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What changed in Ally Financial Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Ally Financial Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+898 added−777 removedSource: 10-K (2025-02-19) vs 10-K (2024-02-20)

Top changes in Ally Financial Inc.'s 2024 10-K

898 paragraphs added · 777 removed · 659 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

157 edited+39 added−39 removed91 unchanged
Biggest changeIn 2023, Ally: • Submitted our annual CDP (formally the Carbon Disclosure Project) climate change questionnaire. • Achieved third-party verification to a limited level of assurance using ISO 14064-3 for our 2022 greenhouse gas emissions. • Executed Ally's operational carbon neutrality strategy for fiscal year 2022 Scope 1 and 2 emissions for the third consecutive year through a combined purchase of carbon offsets and Green-e Energy Certified renewable energy credits. • Leveraged initial climate risk identification efforts, aligned to the Enterprise Risk Management framework, as well as climate scenario analysis, to begin evaluating Ally’s potential climate risk exposure, both physical and transition, across material risk types, and continued the development of an appropriate risk mitigation strategy. • Initiated a new relationship with an independent sustainability ratings and assessment provider to begin evaluating the sustainability performance of certain third parties within our supply chain. • Focused on improving operational sustainability through strategic initiatives, including centralized trash and composting, installation of solar panels and additional EV charging stations, more efficient HVAC units, and promotion of biodiversity through landscape redesign with native species. • Launched a community apiary in April 2023 that features educational programming to emphasize the importance of biodiversity in an era of climate change. • Continued to support environmental volunteerism through Green Teams, an employee network of volunteers dedicated to sustainability.
Biggest changeIn 2024, we: • Submitted our annual CDP (formally the Carbon Disclosure Project) climate change questionnaire. • Achieved third-party verification to a limited level of assurance using ISO 14064-3 for our reported 2023 greenhouse gas emissions metrics. • Executed Ally's operational carbon neutrality strategy for Scope 1 and 2 emissions for the fourth consecutive year through a combined purchase of carbon offsets and Green-e Energy Certified renewable energy credits. • Prepared for evolving regulatory requirements and reporting frameworks by conducting gap analyses and developing a compliance roadmap aligned with strategic priorities. • Enhanced climate risk management capabilities to further embed climate risk considerations into existing risk management strategies. • Engaged key suppliers via EcoVadis, a global sustainability assessment platform, to improve our ability to evaluate third-party sustainability performance. • Focused on improving operational sustainability through strategic initiatives, including installation of solar panels and additional EV charging stations, more efficient HVAC units, centralized trash and composting, and promotion of biodiversity through landscape redesign with native species. • Continued to support environmental volunteerism through Green Teams, an employee network of volunteers dedicated to sustainability. 99 Table of Contents Management’s Discussion and Analysis Ally Financial Inc. • Form 10-K Liquidity Management, Funding, and Regulatory Capital Overview The purpose of liquidity management is to enable us to meet loan and operating lease demand, debt maturities, deposit withdrawals, and other cash commitments under both normal operating conditions as well as periods of economic or financial stress.
In addition, we make investments in people, processes, and technology to assist us in our efforts to prevent, monitor, and respond to cybersecurity incidents. More specifically, information technology/cybersecurity operational metrics and data are monitored on an ongoing basis and assessed against established risk-appetite limits.
In addition, we make investments in people, processes, and technology to assist us in our efforts to prevent, monitor, and respond to incidents. More specifically, information technology/cybersecurity operational metrics and data are monitored on an ongoing basis and assessed against established risk-appetite limits.
The model risk management function’s specific responsibility includes maintaining a centralized inventory of all models in production, under development, or recently retired; performing independent validation and annual review testing to verify that models are built as intended, conceptually sound, and appropriate for their intended use; monitoring ongoing model performance to identify potential model degradation; and producing risk appetite metrics and key risk indicators for consumption by Board-level and management-level risk committees.
The MRM function’s specific responsibility includes maintaining a centralized inventory of all models in production, under development, or recently retired; performing independent validation and annual review testing to verify that models are built as intended, conceptually sound, and appropriate for their intended use; monitoring ongoing model performance to identify potential model degradation; and producing risk appetite metrics and key risk indicators for consumption by Board-level and management-level risk committees.
We optimize our funding sources at Ally Bank by prioritizing retail deposits, maintaining an active securitization program, managing the maturity profile of our brokered deposit portfolio, utilizing repurchase agreements, and continuing to access funds from the FHLB. Assets are primarily originated by Ally Bank to reduce parent company exposures and funding requirements, and to utilize our growing consumer deposit-taking capabilities.
We optimize our funding sources at Ally Bank by prioritizing retail deposits, maintaining an active securitization program, managing the maturity profile of our brokered deposit portfolio, utilizing repurchase agreements, and continuing to access funds from the FHLB. Assets are primarily originated by Ally Bank to reduce parent company exposures and funding requirements, and to utilize consumer deposit-taking capabilities.
We offer competitive rates and fees on a full spectrum of retail deposit products, including savings accounts, money-market demand accounts, CDs, interest-bearing spending accounts, trust accounts, and IRAs. Our primary funding source is retail deposits, which we believe, at scale, are the most efficient and stable source of funding for us when compared to other funding sources.
We offer competitive rates and fees on a full spectrum of retail deposit products, including savings accounts, money-market demand accounts, CDs, interest-bearing spending accounts, trust accounts, and IRAs. Our primary funding source is retail deposits, which we believe, at scale, is the most efficient and stable source of funding for us when compared to other funding sources.
Any identified threats, vulnerabilities, or cybersecurity incidents are addressed as appropriate through the CSRP or our business-continuity and crisis-management plans, as described earlier. Cybersecurity and the continued enhancement of our controls, processes, and systems to protect our technology infrastructure, customer information, and other proprietary information or assets remain a critical and ongoing priority.
Any identified threats, vulnerabilities, or cybersecurity incidents are addressed as appropriate through the CSRP or our business-continuity and crisis-management plans, as described earlier. Cybersecurity and the continued enhancement of our controls, processes, and systems to protect our technology and data infrastructure, customer information, and other proprietary information or assets remain a critical and ongoing priority.
An inventory of information technology/cybersecurity processes, risks, and controls is maintained, which is derived utilizing regulatory and industry guidance, including the Federal Financial Institutions Examination Council Information Technology Examination Handbook and the National Institute of Standards and Technology Cybersecurity Framework. This inventory is used to assist in the identification and assessment of information technology/cybersecurity risks.
An inventory of information technology/cybersecurity/data processes, risks, and controls is maintained, which is derived utilizing regulatory and industry guidance, including the Federal Financial Institutions Examination Council Information Technology Examination Handbook and the National Institute of Standards and Technology Cybersecurity Framework. This inventory is used to assist in the identification and assessment of information technology/cybersecurity/data risks.
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 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. 104 Table of Contents Management’s Discussion and Analysis Ally Financial Inc. • Form 10-K Regulatory Capital We became subject to U.S.
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 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. 107 Table of Contents Management’s Discussion and Analysis Ally Financial Inc. • Form 10-K Regulatory Capital We became subject to U.S.
Our CISO, who has over 27 years of experience within the financial-services industry, is supported by employees involved in the management of information security/cybersecurity risks that possess experience across a variety of areas.
Our CISO, who has over 27 years of experience within the financial-services industry, is supported by employees involved in the management of information security/cybersecurity/data risks that possess experience across a variety of areas.
Refer to the Risk Factors section for additional information on our information technology/cybersecurity risks. Information technology/cybersecurity risk management is part of our broader enterprise risk-management framework described earlier in Risk Management , including the multiple layers of defense described there.
Refer to the Risk Factors section for additional information on our information technology/cybersecurity/data risks. Information technology/cybersecurity/data risk management is part of our broader enterprise risk-management framework described earlier in Risk Management , including the multiple layers of defense described there.
Our CISO, who reports to the CIDDO, is principally responsible for managing and implementing our cybersecurity program. Our CIDDO and CISO collectively possess substantial expertise in the areas of information technology, information security, and cybersecurity risk management.
Our CISO, who reports to the CIDDO, is principally responsible for managing and implementing our cybersecurity program. Our CIDDO and CISO collectively possess substantial expertise in the areas of information technology, information security, cybersecurity, and data risk management.
This is particularly true for certain institutional investors whose investment guidelines require investment-grade ratings on term debt and the two highest rating categories for short-term debt (particularly money-market investors). 105 Table of Contents Management’s Discussion and Analysis Ally Financial Inc. • Form 10-K Nationally recognized statistical rating organizations rate substantially all our debt.
This is particularly true for certain institutional investors whose investment guidelines require investment-grade ratings on term debt and the two highest rating categories for short-term debt (particularly money-market investors). 108 Table of Contents Management’s Discussion and Analysis Ally Financial Inc. • Form 10-K Nationally recognized statistical rating organizations rate substantially all our debt.
The RC reviews reports and other information from the TC in approving our information-technology and information-security risk appetite and in exercising oversight of our independent risk-management program.
The RC reviews reports and other information from the TC in approving our information-technology, information-security, and data risk appetite, and in exercising oversight of our independent risk-management program.
(e) Comprises adjustments related to our accumulated other comprehensive income opt-out election, which allows us to exclude most elements of accumulated other comprehensive income from regulatory capital. (f) Risk-weighted assets are defined by regulation and are generally determined by allocating assets and specified off-balance sheet exposures to various risk categories.
(f) Comprises adjustments related to our accumulated other comprehensive income opt-out election, which allows us to exclude most elements of accumulated other comprehensive income from regulatory capital. (g) Risk-weighted assets are defined by regulation and are generally determined by allocating assets and specified off-balance sheet exposures to various risk categories.
This available liquidity is held at various legal entities and is subject to regulatory restrictions and tax implications that may limit our ability to transfer funds across entities. 97 Table of Contents Management’s Discussion and Analysis Ally Financial Inc. • Form 10-K The following table summarizes our total available liquidity.
This available liquidity is held at various legal entities and is subject to regulatory restrictions and tax implications that may limit our ability to transfer funds across entities. 100 Table of Contents Management’s Discussion and Analysis Ally Financial Inc. • Form 10-K The following table summarizes our total available liquidity.
Refer to Note 15 to the Consolidated Financial Statements for a summary of the scheduled maturity of long-term debt as of December 31, 2023. In recent years, we have become less reliant on market-based funding, reducing our exposure to disruptions in wholesale funding markets.
Refer to Note 15 to the Consolidated Financial Statements for a summary of the scheduled maturity of long-term debt as of December 31, 2024. In recent years, we have become less reliant on market-based funding, reducing our exposure to disruptions in wholesale funding markets.
Refer to Note 15 to the Consolidated Financial Statements for a summary of the scheduled maturity of long-term debt at December 31, 2023. Deposits Ally Bank is a digital direct bank with no branch network that obtains retail deposits directly from customers.
Refer to Note 15 to the Consolidated Financial Statements for a summary of the scheduled maturity of long-term debt at December 31, 2024. Deposits Ally Bank is a digital direct bank with no branch network that obtains retail deposits directly from customers.
In some instances, deposits in excess of federal insurance limits may be insured based upon the number of account owners, beneficiaries, and accounts held. 112 Table of Contents Quantitative and Qualitative Disclosures about Market Risk Ally Financial Inc. • Form 10-K
In some instances, deposits in excess of federal insurance limits may be insured based upon the number of account owners, beneficiaries, and accounts held. 116 Table of Contents Quantitative and Qualitative Disclosures about Market Risk Ally Financial Inc. • Form 10-K
The monthly liquidity forecasts demonstrate our ability to generate and obtain adequate amounts of cash to meet loan and operating lease demand, debt maturities, deposit withdrawals, and other cash commitments under normal operating conditions throughout the forecast horizon (currently through December 2026).
The monthly liquidity forecasts demonstrate our ability to generate and obtain adequate amounts of cash to meet loan and operating lease demand, debt maturities, deposit withdrawals, and other cash commitments under normal operating conditions throughout the forecast horizon (currently through December 2027).
(c) Refer to Note 17 to the Consolidated Financial Statements for additional details about our non-cumulative perpetual preferred stock. (d) Contains deferred tax assets required to be deducted from capital under U.S. Basel III.
(d) Refer to Note 17 to the Consolidated Financial Statements for additional details about our non-cumulative perpetual preferred stock. (e) Contains deferred tax assets required to be deducted from capital under U.S. Basel III.
If the realized values of our leased vehicles were to decline 1% below our estimated realizable values, we would incur $73 million of incremental depreciation expense over the remaining life of our operating lease portfolio on a scheduled termination basis.
If the realized values of our leased vehicles were to decline 1% below our estimated realizable values, we would incur $49 million of incremental depreciation expense over the remaining life of our operating lease portfolio on a scheduled termination basis.
Senior management briefs the RC, the TC, or the Board on information-technology and information-security matters at least quarterly and identified cybersecurity incidents are reported to the Board as deemed appropriate pursuant to our business-continuity and crisis-management plans.
Senior management briefs the RC, the TC, or the Board on information-technology, information-security, and data risk matters at least quarterly and identified cybersecurity incidents are reported to the Board as deemed appropriate pursuant to our business-continuity and crisis-management plans.
As of December 31, 2023, 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.
As of December 31, 2024, 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.
Actual loss sensitivities and resulting estimates of consolidated allowance for loan losses may be influenced by numerous other factors including, but not limited to, the actual evaluation of macroeconomic conditions, the underlying performance of our portfolios relative to historical loss experience, future government and management actions, and other quantitative and qualitative information and adjustments.
Actual loss sensitivities and resulting estimates of consolidated allowance for loan losses may be influenced by numerous other factors including, but not limited to, the actual evaluation of macroeconomic conditions, the underlying performance of our portfolios relative to historical loss experience and current modeled assumptions, future government and management actions, and other quantitative and qualitative information and adjustments.
(b) We elected to delay recognizing the estimated impact of CECL on regulatory capital until after a two-year deferral period, which for us extended through December 31, 2021.
(c) We elected to delay recognizing the estimated impact of CECL on regulatory capital until after a two-year deferral period, which for us extended through December 31, 2021.
At both December 31, 2023, and December 31, 2022, the outstanding principal balance of the Guaranteed Notes was $2.0 billion, with the last scheduled maturity to take place in 2031.
At both December 31, 2024, and December 31, 2023, the outstanding principal balance of the Guaranteed Notes was $2.0 billion, with the last scheduled maturity to take place in 2031.
(b) Loan maturities are based on the remaining maturities under contractual terms. (c) 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.
(b) Loan maturities are based on the remaining maturities under contractual terms. (c) Certain consumer automotive loans are included in fair value hedging relationships. The amortized cost excludes a liability of $41 million related to basis adjustments for loans in closed portfolios with active hedges under the portfolio layer method at December 31, 2024.
To this end, the TC periodically reviews and approves policies addressing information-technology and information-security risks and reviews reports and trends on Ally’s information-technology and information-security risks—including those involving cybersecurity, data management and protection, and crisis management—and receives reports from management on its actions to assess, monitor, and control those risks.
To this end, the TC periodically reviews and approves policies addressing information-technology, information-security, and data risks, and reviews reports and trends on these risks—including those involving cybersecurity, data management and protection, and crisis management—and receives reports from management on its actions to assess, monitor, and control them.
Other compliance-risk exposures are overseen and addressed by designated subject-matter experts across the enterprise—including in Finance, Tax, Accounting, Information Technology, Risk, Human Resources, and Corporate Structure and Facilities—and are escalated through their established governance and oversight routines.
Other compliance-risk exposures are overseen and addressed by designated subject-matter experts across the enterprise—including in Finance, Tax, Accounting, Information Technology, Risk, HR, and Corporate Structure and Facilities—and are escalated through their established governance and oversight routines.
The FSR is intended to be an indicator of the ability of the insurance company to meet its senior most obligations to policyholders. Lower ratings generally result in fewer opportunities to write business, as insureds, particularly large commercial insureds, and insurance companies purchasing reinsurance have guidelines requiring high FSR ratings. On September 21, 2023, A.M.
The FSR is intended to be an indicator of the ability of the insurance company to meet its senior most obligations to policyholders. Lower ratings generally result in fewer opportunities to write business, as insureds, particularly large commercial insureds, and insurance companies purchasing reinsurance have guidelines requiring high FSR ratings. On September 20, 2024, A.M.
To manage compliance risk, we maintain a system of policies, change-management protocols, control frameworks, and other formal governance structures. Our compliance function, which is led by the Chief Compliance Officer who reports to our CEO, provides independent, enterprise-wide oversight of consumer and customer-related compliance-risk exposures and related risk-management practices.
To manage compliance risk, we maintain a system of policies, change-management protocols, control frameworks, and other formal governance structures. Our compliance function, which is led by the Chief Compliance Officer who reports to our Chief Legal and Corporate Affairs Officer, provides independent, enterprise-wide oversight of consumer and customer-related compliance-risk exposures and related risk-management practices.
These scenarios are based on fixed probabilities of occurrence. • The unfavorable (or downside) scenario is consistent with the 90th percentile in a distribution of possible economic outcomes and implies that there is a 90% chance that the realized economy will be better than the defined path and a 10% chance that the realized economy will be worse than the defined path. • The alternative unfavorable (or alternative downside) scenario is consistent with the 96th percentile in a distribution of possible economic outcomes and implies that there is a 96% chance that the realized economy will be better than the defined path and a 4% chance that the realized economy will be worse than the defined path.
These scenarios are based on fixed probabilities of occurrence. • The unfavorable (or downside) scenario is consistent with the 90th percentile in a distribution of possible economic outcomes and implies that there is a 90% chance that the realized economy will be better than the defined path and a 10% chance that the realized economy will be worse than the defined path.
Notably, our digital tools (e.g. Savings & Spend Buckets) improve the digital banking experience across the entire customer journey, and additional account features like CoverDraft and early direct deposit further bolster our “Do It Right” commitment for our customers. We continue to be recognized for the totality of experience and value we provide our customers.
Savings & Spend Buckets) improve the digital banking experience across the entire customer journey, and additional account features like CoverDraft and early direct deposit further bolster our “Do It Right” commitment for our customers. We continue to be recognized for the totality of experience and value we provide our customers.
(b) Includes the effects of derivative financial instruments designated as hedges. Refer to Note 21 to the Consolidated Financial Statements for further information about the effects of our hedging activities. (c) Nonperforming finance receivables and loans are included in the average balances. For information on our accounting policies regarding nonperforming status, refer to Note 1 to the Consolidated Financial Statements.
(d) Includes the effects of derivative financial instruments designated as hedges. Refer to Note 21 to the Consolidated Financial Statements for further information about the effects of our hedging activities. (e) Nonperforming finance receivables and loans are included in the average balances. For information on our accounting policies regarding nonperforming status, refer to Note 1 to the Consolidated Financial Statements.
More specifically, our Enterprise Risk Management Committee is responsible for supporting the Chief Risk Officer’s oversight of senior management’s responsibility to execute on our strategy within our risk appetite set by the RC, and the Chief Risk Officer’s implementation of our independent risk-management.
More specifically, our ERMC is responsible for supporting the Chief Risk Officer’s oversight of senior management’s responsibility to execute on our strategy within our risk appetite set by the RC, and the Chief Risk Officer’s implementation of our independent risk-management.
The securities sold in repurchase agreements include U.S. government and federal agency obligations. As of December 31, 2023, we had $747 million debt outstanding under repurchase agreements. Additionally, we have access to the FRB Discount Window and can borrow funds to meet short-term liquidity demands. The FRB, however, is not a primary source of funding for day-to-day business.
The securities sold in repurchase agreements include U.S. government and federal agency obligations. As of December 31, 2024, we had no debt outstanding under repurchase agreements. Additionally, we have access to the FRB Discount Window and can borrow funds to meet short-term liquidity demands. The FRB, however, is not a primary source of funding for day-to-day business.
(b) 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.
(b) Certain consumer automotive loans are included in fair value hedging relationships. The amortized cost excludes a liability of $41 million related to basis adjustments for loans in closed portfolios with active hedges under the portfolio layer method at December 31, 2024.
We believe that in addition to the traditional cash flow analysis, the discussion related to liquidity, dividends, and ALM herein may provide more useful context in evaluating our liquidity position and related activity. Net cash provided by operating activities was $4.7 billion and $6.2 billion for the years ended December 31, 2023, and 2022, respectively.
We believe that in addition to the traditional cash flow analysis, the discussion related to liquidity, dividends, and ALM herein may provide more useful context in evaluating our liquidity position and related activity. Net cash provided by operating activities was $4.5 billion and $4.6 billion for the years ended December 31, 2024, and 2023, respectively.
Best upgraded the FSR for Ally Insurance Group to A (excellent) from A- (excellent), upgraded the ICR to a (excellent) from a- (excellent), and maintained a Stable outlook. Critical Accounting Estimates Accounting policies are integral to understanding our MD&A. The preparation of financial statements in accordance with U.S.
Best affirmed the FSR for Ally Insurance Group of A (excellent), affirmed the ICR of a (excellent), and affirmed a Stable outlook. Critical Accounting Estimates Accounting policies are integral to understanding our MD&A. The preparation of financial statements in accordance with U.S.
It has a voting membership that includes the Chief Risk Officer, model risk management function senior leaders, and executives from independent risk management and business line risk management. Key model risk updates and risk appetite metrics are also reported to the Executive Risk Management Committee and the RC.
It has a voting membership that includes the Chief Risk Officer, MRM function senior leaders, and executives from independent risk management and business line risk management. Key model risk updates and risk appetite metrics are also reported to the ERMC and the RC.
We maintain a governance and internal control framework to support the establishment of our allowance, and models used in that allowance process are regularly assessed through ongoing performance monitoring routines that are reviewed by the model risk management function.
We maintain a governance and internal control framework to support the establishment of our allowance, and models used in that allowance process are regularly assessed through ongoing performance monitoring routines that are reviewed by the MRM function.
Additional liquidity is available through a pool of unencumbered highly liquid securities, repurchase agreements, advances from the FHLB of Pittsburgh, and the FRB Discount Window.
Additional liquidity is available through a pool of unencumbered highly liquid securities, repurchase agreements, advances from the FHLB of Pittsburgh, the FRB Standing Repo Facility, and the FRB Discount Window.
Human Capital & Additional Information for further discussion. • Legal risk — The risk arising from the potential that unenforceable contracts, lawsuits, or adverse judgments can disrupt or otherwise negatively affect our operations or condition. • Process execution and management risk — The risk caused by failure to execute or adhere to policies, standards, procedures, processes, controls, and activities as designed and documented. • Supplier (third party) risk — The risk associated with third-party suppliers and their delivery of products or services and effect on overall business performance.
Human Capital & Additional Information for further discussion. • Legal risk — The risk arising from the potential that unenforceable contracts, lawsuits, or adverse judgments can disrupt or otherwise negatively affect our operations or condition. • Process execution and management risk — The risk caused by failure to execute or adhere to policies, standards, procedures, processes, controls, and activities as designed and documented. • Supplier (third party) risk — The risk associated with third- and fourth-party suppliers and their ability to deliver products and/or services in support of overall business performance.
(g) Net interest spread represents the difference between the rate on total interest-earning assets and the rate on total interest-bearing liabilities.
(i) Net interest spread represents the difference between the rate on total interest-earning assets and the rate on total interest-bearing liabilities.
Other deposits also include a deposit related to Ally Invest customer cash balances deposited at Ally Bank by a third party of $1.3 billion as of both December 31, 2023, and September 30, 2023, $1.5 billion as of both June 30, 2023, and March 31, 2023, and $1.8 billion as of December 31, 2022.
Other deposits also include a deposit related to Ally Invest customer cash balances deposited at Ally Bank by a third party of $1.3 billion as of December 31, 2024, $1.2 billion as of both September 30, 2024, and June 30, 2024, and $1.3 billion as of both March 31, 2024, and December 31, 2023.
Rating agency Short-term Senior unsecured debt Outlook Fitch (a) F3 BBB- Stable Moody’s (b) P-3 Baa3 Negative S&P (c) A-3 BBB- Stable DBRS (d) R-2 (high) BBB Stable (a) Fitch affirmed our senior unsecured debt rating of BBB-, short-term rating of F3, and affirmed the outlook of Stable on March 20, 2023.
Rating agency Short-term Senior unsecured debt Outlook Fitch (a) F3 BBB- Stable Moody’s (b) P-3 Baa3 Stable S&P (c) A-3 BBB- Stable DBRS (d) R-2 (high) BBB Stable (a) Fitch affirmed our senior unsecured debt rating of BBB-, short-term rating of F3, and affirmed the outlook of Stable on March 8, 2024.
We maintain available liquidity in the form of cash, unencumbered highly liquid securities, available FHLB capacity, and available FRB Discount Window capacity.
We maintain available liquidity in the form of cash, unencumbered highly liquid securities, available FHLB capacity, and available FRB Standing Repo Facility capacity and the FRB Discount Window capacity.
Ally received an updated preliminary stress capital buffer requirement 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.
We 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 in October 2022.
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.
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 such final rules, remain unclear.
Instead, it is a liquidity source that can be accessed in stressed environments or periods of market disruption. As of December 31, 2023, we had assets pledged and restricted as collateral to the FRB totaling $34.0 billion, resulting in $26.0 billion in total funding capacity with no debt outstanding.
Instead, it is a liquidity source that can be accessed in stressed environments or periods of market disruption. As of December 31, 2024, we had assets pledged and restricted as collateral to the FRB totaling $33.8 billion, resulting in $26.7 billion in total funding capacity with no debt outstanding.
Information Technology/Cybersecurity Risk Risk Management and Strategy Information technology/cybersecurity is one of our primary risks, which we define as risks resulting from the failure of, or insufficiency in, information technology (for example, a system outage) or intentional or accidental unauthorized access, sharing, removal, tampering, or disposal of company and customer data or records.
Information Technology/Cybersecurity/Data Risk Risk Management and Strategy Information technology/cybersecurity/data is one of our primary risks, which we define as risks resulting from the failure of, or insufficiency in, information technology (for example, a system outage) or intentional or accidental unauthorized access, sharing, removal, tampering, or disposal of company and customer data or records (for example, a cybersecurity incident), or the lack of data governance, the mismanagement of data, or poor data privacy and protection.
(b) Includes brokered certificates of deposit average balance of $12.3 billion and $5.5 billion as of December 31, 2023, and 2022, respectively. The following table presents the amounts of uninsured certificates of deposit, segregated by time remaining until maturity.
(b) Includes brokered certificates of deposit average balance of $9.1 billion and $12.3 billion as of December 31, 2024, and 2023, respectively. The following table presents the amounts of uninsured certificates of deposit, segregated by time remaining until maturity.
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 103 Table of Contents Management’s Discussion and Analysis Ally Financial Inc. • Form 10-K 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.
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.
Employee conduct is considered through various human resources and management activities including associate recruiting, on-boarding, performance management, incentive programs and compensation, conflicts of interest, and corrective action. Oversight of conduct risk is performed by the Conduct Risk Officer within Sustainability Risk Management. Employee engagement surveys provide valuable insight into employee views and opinions about the company’s culture and conduct.
Employee conduct is considered through various HR and management activities including associate recruiting, on-boarding, performance management, incentive programs and compensation, conflicts of interest, and corrective action. Oversight of conduct risk is performed by Enterprise Risk Management. Employee engagement surveys provide valuable insight into employee views and opinions about the company’s culture and conduct.
Ally business lines and support functions use models to inform business decisions over a wide range of activities, including estimation of credit losses, stress testing and scenario analysis, credit underwriting, balance sheet management, risk management, insurance risk, and identification of potential fraud and money laundering events.
Ally business lines and support functions use models to inform business decisions over a wide range of activities, including estimation of the allowance for credit losses, credit loss forecasting, stress testing and scenario analysis, loan and lease underwriting, balance sheet management, risk management, insurance risk, and identification of potential fraud and money laundering events.
We seek to minimize the occurrence and impact of unauthorized access, disruption, alteration, or compromise of our systems and information through real-time review and monitoring of our cybersecurity-risk exposures and the implementation of processes and controls to manage those risks.
We seek to minimize the occurrence and impact of unauthorized access, disruption, alteration, poor privacy or protection, mismanagement or compromise of our systems and information through real-time review and monitoring of applicable risk exposures and the implementation of processes and controls to manage those risks.
Compliance Risk Compliance risk is the risk of legal or regulatory sanctions, financial loss, or damage to reputation resulting from failure to comply with laws, regulations, rules, other regulatory requirements, or codes of conduct and other standards of self-regulatory organizations applicable to the banking organization (applicable rules and standards).
Compliance Risk Compliance risk is the risk of legal or regulatory sanctions, financial loss, or damage to reputation resulting from failure to comply with laws, regulations, rules, key internal policies, other regulatory requirements, or codes of conduct and other standards of SROs applicable to the banking organization (applicable rules and standards).
In addition, cybersecurity teams managed by our CISO are responsible for the ongoing assessment of information technology/cybersecurity risks that pertain to their areas of responsibility. We have adopted a CSRP, which provides a structured approach for our response to cybersecurity incidents.
In addition, information protection and risk management teams managed by our CISO are responsible for the administration, governance, and ongoing assessment of information technology/cybersecurity/data risks that pertain to their areas of responsibility. We have adopted a CSRP, which provides a structured approach for our response to cybersecurity incidents.
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. Refer to Note 20 to the Consolidated Financial Statements for additional information.
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.
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.
CIDIs, 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 CIDI, which would in turn be required to purchase that long-term debt.
Our Technology and Security Risk Management Committee, which reports to our Enterprise Risk Management Committee, provides oversight of senior management’s responsibility to manage and measure information technology/cybersecurity risks against the established risk appetite and monitors compliance with legal requirements and regulatory commitments.
Our Technology and Security Risk Management Committee and Data Risk Management Committee, which report to our ERMC, provide oversight of senior management’s responsibility to manage and measure information technology/cybersecurity/data risks against the established risk appetite and monitors compliance with legal requirements and regulatory commitments.
The following tables present summarized financial data for the Parent and the Guarantors on a combined basis. The Guarantors, both of which the Parent is deemed to possess control over, are fully consolidated after eliminating intercompany balances and transactions. Summarized financial data for nonguarantor subsidiaries is excluded.
The Guarantors, both of which the Parent is deemed to possess control over, are fully consolidated after eliminating intercompany balances and transactions. Summarized financial data for nonguarantor subsidiaries is excluded.
If the lessee declines to purchase the off-lease vehicle, the dealer is offered the opportunity to purchase the vehicle directly from us at a price we define. If both the lessee and the dealer decline their options to purchase, we remarket the off-lease vehicle at auction. At this point, we are exposed to a risk of loss.
If the lessee declines to purchase the off-lease vehicle, the dealer is offered the opportunity to purchase the vehicle directly from us at a price we define. If both the lessee and the dealer decline their options to purchase, we remarket the off-lease vehicle at auction.
Year ended December 31, ($ in millions) 2023 2022 2021 Net financing loss and other interest income (a) $ (945) $ (1,000) $ (1,070) Dividends from bank subsidiaries 1,350 3,150 3,450 Dividends from nonbank subsidiaries 250 1 27 Total other revenue 169 103 243 Total net revenue 824 2,254 2,650 Provision for credit losses (13) (32) (106) Total noninterest expense 465 665 650 Income from continuing operations before income tax benefit 372 1,621 2,106 Income tax benefit from continuing operations (b) (408) (253) (412) Net income from continuing operations 780 1,874 2,518 Loss from discontinued operations, net of tax (2) (1) (5) Net income (c) $ 778 $ 1,873 $ 2,513 (a) Net financing loss and other interest income is primarily driven by interest expense on long-term debt.
Year ended December 31, ($ in millions) 2024 2023 2022 Net financing loss and other interest income (a) $ (884) $ (945) $ (1,000) Dividends from bank subsidiaries 1,200 1,350 3,150 Dividends from nonbank subsidiaries — 250 1 Total other revenue 134 169 103 Total net revenue 450 824 2,254 Provision for credit losses 8 (13) (32) Total noninterest expense 473 465 665 (Loss) income from continuing operations before income tax benefit (31) 372 1,621 Income tax benefit from continuing operations (b) (327) (408) (253) Net income from continuing operations 296 780 1,874 Loss from discontinued operations, net of tax (1) (2) (1) Net income (c) $ 295 $ 778 $ 1,873 (a) Net financing loss and other interest income is primarily driven by interest expense on long-term debt.
(b) Moody’s affirmed our senior unsecured rating of Baa3, affirmed our short-term rating of P-3, and changed our outlook to Negative from Stable on August 7, 2023. (c) Standard & Poor’s affirmed our senior unsecured debt rating of BBB-, affirmed our short-term rating of A-3, and changed the outlook to Stable from Negative on March 25, 2021.
(b) Moody’s affirmed our senior unsecured rating of Baa3, affirmed our short-term rating of P-3, and changed our outlook to Stable from Negative on August 8, 2024. (c) S&P affirmed our senior unsecured debt rating of BBB-, affirmed our short-term rating of A-3, and changed our outlook to Stable from Negative on March 25, 2021.
(d) DBRS upgraded our senior unsecured debt rating to BBB from BBB (Low), upgraded our short-term rating to R-2 (high) from R-3, and affirmed the outlook of Stable on March 6, 2023. As illustrated by the issuer ratings above, as of December 31, 2023, Ally holds an investment-grade rating from all the respective nationally recognized rating agencies.
(d) DBRS affirmed our senior unsecured debt rating of BBB, affirmed our short-term rating of R-2 (high), and affirmed our outlook of Stable on February 11, 2025. As illustrated by the issuer ratings above, as of December 31, 2024, Ally holds an investment-grade rating from all the respective nationally recognized rating agencies.
All incentive pay, whether paid or unpaid, vested or not vested, is subject to cancellation or recoupment if 95 Table of Contents Management’s Discussion and Analysis Ally Financial Inc. • Form 10-K based on, without limitation, material misstatements, misrepresentations, or fraud, or if the employee recipient failed to identify, raise, or assess issues with respect to financial loss or reputational risk to us or otherwise engaged in or contributed to other conduct adverse to us.
All incentive pay, whether paid or unpaid, vested or not vested, is subject to cancellation or recoupment if based on, without limitation, material misstatements, misrepresentations, or fraud, or if the employee recipient failed to identify, raise, or assess issues with respect to financial loss or reputational risk to us or otherwise engaged in or contributed to other conduct adverse to us.
For additional information regarding the allowance calculation for the consumer portfolio segments, refer to Note 1 to the Consolidated Financial Statements. 106 Table of Contents Management’s Discussion and Analysis Ally Financial Inc. • Form 10-K The commercial portfolio segment is composed of loans that may or may not share similar risk characteristics within our Automotive Finance operations and Corporate Finance operations.
For additional information regarding the allowance calculation for the consumer portfolio segments, refer to Note 1 to the Consolidated Financial Statements. The commercial portfolio segment is composed of loans that may or may not share similar risk characteristics within our Automotive Finance operations and Corporate Finance operations.
Even before these failures, in response to the unprecedented pace of monetary tightening in 2022 and the resultant macroeconomic uncertainty, we had increased cash and available liquidity. Refer to the section above titled Recent Funding Developments.
Even before these failures, in response to the unprecedented pace of monetary tightening in 2022 and the resultant macroeconomic uncertainty, we had increased cash and available liquidity.
Third parties are also engaged to conduct cybersecurity penetration testing to assist us in identifying system vulnerabilities. We actively partner with other industry peers in order to share knowledge and information to further our security environment and invest in training and employee awareness regarding cyber-related risks. Our business lines are actively engaged in overseeing our third-party service providers.
We actively partner with other industry peers in order to share knowledge and information to further our security environment and invest in training and employee awareness regarding cyber-related risks. Our business lines are actively engaged in overseeing our third-party service providers.
We believe that the presentation of uninsured deposits adjusted for the impact of the affiliate deposits provides enhanced clarity of uninsured deposits at risk. 2023 2022 December 31, ($ in millions) Amount Percentage of total deposits Amount Percentage of total deposits Uninsured deposits Total uninsured deposits, as calculated per regulatory guidelines $ 16,895 11 % $ 19,303 13 % Less: Affiliate and intercompany deposits 5,313 4 % 4,072 3 % Total uninsured deposits, excluding affiliate and intercompany deposits $ 11,582 7 % $ 15,231 10 % The following table shows Ally Bank’s total primary retail deposit customers and deposit balances as of the end of each of the last five quarters.
We believe that the presentation of uninsured deposits adjusted for the impact of the affiliate deposits provides enhanced clarity of uninsured deposits at risk. 2024 2023 December 31, ($ in millions) Amount % of total deposits Amount % of total deposits Uninsured deposits Total uninsured deposits, as calculated per regulatory guidelines $ 17,921 12 $ 16,895 11 Less: Affiliate and intercompany deposits 6,320 4 5,313 4 Total uninsured deposits, excluding affiliate and intercompany deposits $ 11,601 8 $ 11,582 7 The following table shows Ally Bank’s total primary retail deposit customers and deposit balances as of the end of each of the last five quarters.
December 31, ($ in millions) 2023 2022 Total assets (a) $ 7,242 $ 5,467 Total liabilities $ 11,671 $ 10,996 (a) Excludes investments in all nonguarantor subsidiaries. Cash Flows The following summarizes the activity reflected in the Consolidated Statement of Cash Flows.
December 31, ($ in millions) 2024 2023 Total assets (a) $ 7,436 $ 7,242 Total liabilities $ 12,644 $ 11,671 (a) Excludes investments in all nonguarantor subsidiaries. Cash Flows The following summarizes the activity reflected in the Consolidated Statement of Cash Flows.
After the failures, we continued to do so by optimizing brokered CD issuances, borrowing from the FHLB, managing securities collateral pledged to the FHLB, maintaining competitive retail deposit pricing, and managing new loan origination volumes.
After the failures, we continued to do so by optimizing brokered CD issuances, borrowing from the FHLB, managing securities collateral pledged to the FHLB, maintaining competitive retail deposit pricing, managing new loan origination volumes, and increasing available FRB Discount Window capacity by pledging additional consumer automotive loan collateral.
The Note Guarantees are structurally subordinate to indebtedness and other liabilities (including trade payables and lease 102 Table of Contents Management’s Discussion and Analysis Ally Financial Inc. • Form 10-K obligations, and in the case of Ally Bank, its deposits) of any nonguarantor subsidiaries of the applicable Guarantor to the extent of the value of the assets of such subsidiaries.
The Note Guarantees are structurally subordinate to indebtedness and other liabilities (including trade payables and lease obligations, and in the case of Ally Bank, its deposits) of any nonguarantor subsidiaries of the applicable Guarantor to the extent of the value of the assets of such subsidiaries.
As of December 31, 2023, results of this sensitivity analysis indicate that the downside scenario would increase our allowance for loan losses by 10% and the alternative unfavorable scenario would increase our allowance for loan losses by 13%.
As of December 31, 2024, the results of this hypothetical sensitivity analysis indicate that the downside scenario would increase our allowance for loan losses by 16% and the alternative downside scenario would increase our allowance for loan losses by 22%.
The CSRP describes internal roles and responsibilities and describes the operational coordination among internal cybersecurity teams, application owners, business partners and other stake holders to detect and respond to cybersecurity incidents promptly, mitigate the impact of them, and resume normal operations. Our business-continuity and crisis-management plans also address cybersecurity incidents as appropriate.
The CSRP describes internal roles and responsibilities and describes the operational coordination among internal cybersecurity teams, application owners, business partners and other stake holders to detect, track, respond to, and escalate cybersecurity incidents promptly, mitigate the impact of them, and resume normal operations.
We had $63.5 billion of total available liquidity as of December 31, 2023, which included $10.3 billion of available FHLB capacity and $26.0 billion of available FRB Discount Window capacity. Refer to the section above titled Liquidity Risk Management.
We had $68.5 billion of total available liquidity as of December 31, 2024, which included $12.2 billion of available FHLB capacity and $26.7 billion of available FRB Discount Window capacity. Refer to the section above titled Liquidity Risk Management.
Conduct Risk Conduct risk is the risk of customer harm, employee harm, reputational damage, regulatory sanction, or financial loss resulting from the behavior of our employees and contractors toward customers, counterparties, other employees and contractors, or the markets in which we operate.
Conduct Risk Conduct risk is the risk of customer harm, employee harm, reputational damage, regulatory sanction, or financial loss resulting from certain behaviors that would lead to misconduct, whether intentional or not, of our employees and contractors toward customers, counterparties, other employees and contractors, or the markets in which we operate.
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 99 Table of Contents Management’s Discussion and Analysis Ally Financial Inc. • Form 10-K of the first, second, and third years, respectively, after finalization of the rule.
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.
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.
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 106 Table of Contents Management’s Discussion and Analysis Ally Financial Inc. • Form 10-K supervisory stress test.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeFor example, we could experience a decline in the demand for and value of used gasoline-powered vehicles that secure our loans to dealers, retailers, and consumers or that we remarket. These physical and transition risks also may have a negative impact on the business, operations, or financial condition of customers, counterparties, and service providers on whom we rely.
Biggest changeThese physical and transition risks also may have a negative impact on the business, operations, or financial condition of customers, counterparties, and service providers on whom we rely. The impact of natural disasters and the potential financial costs on us or our customers has increased in recent years, and may continue to increase in the future.
The financial-services industry continues to face scrutiny from supervisory authorities in the examination process, including through an increasing use of horizontal reviews from a broader industry perspective as well as strict enforcement of laws at federal, state, and local levels—particularly in connection with business and other practices that may harm or appear to harm consumers and compliance with anti-money-laundering, sanctions, and related laws.
The financial-services industry continues to face increased scrutiny from supervisory authorities in the examination process, including through an increasing use of horizontal reviews from a broader industry perspective as well as strict enforcement of laws at federal, state, and local levels—particularly in connection with business and other practices that may harm or appear to harm consumers and compliance with anti-money-laundering, sanctions, and related laws.
We could be required as well to dispose of specified assets and liabilities within a prescribed period of time. As a result, any enforcement or other supervisory action could have an adverse effect on our business, financial condition, results of operations, and prospects. Our regulatory and supervisory environments—whether at federal, state, or local levels—are not static.
We could be required as well to dispose of specified assets and liabilities within a prescribed period of time. As a result, any enforcement or other supervisory action could have an adverse effect on our business, financial condition, results of operations, and prospects. Our regulatory and supervisory environments—whether at international, federal, state, or local levels—are not static.
For example, if sensitive, confidential, or proprietary data or other information about us or our customers, employees, or third parties were improperly disclosed, accessed, or destroyed because of a security breach, we could experience severe business or operational disruptions, reputational damage, contractual claims, supervisory actions, or litigation by private plaintiffs.
For example, if sensitive, confidential, or proprietary data or other information about us or our customers, employees, third-parties, or others were improperly disclosed, accessed, or destroyed because of a security breach, we could experience severe business or operational disruptions, reputational damage, contractual claims, supervisory actions, or litigation by private plaintiffs.
Refer to the section titled Risk Management in the MD&A that follows. We continuously improve the risk-management framework in response to internal reviews and assessments, evolving industry practices, and changes in business and regulatory expectations. Even with these improvements, however, the framework cannot guarantee that we will effectively mitigate risk and limit losses in our business and operations.
Refer to the section titled Risk Management in the MD&A that follows. We aim to continuously improve the risk-management framework in response to internal reviews and assessments, evolving industry practices, and changes in business and regulatory expectations. Even with these improvements, however, the framework cannot guarantee that we will effectively mitigate risk and limit losses in our business and operations.
Many of these initiatives take a significant amount of time to develop and implement, are tied to critical systems, and require substantial financial, human, and other resources, and our utilization of artificial intelligence technologies could result in content or analyses that are inaccurate or deficient.
Many of these initiatives take a significant amount of time to develop and implement, are tied to critical systems, and require substantial financial, human, and other resources. Further, our utilization of artificial intelligence technologies could result in content or analyses that are inaccurate or deficient.
Further, following the failures of three large banks in 2023, banking regulators have proposed changes, or indicated the potential for changes, regarding the regulation and supervision of banking organizations, in particular those, such as Ally, with $100 billion or more in assets.
Following the failures of three large banks in 2023, banking regulators have proposed changes, or indicated the potential for changes, regarding the regulation and supervision of banking organizations, in particular those, such as Ally, with $100 billion or more in assets.
These security risks could result in business, reputational, financial, regulatory, and other harm to us, which could be particularly pronounced due to our being a digital financial-services company with a meaningful dependence on service providers.
These security and fraud risks could result in business, reputational, financial, regulatory, and other harm to us, which could be particularly pronounced due to our being a digital financial-services company with a meaningful dependence on service providers.
For example, a cyberattack or other security breach affecting a service provider or another entity on whom we rely could negatively impact us and our ability to conduct business and operations just as much as a breach affecting us directly.
For example, a cyberattack or other security breach affecting dealers, a service provider or another entity on whom we rely could negatively impact us and our ability to conduct business and operations just as much as a breach affecting us directly.
In addition, we are subject to Section 203 of the General Corporation Law of the State of Delaware, which generally prohibits a corporation from engaging in various business combination transactions with any interested stockholder (generally defined as a stockholder who owns 15% or more of a corporation’s voting stock) for a period of three years following the time that the stockholder became an interested stockholder, except under specified circumstances such as the receipt of prior board approval.
In addition, we are subject to Section 203 of the General Corporation Law of the State of Delaware, which generally prohibits a corporation from engaging in various business combination transactions with any interested shareholder (generally defined as a shareholder who owns 15% or more of a corporation’s voting stock) for a period of three years following the time that the shareholder became an interested shareholder, except under specified circumstances such as the receipt of prior board approval.
Our enterprise risk-management framework or independent risk-management function may not be effective in mitigating risk and loss. We maintain an enterprise risk-management framework that is designed to identify, measure, assess, monitor, test, control, report, escalate, and mitigate the risks that we face. These include credit, insurance/underwriting, market, liquidity, business/strategic, reputation, operational, information-technology/cyber-security, compliance, and conduct risks.
Our enterprise risk-management framework or independent risk-management function may not be effective in mitigating risk and loss. We maintain an enterprise risk-management framework that is designed to identify, measure, assess, monitor, test, control, report, escalate, and mitigate the risks that we face. These include credit, insurance/underwriting, market, liquidity, business/strategic, reputation, operational, model, information-technology/cyber-security/data, compliance, and conduct risks.
Even though compensation and benefits expense is among our highest costs, we may not be able to locate and hire the best people, keep them with us, or properly motivate them to perform at a high level. This risk may be exacerbated due to some of our competitors having significantly greater scale, financial and operational resources, and brand recognition.
Even though compensation and benefits expense are among our highest costs, we may not be able to locate and hire the best people, keep them with us, or properly motivate them to perform at a high level. This risk may be exacerbated due to some of our competitors having significantly greater scale, financial and operational resources, and brand recognition.
Regulatory agencies periodically review our allowance for loan losses, as well as our methodology and models used for calculating our allowance for loan losses, and from time to time may insist on an increase in the allowance for loan losses or the recognition of additional 27 Table of Contents Ally Financial Inc. • Form 10-K loan charge-offs based on judgments different than those of management.
Regulatory agencies periodically review our allowance for loan losses, as well as our methodology and models used for calculating our allowance for loan losses, and from time to time may insist on an increase in the allowance for loan losses or the recognition of additional 24 Table of Contents Ally Financial Inc. • Form 10-K loan charge-offs based on judgments different than those of management.
For example, in August 2023, the U.S. banking agencies issued a proposed rule that would require Category II, III, and IV firms, their large consolidated banks, and other institutions to issue and maintain minimum amounts of long-term debt that is most readily able to absorb losses in a resolution proceeding.
For example, in August 2023, the U.S. banking agencies issued a proposed rule that would require Category II, III, and IV firms, their large consolidated IDIs, and other institutions to issue and maintain minimum amounts of long-term debt that is most readily able to absorb losses in a resolution proceeding.
As a digital financial-services company and a direct bank with no branch network, we significantly depend on technology to deliver our products and services and to otherwise conduct our business and operations. To remain technologically competitive and operationally efficient, we invest in system upgrades, new solutions, cloud-based services, and other technology initiatives.
As a digital financial-services company and a direct bank with no branch network, we significantly depend on technology to deliver our products and services and to otherwise conduct our business and operations. To remain technologically competitive and operationally efficient, we invest in system upgrades, new solutions, cloud-based services, artificial intelligence, and other technology initiatives.
This regulatory and supervisory oversight is designed to protect public and private interests—such as macroeconomic policy objectives, financial-market stability and liquidity, and the confidence and security of depositors generally—that may not always be aligned with those of our stockholders or non-deposit creditors.
This regulatory and supervisory oversight is designed to protect public and private interests—such as macroeconomic policy objectives, financial-market stability and liquidity, and the confidence and security of depositors generally—that may not always be aligned with those of our shareholders or non-deposit creditors.
An acquisition also could be dilutive to our existing stockholders if we were to issue common stock to fully or partially pay or fund the purchase price. We, moreover, may not be successful in identifying appropriate acquisition candidates, integrating acquired companies or businesses, or realizing expected value from acquisitions.
An acquisition also could be dilutive to our existing shareholders if we were to issue common stock to fully or partially pay or fund the purchase price. We, moreover, may not be successful in identifying appropriate acquisition candidates, integrating acquired companies or businesses, or realizing expected value from acquisitions.
Risks to our reputation could arise in any number of contexts—for example, stricter regulatory or supervisory environments, cyber incidents and other security breaches, inabilities to meet customer expectations, political controversies and social trends involving financial-services, mergers and acquisitions, lending or banking practices, actual or perceived conflicts of interest, failures to prevent money laundering, inappropriate conduct by employees, inadequate corporate governance, and any similar issues affecting our service providers.
Risks to our reputation could arise in any number of contexts—for example, stricter regulatory or supervisory environments, cyber incidents and other security breaches, material accounting errors, inabilities to meet customer expectations, political controversies and social trends involving financial-services, mergers and acquisitions, lending or banking practices, actual or perceived conflicts of interest, failures to prevent money laundering, inappropriate conduct by employees, inadequate corporate governance, and any similar issues affecting our service providers.
Depending on the circumstances, to satisfy the FRB in its review of our capital plan, we may be required to further cease or limit 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.
Depending on the circumstances, to satisfy the FRB in its review of our capital plan, we may be required to further cease or limit capital distributions or to issue capital instruments that could be dilutive to shareholders. The FRB also may prevent us from maintaining or expanding lending or other business activities.
Climate change and the management of climate and related environmental risks is inherently complex. The dynamic nature of climate-related and environmental issues, as well as related science, standards, technology and methodologies, create challenges in evaluating and measuring potential impacts of climate-related physical and transition risks, particularly those that occur over long time horizons.
Climate change and the management of climate and related environmental risks is inherently complex. The dynamic nature of climate and sustainability-related issues, as well as related science, standards, regulations, technology and methodologies create challenges in evaluating and measuring potential impacts of climate-related physical and transition risks, particularly those that occur over long time horizons.
For example, our organizational documents include provisions that limit the liability of our directors, provide indemnification to our directors and officers, and limit the ability of our stockholders to call and bring business before special meetings of stockholders by requiring any requesting stockholders to hold at least 25% of our common stock in the aggregate.
For example, our organizational documents include provisions that limit the liability of our directors, provide indemnification to our directors and officers, and limit the ability of our shareholders to call and bring business before special meetings of shareholders by requiring any requesting shareholders to hold at least 25% of our common stock in the aggregate.
Our share of commercial wholesale financing remains at risk of decreasing in the future as a result of intense competition and other factors. The number of dealers with whom we have wholesale relationships decreased approximately 5% as of December 31, 2023, compared to December 31, 2022.
Our share of commercial wholesale financing remains at risk of decreasing in the future as a result of intense competition and other factors. The number of dealers with whom we have wholesale relationships decreased approximately 5% as of December 31, 2024, compared to December 31, 2023.
In addition, we may experience competition in retaining employees based on remote or other flexible work arrangements, and our ability to attract or retain qualified employees may be adversely affected if our work arrangements are perceived as less favorable than those of our competitors.
We may also experience competition in retaining employees based on remote or other flexible work arrangements, and our ability to attract or retain qualified employees may be adversely affected if our work arrangements are perceived as less favorable than those of our competitors.
Even so, we may not be able to anticipate or implement effective preventive measures against all security breaches, especially because techniques change frequently, attacks can be launched with no warning from a wide variety of sources around the globe, and attackers often need few resources to extensively probe and exploit vulnerabilities over lengthy periods of time.
Even so, we may not be able to anticipate, detect, or recognize threats or implement effective preventive measures against all security breaches, especially because techniques change frequently, attacks can be launched with no warning from a wide variety of sources around the globe, and attackers often need few resources to extensively probe and exploit vulnerabilities over lengthy periods of time.
Ally is a legal entity separate and distinct from its bank and nonbank subsidiaries and, in significant part, depends on dividend payments and other distributions from those subsidiaries to fund its obligations to counterparties and creditors, its dividend payments to stockholders, and its repurchases of common stock.
Ally is a legal entity separate and distinct from its bank and nonbank subsidiaries and, in significant part, depends on dividend payments and other distributions from those subsidiaries to fund its obligations to counterparties and creditors, its dividend payments to shareholders, and its repurchases of common stock.
Our certificate of incorporation, our bylaws, and Delaware law contain provisions that could have the effect of discouraging, hindering, or preventing an acquisition that the Board does not find to be in the best interests of us and our stockholders.
Our certificate of incorporation, our bylaws, and Delaware law contain provisions that could have the effect of discouraging, hindering, or preventing an acquisition that the Board does not find to be in the best interests of us and our shareholders.
How governments act to address climate and related environmental risks, as well as associated changes in the behavior and preferences of businesses and consumers, could have an adverse effect on our business and financial results.
How governments act to address climate and related sustainability risks, as well as associated changes in the behavior and preferences of businesses and consumers, could have an adverse effect on our business and financial results.
If our ability to receive distributions from subsidiaries is restricted, we may not be able to satisfy our obligations to counterparties or creditors, make dividend payments to stockholders, or repurchase our common stock.
If our ability to receive distributions from subsidiaries is restricted, we may not be able to satisfy our obligations to counterparties or creditors, make dividend payments to shareholders, or repurchase our common stock.
Any provision of our organizational documents or applicable law that deters, hinders, or prevents a non-negotiated takeover or change in control of Ally could limit the opportunity for our stockholders to receive a premium for their shares of our common stock and could also affect the price that some investors are willing to pay for our common stock. 37 Table of Contents Ally Financial Inc. • Form 10-K Item 1B.
Any provision of our organizational documents or applicable law that deters, hinders, or prevents a non-negotiated takeover or change in control of Ally could limit the opportunity for our shareholders to receive a premium for their shares of our common stock and could also affect the price that some investors are willing to pay for our common stock. 35 Table of Contents Ally Financial Inc. • Form 10-K Item 1B.
Such a requirement may be judicially enforceable or impractical for us to contest, and if we are unable to comply with the requirement in a timely and effective manner, we could become subject to formal or informal enforcement and other supervisory actions, including memoranda of understanding, written agreements, cease-and-desist orders, and prompt-corrective-action or safety-and-soundness directives.
Such a requirement may be judicially enforceable or impractical for us to contest, and if we are unable to comply with the requirement in a timely and effective manner, we have in the past and in the future may become subject to formal or informal enforcement and other supervisory actions, including memoranda of understanding, written agreements, cease-and-desist orders, and prompt-corrective-action or safety-and-soundness directives.
During the year ended December 31, 2023, approximately 58% of our average earning assets were composed of vehicle loans or operating leases and related residual securitization interests. If we experience higher losses on the sale of repossessed vehicles or lower or more volatile residual values for off-lease vehicles, our business or financial results could be adversely affected.
During the year ended December 31, 2024, approximately 59% of our average earning assets were composed of vehicle loans or operating leases and related residual securitization interests. If we experience higher losses on the sale of repossessed vehicles or lower or more volatile residual values for off-lease vehicles, our business or financial results could be adversely affected.
We seek to distinguish ourselves as a customer-centric company that delivers passionate customer service and innovative financial solutions and that is relentlessly focused on “Doing it Right.” Third-party service providers, however, are key to much of our business and operations, including online and mobile banking, mortgage finance, credit cards, brokerage, customer service, and operating systems and infrastructure.
We seek to distinguish ourselves as a customer-centric company that delivers passionate customer service and innovative financial solutions and that is relentlessly focused on “Doing it Right.” Third-party service providers, however, are key to much of our business and operations, including online and mobile banking, brokerage, customer service, and operating systems and infrastructure.
Any failure of or interruption in these systems or infrastructure or those of our service providers or others on whom we rely—including as a result of inadequate or failed technology or processes, unplanned or unsuccessful updates to technology, sudden increases in transaction volume, human errors, fraud or other misconduct, deficiencies in the integration of acquisitions or the commencement of new businesses, energy or similar infrastructure outages, disruptions in communications networks or systems, natural disasters, catastrophic events, pandemics, acts of terrorism, political or social unrest, external or internal security breaches, acts of vandalism, cyberattacks such as computer viruses and malware, misplaced or lost data, or breakdowns in business continuity plans—could cause failures or delays in receiving applications for loans and operating leases, underwriting or processing loan or operating-lease applications, servicing loans and operating leases, accessing online accounts, processing transactions, executing brokerage orders, communicating with our customers, managing our investment portfolio, or otherwise conducting our business and operations.
Any failure of or interruption in these systems or infrastructure or those of our service providers or others on whom we rely—including as a result of inadequate or failed technology or processes, coding errors, unplanned or unsuccessful updates to technology, sudden increases in transaction volume, human errors, fraud or other misconduct, deficiencies in the integration of acquisitions or the commencement of new businesses, energy or similar infrastructure outages, disruptions in communications networks or systems, natural disasters, catastrophic events, pandemics, acts of terrorism, political or social unrest, external or internal security breaches, acts of vandalism, cyberattacks such as computer viruses and malware, misplaced or lost data, or breakdowns in business continuity plans—could cause failures or delays in receiving applications for loans and operating leases, 33 Table of Contents Ally Financial Inc. • Form 10-K underwriting or processing loan or operating-lease applications, servicing loans and operating leases, accessing online accounts, processing transactions, executing brokerage orders, communicating with our customers, managing our investment portfolio, or otherwise conducting our business and operations.
At December 31, 2023, approximately $1.5 billion in principal amount of total outstanding consolidated unsecured debt is scheduled to mature in 2024, and approximately $2.5 billion and $149 million is scheduled to mature in 2025 and 2026, respectively. We also utilize secured funding.
At December 31, 2024, approximately $2.5 billion in principal amount of total outstanding consolidated unsecured debt is scheduled to mature in 2025, and approximately $149 million and $1.6 billion is scheduled to mature in 2026 and 2027, respectively. We also utilize secured funding.
Despite our supplier-risk-management program, service providers have not always met our requirements and expectations, and no assurance can be provided that in the future they will perform to our standards, adequately represent our brand, comply with applicable law, appropriately manage their own risks (including cybersecurity), remain financially or operationally viable, abide by their contractual obligations, or continue to provide us with the services that we require.
Service providers have not always met our requirements and expectations, and no assurance can be provided that in the future they will perform to our standards, adequately represent our brand, comply with applicable law, appropriately manage their own risks (including cybersecurity), remain financially or operationally viable, abide by their contractual obligations, or continue to provide us with the services that we require.
At December 31, 2023, and 2022, $258 million and $302 million, respectively, of nonprime consumer automotive loans were considered nonperforming as they had been placed on nonaccrual status in accordance with our accounting policies. Refer to the Nonaccrual Loans section of Note 1 to the Consolidated Financial Statements for additional information.
At December 31, 2024, and 2023, $286 million and $258 million, respectively, of nonprime consumer automotive loans were considered nonperforming as they had been placed on nonaccrual status in accordance with our accounting policies. Refer to the Nonaccrual Loans section of Note 1 to the Consolidated Financial Statements for additional information.
For example, in 2022 we recorded a net loss on nonmarketable equity investments of $132 million primarily related to downward adjustments, driven by an impairment in our investment in the parent of BMC (BMC Holdco). Additionally, negative fluctuations in the value of available-for-sale investment securities could result in unrealized losses recorded in equity.
For example, in 2022 we recorded a net loss on nonmarketable equity investments of $132 million primarily related to downward adjustments, driven by an impairment in one of our investments. Additionally, negative fluctuations in the value of available-for-sale investment securities could result in unrealized losses recorded in equity.
The FRB may require us to revise and resubmit our capital plan in specified circumstances, including if the FRB determines that our capital plan is incomplete, our capital plan or internal capital adequacy process contains material weaknesses, or 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.
The FRB may require us to revise and resubmit our capital plan in specified circumstances, including in connection with certain acquisitions or dispositions or if the FRB determines that our capital plan is incomplete, our capital plan or internal capital adequacy process contains material weaknesses, or 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.
If a BHC or any of its insured depository institutions is found not to be well capitalized or well managed, as defined under applicable law, the BHC can be restricted from engaging in the broader range of financial and related activities permitted for FHCs, including the ability to acquire companies engaged in those activities, and can be required to discontinue these activities or even divest any of its insured depository institutions.
If a BHC or any of its insured depository institutions is found not to be well capitalized or well managed, the BHC can be restricted from engaging in the broader range of financial and related activities permitted for FHCs, including the ability to acquire companies engaged in those activities, and can be required to discontinue these activities or even divest any of its insured depository institutions.
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), and on July 27, 2023, the FRB and FDIC issued a proposed rule to implement the Basel Committee’s 2017 standards and make other changes to regulatory capital rules for banking organizations with total consolidated assets of $100 billion or more.
In December 2017, the Basel Committee approved revisions to the global Basel III capital framework and on July 27, 2023, the FRB and FDIC issued a proposed rule to implement the Basel Committee’s 2017 standards and make other changes to regulatory capital rules for banking organizations with total consolidated assets of $100 billion or more.
Each of Standard & Poor’s Rating Services, Moody’s Investors Service, Inc., Fitch, Inc., and Dominion Bond Rating Service rates some or all of our debt, and these ratings reflect the rating agency’s opinion of our financial strength, operating performance, strategic position, and ability to meet our obligations.
Each of S&P’s Rating Services, Moody’s Investors Service, Inc., Fitch, Inc., and Dominion Bond Rating Service rates some or all of our debt, and these ratings reflect the rating agency’s opinion of our financial strength, operating performance, strategic position, and ability to meet our obligations.
Our hedging strategies are not designed to eliminate all interest rate, foreign exchange, and market risks, and we were adversely impacted from rising interest rates in 2022 and 2023.
Our hedging strategies are not designed to eliminate all interest rate, foreign exchange, and market risks, and we were adversely impacted from high interest rates in 2022, 2023, and 2024.
Assumptions and estimates are also far more difficult during periods when markets are dislocated or illiquid and when comparable historical data is lacking, such as during the COVID-19 pandemic and the subsequent recovery. As a result, our actual experience may differ substantially from these estimates and assumptions.
Assumptions and estimates are also far more difficult during periods when markets are dislocated or illiquid and when comparable historical data is lacking or where future outcomes deviate from historical results, such as during the COVID-19 pandemic and the subsequent recovery. As a result, our actual experience may differ substantially from these estimates and assumptions.
Refer to the risk factor above, titled Our business and financial results may be negatively affected by governmental responses to climate change and related environmental issues for more information on risks associated with governmental responses to climate change.
Refer to the risk factor above, titled Our business and financial results may be negatively affected by governmental responses to climate and other sustainability issues for more information on risks associated with governmental responses to climate change.
In addition, climate change may impact the broader economy, including through changes to the production, allocation, and use of energy and disruptions to supply chains.
Climate change may also impact the broader economy, including through changes to the production, allocation, and use of energy and disruptions to supply chains.
We, along with other financial institutions, our service providers, and others on whom we rely, have been and are expected to continue to be the target of cyberattacks, which could include computer viruses, malware, malicious or destructive code, social engineering (including phishing or spear phishing attacks), denial-of-service or denial-of-information attacks, ransomware, identity theft, access violations by employees or vendors, attacks on the personal email of employees, and ransom demands accompanied by threats to expose security vulnerabilities.
We, along with other financial institutions, our service providers, and others on whom we rely, have been and are expected to continue to be the target of cyberattacks and fraud, which could include computer viruses, malware, malicious or destructive code, social engineering (including phishing, spear phishing, or other attacks), denial-of-service or denial-of-information attacks, ransomware, account takeover or identity theft, fraudulent remote work schemes, access violations or other insider threats by employees or vendors, attacks on the personal email of employees, and ransom demands accompanied by extortion or other threats to expose security vulnerabilities.
The carrying value of our nonprime consumer automotive loans before allowance for loan losses was $8.7 billion, or approximately 10.3% of our total consumer automotive loans at December 31, 2023, as compared to $8.8 billion, or approximately 10.6% of our total consumer automotive loans at December 31, 2022.
The carrying value of our nonprime consumer automotive loans before allowance for loan losses was $8.2 billion, or approximately 9.7% of our total consumer automotive loans at December 31, 2024, as compared to $8.7 billion, or approximately 10.3% of our total consumer automotive loans at December 31, 2023.
In connection with their continuous supervision and examinations of us, the FRB, the UDFI, the CFPB, the SEC, FINRA, the NYDFS, or other regulatory agencies may explicitly or implicitly require changes in our business or operations.
In connection with their continuous supervision and examinations of us, the FRB, the UDFI, the CFPB, the SEC, FINRA, the NYDFS, or other regulatory agencies have in the past and in the future may continue to explicitly or implicitly require changes in our business or operations.
Enforcement and other supervisory actions also can result in the imposition of civil monetary penalties or injunctions, related litigation by private plaintiffs, damage to our reputation, and a loss of customer or investor confidence, and a prior enforcement action may also increase the risk that regulators and governmental authorities pursue formal enforcement actions in connection 23 Table of Contents Ally Financial Inc. • Form 10-K with the resolution of an inquiry or investigation, even if unrelated to the prior enforcement action.
Enforcement and other supervisory actions also can result in the imposition of civil monetary penalties or injunctions, related litigation by private plaintiffs, damage to our reputation, and a loss of customer or investor confidence, and a prior enforcement action may also increase the risk that regulators and governmental authorities pursue formal enforcement actions in connection with the resolution of an inquiry or investigation, even if unrelated to the prior enforcement action.
Changes in economic conditions affecting borrowers, revisions to accounting rules and related guidance, new qualitative or quantitative information about existing loans, identification of additional problem loans, changes in the size or composition of our finance receivables and loan portfolio, changes to our models or loss estimation techniques including consideration of forecasted economic assumptions, and other factors, both within and outside of our control, may require an increase in the allowance for loan losses.
Changes in economic conditions affecting borrowers, revisions to accounting rules and related guidance, new qualitative or quantitative information about existing loans, identification of additional problem loans, changes in the size or composition of our finance receivables and loan portfolio, changes to or errors in our models or loss estimation techniques including consideration of forecasted economic assumptions, the impact of natural disasters and other catastrophic events that may be difficult to predict and other factors, both within and outside of our control, may require an increase in the allowance for loan losses.
The development of new technologies, as well as the utilization of decentralized technology infrastructures (such as our increased utilization of cloud computing) and software-defined networks, could expose us to additional cybersecurity risks.
The development of new technologies, systems or processes, as well as the utilization of decentralized technology infrastructures (such as our increased utilization of cloud computing), software-defined networks and artificial intelligence, could expose us to additional cybersecurity risks.
Basel III subjects Ally and Ally Bank to minimum risk-based capital ratios (including the dynamic stress capital buffer requirement applicable to Ally and the static capital conservation buffer requirement applicable to Ally Bank).
Ally and Ally Bank are subject to U.S. Basel III. U.S. Basel III subjects Ally and Ally Bank to minimum risk-based capital ratios (including the dynamic stress capital buffer requirement applicable to Ally and the static capital conservation buffer requirement applicable to Ally Bank).
At December 31, 2023, approximately $2.9 billion in principal amount of total outstanding consolidated secured long-term debt is scheduled to mature in 2024, approximately $1.9 billion is scheduled to mature in 2025, and approximately $1.7 billion is scheduled to mature in 2026.
At December 31, 2024, approximately $2.4 billion in principal amount of total outstanding consolidated secured long-term debt is scheduled to mature in 2025, approximately $2.2 billion is scheduled to mature in 2026, and approximately $1.4 billion is scheduled to mature in 2027.
The long-term debt proposal, if adopted, would require Ally to maintain more long-term debt than it does currently, which would adversely affect interest expense, net interest income, and net interest margin. Our business and financial results could be adversely affected by the political environment and governmental fiscal and monetary policies.
The long-term debt proposal, if adopted, would require Ally to maintain more long-term debt than it does currently, which would adversely affect interest expense, net interest income, and net interest margin. 21 Table of Contents Ally Financial Inc. • Form 10-K Our business and financial results could be adversely affected by the political environment and governmental fiscal and monetary policies.
The markets for automotive financing, insurance, banking (including corporate finance, mortgage finance, and credit-card products), brokerage, and investment-advisory services are highly competitive, and we expect competitive pressures only to intensify in the future, especially in light of the regulatory and supervisory environments in which we operate, innovations that alter the barriers to entry, current and evolving economic and market conditions, changing customer preferences and consumer and business sentiment, and monetary and fiscal policies.
The markets for automotive financing, insurance, banking, brokerage, and investment-advisory services are highly competitive, and we expect competitive pressures only to remain intense in the future, especially in light of the regulatory and supervisory environments in which we operate, innovations that alter the barriers to entry, current and evolving economic and market conditions, changing customer preferences and consumer and business sentiment, and monetary and fiscal policies.
At December 31, 2023, we had approximately $18.3 billion in principal amount of indebtedness outstanding (including $7.1 billion in secured indebtedness). Interest expense on our indebtedness was equal to approximately 8% of our total financing revenue and other interest income for the year ended December 31, 2023. We also have the ability to create additional indebtedness.
At December 31, 2024, we had approximately $18.2 billion in principal amount of indebtedness outstanding (including $6.4 billion in secured indebtedness). Interest expense on our indebtedness was equal to approximately 8% of our total financing revenue and other interest income for the year ended December 31, 2024. We also have the ability to create additional indebtedness.
This is due, in part, to the introduction of new technologies, the continued expansion of the use of internet and telecommunications technologies (including mobile devices) to conduct financial and other business transactions, and the increased sophistication and activities of hostile state-sponsored actors, organized crime, perpetrators of fraud, hackers, terrorists, and others.
This is due, in part, to the introduction of new 32 Table of Contents Ally Financial Inc. • Form 10-K technologies, the continued expansion of the use of internet and telecommunications technologies (including mobile devices) to conduct financial and other business transactions, and the increased sophistication and activities of hostile state-sponsored actors, organized crime, perpetrators of fraud, hackers, terrorists, and others.
These enhanced liquidity standards could constrain our ability to originate or invest in longer-term or less liquid assets or to take advantage of other profitable opportunities and, therefore, may adversely affect our business, results of operations, and prospects. 24 Table of Contents Ally Financial Inc. • Form 10-K Our ability to rely on deposits as a part of our funding strategy may be limited.
These enhanced liquidity standards could constrain our ability to originate or invest in longer-term or less liquid assets or to take advantage of other profitable opportunities and, therefore, may adversely affect our business, results of operations, and prospects. Our ability to rely on deposits as a part of our funding strategy may be limited.
If we were to lose 30 Table of Contents Ally Financial Inc. • Form 10-K and find ourselves unable to replace these personnel or other skilled employees or if the competition for talent were to drive our compensation costs to unsustainable levels, our management of operational and other risks could suffer, and our business and financial results could be negatively impacted.
If we were to lose and find ourselves unable to replace these personnel or other skilled employees or if the competition for talent were to drive our compensation costs to unsustainable levels, our management of operational and other risks could suffer, and our business and financial results could be negatively impacted.
For example, recent increases in interest rates have resulted in, and could in the future further result in, unrealized losses in our investment securities portfolio, which are recognized in accumulated other comprehensive loss within the Consolidated Balance Sheet.
In addition, high interest rates have resulted in, and could in the future further result in, unrealized losses in our investment securities portfolio, which are recognized in accumulated other comprehensive loss within the Consolidated Balance Sheet.
In addition, if an insured-depository-institution subsidiary of a BHC fails to achieve a satisfactory or better rating under the CRA, the ability of the BHC to expand its financial and related activities or make acquisitions could be restricted.
In addition, if an insured-depository-institution subsidiary of a BHC fails to achieve a “satisfactory” or better rating in its most recent CRA performance evaluation, the ability of the BHC to expand its financial and related activities or make acquisitions could be restricted.
These risks may be propagated through the economy and financial 26 Table of Contents Ally Financial Inc. • Form 10-K system, and as a result, the financial sector may experience credit and market risks associated with loss of income, defaults and changes in the values of assets, liquidity risks associated with changing demand for liquidity, operational risks associated with disruptions to infrastructure or other channels, or legal risks.
These risks are often difficult to quantify or predict, and may be 23 Table of Contents Ally Financial Inc. • Form 10-K propagated through the economy and financial system, the financial sector may experience credit and market risks associated with loss of income, defaults and changes in the values of assets, liquidity risks associated with changing demand for liquidity, operational risks associated with disruptions to infrastructure or other channels, or legal risks.
For example, they often involve matters that are inherently difficult to predict and that are beyond our control (such as macroeconomic conditions and their impact on automotive dealers and retailers, and consumers) and often involve complex interactions between a number of dependent and independent variables, factors, and other assumptions.
For example, they often involve matters that are inherently difficult to predict and that are 30 Table of Contents Ally Financial Inc. • Form 10-K beyond our control (such as macroeconomic conditions and their impact on automotive dealers and retailers, and consumers) and often involve complex interactions between a number of dependent and independent variables, factors, and other assumptions.
Ally has elected to be treated as an FHC, which permits us to engage in a number of financial and related activities—including securities, advisory, insurance, and merchant-banking activities—beyond the business of banking. Ally and Ally Bank are subject to ongoing requirements for Ally to qualify as an FHC.
Ally has elected to be treated as an FHC, which permits us to engage in a number of financial and related activities—including securities, advisory, insurance, and merchant-banking activities—beyond the business of banking.
A downturn in economic conditions, disruptions in the equity or debt markets, high unemployment or underemployment, depressed vehicle or housing prices, unsustainable debt levels, high inflation, high interest rates, unfavorable changes in interest rates, declines in household incomes or savings, deteriorating consumer or business sentiment, consumer or commercial bankruptcy filings, or declines in the strength of national or local economies could decrease demand for our products and services, increase the amount and rate of delinquencies and losses, raise our operating and other expenses, and negatively impact the returns on and the value of our loans, investment portfolio, and other assets.
A downturn in economic conditions, disruptions in the equity or debt markets, high unemployment or underemployment, depressed vehicle or housing prices, unsustainable debt levels, high inflation, high interest rates, unfavorable changes in interest rates, the introduction of trade tariffs or other policies that negatively impact the automotive industry, declines in household incomes or savings, deteriorating consumer or business sentiment, consumer or commercial bankruptcy filings, or declines in the strength of national or local 29 Table of Contents Ally Financial Inc. • Form 10-K economies could decrease demand for our products and services, increase the amount and rate of delinquencies and losses, raise our operating and other expenses, and negatively impact the returns on and the value of our loans, investment portfolio, and other assets.
Further, recent increases in short-term interest rates have resulted in, and are expected to continue to result in, more intense competition in deposit pricing and with respect to non-deposit financial products.
Further, the elevated level of short-term interest rates in recent years have resulted in, and are expected to continue to result in, more intense competition in deposit pricing and with respect to non-deposit financial products.
Furthermore, at December 31, 2023, approximately $43.5 billion in certificates of deposit at Ally Bank are scheduled to mature in 2024, which is not included in the amounts provided above.
Furthermore, at December 31, 2024, approximately $37.2 billion in certificates of deposit at Ally Bank are scheduled to mature in 2025, which is not included in the amounts provided above.
Further, it is possible that government responses to actual or perceived changes in climate and related environmental risks, including expectations regarding the purpose of climate scenario analysis, may occur more rapidly than we (or third parties on whom we rely for certain climate- or other sustainability-related information or services) are able to adapt.
Further, it is possible that government responses to actual or perceived changes in climate and related sustainability risks may occur more rapidly than we (or third-parties on whom we rely for certain climate- or other sustainability-related information or services) are able to adapt.
Additionally, the carrying value of our consumer automotive used vehicle loans before allowance for loan losses was $57.6 billion, or approximately 68.3% of our total consumer automotive loans at December 31, 2023, as compared to $55.7 billion, or approximately 67.0% of our total consumer automotive loans at December 31, 2022.
Additionally, the carrying value of our consumer automotive used vehicle loans before allowance for loan losses was $57.4 billion, or approximately 68.5% of our total consumer automotive loans at December 31, 2024, as compared to $57.6 billion, or approximately 68.3% of our total consumer automotive loans at December 31, 2023.
Our automotive finance and insurance businesses can be impacted by the sales volume for new and used vehicles. Vehicle sales are impacted, in turn, by several economic and market conditions, including employment levels, household income and savings, interest rates, credit availability, inventory levels, customer preferences, and fuel costs.
Our automotive finance and insurance businesses can be impacted by the sales volume for new and used vehicles. Vehicle sales are impacted, in turn, by several economic and market conditions, including employment levels, household income and savings, interest rates, 25 Table of Contents Ally Financial Inc. • Form 10-K credit availability, inventory levels, customer preferences, and fuel costs.
In addition, if governmental authorities were to conclude that we or our service providers had not adequately implemented laws on cybersecurity and data privacy or had not otherwise met related supervisory expectations, we could be subject to enforcement and other supervisory actions, related litigation by private plaintiffs, reputational damage, or a loss of customer or investor confidence.
If governmental or supervisory authorities were to conclude that we or our service providers had not adequately implemented appropriate operational infrastructure, policies, or practices with respect to cybersecurity and data privacy or had not otherwise met related supervisory expectations, we could be subject to enforcement and other supervisory actions, related litigation by private plaintiffs, reputational damage, or a loss of customer or investor confidence.
While we have reduced our reliance on unsecured funding as our deposits have grown to 88% of our total funding profile as of December 31, 2023, it remains an important component of our capital structure and financing plans.
While we have reduced our reliance on unsecured funding as our deposits have grown to 89% of our total liability-based funding as of December 31, 2024, it remains an important component of our capital structure and financing plans.
Geopolitical conditions, government shutdowns, military conflicts (including Russia’s invasion of Ukraine and the conflicts in the Middle East), acts or threats of terrorism, natural disasters, pandemics (including the COVID-19 pandemic), and other conditions or events beyond our control may adversely affect our business, results of operations, financial condition, or prospects.
Geopolitical conditions, government shutdowns, military conflicts (including Russia’s invasion of Ukraine and the conflicts in the Middle East), acts or threats of terrorism, natural disasters, pandemics (including the COVID-19 pandemic or similar global pandemics in the future), disruptions in the U.S. or global economy caused by geopolitical events and related sanctions, and other conditions or events beyond our control may adversely affect our business, results of operations, financial condition, or prospects.
Refer to the risk factor below, titled The levels of or 25 Table of Contents Ally Financial Inc. • Form 10-K changes in interest rates could affect our results of operations and financial condition , for more information on how the FRB affects interest rates.
Refer to the risk factor below, titled The levels of or changes in interest rates could affect our results of operations and financial condition , for more information on how the FRB affects interest rates.
Our business and financial results may be negatively affected by governmental responses to climate change and related environmental issues. Governments and policymakers at the federal, state and international levels are increasingly focused on climate change and related environmental, social and governance issues, and the potential for climate-related risks to impact the safety and soundness of large financial institutions.
Our business and financial results may be negatively affected by governmental actions related to climate and other sustainability issues. Governments and policymakers at the federal, state, local and international levels are increasingly focused on climate- and other sustainability-related issues, including the potential for climate-related risks to impact the safety and soundness of large financial institutions.
Any future downgrades to our credit ratings or their failure to meet investor expectations may result in higher non-deposit borrowing costs, reduced access to the banking and capital markets, more restrictive terms and conditions being added to any new or replacement financing arrangements.
Any future downgrades to our credit ratings or their failure to meet investor expectations may result in higher non-deposit borrowing costs, reduced access to the banking and capital markets, more restrictive terms and conditions being added to any new or replacement financing arrangements. Moody’s has since upgraded our outlook from Negative to Stable in August of 2024.
Changes in the regulatory and supervisory environments could adversely affect us in substantial and unpredictable ways, including by limiting the types of financial services and products we may offer, enhancing the ability of others to offer more competitive financial services and products, and restricting our ability to make acquisitions or pursue other profitable opportunities.
Changes in the regulatory and supervisory environments, including as a result of changes from recent elections in the United States and the corresponding change in administrative regimes, could adversely affect us in substantial and unpredictable ways, including by limiting the types of financial services and products we may offer, enhancing the ability of others to offer more competitive financial services and products, and restricting our ability to make acquisitions or pursue other profitable opportunities.
These actions are comprehensive in their coverage, such as rulemakings on climate-related disclosures, cybersecurity risk governance (including incident disclosure), CRA reform, credit-card fees (such as the CFPB’s proposed rule to cap late fees), and personal-financial-data rights as well as guidance and statements on mergers and acquisitions, regulatory capital, resolution planning, automotive financing and insurance, fees for financial services, and UDAAP.
These actions are comprehensive in their coverage, such as rulemakings on cybersecurity risk governance (including incident disclosure), climate-, diversity- and other sustainability related matters (including disclosures), CRA reform, and personal-financial-data rights as well as guidance and statements on mergers and acquisitions, regulatory capital, resolution planning, automotive financing and insurance, fees for financial services, and UDAAP.
The markets for automotive financing, insurance, banking (including corporate finance, mortgage finance, and credit-card products), brokerage, and investment-advisory services are extremely competitive, and competitive pressures could adversely affect our business and financial results.
The markets for automotive financing, insurance, banking, brokerage, and investment-advisory services are extremely competitive, and competitive pressures could adversely affect our business and financial results.
In addition, to the extent that any flawed models or inaccurate model outputs are used in reports to banking agencies or the public, we could be subjected to supervisory actions, private litigation, and other proceedings that may adversely affect our business and financial results. Refer to the section titled Risk Management in the MD&A that follows.
In addition, to the extent that any flawed or misused models or inappropriate inputs cause inaccurate model outputs are used in reports to banking agencies or the public, we could be subjected to supervisory actions, private litigation, and other proceedings that may adversely affect our business and financial results.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe primary office for our Corporate Finance operations is located in New York, New York, where we lease approximately 55,000 square feet of office space under a lease that expires in August 2025. In addition to the properties described above, we lease additional space to conduct our operations.
Biggest changeThe primary offices for both our Automotive Finance and Insurance operations are located in Detroit, and are included in the totals referenced above. The primary office for our Corporate Finance operations is located in New York, New York, where we lease approximately 55,000 square feet of office space under a lease that expires in October 2026.
Item 2. Properties Our principal corporate offices are located in Detroit, Michigan, and Charlotte, North Carolina. In Detroit, we lease approximately 403,000 square feet of office space under a lease that expires in December 2028. In Charlotte, we occupy approximately 662,000 square feet of office space in a corporate facility that we own.
Item 2. Properties Our principal corporate offices are located in Detroit, Michigan, and Charlotte, North Carolina. In Detroit, we lease approximately 403,000 square feet of office space under a lease that expires in December 2028. In Charlotte, we occupy approximately 632,000 square feet of office space in a corporate facility that we own.
We believe our facilities are adequate for us to conduct our present business activities. Item 3. Legal Proceedings Refer to Note 29 to the Consolidated Financial Statements for a discussion related to our legal proceedings.
In addition to the properties described above, we lease additional space to conduct our operations. We believe our facilities are adequate for us to conduct our present business activities. Item 3. Legal Proceedings Refer to Note 29 to the Consolidated Financial Statements for a discussion related to our legal proceedings.
Removed
The primary offices for both our Automotive Finance and Insurance operations are located in Detroit, and are included in the totals referenced above. The primary office for our Mortgage Finance operations is located in Charlotte, and is included in the totals referenced above.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings 38 Item 4. Mine Safety Disclosures 38 Part II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 39 Item 6. [Reserved] 40 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 41 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 113 Item 8.
Biggest changeItem 3. Legal Proceedings 36 Item 4. Mine Safety Disclosures 36 Part II Item 5. Market for Registrant’s Common Equity, Related S tock holder Matters and Issuer Purchases of Equity Securities 37 Item 6. [Reserved] 38 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 39 Item 7A.
Financial Statements and Supplementary Data 114 Management’s Report on Internal Control over Financial Reporting 114 Reports of Independent Registered Public Accounting Firm 115 Consolidated Statement of Income 118 Consolidated Statement of Comprehensive Income (Loss) 120 Consolidated Balance Sheet 121 Consolidated Statement of Changes in Equity 123 Consolidated Statement of Cash Flows 124 Notes to Consolidated Financial Statements 126
Financial Statements and Supplementary Data 118 Management’s Report on Internal Control over Financial Reporting 118 Reports of Independent Registered Public Accounting Firm 119 Consolidated Statement of Income 122 Consolidated Statement of Comprehensive Income (Loss) 124 Consolidated Balance Sheet 125 Consolidated Statement of Changes in Equity 127 Consolidated Statement of Cash Flows 128 Notes to Consolidated Financial Statements 130
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Quantitative and Qualitative Disclosures About Market Risk 117 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeStock Performance Graph The following graph compares the cumulative total return to stockholders on our common stock relative to the cumulative total returns of the S&P 500 index and the S&P Financials index.
Biggest changeSecurities Authorized for Issuance Under Equity Compensation Plans For information regarding securities authorized for issuance under our equity compensation plans, see Part III, Item 12. Stock Performance Graph The following graph compares the cumulative total return to shareholders on our common stock relative to the cumulative total returns of the S&P 500 index and the S&P Financials index.
An investment of $100 (with reinvestment of all dividends) is assumed to have been made in our common stock and in each index on December 31, 2018, and its relative performance is tracked through December 31, 2023. The returns shown are based on historical results and are not intended to suggest future performance.
An investment of $100 (with reinvestment of all dividends) is assumed to have been made in our common stock and in each index on December 31, 2019, and its relative performance is tracked through December 31, 2024. The returns shown are based on historical results and are not intended to suggest future performance.
Recent Sales of Unregistered Securities Ally did not have any sales of unregistered securities in the last three fiscal years. 39 Table of Contents Ally Financial Inc. • Form 10-K Purchases of Equity Securities by the Issuer The following table presents repurchases of our common stock, by month, for the three months ended December 31, 2023.
Recent Sales of Unregistered Securities Ally did not have any sales of unregistered securities in the last three fiscal years. 37 Table of Contents Ally Financial Inc. • Form 10-K Purchases of Equity Securities by the Issuer The following table presents repurchases of our common stock, by month, for the three months ended December 31, 2024.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is listed on the NYSE under the symbol “ALLY.” At December 31, 2023, we had 302,459,258 shares of common stock outstanding, compared to 299,324,357 shares at December 31, 2022.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is listed on the NYSE under the symbol “ALLY.” At December 31, 2024, we had 305,387,550 shares of common stock outstanding, compared to 302,459,258 shares at December 31, 2023.
Three months ended December 31, 2023 Total number of shares repurchased (a) (in thousands) Weighted-average price paid per share (a) (in dollars) October 2023 — $ — November 2023 5 27.69 December 2023 140 31.22 Total 145 31.09 (a) Consists of common stock withheld to cover income taxes owed by participants in our share-based incentive plans.
Three months ended December 31, 2024 Total number of shares repurchased (a) (in thousands) Weighted-average price paid per share (a) (in dollars) October 2024 — $ — November 2024 35 34.53 December 2024 132 39.28 Total 167 38.27 (a) Consists of common stock withheld to cover income taxes owed by participants in our share-based incentive plans.
Removed
As of February 15, 2024, we had approximately 36 holders of record of our common stock. Securities Authorized for Issuance Under Equity Compensation Plans For information regarding securities authorized for issuance under our equity compensation plans, see Part III, Item 12.
Added
As of February 14, 2025, we had approximately 33 holders of record of our common stock. On January 16, 2025, our Board declared a quarterly cash dividend of $0.30 per share on all common stock.
Added
Any future dividends on our common stock will be determined by our Board in its sole discretion and will depend on our business, financial condition, earnings, capital, liquidity, and other factors at the time.
Added
In addition, any plans to continue dividends in the future will be subject to our stress capital buffer requirement and the FRB’s review of our annual capital plan. There is no assurance that our Board will approve, or the FRB will permit, future dividends.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

361 edited+124 added−55 removed220 unchanged
Biggest change(f) Coverage percentages are based on the allowance for loan losses related to finance receivables and loans excluding those loans held at fair value as a percentage of the amortized cost. 85 Table of Contents Management’s Discussion and Analysis Ally Financial Inc. • Form 10-K ($ in millions) Consumer automotive Consumer mortgage Consumer other (a) Total consumer Commercial Total Allowance at January 1, 2022 $ 2,769 $ 27 $ 221 $ 3,017 $ 250 $ 3,267 Charge-offs (b) (1,434) (3) (133) (1,570) (58) (1,628) Recoveries 649 12 12 673 3 676 Net charge-offs (785) 9 (121) (897) (55) (952) Provision due to change in portfolio size 196 3 182 381 33 414 Provision due to incremental charge-offs 785 (9) 121 897 55 952 Provision due to all other factors 55 (2) 23 76 (46) 30 Total provision for credit losses (c) 1,036 (8) 326 1,354 42 1,396 Other — (1) — (1) 1 — Allowance at December 31, 2022 $ 3,020 $ 27 $ 426 $ 3,473 $ 238 $ 3,711 Net charge-offs to average finance receivables and loans outstanding for the year ended December 31, 2022 1.0 % — % 4.4 % 0.9 % 0.2 % 0.7 % Allowance for loan losses to total nonperforming finance receivables and loans at December 31, 2022 (d) 254.3 % 54.3 % n/m 268.7 % 147.4 % 255.2 % Nonaccrual loans to finance receivables and loans outstanding at December 31, 2022 1.4 % 0.3 % 1.6 % 1.2 % 0.6 % 1.1 % Ratio of allowance for loan losses to annualized net charge-offs at December 31, 2022 3.8 (3.0) 3.5 3.9 4.3 3.9 n/m = not meaningful (a) Includes Credit Card and Personal Lending.
Biggest change($ in millions) Consumer automotive Consumer mortgage Consumer other (a) Total consumer Commercial Total Allowance at January 1, 2024 $ 3,083 $ 21 $ 293 $ 3,397 $ 190 $ 3,587 Charge-offs (b) (2,681) (2) (262) (2,945) (3) (2,948) Recoveries 871 5 30 906 8 914 Net charge-offs (1,810) 3 (232) (2,039) 5 (2,034) Write-downs from transfers to held-for-sale (c) (5) — — (5) — (5) Provision for credit losses Provision due to change in portfolio size 19 (2) 45 62 (14) 48 Provision due to incremental charge-offs 1,810 (3) 232 2,039 (5) 2,034 Provision due to all other factors 73 (2) (18) 53 31 84 Total provision for credit losses 1,902 (7) 259 2,154 12 2,166 Other — 2 (1) 1 (1) — Allowance at December 31, 2024 $ 3,170 $ 19 $ 319 $ 3,508 $ 206 $ 3,714 Net charge-offs to average finance receivables and loans outstanding for the year ended December 31, 2024 2.2 % — % 11.2 % 2.0 % — % 1.5 % Net charge-offs and write-downs from transfers to held-for-sale to average finance receivables and loans outstanding for the year ended December 31, 2024 2.2 % — % 11.2 % 2.0 % — % 1.5 % Allowance for loan losses to total nonperforming finance receivables and loans at December 31, 2024 (d) 257.6 % 33.0 % 355.7 % 255.1 % 186.7 % 250.0 % Nonaccrual loans to finance receivables and loans outstanding at December 31, 2024 1.5 % 0.3 % 3.9 % 1.3 % 0.3 % 1.1 % Ratio of allowance for loan losses to annualized net charge-offs at December 31, 2024 1.8 (5.1) 1.4 1.7 (40.5) 1.8 Ratio of allowance for loan losses to annualized net charge-offs and write-downs from transfers to held-for-sale at December 31, 2024 1.7 (5.1) 1.4 1.7 (40.5) 1.8 (a) Includes Credit Card.
A payment extension enables the customer to delay monthly payments for 30, 60, or 90 days. Extensions granted to a customer typically do not exceed 90 days in the aggregate during any 12-month period or 180 days in aggregate over the life of the contract. During the extension period, finance charges continue to accrue.
A payment extension enables the customer to delay monthly payments for 30 or 60 days. Extensions granted to a customer typically do not exceed 90 days in the aggregate during any 12-month period or 180 days in aggregate over the life of the contract. During the extension period, finance charges continue to accrue.
The increase for the year ended December 31, 2023, was primarily driven by higher P&C earned premium from higher dealer inventory levels, growth in other dealer-related protection products, and higher other premium and service revenue written from non-automotive assumed reinsurance business.
The increase for the year ended December 31, 2023, was primarily driven by higher P&C earned premium from higher dealer inventory levels, growth in other dealer-related protection products, and higher other premium and service revenue written from non-automotive assumed reinsurance business.
Refer to section titled Climate-Related Risk within this section for more information. Loan and Operating Lease Exposure The following table summarizes the exposures from our loan and operating-lease activities based on our reportable operating segments.
Refer to the section titled Climate-Related Risk within this section for more information. Loan and Operating Lease Exposure The following table summarizes the exposures from our loan and operating-lease activities based on our reportable operating segments.
Operational risk includes business disruption risk, fraud risk, human capital risk, legal risk, model risk, process execution and management risk, and supplier (third party) risk. • Business disruption risk — The risk of significant disruption to our operations resulting from natural disasters, technology outages, or other incidents and crisis events, such as pandemics. • Fraud risk — The risk from deliberate misrepresentation or concealment of information material to a transaction with the intent to deceive another and that is reasonably relied on or used in decision making.
Operational risk includes business disruption risk, fraud risk, human capital risk, legal risk, process execution and management risk, and supplier (third party) risk. • Business disruption risk — The risk of significant disruption to our operations resulting from natural disasters, technology outages, or other incidents and crisis events, such as pandemics. • Fraud risk — The risk from deliberate misrepresentation or concealment of information material to a transaction with the intent to deceive another and that is reasonably relied on or used in decision making.
Other smaller complementary product offerings that help strengthen our reputation as a full-spectrum provider of financing solutions for borrowers include issuing letters of credit through Ally Bank and selectively offering second-out loans on certain transactions. For additional information regarding industry concentration of our Corporate Finance operations, refer to the Corporate Finance section of this MD&A.
Other smaller complementary product offerings that help strengthen our reputation as a full-spectrum provider of financing solutions include issuing letters of credit through Ally Bank and selectively offering second-out loans on certain transactions. For additional information regarding industry concentration of our Corporate Finance operations, refer to the Corporate Finance section of this MD&A.
While all operating leases are exposed to potential reductions in used vehicle values, only loans where we take possession of the vehicle are affected by potential reductions in used vehicle values. • Finance receivables and loans — Loans that we have the intent and ability to hold for the foreseeable future or until maturity, or loans associated with an on-balance-sheet securitization classified as a secured borrowing.
While all operating leases are exposed to potential reductions in used vehicle values, only those where we take possession of the vehicle are affected by potential reductions in used vehicle values. • Finance receivables and loans — Loans that we have the intent and ability to hold for the foreseeable future or until maturity, or loans associated with an on-balance-sheet securitization classified as a secured borrowing.
Our vehicle inventory insurance product is covered by aggregate excess-of-loss protection, which provides coverage for the accumulation of weather-related losses that exceed pre-determined retention levels. In addition, loss control techniques such as storm path monitoring to assist dealers in preparing for severe weather help to mitigate loss potential.
Our vehicle inventory insurance product is covered by aggregate excess-of-loss protection, which provides coverage for the accumulation of climate-related losses that exceed pre-determined retention levels. In addition, loss control techniques such as storm path monitoring to assist dealers in preparing for severe weather help to mitigate loss potential.
We seek to pay a competitive dividend and may also distribute excess capital to shareholders through common share repurchases. Deposits We are focused on growing and retaining a stable deposit base and deepening relationships with our 3.0 million primary deposit customers by leveraging our compelling brand and strong value proposition.
We seek to pay a competitive dividend and may also distribute excess capital to shareholders through common share repurchases. Deposits We are focused on growing and retaining a stable deposit base and deepening relationships with our 3.3 million primary deposit customers by leveraging our compelling brand and strong value proposition.
Refer to Note 11 to the Consolidated Financial Statements for further information. (d) Consumer other includes a $174 million reduction of allowance from transfers to held-for-sale related to Personal Lending. Refer to Note 2 to the Consolidated Financial Statements for additional information. (e) Excludes $11 million of benefit for credit losses related to our reserve for unfunded commitments.
(d) Consumer other includes a $174 million reduction of allowance from transfers to held-for-sale related to Personal Lending. Refer to Note 2 to the Consolidated Financial Statements for further information. (e) Excludes $11 million of benefit for credit losses related to our reserve for unfunded commitments.
Nonprime applications are subject to more stringent underwriting criteria (for example, minimum payment-to-income ratio, maximum debt-to-income ratio, and maximum amount financed), and our nonprime loan portfolio generally does not include any loans with a term of 76 months or more.
Nonprime applications are subject to more stringent underwriting criteria (for example, maximum payment-to-income ratio, maximum debt-to-income ratio, and maximum amount financed), and our nonprime loan portfolio generally does not include any loans with a term of 76 months or more.
Our Mortgage Finance operations focus on applicants with credit profiles and income streams to support repayments of the loan and operates under credit standards that consider and assess the value of the underlying real estate in accordance with prudent credit practices and regulatory requirements.
Our mortgage operations focus on applicants with credit profiles and income streams to support repayments of the loan and operates under credit standards that consider and assess the value of the underlying real estate in accordance with prudent credit practices and regulatory requirements.
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.
The assumed credit spread is calculated based on a composite investment grade unsecured yield curve, or based on advance rates published by the FHLB for any asset that is eligible to be pledged as collateral to the FHLB.
While 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 participants in 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; • 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 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, 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; 41 Table of Contents Management’s Discussion and Analysis Ally Financial Inc. • Form 10-K • 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 acquisitions or divestitures or to integrate 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; • 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 (Item 1A), Management’s Discussion and Analysis of Financial Condition and Results of Operations (Item 7), or the Notes to the Consolidated Financial Statements (Item 8) in this Annual Report on Form 10-K or described in any of the Company’s annual, quarterly or current reports.
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 participants in 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; • 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 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 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, 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; 39 Table of Contents Management’s Discussion and Analysis Ally Financial Inc. • Form 10-K • 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 acquisitions or divestitures or to integrate 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; • our ability to meet stakeholder expectations on sustainability-related issues; • policies and other actions of governments to manage and mitigate climate and other sustainability issues, 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 (Item 1A), Management’s Discussion and Analysis of Financial Condition and Results of Operations (Item 7), or the Notes to the Consolidated Financial Statements (Item 8) in this Annual Report on Form 10-K or described in any of the Company’s annual, quarterly or current reports.
In addition, we employ our own risk evaluation, including proprietary risk models, in evaluating credit risk, as described in the section above titled Automotive Financing Volume—Acquisition and Underwriting . 59 Table of Contents Management’s Discussion and Analysis Ally Financial Inc. • Form 10-K The following table presents the percentage of retail loan and operating lease originations and purchases, in dollars, by FICO® Score and product type.
In addition, we employ our own risk evaluation, including proprietary risk models, in evaluating credit risk, as described in the section above titled Automotive Financing Volume—Acquisition and Underwriting . 60 Table of Contents Management’s Discussion and Analysis Ally Financial Inc. • Form 10-K The following table presents the percentage of retail loan and operating lease originations and purchases, in dollars, by FICO® Score and product type.
We also assume risks through reinsurance arrangements, where a managing general agent or third party provides certain functions for an insurance product or program which may include, but is not limited to, premium and claims administration and reporting, binding of policies and other customer servicing functions, or underwriting services in exchange for a commission.
We also assume risks through reinsurance arrangements, where a managing general agent or third party provides certain functions for an insurance product or program which may include, but is not limited to, premium and claims administration and reporting, binding of policies and other customer servicing functions, or underwriting services in exchange for a fee.
For information regarding our insured and uninsured deposit liabilities, refer to the section below titled Response to Banking Industry Failures. 89 Table of Contents Management’s Discussion and Analysis Ally Financial Inc. • Form 10-K Fair Value Sensitivity Analysis The following table presents a fair value sensitivity analysis of our assets and liabilities using isolated hypothetical movements in specific market rates.
For information regarding our insured and uninsured deposit liabilities, refer to the section below titled Response to Banking Industry Failures. 91 Table of Contents Management’s Discussion and Analysis Ally Financial Inc. • Form 10-K Fair Value Sensitivity Analysis The following table presents a fair value sensitivity analysis of our assets and liabilities using isolated hypothetical movements in specific market rates.
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.
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 a preferred provider for 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.
The increase in late charges was due to higher delinquencies amid deterioration in macroeconomic conditions, driven by persistent inflation. During the year ended December 31, 2023, we observed a slowing rate of increase in delinquency trends within our consumer automotive loan portfolio, as compared to 2022, as we continue to make adjustments to our underwriting strategies.
The increase in late charges was due to higher delinquencies amid deterioration in macroeconomic conditions, driven by persistent inflation. During the year ended December 31, 2023, we observed a slowing rate of increase in delinquency trends within our consumer automotive loan portfolio, as compared to 2022, as we continued to make adjustments to our underwriting strategies.
The extensive infrastructure, technology, and analytics of our servicing operations, as well as the experience of our servicing personnel, enhance our ability to manage our loan losses and enable us to deliver a favorable customer experience to both our dealers and retail customers. During 2023, we continued to reposition our origination profile to focus on capital optimization and risk-adjusted returns.
The extensive infrastructure, technology, and analytics of our servicing operations, as well as the experience of our servicing personnel, enhance our ability to manage our loan losses and enable us to deliver a favorable customer experience to both our dealers and retail customers. During 2024, we continued to reposition our origination profile to focus on capital optimization and risk-adjusted returns.
Refer to Note 13 to the Consolidated Financial Statements for additional information. 73 Table of Contents Management’s Discussion and Analysis Ally Financial Inc. • Form 10-K Ally Invest Ally Invest is our digital brokerage and advisory offering, which enables us to complement our competitive deposit products with low-cost and commission-free investing.
Refer to Note 13 to the Consolidated Financial Statements for additional information. 74 Table of Contents Management’s Discussion and Analysis Ally Financial Inc. • Form 10-K Ally Invest Ally Invest is our digital brokerage and advisory offering, which enables us to complement our competitive deposit products with low-cost and commission-free investing.
In addition, for operating lease contracts, we require that bodily injury, collision, and comprehensive insurance be obtained by the consumer. 57 Table of Contents Management’s Discussion and Analysis Ally Financial Inc. • Form 10-K The following table presents retail loan originations and purchases by credit tier and product type.
In addition, for operating lease contracts, we require that bodily injury, collision, and comprehensive insurance be obtained by the consumer. 58 Table of Contents Management’s Discussion and Analysis Ally Financial Inc. • Form 10-K The following table presents retail loan originations and purchases by credit tier and product type.
Refer to Note 22 to the Consolidated Financial Statements for further discussion. 53 Table of Contents Management’s Discussion and Analysis Ally Financial Inc. • Form 10-K Dealer Financial Services Results for Dealer Financial Services are presented by reportable operating segment, which includes our Automotive Finance and Insurance operations.
Refer to Note 22 to the Consolidated Financial Statements for further discussion. 52 Table of Contents Management’s Discussion and Analysis Ally Financial Inc. • Form 10-K Dealer Financial Services Results for Dealer Financial Services are presented by reportable operating segment, which includes our Automotive Finance and Insurance operations.
Among other things, audits are intended to assess dealer compliance with the financing agreement and confirm the status of our collateral. 63 Table of Contents Management’s Discussion and Analysis Ally Financial Inc. • Form 10-K Insurance Results of Operations The following table summarizes the operating results of our Insurance operations.
Among other things, audits are intended to assess dealer compliance with the financing agreement and confirm the status of our collateral. 65 Table of Contents Management’s Discussion and Analysis Ally Financial Inc. • Form 10-K Insurance Results of Operations The following table summarizes the operating results of our Insurance operations.
The term “consumer” means all consumer products associated with our 42 Table of Contents Management’s Discussion and Analysis Ally Financial Inc. • Form 10-K 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 “consumer” means all consumer products associated with our 40 Table of Contents Management’s Discussion and Analysis Ally Financial Inc. • Form 10-K 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.
Ally Bank is the largest online only bank as measured by retail deposit balances. Our strong customer acquisition and retention rates reflect the strength of our brand and, together with our overall value proposition, continue to drive growth in retail deposits.
Ally Bank is the largest online only bank in the United States as measured by retail deposit balances. Our strong customer acquisition and retention rates reflect the strength of our brand and, together with our overall value proposition, continue to drive growth in retail deposits.
In addition to our quantitative allowance for loan losses, we also incorporate qualitative adjustments that may relate to idiosyncratic risks, weather-related events, changes in current economic conditions that may not be reflected in quantitatively derived results, and other macroeconomic uncertainty.
In addition to our quantitative allowance for loan losses, we also incorporate qualitative adjustments that may relate to idiosyncratic risks, climate-related events, changes in current economic conditions that may not be reflected in quantitatively derived results, and other macroeconomic uncertainty.
For additional information on equity securities without a readily determinable fair value, refer to Note 13 to the Consolidated Financial Statements . Net Financing Revenue Sensitivity Analysis Interest rate risk represents one of our most significant exposures to market risk.
For additional information on equity investments without a readily determinable fair value, refer to Note 13 to the Consolidated Financial Statements . Net Financing Revenue Sensitivity Analysis Interest rate risk represents one of our most significant exposures to market risk.
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.
We also operate an online direct-lending platform for consumers seeking direct financing. We believe these products will enable us to respond to the growing trends for a more streamlined and digital automotive financing process to serve both dealers and consumers.
The increase for the year ended December 31, 2023, was primarily driven by a higher interest rate environment, resulting in higher funding costs. Total net operating lease revenue increased $8 million for the year ended December 31, 2023, compared to 2022.
The increase for the year ended December 31, 2023, was primarily driven by a higher interest rate environment, resulting in higher funding costs. Total net operating lease revenue increased $28 million for the year ended December 31, 2023, compared to 2022.
Substantially all the loans originated with a term of 76 months or more during both the years ended December 31, 2023, and 2022, were considered to be prime and in credit tiers S, A, or B.
Substantially all the loans originated with a term of 76 months or more during both the years ended December 31, 2024, and 2023, were considered to be prime and in credit tiers S, A, or B.
Market Risk Our financing, investing, and insurance activities give rise to market risk, or the potential change in the value of our assets (including securities, assets held-for-sale, loans and operating leases) and liabilities (including deposits and debt) due to movements in market variables, such as interest rates, spreads, foreign-exchange rates, equity prices, off-lease vehicle prices, and other equity investments.
Market Risk Our financing, investing, and insurance activities give rise to market risk, or the potential change in the value of our assets (including securities, assets held for sale, loans, and operating leases) and liabilities (including deposits and debt) due to movements in market variables, such as interest rates, spreads, foreign-exchange rates, equity prices, off-lease vehicle prices, and other components such as liquidity.
Through December 31, 2023, forecasted economic variables incorporated into our quantitative allowance processes were updated to include the current macroeconomic environment and our future expectations reflecting slow GDP growth in the near term.
Through December 31, 2024, forecasted economic variables incorporated into our quantitative allowance processes were updated to include the current macroeconomic environment and our future expectations reflecting slow GDP growth in the near term.
We seek markets and opportunities where our clients require customized, highly structured, and time-sensitive financing solutions. Our Sponsor Finance business focuses on companies owned by private-equity sponsors with loans typically used for leveraged buyouts, refinancing and recapitalizations, mergers and acquisitions, growth, turnarounds, and debtor-in-possession financings.
We seek markets and opportunities where our clients require customized, highly structured, and time-sensitive financing solutions. Our Sponsor Finance business focuses on companies owned by private-equity sponsors with loans typically used for leveraged buyouts, refinancing and recapitalizations, mergers and acquisitions, growth, co-lending arrangements, turnarounds, and debtor-in-possession financings.
The operating lease rent receivable is accrued when collection is reasonably assured and presented as a component of other assets. The operating lease asset is reviewed for impairment in accordance with applicable accounting standards. Refer to the section titled Critical Accounting Estima tes within this MD&A and Note 1 to the Consolidated Financial Statements for further information.
The operating lease rent receivable is accrued when collection is reasonably assured and presented as a component of other assets. The operating lease asset is reviewed for impairment in accordance with applicable accounting standards. Refer to the section titled Critical Accounting Estimates within this MD&A and Note 1 to the Consolidated Financial Statements for further information.
The increase for the year ended December 31, 2023, was primarily due to higher net financing revenue and other interest income, partially offset by lower total other revenue and higher noninterest expense, as compared to the year ended December 31, 2022.
The increase for the year ended December 31, 2023, was primarily due to higher net financing revenue and other interest income, partially offset by lower total other revenue and higher provision expense, as compared to the year ended December 31, 2022.
Refer to Note 11 to the Consolidated Financial Statements for further information. (b) Consumer other includes a $174 million reduction of allowance from transfers to held-for-sale related to Personal Lending. Refer to Note 2 to the Consolidated Financial Statements for additional information.
(b) Consumer other includes a $174 million reduction of allowance from transfers to held-for-sale related to Personal Lending. Refer to Note 2 to the Consolidated Financial Statements for additional information.
(d) Coverage percentages are based on the allowance for loan losses related to finance receivables and loans excluding those loans held at fair value as a percentage of the amortized cost.
(f) Coverage percentages are based on the allowance for loan losses related to finance receivables and loans excluding those loans held at fair value as a percentage of the amortized cost.
The term “partnerships” means business arrangements rather than partnerships as defined by law. 43 Table of Contents Management’s Discussion and Analysis Ally Financial Inc. • Form 10-K Overview Ally Financial Inc.
The term “partnerships” means business arrangements rather than partnerships as defined by law. 41 Table of Contents Management’s Discussion and Analysis Ally Financial Inc. • Form 10-K Overview Ally Financial Inc.
With respect to our vehicle inventory insurance product, considerations include the dealer’s loss history and loss control practices, as well as the geographic exposure to weather events and natural disasters, among other factors.
With respect to our vehicle inventory insurance product, considerations include the dealer’s loss history and loss control practices, as well as the geographic exposure to climate events and natural disasters, among other factors.
The MD&A has been adjusted to exclude discontinued operations unless otherwise noted. 50 Table of Contents Management’s Discussion and Analysis Ally Financial Inc. • Form 10-K 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 MD&A has been adjusted to exclude discontinued operations unless otherwise noted. 48 Table of Contents Management’s Discussion and Analysis Ally Financial Inc. • Form 10-K Primary Business Lines Dealer Financial Services, which includes our Automotive Finance and Insurance operations, and Corporate Finance are our primary business lines.
Since some of these fees are not assessed until the vehicle is returned, these losses on the operating lease portfolio are correlated with lease termination volume. Operating lease accounts over 30 days past due represented 1.4% and 1.1% of the portfolio at December 31, 2023, and 2022, respectively.
Since some of these fees are not assessed until the vehicle is returned, these losses on the operating lease portfolio are correlated with lease termination volume. Operating lease accounts over 30 days past due represented 1.6% and 1.4% of the portfolio at December 31, 2024, and 2023, respectively.
December 31, 2023 2022 Industry Financial services 46.6 % 40.9 % Services 14.1 13.4 Health services 12.8 14.5 Machinery, equipment, and electronics 7.0 7.3 Chemicals and metals 6.7 7.0 Automotive and transportation 6.4 8.7 Wholesale 1.9 2.6 Retail trade 1.3 1.7 Construction 1.3 0.9 Other manufactured products 1.0 2.1 Other 0.9 0.9 Total finance receivables and loans 100.0 % 100.0 % 70 Table of Contents Management’s Discussion and Analysis Ally Financial Inc. • Form 10-K Corporate and Other The following table summarizes the activities of Corporate and Other, which primarily consist 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.
December 31, 2024 2023 Industry Financial services 42.1 % 46.6 % Health services 15.1 12.8 Services 14.3 14.1 Chemicals and metals 7.4 6.7 Automotive and transportation 7.0 6.4 Machinery, equipment, and electronics 6.7 7.0 Wholesale 3.0 1.9 Other manufactured products 1.5 1.0 Construction 1.3 1.3 Retail trade 1.0 1.3 Other 0.6 0.9 Total finance receivables and loans 100.0 % 100.0 % 70 Table of Contents Management’s Discussion and Analysis Ally Financial Inc. • Form 10-K Corporate and Other The following table summarizes the activities of Corporate and Other, which primarily consist 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.
The consumer is also generally responsible for charges related to past-due payments, excess mileage, excessive wear and tear, and certain disposal fees where applicable. At contract inception, we determine pricing based on the projected residual value of the leased vehicle.
The consumer is also generally responsible for charges related to past-due payments, excess mileage, excessive wear and tear, and certain disposal fees where applicable. At contract inception, pricing is determined based on the projected residual value of the leased vehicle.
We recognized total income tax expense from continuing operations of $61 million for the year ended December 31, 2023, compared to income tax expense of $627 million for the year ended December 31, 2022.
We recognized total income tax expense from continuing operations of $144 million for the year ended December 31, 2023, compared to income tax expense of $627 million for the year ended December 31, 2022.
Our deposit services include Zelle® person-to-person payment services, eCheck remote deposit capture, and mobile banking. Our Smart Savings Tools further demonstrates the ability to deliver innovative digital tools on top of traditional financial products to add incremental value to customers, while also driving increased engagement and loyalty. Nearly 800,000 customers have adopted our Smart Savings Tools.
Our deposit services include Zelle® person-to-person payment services, eCheck remote deposit capture, and mobile banking. Our Smart Savings Tools further demonstrates the ability to deliver innovative digital tools on top of traditional financial products to add incremental value to customers, while also driving increased engagement and loyalty. Over 900,000 customers have adopted our Smart Savings Tools.
These items were more than offset by higher interest expense, provision for credit losses, and noninterest expense for the year ended December 31, 2023. Net financing revenue and other interest income decreased $649 million for the year ended December 31, 2023, as compared to the year ended December 31, 2022.
These items were more than offset by higher interest expense, provision for credit losses, and noninterest expense for the year ended December 31, 2023. Net financing revenue and other interest income decreased $629 million for the year ended December 31, 2023, compared to the year ended December 31, 2022.
Reputation Risk Reputation risk is the risk arising from negative public opinion on Ally’s business practices, whether true or not, that could cause a decline in customer satisfaction, brand sentiment, our customer base, revenue, or result in litigation towards Ally.
Reputation Risk Reputation risk is the risk arising from negative public opinion on our business practices, whether true or not, that could cause a decline in customer satisfaction, brand sentiment, our customer base, revenue, or result in litigation towards us.
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 recorded through depreciation expense. The balance sheet reflects both the operating lease asset as well as any associated rent receivables.
At termination, our actual sales proceeds from remarketing the vehicle may be higher or lower than the estimated residual value, after adjusting for any residual value guarantees, resulting in a gain or loss on remarketing recorded through depreciation expense. The balance sheet reflects both the operating lease asset as well as any associated rent receivables.
As of December 31, 2023, and December 31, 2022, 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.
As of December 31, 2024, and December 31, 2023, we did not have the intent to sell the available-for-sale securities in 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.
Total other revenue increased $44 million for the year ended December 31, 2023, compared to the year ended December 31, 2022. The increase was primarily driven by net downward adjustments (including impairment) related to equity investments without a readily determinable fair value during the year ended December 31, 2022, that did not reoccur during the current periods.
Total other revenue increased $33 million for the year ended December 31, 2023, compared to the year ended December 31, 2022. The increase was primarily driven by net downward adjustments (including impairment) related to equity investments without a readily determinable fair value during the year ended December 31, 2022, that did not reoccur during the year ended December 31, 2023.
We also utilize a New Product Committee, Reserving Committee, Underwriting Committee, and Risk Management Committee to monitor, manage, and mitigate insurance risks, including consideration of pricing adequacy and risk of unfavorable loss development. We mitigate the risk of losses by the active management of claim settlement activities using experienced claims personnel and the evaluation of current period reported claims.
We also utilize a New Product Committee, Reserving Committee, Underwriting Committee, and Risk Management Committee to monitor, manage, and mitigate insurance risks, including consideration of pricing adequacy and risk of unfavorable loss development. We actively manage claim settlement activities using experienced claims personnel and the evaluation of current period reported claims.
The size, maturity, and mix of our hedging activities are adjusted as our balance sheet, ALM objectives, and the interest rate environment evolve over time. Our hedging strategies, however, are not designed to eliminate all interest-rate risk, and we were adversely affected from rising interest rates in 2022 and 2023.
The size, maturity, and mix of our hedging activities are adjusted as our balance sheet, ALM objectives, and the interest rate environment evolve over time. Our hedging strategies, however, are not designed to eliminate all interest rate risk, and we were adversely affected from high interest rates in 2023 and 2024.
For discussion of our credit-risk-management practices and performance, refer to the section titled Risk Management . During the first quarter of 2024, we amended our relationship with Carvana, a leading e-commerce platform for buying and selling used vehicles. Specifically, we maintained our committed facility at a maximum of $4.0 billion to support our continued efforts to optimize risk-adjusted returns.
For discussion of our credit-risk-management practices and performance, refer to the section below titled Risk Management . During the first quarter of 2025, we renewed our relationship with Carvana, a leading e-commerce platform for buying and selling used vehicles. Specifically, we maintained our committed facility at a maximum of $4.0 billion to support our continued efforts to optimize risk-adjusted returns.
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 battery-electric and plug-in hybrid vehicles, including brands such as Jeep, Tesla, Ford, and BMW.
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 battery-electric and plug-in hybrid vehicles, including brands such as Tesla, Jeep, Alfa Romeo, and Chevrolet.
When vehicles are not purchased by customers or the receiving dealer 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.
When vehicles are not purchased by customers or the receiving dealer 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 after adjusting for any residual value guarantees.
During the year ended December 31, 2023, loan purchases from Carvana were 9% of our total consumer automotive financing originations. 60 Table of Contents Management’s Discussion and Analysis Ally Financial Inc. • Form 10-K Manufacturer Marketing Incentives Automotive manufacturers may elect to sponsor incentive programs on retail contracts and operating leases by subsidizing finance rates below market rates.
Loan purchases from Carvana were 8% of our total consumer automotive financing originations during the year ended December 31, 2024, as compared to 9% during the year ended December 31, 2023. 61 Table of Contents Management’s Discussion and Analysis Ally Financial Inc. • Form 10-K Manufacturer Marketing Incentives Automotive manufacturers may elect to sponsor incentive programs on retail contracts and operating leases by subsidizing finance rates below market rates.
Year ended December 31, ($ in millions) 2024 2025 2026 2027 2028 2029 and thereafter (a) Total Original issue discount Outstanding balance at year end $ 763 $ 689 $ 607 $ 513 $ 406 $ — Total amortization (b) 68 74 82 94 107 406 $ 831 (a) The maximum annual scheduled amortization for any individual year is $143 million in 2030.
Year ended December 31, ($ in millions) 2025 2026 2027 2028 2029 2030 and thereafter (a) Total Original issue discount Outstanding balance at year end $ 689 $ 607 $ 513 $ 406 $ 283 $ — Total amortization (b) 74 82 94 107 123 283 $ 763 (a) The maximum annual scheduled amortization for any individual year is $143 million in 2030.
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 recorded through depreciation expense. • Remarketing abilities — Our ability to efficiently process and effectively market off-lease vehicles affects the disposal costs and the proceeds realized from vehicle sales.
At termination, our actual sales proceeds from remarketing the vehicle may be higher or lower than the estimated residual value, after adjusting for any residual value guarantees, resulting in a gain or loss on remarketing recorded through depreciation expense. • Remarketing abilities — Our ability to efficiently process and effectively market off-lease vehicles affects the disposal costs and the proceeds realized from vehicle sales.
In 2023, approximately 505,000 vehicles were sold through SmartAuction, as compared to approximately 336,000 in 2022. • Physical auctions — We dispose of an off-lease vehicle not purchased at termination by the lessee or dealer or sold on SmartAuction through traditional third-party, physical auctions.
In 2024, approximately 556,000 vehicles were sold through SmartAuction, as compared to approximately 505,000 in 2023. • Physical auctions — We dispose of an off-lease vehicle not purchased at termination by the lessee or dealer or sold on SmartAuction through traditional third-party, physical auctions.
Commensurate with this shift in origination mix, we continue to maintain disciplined underwriting within our new- and used- consumer automotive loan originations. 56 Table of Contents Management’s Discussion and Analysis Ally Financial Inc. • Form 10-K With respect to consumer leasing, we purchase operating lease contracts and the associated vehicles from dealerships after those contracts are executed by the dealers and the consumers.
Commensurate with this shift in origination mix, we continue to maintain disciplined underwriting within our new- and used- consumer automotive loan originations. 57 Table of Contents Management’s Discussion and Analysis Ally Financial Inc. • Form 10-K With respect to consumer leasing, we purchase operating lease contracts and the associated vehicles from dealerships and automotive manufacturers with a direct-to-consumer model after those contracts are executed by the dealers, automotive manufacturers, and the consumers.
Additionally, we maintain a qualitative allowance framework to account for ongoing uncertainty and volatility in the macroeconomic environment (including the impact of inflationary pressures) that could adversely impact frequency of loss and LGD.
Additionally, we maintain a qualitative allowance framework to account for ongoing uncertainty and volatility in the macroeconomic environment that could adversely impact frequency of loss and LGD.
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 22,000 active dealer relationships.
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 21,400 active dealer relationships.
By syndicating loans to other lenders, we are able to provide financing commitments in excess of our target hold levels to our customers and generate loan syndication fee income while reducing our risk exposure to individual borrowers. All our loans are floating-rate facilities with maturities typically ranging from two to seven years.
By syndicating loans to other lenders, we are able to provide financing commitments in excess of our target hold levels and generate loan syndication fee income while reducing single obligor risk exposure. All our loans are floating-rate facilities with maturities typically ranging from two to seven years.
We believe we are well-positioned to continue to benefit from the consumer-driven shift from branch banking to direct banking as demonstrated by the growth we have experienced since 2010. We had 3.0 million deposit customers and 6.0 million retail bank accounts as of December 31, 2023, compared to 2.7 million and 5.0 million, respectively, as of December 31, 2022.
We believe we are well-positioned to continue to benefit from the consumer-driven shift from branch banking to direct banking as demonstrated by the growth we have experienced since 2010. We had 3.3 million deposit customers and 6.3 million retail bank accounts as of December 31, 2024, compared to 3.0 million and 6.0 million, respectively, as of December 31, 2023.
This group is also granted free and unrestricted access to any and all of our records, physical properties, technologies, management and employees, and reports directly to the RC. In addition to the primary risks that we manage, climate-related risk has been identified as an emerging risk.
This group is also granted free and unrestricted access to any and all of our records, physical properties, technologies, management and employees, and reports directly to the RC, as well as administratively to the Chief Audit Executive. In addition to the primary risks that we manage, climate-related risk has been identified as an emerging risk.
Over the past several years, we have continued to focus on the consumer used-vehicle segment, primarily through franchised dealers and automotive retailers. This has resulted in used-vehicle financing volume growth, and has positioned us as an industry leader in used-vehicle financing.
We have continued to focus on the consumer used-vehicle segment, primarily through franchised dealers and automotive retailers. This has resulted in used-vehicle financing volume growth, and has positioned us as an industry leader in used-vehicle financing.
Our underwriting processes are designed to consider various deal structure variables—such as payment-to-income, LTV, debt-to-income, and FICO® score—that compensate for longer loan terms and mitigate underwriting risk. During the year ended December 31, 2023, approximately 83% of our used retail loan originations were for vehicles with a model year of 2017 or newer.
Our underwriting processes are designed to consider various deal structure variables—such as payment-to-income, LTV, debt-to-income, and FICO® score—that compensate for longer loan terms and mitigate underwriting risk. During the year ended December 31, 2024, approximately 84% of our used retail loan originations were for vehicles with a model year of 2018 or newer.
Substantially all used retail loan originations with a term of 76 months or more during the year ended December 31, 2023, were for vehicles with a model year of 2017 or newer. 58 Table of Contents Management’s Discussion and Analysis Ally Financial Inc. • Form 10-K The following table presents the percentage of total outstanding retail loans by origination year.
Substantially all used retail loan originations with a term of 76 months or more during the year ended December 31, 2024, were for vehicles with a model year of 2018 or newer. 59 Table of Contents Management’s Discussion and Analysis Ally Financial Inc. • Form 10-K The following table presents the percentage of total outstanding retail loans by origination year.
The provision for credit losses increased $569 million for the year ended December 31, 2023, compared to the year ended December 31, 2022. The increase in provision for credit losses for the year ended December 31, 2023, was primarily driven by higher net charge-offs across our consumer portfolios.
The increase in provision for credit losses for the year ended December 31, 2023, was primarily driven by higher net charge-offs across our consumer portfolios. Noninterest expense increased $476 million for the year ended December 31, 2023, compared to the year ended December 31, 2022.
Year ended December 31, 2023 Used retail New retail Lease 760 + 21 % 20 % 48 % 720–759 14 13 17 660–719 30 29 22 620–659 19 18 9 540–619 9 3 2 3 — — Unscored (a) 4 17 2 Total consumer automotive financing originations 100 % 100 % 100 % Year ended December 31, 2022 760 + 14 % 15 % 47 % 720–759 12 12 18 660–719 33 33 23 620–659 24 21 8 540–619 10 3 2 2 — — Unscored (a) 5 16 2 Total consumer automotive financing originations 100 % 100 % 100 % Year ended December 31, 2021 760 + 11 % 14 % 43 % 720–759 12 11 20 660–719 34 33 24 620–659 27 24 10 540–619 11 5 2 2 — — Unscored (a) 3 13 1 Total consumer automotive financing originations 100 % 100 % 100 % (a) Unscored are primarily CSG contracts with business entities that have no FICO® Score.
Year ended December 31, 2024 Used retail New retail Lease 760 + 26 % 27 % 53 % 720–759 15 13 17 660–719 29 27 20 620–659 17 16 6 540–619 8 3 2 2 — — Unscored (a) 3 14 2 Total consumer automotive financing originations 100 % 100 % 100 % Year ended December 31, 2023 760 + 21 % 20 % 48 % 720–759 14 13 17 660–719 30 29 22 620–659 19 18 9 540–619 9 3 2 3 — — Unscored (a) 4 17 2 Total consumer automotive financing originations 100 % 100 % 100 % Year ended December 31, 2022 760 + 14 % 15 % 47 % 720–759 12 12 18 660–719 33 33 23 620–659 24 21 8 540–619 10 3 2 2 — — Unscored (a) 5 16 2 Total consumer automotive financing originations 100 % 100 % 100 % (a) Unscored are primarily CSG contracts with business entities that have no FICO® Score.
Including the impact of hedging activities, the yield was 7.70%, 4.49%, and 3.17% for the years ended December 31, 2023, 2022, and 2021, respectively. (e) Consists primarily of automotive dealer term loans, including those to finance dealership land and buildings, and dealer fleet financing.
Including the impact of hedging activities, the yield was 7.51%, 7.70%, and 4.49% for the years ended December 31, 2024, 2023, and 2022, respectively. (e) Consists primarily of automotive dealer term loans, including those to finance dealership land and buildings, and dealer fleet financing.
December 31, 2023 2022 Florida 17.6 % 17.9 % Texas 13.6 14.9 California 7.9 8.4 Ohio 5.9 4.2 Michigan 5.4 4.2 North Carolina 5.0 5.3 New York 4.5 6.3 Tennessee 3.7 1.2 Georgia 3.0 3.1 Missouri 2.8 2.6 Other United States 30.6 31.9 Total commercial real estate finance receivables and loans 100.0 % 100.0 % Commercial Criticized Exposure Finance receivables and loans classified as special mention, substandard, or doubtful are reported as criticized.
December 31, 2024 2023 Florida 16.0 % 17.6 % Texas 14.1 13.6 California 6.6 7.9 Ohio 5.6 5.9 New York 5.4 4.5 North Carolina 4.8 5.0 Michigan 4.1 5.4 Georgia 3.3 3.0 Missouri 2.9 2.8 Illinois 2.6 2.6 Other United States 34.6 31.7 Total commercial real estate finance receivables and loans 100.0 % 100.0 % Commercial Criticized Exposure Finance receivables and loans classified as special mention, substandard, or doubtful are reported as criticized.
Bulk purchases are made on a servicing-released basis, allowing us to directly oversee servicing activities and manage refinancing through our direct-to-consumer channel. During the year ended December 31, 2023, we purchased $21 million of mortgage loans that were originated by third parties, primarily to fulfill our CRA objectives.
Bulk purchases are made on a servicing-released basis, allowing us to directly oversee servicing activities and manage refinancing through our direct-to-consumer channel. During the year ended December 31, 2024, we purchased $21 million of mortgage loans that were originated by third-parties.
Periodically, we revise the projected value of the leased vehicle at termination based on then-current market conditions and adjust depreciation expense, if appropriate, over the remaining life of the contract. Upon termination of the lease, lessees generally have the ability to exercise a purchase option at the stated contractual amount.
Periodically, we revise the projected value of the leased vehicle at termination based on then-current market conditions in consideration of any residual value guarantees and may adjust depreciation expense, if appropriate, over the remaining life of the contract. Upon termination of the lease, lessees generally have the ability to exercise a purchase option at the stated contractual amount.
For the year ended December 31, 2023, management determined that there were no expected credit losses for available-for-sale securities in an unrealized loss position. Refer to Note 8 and Note 18 to the Consolidated Financial Statements for additional information.
For the year ended December 31, 2024, management determined that there were no expected credit losses for available-for-sale or held-to-maturity securities in an unrealized loss position. Refer to Note 8 and Note 18 to the Consolidated Financial Statements for additional information.
The highly fragmented used-vehicle financing market, with a total financing opportunity represented by approximately 289 million vehicles in operation, provides an attractive opportunity that we believe will further expand and support our dealer relationships and increase our risk-adjusted return on retail loan originations. As of December 31, 2023, approximately 71% of our dealer relationships were with franchised dealers.
The highly fragmented used-vehicle financing market, with a total financing opportunity represented by approximately 292 million vehicles in operation, provides an attractive opportunity that we believe will further expand and support our dealer relationships and increase our risk-adjusted return on retail loan originations. As of December 31, 2024, approximately 75% of our automotive dealer relationships were with franchised dealers.
Our overall allowance for loan losses decreased $124 million from the prior year to $3.6 billion at December 31, 2023, representing 2.6% and 2.7% as a percentage of total finance receivables at December 31, 2023, and December 31, 2022, respectively. 84 Table of Contents Management’s Discussion and Analysis Ally Financial Inc. • Form 10-K The following tables present an analysis of the activity in the allowance for loan losses on finance receivables and loans for the years ended December 31, 2023, and December 31, 2022, respectively.
Our overall allowance for loan losses increased $127 million from the prior year to $3.7 billion at December 31, 2024, representing 2.7% and 2.6% as a percentage of total finance receivables at December 31, 2024, and December 31, 2023, respectively. 86 Table of Contents Management’s Discussion and Analysis Ally Financial Inc. • Form 10-K The following tables present an analysis of the activity in the allowance for loan losses on finance receivables and loans for the years ended December 31, 2024, and December 31, 2023, respectively.
The results within these channels vary, with physical auction typically resulting in the lowest-priced outcome. • Manufacturer vehicle and marketing programs — Automotive manufacturers influence operating lease residual results in the following ways: ◦ The brand image of automotive manufacturers and consumer demand for their products affects residual risk. ◦ The discontinuation of, or stylistic changes to, a certain make or model may affect the value of existing vehicles. ◦ Automotive manufacturer marketing programs may influence the used vehicle market for those vehicles through programs such as incentives on new vehicles, programs designed to encourage lessees to terminate their operating leases early in conjunction with the acquisition of a new vehicle (referred to as pull-ahead programs), and special rate used vehicle programs. • Used vehicle market — We have exposure to changes in used vehicle prices.
The results within these channels vary, with physical auction typically resulting in the lowest-priced outcome. 93 Table of Contents Management’s Discussion and Analysis Ally Financial Inc. • Form 10-K • Manufacturer vehicle and marketing programs — Automotive manufacturers influence operating lease residual results in the following ways: ◦ The brand image of automotive manufacturers and consumer demand for their products affects residual risk. ◦ The discontinuation of, or stylistic changes to, a certain make or model may affect the value of existing vehicles. ◦ Automotive manufacturer marketing programs may influence the used vehicle market for those vehicles through programs such as incentives on new vehicles, programs designed to encourage lessees to terminate their operating leases early in conjunction with the acquisition of a new vehicle (referred to as pull-ahead programs), and special rate used vehicle programs. • Used vehicle market — We have exposure to changes in used vehicle prices.
Consumer finance receivables and loans sourced from Carvana represented 8.2% of our total consumer automotive finance receivables and loans as of December 31, 2023.
Consumer finance receivables and loans sourced from Carvana represented 8.6% and 8.2% of our total consumer automotive finance receivables and loans as of December 31, 2024, and December 31, 2023, respectively.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeItem 7A. Quantitative and Qualitative Disclosures about Market Risk Refer to the Market Risk section of Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations. 113 Table of Contents Management’s Report on Internal Control over Financial Reporting Ally Financial Inc. • Form 10-K
Biggest changeItem 7A. Quantitative and Qualitative Disclosures about Market Risk Refer to the Market Risk section of Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations. 117 Table of Contents Management’s Report on Internal Control over Financial Reporting Ally Financial Inc. • Form 10-K

Other ALLY 10-K year-over-year comparisons