
Diluted earnings per common share        
Net income (loss) from continuing operations (in dollars per share) [1] 1.89 1.26 6.41 1.06
Net income (loss) (in dollars per share) [1] 1.89 1.26 6.42 1.06
Cash dividends declared per common share (in dollars per share) [1] $ 0.25 $ 0.19 $ 0.63 $ 0.57
Antidilutive securities excluded from computation of earnings per share, amount 0 400,000 0 1,000,000
[1] Figures in the table may not recalculate exactly due to rounding. Earnings per share is calculated based on unrounded numbers.
[2] Includes shares related to share-based compensation that vested but were not yet issued.
[3] During the three months and nine months ended September 30, 2020, there were 0.4 million and 1.0 million, respectively, in shares underlying share-based awards excluded because their inclusion would have been antidilutive. There were no antidilutive shares during the three months and nine months ended September 30, 2021.
v3.21.2
Condensed Consolidated Balance Sheet (unaudited) - USD ($)
$ in Millions
Sep. 30, 2021
Dec. 31, 2020
Cash and cash equivalents    
Noninterest-bearing $ 636 $ 724
Interest-bearing 10,279 14,897
Total cash and cash equivalents 10,915 15,621
Equity securities 1,045 1,071
Available-for-sale securities (amortized cost of $32,972 and $28,936) [1] 33,122 29,830
Held-to-maturity securities (fair value of $1,193 and $1,331) 1,150 1,253
Loans held-for-sale, net 456 406
Finance receivables and loans, net    
Finance receivables and loans, net of unearned income 114,471 118,534
Allowance for loan losses (3,148) (3,283)
Total finance receivables and loans, net 111,323 115,251
Investment in operating leases, net 10,969 9,639
Premiums receivable and other insurance assets 2,752 2,679
Other assets 7,452 6,415
Total assets 179,184 182,165
Deposit liabilities    
Noninterest-bearing 167 128
Interest-bearing 139,277 136,908
Total deposit liabilities 139,444 137,036
Short-term borrowings 0 2,136
Long-term debt 14,946 22,006
Interest payable 422 412
Unearned insurance premiums and service revenue 3,537 3,438
Accrued expenses and other liabilities 3,546 2,434
Total liabilities 161,895 167,462
Contingencies (refer to Note 23)
Equity    
Common stock and paid-in capital ($0.01 par value, shares authorized 1,100,000,000; issued 504,133,393 and 501,237,055; and outstanding 349,598,889 and 374,674,415) 21,644 21,544
Preferred stock 2,324 0
Accumulated deficit (2,136) (4,278)
Accumulated other comprehensive income 51 631
Treasury stock, at cost (154,534,504 and 126,562,640 shares) (4,594) (3,194)
Total equity 17,289 14,703
Total liabilities and equity 179,184 182,165
On-balance sheet variable interest entities    
Finance receivables and loans, net    
Allowance for loan losses (284) (285)
Total finance receivables and loans, net 7,872 13,213
Other assets 621 983
Total assets 8,493 14,196
Deposit liabilities    
Long-term debt 1,437 4,158
Accrued expenses and other liabilities 2 3
Total liabilities 1,439 4,161
On-balance sheet variable interest entities | Consumer    
Finance receivables and loans, net    
Finance receivables and loans, net of unearned income 8,156 7,630
On-balance sheet variable interest entities | Commercial    
Finance receivables and loans, net    
Finance receivables and loans, net of unearned income $ 0 $ 5,868
[1] Refer to Note 6 for discussion of investment securities pledged as collateral.
v3.21.2
Condensed Consolidated Balance Sheet (unaudited) (Parenthetical) - USD ($)
$ in Millions
Sep. 30, 2021
Dec. 31, 2020
Common stock, par value per share (in dollars per share) $ 0.01 $ 0.01
Common stock, shares authorized (in shares) 1,100,000,000 1,100,000,000
Common stock, shares issued (in shares) 504,133,393 501,237,055
Common stock, shares outstanding (in shares) 349,598,889 374,674,415
Treasury stock, shares (in shares) 154,534,504 126,562,640
Available-for-sale debt securities | Available-for-sale securities    
Available-for-sale securities, amortized cost $ 32,972 $ 28,936
Held-to-maturity securities    
Held-to-maturity securities, fair value 1,193 1,331
Held-to-maturity securities | Held-to-maturity securities    
Held-to-maturity securities, fair value $ 1,193 $ 1,331
v3.21.2
Condensed Consolidated Statement of Changes in Equity (unaudited) - USD ($)
$ in Millions
Total
Series B Preferred Stock
Series C Preferred Stock
Cumulative Effect, Period of Adoption, Adjustment
Cumulative Effect, Period of Adoption, Adjusted Balance
Common stock and paid-in capital
Common stock and paid-in capital
Cumulative Effect, Period of Adoption, Adjusted Balance
Preferred stock
Preferred stock
Series B Preferred Stock
Preferred stock
Series C Preferred Stock
Preferred stock
Cumulative Effect, Period of Adoption, Adjusted Balance
Accumulated deficit
Accumulated deficit
Series B Preferred Stock
Accumulated deficit
Series C Preferred Stock
Accumulated deficit
Cumulative Effect, Period of Adoption, Adjustment
Accumulated deficit
Cumulative Effect, Period of Adoption, Adjusted Balance
Accumulated other comprehensive income (loss)
Accumulated other comprehensive income (loss)
Cumulative Effect, Period of Adoption, Adjusted Balance
Treasury stock
Treasury stock
Cumulative Effect, Period of Adoption, Adjusted Balance
Increase (Decrease) in Stockholders' Equity [Roll Forward]                                        
Adoption of Accounting Standards Update 2016-13 $ 14,416     $ (1,017) $ 13,399 $ 21,438 $ 21,438 $ 0     $ 0 $ (4,057)     $ (1,017) $ (5,074) $ 123 $ 123 $ (3,088) $ (3,088)
Beginning balance at Dec. 31, 2019 14,416     $ (1,017) $ 13,399 21,438 $ 21,438 0     $ 0 (4,057)     $ (1,017) $ (5,074) 123 $ 123 (3,088) $ (3,088)
Increase (Decrease) in Stockholders' Equity [Roll Forward]                                        
Net income 398                     398                
Share-based compensation 79         79                            
Other comprehensive income (loss) 572                               572      
Common stock repurchases (105)                                   (105)  
Common stock dividends (217)                     (217)                
Ending balance at Sep. 30, 2020 14,126         21,517   0       (4,893)         695   (3,193)  
Increase (Decrease) in Stockholders' Equity [Roll Forward]                                        
Adoption of Accounting Standards Update 2016-13 13,826         21,499   0       (5,296)         815   (3,192)  
Beginning balance at Jun. 30, 2020 13,826         21,499   0       (5,296)         815   (3,192)  
Increase (Decrease) in Stockholders' Equity [Roll Forward]                                        
Net income 476                     476                
Share-based compensation 18         18                            
Other comprehensive income (loss) (120)                               (120)      
Common stock repurchases (1)                                   (1)  
Common stock dividends (73)                     (73)                
Ending balance at Sep. 30, 2020 14,126         21,517   0       (4,893)         695   (3,193)  
Increase (Decrease) in Stockholders' Equity [Roll Forward]                                        
Adoption of Accounting Standards Update 2016-13 14,126         21,517   0       (4,893)         695   (3,193)  
Adoption of Accounting Standards Update 2016-13 14,703         21,544   0       (4,278)         631   (3,194)  
Beginning balance at Dec. 31, 2020 14,703         21,544   0       (4,278)         631   (3,194)  
Increase (Decrease) in Stockholders' Equity [Roll Forward]                                        
Net income 2,408                     2,408                
Net proceeds from issuance of series preferred stock   $ 1,335 $ 989           $ 1,335 $ 989                    
Preferred stock dividends   (20) (9)                   $ (20) $ (9)            
Share-based compensation 100         100                            
Other comprehensive income (loss) (580)                               (580)      
Common stock repurchases (1,400)                                   (1,400)  
Common stock dividends (237)                     (237)                
Ending balance at Sep. 30, 2021 17,289         21,644   2,324       (2,136)         51   (4,594)  
Increase (Decrease) in Stockholders' Equity [Roll Forward]                                        
Adoption of Accounting Standards Update 2016-13 17,530         21,631   2,324       (2,726)         216   (3,915)  
Beginning balance at Jun. 30, 2021 17,530         21,631   2,324       (2,726)         216   (3,915)  
Increase (Decrease) in Stockholders' Equity [Roll Forward]                                        
Net income 712                     712                
Preferred stock dividends   $ (20) $ (9)                   $ (20) $ (9)            
Share-based compensation 13         13                            
Other comprehensive income (loss) (165)                               (165)      
Common stock repurchases (679)                                   (679)  
Common stock dividends (93)                     (93)                
Ending balance at Sep. 30, 2021 17,289         21,644   2,324       (2,136)         51   (4,594)  
Increase (Decrease) in Stockholders' Equity [Roll Forward]                                        
Adoption of Accounting Standards Update 2016-13 $ 17,289         $ 21,644   $ 2,324       $ (2,136)         $ 51   $ (4,594)  
v3.21.2
Condensed Consolidated Statement of Changes in Equity (unaudited) (Parenthetical) - $ / shares
3 Months Ended 9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Sep. 30, 2021
Sep. 30, 2020
Statement of Stockholders' Equity [Abstract]        
Cash dividends declared per common share (in dollars per share) [1] $ 0.25 $ 0.19 $ 0.63 $ 0.57
[1] Figures in the table may not recalculate exactly due to rounding. Earnings per share is calculated based on unrounded numbers.
v3.21.2
Condensed Consolidated Statement of Cash Flows (unaudited) - USD ($)
$ in Millions
9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Operating activities    
Net income $ 2,408 $ 398
Reconciliation of net income to net cash provided by operating activities    
Depreciation and amortization 931 1,159
Goodwill impairment 0 50
Provision for credit losses 31 1,337
Gain on mortgage and automotive loans, net (73) (35)
Other gain on investments, net (212) (173)
Loss on extinguishment of debt 126 50
Originations and purchases of loans held-for-sale (3,136) (2,241)
Proceeds from sales and repayments of loans held-for-sale 3,186 2,107
Net change in    
Deferred income taxes (558) 122
Interest payable 10 107
Other assets 19 (196)
Other liabilities 419 (29)
Other, net (68) (52)
Net cash provided by operating activities 3,083 2,604
Investing activities    
Purchases of equity securities (1,117) (816)
Proceeds from sales of equity securities 1,280 936
Purchases of available-for-sale securities (17,211) (12,013)
Proceeds from sales of available-for-sale securities 4,870 6,350
Proceeds from repayments of available-for-sale securities 8,725 7,846
Purchases of held-to-maturity securities (201) 0
Proceeds from repayments of held-to-maturity securities 303 306
Purchases of finance receivables and loans held-for-investment (5,466) (5,188)
Proceeds from sales of finance receivables and loans initially held-for-investment 376 122
Originations and repayments of finance receivables and loans held-for-investment and other, net 8,669 14,745
Purchases of operating lease assets (4,231) (3,226)
Disposals of operating lease assets 2,618 1,946
Net change in nonmarketable equity investments 104 305
Other, net (294) (308)
Net cash (used in) provided by investing activities (1,575) 11,005
Financing activities    
Net change in short-term borrowings (2,136) (2,499)
Net increase in deposits 2,398 14,168
Proceeds from issuance of long-term debt 253 3,174
Repayments of long-term debt (4,812) (11,887)
Purchases of land and buildings in satisfaction of finance lease liabilities (391) 0
Repurchases of common stock (1,400) (105)
Preferred stock issuance 2,324 0
Trust preferred securities redemption (2,513) 0
Common stock dividends paid (237) (217)
Preferred stock dividends paid (29) 0
Net cash (used in) provided by financing activities (6,543) 2,634
Effect of exchange-rate changes on cash and cash equivalents and restricted cash 0 (1)
Net (decrease) increase in cash and cash equivalents and restricted cash (5,035) 16,242
Cash and cash equivalents and restricted cash at beginning of year 16,574 4,380
Cash and cash equivalents and restricted cash at September 30, 11,539 20,622
Cash paid for    
Interest 1,422 2,414
Income taxes 1,235 8
Noncash items    
Loans held-for-sale transferred to finance receivables and loans held-for-investment 5 74
Additions of property and equipment 46 0
Finance receivables and loans held-for-investment transferred to loans held-for-sale 414 128
In-kind distribution from equity-method investee 0 126
Equity consideration received in exchange for restructured loans 0 5
Decrease in held-to-maturity securities due to the consolidation of a VIE 0 5
Increase in held-for-investment loans and other, net, due to the consolidation of a VIE 0 114
Increase in collateralized borrowings, net, due to the consolidation of a VIE 0 109
Additional Cash Flow Elements and Supplemental Cash Flow Information [Abstract]    
Cash and cash equivalents on the Condensed Consolidated Balance Sheet 10,915 19,939
Restricted cash included in other assets on the Condensed Consolidated Balance Sheet [1] 624 683
Total cash and cash equivalents and restricted cash in the Condensed Consolidated Statement of Cash Flows $ 11,539 $ 20,622
[1] Restricted cash balances relate primarily to Ally securitization arrangements. Refer to Note 10 for additional details describing the nature of restricted cash balances.
v3.21.2
Description of Business, Basis of Presentation, and Changes in Significant Accounting Policies
9 Months Ended
Sep. 30, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Description of Business, Basis of Presentation, and Changes in Significant Accounting Policies 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 digital financial-services company committed to its promise to “Do It Right” for its consumer, commercial, and corporate customers. Ally is composed of an industry-leading independent automotive finance and insurance operation, an award-winning digital direct bank (Ally Bank, Member FDIC and Equal Housing Lender, which offers mortgage lending, point-of-sale personal lending, and a variety of deposit and other banking products), a corporate finance business for equity sponsors and middle-market companies, and securities brokerage and investment advisory services. A relentless ally for all things money, Ally helps people save well and earn well, so they can spend for what matters. We are a Delaware corporation and are 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 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 September 30, 2021, and for the three months and nine months ended September 30, 2021, and 2020, 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, 2020, as filed on February 24, 2021, with the SEC.
Significant Accounting Policies
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 2020 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 2020 Annual Report on Form 10-K regarding additional significant accounting policies.
Recently Adopted Accounting Standards
Reference Rate Reform (ASU 2021-01)
In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, which clarified the scope of ASU 2020-04, Reference Rate Reform: Facilitation of the Effects of Reference Rate Reform on Financial Reporting, indicating that certain optional expedients and exceptions included in ASU 2020-04 are applicable to derivative instruments affected by the market-wide change in interest rates used for discounting, margining, or contract price alignment. We adopted the amendments in this ASU immediately upon issuance in January 2021 on a prospective basis and will apply this guidance, along with the guidance from ASU 2020-04, as contracts are modified through December 2022. The adoption did not have an immediate direct impact on our financial statements. We do not expect there to be a material impact to our financial statements.
v3.21.2
Revenue from Contracts with Customers
9 Months Ended
Sep. 30, 2021
Revenue from Contract with Customer [Abstract]  
Revenue from Contracts with Customers Revenue from Contracts with Customers
Our primary revenue sources, which include financing revenue and other interest income, are addressed by other GAAP 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 GAAP 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.
The following tables present 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 2020 Annual Report on Form 10-K.
Three months ended September 30, ($ in millions)
Automotive Finance operationsInsurance operationsMortgage Finance operationsCorporate Finance operationsCorporate and OtherConsolidated
2021
Revenue from contracts with customers
Noninsurance contracts (a) (b) (c)$ $157 $ $ $ $157 
Remarketing fee income26     26 
Brokerage commissions and other revenue    12 12 
Deposit account and other banking fees (d)    2 2 
Brokered/agent commissions 4    4 
Other5    1 6 
Total revenue from contracts with customers
31 161   15 207 
All other revenue
30 122 19 16 (3)184 
Total other revenue (e)$61 $283 $19 $16 $12 $391 
2020
Revenue from contracts with customers
Noninsurance contracts (a) (b) (c)$— $148 $— $— $— $148 
Remarketing fee income20 — — — — 20 
Brokerage commissions and other revenue— — — — 12 12 
Deposit account and other banking fees (d)— — — — 
Brokered/agent commissions— — — — 
Other— — — — 
Total revenue from contracts with customers
23 152 — — 16 191 
All other revenue38 186 36 24 293 
Total other revenue (e)$61 $338 $36 $$40 $484 
(a)We had opening balances of $3.1 billion and $2.9 billion in unearned revenue associated with outstanding contracts at July 1, 2021, and July 1, 2020, respectively, and $228 million and $218 million of these balances were recognized as insurance premiums and service revenue earned in our Condensed Consolidated Statement of Comprehensive Income during the three months ended September 30, 2021, and September 30, 2020, respectively.
(b)At September 30, 2021, we had unearned revenue of $3.1 billion associated with outstanding contracts, and with respect to this balance we expect to recognize revenue of $218 million during the remainder of 2021, $817 million in 2022, $735 million in 2023, $572 million in 2024, and $731 million thereafter. At September 30, 2020, we had unearned revenue of $3.0 billion associated with outstanding contracts.
(c)We had deferred insurance assets of $1.9 billion at both July 1, 2021, and September 30, 2021, and recognized $135 million of expense during the three months ended September 30, 2021. We had deferred insurance assets of $1.8 billion at both July 1, 2020, and September 30, 2020, and recognized $125 million of expense during the three months ended September 30, 2020.
(d)Reflects various services fees we charge depositors. Effective May 25, 2021, we eliminated all overdraft fees for Ally Bank deposit accounts.
(e)Represents a component of total net revenue. Refer to Note 22 for further information on our reportable operating segments.
Nine months ended September 30, ($ in millions)
Automotive Finance operationsInsurance operationsMortgage Finance operationsCorporate Finance operationsCorporate and OtherConsolidated
2021
Revenue from contracts with customers
Noninsurance contracts (a) (b)$ $470 $ $ $ $470 
Remarketing fee income80     80 
Brokerage commissions and other revenue    45 45 
Deposit account and other banking fees (c)    13 13 
Brokered/agent commissions 12    12 
Other17    3 20 
Total revenue from contracts with customers
97 482   61 640 
All other revenue
87 524 81 75 87 854 
Total other revenue (d)$184 $1,006 $81 $75 $148 $1,494 
2020
Revenue from contracts with customers
Noninsurance contracts (a) (b)$— $433 $— $— $— $433 
Remarketing fee income52 — — — — 52 
Brokerage commissions and other revenue— — — — 39 39 
Deposit account and other banking fees (c)— — — — 
Brokered/agent commissions— 12 — — — 12 
Other11 — — — — 11 
Total revenue from contracts with customers
63 445 — — 48 556 
All other revenue85 468 65 28 103 749 
Total other revenue (d)$148 $913 $65 $28 $151 $1,305 
(a)We had opening balances of $3.0 billion and $2.9 billion in unearned revenue associated with outstanding contracts at January 1, 2021, and January 1, 2020, respectively, and $681 million and $643 million of these balances were recognized as insurance premiums and service revenue earned in our Condensed Consolidated Statement of Comprehensive Income during the nine months ended September 30, 2021, and September 30, 2020.
(b)We had deferred insurance assets of $1.8 billion and $1.9 billion at January 1, 2021, and September 30, 2021, respectively, and recognized $400 million of expense during the nine months ended September 30, 2021. We had deferred insurance assets of $1.7 billion and $1.8 billion at January 1, 2020, and September 30, 2020, respectively, and recognized $371 million of expense during the nine months ended September 30, 2020.
(c)Reflects various services fees we charge depositors. Effective May 25, 2021, we eliminated all overdraft fees for Ally Bank deposit accounts.
(d)Represents a component of total net revenue. Refer to Note 22 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 $86 million and $278 million for the three months and nine months ended September 30, 2021, respectively, and $71 million and $62 million for the three months and nine months ended September 30, 2020, on the sale of off-lease vehicles. These gains are included in depreciation expense on operating lease assets in our Condensed Consolidated Statement of Comprehensive Income.
v3.21.2
Other Income, Net of Losses
9 Months Ended
Sep. 30, 2021
Other Nonoperating Income (Expense) [Abstract]  
Other Income, Net of Losses Other Income, Net of Losses
Details of other income, net of losses, were as follows.
Three months ended September 30,Nine months ended September 30,
($ in millions)2021202020212020
Gain on nonmarketable equity investments, net$1 $15 $104 $11 
Late charges and other administrative fees29 28 89 65 
Remarketing fees26 20 80 52 
Income from equity-method investments26 63 71 115 
Other, net40 34 154 88 
Total other income, net of losses$122 $160 $498 $331 
v3.21.2
Reserves for Insurance Losses and Loss Adjustment Expenses
9 Months Ended
Sep. 30, 2021
Short-duration Insurance Contracts, Liability for Unpaid Claims and Allocated Claim Adjustment Expense, Net [Abstract]  
Reserves for Insurance Losses and Loss Adjustment Expenses Reserves for Insurance Losses and Loss Adjustment Expenses
The following table shows a rollforward of our reserves for insurance losses and loss adjustment expenses.
($ in millions)20212020
Total gross reserves for insurance losses and loss adjustment expenses at January 1,$129 $122 
Less: Reinsurance recoverable90 88 
Net reserves for insurance losses and loss adjustment expenses at January 1,39 34 
Net insurance losses and loss adjustment expenses incurred related to:
Current year207 298 
Prior years (a)(1)
Total net insurance losses and loss adjustment expenses incurred206 301 
Net insurance losses and loss adjustment expenses paid or payable related to:
Current year(174)(271)
Prior years(29)(27)
Total net insurance losses and loss adjustment expenses paid or payable(203)(298)
Net reserves for insurance losses and loss adjustment expenses at September 30,42 37 
Plus: Reinsurance recoverable83 88 
Total gross reserves for insurance losses and loss adjustment expenses at September 30,$125 $125 
(a)There have been no material adverse changes to the reserve for prior years.
v3.21.2
Other Operating Expenses
9 Months Ended
Sep. 30, 2021
Operating Expenses [Abstract]  
Other Operating Expenses Other Operating Expenses
Details of other operating expenses were as follows.
Three months ended September 30,Nine months ended September 30,
($ in millions)2021202020212020
Insurance commissions$142 $130 $416 $383 
Technology and communications90 77 249 236 
Lease and loan administration56 57 168 141 
Advertising and marketing57 36 143 112 
Property and equipment depreciation40 34 114 102 
Professional services36 28 97 87 
Vehicle remarketing and repossession19 17 57 51 
Charitable contributions (a)2 57 
Regulatory and licensing fees19 18 54 76 
Occupancy14 14 47 43 
Non-income taxes8 23 23 
Amortization of intangible assets5 14 14 
Other56 52 145 149 
Total other operating expenses$544 $478 $1,584 $1,423 
(a)Includes contributions made to the Ally Charitable Foundation.
v3.21.2
Investment Securities
9 Months Ended
Sep. 30, 2021
Investments, Debt and Equity Securities [Abstract]  
Investment Securities Investment Securities
Our investment portfolio includes various debt and equity securities. Our debt securities, which are classified as available-for-sale or held-to-maturity, include government securities, corporate bonds, asset-backed securities, and mortgage-backed securities. The cost, fair value, and gross unrealized gains and losses on available-for-sale and held-to-maturity securities were as follows.
September 30, 2021December 31, 2020
Amortized costGross unrealized
Fair value
Amortized costGross unrealized
Fair value
($ in millions)gainslossesgainslosses
Available-for-sale securities
Debt securities
U.S. Treasury and federal agencies$1,759 $3 $(19)$1,743 $783 $20 $— $803 
U.S. States and political subdivisions839 25 (6)858 1,046 50 (1)1,095 
Foreign government159 4 (2)161 167 — 176 
Agency mortgage-backed residential
19,579 306 (179)19,706 18,053 538 (3)18,588 
Mortgage-backed residential3,463 23 (7)3,479 2,595 49 (4)2,640 
Agency mortgage-backed commercial4,767 90 (121)4,736 4,063 139 (13)4,189 
Asset-backed544 3  547 420 — 425 
Corporate debt1,862 43 (13)1,892 1,809 105 — 1,914 
Total available-for-sale securities (a) (b) (c) (d) (e)
$32,972 $497 $(347)$33,122 $28,936 $915 $(21)$29,830 
Held-to-maturity securities
Debt securities
Agency mortgage-backed residential$1,150 $55 $(12)$1,193 $1,253 $79 $(1)$1,331 
Total held-to-maturity securities (e) (f)$1,150 $55 $(12)$1,193 $1,253 $79 $(1)$1,331 
(a)Certain entities related to our Insurance operations are required to deposit securities with state regulatory authorities. These deposited securities totaled $13 million at both September 30, 2021, and December 31, 2020.
(b)Certain available-for-sale securities are included in fair value hedging relationships. Refer to Note 18 for additional information.
(c)Available-for-sale securities with a fair value of $258 million and $145 million at September 30, 2021, and December 31, 2020, respectively, were pledged for purposes as required by contractual obligation or law. Under these agreements, we granted the counterparty the right to sell or pledge the underlying investment securities.
(d)Totals do not include accrued interest receivable, which was $82 million and $90 million at September 30, 2021, and December 31, 2020, respectively. Accrued interest receivable is included in other assets on our Condensed Consolidated Balance Sheet.
(e)There was no allowance for credit losses recorded at September 30, 2021, or December 31, 2020, as management determined that there were no expected credit losses in our portfolio of available-for-sale and held-to-maturity securities.
(f)Totals do not include accrued interest receivable, which was $2 million and $3 million at September 30, 2021, and December 31, 2020, respectively. Accrued interest receivable is included in other assets on our Condensed Consolidated Balance Sheet.
The maturity distribution of debt securities outstanding is summarized in the following tables based upon contractual maturities. Call or prepayment options may cause actual maturities to differ from contractual maturities.
TotalDue in one year or lessDue after one year through five yearsDue after five years through ten yearsDue after ten years
($ in millions)AmountYieldAmountYieldAmountYieldAmountYieldAmountYield
September 30, 2021
Fair value of available-for-sale securities (a)
U.S. Treasury and federal agencies$1,743 1.1 %$291 0.8 %$180 1.0 %$1,272 1.2 %$  %
U.S. States and political subdivisions858 3.1 33 2.5 74 2.7 134 3.3 617 3.1 
Foreign government161 1.8 2 0.8 97 1.9 62 1.8   
Agency mortgage-backed residential19,706 2.5     28 2.0 19,678 2.5 
Mortgage-backed residential3,479 2.6     25 2.9 3,454 2.6 
Agency mortgage-backed commercial4,736 1.9   26 2.4 1,751 2.3 2,959 1.7 
Asset-backed547 2.0   308 2.4 230 1.4 9 3.3 
Corporate debt1,892 2.3 89 3.0 765 2.3 1,029 2.3 9 2.3 
Total available-for-sale securities$33,122 2.4 $415 1.4 $1,450 2.1 $4,531 2.0 $26,726 2.5 
Amortized cost of available-for-sale securities
$32,972 $413 $1,420 $4,466 $26,673 
Amortized cost of held-to-maturity securities
Agency mortgage-backed residential$1,150 2.8 %$  %$  %$  %$1,150 2.8 %
Total held-to-maturity securities
$1,150 2.8 $  $  $  $1,150 2.8 
December 31, 2020
Fair value of available-for-sale securities (a)
U.S. Treasury and federal agencies$803 1.2 %$13 0.1 %$708 1.1 %