Ally Financial Annual Report 2022

FY2022 Annual Report · Ally Financial

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Annual Report

A leader in digital ﬁnancial services.

Ally Financial Inc. (NYSE: ALLY) is a ﬁnancial services company with the nation’s
largest all-digital bank and an industry-leading auto ﬁnancing business,
driven by a mission to “Do It Right” and be a relentless ally for customers and
communities. The company serves approximately 11 million customers through
a full range of online banking services (including deposits, brokerage and
investment advisory services, mortgage, point-of-sale personal lending and
credit card products) with a corporate ﬁnance business that offers capital for
equity sponsors and middle-market companies, as well as auto ﬁnancing and
insurance offerings through more than 23,000 dealers nationwide.

Be a relentless ally that does right.

As a customer-obsessed company with passionate customer service and
innovative ﬁnancial solutions, we are relentlessly focused on “Doing It Right” and
being a trusted ﬁnancial-services provider to our banking, auto and corporate
customers. We are the nation’s leading auto lender and the largest online-only
bank, who has paved the way for industry transformation by making banking
simpler and more straightforward. We are rooted in the belief that we are all
better off with an ally.

Do right by our customers.

We’re creating a better way to bank. Our teammates are committed to
developing award-winning technology, ﬁnancial services that make your life
easier, products that are never status quo and diverse thinking that inspires new
ideas. We have a ﬁerce commitment to:

• “Do It Right”
• Treat every customer equally with honesty and integrity.
• Give back to our communities—primarily focused on reducing barriers
to economic mobility through ﬁnancial education, affordable housing,
workforce preparedness and digital job training.

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GAAP & core results: annual.

GAAP earnings per common share (“EPS”) (diluted,
net income attributable to common shareholders)

Adjusted EPS1,2

Return (net income) on GAAP common equity

Core ROTCE1,2

GAAP common shareholder’s equity per share

Adjusted tangible book value per share1,2

GAAP total net revenue

Adjusted total net revenue1,2

Pre-provision net revenue2

Core Pre-provision net revenue1,2

FY 2022

FY 2021

FY 2020

FY 2019

FY 2018

$ 5.03

$ 8.22

$ 2.88

$ 4.34

$ 2.95

$ 6.06

13.3%

20.5%

$ 35.20

$ 29.96

$ 8,428

$ 8,685

$ 3,741

$ 4,075

$ 8.61

20.2%

24.3%

$ 43.58

$ 38.73

$ 8,206

$ 8,381

$ 4,096

$ 4,271

$ 3.03

7.7%

9.1%

$ 39.24

$ 36.05

$ 6,686

$ 6,692

$ 2,853

$ 2,909

$ 3.72

12.4%

12.0%

$ 38.51

$ 35.06

$ 6,394

$ 6,334

$ 2,965

$ 2,905

$ 3.34

9.4%

12.3%

$ 32.77

$ 29.93

$ 5,804

$ 6,011

$ 2,540

$ 2,747

1 The following are non-GAAP ﬁnancial measures which Ally believes are important to the reader of the Consolidated Financial Statements, but which are supplemental to and not a

substitute for GAAP measures: Adjusted earnings per share (Adjusted EPS), Core pre-tax income (loss), Core pre-provision net revenue (Core PPNR), Core net income (loss) attributable to
common shareholders, Core return on tangible common equity (Core ROTCE), Adjusted total net revenue, Net ﬁnancing revenue (excluding Core OID), Adjusted other revenue, Adjusted
noninterest expense, Core original issue discount (Core OID) amortization expense, Core outstanding original issue discount balance (Core OID balance), and Adjusted tangible book value
per share (Adjusted TBVPS). These measures are used by management, and we believe are useful to investors in assessing the company’s operating performance and capital.

2 Represents a non-GAAP ﬁnancial measure. Refer to the 2022 Financial Tables later in this document for a Reconciliation to GAAP.

CET1 CAPITAL
RATIO

9.3%

GAAP RETURN
ON EQUITY

13.3%

CORE ROTCE 1

20.5%

CUSTOMERS 2

11 million

4
4

TOTAL ASSETS

$192 billion

TOTAL DEPOSITS

$152 billion

GAAP TOTAL NET REVENUE

$8.4 billion

ADJ. TOTAL NET REVENUE 1

$8.7 billion

CUMULATIVE
SHAREHOLDER
DISTRIBUTIONS3

$8.6
billion

Represents a non-GAAP ﬁnancial measure. Refer to
the 2022 Financial Tables later in this document for a
Reconciliation to GAAP.

Customers include on-balance sheet Auto, U.S. and
Canadian Insurance, active Depositors, on-balance
sheet Ally Home DTC Mortgage, Ally Lending, Ally
Invest and Ally Credit Card.

Includes Ally’s common share repurchase activity
and common dividends.

TABLE OF CONTENTS.

Letter to shareholders 6

Ally’s transformation since 2014 IPO 8

Leading, growing businesses 10

Bringing “Do It Right” to life 14

Get culture right, the rest follows 16

Committed to environmental sustainability 20

Strategic priorities 22

Looking ahead 23

2022 Financial results 24

Automotive ﬁnance 25

Insurance

Corporate ﬁnance 26

Mortgage ﬁnance 26

Our values in action 27

LEADing the way awards 27

Employees 28

Customers 29

Communities 30

Suppliers 33

2022 Financial tables and deﬁnitions 34

Dear
shareholders,

2022 was a year ﬁlled with
rapid changes and unique
challenges. During another year of
unpredictable events that affected
the operating backdrop, Ally
demonstrated steady execution and
delivered solid ﬁnancial results.

At Ally, we take a long-term perspective. This
approach to value creation and capital allocation
results in a sustainable business model that is
well-positioned to withstand a variety of operating
environments. In 2022, we remained focused on
executing against our long-term priorities and
leaned on our core values to continue delivering
for our customers, communities, employees and
shareholders.

We began 2022 with an enterprise-wide challenge
to See Around Corners and to Embrace Disruptive
Forces. These themes have been very appropriate
given the uncertainties surrounding us, from
continued macroeconomic volatility, to concerns
regarding inﬂation in nearly every aspect of life,
and the ever-lingering impacts of the pandemic.

As I reﬂect on 2022, I think it’s important to take
an even bigger step back to recognize what has
transpired over the past three years. The world
has navigated a global pandemic, which has led
to immeasurable lasting impacts and has forever
altered our economies, communities, and

day-to-day lives. We have witnessed a historical
amount of ﬁscal and monetary stimulus to ensure
the global economy could continue to survive. We
observed global supply chain constraints, driven
by lockdowns and goods that weren’t available,
all of which was ampliﬁed by global conﬂict. We
have also witnessed inﬂation that is no longer
transitory, but persistent, real inﬂation that is
impacting our economy, our customers, and our
people.

I highlight these events because given that
backdrop, it is important that we acknowledge
the tremendous transformation that we have
achieved as a company. While it is impossible to
predict the operating environment, the foundation
of our company has never been stronger. We’ve
built businesses that are nimble and able to pivot
against a ﬂuid backdrop. We’ve optimized both
sides of the balance sheet through deliberate
actions, and we maintain healthy levels of capital,
reserves and liquidity which positions us to
manage this dynamic environment. We’ll continue
to drive long-term value for all stakeholders by
focusing on what we can control.

One area that is ﬁrmly under our control is how
we execute against our long-term priorities. Ally
has gone through a fundamental transformation
since becoming a publicly traded company
in 2014. Our businesses have evolved through
optimization within Dealer Financial Services
along with expansion into other consumer lending
verticals. Our funding proﬁle shows equally
meaningful progress. In 2014, we were only 41%
deposit funded relative to 88% at year-end. Within
Dealer Financial Services, we have grown from
a primarily wholesale funded captive ﬁnance
company to the leading, independent full credit
spectrum auto and insurance provider to more
than 23 thousand dealer relationships4 and 6.5
million consumer customers backed by sticky and
stable deposit funding.

“

Since the launch of Ally Bank
we’ve challenged ourselves
to provide differentiated and
frictionless products, and Ally
has grown to the country’s
largest, all-digital direct
bank with $138 billion of retail
deposits and over 4 million
customers without a single
physical branch, making it
clear our model and our brand
resonates with consumers. ”

This transformation on both sides of the balance
sheet has resulted in a structurally more proﬁtable
company. Since 2014, revenues are up $3.7 billion
driven by asset diversiﬁcation and optimization.
Net interest margin has expanded 144 basis
points and our cost of funds are down nearly 30
basis points despite higher interest rates. Since
the inception of our share repurchase program in
2016, shares outstanding are down 38% creating
signiﬁcant value for long-term shareholders. I
recognize there is a lot of focus on the near-term,
but it’s important to consider these tailwinds that
have been created by thoughtful and deliberate
strategic decisions over the past several years.

Ally’s
transformation
since 2014 IPO.

Ally Bank: #1 largest, all digital
direct U.S. bank 5

Retail
Retail
deposits
deposits

Ally Bank
Ally Bank
customers
customers

$138B

$48B

0.9M 4.4M
0.9M 4.4M

2014
2014

2022
2022

Auto Finance: Demonstrating
strength and scale

ons
Originations

$41.0B

$46.4B

Dealer
ler
ps6
relationships6

15.6K

23.3K

ons
Applications

9.1M

12.5M

2014
2014

2022
2022

Balance sheet diversiﬁcation and
revenue expansion

Structurally enhanced net
interest margin

Loans and leases (EOP)

$5B

Net Interest
Margin

Cost of Funds

88%
funded with
deposits

2014

2022

Building long-term intrinsic value

$44
$44
(ex: OCI)
(ex: OCI)

$14
OCI Impact

$30

$35
$35

$30
$30

$23

2014
2014

2022
2022

A
Adjusted tangible book
v
value per share7

GAAP common
G
shareholder’s equity
s
p
per share

38%
decrease
in shares
outstanding

Ally Home, Ally Lending, Ally
Credit Card, Corp Finance

Auto HFI (Retail, Lease,
Commercial)

6
6X Loan
growth
g
for non-Auto
f
s
segments

$110B

2014
2014

$$3$ 3B

$113B

2022

81%
Revenue
growth

GAAP total net revenue

2014

$4.7B

2022

$8.4B

Source: FDIC, FFIEC Call Reports and Company ﬁlings of branchless banks including Marcus, Discover, American Express, Synchrony.

Active U.S. Dealers’ deﬁned as all dealers who utilize one or more of Ally’s products including consumer & commercial lending, SmartAuction or Commercial Services
Group and excludes RV Commercial & Consumer lines of business exited in 2Q 2018.
Represents a non-GAAP ﬁnancial measure. Refer to 2022 Financial Tables later in this document for a reconciliation to GAAP. Prior period OCI impacts are non-material to
Adjusted Tangible Book Value per Share and therefore not included.

This business transformation was intentional and
driven by our obsession to “Do it Right” for our
customers. We have never wavered on this promise,
and our customer-centric strategy continues to be at
the core of who we are as a company. This year, after
leading the charge to eliminate overdraft fees in 2021,
we introduced CoverDraft, a free service that further
enhances overdraft protection and helps take the
stress out of accidental overspending. This service
acts as a fee-free safety net for accidental overdrafts
and provides Ally’s checking customers with
temporary overdraft coverage. This is just another
example of our commitment to be a relentless and
ﬁnancial ally for our customers.

While business execution is essential to our
achievements, I believe that our success starts
with another important controllable - how we treat
our employees. As I’ve said before, my proudest
accomplishment as CEO these past 8 years has been
the evolution of our inclusive culture. Our purpose-
driven culture is the driving force behind everything
we do as a company. I ﬁrmly believe this approach
to culture attracts the best talent and serves as the
foundation for operational results leading to ﬁnancial
performance and long-term value creation for all
stakeholders.

Ally consistently supported our teammates both
ﬁnancially and personally throughout 2022. We
increased our minimum wage for the 2nd consecutive
year to $23 per hour which makes a meaningful
difference for thousands of employees. I was also
thrilled to announce that all employees across the
enterprise would be receiving another #OwnIt grant
of 100 shares. This represents the 4th year of #OwnIt
and will further instill an ownership mentality for Ally
employees. On a more personal level, we enhanced
mental health beneﬁts for our teammates and their
families. We believe in taking action to combat the
challenges our people face, which is why we more
than doubled counseling sessions for each family
member per year. To get culture right, you must
unrelentingly care for your people – in good times
and more importantly, in tough times.

In 2022, Ally received national recognition for our
‘One Ally’ culture – both as a best place to work and
as a culture that cares. Ally continues to be a place
people want to work, evidenced by being named

People’s 2022 Companies That Care and Forbes Best
Employers for New Grads, Women, and Diversity. Ally
was also recently named one of America’s Greatest
Workplaces 2023 for Diversity by Newsweek magazine.
While we never do it for the accolades, they signify the
impact of our “Do it Right” philosophy.

Accolades

Importantly, our culture does not stay within the
four walls of Ally, and this year, we continued
to demonstrate our values in action within our
communities. Ally employees embody our “Do It Right”
Values and in 2022, we volunteered over 44,000 hours
and supported over 1,700 organizations through
grants and volunteerism. Ally recognizes the power of
sports as a vehicle to unite communities and inspire
change. With a hometown corporate presence in the
Motor City (Detroit) and the Queen City (Charlotte), we
ofﬁcially announced a new partnership with the Detroit
Pistons, and a renewed partnership with the Charlotte
Hornets building on the momentum we’ve experienced
with Charlotte FC as their lead sponsor. Ally plans to
leverage these partnerships to make a positive impact
on the communities where our employees work and live
while enhancing the overall fan experience.

I am extremely proud of how our team managed
through a constantly changing operating environment
in 2022. Ally’s long-term strategy remains intact
as we navigate an evolving macroeconomic
landscape in 2023. In this year’s letter, I’ll highlight the
accomplishments of our leading businesses, powered
by our employees, culture, and strategic priorities.

Leading, growing businesses.

Ally’s auto ﬁnance business remains a leader
in the industry, demonstrated by our strength
and scale. Our leading position is backed
by our comprehensive product suite, full
credit-spectrum underwriting, century-long
expertise, high-tech & high-touch approach,
and through the cycle customer service for our
dealer and consumer customers. We continued
to expand dealer relationships8 for the 13th
consecutive year, now over 23 thousand, as part
of a deliberate focus on deepening customer
relationships. Our strategy to expand our market
reach and offer comprehensive products was
well-positioned for the market trends in 2022. As
new vehicle production slowed, demand for used
cars has been robust. The beneﬁts of our scale
and depth of application ﬂow positioned Ally to
generate $46.4 billion in consumer origination
volume sourced from 12.5 million applications
during 2022.

In 2022, the strength of our dealer relationships
and pricing posture enabled the business to
generate compelling risk adjusted yields. In
total, we put nearly 400 basis points of price into
the market, largely in line with changes in the
Fed Funds rate. A key driver of this overall yield
expansion has been our strategic shift to the
intersection of prime9 and used. Several years
ago, we began focusing more heavily on the used
market and reducing our concentration in super
prime, which generally has lower returns. Used
vehicles made up 65% of consumer originations
in 2022 and offer attractive marginal returns
despite the slightly higher loss content. 97 basis
points of 2022 full-year net-charge offs10 were
in-line with our expectations. Underwriting
credit is a core competency of ours, and the
investments we’ve continued to make in risk
management position us well to navigate this
ﬂuid environment and continue delivering strong
risk-adjusted returns through the cycle.

Our insurance business complements our dealer and
consumer value proposition and generated solid results
in 2022, posting written premium volume in excess
of $1 billion for the 5th year in a row. Looking ahead,
our insurance team continues to remain focused on
delivering superior customer service, growing and
optimizing our product offerings, and leveraging
synergies with the auto ﬁnance business to drive organic
growth through an integrated dealer and customer-
centric approach, focused on delivering assistive F&I
training, comprehensive products and robust customer
service and claims adjudication.

At Ally Bank, we saw continued growth and momentum
across each of our consumer and commercial offerings.
Ally Bank has ﬁrmly established a reputation as a
leading, growing digital disruptor. We truly believe
we built the bank of the future – our franchise was
predicated on the mission to be a better bank for
consumers, and this direct bank model has resonated
with our customers as consumer preferences have
evolved over the past decade. Ally Bank’s growth
provides strength to our balance sheet and competitive
positioning. Retail deposits have grown $90 billion and
we’ve grown customers from 1 million to over 4 million
since 201411 and maintain a 96% customer retention
rate. Deposits continue to serve as the primary gateway
to our other banking products which enhance brand
loyalty, drive engagement, and deepen customer
relationships. Our total multi-product customer base has
grown to over 256 thousand customers,12 representing
10% penetration of our primary, active depositors.

Total customers13

11M

Auto

Bank

2014

2016

2018

2020

2022

Active U.S. Dealers’ deﬁned as all dealers who utilize one or more of Ally’s products including consumer & commercial lending, SmartAuction or Commercial Services Group
and excludes RV Commercial & Consumer lines of business exited in 2Q 2018.
Prime deﬁned as 620-719 FICO segment.
Net charge-off ratios are calculated as annualized net charge-offs divided by average outstanding ﬁnance receivables and loans excluding loans measured at fair value and
loans held for sale.
Ally bank customers include Depositors, Ally Home DTC Mortgage, Ally Invest, Ally Lending and Ally Credit Card.
Deposit customers with an Ally Home, Ally Invest, or Ally Credit Card relationship.

Customers include on-balance sheet Auto, U.S. and Canadian Insurance, active Depositors, on-balance sheet Ally Home DTC Mortgage, Ally Lending, Ally Invest and Ally
Credit Card.

Within Ally Home, we generated originations of $3.3
billion in 2022, a decrease compared to the prior
year reﬂecting the changing market dynamics of
the business as we exited the reﬁnance mortgage
cycle. That said, we have built a solid foundation to
focus on strengthening the customer experience,
with Ally Home providing several competitive
advantages to mortgage customers through Ally’s
brand promise. Our digital platform provides a
seamless digital mortgage experience, available
24/7, that uses industry-leading technology to get
customers pre-approved in as little as 3 minutes.
Our streamlined process features no lender fees,
more transparency, and less paper. Additionally, our
partnership model isolates us from the operating
volatility impacting other mortgage originators.

Ally Invest demonstrated solid results as active
funded accounts grew to over 518 thousand with
over 70% of new accounts coming from existing
Ally Bank customers. Ally Invest assets ended
the year at approximately $13 billion. In 2022, we
launched wealth management, a holistic advisory
solution with dedicated, human advisors. With
low fees and minimums, our offering reduces the
barriers to entry and is an important step in the
democratization of investing.

Ally Lending’s point-of-sale offerings continued
to generate compelling results. In 2022, gross
originations grew by over 70% totaling $2.1 billion.
This growth has been driven by expansion into
home improvement lending and momentum in the
healthcare lending vertical. As we look ahead, we
are encouraged by the opportunities for accretive
growth in this business.

Corporate Finance has continued to post solid
results and growth trends. The franchise has
an over 20-year demonstrated track record of
success managing several business verticals
through multiple credit cycles. The team has
experienced an annual growth rate of 20% over
the past ﬁve years, and in 2022, the portfolio
eclipsed $10 billion in outstanding held-for-
investment loans, with growth primarily coming
from asset-based lending, while also continuing
to generate strong risk-adjusted returns.

Ally added Credit Card into our consumer lending
offering in late 2021 through the acquisition of
Fair Square Financial. This acquisition provided
the basis to deliver credit card products to our
customers and rapidly accelerate the pace
towards a proﬁtable business line. We ﬁrmly
believe that there is an underserved segment of
middle-class Americans, and that the business
has a long runway ahead. Since the acquisition,
the Fair Square team has seamlessly integrated
into our culture and operations evidenced by the
solid momentum in customer and balance growth
with over 1 million active cardholders and $1.6
billion in outstanding balances.

Notably, in November, Ally reached a key
milestone in the Ally Credit Card integration and
launched three credit cards. The new credit cards,
which include the Ally Platinum Mastercard, the
Ally Everyday Cash Back Mastercard, and the Ally
Unlimited Cash Back Mastercard, complement
Ally’s existing suite of products and align with our
strategy to be the leading full-service digital bank.

As a leader in digital ﬁnancial services, every
aspect of our customer and employee experience
is powered by technology. Technology enables
our businesses to scale and provide a full suite of
solutions to meet customers’ needs.

In 2022, we continued to invest across cyber security,
engineering, and data. With an ‘essentialism’
approach to technology investment, each year we
aim to shift investment and resources from ‘running
the business’ to ‘growing the business’. With each
technology investment, we are deepening value for
our customers and those that serve them.

Cyber security threats continue to gain in velocity,
volume, and sophistication. We are relentlessly
focused on advancing protections and proactively
preventing attacks to keep our customers, dealers,
and employees safe. We embrace a ‘ﬁnd it ﬁrst’
mindset where employees are encouraged to quickly
raise and resolve risks that could become issues.

We’re building our technology through a platform
lens to enhance customer experiences and
enterprise capabilities. With platforms, such as
SmartAuction, Ally has commercialized technology,
enabling revenue expansion. In 2022, Ally continued
to build application programming interfaces (APIs)
that allow internal and external partners and
developers to tap into the power of our platforms.

Leveraging our underlying platforms, we’re focused
on building seamless customer experiences across
all channels. We’ve been on a journey to unify
customer experiences so they engage with us as
‘One Ally.’ In 2022, Mortgage was integrated into
Ally’s Banking mobile and web experience alongside
deposit and invest capabilities. We continue to
innovate on behalf of our customers to be an ally
throughout their ﬁnancial journey. Inclusive and
accessible design remains a top priority.

Ally’s secure, cloud-based data and analytical
platforms provide the scale to deliver a wide-range
of frictionless products, services and experiences.
Harnessing data from digital interactions serves
as a feedback loop to continue advancing the
overall customer experience. It also fuels artiﬁcial
intelligence powered use cases such as Ally Assist
which addresses customer needs quickly and
efﬁciently through our digital capabilities.

Fostering a culture of
inclusiveness in technology

Ally has launched two diversity-focused
groups that explore the obstacles to
inclusivity that exist speciﬁcally within the
technology industry. The ﬁrst is Women
in Technology (WiT), an organization
committed to LEADing Ally as a best-
in class workplace by developing and
nurturing a pipeline of women leaders and
creating an environment where women will
thrive. The second is Black and Brown in
Technology (BBiT), which advocates for the
development, retention and hiring of black
and brown people within the Technology
organization to ensure we represent the
customers that we serve and support our
black and brown employees. Our objective
is to foster a workplace environment where
diverse perspectives are valued and all
employees have a sense of belonging.

Underpinning our technology ecosystem is
modernized infrastructure that provides a reliable
and secure foundation. In 2022, we overhauled our
network infrastructure and launched a software-
deﬁned network that increased bandwidth,
reduced latency, and bolstered security. We also
rearchitected critical customer-facing platforms
for higher resiliency and availability ensuring our
customers can reach us when they need to.

While we want our infrastructure fast, we also
want our people to be able to move fast. In
2022, Ally’s technology operating model (ATOM)
underwent transformation that positions us
to bring features to customers sooner, while
ensuring robust quality and security. Our
engineers doubled the number of applications
using our development, security, and operations
(DevSecOps) pipelines and leveraged more
automation across our delivery processes.

Ally’s Tech Labs continues to See Around Corners
to apply emerging technology to Ally’s businesses.
In 2022, Tech Labs partnered with several
functions and businesses to deliver customer
facing capabilities at startup speed. We strive
to foster an Inclusive and Learn-It-All Culture
where a growth mindset is nurtured. All employees
are welcome to join any of our 19 communities
of practice, ranging from data science to
observability. Ally’s Tech Academy launched in
2022 and is an internal program that provides
technology bootcamps, leadership development,
and self-paced learning capabilities to employees.

Ally’s technologists know they
have an important role in
sharing their knowledge with
our community and industry.
In 2022, we had over 75
employees speak externally,
published 10 Ally Tech blogs,
and positively impacted over
3,000 lives in our work to
Bridge the Digital Divide.

Bridging the Digital Divide

Ally’s Bridging the Digital Divide (BDD)
program seeks to help close the digital
equity gap for minority and underserved
communities. BDD grew by leaps and
bounds in 2022. Since its inception in
2021, Ally has impacted nearly 4,000
lives in Detroit and Charlotte by focusing
on three strategic pillars. The ﬁrst pillar
is Access, which provides resources
to enable communities to have digital
equity. In 2022, Ally supported MeckTeck
to help distribute 20,000 free laptops to
Charlotte Mecklenburg County adults.
The second pillar is Advancement, which
helps those in underserved communities
with career opportunities in the technology
ﬁeld. Through the Technically Speaking
program, we educated 300 individuals on
topics ranging from the power of data to
the available professional career paths in
technology. The ﬁnal pillar is Opportunities,
which focuses on creating a diverse
talent pipeline by hiring from underserved
communities. Ally hired 60 individuals
through this partnership with Road to
Hire Apprenticeship Program and Stiegler
EdTEch Career Technology Apprenticeship.

Additional insights
from Ally’s technology
team here.

Bringing “Do It Right”
to life.

At Ally, marketing is a strategic investment
designed to drive unprecedented growth and
disruptive consumer engagement. Throughout
the course of 2022, the Ally brand delivered on
that investment through purpose-driven, “Do It
Right” programs.

In 2021, Ally became the ﬁrst banking partner for
the National Women’s Soccer League (NWSL).
In the wake of a destabilizing abuse scandal,
we were the ﬁrst brand to double down on our
commitment to ensure a safer sport. But, our
commitment to women’s sports didn’t end there.

In May 2022, we announced our 50/50 pledge,
a commitment to reach equal spending in paid
advertising across women’s and men’s sports
programming over the next ﬁve years. The
pledge was followed by the launch of “Watch the
Game, Change the Game,” a national advocacy
initiative aimed at rallying viewership of women’s
competitions. An average of 915 thousand
viewers tuned in to watch the Portland Thorns
collect their third National Women’s Soccer
League Championship, a 71% increase over last
year’s audience.

The effort, in just six short months, catapulted
our business in awareness and likeability, driving
tremendous growth in our female customers.
We also became a cultural catalyst for change.
Through Ally’s lobbying and media optimization
efforts, the ﬁrst championship game in women’s
sports aired in primetime on a major network and
set a record for the most-watched game in league
history. Many other brands have stepped up to
invest and join us in making a difference.

Andrea Brimmer,
Chief Marketing and
Public Relations Ofﬁcer

This investment wasn’t just the right thing to do;
it makes great business sense. Research shows a
strong correlation between sports and women’s
success as business leaders: 94% of women
executives have a background in sports, with over
half playing at university levels. We are building the
next generation of business leaders by using our
platform to create meaningful change in the world.

Throughout 2022, we continued our
groundbreaking Milestone Initiative, Ally’s
collaboration with DC Comics and Warner Bros.
Discovery focused on creating more opportunities
for Black and diverse storytellers. The initiative
launched in late 2021 to identify, recruit and mentor
diverse creative talent and create authentic
new stories and characters through a hands-
on program. In one year, Ally and our partners
changed the lives of 24 diverse comic storytellers
through creative mentorship and ﬁnancial
education, paving a pathway for bright careers
and generational wealth.

In the past year, Ally also partnered with music
creator platform United Masters to foster
relationships between independent diverse
artists and major brands. Ally’s support of United
Masters empowers more creators to take control
of their ﬁnancial journey, creating access and
offering the ﬁnancial tools and education that
drive long-term success. At this intersection
of art and technology, Ally consistently ﬁnds
unique, compelling ways to give people the tools
to chase their dreams and ﬁnd success.

These efforts, along with many others, delivered
strong business growth last year. 2022 saw the
highest year-over-year growth of Ally’s category
brand awareness, which was approximately
seven times higher than our average. We
also grew consideration for the Ally brand by
20% during 2022 and reached 85% customer
satisfaction, and we were the ﬁrst and only
ﬁnancial services brand to ever appear on Fast
Company’s Brands That Matter list in 2022.
Ally carries the momentum into the future by
focusing on customers and building a ﬁnancial
services brand that truly serves.

Watch the Game,
Change the Game.
Watch video here.

Get culture right, the
rest follows.

Ally’s culture and “Do it Right” approach is at the
core of everything we do. This is demonstrated in the
innovative and differentiated products delivered to
our customers and actions taken to drive positive
and lasting change in the communities where we
live and serve. Our principles are built upon the
foundation of our LEAD core values that guide our
decisions and drive our actions. Our culture and
values challenge our teammates and partners to
focus relentlessly on driving enhanced value for
all our stakeholders. Our value system drives us to
tirelessly bring innovative, seamless, and relevant
products and services to our customers with the
primary objective to improve their ﬁnancial well-
being. I believe that our culture is a competitive
advantage and an essential component of Ally’s
winning equation.

Ally is ﬁrmly committed to diversity, equity and
inclusion (DE&I), and we believe the best ideas come
from a collective mixture of different voices and
perspectives. We are an equal opportunity employer,
and we strive for an inclusive work environment
where all backgrounds, experiences, interests,
viewpoints, and skills are respected, appreciated,
and encouraged, consistent with our culture. We are
focused on diverse representation and retention
in the workforce including different genders,
races, nationalities, sexual orientations, and other
identities—across all levels of the organization
from entry to leadership. Fostering these diverse
perspectives is important and are the backbone of
our culture.

Look externally
We strive to meet and exceed
the needs of our customers with
agility, speed, and innovation.
We lead the marketplace by
continually evolving, responding
quickly and delivering our
customers a superior experience.

Execute with
excellence
Good enough is never enough.
With a focus on continuous
improvement, our actions are
driven by sound analysis and an
intense focus on excellence.

Act with
professionalism
We operate with integrity,
hold ourselves and each other
accountable, treat others
with respect and embrace
diversity and inclusion. This is
the cornerstone to our long-
term success and at the very
foundation of what it means to
be an Ally.

Deliver results
We are passionate about winning
— for our customers, our teams
and our company. Success is
measured at both the outcome
and the path to achieve it.

Workplace accolades

Notably, our company-wide engagement survey
score for belonging is consistently rated over
the ﬁnancial services industry benchmark and
was eight points above in 2022, as measured by
a third-party provider. The importance of DE&I
starts at the top with our senior management
team and Board, who consistently stress the
value in leveraging our differences. We believe our
commitment to DE&I makes us better and beneﬁts
our various stakeholders culturally, operationally,
and ﬁnancially.

We take deliberate steps to weave DE&I through
the entire employee lifecycle. With this approach,
we have been able to build on our inclusive culture
to celebrate the different perspectives that our
employees bring to the workplace. In 2022, we
held learning sessions focused on educating
our employees on the impacts of systemic
barriers to equity facing a wide-range of diverse
communities. We also implemented unconscious
bias mitigation and awareness training to help
leaders across the organization understand the
impacts of unconscious bias on our decision-
making processes. Every employee has a speciﬁc
culture-related performance objective, which
includes a strong focus on DE&I. Additionally,
for all executive leaders, annual performance
objectives and reviews include a speciﬁc focus
on representation and diversity trends within the
workforce. The importance of DE&I is consistently
reinforced by executive leadership through town
hall meetings, employee communications, and
active participation in and sponsorship of our
employee resource groups (ERGs). A diverse and
inclusive workforce makes us stronger, more agile,
more innovative, and more adaptable.

17
17

Employee resource groups (ERGs).

We maintain eight ERGs sponsored by members
of Ally’s Executive Council and chaired by leaders
from multiple levels of management across Ally.
This July, Ally celebrated the 5-year anniversary of
these ERGs, which were created to recognize and
embrace our differences that make us stronger. On
the ﬁfth anniversary, Ally’s eight ERGs have grown
and matured with more than 50% of teammates
now part of at least one group.

Since 2017, the ERGs have welcomed numerous
guest speakers, held Lunch & Learns and ‘Let’s
Talk About It’ sessions, and given back in our
communities. Through dedicated focus months,
each ERG has a chance to step into the spotlight
and highlight themes driving them and invite
others to connect and engage.

All ERGs have always been and remain open to
not only those who identify, but also allies who
support their fellow teammates.

Aliados
(Hispanics/
Latinos)

AME (Asian/
Middle Eastern)

Chief Compliance
Ofﬁcer Dan Soto was
named Executive of the
Year by Association of
Latino Professionals for
America (ALPFA).

BAA (Black/
African
American)

Diverse
Abilities

Generational
ALLYs

Pride ALLYs

Veteran ALLYs

Women ALLYs

ERG engagement

228

ERG events held
in 2022

50%

of employees are a member
of at least one ERG

27%

of employees are members of
multiple ERGs

Generational
ALLYs

largest member
growth in 2022

449

employees

Women
ALLYs

Most members

24%

of total employee
population

The average ERG member:

Is more likely to
recommend Ally as
an employer

Has a greater sense
of “belonging”

Committed to
environmental
sustainability.

At Ally, we recognize that a healthy environment
is critical for a productive and equitable society
that supports the well-being of all our stakeholders
– our customers, employees, shareholders,
suppliers and community partners. Being an
environmentally responsible company requires us
to continue to build sustainability practices into
the cultural fabric of Ally, with a focus on managing
our own environmental footprint, educating and
encouraging our stakeholders to do the same, and
taking action to facilitate the transition to a low-
carbon economy. These actions will result in lower
costs, lower risk and increased opportunities. But
beyond that, it is the right thing to do to ensure a
common future for all.

As the Ally Sustainability Ofﬁce entered its ﬁrst
full calendar year, the team focused on building
out its programs and processes across the core
areas of Climate Risk Management, Environmental
Stewardship and Transparency and Accountability.
To drive towards consistency with climate
disclosures, initiatives have been organized in
alignment with the recommendations of the Task
Force for Climate-Related Disclosures (TCFD)
across Governance, Strategy, Risk Management
and Metrics and Targets.

In 2022, Ally made progress toward this new
direction. We are proud to have completed
our second annual emissions calculation and
submitted our response to CDP (formerly known
as Carbon Disclosure Project), continuing
our commitment to the transparency of our
environmental impact. Our results again
highlight the beneﬁt of Ally’s digital bank model
that produces a smaller carbon footprint when
compared to traditional brick and mortar ﬁnancial
service providers, and we are working to be (even)
better as we focus on delivering more sustainable
operations. Our baseline emissions calculation
provides valuable insights as to potential
opportunities for reduction strategies that align

with the recommendations from the TCFD and
improve our environmental performance metrics.

We are committed to operating our business
responsibly, understanding that doing so will help
us create long-term, sustainable value for our
stakeholders and society. With an established
baseline for our environmental performance
metrics, we continue to work towards lowering our
energy and emissions impact on the environment
and are prioritizing opportunities to reduce water
consumption and divert waste from landﬁlls.

Based on guidance provided by TCFD, Ally has taken
steps to formalize our approach to climate risk
management and evaluate how best to integrate
these risks into our existing, robust risk management
framework. We conducted an initial review to
identify the most likely transmission channels for
climate-related physical and transition risks that
could impact Ally and we began evaluating the
extent to which climate risks could impact our
business through scenario analysis. We are working
strategically to integrate climate-related insights
into our decision-making and striving to help our
customers and suppliers do the same.

2022 highlights

Carbon Neutrality - Achieved operational carbon
neutrality for Scope 1 and Scope 2 emissions for
the 2nd consecutive year

Green Team - Grew the Green Teams, a network of
Ally volunteers dedicated to environmental service
making an impact within local communities

LEED Certiﬁcation – Reached 40% LEED
certiﬁcation, exceeding our 30% target

WELL Certiﬁcation - Occupy 33%
WELL certiﬁed space

Other highlights in 2022 include hosting numerous internal educational events
to bolster awareness of environmental sustainability across the Enterprise and
expanding Green Teams, a network of Ally volunteers dedicated to environmental
service. Through intentional focus across all areas of conservation – Land,
Water Use, Community Impact, Air Quality, Biodiversity and Recycling – Ally
has established several strategic partnerships within our communities, hosting
volunteer events and innovative programming throughout the year.

We are proud of the accomplishments made towards greener operations and
the impact we’re making in the community. As we evolve, we will further mature
our processes, adapting and adjusting accordingly to create real impact for
our customers, employees, and communities, as evidenced in 2022 through our
signiﬁcant community investments and environmental and social activities.

Belle Isle Conservancy
We formed a partnership with the Belle Isle Conservancy to support the work they do within the community
to protect, preserve, restore, and enhance Belle Isle Park in Detroit. As part of our partnership we organized
a Green Teams Day of Service focused on a beach cleanup, resulting in 250 pounds of trash collected.
Additionally, at the Belle Isle Aquarium, America’s oldest aquarium and a favorite local attraction since 1904,
Ally sponsored the Axolotl Tank. Axolotls are an indicator species which are critical to evaluating the vitality
of a given ecosystem. With over 175,000 visitors each year, the aquarium offers high-quality environmental
education programs to the community and local schools. Ally shares Belle Isle’s passion to educate all
generations on the importance of environmental conservation to ensure a sustainable future.

Green
Teams in
action

Hosted 40+
Engagement
events

Planted and distributed
415 Trees

Collected
2,250 lbs of trash

1,000 lbs
E-waste
recycled

1st
Recognition of
Earth Month

Served over

2,300
volunteer hours

Strategic priorities.

Our solid performance in 2022 was a result of
consistent execution of our long-term priorities for
several years.

We have built a leading digital ﬁnancial services
company and we continue to expand and enhance
our frictionless, customer-centric digital offerings.
We believe our range of innovative and competitive
products, unique brand, and commitment to “Do
It Right” for our customers is a simple, compelling
value proposition to our customers.

Ally’s strong foundation and operating results
are underpinned by the combination of our
established ﬁnancial services capabilities,
seasoned operators, disciplined risk
management approach, proven ability to adapt
and deep-rooted digital-DNA. These factors
have served as key elements of our execution
over the past decade and position us to
continue delivering results in the years ahead.

We remain committed to the continued execution
of our long-term strategic priorities that have
served us well over the past several years:

1 Differentiate our company as

a relentless ally for ﬁnancial
well-being for consumer and
commercial customers

2 Leverage our “Do it Right” culture

to drive enhanced value for
our customers, communities,
employees and shareholders

3 Grow and diversify our leading

auto, insurance and digital-bank
platforms through increased scale
and expanded product solutions
to meet customer needs

4 Drive ongoing customer growth

and relationship deepening

5 Operate under efﬁcient,

disciplined risk management and
capital allocation approaches

6 Out-execute our competition and

create differentiated advantages
through continuous investment
and evolution among our leading
experiences, products and brand

7 Deliver long-term value through

sustainable ﬁnancial results and
shareholder returns

Looking ahead, we certainly recognize the
dynamic environment we’re navigating in 2023
and the impact that will have on our industry.
While we’re focused on delivering against our
long-term strategic priorities, I want to share
what’s top of mind for me in the near-term.

First and foremost, I’m focused on strong
credit risk management – underwriting and
managing credit risk is our core competency
and the investments we’ve made in risk
management position us well to navigate this
ﬂuid environment. Cyber defense is another top
priority and we’re committed to doing whatever
it takes to protect our customers from external
threats. A strong commitment to executing
against our long-term strategic priorities with
an essentialism mindset positioning us to drive
operating efﬁciencies over time and continue
generating long-term shareholder value. And
ﬁnally, now more than ever, we must live our
name and be an ally to our dealer, corporate
ﬁnance, and consumer customers, as well as
to our people – nurturing our purpose driven
culture is even more important during periods of
heightened uncertainty.

Our purpose drives essentialism, essentialism
feeds our efforts to See Around Corners and
Embrace Disruptive Forces. That in turn drives our
execution to Be (Even) Better and brings us back
to our purpose to “Do It Right” for all stakeholders.

In closing, I want to thank Ally’s 11,600 employees,
as well as our Board of Directors, partners,
customers and shareholders. I am conﬁdent in
Ally’s ability to execute and am proud of our
teammates’ contributions to a solid 2022. Staying
true to our company’s culture has enabled us
to successfully grow through various economic
environments in the past, and the challenges
we’ll face in 2023 are opportunities to make
us stronger, better and more aligned with our
purpose. We’ve built a sustainable business
model and have demonstrated a proven ability to
deliver against our long-term priorities, and I’m
conﬁdent in our ability to continue delivering for
all stakeholders in the years ahead underpinned
by prudent, focused execution.

Jeffrey J. Brown,

Chief Executive Ofﬁcer

2022 Financial
results.

In 2022, Ally strengthened its position as a market
leading, diversiﬁed company and delivered another
year of solid ﬁnancial results as we executed against
our long-term strategic priorities.

Net income attributable to common shareholders was
$1.6 billion in 2022, compared to $3.0 billion in 2021, as
higher provision for credit losses, higher noninterest
expense, and lower other revenue outweighed higher
net interest income. Net ﬁnancing revenue improved
to $6.9 billion, up $0.7 billion from the prior year, driven
by accretive balance sheet growth and expanded
earning asset yields, partially offset by higher funding
costs.

Full year NIM was 3.85%, including Core OID of 3 bps,
up 31 bps year-over-year. Excluding Core OID, NIM was
3.88%14, up 32 bps year-over-year. Provision for credit
losses increased $1.2 billion over the prior year, due to
higher net charge offs as credit normalizes off historic
lows as well as reserve releases in the prior year.

Other revenue was down $461 million year-over-year,
including a $215 million decrease in the fair value of
equity securities in the year, compared to a $7 million
decrease in the fair value of equity securities in 2021.
Other revenue, excluding the impact of the change in
fair value of equity securities15, was down $384 million
to $1.8 billion, reﬂecting continued momentum in fee
income business like SmartAuction, but lower realized
gains given broader market trends.

Noninterest expense increased $577 million over
the prior year, largely due to continued investments
within Ally’s growing businesses, brand and
technology.

We will continue to build on these successes and are
focused on disciplined business execution and on
delivering against our long-term strategic priorities to
drive long-term value for all stakeholders.

Earnings per share (EPS)

$6.06

$5.03
$5.03

Return on equity

$3.34
$3.34

$3.03
$3.03

$2.95
$2.95

$2.88
$2.88

$2.16
$2.16

$2.15
$2.15

$1.83
$1.83

$1.68
$1.68

7.9%
7.9%

7.8%
7.8%

10.0%
10.0%

8.0%
8.0%

12.3%
12.3%

9.4% 9.1%
9.4% 9.1%

7.7%

2014
2014

2016
2016

2018
2018

2020
2020

2022
2022

2014
2014

2016
2016

2018
2018

2020
2020

GAAP EPS
GAAP EPS

Adjusted EPS16, 17
Adjusted EPS16, 17

Return on GAAP
Return on GAAP
common equity
common equity

Core Re
Core Return on Tangible
Commo
Common Equity16, 17

Calculated using a non-GAAP ﬁnancial measure. Refer to the 2022 Financial Tables later in this document for a Reconciliation to GAAP.
Adjusted other revenue is a non-GAAP ﬁnancial measure. Equity fair value adjustments related to ASU 2016-01 requires change in the fair value of equity securities to
be recognized in current period net income as compared to periods prior to 1/1/18 in which such adjustments were recognized through other comprehensive income, a
component of equity.
The following are non-GAAP ﬁnancial measures which Ally believes are important to the reader of the Consolidated Financial Statements, but which are supplemental to
and not a substitute for GAAP measures: Adjusted earnings per share (Adjusted EPS), Core pre-tax income (loss), Core pre-provision net revenue (Core PPNR), Core net
income (loss) attributable to common shareholders, Core return on tangible common equity (Core ROTCE), Adjusted total net revenue, Net ﬁnancing revenue (excluding
Core OID), Adjusted other revenue, Adjusted noninterest expense, Core original issue discount (Core OID) amortization expense, Core outstanding original issue discount
balance (Core OID balance), and Adjusted tangible book value per share (Adjusted TBVPS). These measures are used by management, and we believe are useful to
investors in assessing the company’s operating performance and capital.

24
24

Represents a non-GAAP ﬁnancial measure. Refer to the 2021 Financial Tables later in this document for a Reconciliation to GAAP.

Automotive finance.

The Auto team delivered strong results in 2022 and
demonstrated a measured approach amid a historic
interest rate environment and as persistent supply
constraints began to normalize. The Ally team
continued to focus on relationship deepening and
optimization of the business.

Full-year 2022 pre-tax income of $2.3 billion was
down $1.1 billion due to higher provision for credit
losses and higher noninterest expense. Full-year
retail auto charge-offs increased 66 bps year-over-
year to 97 bps as credit normalizes from historic lows
as well as a modest build in reserve levels.

Ally’s focus on deepening dealer relationships and
years-long efforts to increase application volume,
coupled with enhancements in digital capabilities
positioned us to generate $46.4 billion in consumer
loans and leases in 2022 while maintaining a
consistent credit origination proﬁle. The strength
in consumer auto originations partially offset
the continued headwind from a slow rebound in
ﬂoorplan balances driven by market conditions.

“

Ally continues to drive deeper
dealer relationships, with
applications of 12.5 million
across more than 23,000
dealers18.”

Estimated retail auto
originated yield 19

2021

2022

7.10%

8.24%

Consumer originations increased $0.1 billion in 2022
to $46.4 billion, with used volume of $30.1 billion, or
65% of total 2022 originations, $12.6 billion of new
retail volume and $3.7 billion of leases. Estimated
retail auto originated yield was 8.24%19 in 2022
compared to 7.10% in 2021 primarily driven by the
increase in benchmark interest rates.

Broadly, the auto team continues to realize the
beneﬁts of our leading, agile platform underpinned
by a high-tech and high-tough model. Consistent
application ﬂow, driven by stable and growing dealer
relationships, enables Ally to be selective in what we
approve and originate. We have unwavering focus
on high-impact strategies that align to our core
strengths, and we remain well-positioned to deliver.

‘Active US Dealers’ deﬁned as all dealers who utilize one or more of Ally’s
products including consumer & commercial lending,SmartAuction or
Commercial Services Group and excludes RV Commercial & Consumer lines
of business exited in 2Q 2018.
Estimated retail auto originated yield is a ﬁnancial measure determined
by calculating the estimated average annualized yield for loans originated
during that period. At this time, there currently is no comparable GAAP
ﬁnancial measure for Estimated Retail Auto Originated Yield and therefore
this forecasted estimate of yield at the time of origination cannot be
quantitatively reconciled to comparable GAAP information.

Insurance.

Ally’s Insurance business offers consumer ﬁnancial
protection products sold primarily through
the automotive dealer channel in the United
States and Canada and is a leading provider of
commercial insurance products sold directly to
dealers throughout the United States. We serve
approximately 3.0 million consumer customers and
have approximately 4,600 dealer relationships.
Our insurance franchise is deeply integrated
with our auto ﬁnance business enhancing our
value proposition to our vast dealer network
by expanding the suite of consumer protection
products dealers can offer their customers and by
providing valuable insurance products to dealers
that protect their business.

The insurance business posted another strong year,
with enhanced collaboration across Auto Finance,
strengthening a uniﬁed dealer value proposition.
Total net written premiums reached $1.1 billion,
which represented the ﬁfth consecutive year above
$1 billion. Notably, the business experienced the
lowest weather losses since our 2014 IPO, reﬂecting
lower weather activity and strong mitigation
efforts during Hurricane Ian. Going forward, we
remain focused on leveraging our signiﬁcant dealer
network and holistic offerings to drive further
integration of insurance across auto ﬁnance.

Corporate finance.

Ally’s corporate ﬁnance team has over 20-years of
demonstrated success throughout multiple business
and credit cycles. Full-year 2022 pretax income of
$282 million was ﬂat year-over-year as higher revenue
was offset by elevated noninterest expense to support
asset growth. The held for investment portfolio
reached $10.1 billion.

Corporate Finance’s portfolio continues to perform
well, reﬂecting the team’s disciplined approach
to underwriting and servicing. The loan portfolio
is diversiﬁed across industries, with asset-based
loans comprising 59% of the portfolio and a ﬁrst-lien
position in virtually 100% of exposures.

Insurance

approximately 3.0 million
consumer customers

approximately 4,600
dealer relationships

Mortgage finance.

Full year 2022 pre-tax income was $55 million,
up $23 million from 2021, as higher net interest
income due to lower premium amortization was
partially offset by lower gain on sale activity.
Direct-to-consumer originations totaled $3.3
billion in 2022, down $7.2 billion year-over-year,
reﬂecting broader market conditions. Customer
engagement remained strong in 2022 with 52% of
our originations sourced from existing Ally Bank
depositors, further underscoring the signiﬁcance
of our growing multi-product relationships.

Corporate ﬁnance
Held for investment loans

$10.1B

$6.0B

$4.6B

$3.2B

$1.8B

2014

2016

2018

2020

2022

Our values in action.

LEADing the way awards

The LEADing the Way Awards celebrate the employees who embody our LEAD core values by being true
champions of Ally’s winning culture, by going above and beyond in their every day, and by fulﬁlling Ally’s
purpose to “Do It Right”.

LEAD award employee spotlight

Tylin S.
Auto – Director, Sales Operations
Tylin has spearheaded signiﬁcant growth opportunities and Finance and Insurance product
launches this year. He is considered the subject matter expert of his peer group and has quickly
established himself as a leader. He provides outstanding customer experience for some of Ally’s
largest dealer groups and is widely recognized by dealers who participate in Ally structured
insurance plans as a trusted advisor. Tylin goes above and beyond to provide excellent customer
service to dealers and built a strong bridge between multiple matrix partners across auto and
insurance to drive ﬁnancial results that are favorable for Ally. His teammates are equally effusive in
their praise of his involvement in driving the team’s insurance results, and his total commitment to
Ally’s culture is reﬂected in his willingness to accept his role as the PRIDE small site co-lead.

Samantha N.
Ally Invest – Director, Wealth Management
Samantha was the lead product owner in deﬁning, building and executing the delivery of Wealth
Management. She has an exceptional reputation as a thoughtful, driven, and collaborative leader with
an expertise that is unique to Ally. She is frequently nominated for I’m an Ally by her peers and other
leaders, and has built strong relationships across Ally during the Wealth buildout. She is highly focused
on Ally’s culture and DE&I, taking a lead role with the Black/African American this year. She was also
recently awarded the 50 Under 50 award by the Association of African American Financial Advisors.

Lee W.
Technology – Fellow, Architecture
Lee leads the digital architecture team. He is a technical expert of the highest order and is
constantly sought out for his knowledge. Lee’s ﬁngerprints are on every major strategic technology
initiative from Cloud, API, Single Pane of Glass, Architecting for Future Growth, and Digital. More
than his aptitude, Ally recognizes him for his attitude. He always ﬁnds a way to get to a yes. He
always leans in to support his peers and partners across the company to advance Ally’s Company
Platform strategy and Tech labs.

Carey B.
Technology - Senior Director, Software Engineering
In 4.5 years at Ally, Carey has been able to make a considerable impact to the technology
organization across a number of different applications and platforms. She led the development and
build out of Ally’s Enterprise API practice while continuing to grow her technology portfolio which
includes Account Opening, Ally’s Storefront and most recently Credit Card. She is also a Culture
Champion, participating in the Women in Technology group, partnering with Women Who Code and
serving the community through numerous Ally volunteering events. She’s actively involved in Ally’s
Early Talent programs and was on the Ally Tech Labs Curriculum committee developing a program
to onboard and train newly hired employees. Carey embraces the Ally “Do It Right” culture; she is
committed to the growth of the organization, and it’s drive for innovation. She fosters team building
and investing in talent and serves as a mentor to employees across the organization.

Expanded mental health beneﬁts
for the whole family through no
cost, enhanced access to counseling
sessions and online resources and
workshops

Ongoing ﬁnancial education
workshops and free CFPs to provide
tools and resources for employees
to promote informed and effective
decisions with ﬁnancial resources

Expanding LGBTQ+ support through
Inclusive Care including help
locating providers and specialists
that are educated and trained to
address the unique needs of the
LGBTQ+ community

Employees.

#OwnIt2023 all employees across
the enterprise received another
#OwnIt grant of 100 shares in
January 202320

Discretionary contribution of 2%
to retirement plans for all U.S. and
Canadian employees. This being
the 13th consecutive year of the
discretionary contribution for U.S.
employees

Enhanced fertility and childbirth
support including elective egg/
sperm freezing and certiﬁed doulas
for pregnancy support

Increased minimum wage to $23/hr

42%

50%

of directors on our board are
women or people of color*

of our executive council are
women or people of color*

82%

of eligible women or people of
color were promoted or moved
into new roles to advance their
career in 2022*

*Reﬂects data as of December 31, 2022.

retention rate for women
or people of color in 2022*

In January 2023, for the fourth consecutive year, we awarded all active, regular
Ally employees with 100 restricted stock units, up to a maximum grant date value
of $5,000, subject to a 3-year cliff vesting schedule, in recognition of our notable
accomplishments and to support a founder’s mentality.

Customers.

Introduced CoverDraft, a free service
that further enhances overdraft
protection and helps take the stress out
of accidental overspending

Launched Wealth, Ally’s new wealth
management offering makes dedicated,
holistic human advisory more accessible
by lowering the barriers to entry

Ally Home: Expanded Ally powered by
Better to all 50 states + Washington D.C.

Insurance: Supported dealers through
Hurricane Ian and several other weather
and theft events

Launched Ally Credit Card, a product
that complements Ally’s existing
suite of offerings and aligns with our
strategy to be the leading full-service
digital bank

Launched Early Direct Deposit, giving
customers access to their paycheck
up to 2 days early

Launched white-label SmartAuction
product, further enhancing the
support of dealer customers

Expanded application passthrough
programs, which offer increased
loan opportunity to a more diverse
consumer base

Servicing: over 60% of outbound
collections managed digitally, and over
50% adoption of online self service tools

Sold 7,000,000th vehicle through
SmartAuction online wholesale platform

Highly engaged customer base

Smart savings
tools

Multi-product
customers

New customer
adoption rate

10%

179%

Deposit customers with
an Ally Home, Invest or
Credit Card Relationship

Compounded annual
growth rate since 2016

3M Buckets created

since launch

Smart savings tool
users vs. non-users

2x
2x

More likely to be a multi-product relationship

Communities.

Our approach to community is inclusive and
integrates our employees across the organization.
We help our employees develop their own skills
while serving our communities with their time and
talent. We encourage them to utilize eight paid
hours per year to volunteer in their communities,
and in 2022, we volunteered approximately
44,000 hours, a record for us. We also matched
our employees donations of time and dollars,
resulting in $2.3 million to hundreds of nonproﬁt
organizations serving our communities. Both of
these milestones reﬂect our culture of giving back.

Our philanthropic approach is based on a
framework of economic mobility. We support
programs that provide opportunities to
individuals and families in low-and moderate-
income communities with a focus on three
areas: affordable housing, ﬁnancial literacy, and
workforce development. We solely funded the Ally
Charitable Foundation, a non-consolidated entity,
which has approximately $70 million in assets as
of December 31, 2022, to drive positive and lasting
impacts in our communities. In 2022, the Ally
Charitable Foundation made a grant of $5 million,
to be funded over 5 years, to the Atrium Health
Foundation to support equitable opportunities for
individuals pursing careers in healthcare.

Additionally, the Ally Charitable Foundation
increased its ﬁnancial support of Trust-Based
Philanthropy, a philanthropic approach that
supports extraordinary, grassroots nonproﬁts led
by Black, Hispanic, and Latino individuals. Beyond
its ﬁnancial support, the organizations were
provided professional development, technical
assistance, and marketing support. One of our
largest and most powerful initiatives is Moguls in
the Making, an annual competition that fosters
opportunities for students from Historically Black
Colleges and Universities. The annual program
was launched in 2019 in collaboration with the
Thurgood Marshall College Fund and the Sean
Anderson Foundation.

In 2022, we sponsored the fourth Moguls in the
Making competition, with 60 students, who brought
innovative and impactful solutions to economic
mobility challenges. Since the program’s inception,
we have offered internships to 43 students, which
have often led to permanent job placements within
Ally or the broader ﬁnancial-services industry.
Additionally, in 2022, we identiﬁed an opportunity
to support the more than 400 students who were
in attendance at the 22nd Thurgood Marshall
Leadership Institute, which connects students to
organizations seeking diverse talent.

Thurgood Marshall Leadership
Institute

In partnership with the Thurgood
Marshall College Fund (TMCF), Ally
launched a clothing boutique to give
college students from HBCUs the
opportunity to prepare for professional
interviews and look their best. The idea
began as a discussion between Ally’s
Chief Diversity Ofﬁcer and several
graduates of the Moguls in the Making
program who went on to become Ally
employees. The one-day event in NYC
featured a pop-up boutique stocked
with donations of professional clothing
from the Ally teams in Charlotte and
Detroit and showcased the company’s
commitment to DEI and preparing
students for workforce readiness.

Our ﬁnancial education approach is focused
on providing content and programs to advance
economic mobility for individuals and families.
We leverage our team members and community
partners to teach critical ﬁnancial skills to assist
those who we serve towards their ﬁnancial goals.

We committed approximately
$1.1 billion and $1.5 billion in
loans and investments that
primarily beneﬁt low- and
moderate-income individuals
and communities as part of our
CRA program during the years
ended December 31, 2022, and
2021, respectively.

Ally provides $5 million gift to
Atrium Health Foundation

The Ally Charitable Foundation pledged a
$5 million gift to Atrium Health Foundation
in Charlotte to support equitable
opportunities for individuals to pursue
careers in healthcare. The gift establishes
the Ally Charitable Foundation Workforce
Development Center of Excellence as well
as the Ally Charitable Foundation Workforce
Development Scholarship Fund.

Through the Ally Charitable Foundation
Workforce Development Center of
Excellence, individuals from marginalized
or diverse populations will have access to a
variety of career development pathways to
seek their education. Existing programs –
currently serving more than 1,400 students,
66% of whom are diverse participants – are
offered to high school students, Title I high
school graduates and current entry-level
Atrium Health teammates. Our gift will
expand the Atrium Health Foundation’s
current professional development
programming and target individuals who
need additional skills to enter a variety of
high-paying careers in healthcare.

Our work in the communities is woven throughout
our culture. In 2022, we executed on our ongoing
commitment of expanding access to capital
for Black, Hispanic, and Latino communities by
deploying $33 million in loans and investments
speciﬁcally to minority- and women-led
organizations such as The 22 Fund, BetaBoom, and
Raza Development Fund.

These loans and investments are
instrumental in providing the ﬁnancial
foundation required to help develop and
create more opportunities for the next
generation of successful Black, Hispanic,
and Latino entrepreneurs, investors,
affordable housing developers, and
community leaders. We also provided
nearly $1.5 million in grants to 68 nonproﬁt
organizations, including 17 organizations
that are either minority-led or supported
initiatives targeting primarily Black,
Hispanic, and/or Latino individuals.

Additionally, Ally Bank received
consecutive “Outstanding” CRA ratings in
our last two reviews.

Ally commits $2 million to support
and develop Charlotte-area
students at Queens University

Ally provided a $2 million commitment to
support the education for Charlotte-area
students from low-income communities and
provide career opportunities to help them
succeed as future leaders.

The four-year investment in the Queens
University Charlotte Talent Initiative (CTI) –
part of our ongoing workforce development
efforts – will provide full-tuition scholarships,
internships, and job placement opportunities
upon graduation for students in the Ally
cohort. The cohort, which will begin in the
2023 Fall semester, will provide students
with computing and data analytics courses,
onsite experiences, and access to mentors.

Ally is an inaugural corporate partner for
CTI – in addition to providing opportunities
to students, this will also allow us to bring in
more diverse talent that is representative of
our communities and customers.

3232

Ally executives in residence at
Charlotte Mecklenburg schools

The Charlotte Executive Leadership Council
(CELC) has brought together leaders from
top Charlotte area businesses, colleges
and universities to advocate for equitable
opportunity and solutions that improve the
metro area’s economy and quality of life. In
2022, education became a core focus as the
CELC partnered with Charlotte Mecklenburg
Schools (CMS). The schools were navigating
a leadership change and the lingering effects
of the pandemic and needed help. Ally CEO
and CELC member Jeffrey J. Brown was one of
the ﬁrst to raise his hand. He offered two Ally
executives to work full-time with the district
for a full year.

Ally Executive Director LaShauna Lowry was
the ﬁrst to join. Her objective was to help
provide students with tutoring. The pandemic
caused students to fall behind, and the CMS
school district did not have enough staff to
support them all. Lowry worked directly with a
third-party tutoring vendor and the district to
get the $50 million endeavor — serving 6,000
students at 42 schools — up and running by
October, months earlier than the district would
have been able to accomplish on its own.

Ally Chief of Staff for Consumer & Commercial
Bank Elizabeth Sterling also joined CMS in
2022 to support critical processes at the
executive leadership and strategic levels.
Sterling is working with the district to review
and evaluate its high-impact processes and
routines, including budgeting and strategic
planning.

The goal for Sterling and Lowry’s work, along
with the other nine local executives on loan,
is to design systems and routines to optimize
CMS processes through project management,
coaching and guidance — providing the
district with an effective, efﬁcient and
sustainable system for years to come.

Suppliers.

Ally’s Supplier Diversity program focuses on
diversity and inclusion amongst our supplier
base. The Supplier Diversity program includes
a proactive business strategy encouraging
the use of diverse suppliers deﬁned as those
owned by U.S.-based minorities, women, LGBTQ,
veterans, service-disabled veterans and those
with disabilities, and small or disadvantaged
businesses deﬁned by local, state, or federal
classiﬁcations.

Supplier Diversity
accolades

Since the program’s inception in 2020, we have made great
strides, and the 2022 highlights include:

•

Achieved $135M in Tier 1 diverse spend comprised of certiﬁed
Minority and Women-Owned Business Enterprises, Small Business
and classiﬁed diverse spend in 2022

•

Began addressing Supplier Sustainability for Ally’s Supply Chain

• Hosted 2nd annual Supplier Symposium in February 2022 which

engaged more than 50 diverse suppliers in a company-wide event
focusing on interactive industry breakout sessions, a supplier panel,
and discussion with Ally’s CEO on DE&I

•

Engaged with 100+ prospective diverse suppliers during Ally’s
2022 quarterly Spotlight events, intended to increase access and
connection for prospective diverse suppliers

Increased both ﬁrst-tier diverse spend and our third-party supplier
spend by $30M and over $50M, respectively

Expanded our Tier 2 reporting to include over 100 supplier
relationships yielding 150%+ growth in year over-year Tier 2 spend

2022 Financial tables and definitions.

ADJUSTED EARNINGS PER SHARE

($ per share)

GAAP EPS (diluted)

Discontinued Operations, Net of Tax

Core OID, Net of tax1

Change in Fair Value of Equity Securities, Net of Tax2

Repositioning Items, Net of Tax3

Signiﬁcant Discrete Tax Items4

Capital Actions (Series A & G)

Adjusted EPS

ADJUSTED TANGIBLE BOOK VALUE PER SHARE

($ per share)

GAAP Shareholder’s Equity

Preferred Equity

Goodwill & Identiﬁable Intangibles, Net of DTLs

Tangible Common Equity

Tax-effected Core OID Balance5

Series G Discount

FY 2022

FY 2021

FY 2020

FY 2019

FY 2018

$ 5.03

$ 8.22

$ 2.88

$ 4.34

$ 2.95

0.00

0.10

0.53

0.19

0.01

0.08

0.02

0.49

(0.21)

0.00

0.07

0.02

0.06

(0.06)

(0.18)

0.13

(0.51)

0.16

0.22

$ 6.06

$ 8.61

$ 3.03

$ 3.72

$ 3.34

FY 2022

FY 2021

FY 2020

FY 2019

FY 2018

$ 43.0

$ 50.5

$ 39.2

$ 38.5

$ 32.8

(7.8)

(3.0)

32.2

(2.2)

(6.9)

(2.8)

40.8

(2.1)

(1.0)

38.2

(2.2)

(1.2)

37.3

(2.2)

(0.7)

32.1

(2.1)

Adjusted Tangible Book Value Per Share

$ 30.0

$ 38.7

$ 36.1

$ 35.1

$ 29.9

ADJUSTED NON-INTEREST EXPENSE

($ millions)

FY 2022

FY 2021 FY 2020

FY 2019

FY 2018

GAAP Noninterest Expense

[z]

$ 4,687

$ 4,110

$ 3,833

$ 3,429

$ 3,264

Repositioning

$ 77

$ 50

Adjusted NIE (ex. Repositioning)

[c]

$ 4,610

$ 4,110

$ 3,783

$ 3,429

$ 3,264

CORE PRE-PROVISION NET REVENUE

($ millions)

FY 2022

FY 2021

FY 2020

FY 2019

FY 2018

Pre-Provision Net Revenue

[x]+[y]

$ 3,741

$ 4,096

$ 2,853

$ 2,965

$ 2,540

Core Pre-Provision Net Revenue

[a]+[b]

$ 4,075

$ 4,271

$ 2,909

$ 2,905

$ 2,747

ADJUSTED TOTAL NET REVENUE

($ millions)

FY 2022

FY 2021 FY 2020

FY 2019

FY 2018

GAAP Net Income Attributable to Common Shareholders

[x]

$ 6,850

$ 6,167

$ 4,703

$ 4,633

$ 4,390

Core OID

Net Financing Revenue (ex. Core OID)

GAAP Other Revenue

Accelerated OID & Repositioning Items3

Change in Fair Value of Equity Securities6

Adjusted Other Revenue

Adjusted Total Net Revenue

[a]

[y]

$ 6,892

$ 6,205

$ 4,739

$ 4,662

$ 4,476

$ 1,578

$ 2,039

$ 1,983

$ 1,761

$ 1,414

215

131

(29)

(89)

121

[b]

$ 1,793

$ 2,177

$ 1,954

$ 1,672

$ 1,535

$ 8,685

$ 8,381

$ 6,692

$ 6,334

$ 6,011

Unless the context otherwise requires, the following deﬁnitions apply. The term “loans” means the following consumer and commercial products associated with our direct and indirect ﬁnancing activities:
loans, retail installment sales contracts, lines of credit, and other ﬁnancing products excluding operating leases. The term “operating leases” means consumer- and commercial-vehicle lease agreements
where Ally is the lessor and the lessee is generally not obligated to acquire ownership of the vehicle at lease-end or compensate Ally for the vehicle’s residual value. The terms “lend,” “ﬁnance,” and
“originate” mean our direct extension or origination of loans, our purchase or acquisition of loans, or our purchase of operating leases as applicable. The term “consumer” means all consumer products
associated with our loan and operating-lease activities and all commercial retail installment sales contracts. The term “commercial” means all commercial products associated with our loan activities,
other than commercial retail installment sales contracts. The term “partnerships” means business arrangements rather than partnerships as deﬁned by law.

CORE RETURN ON TANGIBLE COMMON EQUITY (ROTCE)

($ millions)

FY 2022

FY 2021

FY 2020

FY 2019

FY 2018

GAAP Net Income Attributable to Common Shareholders

$ 1,604

$ 3,003

$ 1,085

$ 1,715

$ 1,263

Discontinued Operations, Net of Tax

Core OID

Repositioning Items3

Change in Fair Value of Equity Securities2

Tax on Core OID, Repositioning Items

Change in Fair Value of Equity Securities6

Signiﬁcant Discrete Tax Items & Other

215

(70)

228

(57)

(78)

(29)

(89)

(1)

(201)

121

(43)

Core Net Income Attributable to Common Shareholders

$ 1,929

$ 3,146

$ 1,141

$ 1,472

$ 1,427

GAAP Shareholder’s Equity7

Preferred Equity7

Goodwill & Intangibles, Net of DTLs7

Tangible Common Equity

Core OID Balance7

Net Deferred Tax Asset7

$ 14,348

$ 16,239

$ 14,118

$ 13,842

$ 13,381

2,324

(921)

1,394

(489)

(411)

(368)

(290)

$ 11,103

$ 14,356

$ 13,707

$ 13,474

$ 13,091

(862)

(820)

(956)

(451)

(1,046)

(1,078)

(96)

(158)

(1,135)

(391)

Normalized Common Equity

$ 9,421

$ 12,949

$ 12,566

$ 12,239

$11,565

Core Return on Tangible Common Equity7

20.5%

24.3%

9.1%

12.0%

12.3%

ORIGINAL ISSUE DISCOUNT AMORTIZATION EXPENSE

($ millions)

Core OID Amortization Expense8

Other OID

GAAP OID Amortization Expense

FY 2022

FY 2021

FY 2020

FY 2019

FY 2018

$ 42

$ 53

$ 38

$ 49

$ 36

$ 49

$ 29

$ 42

$ 86

$ 101

OUTSTANDING ORIGINAL ISSUE DISCOUNT BALANCE

($ millions)

FY 2022

FY 2021

FY 2020

FY 2019

FY 2018

Core Outstanding OID Balance (Core OID Balance)

$ (841)

$ (883)

$ (1,027)

$ (1,063)

$(1,092)

Other Outstanding OID Balance

(40)

(37)

(43)

GAAP Outstanding OID Balance

$ (882)

$ (923)

$ (1,064)

$ (1,100)

$ (1,135)

1 Tax rate 21% starting 1Q 2018; 35% starting 1Q 2016; 34% prior.

Change in fair value of equity securities reﬂects equity fair value adjustments related to ASU 2016-01, effective 1/1/2018, which requires change in the fair value of equity securities to
be recognized in current period net income as compared to prior periods in which such adjustments were recognized through other comprehensive income, a component of equity

Repositioning items are primarily related to the extinguishment of high cost legacy debt and strategic activities.

Signiﬁcant discrete tax items do not relate to the operating performance of the core businesses. 2017 effective tax rate was impacted primarily by a $119 million revaluation of
federal deferred tax assets and liabilities and related valuation allowance recorded in 4Q 2017 due to the enactment of the Tax Cuts and Jobs Act in 2017. 2019 effective tax rate was
signiﬁcantly impacted by the release of valuation allowance on foreign tax credit carryforwards.

Tax rate 21% starting 4Q 2017; 35% starting 1Q 2016; 34% prior.

Tax rate 21% starting 1Q 2018; 35% prior.

Calculated using 2-period average.

Excludes accelerated OID.

Board of directors.

Our Board of Directors play a key role in overseeing our strategy. In
addition, our Executive Council continues to drive performance and our
culture by focusing on our LEAD core values and “Do It Right” mantra.
Between our Board, Executive Council and 11,600 employees, we have the
right team in place to position Ally for sustained growth.

Franklin W. Hobbs - Chair
Former President and CEO,
Ribbon Communications

Kim S. Fennebresque
Former Chairman and CEO,
Cowen Group

Kenneth J. Bacon
Former Executive Ofﬁcer,
Fannie Mae

Marjorie Magner
Former Executive Ofﬁcer,
Citigroup

Maureen A. Breakiron-Evans
Former CFO, Towers Perrin

Brian H. Sharples
Former Chairman and CEO,
HomeAway

Jeffrey J. Brown
Current CEO, Ally Financial

William H. Cary
Former Executive Ofﬁcer,
General Electric

Mayree C. Clark
Former Executive Ofﬁcer,
Morgan Stanley

Melissa Goldman
Current Vice President,
Google, LLC

Michael F. Steib
Current CEO, Artsy

David Reilly
Former Executive Ofﬁcer,
Bank of America Corporation

Jeffrey J. Brown
Chief Executive Ofﬁcer

Andrea Brimmer
Chief Marketing and Public
Relations Ofﬁcer

Bradley (Brad) J. Brown
Corporate Treasurer & Interim
Chief Financial Ofﬁcer

David DeBrunner
Vice President, Controller, and
Chief Accounting Ofﬁcer

Daniel Eller
President, Insurance

Sean Leary
Head of Investor Relations
and Enterprise FP&A

Sathish Muthukrishnan
Chief Information,
Data and Digital Ofﬁcer

William (Bill) Hall, Jr.
Co-President, Corporate
Finance

Diane Morais
President, Consumer &
Commercial Banking, Ally Bank

Kathleen (Kathie) L. Patterson
Chief Human Resources Ofﬁcer

Stephanie Richard
Chief Audit Executive

Jason Schugel
Chief Risk Ofﬁcer

Dan Soto
Chief Compliance Ofﬁcer

Scott Stengel
General Counsel

Alison Summerville
Business Administration
Executive

Douglas Timmerman
President, Dealer Financial
Services

Executive
management.

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K

☑

☐

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

For the fiscal year ended December 31, 2022, or

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

For the transition period from

Commission file number: 1-3754
ALLY FINANCIAL INC.
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of incorporation or organization)

38-0572512
(I.R.S. Employer Identification No.)

Ally Detroit Center
500 Woodward Ave.
Floor 10, Detroit, Michigan
48226
(Address of principal executive offices)
(Zip Code)
(866) 710-4623
(Registrant’s telephone number, including area code)

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

Title of each class
Common Stock, par value $0.01 per share

Trading Symbol(s)
ALLY

Name of each exchange on which registered
NYSE

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☑ No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☑

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to
Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required
to submit such files). Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and
“emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

Emerging growth company

☐

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

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its
internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting
firm that prepared or issued its audit report. ☑

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included
in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☑

The aggregate market value of the Registrant’s common stock (Common Stock) held on June 30, 2022 by non-affiliated entities was
approximately $10.5 billion (based on the June 30, 2022 closing price of Common Stock of $33.51 per share as reported on the New York Stock
Exchange). At February 22, 2023, the number of shares outstanding of the Registrant’s common stock was 300,809,630 shares.

Documents incorporated by reference: portions of the Registrant’s Proxy Statement for the annual meeting of stockholders to be held on May 3,
2023, are incorporated by reference in this Form 10-K in response to Items 10, 11, 12, 13, and 14 of Part III.

INDEX

Ally Financial Inc. • Form 10-K

Part I

Item 1.

Business

Item 1A.

Risk Factors

Item 1B.

Unresolved Staff Comments

Item 2.

Item 3.

Item 4.

Part II
Item 5.

Item 6.

Item 7.

Properties

Legal Proceedings

Mine Safety Disclosures

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities

[Reserved]

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

Item 8.

Financial Statements and Supplementary Data

Management’s Report on Internal Control over Financial Reporting

Reports of Independent Registered Public Accounting Firm

Consolidated Statement of Income

Consolidated Statement of Comprehensive (Loss) Income

Consolidated Balance Sheet

Consolidated Statement of Changes in Equity

Consolidated Statement of Cash Flows

Notes to Consolidated Financial Statements

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Item 9A.

Controls and Procedures

Item 9B.

Item 9C.

Part III

Item 10.

Item 11.

Item 12.

Item 13.

Item 14.

Part IV

Item 15.

Item 16.

Signatures

Other Information

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Directors, Executive Officers, and Corporate Governance

Executive Compensation

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Certain Relationships and Related Transactions, and Director Independence

Principal Accountant Fees and Services

Exhibits and Financial Statement Schedules

Form 10-K Summary

Page

109

110

111

114

116

117

119

120

122

202

203

205

206

208

209

Index of Defined Terms

Ally Financial Inc. • Form 10-K

Glossary of Abbreviations and Acronyms

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

Term

ALCO

ALM

A.M. Best

AMLA

ASC

ASU

Aurora

Audit Committee of the Ally Board of Directors

Definition

Asset-Liability Committee

Asset Liability Management

A.M. Best Company, Inc.

Anti-Money Laundering Act of 2020

Accounting Standards Codification

Accounting Standards Update

Aurora Acquisition Corp.

Basel Committee Basel Committee on Banking Supervision

BHC

Bornhuetter-Ferguson

Bank holding company

BHC Act

Bank Holding Company Act of 1956, as amended

BMC

Board

CDC

CECL

CEO

CFE

CFPB

CFTC

COH

Better Mortgage Company

Ally Board of Directors

Certificate of deposit

Centers for Disease Control and Prevention

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

Chief executive officer

Cities for Financial Empowerment

Consumer Financial Protection Bureau

U.S. Commodity Futures Trading Commission

Corporate overhead

COVID-19

Coronavirus disease 2019

CRA

CSG

CVA

DE&I

DIF

Community Reinvestment Act of 1977, as amended

Commercial Services Group

Credit valuation adjustment

Diversity, equity, and inclusion

Deposit Insurance Fund

Dodd-Frank Act

Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, as amended

DRR

DVA

EAD

Designated reserve ratio

Debit valuation adjustment

Exposure at default

EGRRCP Act

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

ERG

ERMC

ESG

ETF

Employee resource group

Enterprise Risk Management Committee

Environmental, social, and governance

Exchange-traded fund

Exchange Act

Securities Exchange Act of 1934, as amended

F&I

Finance and insurance

Fair Square

Fair Square Financial Holdings LLC and its subsidiaries

FASB

FDI Act

FDIC

FDICIA

Financial Accounting Standards Board

Federal Deposit Insurance Act, as amended

Federal Deposit Insurance Corporation

Federal Deposit Insurance Corporation Improvement Act of 1991, as amended

Index of Defined Terms

Ally Financial Inc. • Form 10-K

Term

Definition

FHC

FHLB

FinCEN

FINRA

Fintech

FRB

FSR

FTP

GAP

GDP

Financial holding company

Federal Home Loan Bank

Financial Crimes Enforcement Network

Financial Industry Regulatory Authority

Financial-technology

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

Financial Strength Rating

Funds-transfer pricing

Guaranteed asset protection

Gross domestic product of the United States of America

GLB Act

Gramm-Leach-Bliley Act of 1999, as amended

General Motors Company

Human resources

IB Finance

IB Finance Holding Company, LLC

ICP

ICR

IRA

LCR

LGD

Incentive compensation plan

Issuer Credit Rating

Individual retirement account

Liquidity coverage ratio

Loss given default

LIBOR

London Interbank Offered Rate

LIBOR Act

Adjustable Interest Rate (LIBOR) Act

LIHTC

LMI

LTV

MD&A

NFA

NYDFS

NYSE

OTC

P&C

PCA

PCD

PSU

ROU

RSU

RWA

SEC

Low-income housing tax credit

Low-to-moderate income

Loan-to-value

Management’s Discussion and Analysis of Financial Condition and Results of Operations

National Futures Association

New York Department of Financial Services

New York Stock Exchange

Over-the-counter

Property and casualty

Prompt corrective action

Purchased credit deteriorated

Probability of default

Performance Stock Unit or Award

Risk Committee of the Ally Board of Directors

Right-of-use

Restricted Stock Unit or Award

Recreational vehicle

Risk-weighted asset

U.S. Securities and Exchange Commission

Series 2 TRUPS

8.125% Fixed Rate/Floating Rate Trust Preferred Securities, Series 2 of GMAC Capital Trust I

SIPC

SOFR

SPE

SRO

Securities Investor Protection Corporation

Secured Overnight Financing Rate

Special-purpose entity

Self-regulatory organization

Stellantis

Stellantis N.V.

Index of Defined Terms

Ally Financial Inc. • Form 10-K

Term

Definition

Tailoring Rules

The rules implementing Title IV of the EGRRCP Act

TDR

UDAAP

UDFI

UPB

Troubled debt restructuring

Unfair, deceptive, or abusive acts or practices

Utah Department of Financial Institutions

Unpaid principal balance

The rules implementing the 2010 Basel III capital framework in the United States as well as related provisions of the

U.S. Basel III

Dodd-Frank Act, as amended from time to time

U.S. GAAP

Accounting Principles Generally Accepted in the United States of America

VIE

VMC

VSC

WAC

Variable interest entity

Vehicle maintenance contract

Vehicle service contract

Weighted-average coupon

wSTWF

Weighted short-term wholesale funding

Part I

Ally Financial Inc. • Form 10-K

Item 1. Business
Our Business

Ally Financial Inc. (together with its consolidated subsidiaries unless the context otherwise requires, Ally, the Company, we, us, or our)

is a financial-services company with $191.8 billion in assets as of December 31, 2022. The Company comprises the nation’s largest all-digital
bank and an industry-leading automotive financing and insurance business, driven by a mission to “Do It Right” and be a relentless ally for
customers and communities. The Company serves customers through a full range of online banking services (including deposits, mortgage
lending, point-of-sale personal lending and credit-card products) and securities brokerage and investment advisory services. The Company
also includes a corporate finance business that offers capital for equity sponsors and middle-market companies.

Ally is a Delaware corporation and is registered as a BHC under the BHC Act and an FHC under the GLB Act. Our primary business

lines are Dealer Financial Services, which is composed of our Automotive Finance and Insurance operations, Mortgage Finance, and
Corporate Finance. Corporate and Other primarily consists of centralized corporate treasury activities, the management of our legacy
mortgage portfolio, the activity related to Ally Invest and Ally Lending, and reclassifications and eliminations between the reportable
operating segments. Beginning in December 2021 with the acquisition of Fair Square, which we rebranded as Ally Credit Card, financial
information for our credit-card business is included within Corporate and Other. Ally Bank’s assets and operating results are included within
our Automotive Finance, Mortgage Finance, and Corporate Finance segments, as well as Corporate and Other, based on its underlying
business activities. As of December 31, 2022, Ally Bank had total assets of $181.9 billion and total nonaffiliate deposits of $152.3 billion.

Our long-term strategic objectives are centered around (1) differentiating our company as a relentless ally for financial well-being for

consumer and commercial customers, (2) leveraging our “Do it Right” culture to drive enhanced value for our customers, communities,
employees, and stockholders, (3) growing and diversifying our leading auto, insurance, and digital-bank platforms through increased scale
and expanded product solutions to meet customer needs, (4) driving ongoing customer growth and relationship deepening, (5) operating under
efficient, disciplined risk management and capital allocation approaches, (6) out-executing our competition and creating differentiated
advantages through continuous investment and evolution among our leading experiences, products and brand, and (7) delivering long-term
value through sustainable financial results and stockholder returns. Within our Automotive Finance and Insurance operations, we are focused
on strengthening our network of dealer relationships and pursuing digital distribution channels for our products and services, including
through our operation of a direct-lending platform and our work with dealers innovating in digital transactions—all while maintaining an
appropriate level of risk appetite. Within our other banking operations, including Mortgage Finance and Corporate Finance, we seek to
expand our consumer and commercial banking products and services while providing a high level of customer service. We continue to focus
on delivering significant growth and retention in deposit customers and balances while optimizing our cost of funds. Ally Lending primarily
serves medical and home improvement service providers by enabling promotional and fixed rate installment-loan products through a digital
application process at point-of-sale. At Ally Invest, we seek to augment our securities-brokerage and investment-advisory services to more
comprehensively assist our customers in managing their savings and wealth. Additionally, we acquired Fair Square in December 2021, which
provides us with a scalable, digital-first credit card platform, and advances our evolution as a leading digital consumer bank. Ally Credit Card
features leading-edge technology, and a proprietary, analytics-based underwriting model. We believe the addition of credit card to our suite of
products enhances our ability to grow and deepen both new and existing customer relationships.

Unless the context otherwise requires, the following definitions apply. The term “loans” means the following consumer and commercial

products associated with our direct and indirect financing activities: loans, retail installment sales contracts, lines of credit, and other
financing products excluding operating leases. The term “operating leases” means consumer- and commercial-vehicle lease agreements where
Ally is the lessor and the lessee is generally not obligated to acquire ownership of the vehicle at lease-end or compensate Ally for the
vehicle’s residual value. The terms “lend,” “finance,” and “originate” mean our direct extension or origination of loans, our purchase or
acquisition of loans, or our purchase of operating leases, as applicable. The term “consumer” means all consumer products associated with our
loan and operating-lease activities and all commercial retail installment sales contracts. The term “commercial” means all commercial
products associated with our loan activities, other than commercial retail installment sales contracts. The term “partnerships” means business
arrangements rather than partnerships as defined by law.

For further details and information related to our business segments and the products and services they provide, refer to the MD&A in

Part II, Item 7 of this report, and Note 26 to the Consolidated Financial Statements.

Ally Financial Inc. • Form 10-K

Industry and Competition

The markets for automotive financing, insurance, banking (including corporate finance, mortgage finance, point-of-sale personal lending,

consumer credit cards, and deposits), securities brokerage, and investment-advisory services are highly competitive. We directly compete in
the automotive financing market with banks, credit unions, captive automotive finance companies, and independent finance companies. Our
insurance business also faces significant competition from automotive manufacturers, captive automotive finance companies, insurance
carriers, third-party administrators, brokers, and other insurance-related companies. Some of these competitors in automotive financing and
insurance, such as captive automotive finance companies, have certain exclusivity privileges with automotive manufacturers whose customers
and dealers make up a significant portion of our customer base. In addition, our banking, securities-brokerage, and investment-advisory
businesses face intense competition from banks, savings associations, finance companies, credit unions, mutual funds, investment advisers,
asset managers, brokerage firms, hedge funds, insurance companies, mortgage-banking companies, and credit-card companies. Fintech
companies also compete with us directly as well as indirectly through partnership with banks and financial-services providers in lending,
deposits, securities-brokerage, investment-advisory, and other markets.

Many of our competitors have substantial positions nationally or in the markets in which they operate. Some also have significantly

greater scale, financial and operational resources, investment capacity, and brand recognition. Our competitors may be subject to different
and, in some cases, less stringent legislative, regulatory, and supervisory regimes than Ally. A range of competitors differ from us in their
strategic and tactical priorities and, for example, may be willing to suffer meaningful financial losses in the pursuit of disruptive innovation
and customer growth or to accept more aggressive business, compliance, and other risks in the pursuit of higher returns and market
valuations. Competition affects every aspect of our business, including product and service offerings and features, rates, pricing and fees,
credit limits, and customer service. Successfully competing in our markets also depends on our ability to innovate, to invest in technology and
infrastructure, to execute transactions reliably and efficiently, to maintain and enhance our reputation, and to attract, retain, and motivate
talented employees, all while effectively managing risks and expenses. We expect that competition will only intensify in the future.

Regulation and Supervision

We are subject to significant regulatory frameworks in the United States—at federal, state, and local levels—that affect the products and

services that we may offer and the manner in which we may offer them, the risks that we may take, the ways in which we may operate, and
the corporate and financial actions that we may take. We also have limited businesses and operations in Canada and other countries that must
comply with expansive legal frameworks there as well.

We are also subject to direct supervision and periodic examinations by various governmental agencies and industry SROs that are
charged with overseeing the kinds of business activities in which we engage, including the FRB, the UDFI, the FDIC, the CFPB, the SEC,
FINRA, and a number of state regulatory and licensing authorities such as the NYDFS. These agencies and organizations generally have
broad authority and discretion in restricting and otherwise affecting our businesses and operations and may take formal or informal
supervisory, enforcement, and other actions against us when, in the applicable agency’s or organization’s judgment, our businesses or
operations fail to comply with applicable law, comport with safe and sound practices, or meet its supervisory expectations. We strive to
maintain constructive relationships with supervisory authorities.

This system of regulation, supervision, and examination is intended primarily for the protection and benefit of our depositors and other
customers, the FDIC’s DIF, the banking and financial systems as a whole, and the broader economy—and not for the protection or benefit of
our stockholders (except in the case of securities laws) or non-deposit creditors. The scope, intensity, and focus of this system can vary from
time to time for reasons that range from the state of the economic and political environments to the performance of our businesses and
operations, but for the foreseeable future, we expect to remain subject to extensive regulation, supervision, and examinations.

This section summarizes some relevant provisions of the principal statutes, regulations, and other laws that apply to us. The descriptions,

however, are not complete and are qualified in their entirety by the full text and judicial or administrative interpretations of those laws and
other laws that affect us.

Bank Holding Company, Financial Holding Company, and Depository Institution Status

Ally and IB Finance, a Delaware limited liability company, are BHCs under the BHC Act, and Ally has elected to be an FHC under the

GLB Act. IB Finance is a direct subsidiary of Ally and the direct parent of Ally Bank, which is a commercial bank that is organized under the
laws of the State of Utah and whose deposits are insured by the FDIC under the FDI Act. As BHCs, Ally and IB Finance are subject to
regulation, supervision, and examination by the FRB. Ally Bank is a member of the Federal Reserve System and is subject to regulation,
supervision, and examination by the FRB, the UDFI, the FDIC, and the CFPB.

•

Permitted Activities — Under the BHC Act, BHCs and their subsidiaries are generally limited to the business of banking and to
closely related activities that are incident to banking. BHCs that qualify and elect to be treated as FHCs are generally permitted to
engage, directly or indirectly through their nonbank subsidiaries, in a broader range of financial and related activities than those that
are permissible for BHCs—for example, (1) underwriting, dealing in, and making a market in securities; (2) providing financial,
investment, and economic advisory services; (3) underwriting insurance; and (4) merchant banking activities. The FRB regulates,
supervises, and examines FHCs, as it does all BHCs, but insurance and securities activities conducted by an FHC or any of its
nonbank subsidiaries are also regulated, supervised, and examined by functional regulators such as state insurance commissioners,
the SEC, and FINRA. The expanded powers permitted to FHCs include the ability to provide insurance products and services, to
deliver our SmartAuction finder services and a number of related vehicle-remarketing services for third parties, and to offer certain

Ally Financial Inc. • Form 10-K

•

kinds of brokerage and advisory services. To remain eligible to conduct and expand these broader financial and related activities,
Ally must continue to be treated as an FHC. Refer to Note 20 to the Consolidated Financial Statements and the section below titled
Basel Capital Framework for additional information. In addition, our ability to expand these financial and related activities or to
make acquisitions generally requires that we achieve a rating of satisfactory or better under the CRA.

Further, under the BHC Act, we may be subject to approvals, conditions, and other restrictions when seeking to acquire control

over another entity or its assets. For this purpose, “control” includes (a) directly or indirectly owning, controlling, or holding the
power to vote 25% or more of any class of the entity’s voting securities, (b) controlling in any manner the election of a majority of
the entity’s directors, trustees, or individuals performing similar functions, or (c) directly or indirectly exercising a controlling
influence over the management or policies of the entity. Under rules of the FRB, whether Ally is presumed to have a “controlling
influence” over an entity is determined by applying a framework of tiered presumptions of control that are based on the percentage
of a class of voting securities held by Ally and nine other relationships with the entity. For example, Ally would be presumed to
have such a controlling influence with less than 5% of a class of voting securities and any of the following: a management
agreement with the entity, one-half or more of the directors on the entity’s board, or one-third or more of the total equity in the
entity.

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

Capital Adequacy Requirements — Ally and Ally Bank are subject to various capital adequacy requirements. Refer to Note 20 to
the Consolidated Financial Statements and the section below titled Basel Capital Framework for additional information.

Capital Planning and Stress Tests — Under the Tailoring Rules, Ally is generally subject to supervisory stress testing on a two-
year cycle and exempted from mandated company-run capital stress testing requirements. Ally is also required to submit an annual
capital plan to the FRB.

Ally’s annual capital plan must include an assessment of its expected uses and sources of capital and a description of all

planned capital actions over a nine-quarter planning horizon, including any issuance of a debt or equity capital instrument, any
dividend or other capital distribution, and any similar action that the FRB determines could have an impact on our capital. The plan
must also include a detailed description of Ally’s process for assessing capital adequacy, including a discussion of how Ally, under
expected and stressful conditions, will maintain capital commensurate with its 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 its operations by maintaining
ready access to funding, meeting its obligations to creditors and other counterparties, and continuing to serve as a credit
intermediary.

The Tailoring Rules align capital planning, supervisory stress testing, and stress capital buffer requirements for large banking

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

•

Resolution Planning — Under rules of the FDIC, Ally Bank is required to periodically submit to the FDIC a resolution plan
(commonly known as a living will) that would enable the FDIC, as receiver, to resolve Ally Bank in the event of its insolvency

Ally Financial Inc. • Form 10-K

under the FDI Act in a manner that ensures that depositors receive access to their insured deposits within one business day of Ally
Bank’s failure (two business days if the failure occurs on a day other than Friday), maximizes the net present value return from the
sale or disposition of its assets, and minimizes the amount of any loss realized by creditors in the resolution. If the FDIC determines
that the resolution plan is not credible and the deficiencies are not adequately remediated in a timely manner, the FDIC may take
formal or informal supervisory, enforcement, and other actions against us. In June 2021, the FDIC issued a Statement on Resolution
Plans for Insured Depository Institutions, which in part establishes a three-year filing cycle for banks with $100 billion or more in
total assets like Ally Bank. Ally Bank submitted its most recent resolution plan on December 1, 2022, which is now under review
by the FDIC for a period of up to 12 months.

Under the Tailoring Rules, Ally is no longer required to submit to the FRB and the FDIC a plan for the rapid and orderly
resolution of Ally and its significant legal entities under the U.S. Bankruptcy Code and other applicable insolvency laws in the
event of future material financial distress or failure.

Limitations on Bank and BHC Dividends and Other Capital Distributions — Federal and Utah law place a number of conditions,
limits, and other restrictions on dividends and other capital distributions that may be paid by Ally Bank to IB Finance and thus
indirectly to Ally. In addition, even if the FRB does not require us to resubmit our capital plan as described earlier in Capital
Planning and Stress Tests, Ally and IB Finance may be precluded from or limited in paying dividends or other capital distributions
without the FRB’s approval under certain circumstances—for example, if Ally or IB Finance were to not meet minimum regulatory
capital ratios after giving effect to the distributions. FRB supervisory guidance also directs BHCs like us to consult with the FRB
prior to increasing dividends, implementing common-stock-repurchase programs, or redeeming or repurchasing capital instruments.
Further, the U.S. banking agencies are authorized to prohibit an insured depository institution, like Ally Bank, or a BHC, like Ally,
from engaging in unsafe or unsound banking practices and, depending upon the circumstances, could find that paying a dividend or
other capital distribution would constitute an unsafe or unsound banking practice. For information about our capital actions,
including repurchases of and cash dividends on our common stock, refer to Note 20 to the Consolidated Financial Statements.

Our ability to make capital distributions, including our ability to pay dividends or repurchase shares of our common stock, will
continue to be subject to the FRB’s review and our internal governance requirements, including approval by our Board. The amount
and size of any future dividends and share repurchases also will be subject to various factors, including Ally’s capital and liquidity
positions, accounting and regulatory considerations (including any restrictions that may be imposed by the FRB), taxation of share
repurchases, impacts related to the COVID-19 pandemic, 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.

Transactions with Affiliates — Sections 23A and 23B of the Federal Reserve Act and the FRB’s Regulation W prevent Ally and its
nonbank subsidiaries from taking undue advantage of the benefits afforded to Ally Bank as a depository institution, including its
access to federal deposit insurance and the FRB’s discount window. Pursuant to these laws, covered transactions—including Ally
Bank’s extensions of credit to and asset purchases from its affiliates, credit exposures to affiliates arising from derivative
transactions, securities lending and borrowing transactions, and acceptance of affiliate-issued debt obligations (other than securities)
as collateral—are generally subject to meaningful restrictions. For example, unless otherwise exempted, (1) covered transactions are
limited to 10% of Ally Bank’s capital stock and surplus in the case of any individual affiliate and 20% of Ally Bank’s capital stock
and surplus in the case of all affiliates; (2) Ally Bank’s credit transactions with an affiliate are generally subject to stringent
collateralization requirements; (3) with few exceptions, Ally Bank may not purchase any low quality asset from an affiliate; and (4)
covered transactions must be conducted on terms and conditions that are consistent with safe and sound banking practices. In
addition, transactions between Ally Bank and an affiliate must be on terms and conditions that are either substantially the same as or
more beneficial to Ally Bank than those prevailing at the time for comparable transactions with or involving nonaffiliates.

These laws include an attribution rule that treats a transaction between Ally Bank and a nonaffiliate as a transaction between
Ally Bank and an affiliate to the extent that the proceeds of the transaction are used for the benefit of or transferred to the affiliate.

Source of Strength — Ally is required to serve as a source of financial strength for Ally Bank and to commit resources to support
Ally Bank in circumstances when Ally might not otherwise elect to do so. The functional regulator of any nonbank subsidiary of
Ally, however, may prevent that subsidiary from directly or indirectly contributing its financial support, and if that were to preclude
Ally from serving as an adequate source of financial strength, the FRB may instead require the divestiture of Ally Bank and impose
operating restrictions pending such a divestiture.

Orderly Liquidation Authority — Under the Dodd-Frank Act, if a BHC’s failure would have serious adverse effects on the
financial stability of the United States and other specified conditions were met, the BHC may be subjected to an FDIC-administered
resolution regime called the orderly liquidation authority as an alternative to bankruptcy. If Ally were to be placed into receivership
under the orderly liquidation authority, the FDIC as receiver would have considerable rights and powers in liquidating and winding
up Ally, including the ability to assign assets and liabilities without the need for creditor consent or prior court review and the
ability to differentiate and determine priority among creditors. In doing so, moreover, the FDIC’s primary goal would be a
liquidation that mitigates risk to the financial stability of the United States and that minimizes moral hazard.

Acceptance of Brokered Deposits — Under FDICIA and the PCA framework described later in Basel Capital Framework, insured
depository institutions such as Ally Bank must be well capitalized or, with a waiver from the FDIC, adequately capitalized in order

•

Ally Financial Inc. • Form 10-K

to accept brokered deposits, and even adequately capitalized institutions are subject to some restrictions on the rates they may offer
for brokered deposits. At December 31, 2022, Ally Bank met the capital ratios necessary to be classified as well capitalized under
the PCA framework. Brokered deposits totaled $12.6 billion at December 31, 2022, which represented 8.3% of Ally Bank’s total
deposits.

•

Enforcement Authority — The FRB possesses extensive authorities and powers to regulate and supervise the conduct of Ally’s
businesses and operations. If the FRB were to take the position that Ally or any of its subsidiaries have violated any law or
commitment or engaged in any unsafe or unsound practice, formal or informal enforcement and other supervisory actions could be
taken by the FRB against Ally, its subsidiaries, and institution-affiliated parties (such as directors, officers, and agents). The UDFI
and the FDIC have similarly expansive authorities and powers over Ally Bank and its subsidiaries. For example, the FRB, the
UDFI, or the FDIC could order us to cease and desist from engaging in specified activities or practices or could affirmatively
compel us to correct specified violations or practices. Some or all of these governmental authorities also would have the power, as
applicable, to issue administrative orders against us that can be judicially enforced, to direct us to increase capital and liquidity, to
limit our dividends and other capital distributions, to restrict or redirect the growth of our assets, businesses, and operations, to
compel us to change our practices and remediate harm alleged to have been suffered by consumers or others, to assess civil money
penalties against us, to remove our officers and directors, to require the divestiture or the retention of assets or entities, to terminate
deposit insurance, or to force us into bankruptcy, conservatorship, or receivership. These actions could directly affect not only Ally,
its subsidiaries, and institution-affiliated parties but also Ally’s counterparties, stockholders, and creditors and its commitments,
arrangements, and other dealings with them.

In addition, the CFPB has broad authorities and powers to enforce federal consumer-protection laws involving financial

products and services. The CFPB has exercised these authorities and powers through public enforcement actions, lawsuits, and
consent orders and through nonpublic enforcement actions.

The SEC, FINRA, the Department of Justice, state attorneys general, and other domestic or foreign governmental authorities

also have an array of means at their disposal to regulate and enforce matters within their jurisdiction that could impact Ally’s
businesses and operations.

Basel Capital Framework

The FRB and other U.S. banking agencies have adopted risk-based and leverage capital rules that establish minimum capital-to-asset

ratios for BHCs, like Ally, and depository institutions, like Ally Bank.

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

Under U.S. Basel III, Ally and Ally Bank must maintain a minimum Common Equity Tier 1 risk-based capital ratio of 4.5%, a minimum

Tier 1 risk-based capital ratio of 6%, and a minimum total risk-based capital ratio of 8%. On top of the minimum risk-based capital ratios,
Ally and Ally Bank are subject to a capital conservation buffer requirement, which must be satisfied entirely with capital that qualifies as
Common Equity Tier 1 capital. Failure to maintain more than the full amount of the capital conservation buffer requirement would result in
automatic restrictions on the ability of Ally and Ally Bank to make capital distributions, including dividend payments and stock repurchases
and redemptions, and to pay discretionary bonuses to executive officers. U.S. Basel III also subjects Ally and Ally Bank to a minimum Tier 1
leverage ratio of 4%. While the capital conservation buffer requirement for Ally Bank is fixed at 2.5% of RWAs, the capital conservation
buffer requirement for a Category IV firm like Ally is equal to its stress capital buffer requirement. The stress capital buffer requirement for
Ally, in turn, is the greater of 2.5% and the result of the following calculation: (1) the difference between Ally’s starting and minimum
projected Common Equity Tier 1 capital ratios under the severely adverse scenario in the supervisory stress test, plus (2) the sum of the dollar
amount of Ally’s planned common stock dividends for each of the fourth through seventh quarters of its nine-quarter capital planning horizon,
as a percentage of RWAs. As of December 31, 2022, the stress capital buffer requirement for Ally is 2.5%.

Ally and Ally Bank are subject to the U.S. Basel III standardized approach for counterparty credit risk but not to the U.S. Basel III
advanced approaches for credit risk or operational risk. Ally is also not subject to the U.S. market-risk capital rule, which applies only to
banking organizations with significant trading assets and liabilities.

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

Ally Financial Inc. • Form 10-K

guarantees—when PCA is required in connection with one of its depository-institution subsidiaries. At December 31, 2022, Ally Bank met
the capital ratios required to be well capitalized under the PCA framework.

At December 31, 2022, Ally and Ally Bank were in compliance with their regulatory capital requirements. For an additional discussion

of capital adequacy requirements, refer to Note 20 to the Consolidated Financial Statements.

On January 1, 2020, we adopted CECL. Refer to Note 1 to the Consolidated Financial Statements for additional information about our

allowance for loan losses accounting policy. Under a rule finalized by the FRB and other U.S. banking agencies in 2020, we delayed
recognizing the estimated impact of CECL on regulatory capital until after a two-year deferral period, which for us extended through
December 31, 2021. Beginning on January 1, 2022, we were required to phase in 25% of the previously deferred estimated capital impact of
CECL, with an additional 25% to be phased in at the beginning of each subsequent year until fully phased in by the first quarter of 2025. The
estimated impact of CECL on regulatory capital that we deferred and began phasing in on January 1, 2022, is generally calculated as the
entire day-one impact at adoption plus 25% of the subsequent change in allowance during the two-year deferral period. As of December 31,
2022, the total deferred impact on Common Equity Tier 1 capital related to our adoption of CECL was $887 million.

In December 2017, the Basel Committee approved revisions to the global Basel III capital framework (commonly known as the Basel III
endgame or as Basel IV), many of which—if adopted in the United States—could heighten regulatory capital standards. While these revisions
were planned for implementation by member countries by January 1, 2023, the U.S. banking agencies have yet to propose rules to do so. At
this time, how the revisions will be harmonized and finalized in the United States remains unclear.

Insured Depository Institution Status

Ally Bank is an insured depository institution and, as such, is required to file periodic reports with the FDIC about its financial condition.

Total assets of Ally Bank were $181.9 billion at December 31, 2022, $172.8 billion at December 31, 2021, and $172.0 billion at December
31, 2020.

Ally Bank’s deposits are insured by the FDIC in the standard insurance amounts per depositor for each account ownership category as
prescribed by the FDI Act. Insured depository institutions with two million or more deposit accounts, including Ally Bank, are required by the
FDIC to establish and maintain systems and processes designed to facilitate prompt payment of FDIC-insured deposits in the event of a
failure. Deposit insurance is funded through assessments on Ally Bank and other insured depository institutions. The FDIC assesses
premiums from each institution based on its average consolidated total assets minus its average tangible equity, while utilizing a scorecard
method to determine each institution’s risk to the DIF. The FDIC may take action to increase insurance premiums if the DIF is not funded to
its regulatory-mandated DRR. Currently, the FDIC is required to maintain a DRR of 1.35% under the FDI Act. In October 2022, the FDIC
finalized a rule to increase the initial base deposit insurance assessment rate schedules for all insured depository institutions by two basis
points, beginning with the first quarterly assessment period of 2023. The increased assessment rate is intended to improve the likelihood that
the DRR will reach the required minimum of 1.35% by the statutory deadline of September 30, 2028.

If an insured depository institution like Ally Bank were to become insolvent or if other specified events were to occur relating to its
financial condition or the propriety of its actions, the FDIC may be appointed as conservator or receiver for the institution. In that capacity,
the FDIC would have the power to (1) transfer assets and liabilities of the institution to another person or entity without the approval of the
institution’s creditors; (2) require that its claims process be followed and to enforce statutory or other limits on damages claimed by the
institution’s creditors; (3) enforce the institution’s contracts or leases according to their terms; (4) repudiate or disaffirm the institution’s
contracts or leases; (5) seek to reclaim, recover, or recharacterize transfers of the institution’s assets or to exercise control over assets in which
the institution may claim an interest; (6) enforce statutory or other injunctions; and (7) exercise a wide range of other rights, powers, and
authorities, including those that could impair the rights and interests of all or some of the institution’s creditors. In addition, the administrative
expenses of the conservator or receiver could be afforded priority over all or some of the claims of the institution’s creditors, and under the
FDI Act, the claims of depositors (including the FDIC as subrogee of depositors) would enjoy priority over the claims of the institution’s
unsecured creditors.

Investments in Ally

Because Ally Bank is an insured depository institution and Ally and IB Finance are BHCs, direct or indirect control of us—whether
through the ownership of voting securities, influence over management or policies, or other means—is subject to approvals, conditions, and
other restrictions under federal and state laws. Refer to the section above titled Bank Holding Company, Financial Holding Company, and
Depository Institution Status for additional information. These laws may differ in their purposes, definitions and presumptions of control, and
restrictions, which for example is the case as between the BHC Act and the Change in Bank Control Act. Investors are responsible for
ensuring that they do not, directly or indirectly, acquire control of us in contravention of these laws.

Insurance Companies

Some of our insurance operations—including in the United States, Canada, and Bermuda—are subject to certain minimum aggregate

capital requirements, net asset and dividend restrictions, and rules and regulations promulgated by various U.S. and foreign regulatory
agencies. Under state and foreign insurance laws, dividend distributions may be made only from statutory unassigned surplus with approvals
required from applicable regulatory authorities for dividends in excess of statutory limitations. Our insurance operations are also subject to
applicable state and foreign laws generally governing insurance companies, as well as laws addressing products that are not regulated as
insurance, such as VSCs and GAP waivers.

Ally Financial Inc. • Form 10-K

Consumer Finance

Our retail-automotive, consumer-mortgage, personal-lending, and credit-card businesses are subject to extensive federal, state, and local

laws. These laws, for example, may impose licensing obligations and financial requirements; limit the interest rates, finance charges, and
other fees that can be charged; regulate the use of credit reports and the reporting of credit information; impose underwriting and disclosure
requirements; regulate marketing techniques and practices; require the safeguarding of nonpublic information about customers; and regulate
servicing practices, including in connection with assessments, collection and foreclosure activities, claims handling, and investment and
interest payments on escrow accounts. The laws applicable to consumer finance are complex and subject to change and to changes in
interpretation and enforcement. Further, many existing laws were enacted without anticipating technological and related innovations—
including those utilized by fintech companies and the banks and financial-services providers that partner with them—and as a result, the
application of these legal frameworks is not always clear and can be subject to wide supervisory and enforcement discretion.

Ally Invest Subsidiaries

Ally Invest Securities LLC (Ally Invest Securities) is registered as a securities broker-dealer with the SEC and in all 50 states, the
District of Columbia, and Puerto Rico, is registered with the Municipal Securities Rulemaking Board as a municipal securities broker-dealer,
and is a member of FINRA and SIPC. As a result, Ally Invest Securities and its personnel are subject to extensive requirements under the
Exchange Act, SEC regulations, SRO rules, and state laws, which collectively cover all aspects of the firm’s securities activities—including
sales and trading practices, capital adequacy, recordkeeping, privacy, anti-money laundering, financial and other reporting, supervision,
misuse of material nonpublic information, conduct of its business in accordance with just and equitable principles of trade, and personnel
qualifications. The firm operates as an introducing broker and clears all transactions, including all customer transactions, through a third-party
clearing broker-dealer on a fully disclosed basis.

Ally Invest Forex LLC (Ally Invest Forex) is registered with the CFTC as an introducing broker and is a member of the NFA, which is
the primary SRO for the U.S. futures industry. The firm is subject to similarly expansive requirements under the Commodity Exchange Act,
CFTC and NFA rules governing introducing brokers and their personnel, and CFTC retail forex rules.

Ally Invest Advisors Inc. (Ally Invest Advisors) is registered as an investment adviser with the SEC. As a result, the firm is subject to a
host of requirements governing investment advisers and their personnel under the Investment Advisers Act of 1940, as amended, and related
rules and regulations, including certain fiduciary and other obligations with respect to its relationships with its investment advisory clients.

Regulators conduct periodic examinations of Ally Invest Securities, Ally Invest Forex, and Ally Invest Advisors and regularly review

reports that the firms are required to submit on an ongoing basis. Violations of relevant regulatory requirements could result in adverse
consequences for the firms and their personnel, including censure, penalties and fines, the issuance of cease-and-desist orders, and restriction,
suspension or expulsion from the securities or commodity-futures industries.

Other Laws

Ally is subject to numerous federal, state, and local statutes, regulations, and other laws, and the possibility of violating applicable law
presents ongoing compliance, operational, reputation, and other risks to Ally. Some of the other more significant laws to which we are subject
include:

•

Privacy and Data Security — The GLB Act and related regulations impose obligations on financial institutions, within specified
parameters and circumstances, to safeguard consumer information maintained by them, to provide notice of their privacy practices
to consumers, and to allow consumers to opt out of information sharing with unaffiliated parties. Related regulatory guidance also
directs financial institutions to notify consumers in specified cases of unauthorized access to sensitive consumer information. In
addition, most states have enacted laws requiring notice of specified cases of unauthorized access to information. For example, the
NYDFS has imposed significant requirements on regulated entities to establish cybersecurity programs and policies, to designate
chief information security officers, to comply with notice and reporting obligations, and to take other actions in connection with the
security of their information. In addition, comprehensive privacy laws have been enacted in California that require regulated entities
to establish measures to identify, manage, secure, track, produce, and delete personal information.

In November 2021, the U.S. banking agencies adopted a final rule establishing notification requirements for banking

organizations and bank service providers in connection with significant computer security incidents. Under the rule, a BHC, such as
Ally, and a state-chartered bank that is a member of the Federal Reserve System, such as Ally Bank are required to notify the FRB
within 36 hours of incidents that have materially disrupted or degraded, or are reasonably likely to materially disrupt or degrade, the
banking organization’s ability to deliver services to a material portion of its customer base, jeopardize the viability of key
operations of the banking organization, or impact the stability of the financial sector. The rule also requires bank service providers
to notify us of any computer security incident that has caused, or is reasonably likely to cause, a material service disruption for four
or more hours.

Volcker Rule — Section 13 of the BHC Act and its implementing regulations (commonly referred to as the Volcker Rule) prohibit
banking entities, subject to limited exceptions, from engaging in proprietary trading and investing in or sponsoring covered funds.
The Volcker Rule contains exemptions for market-making, hedging, underwriting, and trading in U.S. government and agency
obligations. The Volcker Rule also permits the retention of ownership interests in certain types of funds and the offering and
sponsoring of funds under certain conditions. For firms with limited trading assets and liabilities, like Ally, the regulatory agencies
have simplified and streamlined compliance requirements under the Volcker Rule. The regulatory agencies also have clarified that

Ally Financial Inc. • Form 10-K

•

banking entities may engage in activities that do not raise concerns that the Volcker Rule was intended to address, including in
connection with specified credit funds, venture-capital funds, family-wealth-management vehicles, and customer-facilitation
vehicles.

Fair Lending Laws — The Equal Credit Opportunity Act, the Fair Housing Act, and similar fair-lending laws (collectively, Fair
Lending Laws) generally prohibit a creditor from discriminating against an applicant or borrower in any aspect of a credit
transaction on the basis of specified characteristics known as prohibited bases, such as race, gender, and religion. Creditors are also
required under the Fair Lending Laws to follow a number of highly prescriptive rules, including rules requiring credit decisions to
be made promptly, notices of adverse actions to be given, and, in the case of mortgage lenders of a certain size, anonymized data
and information about mortgage applicants and credit decisions to be gathered and made publicly available.

Fair Credit Reporting Act — The Fair Credit Reporting Act regulates the dissemination of credit reports by credit reporting
agencies, requires users of credit reports to provide specified notices to the subjects of those reports, imposes standards on the
furnishing of information to credit reporting agencies, obligates furnishers to maintain reasonable procedures to deal with the risk of
identity theft, addresses the sharing of specified kinds of information with affiliates and third parties, and regulates the use of credit
reports to make preapproved offers of credit and insurance to consumers.

Truth in Lending Act — The Truth in Lending Act (TILA) and Regulation Z, which implements TILA, require lenders to provide
borrowers with uniform, understandable information about the terms and conditions in certain credit transactions. These rules apply
to Ally and its subsidiaries when they extend credit to consumers and require, in the case of certain loans, conspicuous disclosure of
the finance charge and annual percentage rate, as applicable. In addition, if an advertisement for credit states specific credit terms,
Regulation Z requires that the advertisement state only those terms that actually are or will be arranged or offered by the creditor
together with specified notices. The CFPB in recent years has issued substantial amendments to the mortgage requirements under
Regulation Z, and additional changes are likely in the future. Amendments to Regulation Z and Regulation X, which implements
the Real Estate Settlement Procedures Act, require integrated mortgage loan disclosures to be provided for applications received on
or after October 3, 2015. Further, TILA imposes a number of restrictions on credit-card practices impacting rates and fees, requires
that a consumer’s ability to pay be taken into account before issuing credit or increasing credit limits, and imposes certain disclosure
requirements related to provision of open-end credit.

Bank Secrecy Act/Anti-Money-Laundering Requirements — The Bank Secrecy Act, as amended by the USA PATRIOT Act,
contains provisions designed to detect and prevent the use of the U.S. financial system for money laundering and terrorist financing.
The Bank Secrecy Act generally requires banks, certain other financial institutions, and, in certain cases, BHCs to undertake
activities such as maintaining an anti-money-laundering program, verifying the identity of clients, monitoring for and reporting on
suspicious transactions, reporting on cash transactions exceeding specified thresholds, and responding to certain requests for
information by regulatory authorities and law-enforcement agencies.

In January 2021, the Bank Secrecy Act was amended by the AMLA, which comprehensively reforms and modernizes U.S.

anti-money-laundering laws. The AMLA codifies a risk-based approach to anti-money-laundering compliance for financial
institutions, requires the U.S. Treasury Department to develop standards for evaluating technology and internal processes for Bank
Secrecy Act compliance, directs the FinCEN to establish a registration database of beneficial-ownership information that designated
companies will be required to report, and expands enforcement- and investigation-related authority and available sanctions for
specified Bank Secrecy Act violations. In June 2021, FinCEN issued the priorities for anti-money laundering and countering the
financing of terrorism policy, as required under the AMLA. The priorities include corruption, cybercrime, terrorist financing, fraud,
transnational crime, drug trafficking, human trafficking, and proliferation financing. Many provisions of the AMLA will require
additional rulemakings, reports, and other measures, and the impact of the AMLA will depend at least in part on their development
and implementation.

Community Reinvestment Act — Under the CRA, a bank has a continuing and affirmative obligation, consistent with its safe and
sound operation, to help meet the credit needs of its entire community, including low- and moderate-income persons and
neighborhoods. Although the CRA does not establish specific lending requirements or programs, banks are rated on their
performance in meeting the needs of their communities.

In its most recent performance evaluation in 2020, Ally Bank received an “Outstanding” rating. Ally Bank operated under a
three-year CRA strategic plan (2020–2022) that had been approved by the FRB and is currently operating under a four-year CRA
strategic plan (2023–2026) that also has been approved by the FRB. Failure by Ally Bank to maintain a “Satisfactory” or better
rating under the CRA may adversely affect our ability to expand our financial and related activities as an FHC or make acquisitions.
Refer to the section above titled Bank Holding Company, Financial Holding Company, and Depository Institution Status for
additional information.

LIBOR Act — In March 2022, the Adjustable Interest Rate Act (the LIBOR Act) was enacted. The LIBOR Act provides a uniform
approach for replacing LIBOR as a reference interest rate in tough legacy contracts when LIBOR is no longer published or is no
longer representative. Tough legacy contracts are contracts that do not include effective fallback provisions, for example, because
they have no provisions for replacement benchmarks or provisions based on prior LIBOR values or dealer polls. Under the LIBOR
Act, references to the most common tenors of LIBOR in these contracts will be replaced as a matter of law, without the need to be

Ally Financial Inc. • Form 10-K

amended by the parties, to instead reference benchmark interest rates based on SOFR that will be identified by the FRB. The FRB
issued a final rule effective February 27, 2023, to implement the LIBOR Act. See Risk Factors in Part I, Item 1A of this report for
additional information regarding Ally’s efforts to transition away from LIBOR.

•

Executive and Incentive Compensation — Through guidance adopted in 2010, the U.S. banking agencies conveyed their
expectation that banking organizations maintain incentive-compensation practices that are consistent with safety and soundness,
even when these practices go beyond those needed to align shareholder and employee interests. To be consistent with safety and
soundness, incentive-compensation arrangements at a banking organization should (i) provide employees with incentives that
appropriately balance risk and reward, (ii) be compatible with effective internal controls and risk management, and (iii) be
supported by strong corporate governance, including active and effective oversight by the organization’s board of directors.
Enforcement action may be taken against a banking organization if its incentive-compensation arrangements or related risk-
management, control, or governance processes pose a risk to the organization’s safety and soundness, particularly when the
organization is not taking prompt and effective measures to correct the deficiencies.

In October 2022, the SEC adopted a final rule directing national securities exchanges and associations, including the NYSE, to

implement listing standards that require all listed companies to adopt and comply with policies mandating the prompt recovery of
erroneously awarded incentive-based compensation received by a current or former executive officer during the three fiscal years
preceding a required accounting restatement, including a restatement to correct an error in previously issued financial statements
that would result in a material misstatement if the error were corrected or left uncorrected in the current period. The erroneously
awarded compensation to be recovered would be the excess over the amount that the executive officer would have otherwise
received had the incentive-based compensation been determined using the restated financial statements and must be computed
without regard to any taxes paid. The final rule requires the exchanges to propose conforming listing standards no later than
February 27, 2023, and requires the standards to become effective no later than November 28, 2023. Each listed company, including
Ally, will be required to adopt a policy that complies with the NYSE listing standard no later than 60 days following effectiveness
of the standard.

Human Capital

Our team members are integral to the success of our business, and central to our strategy is attracting, developing, and retaining talented

individuals with the right skills to drive our business forward. We emphasize a working environment and company culture that embrace
diverse talents, backgrounds, and perspectives and where colleagues feel valued as both individuals and members of the team. We had
approximately 11,600 and 10,500 employees as of December 31, 2022, and 2021, respectively, which consisted primarily of full-time
employees in the United States. Our employee growth for the year ended December 31, 2022, was primarily attributable to expansion in the
overall business and our information technology organization.

Oversight and Governance

The identification, prioritization, mitigation, and monitoring of human-capital risks, in alignment with our enterprise risk management

framework, allows us to maintain a well-controlled operational environment. Enterprise policies, HR programs, and risk and control
assessment and effectiveness tests are completed and reviewed at least once a year. Transparency in risk reporting—through issue
management, quarterly business reviews, risk committees, and audits—supports appropriate governance and oversight for human capital
measures and processes. Our priority is to maintain the safety and soundness of Ally, our culture, and our workforce.

The Compensation, Nominating, and Governance Committee of the Board is responsible for the oversight of our human capital
management. This Committee and Ally’s Executive Council biannually review organizational health metrics and progress toward cultural
priorities including our DE&I efforts. Annually, the Board reviews and approves Ally’s Code of Conduct and Ethics, which establishes how
employees must conduct themselves and is required to be attested to by all employees on an annual basis.

The management of our human capital resources is a core responsibility of our leaders. Leaders recognize the importance of attracting,

engaging, and retaining talented employees at all levels of the organization. Human capital risk appetite limits, comprising voluntary turnover
and succession planning, are tracked and communicated as appropriate. Other human capital risk mitigation activities include:

•

Active monitoring of market competition, industry trends and wages, overall benefits structure, engagement surveys, and exit
surveys.

Strategic talent assessment and planning routines focused on promoting internal mobility, diverse representation, and professional
growth.

Succession planning processes to facilitate business continuity.

The HR leadership team reports to Ally’s Chief HR Officer and includes our Chief Diversity Officer, Chief Ethics Officer, and other
direct reports that work with our leaders to identify human capital metrics that are designed to promote the health of our organization. At least
quarterly, our Chief Diversity Officer conducts a diversity council session with senior leaders.

Ally Financial Inc. • Form 10-K

Culture

We recognize our long-term success is underpinned by the strength of our purpose-driven culture—a culture that we believe sets us apart
from the competition and gives us an advantage as we recruit and retain talented team members. Our people-first approach enables a winning,
customer-centric philosophy focused on resiliency, adaptability, and a growth-mindset-oriented drive to “Be (Even) Better.” We strive to
uphold our mantra to “Do it Right” through decisions and deeds at all levels of the organization, and we collectively commit to work with
integrity and accountability and to uphold our core values in the workplace, the marketplace, and the community. Our culture is driven by our
“LEAD” core values, where we emphasize that employees:

•

[L]ook externally – We strive to meet and exceed the needs of our customers with agility, speed, and innovation. We continually
evolve, respond quickly, and deliver a superior customer experience by:

◦

Finding strategies, processes, and initiatives that do right by our customers and their unique needs.

Being adaptable, resourceful, and proactive in problem-solving, incorporating different viewpoints and fresh ideas into
their work.

Responding quickly to change and escalating issues immediately.

[E]xecute with excellence – Good enough is never enough. With a focus on continuous improvement, our actions are driven by
sound analysis and an intense focus on excellence. Executing with excellence means:

◦

Not stopping at the obvious answer—staying curious and respectfully challenging the status quo.

Being open to new ideas and ways to do better, be better and deliver more meaningful solutions.

Calling attention to risks, and challenging that which does not seem right while remaining respectful of established
policies.

[A]ct with professionalism – We operate with integrity, hold ourselves and each other accountable, treat others with respect, and
embrace diversity and inclusion. This is the cornerstone to our long-term success and at the very foundation of what it means to be
an ally. With an emphasis on:

◦

Celebrating the unique perspectives, talents, and contributions of others.

Leveraging the experience and knowledge that peers, colleagues, and leaders have to offer.

Creating strong and collaborative relationships built on mutual respect and accountability.

[D]eliver results – We are passionate about winning – for our customers, our teams, and our company. Success is measured at both
the outcome and the path to achieve it. We deliver results by:

◦ Making an impact and bringing an inspired attitude, competitive spirit, and passion for real results.

◦

Being transparent and communicating current and emerging risks.

Leading the charge and supporting the successes of others.

Our annual, CEO-sponsored enterprise-wide recognition program, “LEADing the Way,” is designed to recognize employees whose
leadership and performance consistently model our core values in one or more of the following areas: innovation, risk culture, corporate
citizenship, customer experience, DE&I, process improvement, or other attributes that reflect our overall culture. This award is one of the
highest recognitions an employee can receive at Ally. In 2022, 80 team members were recognized with this award. Recipients are nominated
based on exceeding their LEAD core value performance objective, which is required for all employees. Additionally, employees can nominate
colleagues for the quarterly peer-to-peer “I’m An Ally” award recognition program that provides employees the opportunity to recognize the
hard work of individuals across the entire organization. These recognition programs reinforce our continued commitment to our culture.

Diversity, Equity, and Inclusion

We believe the best ideas come from a collective mixture of different voices and perspectives. We are an equal opportunity employer,

and we strive for an inclusive work environment where all backgrounds, experiences, interests, viewpoints, and skills are respected,
appreciated, and encouraged—consistent with our culture. We are focused on diverse representation and retention in the workforce—
including different genders, races, nationalities, sexual orientations, and other identities—across all levels of the organization from entry to
leadership. Fostering these diverse perspectives is important and reflects the beliefs and actions that are the backbone of our culture.

Ally Financial Inc. • Form 10-K

We have a deliberate focus on DE&I with an intentional emphasis on inclusion, which expands beyond traditional definitions of

diversity. Notably, our company-wide engagement survey score for belonging improved by two points in 2022 and remains eight points above
the financial services industry benchmark, as measured by our third-party provider. The importance of DE&I starts at the top with our CEO
and Board, who consistently stress the value in leveraging our differences. In June 2017, our CEO was among the first 150 CEOs who signed
on to the CEO Action Pledge for Diversity and Inclusion, and this commitment has been renewed every year since. Our Board and Executive
Council have also publicly pledged our continuing support for all groups with a heightened focus on Black, Hispanic, and Latino colleagues,
suppliers, partners, and communities in the promotion of equity and equality.

Our DE&I Council provides executive leadership on DE&I and promotes belonging at Ally and in our communities. A subset of our
commitment to DE&I is a Financial and Social Inclusion Framework that is built upon four pillars: Community, Customers, Employees, and
Suppliers.

•

Community: Continue to create opportunities for economic mobility in the communities where we work and live, especially for our
Black, Hispanic, and Latino neighbors, who often face disproportionate challenges.

Employees: Community betterment starts from the inside out. As such, we aspire to create a diverse workforce that is truly
reflective of the communities in which we live and work.

Customers: Help enable financial and social inclusion through our culture of customer obsession, by developing education and
solutions to support and strengthen economic mobility for all.

Suppliers: We are intentional about collaborating and working with a diverse group of minority and women-owned business
enterprises.

These four pillars are championed by our employees, which empowers us to advance DE&I efforts in meaningful ways beyond Ally.
Additionally, these efforts are further supported by our Chief Diversity Officer, and 18 full-time employees designated to advance DE&I
within Ally. While our Financial and Social Inclusion Framework is focused on addressing the wealth gap, specifically in Black, Hispanic,
and Latino communities, the four pillars are reflective of our DE&I efforts more broadly as further discussed below.

Community

Our approach to community is inclusive and integrates our employees across the organization. We help our employees develop their own
skills while serving our communities with their time and talent. We encourage our employees to utilize eight paid hours per year to volunteer
in their communities. Employees can donate to eligible nonprofit organizations by credit, debit, or payroll deductions, and Ally will give a
dollar-for-dollar match up to $1,000 per eligible employee, per calendar year. In 2022, our employees volunteered approximately 44,000
hours, a record for us. We also matched our employees’ donations of time and dollars resulting in $2.3 million for our communities. Both of
these milestones reflect our culture of giving back.

Our philanthropic approach is primarily based on a framework of economic mobility. We support programs that provide opportunities to

individuals and families in low- and moderate-income communities with a focus on three areas: affordable housing, financial literacy, and
workforce development. We solely funded the Ally Charitable Foundation, a non-consolidated entity, which has approximately $70 million in
assets as of December 31, 2022, to drive positive and lasting impacts in our communities. The Ally Charitable Foundation is governed by six
senior Ally employees that meet quarterly to approve certain grants, monitor our investments, and provide strategic guidance. In 2022, the
Ally Charitable Foundation made a pledge of $5 million, to be funded over five years, to the Atrium Health Foundation to support equitable
opportunities for individuals pursuing careers in healthcare. The grant established the Ally Charitable Foundation Workforce Development
Center of Excellence, as well as the Ally Charitable Foundation Workforce Development Scholarship Fund. Through the Ally Charitable
Foundation Workforce Development Center of Excellence, individuals from low- and moderate-income or diverse populations will have
access to a variety of career development pathways to fulfill their educational objectives. Additionally, the Ally Charitable Foundation
increased its financial support of trust-based philanthropy, a philanthropic approach that supports extraordinary, grassroots nonprofits led by
Black, Hispanic, and Latino individuals. Beyond its financial support, the organizations were provided professional development, technical
assistance, and marketing support.

One of our largest and most powerful initiatives is Moguls in the Making, an annual competition that fosters opportunities for students

from historically black colleges and universities. The annual program was launched in 2019 in collaboration with the Thurgood Marshall
College Fund and the Sean Anderson Foundation. In 2022, we sponsored the fourth Moguls in the Making competition, with 60 students, who
brought innovative and impactful solutions to economic mobility challenges. Since the program’s inception, we have offered internships to 43
students, which have often led to permanent job placements within Ally or the broader financial-services industry.

Our financial education approach is focused on providing content and programs to advance economic mobility for individuals and
families. We leverage our team members and community partners to teach critical financial skills to assist those that we serve towards their
financial goals.

Our work in the communities is woven throughout our culture. We originated, as defined in our CRA strategic plan approved by the
FRB, approximately $1.1 billion and $1.5 billion in loans and investments that primarily benefit low- and moderate-income individuals and
communities as part of our CRA program during the years ended December 31, 2022, and 2021, respectively. In 2022, we executed on our
ongoing commitment of expanding access to capital for Black, Hispanic, and Latino communities by deploying $33 million in loans and

Ally Financial Inc. • Form 10-K

investments specifically to minority- and women-led organizations such as The 22 Fund, BetaBoom, and Raza Development Fund. These
loans and investments are instrumental in providing the financial foundation required to help develop and create more opportunities for the
next generation of successful Black, Hispanic, and Latino entrepreneurs, investors, affordable housing developers, and community leaders.
We also provided nearly $1.5 million in grants to 68 non-profit organizations, including 17 organizations that are either minority-led or
supported initiatives targeting primarily Black, Hispanic, or Latino individuals. Additionally, Ally Bank received consecutive “Outstanding”
CRA ratings in our last two reviews.

Employees

We take deliberate steps to weave DE&I through all our human capital efforts: from pipelining candidates, onboarding, all the way
through the employee lifecycle. With this approach, we have been able to build on our LEAD culture to celebrate the differences that our
employees bring to the workplace. In 2022, we expanded our implementation of unconscious bias mitigation and awareness training to help
leaders and team members across the organization understand the impacts of unconscious bias on our decision-making processes. Every
employee has a specific culture-related performance objective, which includes a strong focus on DE&I. Additionally, for all executive leaders,
annual performance objectives and reviews include a specific focus on representation and diversity trends within the workforce. The
importance of DE&I is consistently reinforced by executive leadership through town hall meetings, employee communications, and active
participation in and sponsorship of our ERGs. A diverse and inclusive workforce makes us stronger, as well as more agile, innovative, and
adaptable. We believe it benefits our various stakeholders culturally, operationally, and financially.

We maintain eight ERGs sponsored by members of Ally’s Executive Council and chaired by leaders from multiple levels of management
across Ally. These ERGs consist of: Aliados, Asian/Middle Eastern, Black/African American, Diverse Abilities, Generational, Pride, Veteran,
and Women ALLYs. Membership in our ERGs is voluntary and open to all employees, whether they identify with the ERG or view
themselves as an ally to the group. As we celebrated the fifth anniversary of ERGs in 2022, employee participation grew to more than 50% of
our workforce belonging to at least one ERG as of December 31, 2022, as compared to 43% as of December 31, 2021. Beyond our ERGs, our
Technology Organization also launched two diversity-focused groups that explore the obstacles to inclusivity that exist specifically within the
technology industry. These two groups were Women in Technology (WiT) and Black and Brown in Technology (BBiT). Our objective across
all the groups is to foster a workplace environment where all employees have a sense of belonging and know their opinions count.

Our commitment to inclusion emphasizes representation transparency, accountability, and action for our employees. As of December 31,

2022, our gender representation is approximately 51% men and 49% women. We increased representation of women and people of color in
our manager and above roles, and redesigned programs to create more opportunities for early talent.

The following table presents our employee representation of women, and Black or African American, Latino or Hispanic, or Asian

individuals as a percentage of all employees.

December 31,

Women

2022 (a)

Black or
African
American

Latino or
Hispanic

Asian

Women

2021 (a)

Black or
African
American

Latino or
Hispanic

Asian

Associate

Analyst

Managers/Directors

Executive

All employees

73 %

50 %

11 %

3 %

73 %

50 %

10 %

3 %

(a)

Figures in the table are based upon information self-reported by our employees.

We believe equal access to earning potential is essential in attracting, retaining, and inspiring top talent. Our external hiring practices are

based on market rates for roles, experience, and performance. To the same end, we do not and have not requested salary history from
candidates since 2017, and we regularly benchmark our compensation against other companies, both within and outside our industry. Pay
rates for all positions are routinely reviewed, supporting equitable pay across the organization. On February 1, 2021, we established an
internal minimum hourly wage for our U.S. employees of $17, which increased to $20 and $23, on September 13, 2021, and November 7,
2022, respectively. Beginning January 1, 2023, in concurrence with laws in multiple municipalities in which we operate, we began
proactively including pay ranges in job postings nationwide.

Beginning in 2022, we observed Juneteenth as a paid holiday for U.S. employees to commemorate the emancipation of millions of
people from slavery and our Canadian employees observed National Day for Truth and Reconciliation as a paid holiday to honor the Native
children, survivors, families, and communities affected by residential schools.

Customers

The diversity of our employees is a key component of our success as an organization as it allows us to have a workforce that is

representative of customers we serve. In June 2021, we announced the elimination of all overdraft fees across our retail deposit products for
all customers. This change is an example of our “Do It Right” commitment for all customers, including those that may be financially
vulnerable. In January 2022, we announced Ally CoverDraft service, which provides a no fee overdraft allowance to our qualifying customers

Ally Financial Inc. • Form 10-K

on debit transactions subject to a certain amount. In September 2022, we announced early direct deposit, an account feature that allows
customers to access qualifying direct deposits up to two days in advance of receipt.

Suppliers

Our Supplier Diversity program focuses on diversity and inclusion amongst our supplier base. The program includes a proactive business

strategy encouraging the use of diverse suppliers defined as those owned by U.S.-based minorities, women, LGBTQ+, veterans and those
with disabilities, and small or disadvantaged businesses defined by local, state, or federal classifications. We monitor and report expenditure
with diverse suppliers in two tiers: first-tier expenditure is our direct expenditure with diverse suppliers, and second-tier expenditure is
indirect expenditure associated with our prime suppliers that are utilizing minority, women, LGBTQ+, veteran, disability-owned, and small or
disadvantaged businesses to help support us.

Since the program’s inception, we have created operational processes to include diverse suppliers in our bidding and contracting

opportunities. This has resulted in an increase in both first-tier and second-tier diverse supplier expenditures. In 2022, we achieved
$135 million of direct expenditures composed of certified Minority and Women-Owned Business Enterprises, Small Business, and classified
diverse spend, surpassing direct diverse expenditures in 2021 by $30 million. Approximately 100 of our largest suppliers, in terms of dollars
spent, participated in second-tier expenditure reporting during the year ended December 31, 2022. As a result, these suppliers have allowed us
to capture our second-tier diverse supplier expenditures, which provides a more holistic view of our economic impact within our
communities.

Our dedicated Supplier Diversity team assists our business lines and procurement teams in identifying a mix of diverse suppliers with the

proper credentials and capabilities to adhere to our third-party risk, operational, commercial, legal and performance standards. As part of our
initial supplier due diligence process, our Supplier Diversity and procurement teams partner to research qualified diverse suppliers capable of
meeting our standards in Request for Proposal events. This allows us to integrate consideration of diverse business enterprises in third-party
purchasing opportunities. Our comprehensive sourcing network pairs our needs with the business strengths of a diverse mix of large and small
suppliers, who then may participate in our bidding and selection processes.

In February 2022, we hosted the second-annual Supplier Diversity Symposium, which facilitated interactive breakout sessions and a
fireside chat with our CEO to increase access, create connections, and explore opportunities to expand relationships with diverse suppliers. In
addition to our annual Symposium, we hosted quarterly diverse supplier spotlight events as part of our ongoing commitment to supplier
diversity. These events engaged diverse suppliers through interactive mock sales pitches and provided immediate coaching and feedback. As
a result of this access, many of the participating diverse suppliers went on to connect with our supply chain department and business line
executives to explore potential opportunities to work with us. Our Supplier Diversity Month was created in July 2021 as part of our ongoing
commitment to creating access and opportunities for diverse suppliers. During 2022, we featured more than 50 diverse-owned businesses
through our Supplier Diversity Symposium, quarterly spotlight events, and Supplier Diversity Month.

Recognition

As a reflection of our collective efforts across each of these pillars to build an inclusive culture, we were recognized by several

organizations in 2022 and 2021. In 2022, Ally was named a Forbes Best Employer among large employers, which ranked us 64th out of 500
large employers. Additionally, we were recognized as a 2022 Top Workplaces USA award recipient for our people-first culture and were
included in People’s 2022 Companies That Care list. We were named sixth on Newsweek’s Most Loved Workplace list in our inaugural year
of qualification, and ranked first in financial services.

In 2022, we made the Forbes’ lists as a best place to work for women, veterans, new graduates, and diversity. We also were named to
Diversity Inc.’s Top 50 companies for diversity list for a second consecutive year, and as a best place to work for disability inclusion by the
following organizations: American Association of People with Disabilities, and Disability:IN. Additionally, the Human Rights Campaign
Foundation named us a best place to work for LGBTQ+ equality, the sixth straight year we have achieved this recognition.

Our Supplier Diversity Program was acknowledged during 2022. We received the TOP Corporations Award from the Greater Women’s

Business Council and the Ally for Excellence in Supplier Diversity award from the Carolina's LGBTQ+ Chamber of Commerce.

Engagement

Sustaining high levels of employee engagement is key as we continue to build a company where our employees want to work, have

purposeful careers, and feel empowered to make a difference. Throughout the year, we leverage a third-party provider to administer
confidential employee surveys to provide feedback on key strengths and opportunity areas for action-taking to improve our culture.

The following table indicates our company-wide engagement survey results as measured by our third-party provider, based on a 100-

point scale, as well as our participation rates for the survey.

Ally score

Financial services benchmark

Ally employee participation % (a)

(a) The participation rate benchmark from our third-party provider decreased to 75% in 2022, compared to 80% in 2021.

2022

2021

Ally Financial Inc. • Form 10-K

For 2022 and 2021, our employee engagement scores were within the top 10% of all global companies that participated in the survey and

at least nine points higher than the financial services industry benchmark. High levels of employee engagement help reflect a productive and
healthy workforce that takes care of our customers and communities, and contribute to our employee retention rate, which was approximately
85% and 86% for the years ended December 31, 2022, and December 31, 2021, respectively.

Hiring, Retention, and Learning and Development

We make significant investments in recruitment and employee development to attract and retain top talent. Our recruitment process is
vast and includes partnerships with universities, including virtual and on-campus recruiting events, online platforms, internship and rotational
programs, and referral bonuses to current employees. We hold numerous programs to invest in the growth and development of our employees.
Our employee base receives continuing education courses relevant to our industry through the Ally Learning Center, in addition to on-the-job
training related to their function or a regulatory requirement. We offer targeted trainings for management and leadership development. We
have organized a mentor-mentee program as an avenue for our employees to share knowledge, experience, and perspective and to foster the
personal and professional growth of one another. Certain of our business lines offer rotational and leader development programs with the
oversight and guidance of our HR business partners.

Our performance management process is designed to promote a culture of meaningful work, ongoing feedback and coaching, and
employee-owned careers. Annually, employees partner with managers to create and align performance measurements considering company-
wide objectives. We encourage quarterly performance review discussions between employees and managers and require year end
performance evaluations summarizing the ongoing performance, development, and career interest conversations that occurred throughout the
year. Additionally, we provide a multi-rater feedback tool to solicit additional perspectives on employee contributions and a more holistic
picture of employee performance and leadership.

We encourage internal mobility among our employees, contributing to 22% and 26% of our existing eligible workforce that has been
with Ally for at least one year receiving promotions or taking on new roles during the years ended December 31, 2022, and December 31,
2021, respectively. Our deliberate focus on mobility supports our ongoing retention efforts for top talent across the organization. The
retention rate for employees that we determine to be high performers through talent planning was 94% for both years ended December 31,
2022, and December 31, 2021. On a routine basis, we perform talent and succession planning to develop and retain our top talent. We also
provide support for continuing education through a tuition reimbursement program, as well as student loan repayment assistance and
contributions to employee’s 529 education savings plans.

Total Rewards, Health, and Wellness

Our compensation program offers market-competitive base pay and pay-for-performance incentives based on achieving individual and
company goals. In addition, our total rewards include competitive holiday and flexible paid-time-off, a 401(k) retirement savings plan with
matching and company contributions that can total up to 10% of an employee’s salary per year, as well as other benefits designed to support
the personal and professional lives of our employees. Examples of these benefits include paid parental and caregiver leave, adoption and
surrogacy assistance, a backup child and adult/elder care program, no-cost access to certified financial planners, and an employee assistance
program. We also match employee donations to registered nonprofits subject to an annual cap and provide our employees with eight hours of
voluntary-time-off to give back in the communities where we work.

We empower our employees to act as founders with an owner’s mindset across all levels of the organization and all parts of the business

which is encouraged through our shared equity program. In August 2021, we announced that all eligible employees may be awarded Ally
stock annually through our discretionary #OwnIt Annual Grant Program dependent upon our financial performance and Board approval. In
January 2023, for the fourth consecutive year, we awarded all active, regular Ally employees with 100 restricted stock units, up to a
maximum grant date value of $5,000, and subject to a 3-year cliff vesting schedule, in recognition of our notable accomplishments and to
support a founder’s mentality. This benefit provides shared equity to our employees and to further encourage the mindset of an owner, we
also maintain an employee stock purchase plan that provides employees with the opportunity to purchase Ally stock at a discount.

Supporting and valuing all our employees is central to our culture. We offer flexible health insurance options including dental and vision

for our employees, as well as a pre-tax health savings account with employer contributions and reimbursement for certain eligible
transportation and lodging expenses when in-network covered care is not available within 100 miles of a member’s home address. We provide
life and disability benefits and manage a wellness program encouraging healthy living with financial rewards. In 2022, we announced
expanded mental health benefits for our employees, their dependents, and immediate household members. This additional benefit will provide
up to 16 free counseling sessions for each individual, regardless of their participation in our medical plans, to help address on-going
community concerns over affordability and access to mental health care and build resiliency among our employee population.

We continue to adapt and update protocols around COVID-19, with foremost emphasis on our employee health and safety. Changes are
driven by guidance from medical experts and in alignment with the CDC. As the government takes steps to end the public health emergency
declarations come May 2023, we are also updating our guidelines and protocols. For our work to prioritize employee well-being with
resources, benefits, and support, we were recognized with a Nation’s Best and Brightest in Wellness award in 2022, for the sixth consecutive
year.

Ally Financial Inc. • Form 10-K

Additional Information

Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K (and amendments to these
reports) are available on our internet website, free of charge, as soon as reasonably practicable after the reports are electronically filed with or
furnished to the SEC. These reports are available at www.ally.com/about/investor/sec-filings/. These reports can also be found on the SEC
website at www.sec.gov.

Ally Financial Inc. • Form 10-K

Item 1A. Risk Factors

We face many risks and uncertainties, any one or more of which could have a material adverse effect on our business, results of
operations, financial condition (including capital and liquidity), or prospects or the value of or return on an investment in Ally. We describe
certain of these risks and uncertainties in this section, although we may be adversely affected by other risks or uncertainties that are not
presently known to us, that we have failed to appreciate, or that we currently consider immaterial. These risk factors should be read in
conjunction with the MD&A in Part II, Item 7 of this report, and the Consolidated Financial Statements and notes thereto. This Annual Report
on Form 10-K is qualified in its entirety by these risk factors.

Risks Related to Regulation and Supervision

The regulatory and supervisory environment in which we operate could have an adverse effect on our business, financial condition,

results of operations, and prospects.

We are subject to extensive regulatory frameworks and to direct supervision and periodic examinations by various governmental
agencies and industry SROs that are charged with overseeing the kinds of business activities in which we engage. 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. At any given time, we are involved in a number of legal and regulatory proceedings and governmental and regulatory
examinations, investigations, and other inquiries. Refer to the section above titled Regulation and Supervision in Part I, Item 1 of this report
and to the risk factor below titled We are or may be subject to potential liability in connection with pending or threatened legal proceedings
and other matters, which could adversely affect our business or financial results.

While the scope, intensity, and focus of governmental oversight can vary from time to time, we expect a highly demanding environment
for the foreseeable future. Recently, regulatory and other governmental agencies have taken a host of actions that create more challenging and
volatile financial and operating conditions for financial-services companies, including through formal rulemakings that change the law or
interpretations of the law, supervisory expectations and public statements that are designed to informally compel changes in industry
practices, and more aggressive approaches to enforcement that are accompanied by increasingly severe penalties. 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, 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. Governmental oversight
of this kind may reduce our revenues, limit the types of financial services and products we may offer, alter the investments we may make,
affect the manner in which we conduct our business and operations, increase our litigation and regulatory costs, and enhance the ability of
others to offer more competitive financial services and products. We continue to devote substantial time and resources to risk management,
compliance, regulatory-change management, and cybersecurity and other technology initiatives, each of which—whether successful or not—
also may adversely affect our ability to operate profitably or to pursue advantageous business opportunities.

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. 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. 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 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. 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. 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. Because of
the regulatory and supervisory framework, financial institutions often are less inclined to litigate with governmental authorities. In general,
the amounts paid by financial institutions in settling proceedings or investigations and the severity of other terms of regulatory settlements are
likely to remain elevated. In some cases, governmental authorities have required criminal pleas or other extraordinary terms, including
admissions of wrongdoing and the imposition of monitors, as part of settlements. Supervisory actions could entail significant restrictions on
our existing business, our ability to develop new business or make acquisitions, our flexibility in conducting operations, and our ability to pay
dividends or utilize capital. 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. 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.

Ally Financial Inc. • Form 10-K

Our regulatory and supervisory environments—whether at federal, state, or local levels—are not static. No assurance can be given that

applicable statutes, regulations, and other laws will not be amended or construed differently, that new laws will not be adopted, or that any of
these laws will not be enforced more aggressively. For example, while Congress nullified the CFPB’s guidance about compliance with fair-
lending laws in the context of indirect automotive financing, the NYDFS later adopted arguably more far-reaching guidance on the subject.
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, restricting our ability to make acquisitions or pursue other profitable opportunities, and negatively impacting our financial condition
and results of operations. Further, our noncompliance with applicable laws—whether as a result of changes in interpretation or enforcement,
system or human errors, or otherwise and, in some cases, regardless of whether noncompliance was inadvertent—could result in the
suspension or revocation of licenses or registrations that we need to operate and in the initiation of enforcement and other supervisory actions
or private litigation.

Our ability to execute our business strategy for Ally Bank may be adversely affected by regulatory constraints.

Much of our business and operations is conducted by Ally Bank, which is a direct bank with no branch network, and a primary
component of our business strategy is its continued growth. This growth includes expanding our consumer and commercial lending and
increasing our deposit customers and balances while optimizing our cost of funds. If regulatory agencies raise concerns about any aspect of
our business strategy for Ally Bank or the way in which we implement it, we may be obliged to limit or even reverse the growth of Ally Bank
or otherwise alter our strategy, which could have an adverse effect on our business, financial condition, results of operations, or prospects. In
addition, if we are compelled to retain or shift any of our business activities in or to nonbank affiliates, our funding costs for those activities—
such as unsecured funding in the capital markets—could be more expensive than our cost of funds at Ally Bank.

We are subject to stress tests, capital and liquidity planning, and other enhanced prudential standards, which impose significant

restrictions and costly requirements on our business and operations.

We are currently subject to enhanced prudential standards that have been established by the FRB under the Dodd-Frank Act, as amended

by the EGRRCP Act. Refer to the section above titled Regulation and Supervision in Part I, Item 1 of this report. Under the Tailoring Rules,
Ally is a Category IV firm and, as such, is generally subject to supervisory stress testing on a two-year cycle and is required to submit an
annual capital plan to the FRB.

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. While a resubmission is pending, without prior approval of the FRB, we would generally be prohibited from paying
dividends, repurchasing our common stock, or making other capital distributions. For example, in response to the outbreak of COVID-19, the
FRB determined that changes in financial markets or the macroeconomic outlook could have a material effect on the risk profiles and
financial conditions of firms subject to the capital-plan rule and that, as a result, the firms (including Ally) were required to resubmit capital
plans as well as, for a period of time, suspend nearly all common-stock repurchases and restrict common-stock dividends.

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. Any of these developments, including the mere fact of being required by the FRB to revise or
resubmit our capital plan and especially if unique to us or a group of firms like us, may damage our reputation and result in a loss of customer
or investor confidence.

Further, we may be required to raise capital if we are at risk of failing to satisfy our minimum regulatory capital ratios or related
supervisory requirements, whether due to inadequate operating results that erode capital, future growth that outpaces the accumulation of
capital through earnings, changes in regulatory capital standards, changes in accounting standards that affect capital (such as CECL), or
otherwise. In addition, we may elect to raise capital for strategic reasons even when we are not required to do so. Our ability to raise capital
on favorable terms or at all will depend on general economic and market conditions, which are outside of our control, and on our operating
and financial performance. Accordingly, we cannot be assured of being able to raise capital when needed or on favorable terms. An inability
to raise capital when needed and on favorable terms could damage the performance and value of our business, prompt supervisory actions and
private litigation, harm our reputation, and cause a loss of customer or investor confidence, and if the condition were to persist for any
appreciable period of time, our viability as a going concern could be threatened. Even if we are able to raise capital but do so by issuing
common stock or convertible securities, the ownership interest of our existing stockholders could be diluted, and the market price of our
common stock could decline.

The enhanced prudential standards also require Ally, as a Category IV firm, to conduct quarterly liquidity stress tests, to maintain a

buffer of unencumbered highly liquid assets to meet projected net stressed cash outflows over a 30-day planning horizon, to adopt a
contingency funding plan that would address liquidity needs during various stress events, and to implement specified liquidity risk
management and corporate governance measures. 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.

Ally Financial Inc. • Form 10-K

Our ability to rely on deposits as a part of our funding strategy may be limited.

Ally Bank is a key part of our funding strategy, and we place great reliance on deposits at Ally Bank as a source of funding. Competition
for deposits and deposit customers, however, is fierce. 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. Ally Bank does not have a branch network but, instead, obtains its
deposits through online and other digital channels, from customers of Ally Invest, and through deposit brokers. Brokered deposits may be
more price sensitive than other types of deposits and may become less available if alternative investments offer higher returns. Brokered
deposits totaled $12.6 billion at December 31, 2022, which represented 8.3% of Ally Bank’s total deposits. In addition, our ability to
maintain, grow, or favorably price deposits may be constrained by our lack of in-person banking services, gaps in our product and service
offerings, changes in consumer trends, our smaller scale relative to other financial institutions, competition from fintech companies and
emerging financial-services providers, any failures or deterioration in our customer service, or any loss of confidence in our brand or our
business. Our level and cost of deposits also could be adversely affected by regulatory or supervisory restrictions, including any applicable
prior approval requirements or limits on our offered rates or brokered deposit growth, and by changes in monetary or fiscal policies that
influence deposit or other interest rates. Perceptions of our existing and future financial strength, rates or returns offered by other financial
institutions or third parties, and other competitive factors beyond our control, including returns on alternative investments, will also impact
the size and cost of our deposit base.

Requirements under U.S. Basel III that increased the quality and quantity of regulatory capital and future revisions to the Basel III

framework may adversely affect our business and financial results.

Ally and Ally Bank are subject to U.S. Basel III. Refer to the section above titled Regulation and Supervision in Part I, Item 1 of this

report. 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). Failure to satisfy these
regulatory capital requirements would result in restrictions on our ability to make capital distributions, including dividend payments and stock
repurchases and redemptions, and to pay discretionary bonuses to executive officers.

If Ally or Ally Bank were to fail to satisfy its regulatory capital requirements, significant regulatory sanctions could result, such as a bar
on capital distributions, limitations on acquisitions and new activities, restrictions on our acceptance of brokered deposits, a loss of our status
as an FHC, or informal or formal enforcement and other supervisory actions. Such a failure also could irrevocably damage our reputation,
prompt a loss of customer and investor confidence, prompt private litigation, and even lead to our resolution or receivership. Any of these
consequences could have an adverse effect on our business, results of operations, financial condition, or prospects.

Our business and financial results could be adversely affected by the political environment and governmental fiscal and monetary

policies.

A fractious or volatile political environment in the United States, including any related social unrest, could negatively impact business

and market conditions, economic growth, financial stability, and business, consumer, investor, and regulatory sentiments, any one or more of
which in turn could cause our business and financial results to suffer. In addition, disruptions in the foreign relations of the United States
could adversely affect the automotive and other industries on which our business depends and our tax positions and other dealings in foreign
countries. We also could be negatively impacted by political scrutiny of the financial-services industry in general or our business or
operations in particular, whether or not warranted, and by an environment where criticizing financial-services providers or their activities is
politically advantageous.

Our business and financial results are also significantly affected by the fiscal and monetary policies of the U.S. government and its

agencies. We are particularly affected by the monetary policies of the FRB, which regulates the supply of money and credit in the United
States in pursuit of maximum employment, stable prices, and moderate long-term interest rates. The FRB and its policies influence the
availability and demand for loans and deposits, the rates and other terms for loans and deposits, the conditions in equity, fixed-income,
currency, and other markets, and the value of securities and other financial instruments. 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. These policies and related governmental actions could adversely affect every facet of our business and operations—for example, the
new and used vehicle financing market, the creditworthiness of our customers, the cost of our deposits and other interest-bearing liabilities,
and the yield on our earning assets.

Additionally, changes to tax policies could have a significant impact on our results of operations and financial condition. For example, in
August 2022, the Inflation Reduction Act was signed into law in the United States and, in part, imposes a 15% corporate alternative minimum
tax on certain large corporations, such as Ally, and a surcharge on stock repurchases. Tax and other fiscal policies, moreover, impact not only
general economic and market conditions but also give rise to incentives or disincentives that affect how we and our customers prioritize
objectives, deploy resources, and run households or operate businesses. Both the timing and the nature of any changes in monetary or fiscal

Ally Financial Inc. • Form 10-K

policies, as well as their consequences for the economy and the markets in which we operate, are beyond our control and difficult to predict
but could adversely affect us.

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.

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. Refer to the section above titled Regulation and Supervision in Part I, Item 1 of this report. Regulatory
or other legal restrictions, deterioration in a subsidiary’s performance, or investments in a subsidiary’s own growth may limit the ability of the
subsidiary to transfer funds freely to Ally. In particular, many of Ally’s subsidiaries are subject to laws that authorize their supervisory
agencies to block or reduce the flow of funds to Ally in certain situations. In addition, if any subsidiary were unable to remain viable as a
going concern, Ally’s right to participate in a distribution of assets would be subject to the prior claims of the subsidiary’s creditors
(including, in the case of Ally Bank, its depositors and the FDIC).

Legislative or regulatory initiatives on cybersecurity and data privacy could adversely impact our business and financial results.

Cybersecurity and data-privacy risks have received heightened legislative and regulatory attention. For example, the U.S. banking
agencies have adopted a final rule requiring us to notify the FRB within 36 hours of any significant computer security incident and have
proposed enhanced cyber risk management standards applicable to us and our service providers that would address cyber risk governance and
management, management of internal and external dependencies, and incident response, cyber resilience, and situational awareness. In
addition, rulemakings by the SEC and the CFPB have commenced to further regulate cybersecurity risk governance (including incident
disclosure) and personal-financial-data rights, respectively. Several states and their governmental agencies, such as the NYDFS, also have
adopted or proposed cybersecurity and data-privacy laws. Privacy laws in the State of California, for example, require regulated entities to
establish measures to identify, manage, secure, track, produce, and delete personal information.

Legislation and regulations on cybersecurity and data privacy may compel us to enhance or modify our systems and infrastructure, invest
in new systems and infrastructure, change our service providers, augment our scenario and vulnerability testing, or alter our business practices
or our policies on security, data governance, and privacy. If any of these outcomes were to occur, the complexity and costs of our operations
could increase significantly. 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.

Our business and financial results may be negatively affected by governmental responses to climate change and related environmental

issues.

Governments are intensely focused on the effects of climate change and related environmental issues. For example, since December

2020, the FRB has become a member of the Network of Central Banks and Supervisors for Greening the Financial System, created a
Supervision Climate Committee to identify and assess financial risks from climate change and to develop a program to ensure the resilience of
supervised firms to those risks, and created a Financial Stability Climate Committee to identify, assess, and address climate-related risks to
financial stability. The FRB also proposed in December 2022 a high-level framework for the safe and sound management of exposures to
climate-related financial risks for large banking organizations, such as Ally, after announcing in September 2022 that six of the nation’s
largest banks will participate in a pilot climate-scenario-analysis exercise designed to enhance the ability of supervisors and firms to measure
and manage climate-related financial risks. In addition, President Biden has issued an Executive Order on Climate-Related Financial Risks,
which in part directs the U.S. Treasury Secretary to work with other members of the Financial Stability Oversight Council to consider a
number of actions. Included among them are the Financial Stability Oversight Council’s assessment of climate-related financial risk to the
stability of the federal government and the U.S. financial system, facilitation of the sharing of climate-related financial risk data and
information among its members and other executive departments and agencies, and issuance of a report on any efforts by its members to
integrate consideration of climate-related financial risk in their policies and programs. Further, the SEC has created a Climate and ESG Task
Force in the Division of Enforcement, whose purpose includes proactively identifying ESG-related misconduct such as material gaps or
misstatements in the disclosure of climate risks.

How governments act to mitigate 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. The FRB has announced its development of a
program of scenario analysis to evaluate the potential economic and financial risks posed by different climate outcomes, and especially
because of our concentration in automotive finance and insurance, this could have the effect of directly or indirectly compelling us to alter our
businesses or operations in ways that would be detrimental to our results of operations and prospects. Such a program, moreover, could be
followed by an incorporation of climate and related environmental risks into the FRB’s supervisory stress tests, which may negatively impact
us and our future capital plans. Further, we may be compelled to change or cease some of our business or operational practices or to incur
additional capital, compliance, and other costs because of climate- or environmental-driven changes in applicable law or supervisory
expectations or due to related political, social, market, or similar pressure. We also 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. It is possible as well that

Ally Financial Inc. • Form 10-K

changes in climate and related environmental risks, perceptions of them, and governmental responses to them may occur more rapidly than
we are able to adapt without disrupting our business and impairing our financial results.

Risks Related to Our Business

Weak or deteriorating economic conditions, failures in underwriting, changes in underwriting standards, financial or systemic shocks,

or continued growth in our nonprime or used vehicle financing business could increase our credit risk, which could adversely affect our
business and financial results.

Our business is centered around lending and banking with an emphasis on our digital platform, and a significant percentage of our assets

are composed of loans, operating leases, and securities. As a result, in the ordinary course of business, credit risk is one of our most
significant risks.

Our business and financial results depend significantly on household, business, economic, and market conditions. When those conditions

are weak or deteriorating, we could simultaneously experience reduced demand for credit and increased delinquencies or defaults, including
in the loans that we have securitized and in which we retain a residual interest. These kinds of conditions also could dampen the demand for
products and services in our insurance, banking, brokerage, advisory, and other businesses. Increased delinquencies or defaults could also
result from our failing to appropriately underwrite loans and operating leases that we originate or purchase or from our adopting—for
strategic, competitive, or other reasons—more liberal underwriting standards. If delinquencies or defaults on our loans and operating leases
increase, their value and the income derived from them could be adversely affected, and we could incur increased administrative and other
costs in seeking a recovery on claims and any collateral. If unfavorable conditions are negatively affecting used vehicle or other collateral
values at the same time, the amount and timing of recoveries could suffer as well. Weak or deteriorating economic conditions also may
negatively impact the market value and liquidity of our investment securities, and we may be required to record additional impairment
charges that adversely affect earnings if debt securities suffer a decline in value that is considered other-than-temporary. There can be no
assurance that our forecasts of economic conditions, our assessments and monitoring of credit risk, and our efforts to mitigate credit risk
through risk-based pricing, appropriate underwriting and investment policies, loss-mitigation strategies, and diversification are, or will be,
sufficient to prevent an adverse impact to our business and financial results. For example, early loss performance in our consumer automotive
lending portfolio is trending higher compared to expectations at the time of origination for loans originated between the third quarter of 2021
and the second quarter of 2022. In addition, because of CECL, our financial results may be negatively affected as soon as weak or
deteriorating economic conditions are forecasted and alter our expectations for credit losses. Refer to the section above titled Regulation and
Supervision in Part I, Item 1 of this report. A financial or systemic shock and a failure of a significant counterparty or a significant group of
counterparties could negatively impact us as well, possibly to a severe degree, due to our role as a financial intermediary and the
interconnectedness of the financial system.

We continue to have exposure to nonprime consumer automotive financing and used vehicle financing. We define nonprime consumer

automotive loans primarily as those loans with a FICO® Score (or an equivalent score) at origination of less than 620. Customers that finance
used vehicles tend to have lower FICO® Scores as compared to new vehicle customers, and defaults resulting from vehicle breakdowns are
more likely to occur with used vehicles as compared to new vehicles that are financed. The carrying value of our nonprime consumer
automotive loans before allowance for loan losses was $8.8 billion, or approximately 10.6% of our total consumer automotive loans at
December 31, 2022, as compared to $8.8 billion, or approximately 11.3% of our total consumer automotive loans at December 31, 2021. At
December 31, 2022, and 2021, $302 million and $294 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. Additionally, the carrying value of our consumer
automotive used vehicle loans before allowance for loan losses was $55.7 billion, or approximately 67.0% of our total consumer automotive
loans at December 31, 2022, as compared to $49.3 billion, or approximately 63.0% of our total consumer automotive loans at December 31,
2021. If our exposure to nonprime consumer automotive loans or used vehicle financing continue to increase over time, our credit risk will
increase to a possibly significant degree.

As part of the underwriting process, we rely heavily upon information supplied by applicants and other third parties, such as credit
reporting agencies, automotive dealers and retailers (in the case of automotive consumer and commercial loans), and service providers (in the
case of unsecured personal loans). If any of this information is intentionally or negligently misrepresented and the misrepresentation is not
detected before completing the transaction, we may experience increased credit risk.

Our allowance for loan losses may not be adequate to cover actual losses, and we may be required to significantly increase our

allowance, which may adversely affect our financial condition and results of operations.

On January 1, 2020, we adopted CECL to measure credit losses for financial assets measured at amortized cost, which includes the vast
majority of our finance receivables and loan portfolio. Under CECL, the allowance is established to reserve for management’s best estimate
of expected lifetime losses inherent in our finance receivables and loan portfolio. CECL substantially increased our allowance for loan losses
with a resulting negative day-one adjustment to equity on January 1, 2020. Refer to the section above titled Regulation and Supervision in
Part I, Item 1 of this report.

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

Ally Financial Inc. • Form 10-K

loan charge-offs based on judgments different than those of management. If these differences in judgment are considerable, our allowance
could meaningfully increase and result in a sizable decrease in our net income and capital.

The determination of the appropriate level of the allowance for loan losses inherently involves a high degree of subjectivity and requires

us to make significant estimates of current and future credit risks using existing quantitative and qualitative information, all of which may
change substantially over time. 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. For
example, our shift to a full credit spectrum consumer automotive finance portfolio over the past several years has resulted in additional
increases in our allowance for loan losses, and could result in additional increases in the future. Any increase in the allowance in future
periods may adversely affect our financial condition or results of operations. Refer to the risk factor below, titled Our business and operations
make extensive use of models, and we could be adversely affected if our design, implementation, or use of models is flawed, for more
information on how risks associated with our use of models could affect our allowance for loan losses.

We have dealer-centric automotive finance and insurance businesses, and a change in the key role of dealers within the automotive

industry or our ability to maintain or build relationships with them could have an adverse effect on our business, results of operations,
financial condition, or prospects.

Our Dealer Financial Services business, which includes our Automotive Finance and Insurance segments, depends on the continuation of

the key role of dealers within the automotive industry, the maintenance of our existing relationships with dealers, and our creation of new
relationships with dealers. Refer to the section titled Our Business in the MD&A that follows.

A number of trends are affecting the automotive industry and the role of dealers within it. These include challenges to the dealer’s role as

intermediary between manufacturers and purchasers, shifting financial and other pressures exerted by manufacturers on dealers, the rise of
vehicle sharing and ride hailing, the development of autonomous and alternative-energy vehicles, the impact of demographic shifts on
attitudes and behaviors toward vehicle ownership and use, changing consumer and regulatory expectations around the vehicle buying
experience, adjustments in the geographic distribution of new and used vehicle sales, and advancements in communications technology.
While it is not currently clear how and how quickly these trends may develop, any one or more of them could adversely affect the key role of
dealers and their business models, profitability, and viability, and if this were to occur, our dealer-centric automotive finance and insurance
businesses could suffer as well.

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 4% as of December 31, 2022, compared
to December 31, 2021. If we are not able to maintain existing relationships with significant automotive dealers or if we are not able to develop
new relationships for any reason—including if we are not able to provide services on a timely basis, offer products and services that meet the
needs of the dealers, compete successfully with the products and services of our competitors, or effectively counter the influence that captive
automotive finance companies have in the marketplace or the exclusivity privileges that some competitors have with automotive
manufacturers—our wholesale funding volumes, and the number of dealers with whom we have retail funding relationships, could decline in
the future. If this were to occur, our business, results of operations, financial condition, or prospects could be adversely affected.

GM and Stellantis dealers and their retail customers continue to constitute a significant portion of our customer base, which creates

concentration risk for us.

While we continue to diversify our automotive finance and insurance businesses and to expand into other financial services, GM and
Stellantis dealers and their retail customers still constitute a significant portion of our customer base. In 2022, 31% of our new vehicle dealer
inventory financing and 22% of our consumer automotive financing volume were transacted for GM dealers and customers, and 55% of our
new vehicle dealer inventory financing and 22% of our consumer automotive financing volume were transacted for Stellantis dealers and
customers. In 2021, 31% of our new vehicle dealer inventory financing and 21% of our consumer automotive financing volume were
transacted for GM-franchised dealers and customers, and 48% of our new vehicle dealer inventory financing and 26% of our consumer
automotive financing volume were transacted for Stellantis dealers and customers. GM, Stellantis, and their captive finance companies
compete vigorously with us and could take further actions that negatively impact the amount of business that we do with GM and Stellantis
dealers and their customers. A significant adverse change in GM’s or Stellantis’ business—including, for example, in the production or sale of
GM or Stellantis vehicles, the quality or resale value of GM or Stellantis vehicles, GM’s or Stellantis’ relationships with its key suppliers, or
the rate or volume of recalls of GM or Stellantis vehicles—could negatively impact our GM and Stellantis dealer and retail customer bases
and the value of collateral securing our extensions of credit to them. Any future reductions in GM and Stellantis business that we are not able
to offset could adversely affect our business and financial results.

Our business and financial results are dependent upon overall U.S. automotive industry sales volume.

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. For example, new vehicle sales decreased dramatically during the
economic crisis that began in 2007–2008 and did not rebound significantly until 2012 and 2013. More recently, automotive manufacturers
have continued to experience shortages in their supply of semiconductor chips and other supply chain delays, which have materially

Ally Financial Inc. • Form 10-K

constrained their production and sale of new vehicles. Additionally, a meaningful rise in inflation during 2021 and through 2022 prompted the
FRB to sharply increase the federal funds rate more than expected during 2022, and FRB officials have signaled that further increases are
expected in 2023. The current level and trajectory of borrowing costs could adversely affect demand for new and used vehicles in the near
term. Any future declines in new or used vehicle sales could have an adverse effect on our business and financial results.

Vehicle loans and operating leases make up a significant part of our earning assets, and our business and financial results could suffer if

used vehicle prices are low or volatile or decrease in the future.

During the year ended December 31, 2022, 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.

General economic conditions, the supply of off-lease and other vehicles to be sold, the levels of demand for vehicle ownership and use,
relative market prices for new and used vehicles, perceived vehicle quality, the shift from gasoline to electric vehicles, overall vehicle prices,
the vehicle disposition channel, volatility in gasoline or diesel fuel prices, levels of household income and savings, interest rates, and other
factors outside of our control heavily influence used vehicle prices. Consumer confidence levels and the strength of automotive
manufacturers, dealers, and retailers can also influence the used vehicle market. For example, during the economic crisis that began in 2007–
2008, sharp declines in used vehicle demand and sale prices adversely affected our remarketing proceeds and financial results.

Our expectation of the residual value of a vehicle subject to an automotive operating lease contract is a critical element used to determine

the amount of the operating lease payments under the contract at the time the customer enters into it. As a result, to the extent that the actual
residual value of the vehicle—as reflected in the sale proceeds received upon remarketing at lease termination—is less than the expected
residual value for the vehicle at lease inception, we will incur additional depreciation expense and lower profit on the operating lease
transaction than our priced expectations. Our expectation of used vehicle values is also a factor in determining our pricing of new loan and
operating lease originations. In stressed economic environments, residual-value risk may be even more volatile than credit risk. To the extent
that used vehicle prices are significantly lower than our expectations, our profit on vehicle loans and operating leases could be substantially
less than our expectations, even more so if our estimate of loss frequency is underestimated as well. In addition, we could be adversely
affected if we fail to efficiently process and effectively market off-lease vehicles and repossessed vehicles and, as a consequence, incur
higher-than-expected disposal costs or lower-than-expected proceeds from the vehicle sales.

The levels of or changes in interest rates could affect our results of operations and financial condition.

We are highly dependent on net interest income, which is the difference between interest income on earning assets (such as loans and

investments) and interest expense on deposits and borrowings. Net interest income is significantly affected by market rates of interest, which
in turn are influenced by monetary and fiscal policies, general economic and market conditions (including high or increasing levels of
inflation), the political and regulatory environments, business and consumer sentiment, competitive pressures, and expectations about the
future (including future changes in interest rates). We may be adversely affected by policies, laws, and events that have the effect of flattening
or inverting the yield curve (that is, the difference between long-term and short-term interest rates), depressing the interest rates associated
with our earning assets to levels near the rates associated with our interest expense, increasing the volatility of market rates of interest
(including the rate of change), or changing the spreads among different interest rate indices. As of December 31, 2022, we remain liability
sensitive and expect increasing interest rates to have a negative impact to our near-term net interest income.

The levels of or changes in interest rates could adversely affect us beyond our net interest income, including by increasing the cost or
decreasing the availability of deposits or other variable-rate funding instruments, reducing the return on or demand for loans or increasing the
prepayment speed of loans, increasing customer or counterparty delinquencies or defaults, negatively impacting our ability to remarket off-
lease and repossessed vehicles, and reducing the value of our loans, retained interests in securitizations, and fixed-income securities in our
investment portfolio and the efficacy of our hedging strategies. 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. We recognize the accumulated change in estimated fair value of these fixed-income securities in
net income when we realize a gain or loss upon the sale of the security.

The level of and changes in market rates of interest—and, as a result, these risks and uncertainties—are beyond our control. The
dynamics among these risks and uncertainties are also challenging to assess and manage. For example, while an accommodative monetary
policy may benefit us to some degree by spurring economic activity among our customers, such a policy may ultimately cause us more harm
by inhibiting our ability to grow or sustain net interest income. A rising interest rate environment can pose different challenges, such as
potentially slowing the demand for credit, increasing delinquencies and defaults, and reducing the values of our loans and fixed-income
securities. Market volatility in interest rates, including the rate of change, can create particularly difficult conditions. Following a prolonged
period in which the federal funds rate was stable or decreasing, the FRB increased this benchmark rate on a number of occasions during 2017
and 2018 and began to end its quantitative-easing program and reduce the size of its balance sheet. During 2019, however, the FRB reversed
course and reduced the federal funds rate several times and, in March 2020, reduced the target range for the federal funds rate to zero to 0.25
percent. A meaningful rise in inflation during 2021 and through 2022 prompted the FRB to sharply increase the federal funds rate more than
expected during 2022, and FRB officials have signaled that further increases are expected in 2023. Refer to the section titled Market Risk in
the MD&A that follows and Note 21 to the Consolidated Financial Statements.

Ally Financial Inc. • Form 10-K

The discontinuation of LIBOR may adversely affect our business and financial results.

LIBOR meaningfully influences market interest rates around the globe. We have exposure to LIBOR-based contracts through a number

of our finance receivables and loans, primarily commercial automotive loans and corporate finance loans, as well as certain investment
securities and other arrangements.

In March 2021, the United Kingdom Financial Conduct Authority, which regulates LIBOR’s administrator, announced that U.S. dollar
LIBOR settings (other than the 1-week and 2-month U.S. dollar LIBOR settings) will cease to be provided or cease to be representative after
June 30, 2023. The publication of the 1-week and 2-month U.S. dollar LIBOR settings ceased to be provided or ceased to be representative as
of December 31, 2021. The LIBOR Act, enacted in March 2022, provides a uniform approach for replacing LIBOR as a reference interest rate
in tough legacy contracts—that is, contracts that do not include effective fallback provisions—when LIBOR is no longer published or is no
longer representative. Under the LIBOR Act, references to the most common tenors of LIBOR in these contracts will be replaced as a matter
of law, without the need to be amended by the parties, to instead reference benchmark interest rates based on SOFR that will be identified by
the FRB. The FRB issued a final rule effective February 27, 2023, to implement the LIBOR Act. Ally continues to evaluate the effects of the
LIBOR Act and the FRB’s final rule on Ally’s LIBOR-linked contracts, which remain uncertain.

Although governmental authorities have endeavored to facilitate an orderly discontinuation of LIBOR, no assurance can be provided that
this aim will be achieved or that the use, level, and volatility of LIBOR or other interest rates or the value of LIBOR-based securities will not
be adversely affected. Further, the viability of SOFR as an alternative reference rate and the availability and acceptance of other alternative
reference rates remain unclear and also may have adverse effects on market rates of interest and the value of securities and other financial
arrangements. In addition, although the LIBOR Act and its implementing regulations include safe harbors if the FRB’s SOFR-based
replacement rates are selected, these safe harbors are untested, and we could still be exposed to risks associated with disputes and litigation
with customers, counterparties, and other market participants in connection with implementing replacement rates for LIBOR. These
uncertainties, proposals and actions to resolve them, and their ultimate resolution also could negatively impact our funding costs, loan and
other asset values, asset-liability management strategies, and other aspects of our business and financial results. Refer to the section titled
Market Risk in the MD&A that follows and Note 21 to the Consolidated Financial Statements.

We rely extensively on third-party service providers in delivering products and services to our customers and otherwise conducting our

business and operations, and their failure to perform to our standards or other issues of concern with them could adversely affect our
reputation, business, and financial results.

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, personal lending, credit cards, brokerage, customer service, and operating
systems and infrastructure. While we have implemented a supplier-risk-management program and can exert varying degrees of influence over
our service providers, we do not control them, their actions, or their businesses. Our contracts with service providers, moreover, may not
require or sufficiently incent them to perform at levels and in ways that we would choose to act on our own. 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. In such a circumstance, our ability to deliver products and services to customers, to satisfy customer expectations,
and to otherwise successfully conduct our business and operations have been and, in the future, could be adversely affected. In addition, we
may need to incur substantial expenses to address issues of concern with a service provider, and if the issues cannot be acceptably resolved,
we may not be able to timely or effectively replace the service provider due to contractual restrictions, the unavailability of acceptable
alternative providers, or other reasons. Further, regardless of how much we can influence our service providers, issues of concern with them
could result in supervisory actions and private litigation against us and could harm our reputation, business, and financial results.

We are or may be subject to potential liability in connection with pending or threatened legal proceedings and other matters, which

could adversely affect our business or financial results.

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

The course and outcome of legal matters are inherently unpredictable. This is especially so when a matter is still in its early stages, the
damages sought are indeterminate or unsupported, significant facts are unclear or disputed, novel questions of law or other meaningful legal
uncertainties exist, a request to certify a proceeding as a class action is outstanding or granted, multiple parties are named, or regulatory or
other governmental entities are involved. Other contingent exposures and their ultimate resolution are similarly unpredictable for reasons that
can vary based on the circumstances. As a result, we often are unable to determine how or when threatened or pending legal matters and other
contingent exposures will be resolved and what losses may be incrementally and ultimately incurred. Actual losses may be higher or lower

Ally Financial Inc. • Form 10-K

than any amounts accrued or estimated for those matters and other exposures, possibly to a significant degree. Refer to Note 29 to the
Consolidated Financial Statements. In addition, while we maintain insurance policies to mitigate the cost of litigation and other proceedings,
these policies have deductibles, limits, and exclusions that may diminish their value or efficacy. Substantial legal claims, even if not
meritorious, could have a detrimental impact on our business, results of operations, and financial condition and could cause us reputational
harm.

Our inability to attract, retain, or motivate qualified employees could adversely affect our business or financial results.

Skilled employees are our most important resource, and competition for talented people is intense. 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. While we strive to mitigate human-capital risks, our senior executives and other key leaders
have deep and broad industry experience and would be difficult to replace without some degree of disruption. 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. Continued
scrutiny of compensation practices, especially in the financial services industry, has made this competition for talent only more difficult. In
addition, many parts of our business are particularly dependent on key personnel, and retaining talented people in certain areas, such as
technology, has been challenging. Further, growth in our businesses, through acquisitions or otherwise, will further increase our need for
skilled employees. 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.

Our ability to successfully make acquisitions is subject to significant risks, including the risk that governmental authorities will not
provide the requisite approvals, the risk that integrating acquisitions may be more difficult, costly, or time consuming than expected, and the
risk that the value of acquisitions may be less than anticipated.

We may from time to time seek to acquire other financial-services companies or businesses. These acquisitions may be subject to

regulatory approval, and no assurance can be provided that we will be able to obtain that approval in a timely manner or at all or that approval
may not be subject to burdensome conditions. This risk has become more pronounced in the last year as several governmental officials have
expressed skepticism about the value of further consolidation in the financial-services industry. Refer to the section above titled Regulation
and Supervision in Part I, Item 1 of this report. Even when we are able to obtain regulatory approval, the failure of other closing conditions to
be satisfied or waived could delay the completion of an acquisition for a significant period of time or prevent it from occurring altogether.
Any failure or delay in closing an acquisition could adversely affect our reputation, business, and performance.

Acquisitions involve numerous risks and uncertainties, including inaccurate financial and operational assumptions, incomplete or failed

due diligence, lower-than-expected performance, higher-than-expected costs, difficulties related to integration, diversion of management’s
attention from other business activities, adverse market or other reactions, changes in relationships with customers or counterparties, the
potential loss of key personnel, and the possibility of litigation and other disputes. 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.
There is significant competition for valuable acquisition targets, and we may not be able to acquire other companies or businesses on
attractive terms. No assurance can be given that we will pursue future acquisitions, and our ability to grow and successfully compete may be
impaired if we choose not to pursue or are unable to successfully make acquisitions.

Our business requires substantial capital and liquidity, and a disruption in our funding sources or access to the capital markets may

have an adverse effect on our liquidity, capital positions, and financial condition.

Liquidity is the ability to fund increases in assets and meet obligations as they come due, all without incurring unacceptable losses.

Banks are especially vulnerable to liquidity risk because of their role in the maturity transformation of demand or short-term deposits into
longer-term loans or other extensions of credit. We, like other financial services companies, rely to a significant extent on external sources of
funding (such as deposits and borrowings) for the liquidity needed to conduct our business and operations. A number of factors beyond our
control, however, could have a detrimental impact on the availability or cost of that funding and thus on our liquidity. These include market
disruptions, changes in our credit ratings or the sentiment of our investors, the state of the regulatory environment and monetary and fiscal
policies, competitive dynamics, reputational damage, the confidence of depositors in us, financial or systemic shocks, and significant
counterparty failures. Weak business or operational performance, unexpected declines or limits on dividends or other distributions from our
subsidiaries, and other failures to execute our strategic plan also could adversely affect Ally’s liquidity position.

We have significant maturities of unsecured debt each year. While we have reduced our reliance on unsecured funding as our deposits

have grown, it remains an important component of our capital structure and financing plans. At December 31, 2022, approximately $2.1
billion in principal amount of total outstanding consolidated unsecured debt is scheduled to mature in 2023, and approximately $1.5 billion
and $2.5 billion is scheduled to mature in 2024 and 2025, respectively. We also utilize secured funding. At December 31, 2022,
approximately $2.4 billion in principal amount of total outstanding consolidated secured long-term debt is scheduled to mature in 2023,
approximately $2.9 billion is scheduled to mature in 2024, and approximately $1.4 billion is scheduled to mature in 2025. Furthermore, at
December 31, 2022, approximately $26.1 billion in certificates of deposit at Ally Bank are scheduled to mature in 2023, which is not included

Ally Financial Inc. • Form 10-K

in the amounts provided above. Additional funding, whether through deposits or borrowings, will be required to fund a substantial portion of
the debt maturities over these periods.

At times we may rely on our ability to borrow from other financial institutions, and bank facilities are generally up for renewal on a
yearly basis. Any weakness in market conditions, tightening of credit availability, or other events referenced earlier in this risk factor could
have a negative effect on our ability to refinance any existing facilities and could increase the costs of bank funding. Ally and Ally Bank also
continue to access the securitization markets. While those markets have stabilized following the liquidity crisis that commenced in 2007–
2008, there can be no assurances that these sources of liquidity will remain available to us.

Our policies and controls are designed to enable us to maintain adequate liquidity to conduct our business in the ordinary course even in
a stressed environment. There is no guarantee, however, that our liquidity position will never become compromised. In such an event, we may
be required to sell assets at a loss or reduce loan and operating lease originations in order to continue operations. This could damage the
performance and value of our business, prompt regulatory intervention and private litigation, harm our reputation, and cause a loss of
customer and investor confidence, and if the condition were to persist for any appreciable period of time, our viability as a going concern
could be threatened. Refer to the section titled Liquidity Management, Funding, and Regulatory Capital in the MD&A that follows and Note
20 to the Consolidated Financial Statements.

Our indebtedness and other obligations are significant and could adversely affect our business and financial results.

We have a significant amount of indebtedness apart from deposit liabilities. At December 31, 2022, we had approximately $18.6 billion

in principal amount of indebtedness outstanding (including $7.7 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, 2022. We also have the
ability to create additional indebtedness.

If our debt service obligations increase, whether due to the increased cost of existing indebtedness or the incurrence of additional

indebtedness, more of our cash flow from operations would need to be allocated to the payment of principal of, and interest on, our
indebtedness, which would reduce the funds available for other purposes. Our indebtedness also could limit our ability to execute our strategic
plan and withstand competitive pressures and could reduce our flexibility in responding to changing business and economic conditions. In
addition, if we are unable to satisfy our indebtedness and other obligations in full and on time, our business, reputation, and value as a going
concern could be profoundly and perhaps inexorably damaged.

Our borrowing costs and access to the banking and capital markets could be negatively impacted if our credit ratings are downgraded

or otherwise fail to meet investor expectations.

The cost and availability of our funding are meaningfully affected by our short- and long-term credit ratings. 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. Agency ratings are not a recommendation to buy, sell, or hold any security and may be revised or withdrawn at any time. Each
agency’s rating should be evaluated independently of any other agency’s rating.

Future downgrades to our credit ratings or their failure to meet investor expectations may result in higher borrowing costs, reduced

access to the banking and capital markets, more restrictive terms and conditions being added to any new or replacement financing
arrangements.

The markets for automotive financing, insurance, banking (including corporate finance, mortgage finance, point-of-sale personal
lending, 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 (including corporate finance, mortgage finance, point-of-sale personal lending,

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. In addition, the emergence, adoption, and evolution of new technologies that affect intermediation, including
distributed ledgers such as digital assets and blockchain, as well as advances in robotic process automation could significantly affect the
competition for financial services. Refer to the section above titled Industry and Competition in Part I, Item 1 of this report. Competitive
pressures may drive us to take actions that we might otherwise eschew, such as lowering the interest rates or fees on loans, raising the interest
rates on deposits, or adopting more liberal underwriting standards. These pressures also may accelerate actions that we might otherwise elect
to defer, such as substantial investment in systems or infrastructure. Whatever the reason, actions that we take in response to competition may
adversely affect our results of operations and financial condition. These consequences could be exacerbated if we are not successful in
introducing new products and services, achieving market acceptance of our products and services, developing and maintaining a strong
customer base, continuing to enhance our reputation, or prudently managing risks and expenses.

Ally Financial Inc. • Form 10-K

Challenging business, economic, or market conditions may adversely affect our business, results of operations, and financial condition.

Our businesses are driven by robust economic and market activity, monetary and fiscal stability, and positive investor, business, and
consumer sentiment. 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, 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.
Further, if a significant and sustained increase in fuel prices or other adverse conditions were to lead to diminished new and used vehicle
purchases or prices, our automotive finance and insurance businesses could suffer considerably. In addition, concerns about the pace of
economic growth and uncertainty about fiscal and monetary policies can result in significant volatility in the financial markets and could
impact our ability to obtain cost-effective funding. If any of these events were to occur or worsen, our business, results of operation, and
financial condition could be adversely affected.

Geopolitical conditions, military conflicts, acts or threats of terrorism, natural disasters, pandemics, and other conditions or events

beyond our control could adversely affect us.

Geopolitical conditions, military conflicts (including Russia’s invasion of Ukraine), 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. For example, military conflicts, acts or threats of terrorism, and political, financial, or military
actions taken in response could adversely affect general economic, business, or market conditions and, in turn, us, especially as an
intermediary within the financial system. In addition, nation states engaged in warfare or other hostile actions may directly or indirectly use
cyberattacks against financial systems and financial-services companies like us to exert pressure on one another or other countries with
influence or interests at stake. We also could be negatively impacted if our key personnel, a significant number of our employees, or our
systems or infrastructure were to become unavailable or damaged due to a pandemic, natural disaster, war, act of terrorism, accident, or
similar cause. These same risks and uncertainties arise too for the service providers and counterparties on whom we depend as well as their
own third-party service providers and counterparties.

The most notable impact of COVID-19 on our results of operations was a significant increase in our provision expense for credit losses

during the year ended December 31, 2020. This was primarily driven by incremental reserves associated with a deterioration in
macroeconomic conditions, such as unemployment, following the onset of the pandemic. In the case of Russia’s invasion of Ukraine, security
risks as well as increases in fuel and other commodity costs, supply-chain disruptions, and associated inflationary pressures have impacted our
business the most. These conditions and events and others like them are highly complex and inherently uncertain, and their effect on our
business, results of operations, financial condition, and prospects in the future cannot be reliably predicted.

Our hedging strategies may not be successful in mitigating our interest rate, foreign exchange, and market risks, which could adversely

affect our financial results.

We employ various hedging strategies to mitigate the interest rate, foreign exchange, and market risks inherent in many of our assets and

liabilities. Our hedging strategies rely considerably on assumptions and projections regarding our assets and liabilities as well as general
market factors. If any of these assumptions or projections prove to be incorrect or our hedges do not adequately mitigate the impact of
changes in interest rates, foreign exchange rates, and other market factors, we may experience volatility in our earnings that could adversely
affect our profitability and financial condition. In addition, we may not be able to find market participants that are willing to act as our
hedging counterparties on acceptable terms or at all, which could have an adverse effect on the success of our hedging strategies. 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. Refer to the risk factors titled The levels of or changes in interest rates could affect our results of operations and
financial condition and Significant fluctuations in the valuation of investment securities or market prices could negatively affect our financial
results.

We use estimates and assumptions in determining the value or amount of many of our assets and liabilities. If our estimates or

assumptions prove to be incorrect, our cash flow, profitability, financial condition, and prospects could be adversely affected.

We use estimates and assumptions in determining the fair value of many of our assets, including retained interests from securitizations,
loans held for sale, and other investments that do not have an established market value or are not publicly traded. We also use estimates and
assumptions in determining the residual values of our operating lease assets. In addition, we use estimates and assumptions in determining our
allowance for loan losses, reserves for legal matters, insurance losses, and loss adjustment expenses (which represent the accumulation of
estimates for both reported losses and those incurred, but not reported, including claims adjustment expenses relating to direct insurance and
assumed reinsurance agreements). Refer to the section titled Critical Accounting Estimates in the MD&A that follows. Our assumptions and
estimates may be inaccurate for many reasons. 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. 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. A meaningful difference between our estimates and assumptions and our actual experience may adversely affect

Ally Financial Inc. • Form 10-K

our cash flow, profitability, financial condition, and prospects and may increase the volatility of our financial results. In addition, several
different judgments associated with assumptions or estimates could be reasonable under the circumstances and yet result in significantly
different results being reported.

Significant fluctuations in the valuation of investment securities or market prices could negatively affect our financial results.

Market prices for investment securities, nonmarketable equity investments, and other financial assets are subject to considerable

fluctuation. Fluctuations may result, for example, from perceived changes in the value of the asset, the relative price of alternative
investments, the usual volume of trading in the asset, shifts in investor sentiment, geopolitical events, actual or expected changes in monetary
or fiscal policies, and general market conditions, such as inflation. Due to these kinds of fluctuations, the amount that we realize in the
subsequent sale of an investment may significantly differ from the last reported value and could negatively affect our financial results. For
example, because nonmarketable equity investments are not readily salable in capital markets, their values are particularly susceptible to
extreme volatility. 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 $4.0 billion of net unrealized losses on our available-for-sale securities within
accumulated other comprehensive loss. Refer to the risk factor above, titled The levels of or changes in interest rates could affect our results
of operations and financial condition for more information on risks associated with increases in interest rates.

Changes in accounting standards could adversely affect our reported revenues, expenses, profitability, and financial condition.

Our financial statements are subject to the application of U.S. GAAP, which are periodically revised or expanded. The application of
U.S. GAAP is also subject to varying interpretations over time. Accordingly, we are required to adopt new or revised accounting standards or
comply with revised interpretations that are issued from time to time by various parties, including accounting standard setters and those who
interpret the standards, such as the FASB, the SEC, banking agencies, and our independent registered public accounting firm. Those changes
are beyond our control but could adversely affect our revenues, expenses, profitability, or financial condition. For example, the adoption of
CECL effective January 1, 2020, resulted in a significant increase to our allowance for loan losses in 2020. Refer to Note 1 to the
Consolidated Financial Statements for financial accounting standards issued by the FASB, but not yet adopted by the Company.

The financial system is highly interrelated, and the failure of even a single financial institution or other participant in the financial

system could adversely affect us.

The financial system is highly interrelated, including as a result of lending, trading, clearing, counterparty, and other relationships. We

have exposure to and routinely execute transactions with a wide variety of financial institutions, including brokers, dealers, commercial
banks, and investment banks. The financial system includes other substantial participants as well, including exchanges, central counterparties,
government-sponsored enterprises, insurance companies, private-equity funds, hedge funds, family offices, mutual funds, and money-market
funds. If any of these institutions or participants were to become or perceived to be unstable, were to fail in meeting its obligations in full and
on time, or were to enter bankruptcy, conservatorship, or receivership, the consequences could ripple throughout the financial system and may
adversely affect our business, results of operations, financial condition, or prospects. Because of interrelationships within the financial system,
this could occur even if the institution or participant itself were not systemically important or perceived to play a meaningful role in the stable
functioning of the financial markets.

Adverse economic conditions or changes in laws in the states where we have loan or operating lease concentrations may negatively

affect our business and financial results.

We are exposed to portfolio concentrations in some states, including California, Texas, and Florida. Factors adversely affecting the
economies and applicable laws in these states, including public policies that have the effect of drawing financial-services companies into
contentious political or social issues, could have an adverse effect on our business, results of operations, and financial condition.

Negative publicity outside of our control, or our failure to successfully manage issues arising from our conduct or in connection with the

financial services industry generally, could damage our reputation and adversely affect our business or financial results.

The performance and value of our business could be negatively impacted by any reputational harm that we may suffer, especially as an

intermediary within the financial system. This harm could arise from negative publicity outside of our control or our failure to adequately
address issues arising from our conduct or in connection with the financial services industry generally. 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.

Our failure to maintain appropriate ESG practices, oversight, and disclosures could result in reputational harm, a loss of customer and

investor confidence, and adverse business and financial results.

Governments, investors, customers, and the general public are increasingly focused on ESG practices, oversight, and disclosures. For us

and others in the financial-services industry, this focus extends to the practices and disclosures of the customers, counterparties, and service
providers with whom we choose to do business. For example, while we have a smaller carbon footprint as a digital financial services
company and do not have commercial-lending relationships with a host of sensitive industries (such as those whose products are or are

Ally Financial Inc. • Form 10-K

perceived to be harmful to the environment or the public health), the majority of our business and operations are connected to the automotive
industry. Views about ESG are diverse, dynamic, and rapidly changing, with a number of competing constituencies. If our ESG practices,
oversight, and disclosures were considered to be inadequate or inappropriate by governmental officials, supervisory authorities, investors,
customers, or other constituencies with the ability to affect our business and financial results, we could suffer reputational damage, a loss of
customer and investor confidence, and adverse effects on our results of operations and prospects.

Climate change could adversely affect our business, operations, and reputation.

A prominent aspect of ESG is climate change and the management of climate and related environmental risks. The climate and the
environment, however, are extraordinarily complex and impossible to reliably model, and as a result, related physical and transition risks and
the scope and severity of their consequences are pervaded by uncertainty. Climate change and the transition to a less carbon-dependent
economy may adversely affect our business, results of operations, financial condition, or prospects due to our concentration in automotive
finance and insurance or for entirely different reasons that we cannot yet foresee. 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. 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. If our strategic or tactical responses to these physical and transition risks are or are perceived to be ineffective or
insufficient, we could be subject to enforcement and other supervisory actions, reputational damage, a loss of customer or investor
confidence, difficulty retaining or attracting talented employees, or other harm. 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.

Risks Related to Our Operations

We face a wide array of security risks that could result in business, reputational, financial, regulatory, and other harm to us.

Our operating systems and infrastructure, as well as those of our service providers or others on whom we rely, are subject to security

risks that are rapidly evolving and increasing in scope, complexity, and frequency. 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. 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. Risks relating to cyberattacks on our service providers and other third parties,
including supply-chain attacks affecting our software and information-technology providers, have been rising as such attacks become
increasingly frequent and severe. 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. We,
our service providers, and others on whom we rely are also exposed to more traditional security threats to physical facilities and personnel.

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. 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. As a digital financial-services company and a direct bank
with no branch network, we may face heightened pressure to resolve security breaches more expeditiously to prevent or mitigate a loss of
depositor or customer confidence, and if we were to fail to do so, our viability as a going concern could be threatened. As threats inevitably
evolve, we expect to continue experiencing increased scrutiny of our security frameworks and protocols by supervisory authorities and others
and to continue expending significant resources to enhance our defenses, to educate our employees, to monitor and support the defenses
established by our service providers and others on whom we rely, and to investigate and remediate incidents and vulnerabilities as they arise
or are identified. 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. A sophisticated breach,
moreover, may not be identified until well after the attack has occurred and the damage has been caused.

We also could be adversely affected by security risks faced by others. 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. Further, in such a circumstance, we may not receive timely notice of or sufficient information about
the breach or be able to exert any meaningful control or influence over how and when the breach is addressed. In addition, a security threat
affecting the business community, the markets, or parts of them may cycle or cascade through the financial system and harm us. The mere
perception of a security breach involving us or any part of the financial services industry, whether or not true, also could damage our business,
operations, or reputation.

Many if not all of these risks and uncertainties are some of our most significant and yet beyond our control. Refer to the section titled

Risk Management in the MD&A that follows.

Ally Financial Inc. • Form 10-K

Our operating systems or infrastructure, as well as those of our service providers or others on whom we rely, could fail or be

interrupted, which could disrupt our business and adversely affect our results of operations, financial condition, and prospects.

We rely heavily upon communications, data management, and other operating systems and infrastructure—including cloud-based
services—to conduct our business and operations, which creates meaningful operational risk for us. For example, during 2021, there were a
number of widely publicized cases of outages in connection with access to cloud service providers. 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. These adverse effects could be exacerbated if systems or infrastructure need to be taken offline or meaningfully
repaired, if backup systems or infrastructure are not adequately redundant and effective for the conduct of our business and operations, or if
technological or other solutions do not exist or are slow to be developed. Further, to the extent that the systems or infrastructure of service
providers or others are involved, we may have little or no knowledge, control, or influence over how and when failures or delays are
addressed. As a digital financial-services company with a meaningful dependence on service providers, we are susceptible to business,
reputational, financial, regulatory, and other harm as a result of these risks.

In the ordinary course of our business, we collect, store, process, and transmit sensitive, confidential, or proprietary data and other
information, including business information, intellectual property, and the personally identifiable information of customers and employees.
The secure collection, storage, processing, and transmission of this information are critical to our business and reputation, and if any of this
information were mishandled, misused, improperly accessed, altered, lost, or stolen or if related operations were disabled or otherwise
disrupted, we could suffer significant business, reputational, financial, regulatory, and other damage.

Even when a failure of or interruption in operating systems or infrastructure is timely resolved, we may need to expend substantial
resources in doing so, may be required to take actions that could adversely affect customer satisfaction or behavior, and may be exposed to
reputational damage. We also could be exposed to contractual claims, supervisory actions, or litigation by private plaintiffs.

We are heavily reliant on technology, and a failure in effectively implementing technology initiatives, anticipating future technology

needs or demands, or maintaining rights or interests in associated intellectual property could adversely affect our business or financial
results.

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. 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. Although we take steps to mitigate the risks and uncertainties associated with these initiatives, they are not always implemented on
time, within budget, or without negative financial, operational, or customer impact and do not always perform as we or our customers expect,
and no assurance can be provided that initiatives in the future will be or will do so. We also may not succeed in anticipating or keeping pace
with future technology needs, the technology demands of customers, or the competitive landscape for technology. If we were to misstep in
any of these areas, our business, financial results, or reputation could be negatively impacted. Our use of systems and other technologies also
depends on rights or interests in the underlying intellectual property, which we or our service providers may own or license. If we or a service
provider were alleged or found to be infringing on the intellectual-property rights of another person or entity, we could be liable for
significant damages for past infringement, substantial fees for continued use, and deprivation of access for limited or extended periods of time
without the practical availability of an alternative.

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. The framework incorporates risk culture and incentives,
risk governance and organization, strategy and risk appetite, a material-risk taxonomy, key risk-management processes, and risk capabilities.
Our chief risk officer, chief compliance officer, and other personnel who make up our independent risk-management function are responsible
for overseeing and implementing the framework. 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. If conditions or circumstances arise that expose flaws or gaps in the framework
or its design or implementation, the performance and value of our business and operations could be adversely affected. An ineffective risk-
management framework or function also could give rise to enforcement and other supervisory actions, damage our reputation, and result in
private litigation.

Ally Financial Inc. • Form 10-K

Our business and operations make extensive use of models, and we could be adversely affected if our design, implementation, or use of

models is flawed.

We use quantitative models to price products and services, measure risk, calculate the quantitative portion of our allowance for loan
losses, estimate asset and liability values, assess capital and liquidity, manage our balance sheet, create financial forecasts, and otherwise
conduct our business and operations. If the design, implementation, or use of any of these models is flawed, we could make strategic or
tactical decisions based on incorrect, misleading, or incomplete information. 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.

Risks Related to Ownership of Our Common Stock

Our ability to pay dividends on our common stock or repurchase shares in the future may be limited.

Any future dividends on our common stock or changes in our stock-repurchase program 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. In addition, any plans
to continue dividends or share repurchases in the future will be subject to our stress capital buffer requirement and the FRB’s review of our
annual capital plan, which are unpredictable. There is no assurance that our Board will approve, or the FRB will permit, future dividends or
share repurchases. Refer to the section above titled Regulation and Supervision in Part I, Item 1 of this report.

It is possible that any indentures or other financing arrangements that we execute in the future could limit our ability to pay dividends on

our capital stock, including our common stock. In the event that any of our indentures or other financing arrangements in the future restrict
that ability, we may be unable to pay dividends unless and until we can refinance the amounts outstanding under those arrangements. In
addition, under Delaware law, our Board may declare dividends on our capital stock only to the extent of our statutory surplus (which is
defined as the amount equal to total assets minus total liabilities, in each case at fair market value, minus statutory capital) or, if no surplus
exists, out of our net profits for the then-current or immediately preceding fiscal year. Further, even if we are permitted under our contractual
obligations and Delaware law to pay dividends on our common stock, we may not have sufficient cash or regulatory approvals to do so.

The market price of our common stock could be adversely impacted by anti-takeover provisions in our organizational documents and
Delaware law that could delay or prevent a takeover attempt or change in control of Ally or by other banking, antitrust, or corporate laws
that have or are perceived as having an anti-takeover effect.

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. 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.

These provisions, alone or together, could delay hostile takeovers and changes in control of Ally or changes in management.

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.

Banking and antitrust laws, including associated regulatory-approval requirements, also impose significant restrictions on the acquisition

of direct or indirect control over any BHC like Ally or any insured depository institution like Ally Bank. Refer to the section above titled
Regulation and Supervision in Part I, Item 1 of this report. 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.

Ally Financial Inc. • Form 10-K

Item 1B. Unresolved Staff Comments

None.

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 692,000 square feet
of office space in a corporate facility that we own.

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. 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 August 2025.

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.

Item 4. Mine Safety Disclosures

Not applicable.

Part II

Ally Financial Inc. • Form 10-K

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, 2022, we had 299,324,357 shares of common

stock outstanding, compared to 337,940,636 shares at December 31, 2021. As of February 22, 2023, we had approximately 33 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.

Stock 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. 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, 2017, and its relative performance is tracked through December 31, 2022. The
returns shown are based on historical results and are not intended to suggest future performance.

This performance graph is not deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities
of that section, or incorporated by reference into any filing of Ally under the Securities Act of 1933, as amended, or the Exchange Act, except
as expressly set forth by specific reference in such a filing.

Comparison of Cumulative Total Return

e
u
l
a
v

x
e
d
n
I

200
190
180
170
160
150
140
130
120
110
100
90
80
70
60
50
40

12/31/17

12/31/18

12/31/19

12/31/20

12/31/21

12/31/22

Period ending

Ally Financial Inc.

S&P Financials Index

S&P 500 Index

Recent Sales of Unregistered Securities

Ally did not have any sales of unregistered securities in the last three fiscal years.

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, 2022.

Three months ended December 31, 2022

October 2022

November 2022

December 2022

Total

Total number of
shares
repurchased (a)
(in thousands)

Weighted-average
price paid per
share (a) (b)
(in dollars)

1,688

1,731

29.62

26.26

25.80

29.53

Total number of
shares
repurchased as
part of publicly
announced
program (a) (c)
(in thousands)

Maximum
approximate dollar
value of shares that
may yet be
repurchased under the
program (a) (b) (c)
($ in millions)

1,688

1,731

351

350

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

(a)
(b) Excludes brokerage commissions.
(c) On January 11, 2022, we announced a common stock-repurchase program of up to $2.0 billion. The program commenced in the first quarter of 2022 and

expired on December 31, 2022. Refer to Note 20 to the Consolidated Financial Statements for further details.

Item 6.

[Reserved]

Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-K

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Cautionary Notice about Forward-Looking Statements and Other Terms

From time to time we have made, and in the future will make, forward-looking statements within the meaning of the Private Securities

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

This report, including any information incorporated by reference in this report, contains forward-looking statements. We also may make

forward-looking statements in other documents that are filed or furnished with the SEC. In addition, we may make forward-looking
statements orally or in writing to investors, analysts, members of the media, or others.

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

•

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

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

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

changes in accounting standards or policies;

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

any instability or breakdown in the financial system, including as a result of the failure of a financial institution or other participant
in it;

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

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

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

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

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

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

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 and the capital markets;

changes in any credit rating assigned to Ally, including Ally Bank;

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;

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 that affect us or our customers, counterparties, service providers, or competitors
or to maintain rights or interests in associated intellectual property;

our ability to successfully make and integrate acquisitions;

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

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

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.

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

Unless the context otherwise requires, the following definitions apply. The term “loans” means the following consumer and commercial

Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-K

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

Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-K

Overview

Ally Financial Inc. (together with its consolidated subsidiaries unless the context otherwise requires, Ally, the Company, we, us, or our)

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

Our Business
Dealer Financial Services

Dealer Financial Services is composed of our Automotive Finance and Insurance segments. Our primary customers are automotive
dealers, which are independently owned businesses, and automotive retailers, such as Carvana, CarMax, and EchoPark. A dealer may sell or
lease a vehicle for cash but, more typically, enters into a retail installment sales contract or operating lease with the customer and then sells
the retail installment sales contract or the operating lease and the leased vehicle, as applicable, to Ally or another automotive-finance provider.
The purchase by Ally or another provider is commonly described as indirect automotive lending to the customer.

Our Dealer Financial Services business is one of the largest full-service automotive finance operations in the country and offers a wide

range of financial services and insurance products to automotive dealerships and their customers. We have deep dealer relationships that have
been built throughout our over 100-year history, and we are leveraging competitive strengths to expand our dealer footprint. Our business
model encourages dealers to use our broad range of products through incentive programs like our Ally Dealer Rewards program. Our
automotive finance services include purchasing retail installment sales contracts and operating leases from dealers and automotive retailers,
extending automotive loans directly to consumers, offering term loans to dealers, financing dealer floorplans and providing other lines of
credit to dealers, supplying warehouse lines to automotive retailers, offering automotive-fleet financing, providing financing to companies and
municipalities for the purchase or lease of vehicles, and supplying vehicle-remarketing services. We also offer retail VSCs and commercial
insurance primarily covering dealers’ vehicle inventories. We are a leading provider of VSCs, GAP, and VMCs.

Automotive Finance

Our Automotive Finance operations provide U.S.-based automotive financing services to consumers, automotive dealers and retailers,

other businesses, and municipalities. Our business model, value-added products and services, full-spectrum financing, and business expertise
proven over many credit cycles make us a premier automotive finance company. At December 31, 2022, our Automotive Finance operations
had $111.5 billion of assets and generated $5.5 billion of total net revenue in 2022. For consumers, we provide financing for new and used
vehicles. In addition, our CSG provides automotive financing for small businesses and municipalities. At December 31, 2022, our CSG had
$10.0 billion of loans outstanding. Through our commercial automotive financing operations, we fund purchases of new and used vehicles
through wholesale floorplan financing. We manage commercial account servicing on approximately 2,600 dealers that utilize our floorplan
inventory lending or other commercial loans. We serviced 87.6 billion consumer loan and operating leases at December 31, 2022, and our
commercial automotive loan portfolio was approximately $18.8 billion at December 31, 2022. 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 2022, we continued to reposition our
origination profile to focus on capital optimization and risk-adjusted returns. In 2022, total consumer automotive originations were $46.4
billion, an increase of $98 million compared to 2021. The shorter-term duration consumer automotive loan and variable-rate commercial loan
portfolios offer attractive asset classes where we continue to optimize risk-adjusted returns through origination mix management and pricing
and underwriting discipline.

Our success as an automotive finance provider is driven by the consistent and broad range of products and services we offer to dealers

and automotive retailers. The automotive marketplace is dynamic and evolving, including substantial investments in electrification by
automotive manufacturers and suppliers. We remain focused on meeting the needs of both our dealer and consumer customers and continuing
to strengthen and expand upon our approximately 23,000 dealer relationships. We continue to identify and cultivate relationships with
automotive retailers, including those with leading eCommerce platforms. We also operate an online direct-lending platform for consumers
seeking direct financing. We believe these actions will enable us to respond to the growing trends for a more streamlined and digital
automotive financing process to serve both dealers and consumers. Furthermore, our strong and expansive dealer relationships,
comprehensive suite of products and services, full-spectrum financing, and depth of experience position us to evolve with future shifts in
automobile technologies, including electrification. We have provided and continue to provide automobile financing for hybrid and battery-
electric vehicles, including brands such as Jeep, Tesla, Ford, and BMW. This positions us to remain a leader in automotive financing as we
believe the majority of these vehicles will be sold through dealerships and automotive retailers with whom we have an established
relationship.

We have focused on developing dealer relationships beyond those relationships that primarily were developed through our previous role

as a captive finance company for GM and Stellantis. We have established relationships with thousands of automotive dealers through our
customer-centric approach and specialized incentive programs designed to drive loyalty amongst dealers to our products and services. Our
Growth channel includes brands such as Ford, Nissan, Kia, Hyundai, Toyota, Honda, as well as used-vehicle-only retailers with a national

Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-K

presence and online-only automotive retailers. As of December 31, 2022, approximately 66% of our Growth channel dealer relationships were
with franchised dealers.

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. The highly fragmented used-vehicle financing market, with a total financing opportunity represented by approximately 285 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.

For consumers, we provide automotive loan financing and leasing for approximately 4.3 million new and used vehicle contracts. Retail
financing for the purchase of vehicles by individual consumers generally takes the form of installment sales financing. We originated a total
of approximately 1.3 million and 1.4 million automotive loans and operating leases during the years ended December 31, 2022, and 2021,
respectively, totaling $46.4 billion and $46.3 billion.

Our consumer automotive financing operations generate revenue primarily through finance charges on retail installment sales contracts
and rental payments on operating lease contracts. For operating leases, when the contract is originated, we estimate the residual value of the
leased vehicle at lease termination. Periodically thereafter we revise the projected residual value of the leased vehicle at lease termination and
adjust depreciation expense over the remaining life of the lease, if appropriate. Given the fluctuations in used vehicle values, our actual sales
proceeds from remarketing the vehicle may be higher or lower than the projected residual value, which results in gains or losses on lease
termination. 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. Refer to the Operating Lease Residual Risk Management and Critical
Accounting Estimates sections of this MD&A for further discussion of credit risk and lease residual risk.

We continue to maintain a diverse mix of product offerings across a broad risk spectrum, subject to underwriting policies that reflect our
risk appetite. Our current operating results increasingly reflect our ongoing strategy to grow used vehicle financing and expand risk-adjusted
returns. While we predominately focus on prime-lending markets, we seek to be a meaningful source of financing to a wide spectrum of
customers and continue to carefully measure risk versus return. We place great emphasis on our risk management and risk-based pricing
policies and practices and employ robust credit decisioning processes coupled with granular pricing that is differentiated across our
proprietary credit tiers.

Our commercial automotive financing operations primarily fund inventory purchases of new and used vehicles by dealers, commonly

referred to as wholesale floorplan financing. This represents the largest portion of our commercial automotive financing business. Wholesale
floorplan loans are secured by vehicles financed (and all other vehicle inventory), which provide strong collateral protection in the event of
dealership default. Additional collateral or other credit enhancements (for example, personal guarantees from dealership owners) are typically
obtained to further mitigate credit risk. The amount we advance to dealers is equal to 100% of the wholesale invoice price of new vehicles,
subject to payment curtailment schedules. Interest on wholesale automotive financing is generally payable monthly and is indexed to a
floating-rate benchmark. The rate for a particular dealer is based on, among other considerations, competitive factors and the dealer’s
creditworthiness. During 2022, we financed an average of $11.4 billion of dealer vehicle inventory through wholesale floorplan financings.
Other commercial automotive lending products, which averaged $5.0 billion during 2022, consist of automotive dealer revolving lines of
credit, term loans, including those to finance dealership land and buildings, and dealer fleet financing. We also provide comprehensive
automotive remarketing services, including the use of SmartAuction, our online auction platform, which efficiently supports dealer-to-dealer
and other commercial wholesale vehicle transactions. SmartAuction provides diversified fee-based revenue and serves as a means of
deepening relationships with our dealership customers. In 2022, Ally and other parties, including dealers, fleet rental companies, and financial
institutions, utilized SmartAuction to sell approximately 336,000 vehicles to dealers and other commercial customers. SmartAuction served as
the remarketing channel for 9% of our off-lease vehicles.

Insurance

Our Insurance operations offer both consumer finance protection and insurance products sold primarily through the automotive dealer
channel, and commercial insurance products sold directly to dealers. We serve approximately 2.5 million consumers nationwide across F&I
and P&C products. In addition, we offer F&I products in Canada, where we serve more than 400 thousand consumers and are the preferred
VSC and other protection plan provider for GM Canada and VSC provider for Subaru Canada. Additionally, during the third quarter of 2022,
we entered into a long-term commitment to continue as the preferred VSC and other protection plan provider for GM Canada. Our Insurance
operations had $8.7 billion of assets at December 31, 2022, and generated $1.1 billion of total net revenue during 2022. As part of our focus
on offering dealers a broad range of consumer F&I products, we offer VSCs, VMCs, and GAP products. Ally Premier Protection is our
flagship VSC offering, which provides coverage for new and used vehicles of virtually all makes and models. We also offer ClearGuard on
the SmartAuction platform, which is a protection product designed to minimize the risk to dealers from arbitration claims for eligible vehicles
sold at auction. We also underwrite selected commercial insurance coverages, which primarily insure dealers’ wholesale vehicle inventory,
and offer additional products to protect a dealer’s business, including property and liability coverage that is underwritten by a third-party
carrier with a portion of the insurance risk assumed through a quota share agreement. On a smaller scale, we also periodically assume other
insurance risks through quota share arrangements and perform services as an underwriting carrier for an insurance program managed by a
third-party where we cede the majority of such business to external reinsurance markets.

From a dealer perspective, Ally provides significant value and expertise, which creates high retention rates and strong relationships. In

addition to our product offerings, we provide consultative services and training to assist dealers in optimizing F&I results while achieving

Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-K

high levels of customer satisfaction and regulatory compliance. We also advise dealers regarding necessary liability and physical damage
coverages.

Our F&I products are primarily distributed indirectly through the automotive dealer network. We have established approximately 1,500

F&I dealer relationships nationwide and 590 dealer relationships in Canada, with a focus on growing dealer relationships in the future. Our
VSCs for retail customers offer owners and lessees mechanical repair protection and roadside assistance for new and used vehicles beyond the
manufacturer’s new vehicle warranty. These VSCs are marketed to the public through automotive dealerships and on a direct response basis.
We also offer GAP products, which cover certain amounts owed by a customer beyond their covered vehicle’s value in the event the vehicle
is damaged or stolen and declared a total loss. We continue to evolve our product suite and digital capabilities to position our business for
future opportunities through growing third-party relationships and sales through our online direct-lending platform.

We have approximately 3,200 dealer relationships within our P&C business to whom we offer a variety of commercial products and

levels of coverage. Vehicle inventory insurance for dealers provides physical damage protection for dealers’ floorplan vehicles. Among
dealers to whom we provide wholesale financing, our insurance product penetration rate is approximately 76%. Dealers who receive
wholesale financing from us are eligible for insurance incentives such as automatic eligibility for our preferred insurance programs.

A significant aspect of our Insurance operations is the investment of proceeds from premiums and other revenue sources. We use these

investments to satisfy our obligations related to future claims at the time these claims are settled. Our Insurance operations have an
Investment Committee, which develops guidelines and strategies for these investments. The guidelines established by this committee reflect
our risk appetite, liquidity requirements, regulatory requirements, and rating agency considerations, among other factors.

Mortgage Finance

Our Mortgage Finance operations consist of the management of held-for-investment and held-for-sale consumer mortgage loan
portfolios. Our held-for-investment portfolio includes our direct-to-consumer Ally Home mortgage offering, and bulk purchases of high-
quality jumbo and LMI mortgage loans originated by third parties. Our Mortgage Finance operations had $19.5 billion of assets at December
31, 2022, and generated $248 million of total net revenue in 2022.

Through our direct-to-consumer channel, we offer a variety of competitively priced jumbo and conforming fixed- and adjustable-rate
mortgage products through a third-party. Under our current arrangement, our direct-to-consumer conforming mortgages are originated as
held-for-sale and sold, while jumbo and LMI mortgages are originated as held-for-investment and subserviced by a third party. Loans
originated in the direct-to-consumer channel are sourced by existing Ally customer marketing, prospect marketing on third-party websites,
and email or direct mail campaigns. In April 2019, we announced a strategic partnership with BMC, which delivers an enhanced end-to-end
digital mortgage experience for our customers through our direct-to-consumer channel. Through this partnership, BMC conducts the sales,
processing, underwriting, and closing for Ally’s digital mortgage offerings in a highly innovative, scalable, and cost-efficient manner, while
Ally retains control of all the marketing and advertising strategies and loan pricing. This partnership with BMC limits operational volatility as
the mortgage industry continues to evolve in the current interest rate environment. During the year ended December 31, 2022, we originated
$3.3 billion of mortgage loans through our direct-to-consumer channel. During 2018, we made a strategic equity investment in the parent of
BMC (BMC Holdco) that was subsequently increased in 2019 and 2020. This investment is recognized as a nonmarketable equity investment
within other assets of our Consolidated Balance Sheet and is included in Corporate and Other. Refer to the Market Risk section of this MD&A
and Note 13 to the Consolidated Financial Statements for more information.

Through the bulk loan channel, we purchase loans from several qualified sellers including direct originators and large aggregators who

have the financial capacity to support strong representations and warranties and the industry knowledge and experience to originate high-
quality assets. 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, 2022, we purchased $2.8 billion of mortgage loans
that were originated by third parties. Our mortgage loan purchases are held-for-investment.

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

Corporate Finance

Our Corporate Finance operations primarily offer senior-secured loans to private equity sponsor-owned U.S.-based middle-market
companies and to well-established asset managers that mostly provide leveraged loans. The portfolio is composed of floating-rate leveraged
asset-based and cash flow/enterprise value loans. Our Corporate Finance operations had $10.5 billion of assets at December 31, 2022, and
generated $456 million of total net revenue during 2022, and continues to offer attractive returns and diversification benefits to our broader
lending portfolio. We believe our growing deposit-based funding model coupled with our expanded product offerings and deep industry
relationships provide an advantage over our competition, which includes other banks as well as publicly and privately held finance
companies. We have continued to prudently grow our lending portfolio with a focus on a disciplined and selective approach to credit quality,
including a greater focus on asset-based loans. As of December 31, 2022, 59% of our loans and 55% of our lending commitments were asset-
based, with 99.9% in a first-lien position. We seek markets and opportunities where our clients require customized, highly structured, and
time-sensitive financing solutions. Our corporate-finance lending portfolio is generally composed of first-lien, first-out loans.

Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-K

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. Additionally, our
Lender Finance business provides asset managers with facilities to partially fund their direct-lending activities. We also provide a commercial
real estate product, currently focused on lending to skilled nursing facilities, senior housing, and medical office buildings. Sponsor Finance
loan facilities typically include both a revolver and term loan component. Our target commitment hold level for these individual exposures
ranges from $15 million to $150 million, depending on product type. Additionally, hold sizes in our Lender Finance business range from
$50 million to $750 million. We also selectively arrange larger transactions that we may retain on-balance sheet or syndicate to other lenders.
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. In certain instances, we may be offered the opportunity to make small equity
investments in our borrowers, which provides an additional revenue opportunity for our business. The portfolio is well diversified across
multiple industries including financials, services, manufacturing distribution, and other specialty sectors. These specialty sectors include
technology/venture finance, defense and aerospace, and transportation and logistics. 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.

Corporate and Other
Overview

Corporate and Other primarily consists of centralized corporate treasury activities such as management of the cash and corporate
investment securities and loan portfolios, short- and long-term debt, retail and brokered deposit liabilities, derivative instruments, original
issue discount, and the residual impacts of our corporate FTP and treasury ALM activities. Corporate and Other also includes activity related
to certain equity investments, which primarily consist of FHLB and FRB stock, as well as other equity investments through Ally Ventures,
our strategic investment business. Additionally, Corporate and Other includes the management of our legacy mortgage portfolio, which
primarily consists of loans originated prior to January 1, 2009, CRA loans and related investments, and reclassifications and eliminations
between the reportable operating segments. Costs that are not allocated to our reportable operating segments as part of our COH
methodology, which involves management judgment, are also included in Corporate and Other.

Ally Invest

Corporate and Other includes the results of Ally Invest, our digital brokerage and wealth management offering, which enables us to

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

Through Ally Invest, we are able to offer a broad array of products through a fully integrated digital consumer platform centered around

self-directed products and digital advisory services. Ally Invest’s suite of commission-free and low-cost investing options serve both active
and passive investors with diverse and evolving financial objectives through a transparent online process. Our digital platform and broad
product offerings are enhanced by outstanding client-focused and user-friendly customer service that is generally accessible twenty-four hours
a day, seven days a week, via the phone, web or email—consistent with the Ally brand.

Ally Invest provides clients with self-directed trading services for a variety of securities including stocks, options, ETFs, mutual funds,

and fixed-income products through Ally Invest Securities. Ally Invest Securities also offers margin lending, which allows customers to
borrow money by using securities and cash currently held in their accounts as collateral. Through Ally Invest Forex, we offer self-directed
investors and traders the ability to trade over 50 currency pairs through a forex trading platform.

Ally Invest also provides advisory services to clients through wealth advisors, web-based solutions, informational resources, and virtual

interaction through Ally Invest Advisors, an SEC-registered investment advisor. Ally Invest Advisors provides clients the opportunity to
obtain professional portfolio management services in return for a fee based upon the client’s assets under management. In addition to
customized advice from wealth advisors, we offer cash enhanced portfolios that incur no management fee, and a number of core robo
portfolios, which hold ETFs diversified across asset class, industry sector, and geography and which are customized for clients based on risk
tolerance, investment time horizon, and wealth ratio.

Ally Lending

Ally Lending is also included within Corporate and Other and primarily serves medical and home improvement service providers by

enabling promotional and fixed rate installment-loan products through a digital application process at point-of-sale. The home improvement
vertical had originations of $1.2 billion during the year ended December 31, 2022, and represented approximately 57% of new originations.
Point-of-sale lending broadens our capabilities, and expands our product offering into consumer unsecured lending, all while helping to
further meet the financial needs of our customers.

Ally Credit Card

Beginning in December 2021 with the acquisition of Fair Square, which we rebranded as Ally Credit Card, financial information for our
credit-card business is included within Corporate and Other. The acquisition provides us with a scalable, digital-first credit card platform, and
advances our evolution as a leading digital consumer bank. Ally Credit Card features leading-edge technology, and a proprietary, analytics-

Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-K

based underwriting model. We believe the addition of credit card to our suite of products enhances our ability to grow and deepen both new
and existing customer relationships. As of December 31, 2022, our credit card business had approximately 1.0 million customers. Refer to
Note 2 to the Consolidated Financial Statements for additional details on the acquisition of Ally Credit Card.

Corporate Treasury and ALM Activities

The net financing revenue and other interest income of our Automotive Finance, Mortgage Finance, and Corporate Finance operations

include the results of an FTP process that insulates these operations from interest rate volatility by matching assets and liabilities with similar
interest rate sensitivity. The FTP process assigns charge rates to the assets and credit rates to the liabilities within our Automotive Finance,
Mortgage Finance, and Corporate Finance operations, based on anticipated maturity and a benchmark rate curve plus an assumed credit
spread. The assumed credit spread represents the cost of funds for each asset class based on a blend of funding channels available to the
enterprise, including unsecured and secured capital markets, private funding facilities, and deposits. In addition, capital is managed with the
goal of enhancing risk-adjusted returns on shareholders’ equity, while maintaining a strong capital position that is consistent with our risk
profile. We allocate capital to business growth opportunities, within an established risk appetite, to support our customers and communities.
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 2.7 million primary deposit
customers by leveraging our compelling brand and strong value proposition. Ally Bank is a digital direct bank with no branch network that
obtains retail deposits directly from customers. We have grown our deposits with a strong brand that is based on a promise of being
straightforward with our customers, and offering high-quality customer service and competitive interest rates. 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. At December 31, 2022, Ally Bank had $152.3 billion
of total deposits—including $137.7 billion of retail deposits, which grew $3.0 billion, or 2% during 2022. Over the past several years, the
continued growth of our retail-deposit base has contributed to a more favorable mix of lower cost funding and we continue to focus on
efficient deposit growth by continuing to expand the deposit value proposition beyond competitive deposit rates. Our segment results include
cost of funds associated with these deposit-product offerings.

Our deposit products and services are designed to develop long-term customer relationships and capitalize on the shift in consumer
preference for direct banking. Our deposits franchise is key to growing and building momentum across our suite of digital offerings at Ally
Home, Ally Invest, Ally Lending, and Ally Credit Card, consistent with our strategic objective to grow multi-product customers. These
products and services appeal to a broad group of customers, many of whom appreciate a streamlined digital experience coupled with our
strong value proposition. Ally Bank offers a full spectrum of retail deposit products, including online savings accounts, money-market
demand accounts, CDs, interest-bearing checking accounts, trust accounts, and IRAs. Our deposit services include Zelle® person-to-person
payment services, eCheck remote deposit capture, and mobile banking. As demonstrated with the successful launch of our Smart Savings
Tools, Ally continues 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 650,000 customers have adopted our Smart Savings Tools.

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 2.7 million deposit customers and 5.0 million retail bank accounts as of
December 31, 2022, compared to 2.5 million and 4.7 million, respectively, as of December 31, 2021. Our customer base spans across diverse
demographic segmentations and socioeconomic bands. Our direct bank business model resonates particularly well with the millennial
generation, which consistently makes up the largest percentage of our new customers. According to a 2022 American Bankers Association
survey, 83% of customers prefer to do their banking most often via digital and other direct channels (internet, mobile, telephone, and mail).
Furthermore, over the past five years, estimated direct banking deposits as a percentage of the broader retail deposits market increased by
approximately 1 percentage point, from 9% in 2017 to 10% in 2022. We have received a positive response to innovative savings and other
deposit products. In April 2022, Forbes named Ally to its “World’s Best Banks” list, and in June 2022, Kiplinger named Ally Bank to its
“Best Internet Banks” list for the sixth consecutive year. In September 2022, The Wall Street Journal named Ally Bank the “Best Overall
Online Bank.” In November 2022, MONEY® Magazine named Ally to its “Best Online Bank” list for the fifth consecutive year, as well as
the tenth time in the past twelve years. Ally Bank’s competitive direct banking offerings include online and mobile banking features such as
electronic bill pay, remote deposit, and electronic funds transfer nationwide, and no minimum balance requirements.

We intend to continue to grow and invest in our digital direct bank and further capitalize on the shift in consumer preference for direct

banking with expanded digital capabilities and customer-centric products that utilize advanced analytics for personalized interactions and
other technologies that improve efficiency, security, and the customer’s connection to the brand. We are focused on growing, deepening, and
further leveraging the customer relationships and brand loyalty that exist with Ally Bank as a catalyst for future loan and deposit growth, as
well as revenue opportunities that arise from introducing Ally Bank deposit customers to our digital wealth management offering, Ally Invest.

Funding and Liquidity

Our funding strategy targets a stable retail deposit base, supplemented by brokered deposits, public and private secured debt, and public

unsecured debt. These diversified funding sources are managed across products, markets, and investors to enhance funding flexibility and
stability, resulting in a more cost-effective long-term funding strategy.

Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-K

Prudent expansion of asset originations at Ally Bank and continued growth of a stable deposit base continue to be the cornerstone of our
long-term liquidity strategy. Our primary funding source is retail deposits, which provide us with stable, low-cost funding. We believe retail
deposits are less sensitive to interest rate changes, market volatility, or changes in credit ratings when compared to other funding sources. In
addition, we utilize brokered deposits, which are obtained through third-party intermediaries. At December 31, 2022, deposit liabilities totaled
$152.3 billion, which reflects an increase of $10.7 billion as compared to December 31, 2021. Deposits as a percentage of total liability-based
funding decreased one percentage point to 88% at December 31, 2022, as compared to December 31, 2021.

At both December 31, 2022, and December 31, 2021, 95% of Ally’s total assets were within Ally Bank. Longer-term unsecured debt is

the primary funding source utilized at the parent company. At December 31, 2022, we had $2.1 billion and $1.5 billion of unsecured long-
term debt principal maturing in 2023 and 2024, respectively. We have substantially reduced our reliance on market-based funding by
continuing to focus on retail deposit funding.

The strategies outlined above have allowed us to build and maintain a conservative liquidity position. Total available liquidity at
December 31, 2022, was $27.3 billion. Absolute levels of liquidity decreased during 2022, primarily as a result of decreased unencumbered
highly liquid securities. Refer to the section below titled Liquidity Management, Funding, and Regulatory Capital for a further discussion
about liquidity risk management.

Credit Strategy

Our strategy and approach to extending credit, as well as our management of credit risk, are critical elements of our business. Credit
performance is influenced by several factors including our risk appetite, our credit and underwriting processes, our monitoring and collection
efforts, the financial condition of our borrowers, the performance of loan collateral, fiscal and monetary stimulus, and various macroeconomic
considerations, including inflation. Our credit strategies are dynamic and are adjusted in response to asset performance, as well as changing
macroeconomic conditions and outlook. Most of our businesses offer credit products and services, which drive overall business performance.
Consistent with our risk appetite, our business lines operate under credit standards that consider the borrower’s ability and willingness to
repay loans. The failure to effectively manage credit risk can have a direct and significant impact on our earnings, capital position, and
reputation. Refer to the Risk Management section of this MD&A for a further discussion of credit risk and performance of our consumer and
commercial credit portfolios.

Within our consumer automotive loan portfolio, we serve a mix of consumers across the credit spectrum to achieve portfolio

diversification and to optimize the risk and return of our consumer automotive portfolio. This is achieved through the utilization of robust
credit decisioning processes coupled with granular pricing that is differentiated across our proprietary credit tiers. While we are a full-
spectrum automotive finance lender, the significant majority of our consumer automotive loans are underwritten within the prime-lending
segment. We define prime consumer automotive loans primarily as those loans with a FICO® Score at origination of 620 or greater. The
carrying value of our held-for-investment, nonprime consumer automotive loans before allowance for loan losses, as of December 31, 2022,
was approximately 10.6% of our total consumer automotive loans at December 31, 2022. During 2022, our strategy for originations has been
to optimize the deployment of capital by focusing on risk-adjusted returns against available origination opportunities, which has included a
continued gradual and measured shift towards used-vehicle financings.

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. Refer to the Mortgage Finance section of the MD&A that follows for credit quality information about purchases and
originations of consumer mortgages held-for-investment. We generally rely on appraisals conducted by licensed appraisers in conformance
with the expectations and requirements of Fannie Mae and federal regulators. When appropriate, we require credit enhancements such as
private mortgage insurance. We price each mortgage loan that we originate based on several factors, including the customer’s FICO® Score,
the LTV ratio, and the size of the loan. For bulk purchases, we only purchase loans from sellers with the experience to originate high-quality
loans and the financial wherewithal to support their representations and warranties.

Within Ally Lending, our digital provider that offers point-of-sale financing to consumers, we serve a mix of consumers to achieve
portfolio diversification and to optimize the risk-adjusted returns of our personal lending portfolio. As of December 31, 2022, the amortized
cost of our finance receivables related to Ally Lending was $2.0 billion.

Additionally, on December 1, 2021, we acquired Fair Square, which we rebranded Ally Credit Card, a digital credit card provider. This

expansion into credit card lending further broadens our consumer finance product portfolio. Through Ally Credit Card, we have grown and
deepened new and existing customer relationships. As of December 31, 2022, the amortized cost of our finance receivables related to Ally
Credit Card was $1.6 billion, as compared to $953 million at December 31, 2021.

Within our commercial lending portfolios, our Corporate Finance operations offer senior-secured loans to private equity sponsor-owned
U.S.-based middle-market companies and to well-established asset managers that mostly provide leveraged loans. The portfolio is composed
of floating-rate leveraged asset-based and cash flow/enterprise value loans. Throughout 2022, we continued to prudently grow this portfolio
with a disciplined and selective approach to credit quality, which included a greater focus on asset-based loans. This focus includes significant
growth of our lender finance business, which provides senior secured revolving credit facilities to asset managers, collateralized by a portfolio
of loans. Within our commercial automotive business, we continue to offer a variety of dealer-centric lending products, including automotive
dealer revolving lines of credit, term loans, including those to finance dealership land and buildings, and dealer fleet financing. These
commercial automotive products are an important aspect of our dealer relationships and offer a secured lending arrangement with strong

Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-K

collateral protections in the event of dealer default. The performance of our commercial credit portfolios continues to remain strong.
Nonperforming finance receivables and loans decreased $95 million from December 31, 2021, to $162 million at December 31, 2022. Our
total net charge-offs within our commercial lending portfolio remained low at $55 million for the year ended December 31, 2022, compared
to $11 million for the year ended December 31, 2021. Refer to the Risk Management section of the MD&A for further details.

Discontinued Operations

During 2013 and 2012, certain disposal groups met the criteria to be presented as discontinued operations. The remaining activity relates

to previous discontinued operations for which we continue to have income taxes, net of valuation allowances, as well as wind-down, legal,
and minimal operational costs. For all periods presented, the operating results for these operations have been removed from continuing
operations. The MD&A has been adjusted to exclude discontinued operations unless otherwise noted.

Primary Business Lines

Dealer Financial Services, which includes our Automotive Finance and Insurance operations, Mortgage Finance, and Corporate Finance

are our primary business lines. The remaining activity is reported in Corporate and Other, which primarily consists of centralized treasury
activities as well as Ally Invest, our digital brokerage and wealth management offering, Ally Lending, our point-of-sale financing business,
Ally Credit Card, CRA loans, and certain strategic investments. The following table summarizes the operating results excluding discontinued
operations of each business line. Operating results for each of the business lines are more fully described in the MD&A sections that follow.

Favorable/
(unfavorable)
2022–2021
% change

Favorable/
(unfavorable)
2021–2020
% change

(21)

(34)

(111)

—

(11)

(39)

(1)

167

163

(40)

n/m

173

Year ended December 31, ($ in millions)

2022

2021

2020

Total net revenue

Dealer Financial Services

Automotive Finance

Insurance

Mortgage Finance

Corporate Finance

Corporate and Other

Total

Income (loss) from continuing operations before income tax

5,530

5,460

1,112

248

456

1,082

1,404

218

436

688

4,488

1,376

220

344

258

8,428

8,206

6,686

expense

Dealer Financial Services

Automotive Finance

Insurance

Mortgage Finance

Corporate Finance

Corporate and Other

Total

n/m = not meaningful

2,250

3,384

(38)

282

(207)

343

282

1,285

284

(186)

(296)

2,342

3,855

1,414

Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-K

Consolidated Results of Operations

The following table summarizes our consolidated operating results for the periods shown. Refer to the reportable operating segment
sections of the MD&A that follows for a more complete discussion of operating results by business line. For a discussion of our fiscal 2021
results compared to fiscal 2020, refer to Part II, Item 7. Management Discussion and Analysis of Financial Condition and Results of
Operations in our 2021 Annual Report on Form 10-K.

Year ended December 31, ($ in millions)

2022

2021

2020

Net financing revenue and other interest income

Total financing revenue and other interest income

$ 10,621

8,651

8,797

Total interest expense

Net depreciation expense on operating lease assets

Net financing revenue and other interest income

Other revenue

Insurance premiums and service revenue earned

Gain on mortgage and automotive loans, net

Loss on extinguishment of debt

Other (loss) gain on investments, net

Other income, net of losses

Total other revenue

Total net revenue

Provision for credit losses

Noninterest expense

Compensation and benefits expense

Insurance losses and loss adjustment expenses

Goodwill impairment

Other operating expenses

Total noninterest expense

Income from continuing operations before income tax

expense

Income tax expense from continuing operations

2,857

914

6,850

1,151

—

(120)

495

1,578

8,428

1,399

1,900

280

—

2,507

4,687

2,342

627

1,914

570

6,167

1,117

(136)

285

686

2,039

8,206

241

1,643

261

—

2,206

4,110

3,855

790

3,243

851

4,703

1,103

110

(102)

307

565

1,983

6,686

1,439

1,376

363

2,044

3,833

1,414

328

Net income from continuing operations

1,715

3,065

1,086

Financial ratios:

Return on average assets (a)

Return on average equity (a)

Equity to assets (a)

Common dividend payout ratio (b)

0.93 %

11.91 %

7.77 %

23.72 %

1.70 %

18.31 %

9.26 %

10.63 %

0.59 %

7.59 %

7.83 %

26.30 %

Favorable/
(unfavorable)
2022-2021
% change

Favorable/
(unfavorable)
2021–2020
% change

(49)

(60)

(40)

100

(142)

(28)

(23)

n/m

(16)

(7)

—

(14)

(39)

(44)

n/m

(2)

(21)

(33)

(7)

(19)

100

(8)

(7)

173

(141)

182

n/m

n/m = not meaningful
(a) The ratios were based on average assets and average total equity using an average daily balance methodology.
(b) The common dividend payout ratio was calculated using basic earnings per common share.

2022 Compared to 2021

We earned net income from continuing operations of $1.7 billion for the year ended December 31, 2022, compared to $3.1 billion for the

year ended December 31, 2021. During the year ended December 31, 2022, results were favorably impacted by higher net financing revenue
and other interest income, as well as lower income tax expense. These items were more than offset by higher provision for credit losses,
noninterest expense, and other loss on investments, net for the year ended December 31, 2022.

Net financing revenue and other interest income increased $683 million for the year ended December 31, 2022, as compared to the year
ended December 31, 2021. Consumer automotive revenue increased as higher average consumer assets contributed to the increase in revenue
resulting from growth in the used-vehicle portfolio, primarily through franchised dealers, as well as increases in portfolio yields resulting
from pricing actions. The increases were also favorably impacted by the acquisition of Ally Credit Card in December 2021. We experienced
higher interest expense for the year ended December 31, 2022, as compared to 2021, in response to higher benchmark interest rates, which

Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-K

increased our cost of funds. Within our Automotive Finance operations, total net operating lease revenue decreased $298 million for the year
ended December 31, 2022, compared to 2021, driven by an increase in depreciation expense resulting from a declining impact of downward
adjustments to the rate of depreciation enacted in prior years, as well as a decrease in remarketing performance due to the continued shift in
off-lease disposition channel mix with lessee and dealer buyouts increasing from the prior year. These decreases were partially offset by an
increase in gross operating lease revenue driven by higher vehicle prices on new originations.

Loss on extinguishment of debt decreased $136 million for the year ended December 31, 2022, as compared to the year ended December

31, 2021. During the year ended December 31, 2021, we incurred $131 million of losses incurred for the full redemption of the Series 2
TRUPs.

Other loss on investments, net was $120 million for the year ended December 31, 2022, compared to other gains on investments, net of

$285 million for the year ended December 31, 2021. The decrease for the year ended December 31, 2022, as compared to 2021, was primarily
driven by $215 million of unrealized equity mark-to-market losses, consistent with broader stock market performance, as compared to results
from the year ended December 31, 2021, which included $7 million of unrealized losses. Results were also impacted by elevated realized
gains from the sale of available-for-sale securities and equity securities during the year ended December 31, 2021, that did not reoccur.

Other income, net of losses decreased $191 million for the year ended December 31, 2022, as compared to the year ended December 31,

2021. The decrease for the year ended December 31, 2022, compared to 2021, was primarily due to net downward adjustments (including
impairment) of $137 million related to equity investments without a readily determinable fair value during the year ended December 31,
2022, compared to net upward adjustments of $87 million during the year ended December 31, 2021. Refer to Note 13 to the Consolidated
Financial Statements for further information.

The provision for credit losses increased $1.2 billion for the year ended December 31, 2022, compared to the year ended December 31,
2021. The increases in provision for credit losses for the year ended December 31, 2022, were primarily driven by higher net charge-offs, as
well as reserve reductions during the year ended December 31, 2021, associated with improvements to the macroeconomic environment
following the onset of the COVID-19 pandemic. Refer to the Risk Management section of this MD&A for further discussion on our provision
for credit losses.

Noninterest expense was $4.7 billion for the year ended December 31, 2022, compared to $4.1 billion for the year ended December 31,
2021. The increase for the year ended December 31, 2022, was driven by increased expenses to support the growth of our consumer product
suite and expand our digital capabilities and portfolio of products.

We recognized total income tax expense from continuing operations of $627 million for the year ended December 31, 2022, compared to
income tax expense of $790 million for 2021. The decrease in income tax expense for the year ended December 31, 2022, compared to 2021,
was primarily due to the tax effects of a decrease in pretax earnings, partially offset by adjustments to the valuation allowance on foreign tax
credit carryforwards. Refer to Note 22 to the Consolidated Financial Statements for further information.

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.

Automotive Finance
Results of Operations

The following table summarizes the operating results of our Automotive Finance operations. The amounts presented are before the

elimination of balances and transactions with our other reportable operating segments.

Year ended December 31, ($ in millions)

2022

2021

2020

Net financing revenue and other interest income

Consumer

Commercial

Loans held-for-sale

Operating leases

Other interest income

Total financing revenue and other interest income

Interest expense

Net depreciation expense on operating lease assets (a)

Net financing revenue and other interest income

Other revenue

Gain on automotive loans, net

Other income

Total other revenue

Total net revenue

Provision for credit losses

Noninterest expense

Compensation and benefits expense

Other operating expenses

Total noninterest expense

5,680

5,198

4,931

712

1,596

—

7,990

1,852

914

5,224

280

306

5,530

1,036

629

1,615

2,244

514

—

1,550

—

7,262

1,483

570

5,209

—

251

5,460

571

1,452

2,023

833

—

1,435

7,204

2,069

851

4,284

—

204

4,488

1,236

549

1,418

1,967

Income from continuing operations before income tax

expense

Total assets

2,250

111,463

3,384

103,653

1,285

104,794

Favorable/
(unfavorable)
2022-2021
% change

Favorable/
(unfavorable)
2021–2020
% change

n/m

—

(25)

(60)

—

n/m

(10)

(11)

(34)

(38)

—

(100)

—

(4)

(2)

(3)

163

(1)

n/m = not meaningful
(a)

Includes net remarketing gains of $170 million, $344 million, and $127 million for the years ended December 31, 2022, 2021, and 2020, respectively.

2022 Compared to 2021

Our Automotive Finance operations earned income from continuing operations before income tax expense of $2.3 billion for the year

ended December 31, 2022, compared to $3.4 billion for the year ended December 31, 2021. For the year ended December 31, 2022, the
decrease was primarily due to higher provision for credit losses, higher interest expense, higher net depreciation expense on operating lease
assets, and higher noninterest expense, partially offset by higher financing revenue.

Consumer automotive loan financing revenue increased $482 million for the year ended December 31, 2022, compared to 2021. Higher

average consumer assets contributed to the increase in revenue resulting from growth in the used-vehicle portfolio, primarily through
franchised dealers, as well as increases in portfolio yields resulting from pricing actions.

Commercial loan financing revenue increased $198 million for the year ended December 31, 2022, compared to 2021. The increase was

primarily due to higher yields from higher benchmark interest rates.

Interest expense was $1.9 billion for the year ended December 31, 2022, compared to $1.5 billion for the year ended December 31, 2021.

The increase for the year ended December 31, 2022, was primarily due to market and industry dynamics, which drove an increase in our
deposit rates and other funding costs.

Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-K

Total noninterest expense increased $221 million for the year ended December 31, 2022, compared to 2021. The increase was primarily
due to higher COH allocations, as well as compensation and benefits expense, which increased primarily due to higher headcount to support
the growth of the business.

Total net operating lease revenue decreased $298 million for the year ended December 31, 2022, respectively, compared to 2021. We

recognized remarketing gains of $170 million for the year ended December 31, 2022, compared to remarketing gains of $344 million for the
year ended December 31, 2021, while depreciation expense on operating lease assets increased $170 million for the year ended December 31,
2022, compared to 2021. The decrease in net operating lease revenue was primarily driven by an increase in depreciation expense resulting
from a declining impact of downward adjustments to the rate of depreciation enacted in prior years, as well as a decrease in remarketing
performance due to the continued shift in off-lease disposition channel mix with lessee and dealer buyouts increasing from the prior year.
These decreases were partially offset by an increase in gross operating lease revenue driven by higher vehicle prices on new originations. The
shift in off-lease vehicle disposition may limit our ability to optimize remarketing proceeds, but it is expected to moderate in the near term in
connection with declining used vehicle values, which would soften any resulting adverse impacts to remarketing performance. Refer to the
Operating Lease Residual Risk Management section of this MD&A for further discussion.

The provision for credit losses increased $983 million for the year ended December 31, 2022, compared to the year ended December 31,
2021. The increase in provision for credit losses was primarily driven by higher net charge-offs during the year ended December 31, 2022, as
well as reserve reductions during the year ended December 31, 2021, associated with improvements to the macroeconomic environment
following the onset of the COVID-19 pandemic. Additionally, provision for credit losses was impacted by reserve increases associated with
portfolio growth across our consumer and commercial automotive businesses for the year ended December 31, 2022. Refer to the Risk
Management section of this MD&A for further discussion on our provision for credit losses.

The following table presents the average balance and yield of the loan and operating lease portfolios of our Automotive Financing

operations.

Year ended December 31, ($ in millions)

Finance receivables and loans, net (b)

Consumer automotive (c)

Commercial

Wholesale floorplan (d)

Other commercial automotive (e)

Investment in operating leases, net (f)

2022

2021

2020

Average
balance (a)

Yield

Average
balance (a)

Yield

Average
balance (a)

Yield

81,032

7.19 % $

75,689

6.65 % $

72,805

6.54 %

11,418

5,044

10,656

4.49

4.38

6.41

11,183

5,273

10,518

3.17

4.21

9.32

19,308

5,740

9,264

3.45

4.21

6.30

(a) Average balances are calculated using an average daily balance methodology.
(b) Nonperforming finance receivables and loans are included in the average balances. For information on our accounting policies regarding nonperforming

(c)

(d)

status, refer to Note 1 to the Consolidated Financial Statements.
Includes the effects of derivative financial instruments designated as hedges, which is included within Corporate and Other. Excluding the impact of
hedging activities, the yield was 7.01%, 6.87%, and 6.77% for the years ended December 31, 2022, 2021, and 2020, respectively.
Includes the effects of derivative financial instruments designated as hedges, which is included within Corporate and Other. Excluding the impact of
hedging activities, the yield was 4.30%, 2.61%, and 3.07% for the years ended December 31, 2022, 2021, and 2020, respectively.
(e) Consists primarily of automotive dealer term loans, including those to finance dealership land and buildings, and dealer fleet financing.
(f) Yield includes net gains on the sale of off-lease vehicles of $170 million, $344 million, and $127 million for the years ended December 31, 2022, 2021,
2020, respectively. Excluding these gains and losses on sale, the yield was 4.81%, 6.05%, and 4.93% for the years ended December 31, 2022, 2021, and
2020, respectively.

During the year ended December 31, 2022, our portfolio yield for consumer automotive loans, excluding the impact of hedging

activities, increased 14 basis points as compared to the year ended December 31, 2021. The increase for the year ended December 31, 2022,
was primarily driven by a higher interest rate environment. Our portfolio yield for consumer automotive loans, including the effects of
derivative financial instruments designated as hedges, was 18 basis points higher than our portfolio yield for consumer automotive loans
excluding the effects of derivative financial instruments designated as hedges for the year ended December 31, 2022, as compared to the year
ended December 31, 2021. This is attributable to the successful execution of hedging strategies that are used to mitigate interest rate risks.
Refer to Note 21 to the Consolidated Financial Statements for further discussion.

Our portfolio yield for investment in operating leases, net, including net gains on the sale of off-lease vehicles, was 6.41% for the year

ended December 31, 2022, compared to 9.32% for the year ended December 31, 2021. The decline was due to an increase in depreciation
expense resulting from a declining impact of downward adjustments to the rate of depreciation enacted in prior years, as well as a decrease in
remarketing performance due to the continued shift in off-lease disposition channel mix with lessee and dealer buyouts increasing from the
prior year. The shift in off-lease vehicle disposition mix may limit our ability to optimize remarketing proceeds, but is expected to moderate
in the near term in connection with declining used vehicle values, which could soften any resulting adverse impacts to remarketing
performance. Refer to the section titled Operating Lease Residual Risk Management within this MD&A for additional information.

Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-K

Automotive Financing Volume

Our Automotive Finance operations provide automotive financing services to consumers and automotive dealers and retailers. For
consumers, we provide retail financing and leasing for new and used vehicles, and through our commercial automotive financing operations,
we fund dealer purchases of new and used vehicles through wholesale floorplan financing and provide dealer term and revolving loans and
automotive fleet financing.

Acquisition and Underwriting

Our consumer underwriting process is focused on multidimensional risk factors and data driven risk-adjusted probabilities that are

continuously monitored and routinely updated. Each application is placed into an analytical category based on specific aspects of the
applicant’s credit profile and loan structure. We then evaluate the application by applying a proprietary credit scoring algorithm tailored to its
applicable category. Inputs into this algorithm include, but are not limited to, proprietary scores and deal structure variables such as LTV, new
or used vehicle collateral, and term of financing. The output of the algorithm is used to sort applications into various credit tiers (S, A, B, C,
D, and E). Credit tiers help determine our primary indication of credit quality and pricing, and are also communicated to the dealer that
submitted the application. This process is built on long established credit risk fundamentals to determine both the applicant’s ability and
willingness to repay. While advances in excess of 100% of the vehicle collateral value at loan origination—notwithstanding cash down and
vehicle trade in value—are typical in the industry (primarily due to additional costs such as mechanical warranty contracts, taxes, license, and
title fees), our pricing, risk, and underwriting processes are rooted in statistical analysis to manage this risk.

Our underwriting process uses a combination of automated strategies and manual evaluation by an experienced team of dedicated
underwriters. Continued advancements in our data-driven risk assessment process have allowed us to methodically increase our use of
automated credit decisioning in recent years. This increase in automated decisioning has enhanced the buying experience for our dealer and
consumer customers through improved response times, and more consistent credit decisions. Underwriting is also governed by our credit
policies, which set forth guidelines such as acceptable transaction parameters and verification requirements. For higher-risk approved
transactions, these guidelines require verification of details such as applicant income and employment through documentation provided by the
applicant or other data sources. We continue to monitor loss performance across the risk spectrum, which enables us to implement risk
mitigation strategies, including pricing increments and curtailment actions on underperforming microsegments.

Underwriters have a limited ability to approve exceptions to the guidelines in our credit policies. For example, an exception may be
approved to allow a term or a ratio of payment-to-income, debt-to-income, or LTV greater than that in the guidelines. Exceptions must be
approved by underwriters with appropriate approval authority and generally are based on compensating factors. We monitor exceptions with
the goal of limiting them to a small portion of approved applications and originated loans, and rarely permit more than a single exception to
avoid layered risk.

Consumer Automotive Financing

New- and used-vehicle consumer financing through dealerships takes one of two forms: retail installment sales contracts (retail
contracts) and operating lease contracts. We purchase retail contracts for new and used vehicles and operating lease contracts from dealers
after those contracts are executed by the dealers and the consumers. Our consumer automotive financing operations generate revenue
primarily through finance charges on retail contracts and rental payments on operating lease contracts. In connection with operating lease
contracts, we recognize depreciation expense on the vehicle over the operating lease contract period and we may also recognize a gain or loss
on the remarketing of the vehicle at the end of the lease.

The amount we pay a dealer for a retail contract is based on the rate of finance charge agreed by the dealer and customer, the negotiated

purchase price of the vehicle, any other products such as service contracts, less any vehicle trade-in value, any down payment from the
consumer, and any available automotive manufacturer incentives. Under the retail contract, the consumer is obligated to make payments in an
amount equal to the purchase price of the vehicle (less any trade-in or down payment) plus finance charges at a rate negotiated between the
consumer and the dealer. In addition, the consumer is responsible for charges related to past-due payments. Consistent with industry practice,
when we purchase the retail contract, we pay the dealer at a rate discounted below the rate agreed by the dealer and the consumer (generally
described in the industry as the “buy rate”). Our agreements with dealers limit the amount of the discount that we will accept. Although we do
not own the vehicles that we finance through retail contracts, our agreements require that we hold a perfected security interest in those
vehicles.

We set our buy rates using a granular, risk-based methodology factoring in several variables including interest costs, projected net

average annualized loss rates at the time of origination, anticipated operating costs, and targeted return on equity. Our underwriting
capabilities allow us to manage our risk tolerance levels to quickly react to major changes in the economy. Over the past several years, we
have continued to focus on optimizing pricing relative to market interest rates as well as portfolio diversification and the used-vehicle
segment, primarily through franchised dealers and automotive retailers, which has contributed to higher yields on our consumer automotive
loan portfolio. Commensurate with this shift in origination mix, we continue to maintain disciplined underwriting within our new- and used-
consumer automotive loan originations.

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. The amount we pay a dealer for an operating lease contract is based on the
negotiated price for the vehicle, less any vehicle trade-in, any down payment from the consumer, and any available automotive manufacturer
incentives. Under an operating lease, the consumer is obligated to make payments in amounts equal to the amount by which the negotiated
purchase price of the vehicle (less any trade-in value, down payment, or any available manufacturer incentives) exceeds the contract residual
value (including residual support) of the vehicle at lease termination, plus operating lease rental charges. 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. This evaluation is primarily based on a
proprietary model, which includes variables such as vehicle age, expected mileage, seasonality, segment factors, vehicle type, economic
indicators, production cycle, automotive manufacturer incentives, and shifts in used vehicle supply. This internally generated data is
compared against third-party, independent data for reasonableness.

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. If the lessee declines to exercise the purchase option, the dealer then has the
ability to buy out the vehicle. If neither the lessee or dealer completes the buyout, the vehicle is returned to us and we remarket the vehicle. 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.

Our standard consumer operating lease contract, SmartLease, requires a monthly payment by the consumer. We also offer an alternative
leasing plan, SmartLease Plus, which requires one up-front payment of all operating lease amounts at the time the consumer takes possession
of the vehicle.

Our standard consumer lease contracts are operating leases; therefore, credit losses on the operating lease portfolio are not as significant
as losses on retail contracts because lease credit losses are primarily limited to past-due payments and assessed fees. 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 1.1% and 0.8% of the portfolio at December 31, 2022, and 2021, respectively.

With respect to all financed vehicles, whether subject to a retail contract or an operating lease contract, we require that property damage
insurance be obtained by the consumer. In addition, for operating lease contracts, we require that bodily injury, collision, and comprehensive
insurance be obtained by the consumer.

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.

Credit Tier (a)

Year ended December 31, 2022

Total retail originations

Year ended December 31, 2021

Total retail originations

Year ended December 31, 2020

Used retail

New retail

Volume
($ in billions)

% Share of
volume

Average
FICO®

Volume
($ in billions)

% Share of
volume

Average
FICO®

6.7

15.0

6.2

1.5

0.5

0.2

30.1

5.4

13.8

6.8

1.3

0.3

0.1

27.7

4.6

9.2

4.1

1.0

0.3

0.1

100

—

100

743

686

648

611

569

553

684

736

682

648

610

563

545

679

736

682

646

609

566

542

682

4.4

6.7

1.4

0.1

—

12.6

100

4.4

6.7

1.9

0.1

—

13.1

100

4.9

4.8

1.3

0.2

—

11.2

100

746

686

654

629

604

541

700

740

681

650

616

585

564

693

736

678

646

611

593

574

698

Total retail originations

19.3

100

(a) Represents Ally’s internal credit score, incorporating numerous borrower and structure attributes including: severity and aging of delinquency; number of
credit inquiries; LTV ratio; term; and payment-to-income ratio. We periodically update our underwriting scorecard, which can have an impact on our
credit tier scoring.

The following table presents the percentage of total retail loan originations and purchases, in dollars, by the loan term in months.

Year ended December 31,

0–71

72–75

76 +

Total retail originations

2022

2021

2020

14 %

15 %

19 %

100 %

Retail originations with a term of 76 months or more represented 22% of total retail originations for the year ended December 31, 2022,
compared to 19% for the year ended December 31, 2021, and 17% for the year ended December 31, 2020. The increase in retail originations
with a term of 76 months or more is consistent with broader industry trends, as increases in average transaction prices and higher interest rates
elevated borrowers’ monthly payments. Substantially all the loans originated with a term of 76 months or more during the years ended
December 31, 2022, 2021, and 2020, were considered to be prime and in credit tiers S, A, or B. 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.

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.

December 31,

Pre-2018

2018

2019

2020

2021

2022

Total retail

2022

2021

2020

3 %

8 %

18 %

—

100 %

The following tables present the total retail loan and operating lease origination and purchase dollars and percentage mix by product type

and by channel.

Consumer automotive financing
originations

% Share of Ally originations

Year ended December 31, ($ in millions)

2022

2021

2020

2022

2021

2020

Used retail

New retail

Lease

30,107

27,743

12,579

3,665

13,141

5,369

19,312

11,185

4,618

Total consumer automotive financing originations (a) $

46,351

46,253

35,115

100

(a)

Includes CSG originations of $5.7 billion, $4.7 billion, and $3.8 billion for the years ended December 31, 2022, 2021, and 2020, respectively.

Consumer automotive financing
originations

% Share of Ally originations

Year ended December 31, ($ in millions)

2022

2021

2020

2022

2021

2020

Growth channel

Stellantis dealers

GM dealers

25,930

24,680

17,460

10,396

10,025

11,989

9,584

9,745

7,910

Total consumer automotive financing originations

46,351

46,253

35,115

100

Total consumer automotive loan and operating lease originations increased $98 million for the year ended December 31, 2022, compared

to 2021. The increase was primarily driven by continued momentum in used-vehicle lending and higher financed transaction amounts,
partially offset by decreased application flow.

We have included origination metrics by loan term and FICO® Score within this MD&A. 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.

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 define prime consumer automotive loans primarily as those loans with a FICO® Score at origination of 620 or greater.

Year ended December 31, 2022

760 +

720–759

660–719

620–659

540–619

< 540

Unscored (a)

Total consumer automotive financing originations

Year ended December 31, 2021

760 +

720–759

660–719

620–659

540–619

< 540

Unscored (a)

Total consumer automotive financing originations

Year ended December 31, 2020

760 +

720–759

660–719

620–659

540–619

< 540

Unscored (a)

Used retail

New retail

Lease

14 %

15 %

47 %

—

100 %

11 %

14 %

43 %

—

100 %

13 %

16 %

37 %

—

Total consumer automotive financing originations

100 %

(a) Unscored are primarily CSG contracts with business entities that have no FICO® Score.

Originations with a FICO® Score of less than 620 (considered nonprime) represented 9% of total consumer loan and operating lease

originations for both the years ended December 31, 2022, and December 31, 2021, and 10% for the year ended December 31, 2020.
Consumer loans and operating leases with FICO® Scores of less than 540 represented 1% of total originations for the years ended December
31, 2022, 2021, and 2020. 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. The carrying value of our held-for-investment, nonprime consumer automotive loans before
allowance for loan losses was $8.8 billion at both December 31, 2022, and December 31, 2021, which represented approximately 10.6% and
11.3% of our total consumer automotive loans at December 31, 2022, and December 31, 2021, respectively. For discussion of our credit-risk-
management practices and performance, refer to the section titled Risk Management.

During the first quarter of 2023, we amended our relationship with Carvana, a leading e-commerce platform for buying and selling used

vehicles. Specifically, we decreased our committed facility from a maximum of $5.0 billion to a maximum of $4.0 billion to support our
continued efforts to optimize risk-adjusted returns. This commitment is effective for 364 days. As part of the agreement, we purchase finance
receivables meeting certain prescribed eligibility requirements on a periodic basis from Carvana. We also have the opportunity to purchase
additional contracts from Carvana on an ad-hoc basis that may fall outside of the prescribed eligibility requirements utilized within the
recurring pools. The risk profile of the contractual purchases is similar to the volume we fund through other dealer-facing channels. All the
finance receivables purchased through this channel are used vehicles, and are included in Growth channel in our consumer origination
metrics. While different vintages exhibit varying performance, collectively to date, finance receivables purchased from Carvana have
exhibited (1) favorable delinquency and loss performance, as compared to original expectations assumed at the time of purchase, and (2)
consistent delinquency and loss performance compared to loans with similar credit characteristics acquired through our indirect dealer
channel. Consumer finance receivables sourced from Carvana represented 7% of our total consumer automotive finance receivables as of
December 31, 2022.

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. These marketing incentives are also referred to as rate support or subvention. When an automotive manufacturer
subsidizes the finance rate, we are compensated at contract inception for the present value of the difference between the manufacturer-
supported customer rate and our standard rate. For a retail contract, we defer and recognize this amount as a yield adjustment over the life of
the contract. For an operating lease contract, this payment reduces our cost basis in the underlying operating lease asset.

Automotive manufacturers may also elect to sponsor incentives, referred to as residual support, on operating leases. When an automotive
manufacturer provides residual support, we receive payment at contract inception that increases the contractual operating lease residual value
resulting in a lower operating lease payment from the customer. The payment received from the automotive manufacturer reduces our cost
basis in the underlying operating lease asset. Other operating lease incentive programs sponsored by automotive manufacturers may be made
at contract inception indirectly through dealers, which also reduces our cost basis in the underlying operating lease asset.

Under what the automotive finance industry refers to as “pull-ahead programs,” consumers may be encouraged by the manufacturer to
terminate operating leases early in conjunction with the acquisition of a new vehicle. As part of these programs, we may waive all or a portion
of the customer’s remaining payment obligation. Under most programs, the automotive manufacturer compensates us for a portion of the
foregone revenue from the waived payments. This compensation may be partially offset to the extent that our remarketing sales proceeds are
higher than otherwise would be realized if the vehicle had been remarketed upon contract maturity.

Servicing

We have historically serviced all retail contracts and operating leases we originated, including a small amount of retail contracts

originated as held-for-sale. On occasion, we have sold a portion of the retail contracts we originated through whole-loan sales and
securitizations, but generally retained the right to service and earn a servicing fee for our servicing functions. However, our expansion into
direct-to-consumer lending and other relationships with automotive retailers have resulted in the employment of third-party servicers. As of
December 31, 2022, we serviced 92% of our consumer automotive loan portfolio.

Servicing activities consist largely of collecting and processing customer payments, responding to customer concerns and inquiries,

processing customer requests (including those for payoff quotes, total-loss handling, and payment modifications), maintaining a perfected
security interest in the financed vehicle, engaging in collections activity, and disposing of off-lease and repossessed vehicles. Servicing
activities are generally consistent across our Automotive Finance operations; however, certain practices may be influenced by state laws.

Our customers have the option to receive monthly billing statements and remit payment by mail or through electronic fund transfers, or

to establish online web-based account administration through Ally Auto Online Services. Customer payments are processed by regional third-
party processing centers that electronically transfer payment information to customers’ accounts.

Collections activity includes initiating contact with customers who fail to comply with the terms of the retail contract or operating lease

agreement by sending reminder notices or contacting customers via various channels when an account becomes 3 to 7 days past due. The type
of collection treatment and level of intensity increases as the account becomes more delinquent. The nature and timing of these activities
depend on the repayment risk of the account.

During the collections process, we may offer a payment extension to a customer experiencing temporary financial difficulty. 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. If the customer’s financial difficulty is not temporary but we believe the customer is willing and able to repay
their loan at a lower payment amount, we may offer to modify the remaining obligation through a rewrite, extending the term and lowering
the interest rate. In the event of a rewrite, the outstanding balance generally remains unchanged. The use of extensions and modifications
helps us mitigate financial loss. Extensions may assist in cases where we believe the customer will recover from short-term financial difficulty
and resume regularly scheduled payments. Modifications may also be utilized in cases where we believe customers can fulfill the obligation
with lower payments over a longer period. Before offering an extension or modification, we evaluate and take into account the capacity of the
customer to meet the revised payment terms. We generally do not consider extensions that fall within our policy guidelines to represent more
than an insignificant delay in payment, and therefore, they are not considered a TDR. Although the granting of an extension could delay the
eventual charge-off of an account, typically we are able to repossess and sell the related collateral, thereby mitigating the loss. At December
31, 2022, 14.8% of the total amount outstanding in the servicing portfolio had been granted an extension or was rewritten, compared to 18.8%
at December 31, 2021. As of December 31, 2022, we had fewer outstanding loans that were granted deferrals under our COVID-19
modification program, as compared to the prior year.

Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-K

Subject to legal considerations, we generally begin repossession activity once an account is at least 90 days past due. Repossession may

occur earlier if we determine the customer is unwilling to pay, the vehicle is in danger of being damaged or hidden, or the customer
voluntarily surrenders the vehicle. We assign accounts to approved third-party repossession vendors, who handle the repossession activity on
our behalf. Any disruptions in the repossession process could impact our ability to timely or successfully repossess the vehicle. Generally,
after repossession, the customer is given a period of time to redeem the vehicle or reinstate the contract by paying off the account or bringing
the account current, respectively. If the vehicle is not redeemed or the contract is not reinstated, the vehicle is sold at auction. Generally, the
proceeds do not cover the unpaid balance, including unpaid earned finance charges and allowable expenses, and the resulting deficiency is
charged-off. Asset recovery centers pursue collections on accounts that have been charged-off, including those accounts where the vehicle
was repossessed, and skip accounts where the vehicle cannot be located.

Our total consumer automotive loan and lease serviced portfolio was $87.6 billion and $84.8 billion at December 31, 2022, and 2021,

respectively, compared to our consumer automotive on-balance-sheet serviced portfolio of $87.4 billion and $84.8 billion.

Remarketing and Sales of Leased Vehicles

When we acquire an operating lease, we assume ownership of the vehicle from the dealer. Neither the consumer nor the dealer is

responsible for the value of the vehicle at the time of lease termination. When vehicles are not purchased by customers or the receiving dealer
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. Conversely, we may recognize a remarketing gain when the proceeds
from a returned vehicle are greater than the expected residual value. Our ability to efficiently process and effectively market off-lease vehicles
affects the disposal costs and the proceeds realized from vehicle sales. Our methods of vehicle sales at lease termination primarily include the
following:

•

Sale to lessee — The lessee has the first opportunity to purchase the off-lease vehicle at the end of the lease term for the price stated
in the lease agreement, which equals the contract residual value determined at origination.

Sale to dealer — After the lessee declines an option to purchase the off-lease vehicle, the dealer who accepts it has the opportunity
to purchase it directly from us at a price we define.

Internet auctions — Once the lessee and the dealer decline to purchase the off-lease vehicle, we offer it to dealers and other third
parties through our proprietary internet site (SmartAuction). Through SmartAuction, we seek to maximize the net sales proceeds
from an off-lease vehicle by reducing the time between vehicle return and ultimate disposition, reducing holding costs, and
broadening the number of prospective buyers. We use SmartAuction for our own vehicles and make it available for third-party use.
We earn a service fee for every third-party vehicle sold through SmartAuction, which includes the cost of ClearGuard coverage, our
protection product designed to assist in minimizing the risk to dealers of arbitration claims for eligible vehicles. In 2022,
approximately 336,000 vehicles were sold through SmartAuction, as compared to approximately 261,000 in 2021.

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. We are responsible for handling decisions at the auction including
arranging for inspections, authorizing repairs and reconditioning, and determining whether bids received at auction should be
accepted.

We employ an internal team, including statisticians, to manage our analysis of projected used vehicle values and residual risk. This team

aids in the pricing of new operating leases, managing the disposal process including vehicle concentration risk, geographic optimization of
vehicles to maximize gains, disposal platform (internet vs. physical), and evaluating our residual risk on a real-time basis. This team tracks
market movements of used vehicles using data down to the VIN level including trim and options, vehicle age, mileage, and seasonality factors
that we feel are more relevant than other published indices (for example, Manheim, NADA). This analysis includes vehicles sold on our
SmartAuction platform, as well as vehicles sold through Manheim, ADESA, and over 200 independent physical auction sites. We believe this
analysis gives us a competitive advantage over our peers.

Commercial Automotive Financing
Automotive Wholesale Dealer Financing

One of the most important aspects of our dealer relationships is providing wholesale floorplan financing for new- and used-vehicle
inventories at dealerships. Wholesale floorplan financing, including syndicated loan arrangements, represents the largest portion of our
commercial automotive financing business and is the primary source of funding for dealers’ purchases of new and used vehicles.

Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-K

Wholesale floorplan financing is generally extended in the form of lines of credit to individual dealers. These lines of credit are secured

by the vehicles financed and all other vehicle inventory, which provide strong collateral protection in the event of dealership default.
Additional collateral (for example, blanket lien over all dealership assets) or other credit enhancements (for example, personal guarantees
from dealership owners) are generally obtained to further mitigate credit risk. Furthermore, in some cases, we may benefit from situations
where an automotive manufacturer repurchases vehicles. These repurchases may serve as an additional layer of protection in the event of
repossession of dealership new-vehicle inventory or dealership franchise termination. The amount we advance to dealers for a new vehicle is
equal to 100% of the manufacturer’s wholesale invoice price, subject to payment curtailment schedules. The amount we advance to dealers
for a used vehicle is typically 90–100% of the dealer’s cost of acquiring it. Interest on wholesale floorplan financing is generally payable
monthly. The majority of wholesale floorplan financing is structured to yield interest at a floating rate indexed to the Prime Rate. Although a
small number of financing arrangements are indexed to LIBOR, we have established an enterprise-wide LIBOR transition program to manage
the discontinuance of LIBOR. Refer to the section titled LIBOR Transition within the MD&A for further details. The rate for a particular
dealer is based on, among other things, competitive factors, the size of the account, and the dealer’s creditworthiness. Additionally, under our
Ally Dealer Rewards Program, dealers benefit in certain circumstances from wholesale-floorplan-financing incentives, which we pay and
account for as a reduction to interest income in the period they are earned.

Under our wholesale-floorplan-financing agreement, a dealership is generally required to pay the principal amount financed for a vehicle

within a specified number of days following the dealership’s sale or lease of the vehicle. The agreement also affords us the right to demand
payment of all amounts owed under the wholesale credit line at any time. We, however, generally make this demand only if we terminate the
credit line, the dealer defaults, or a risk-based reason exists to do so.

Commercial Wholesale Financing Volume

The following table presents the percentage of average balance of our commercial wholesale floorplan finance receivables, in dollars, by

product type and by channel.

Year ended December 31, ($ in millions)

Used vehicles

Stellantis new vehicles

GM new vehicles

Growth new vehicles

Total

Total commercial wholesale finance receivables

Average balance

2022

2021

2020

44 %

34 %

18 %

100 %

$ 11,418

$ 11,183

$ 19,308

Average commercial wholesale financing receivables outstanding increased $235 million during the year ended December 31, 2022, as

compared to 2021. The increase for the year ended December 31, 2022, as compared to 2021, was primarily due to an increase in average
vehicle values, and was partially offset by a reduction in the number of GM dealer relationships due to the competitive environment across the
automotive lending market.

During the year ended December 31, 2022, we amended Carvana’s commercial line of credit to a total of $2.2 billion and included a
participation agreement for a total of $200 million. The participation agreement met the requirements for derecognition and therefore all
outstanding amounts under this $200 million agreement are excluded from finance receivables and loans, net on our Consolidated Balance
Sheet. The $2.2 billion line of credit and related $200 million participation agreement are scheduled to terminate in the third quarter of 2023.
The credit line will revert to $2.0 billion thereafter, with a scheduled maturity in the first quarter of 2024. The line of credit represents a
commitment to fund Carvana’s wholesale floorplan financing of used vehicles and is consistent in form and structure with our other
wholesale floorplan financing arrangements. This includes the credit line being fully collateralized, as well as additional security placed
through cash collateral, to mitigate counterparty credit risk in the event of a default. At December 31, 2022, Carvana’s wholesale floorplan
assets outstanding balance was $517 million, net of $52 million attributable to the third-party participation agreement.

Other Commercial Automotive Financing

We also provide other forms of commercial financing for the automotive industry including automotive dealer term and revolving loans
and automotive fleet financing. Automotive dealer term and revolving loans are loans that we make to dealers to finance other aspects of the
dealership business, including acquisitions. These loans are usually secured by real estate or other dealership assets and are typically
personally guaranteed by the individual owners of the dealership. Additionally, these loans generally include cross-collateral and cross-default
provisions. Automotive fleet financing credit lines may be obtained by dealers, their affiliates, and other independent companies that are used
to purchase vehicles, which they lease or rent to others. The average balances of other commercial automotive loans decreased $229 million
for the year ended December 31, 2022, compared to 2021, to an average of $5.0 billion for the year ended December 31, 2022.

Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-K

Servicing and Monitoring

We service all of the wholesale credit lines in our portfolio and the associated wholesale automotive finance receivables. A statement
setting forth billing and account information is distributed on a monthly basis to each dealer. Interest and other nonprincipal charges are billed
in arrears and are required to be paid immediately upon receipt of the monthly billing statement. Generally, dealers remit payments to us
through ACH transactions initiated by the dealer through a secure web application.

We manage risk related to wholesale floorplan financing by assessing dealership borrowers using a proprietary model based on various

factors, including their capital sufficiency, operating performance, and credit and payment history. This model assigns dealership borrowers a
risk rating that affects the amount of the line of credit and the ongoing risk management of the account. We monitor the level of borrowing
under each dealer’s credit line daily. We may adjust the dealer’s credit line if warranted, based on the dealership’s vehicle sales rate, and
temporarily suspend the granting of additional credit, or take other actions following evaluation and analysis of the dealer’s financial
condition.

We periodically inspect and verify the existence of dealer vehicle inventories. The timing of these collateral audits varies, and no
advance notice is given to the dealer. Among other things, audits are intended to assess dealer compliance with the financing agreement and
confirm the status of our collateral.

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 amounts presented are before the elimination of

balances and transactions with our other reportable segments.

Year ended December 31, ($ in millions)

Insurance premiums and other income

2022

2021

2020

Insurance premiums and service revenue earned

1,151

1,117

1,103

Interest and dividends on investment securities, cash and
cash equivalents, and other earning assets, net (a)

Other (loss) gain on investments, net (b)

Other income

Total insurance premiums and other income

Expense

Insurance losses and loss adjustment expenses

Acquisition and underwriting expense

Compensation and benefits expense

Insurance commissions expense

Other expenses

Total acquisition and underwriting expense

Total expense

(Loss) income from continuing operations before income

tax expense

Total assets

Insurance premiums and service revenue written

(143)

1,112

280

101

610

159

870

1,150

(38)

8,659

1,103

216

220

1,404

1,376

261

562

146

800

1,061

343

9,381

1,197

363

517

130

729

1,092

284

9,137

1,229

Favorable/
(unfavorable)
2022-2021
% change

Favorable/
(unfavorable)
2021–2020
% change

(166)

(21)

(7)

(10)

(9)

(8)

(111)

(8)

(2)

(12)

(9)

(12)

(10)

(3)

Combined ratio (c)

98.6 %

93.9 %

98.0 %

(a)
(b)

Includes interest expense of $37 million, $58 million, and $80 million for the years ended December 31, 2022, 2021, and 2020, respectively.
Includes net unrealized losses on equity securities of $210 million and $10 million for the years ended December 31, 2022, and 2021, respectively, and
net unrealized gains on equity securities of $31 million for the year ended December 31, 2020.

(c) Management uses a combined ratio as a primary measure of underwriting profitability. Underwriting profitability is indicated by a combined ratio under
100% and is calculated as the sum of all incurred losses and expenses (excluding interest and income tax expense) divided by the total of premiums and
service revenues earned and other income (excluding interest, dividends, and other investment activity).

2022 Compared to 2021

Our Insurance operations incurred a loss from continuing operations before income tax expense of $38 million for the year ended
December 31, 2022, compared to income earned of $343 million for the year ended December 31, 2021. The decrease for the year ended
December 31, 2022, was primarily due to higher unrealized losses and lower realized gains on equity securities, as compared to the same
period in 2021.

Insurance premiums and service revenue earned was $1.2 billion for the year ended December 31, 2022, compared to $1.1 billion for the

same period in 2021. The increase for the year ended December 31, 2022, was driven by a higher F&I earned premium, primarily related to
VSCs and higher P&C revenues from ancillary dealer-related products, which more than offset declines from lower industry-wide dealer
vehicle inventory levels as a result of supply chain disruptions.

Other loss on investments, net was $143 million for the year ended December 31, 2022, compared to other gain on investments, net of

$216 million for the same period in 2021. The decrease was primarily attributable to elevated realized capital gains from equity securities
during 2021 that did not reoccur. Additionally, results are inclusive of $210 million of unrealized equity mark-to-market losses, consistent
with broader stock market performance, as compared to results from 2021, which included $10 million of unrealized losses.

Insurance losses and loss adjustment expenses totaled $280 million for the year ended December 31, 2022, compared to $261 million for

the same period in 2021. Losses have increased from 2021 due to higher VSC and other F&I service contract claims and volume growth in
other ancillary P&C products. These increases were partially offset by lower GAP claims as a result of higher used vehicle values. In April
2022, we renewed our annual excess of loss reinsurance agreement and continue to utilize this coverage for our vehicle inventory insurance to
manage our risk of weather-related loss. Our weather-related losses for the year did not exceed the retention limit, therefore we did not cede
weather-related losses for the year ended December 31, 2022, pursuant to our reinsurance agreement.

Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-K

Total acquisition and underwriting expense increased $70 million for the year ended December 31, 2022, as compared to the same period

in 2021. The changes were primarily due to an increase in insurance commission expense, commensurate with higher earned premiums from
our F&I products and higher ceding commissions assumed in connection with growth in our ancillary dealer product offering. Additionally,
the increase was driven by higher incentive program expenses and higher compensation and benefits expense and business support costs.

Our combined ratio was 98.6% for the year ended December 31, 2022, compared to 93.9% for the same period in 2021. The increase was

primarily driven by higher acquisition and underwriting expenses.

Premium and Service Revenue Written

The following table summarizes premium and service revenue written by product, net of premiums ceded to reinsurers, and premiums

and service revenue assumed from third-parties. VSC and GAP revenue are earned over the life of the service contract on a basis
proportionate to the anticipated loss pattern. Refer to Note 3 to the Consolidated Financial Statements for further discussion of this revenue
stream.

Year ended December 31, ($ in millions)

Finance and insurance products

Vehicle service contracts

Guaranteed asset protection and other finance and insurance products (a)

Total finance and insurance products

Property and casualty insurance (b)

Other premium and service revenue written (c)

Total

2022

2021

2020

702

175

877

215

838

162

1,000

197

—

850

137

987

242

—

1,103

1,197

1,229

(a) Other financial and insurance products include VMCs, ClearGuard, and other ancillary products.
(b) P&C insurance includes vehicle inventory insurance and dealer ancillary products including property and liability coverage underwritten by a third-party

carrier.
Primarily includes non-automotive assumed reinsurance and revenues associated with performing services as an underwriting carrier.

(c)

Insurance premiums and service revenue written was $1.1 billion for the year ended December 31, 2022, compared to $1.2 billion for the

same period in 2021. The decrease was primarily due to lower F&I volume commensurate with lower industry retail sales and a shift in VSC
product mix toward dealer reinsurance structures. These decreases were partially offset by growth in other P&C dealer property and liability
products, which also more than offset declines in P&C vehicle inventory insurance premiums related to lower industry vehicle inventory
levels that resulted from supply chain disruptions.

Cash and Investments

A significant aspect of our Insurance operations is the investment of proceeds from premiums and other revenue sources. We use these

Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-K

The following table summarizes the composition of our Insurance operations cash and investment portfolio at fair value.

December 31, ($ in millions)

Cash and cash equivalents

Noninterest-bearing cash

Interest-bearing cash

Total cash and cash equivalents

Equity securities

Available-for-sale securities

Debt securities

U.S. Treasury and federal agencies

U.S. States and political subdivisions

Foreign government

Agency mortgage-backed residential

Mortgage-backed residential

Corporate debt

Total available-for-sale securities

Total cash, cash equivalents, and securities

2022

2021

401

492

675

485

474

146

1,026

235

1,719

4,085

5,252

173

549

722

1,085

255

526

157

703

195

1,887

3,723

5,530

In addition to these cash and investment securities, the Insurance segment has an interest-bearing intercompany arrangement with
Corporate and Other, callable on demand. The intercompany loan balance due to Insurance was $417 million and $923 million at December
31, 2022, and December 31, 2021, respectively, and interest income of $9 million and $14 million was recognized for the years ended
December 31, 2022, and December 31, 2021, respectively.

Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-K

Mortgage Finance
Results of Operations

The following table summarizes the activities of our Mortgage Finance operations. The amounts presented are before the elimination of

balances and transactions with our reportable segments.

Year ended December 31, ($ in millions)

2022

2021

2020

Favorable/
(unfavorable)
2022-2021
% change

Favorable/
(unfavorable)
2021–2020
% change

Net financing revenue and other interest income

Total financing revenue and other interest income

Interest expense

Net financing revenue and other interest income

Gain on mortgage loans, net

Other income, net of losses

Total other revenue

Total net revenue

Provision for credit losses

Noninterest expense

Compensation and benefits expense

Other operating expenses

Total noninterest expense

Income from continuing operations before income tax

expense

Total assets

n/m = not meaningful

2022 Compared to 2021

575

354

221

248

167

190

19,529

407

283

124

218

(1)

165

187

17,847

487

369

118

102

220

138

160

14,889

(25)

(70)

(86)

(71)

n/m

(5)

(1)

(2)

(16)

(6)

(22)

(8)

(1)

114

—

(20)

(17)

(40)

Our Mortgage Finance operations earned income from continuing operations before income tax expense of $55 million for the year

ended December 31, 2022, compared to $32 million for the year ended December 31, 2021. The increase for the year ended December 31,
2022, was primarily driven by higher net financing revenue and other interest income, partially offset by lower net gains on the sale of
mortgage loans.

Net financing revenue and other interest income was $221 million for the year ended December 31, 2022, compared to $124 million for

the year ended December 31, 2021. The increase in net financing revenue and other interest income for the year ended December 31, 2022,
was primarily due to higher asset balances and lower prepayment activity, driven by a higher interest rate environment, which resulted in
lower premium amortization. Premium amortization was $18 million for the year ended December 31, 2022, compared to $92 million for the
year ended December 31, 2021. During the year ended December 31, 2022, we purchased $2.8 billion of mortgage loans that were originated
by third parties, compared to $3.9 billion for the year ended December 31, 2021. We originated $1.1 billion of mortgage loans held-for-
investment during the year ended December 31, 2022, compared to $7.0 billion during the year ended December 31, 2021.

Gain on sale of mortgage loans, net, was $26 million for the year ended December 31, 2022, compared to $87 million for the year ended

December 31, 2021. The decrease was attributable to lower margins and lower volume on direct-to-consumer mortgage originations and the
subsequent sale of these loans to a third party. We originated $2.1 billion of loans held-for-sale during the year ended December 31, 2022,
compared to $3.4 billion during the year ended December 31, 2021.

The provision for credit losses increased $4 million for the year ended December 31, 2022, compared to the year ended December 31,
2021. The increase in provision for credit losses for the year ended December 31, 2022, was primarily driven by reserve reductions during the
year ended December 31, 2021, associated with improvements to the macroeconomic environment following the onset of the COVID-19
pandemic. Refer to the Risk Management section of this MD&A for further discussion on our provision for credit losses.

Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-K

The following table presents the total UPB of purchases and originations of consumer mortgages held-for-investment, by FICO® Score

at the time of acquisition.

FICO® Score

Year ended December 31, 2022

740 +

720–739

700–719

680–699

660–679

Total consumer mortgage financing volume

Year ended December 31, 2021

740 +

720–739

700–719

680–699

Total consumer mortgage financing volume

Year ended December 31, 2020

740 +

720–739

700–719

680–699

660–679

< 660

Volume
($ in millions)

% Share of
volume

3,217

388

235

3,893

9,830

783

268

10,893

5,151

580

362

—

100

—

100

—

100

Total consumer mortgage financing volume

6,207

During the year ended December 31, 2022, we purchased and originated fewer consumer mortgage held-for-investment loans, as
compared to the year ended December 31, 2021. The decrease was primarily driven by the elevated interest rate environment. When interest
rates rise, the likelihood of refinancing decreases and origination volumes tend to decrease.

The following table presents the net UPB, net UPB as a percentage of total, WAC, premium net of discounts, LTV, and FICO® Scores

for the products in our Mortgage Finance held-for-investment loan portfolio.

Product

December 31, 2022

Adjustable-rate

Fixed-rate

Total

December 31, 2021

Adjustable-rate

Fixed-rate

Total

Net UPB (a)
($ in millions)

% of total net
UPB

WAC

Net premium
(discount)
($ in millions)

Average
refreshed
LTV (b)

Average
refreshed
FICO® (c)

408

19,039

19,447

378

17,158

17,536

100

3.18 % $

3.18

2.76 % $

3.15

3.14

(4)

(2)

106

109

52.64 %

54.69

54.65

50.37 %

57.09

56.94

771

782

781

763

776

(a) Represents UPB, net of charge-offs.
(b) Updated home values were derived using a combination of appraisals, broker price opinions, automated valuation models, and metropolitan statistical area

level house price indices.

Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-K

Corporate Finance
Results of Operations

The following table summarizes the activities of our Corporate Finance operations. The amounts presented are before the elimination of

balances and transactions with our reportable segments.

Year ended December 31, ($ in millions)

2022

2021

2020

Net financing revenue and other interest income

Interest and fees on finance receivables and loans

527

334

Interest on loans held-for-sale

Interest expense

Net financing revenue and other interest income

Total other revenue

Total net revenue

Provision for credit losses

Noninterest expense

Compensation and benefits expense

Other operating expenses

Total noninterest expense

Income from continuing operations before income tax

expense

Total assets

n/m = not meaningful

2022 Compared to 2021

212

334

122

456

131

282

10,544

308

128

436

116

282

7,950

6,108

Favorable/
(unfavorable)
2022-2021
% change

Favorable/
(unfavorable)
2021–2020
% change

n/m

(5)

(13)

(7)

(22)

(13)

—

(4)

—

184

(13)

(2)

(8)

n/m

349

299

344

149

107

Our Corporate Finance operations earned income from continuing operations before income tax expense of $282 million for both the

years ended December 31, 2022, and 2021. For the year ended December 31, 2022, higher net financing revenue was offset by lower
investment gains, and higher noninterest and provision expense compared to the year ended December 31, 2021.

Net financing revenue and other interest income was $334 million for the year ended December 31, 2022, compared to $308 million for

the year ended December 31, 2021. The increase for the year ended December 31, 2022, was primarily due to higher average assets from
continued growth in the portfolio. This was partially offset by an increase in interest expense as benchmark interest rates continued to rise.

Other revenue decreased $6 million for the year ended December 31, 2022, compared to the year ended December 31, 2021. The
decrease was primarily due to lower investment gains, partially offset by higher syndication and fee income for the year ended December 31,
2022, compared to 2021.

The provision for credit losses increased $5 million for the year ended December 31, 2022, compared to the year ended December 31,

2021. The increase in provision for credit losses was primarily driven by reserve increases associated with portfolio growth, as well as higher
specific provision activity. Refer to the Risk Management section of this MD&A for further discussion on our provision for credit losses.

Total noninterest expense increased $15 million for the year ended December 31, 2022, compared to the year ended December 31, 2021.

The increase was primarily due to higher direct and allocated expenses related to the growth of the business during 2022.

Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-K

Credit Portfolio

The following table presents loans held for sale, the amortized cost of finance receivables and loans outstanding, unfunded commitments

to lend, and total serviced loans of our Corporate Finance operations. As of December 31, 2022, 59% of our loans and 55% of our lending
commitments were asset-based, with 99.9% in a first-lien position.

December 31, ($ in millions)

Loans held-for-sale, net

Finance receivables and loans

Unfunded lending commitments (a)

Total serviced loans

2022

2021

445

10,147

6,390

14,823

305

7,770

4,967

11,180

(a)

Includes unused revolving credit line commitments for loans held for sale and finance receivables and loans, signed commitment letters, and standby letter
of credit facilities, which are issued on behalf of clients and may contingently require us to make payments to a third-party beneficiary in the event of a
draw by the beneficiary thereunder. As many of these commitments are subject to borrowing base agreements and other restrictive covenants or may
expire without being fully drawn, the stated amounts of these unfunded commitments are not necessarily indicative of future cash requirements.

The following table presents the percentage of total finance receivables and loans of our Corporate Finance operations by industry

concentration. The finance receivables and loans are reported at amortized cost.

December 31,

Industry

Financial services

Health services

Services

Automotive and transportation

Machinery, equipment, and electronics

Chemicals and metals

Wholesale

Other manufactured products

Retail trade

Other

Total finance receivables and loans

2022

2021

40.9 %

38.1 %

14.5

13.4

8.7

7.3

7.0

2.6

2.1

1.7

1.8

16.4

13.8

8.9

5.4

8.8

1.7

1.4

1.2

4.3

100.0 %

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.
Corporate and Other also includes certain equity investments, which primarily consist of FHLB and FRB stock as well as other strategic
investments through Ally Ventures, the management of our legacy mortgage portfolio, which primarily consists of loans originated prior to
January 1, 2009, the activity related to Ally Invest, Ally Lending, Ally Credit Card, CRA loans and related investments, and reclassifications
and eliminations between the reportable operating segments. Additionally, Corporate and Other includes costs that are not allocated to our
reportable operating segments as part of our COH methodology, which involves management judgment. Refer to Note 26 to the Consolidated
Financial Statements for more information.

Year ended December 31, ($ in millions)

2022

2021

2020

Favorable/
(unfavorable)
2022-2021
% change

Favorable/
(unfavorable)
2021–2020
% change

Net financing revenue and other interest income

Interest and fees on finance receivables and loans (a)

599

Interest on loans held-for-sale

Interest and dividends on investment securities and other

earning assets

Interest on cash and cash equivalents

Other, net

Total financing revenue and other interest income

Interest expense

Original issue discount amortization (b)

Other interest expense (c)

Total interest expense

Net financing revenue (loss) and other interest income

Other revenue

Gain on mortgage and automotive loans, net

Loss on extinguishment of debt

Other gain on investments, net

Other income, net of losses

Total other revenue

Total net revenue

Provision for credit losses

Total noninterest expense (d)

726

—

1,384

349

402

982

—

100

1,082

317

972

498

—

520

467

—

(136)

293

221

688

151

723

(15)

629

(8)

624

617

664

(40)

(102)

295

298

258

507

Loss from continuing operations before income tax

expense

Total assets

(207) $

(186) $

(296)

41,631

43,283

47,237

n/m

133

n/m

—

166

(8)

n/m

110

—

100

(66)

(73)

(55)

(110)

(34)

(11)

(4)

133

(25)

(21)

—

100

(17)

(4)

n/m

(100)

(33)

(27)

(1)

(26)

167

n/m

(43)

(8)

n/m = not meaningful
(a)

Includes impacts associated with hedging activities within our automotive loan portfolio, consumer other lending activity, and financing revenue from our
legacy mortgage portfolio.

(b) Amortization is included as interest on long-term debt in the Consolidated Statement of Income.
(c)
(d)

Includes the residual impacts of our FTP methodology and impacts of hedging activities of certain debt obligations.
Includes reductions of $1.3 billion, $1.1 billion, and $986 million for the years ended December 31, 2022, 2021, and 2020, respectively, related to the
allocation of COH expenses to other segments. The receiving segments record their allocation of COH expense within other operating expense.

Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-K

The following table presents the scheduled remaining amortization of the original issue discount at December 31, 2022.

Year ended December 31, ($ in millions)

2023

2024

2025

2026

2027

2028 and
thereafter (a)

Total

Original issue discount

Outstanding balance at year end

821

753

680

598

505

—

Total amortization (b)

505

882

(a) The maximum annual scheduled amortization for any individual year is $141 million in 2030.
(b) The amortization is included as interest on long-term debt in the Consolidated Statement of Income.

2022 Compared to 2021

Corporate and Other incurred a loss from continuing operations before income tax expense of $207 million for the year ended December

31, 2022, compared to a loss of $186 million for the year ended December 31, 2021. The increase in loss for the year ended December 31,
2022, was primarily driven by increases in both noninterest expense and provision expense, as well as a decrease in other revenue resulting
from an impairment of an equity investment without a readily determinable fair value. The increase in loss was partially offset by an increase
in net financing revenue and other interest income.

Total financing revenue and other interest income was $1.4 billion for the year ended December 31, 2022, compared to $520 million for
the year ended December 31, 2021. The increase was primarily driven by the impacts of a higher interest rate environment on the investment
securities portfolio and hedging activities, along with financing revenue from Ally Credit Card, which we acquired in the fourth quarter of
2021.

Total interest expense increased $349 million for the year ended December 31, 2022, compared to the year ended December 31, 2021.

The increase was primarily driven by a higher interest rate environment, resulting in higher funding costs.

Total other revenue decreased $121 million for the year ended December 31, 2022, compared to the year ended December 31, 2021. The

decrease was primarily driven by net downward adjustments (including impairment) of $137 million related to equity investments without a
readily determinable fair value during the year ended December 31, 2022, compared to net upward adjustments of $87 million during the year
ended December 31, 2021. Refer to Note 13 to the Consolidated Financial Statements for additional information. The decrease was partially
offset by the loss on extinguishment of debt during the year ended December 31, 2021.

The provision for credit losses increased $166 million for the year ended December 31, 2022, compared to the year ended December 31,
2021. For the year ended December 31, 2022, the increase in provision for credit losses was primarily driven by higher net charge-offs within
Ally Credit Card following our acquisition in December 2021, as well as higher net charge-offs and portfolio growth within Ally Lending.
Refer to the Risk Management section of this MD&A for further discussion on our provision for credit losses.

Noninterest expense increased $249 million for the year ended December 31, 2022, as compared to the year ended December 31, 2021.

The increase was primarily driven by incremental costs associated with Ally Credit Card, as well as compensation and benefits expense,
which increased primarily as a result of the settlement of our qualified defined pension plan.

Total assets were $41.6 billion as of December 31, 2022, compared to $43.3 billion as of December 31, 2021. This decrease was
primarily the result of a reduction in our investment securities balances, partially offset by growth in consumer loans associated with Ally
Lending and Ally Credit Card. Additionally, as of December 31, 2022, the amortized cost of the legacy mortgage portfolio was $290 million,
compared to $368 million at December 31, 2021, which also contributed to the decrease.

Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-K

Cash and Securities

The following table summarizes the composition of the cash and securities portfolio at fair value for Corporate and Other.

December 31, ($ in millions)

Cash and cash equivalents

Noninterest-bearing cash

Interest-bearing cash

Total cash and cash equivalents

Equity securities

Available-for-sale securities

Debt securities

U.S. Treasury and federal agencies

U.S. States and political subdivisions

Agency mortgage-backed residential

Mortgage-backed residential

Agency mortgage-backed commercial

Asset-backed

Total available-for-sale securities

Held-to-maturity securities

Debt securities

Agency mortgage-backed residential

Total held-to-maturity securities

Total cash, cash equivalents, and securities

Other Investments

2022

2021

451

4,628

5,079

—

1,531

286

15,607

4,064

3,535

433

306

4,011

4,317

1,900

338

18,336

4,230

4,526

534

25,456

29,864

884

1,204

31,419

35,391

The following table summarizes other investments at carrying value for Corporate and Other. Refer to Note 1 to the Consolidated

Financial Statements for further information on these investments.

December 31, ($ in millions)

Other assets

Investment in qualified affordable housing projects

Nonmarketable equity investments

Equity-method investments (a)

Total other investments

(a)

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

Ally Invest

2022

2021

1,596

1,378

794

563

956

424

2,953

2,758

Ally Invest is our digital brokerage and wealth management offering, which enables us to complement our competitive deposit products
with low-cost and commission-free investing. The following table presents trading days and average customer trades per day, the number of
funded accounts, total net customer assets, and total customer cash balances as of the end of each of the last five quarters.

December 31,
2022

September 30,
2022

June 30,
2022

March 31,
2022

December 31,
2021

Trading days (a)

Average customer trades per day, (in thousands)

Funded accounts (b) (in thousands)

62.5

27.1

518

64.0

29.1

521

62.0

33.7

518

62.0

40.2

517

Total net customer assets (b) ($ in millions)

Total customer cash balances (b) ($ in millions)

12,834

1,757

13,095

1,917

13,508

2,027

16,773

2,268

63.5

42.8

506

17,391

2,195

(a) Represents the number of days the New York Stock Exchange and other U.S. stock exchange markets are open for trading. A half day represents a day

when the U.S. markets close early.

(b) Represents activity across the brokerage, robo, and wealth management portfolios.

During the year ended December 31, 2022, macroeconomic uncertainty and market volatility resulted in lower customer engagement and

lower trade activity. Total funded accounts increased 2% from the fourth quarter of 2021. Average customer trades per day decreased 37%

Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-K

from the fourth quarter of 2021, driven primarily by lower customer engagement. Additionally, net customer assets decreased 26% from the
fourth quarter of 2021, as a result of lower equity market valuations.

Ally Lending

Ally Lending is our unsecured personal lending offering, which primarily serves medical and home improvement service providers by
enabling promotional and fixed rate installment-loan products through a digital application process at point-of-sale. Total active merchants
totaled approximately 3,400 as of December 31, 2022, reflecting an increase of 13% from December 31, 2021. Total active borrowers totaled
approximately 460,000 as of December 31, 2022, reflecting an increase of 58% compared to December 31, 2021.

The following table presents personal lending originations by average FICO® Score.

Year ended December 31, ($ in millions)

Total personal lending originations (a)

(a)

Includes loans for which we have elected the fair value option measurement.

2022

2021

Volume

2,131

Average
FICO®

Volume

Average
FICO®

736

1,241

734

During the year ended December 31, 2022, personal lending originations increased $890 million to $2.1 billion, as compared to the year

ended December 31, 2021. We continue to expand our relationships across the home improvement and medical verticals.

The carrying value of our personal lending portfolio was $2.0 billion at December 31, 2022, compared to $1.0 billion at December 31,
2021, while the associated yield was 11.3% for the year ended December 31, 2022, as compared to 13.8% for the year ended December 31,
2021. The decrease in associated yields for the year ended December 31, 2022, as compared to 2021, was due to increased originations in the
home improvement vertical.

The following table presents the percentage of total finance receivables and loans of Ally Lending by vertical. The finance receivables

and loans are reported at amortized cost.

December 31,

Vertical

Home improvement

Medical

Other

Total finance receivables and loans (a)

(a)

Includes loans for which we have elected the fair value option measurement.

Ally Credit Card

2022

2021

61.9 %

39.3 %

37.9

0.2

60.3

0.4

100.0 %

Ally Credit Card is our scalable, digital-first credit card platform that features leading-edge technology, and a proprietary, analytics-

based underwriting model. The following table presents total active cardholders and finance receivables and loans.

December 31,

Total active cardholders (in thousands)

Finance receivables and loans ($ in millions)

2022

2021

1,042

1,599

766

953

Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-K

Risk Management

Managing the risk/reward trade-off is a fundamental component of operating our businesses, and all employees are responsible for

managing risk. We use multiple layers of defense to identify, monitor, and manage current and emerging risks.

•

Business lines — Responsible for owning and managing all the risks that emanate from their risk-taking activities, including
business units and support functions.

Independent risk management — Operates independent of the business lines and is responsible for establishing and maintaining
our risk-management framework and promulgating it enterprise-wide. Independent risk management also provides an objective,
critical assessment of risks and—through oversight, effective challenge, and other means—evaluates whether Ally remains aligned
with its risk appetite.

Internal audit — Provides its own independent assessments regarding the quality of our loan portfolios as well as the effectiveness
of our risk management, internal controls, and governance. Internal audit includes Audit Services and the Loan Review Group.

Our risk-management framework is overseen by the RC of our Board. The RC sets the risk appetite across our company while risk-
oriented management committees, the executive leadership team, and our associates identify and monitor current and emerging risks and
manage those risks within our risk appetite. Our primary types of risks include the following:

•

Credit risk — The risk of loss arising from an obligor not meeting its contractual obligations to us.

Insurance/underwriting risk — The risk of loss or of adverse change in the value of insurance liabilities, due to inadequate pricing
and provisioning assumptions.

Liquidity risk — The risk that our financial condition or overall safety and soundness is adversely affected by the actual or
perceived inability to liquidate assets or obtain adequate funding or to easily unwind or offset specific exposures without
significantly lowering market prices because of inadequate market depth or market disruptions. Refer to discussion in the section
titled Liquidity Management, Funding, and Regulatory Capital within this MD&A.

• Market risk — The risk that movements in market variables such as benchmark interest rates, investors’ required risk premium,

foreign-exchange rates, equity prices, and used car prices may adversely affect our earnings, capital, or economic value. Market risk
includes interest rate risk, investment risk, and lease residual risk.

•

Business/strategic risk — The risk resulting from the pursuit of business plans that turn out to be unsuccessful due to a variety of
factors.

Reputation risk — The risk arising from negative public opinion on our business practices, whether true or not, that could cause a
decline in the customer base, litigation, or revenue reductions.

Operational risk — Operational risk is the risk of loss or harm arising from inadequate or failed processes or systems, human
factors, or external events and is inherent in all of our risk-generating activities.

Information technology/cybersecurity risk — The risk 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, cybersecurity).

Compliance risk — 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).

Conduct risk — 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.

Our risk-governance structure starts within each business line, including committees established to oversee risk in their respective areas.

The business lines are responsible for their risk-based performance and compliance with risk-management policies and applicable law. The
independent risk-management function is accountable for independently identifying, monitoring, measuring, and reporting on our various
risks and for designing an effective risk-management framework and structure. The independent risk-management function is also responsible
for developing, maintaining, and implementing enterprise risk-management. In addition, the 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 program. The Chief Risk Officer reports to the RC, as well as
administratively to the CEO.

All business lines and corporate functions are subject to full and unrestricted audits by Audit Services. The Chief Audit Executive reports

to the AC, as well as administratively to the CEO, and is primarily responsible for assisting the AC in fulfilling its governance and oversight

Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-K

responsibilities. Audit Services is granted free and unrestricted access to any and all of our records, physical properties, technologies,
management, and employees.

In addition, our Loan Review Group provides an independent assessment of the quality of our extensions of credit and credit-risk-
management practices, and all business lines that create or influence credit risk are subject to full and unrestricted reviews by the Loan
Review Group. 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. Climate-related risk refers

to the risk of loss or change in business activities arising from climate change and represents a transverse risk that could impact other risks
within Ally’s risk-management framework, such as credit risk from negatively impacted borrowers, reputation risk from increased
stakeholder concerns, and operational risk from physical climate risks. 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.

December 31, ($ in millions)

Finance receivables and loans

Automotive Finance (a)

Mortgage Finance

Corporate Finance

Corporate and Other (b)

Total finance receivables and loans

Loans held-for-sale

Automotive Finance

Mortgage Finance (c)

Corporate Finance

Corporate and Other

Total loans held-for-sale

Total on-balance-sheet loans

Whole-loan sales

Automotive Finance

Corporate and Other

Total off-balance-sheet loans (d)

Operating lease assets

Automotive Finance

Total operating lease assets

Total loan and operating lease exposure

2022

2021

102,070

19,445

10,147

4,086

94,326

17,644

7,770

2,528

135,748

122,268

445

190

654

—

305

164

549

136,402

122,817

227

103

330

—

10,444

10,862

147,176

133,683

(a)

(b)

Includes a liability of $617 million and $37 million associated with fair value hedging adjustments at December 31, 2022, and December 31, 2021,
respectively. Refer to Note 21 to the Consolidated Financial Statements for additional information.
Includes $290 million and $368 million of consumer mortgage loans in our legacy mortgage portfolio at December 31, 2022, and December 31, 2021,
respectively.

(c) Represents the current balance of conforming mortgages originated directly to the held-for-sale portfolio.
(d) Represents the current unpaid principal balance of outstanding loans based on our customary representation and warranty provisions.

The risks inherent in our loan and operating lease exposures are largely driven by changes in the overall economy (including GDP trends
and inflationary pressures), used vehicle and housing prices, unemployment levels, real personal income, household savings, and their impact
on our borrowers. The potential financial statement impact of these exposures varies depending on the accounting classification and future
expected disposition strategy. We retain most of our consumer automotive and credit card loans as they complement our core business model,
but we do sell loans from time to time on an opportunistic basis. We ultimately manage the associated risks based on the underlying
economics of the exposure. Our operating lease residual risk may be more volatile than credit risk in stressed macroeconomic scenarios.
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. Finance receivables and loans are

Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-K

reported at their amortized cost basis, which includes the principal amount outstanding, net of unamortized deferred fees and costs
on originated loans, unamortized premiums and discounts on purchased loans, unamortized basis adjustments arising from the
designation of finance receivables and loans as the hedged item in qualifying fair value hedge relationships, and cumulative
principal net charge-offs. We refer to the amortized cost basis less the allowance for loan losses as the net carrying value in finance
receivables and loans. We manage the economic risks of these exposures, including credit risk, by adjusting underwriting standards
and risk limits, augmenting our servicing and collection activities (including loan modifications and restructurings), and optimizing
our product and geographic concentrations. Additionally, we may elect to account for certain loans at fair value. Changes in the fair
value of these loans are recognized in a valuation allowance separate from the allowance for loan losses and are reflected in current
period earnings. We may use market-based instruments, such as derivatives, to hedge changes in the fair value of these loans.

•

Loans held-for-sale — Loans that we do not have the intent and ability to hold for the foreseeable future or until maturity. These
loans are recorded on our balance sheet at the lower of their net carrying value or fair market value and are evaluated by portfolio
and product type. We manage the economic risks of these exposures, including market and credit risks, in various ways including
the use of market-based instruments, such as derivatives.

• Whole-loan sales — Loans that we transfer off-balance sheet to third-party investors. Our exposure is primarily limited to

customary representation, warranty and covenant provisions. Similar to finance receivables and loans, we manage the economic
risks of these exposures through activities including servicing and collections.

•

Operating lease assets — The net book value of the automotive assets we lease includes the expected residual values upon
remarketing the vehicles at the end of the lease and is reported net of accumulated depreciation. We are exposed to fluctuations in
the expected residual value upon remarketing the vehicle at the end of the lease, and accordingly at contract inception, we determine
pricing based on the projected residual value of the leased vehicle. This evaluation is primarily based on a proprietary model, which
includes variables such as age, expected mileage, seasonality, segment factors, vehicle type, economic indicators, production cycle,
automotive manufacturer incentives, and shifts in used vehicle supply. This internally generated data is compared against third-
party, independent data for reasonableness. Periodically, we revise the projected value of the leased vehicle at termination based on
current market conditions and adjust depreciation expense appropriately over the remaining life of the contract. 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. 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.

Credit Risk

Credit risk is defined as the risk of loss arising from an obligor not meeting its contractual obligations to us. Credit risk includes

consumer credit risk, commercial credit risk, and counterparty credit risk.

Credit risk is a major source of potential economic loss to us. Credit risk is monitored by the executive leadership team and our

associates, and is regularly reported to and reviewed with the RC. Management oversees credit decisioning, account servicing activities, and
credit-risk-management processes, and manages credit risk exposures within our risk appetite. In addition, our Loan Review Group provides
an independent assessment of the quality of our credit portfolios and credit-risk-management practices and reports its findings to the RC on a
regular basis.

To mitigate risk, we have implemented specific policies and practices across business lines, utilizing both qualitative and quantitative

analyses. This reflects our commitment to maintaining an independent and ongoing assessment of credit risk and credit quality. Our policies
require an objective and timely assessment of the overall quality of the consumer and commercial loan and operating lease portfolios. This
includes the identification of relevant trends that affect the collectability of the portfolios, microsegments of the portfolios that are potential
problem areas, loans and operating leases with potential credit weaknesses, and the assessment of the adequacy of internal credit risk policies
and procedures. Our consumer and commercial loan and operating lease portfolios are subject to periodic stress tests, which include economic
scenarios whose severity mirrors those developed and distributed by the FRB to assess how the portfolios may perform in a severe economic
downturn. In addition, we establish and maintain underwriting policies and limits across our portfolios and higher risk segments (for example,
nonprime) based on our risk appetite.

Another important aspect to managing credit risk involves the need to carefully monitor and manage the performance and pricing of our
loan products with the aim of generating appropriate risk-adjusted returns. When considering pricing, various granular risk-based factors are
considered such as expected loss rates, loss volatility, anticipated operating costs, and targeted returns on equity. We carefully monitor credit
losses and trends in credit losses relative to expected credit losses at contract inception. We closely monitor our loan performance and
profitability in light of forecasted economic conditions and manage credit risk and expectations of losses in the portfolio.

Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-K

We manage credit risk based on the risk profile of the borrower, the source of repayment, the underlying collateral, and current market

and economic conditions. We monitor the credit risk profile of individual borrowers, various segmentations (for example, geographic region,
product type, industry segment), as well as the aggregate portfolio. We perform quarterly analyses of the consumer automotive, consumer
mortgage, consumer other, and commercial portfolios to assess the adequacy of the allowance for loan losses based on historical, current, and
anticipated trends. Refer to Note 9 to the Consolidated Financial Statements for additional information.

Additionally, we utilize numerous collection strategies to mitigate loss and provide ongoing support to customers in financial distress.

We have enhanced our collection strategies to include customized messaging, digital communication, and proactive monitoring of vendor
performance. For consumer automotive loans, we work with customers when they become delinquent on their monthly payment. In lieu of
repossessing their vehicle, we may offer several types of assistance to aid our customers based on their willingness and ability to repay their
loan. Loss mitigation may include payment extensions and rewrites of the loan terms. For mortgage loans, as part of certain programs, we
offer mortgage loan modifications to qualified borrowers. These programs are in place to provide support to our mortgage customers in
financial distress, including maturity extensions, delinquent interest capitalization, changes to contractual interest rates, and principal
forgiveness.

Furthermore, we manage our credit exposure to financial counterparties based on the risk profile of the counterparty. Within our policies

we have established standards and requirements for managing counterparty risk exposures in a safe and sound manner. Counterparty credit
risk is derived from multiple exposure types including derivatives, securities trading, securities financing transactions, lending arrangements,
and certain cash balances. For more information on derivative counterparty credit risk, refer to Note 21 to the Consolidated Financial
Statements.

We employ an internal team of economists to enhance our planning and forecasting capabilities. This team conducts industry and market
research, monitors economic risks, and helps support various forms of scenario planning. This group closely monitors macroeconomic trends
given the nature of our business and the potential impacts on our exposure to credit risk. As measured by GDP, the U.S. economy grew
modestly in 2022, and the unemployment rate remained low at 3.5% as of December 31, 2022. Sales of new light vehicles have been
adversely affected primarily by supply chain difficulties and slowed to an average annual rate of 13.8 million during December 2022. Sales of
new light motor vehicles remain below the pre-pandemic annual pace of 17.0 million in 2019, driving an increase in used vehicle values, as
further described in the section below titled Operating Lease Vehicle Terminations and Remarketing. Additionally, used vehicle values may
also be impacted by availability, price of new vehicles, or changes in customer preferences.

Consumer Credit Portfolio

Our consumer loan portfolio primarily consists of automotive loans, first-lien mortgages, home equity loans, personal loans, and credit

card loans. Loan losses in our consumer loan portfolio are influenced by changes in the overall economy (including GDP trends and
inflationary pressures), used vehicle and housing prices, unemployment levels, real personal income, household savings, and their impact on
our borrowers. Additionally, our consumer credit exposure is significantly concentrated in automotive lending.

Credit risk management for the consumer loan portfolio begins with the initial underwriting and continues throughout a borrower’s credit

life cycle. We manage consumer credit risk through our loan origination and underwriting policies and the credit approval process. We use
proprietary credit-scoring models to differentiate the expected default rates of credit applicants enabling us to better evaluate credit
applications for approval and to tailor the pricing and financing structure according to this assessment of credit risk. We continue to monitor
loss performance across the risk spectrum, which enables us to implement risk mitigation strategies, including pricing increments and
curtailment actions on underperforming microsegments. We continuously monitor and routinely update the inputs of the credit scoring
models. These and other actions mitigate but do not eliminate credit risk. Ineffective evaluations of a borrower’s creditworthiness, fraud, or
changes in the applicant’s financial condition after approval could negatively affect the quality of our portfolio, resulting in loan losses. For
example, early loss performance in our consumer automotive lending portfolio is trending higher compared to expectations at the time of
origination for loans originated between the third quarter of 2021 and the second quarter of 2022.

Our servicing activities are another important factor in managing consumer credit risk. Servicing activities consist of collecting and
processing customer payments, responding to customer concerns and inquiries, processing customer requests (including those for payoff
quotes, total-loss handling, and payment modifications), maintaining a perfected security interest in the financed vehicle, engaging in
collections activity, and disposing of off-lease and repossessed vehicles. Servicing activities are generally consistent across our Automotive
Finance operations; however, certain practices may be influenced by state laws.

During the year ended December 31, 2022, the credit performance of the consumer loan portfolio reflected our underwriting strategy to
originate a diversified portfolio of consumer automotive loan assets, including new, used, prime and nonprime finance receivables and loans,
high-quality jumbo and LMI mortgage loans that are obtained through bulk loan purchases and direct-to-consumer mortgage originations, as
well as point-of-sale personal lending through Ally Lending. Additionally, beginning in December 2021 with the acquisition of Ally Credit
Card, financial information related to our credit card business is included within Corporate and Other.

The carrying value of our nonprime held-for-investment consumer automotive loans before allowance for loan losses represented
approximately 10.6% and 11.3% of our total consumer automotive loans at December 31, 2022, and December 31, 2021, respectively. For
information on our consumer credit risk practices and policies regarding delinquencies, nonperforming status, and charge-offs, refer to Note 1
to the Consolidated Financial Statements.

Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-K

The following table includes consumer finance receivables and loans recorded at amortized cost.

Outstanding

Nonperforming (a)

Accruing past due 90
days or more (b)

December 31, ($ in millions)

Consumer automotive (c) (d)

Consumer mortgage

Mortgage Finance

Mortgage — Legacy

Total consumer mortgage

Consumer other

Personal Lending (e)

Credit Card

Total consumer other

2022

2021

2022

2021

2022

2021

83,286

78,252

1,187

1,078

— $

19,445

290

19,735

1,987

1,599

3,586

17,644

368

18,012

1,002

953

1,955

—

Total consumer finance receivables and loans

106,607

98,219

1,292

1,179

— $

—

Includes nonaccrual TDR loans of $684 million and $714 million at December 31, 2022, and December 31, 2021, respectively.

(a)
(b) Loans are generally in nonaccrual status when principal or interest has been delinquent for 90 days or more, or when full collection is not expected. Refer

to Note 1 to the Consolidated Financial Statements for a description of our accounting policies for finance receivables and loans.

(c) Certain finance receivables and loans are included in fair value hedging relationships. Refer to Note 21 to the Consolidated Financial Statements for

(d)

additional information.
Includes outstanding CSG loans of $10.0 billion and $8.6 billion at December 31, 2022, and December 31, 2021, respectively, and RV loans of $578
million and $763 million at December 31, 2022, and December 31, 2021, respectively.

(e) Excludes finance receivables of $3 million and $7 million at December 31, 2022, and December 31, 2021, respectively, for which we have elected the fair

value option.

Total consumer finance receivables and loans increased $8.4 billion at December 31, 2022, compared with December 31, 2021. The
increase consists of $5.0 billion of consumer automotive finance receivables and loans, $1.7 billion of consumer mortgage finance receivables
and loans and $1.6 billion of consumer other finance receivables and loans. The increase was primarily due to an increase in consumer
automotive finance receivables and loans, primarily related to continued momentum in our used-vehicle lending. Growth within the consumer
mortgage and consumer other finance receivables and loans portfolios was primarily due to loan originations and purchases, which outpaced
portfolio runoff.

Total consumer nonperforming finance receivables and loans at December 31, 2022, increased $113 million to $1.3 billion from
December 31, 2021. We experienced increases from prior year COVID-19 pandemic lows in delinquency and loss statistics in our consumer
automotive portfolio. Refer to Note 9 to the Consolidated Financial Statements for additional information. Nonperforming consumer finance
receivables and loans as a percentage of total outstanding consumer finance receivables and loans were 1.2% at both December 31, 2022, and
December 31, 2021.

Total consumer TDRs outstanding at December 31, 2022, decreased $346 million since December 31, 2021, to $1.8 billion. Results

primarily reflect a $348 million decrease in our consumer automotive portfolio. The level of consumer TDRs is continuing to stabilize,
following our 2020 loan modification program offered to borrowers affected by the COVID-19 pandemic, which are continuing to runoff in
the current year. Refer to Note 9 to the Consolidated Financial Statements for additional information.

Consumer automotive loans accruing and past due 30 days or more increased $1.3 billion to $3.0 billion at December 31, 2022,

compared to $1.7 billion at December 31, 2021, which was driven by growth in the consumer automotive portfolio.

Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-K

The following table includes consumer net charge-offs from finance receivables and loans at amortized cost and related ratios.

Year ended December 31, ($ in millions)

Consumer automotive

Consumer mortgage

Mortgage Finance

Mortgage — Legacy

Total consumer mortgage

Consumer other

Personal Lending

Credit Card

Total consumer other

Net charge-offs
(recoveries)

Net charge-off ratios (a)

2022

2021

2022

2021

785

237

1.0 %

0.3 %

—

(9)

121

897

(9)

(7)

258

—

(2.7)

—

4.6

4.1

4.4

0.9

—

(2.0)

—

4.0

2.8

3.3

0.3

Total consumer finance receivables and loans

(a) Net charge-off ratios are calculated as net charge-offs divided by average outstanding finance receivables and loans excluding loans measured at fair value

and loans held for sale during the period for each loan category.

Our net charge-offs from total consumer finance receivables and loans were $897 million for the year ended December 31, 2022,

respectively, compared to net charge-offs of $258 million for the year ended December 31, 2021. Net charge-offs for our consumer
automotive portfolio increased by $548 million for the year ended December 31, 2022, compared to 2021. We experienced increases from
prior year COVID-19 pandemic lows in delinquency and loss statistics in our consumer automotive portfolio. Net charge-offs in our
consumer other portfolio increased primarily due to the acquisition of Ally Credit Card, which we acquired in December 2021.

The following table summarizes total consumer loan originations for the periods shown. Total consumer loan originations include loans

classified as finance receivables and loans held-for-sale during the period.

Year ended December 31, ($ in millions)

Consumer automotive (a)

Consumer mortgage (b)

Consumer other (c) (d)

Total consumer loan originations

2022

2021

42,923

3,255

2,131

40,884

10,433

1,241

48,309

52,558

Includes $237 million of loans originated as held-for-sale for the year ended December 31, 2022.

(a)
(b) Excludes bulk loan purchases associated with our Mortgage Finance operations, and includes $2.1 billion of loans originated as held-for-sale for the year

ended December 31, 2022, and $3.4 billion for the year ended December 31, 2021.
Includes loans related to our Ally Lending business for which we have elected the fair value option measurement.

Total consumer loan originations decreased $4.2 billion for the year ended December 31, 2022, compared to the year ended December

31, 2021. The decrease was primarily due to decreased loan originations within the consumer mortgage portfolio, due to a higher interest rate
environment. The decrease was partially offset by increased originations in the consumer automotive portfolio, driven by higher financed
transaction amounts, and partially offset by decreased application flow in the consumer automotive portfolio.

Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-K

The following table shows the percentage of consumer finance receivables and loans by state concentration based on amortized cost.

California

Texas

Florida

Pennsylvania

Georgia

North Carolina

Illinois

New York

New Jersey

Ohio

December 31, 2022 (a)

December 31, 2021

Consumer
automotive

Consumer
mortgage

Consumer
other (b)

Consumer
automotive

Consumer
mortgage

Consumer
other (b)

8.7 %

38.8 %

8.4 %

8.7 %

39.6 %

9.4 %

13.6

9.5

4.5

4.1

3.5

3.6

3.2

3.4

7.3

6.6

2.1

2.9

1.9

2.8

1.9

2.4

0.4

7.7

7.8

4.6

3.5

4.6

4.3

4.8

3.6

13.0

9.3

4.4

4.0

4.1

3.7

3.3

3.0

3.4

7.3

6.3

2.3

3.0

1.6

3.1

2.1

2.5

0.5

7.4

8.4

4.5

3.4

4.4

5.5

3.4

3.9

Other United States

Total consumer loans

41.8

32.9

47.1

43.1

31.7

46.3

100.0 %

Presentation is in descending order as a percentage of total consumer finance receivables and loans at December 31, 2022.

(a)
(b) Excludes $3 million and $7 million of finance receivables at December 31, 2022, and December 31, 2021, respectively, for which we have elected the fair

value option.

We monitor our consumer loan portfolio for concentration risk across the states in which we lend. The highest concentrations of
consumer loans are in California and Texas, which represented an aggregate of 26.5% and 26.4% of our total outstanding consumer finance
receivables and loans at December 31, 2022, and December 31, 2021, respectively. Our consumer mortgage loan portfolio concentration
within California, which is primarily composed of high-quality jumbo mortgage loans, generally aligns to the California share of jumbo
mortgages nationally.

Repossessed and Foreclosed Assets

We classify a repossessed or foreclosed asset as held-for-sale, which is included in other assets on our Consolidated Balance Sheet, when

physical possession of the collateral is taken. We dispose of the acquired collateral in a timely fashion in accordance with regulatory
requirements. For more information on repossessed and foreclosed assets, refer to Note 1 to the Consolidated Financial Statements.

Repossessed consumer automotive loan assets in our Automotive Finance operations were $182 million and $120 million at December
31, 2022, and December 31, 2021, respectively, and foreclosed mortgage assets were $2 million and $1 million at December 31, 2022, and
December 31, 2021, respectively.

Commercial Credit Portfolio

Our commercial portfolio consists primarily of automotive loans through the extension of wholesale floorplan financing, automotive

dealer term real estate loans, and automotive fleet financing, as well as other commercial loans from our Corporate Finance operations.
Wholesale floorplan loans are secured by the vehicles financed (and all other vehicle inventory), which provides strong collateral protection
in the event of dealership default. Additional collateral (for example, a blanket lien over all dealership assets) or other credit enhancements
(for example, personal guarantees from dealership owners) are typically obtained to further mitigate credit risk. Furthermore, in some cases,
we may benefit from situations where an automotive manufacturer repurchases vehicles. These repurchases may serve as an additional layer
of protection in the event of repossession of new-vehicle dealership inventory or dealership franchise termination.

Within our commercial portfolio, we utilize proprietary risk rating models that are fundamental to managing credit risk exposure
consistently across various types of commercial borrowers and captures critical risk factors for each borrower. The ratings are used for many
areas of credit risk management, including loan origination, portfolio risk monitoring, management reporting, and loan loss reserves analyses.
Therefore, the rating systems are critical to an effective and consistent credit-risk-management framework.

During the year ended December 31, 2022, the credit performance of the commercial portfolio remained strong. For information on our

commercial credit risk practices and policies regarding delinquencies, nonperforming status, and charge-offs, refer to Note 1 to the
Consolidated Financial Statements.

Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-K

The following table includes total commercial finance receivables and loans reported at amortized cost.

December 31, ($ in millions)

2022

2021

2022

2021

2022

2021

Outstanding

Nonperforming (a)

Accruing past due 90
days or more (b)

Commercial

Commercial and industrial

Automotive

Other (c)

Commercial real estate

14,595

12,229

— $

9,154

5,389

6,874

4,939

157

—

221

—

Total commercial finance receivables and loans

29,138

24,042

162

257

— $

—

Includes nonaccrual TDR loans of $157 million and $117 million at December 31, 2022, and December 31, 2021, respectively.

(a)
(b) Loans are generally in nonaccrual status when principal or interest has been delinquent for 90 days or more, or when full collection is not expected. Refer

to Note 1 to the Consolidated Financial Statements for a description of our accounting policies for finance receivables and loans.

(c) Other commercial and industrial primarily includes senior secured commercial lending largely associated with our Corporate Finance operations.

Total commercial finance receivables and loans outstanding increased $5.1 billion from December 31, 2021, to $29.1 billion at

December 31, 2022. Results were driven by a $2.7 billion increase in our Automotive Finance segment, primarily within the commercial and
industrial receivables class.

Total commercial nonperforming finance receivables and loans were $162 million at December 31, 2022, reflecting a decrease of $95

million compared to December 31, 2021. This decrease was primarily impacted by a $64 million decrease in our Corporate Finance segment
within the commercial and industrial receivables. Nonperforming commercial finance receivables and loans as a percentage of outstanding
commercial finance receivables and loans decreased to 0.6% at December 31, 2022, compared to 1.1% at December 31, 2021.

Total commercial TDRs outstanding at December 31, 2022, increased $369 million from December 31, 2021, to $540 million. The
increase was primarily driven by the restructuring of five exposures within commercial other in our commercial and industrial portfolio class.
Refer to Note 9 to the Consolidated Financial Statements for additional information.

The following table includes total commercial net charge-offs from finance receivables and loans at amortized cost and related ratios.

Year ended December 31, ($ in millions)

Commercial

Commercial and industrial

Automotive

Other

Commercial real estate

Total commercial finance receivables and loans

Net (recoveries)
charge-offs

Net charge-off ratios (a)

2022

2021

2022

2021

(1) $

(1)

—

— %

0.7

—

0.2

—

(a) Net charge-off ratios are calculated as net charge-offs divided by average outstanding finance receivables and loans excluding loans measured at fair value

and loans held for sale during the period for each loan category.

Our net charge-offs from total commercial finance receivables and loans were $55 million for the year ended December 31, 2022,
compared to $11 million for the year ended December 31, 2021. The increase for the year ended December 31, 2022, was primarily driven by
our Corporate Finance operations and included the partial charge-off of two exposures during 2022.

Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-K

Commercial Real Estate

The commercial real estate portfolio consists of finance receivables and loans issued primarily to automotive dealers. Commercial real

estate finance receivables and loans were $5.4 billion and $4.9 billion at December 31, 2022, and December 31, 2021, respectively. The
following table presents the percentage of total commercial real estate finance receivables and loans by state concentration based on
amortized cost.

December 31,

Florida

Texas

California

New York

North Carolina

Michigan

Ohio

Georgia

Utah

Illinois

Other United States

Total commercial real estate finance receivables and loans

Commercial Criticized Exposure

2022

2021

17.9 %

14.9

16.4 %

13.9

8.4

6.3

5.3

4.2

3.1

2.9

2.7

8.3

3.8

5.8

3.4

3.3

3.0

2.9

30.1

33.4

100.0 %

Finance receivables and loans classified as special mention, substandard, or doubtful are reported as criticized. These classifications are

based on regulatory definitions and generally represent finance receivables and loans within our portfolio that have a higher default risk or
have already defaulted. These finance receivables and loans require additional monitoring and review including specific actions to mitigate
our potential loss.

Total criticized exposures increased $889 million from December 31, 2021, to $2.6 billion at December 31, 2022. The increase in total

criticized exposures was primarily driven by increases in Special Mention loans within our Corporate Finance and Automotive Finance
operations. Total criticized exposures represented 9.1% and 7.3% of total commercial finance receivables and loans at December 31, 2022,
and December 31, 2021, respectively, representing strong overall credit performance as the commercial loan portfolio continues to grow.

The following table presents the percentage of total commercial criticized finance receivables and loans by industry concentration based

on amortized cost.

December 31,

Industry

Automotive

Chemicals

Electronics

Other

Total commercial criticized finance receivables and loans

Allowance for Loan Losses

2022

2021

53.4 %

50.8 %

14.7

11.9

20.0

14.4

3.6

31.2

100.0 %

We adopted CECL on January 1, 2020. The CECL standard introduced a new accounting model to measure credit losses for financial
assets measured at amortized costs. In contrast to the previous incurred loss model, CECL requires credit losses for financial assets measured
at amortized cost to be determined based on the total current expected credit losses over the life of the financial asset or group of assets.

Under CECL, our modeling processes incorporate the following macroeconomic considerations:

•

a single forecast scenario for macroeconomic factors incorporated into the modeling process;

a 12-month reasonable and supportable forecast period for macroeconomic factors with a reversion to the historical mean on a
straight-line basis over a 24-month period; and

data from the historical mean will be calculated from January 2008 through the most current period available, which includes data
points from the most recent recessionary period.

Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-K

Our quantitatively determined allowance under CECL is impacted by certain forecasted economic factors as further described in Note 1

to the Consolidated Financial Statements. For example, our consumer automotive allowance for loan losses is most sensitive to state-level
unemployment rates. Our process for determining the allowance for loan losses considers a borrower’s willingness and ability to pay and
considers other factors, including loan modification programs. 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 such as the impacts associated with COVID-19, and other macroeconomic uncertainty. We also
monitor model performance, using model error and related assessments, and we may incorporate qualitative reserves to adjust our
quantitatively determined allowance if we observe deterioration in model performance. Additionally, we perform a sensitivity analysis of our
allowance utilizing varying macroeconomic scenarios, as described further within Critical Accounting Estimates — Allowance for Credit
Losses within the MD&A.

Through December 31, 2022, forecasted economic variables incorporated into our quantitative allowance processes were updated to

include the current macroeconomic environment and our future expectations reflecting mild recessionary conditions in 2023. This included
(but were not limited to) the following: the unemployment rate rising to approximately 4.6% in the fourth quarter of 2023, before reverting to
the historical mean of approximately 6.3% by the fourth quarter of 2025, negative GDP growth as measured on a quarter-over-quarter
seasonally adjusted annualized rate basis through the second quarter of 2023, before reverting to the historical mean of approximately 1.9%
by the fourth quarter of 2025, and stable new light vehicle sales on a seasonally adjusted annualized rate basis of approximately 15 million
units throughout the forecast horizon. 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. Our overall allowance for loan losses increased $444 million from the prior year to $3.7 billion at December 31, 2022, representing
2.7% as a percentage of total finance receivables at both December 31, 2022, and December 31, 2021.

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, 2022, and December 31, 2021, respectively.

($ in millions)

Consumer
automotive

Consumer
mortgage

Consumer
other

Total
consumer

Commercial

Total

221

3,017

Allowance at January 1, 2022

2,769

Charge-offs (a)

Recoveries

Net charge-offs

Provision due to change in portfolio size

Provision due to incremental charge-offs

Provision due to all other factors

Total provision for credit losses (b)

Other

(1,434)

649

(785)

196

785

1,036

—

Allowance at December 31, 2022

3,020

(3)

(9)

(2)

(8)

(1)

(133)

(121)

182

121

326

—

426

(1,570)

673

(897)

381

897

1,354

(1)

250

(58)

(55)

(46)

3,267

(1,628)

676

(952)

414

952

1,396

—

3,473

238

3,711

Net charge-offs to average finance receivables
and loans outstanding for the year ended
December 31, 2022

Allowance for loan losses to total nonperforming
finance receivables and loans at December
31, 2022 (c)

Nonaccrual loans to finance receivables and loans

outstanding at December 31, 2022

Ratio of allowance for loan losses to annualized

net charge-offs at December 31, 2022

1.0 %

— %

4.4 %

0.9 %

0.2 %

0.7 %

254.3 %

54.3 %

n/m

268.7 %

147.4 %

255.2 %

1.4 %

0.3 %

1.6 %

1.2 %

0.6 %

1.1 %

3.8

(3.0)

3.5

3.9

4.3

3.9

n/m = not meaningful
(a) Refer to Note 1 to the Consolidated Financial Statements for information regarding our charge-off policies.
(b) Excludes $3 million of provision for credit losses related to our reserve for unfunded commitments. The liability related to the reserve for unfunded

commitments is included in accrued expenses and other liabilities on our Consolidated Balance Sheet.

(c) 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.

Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-K

($ in millions)

Consumer
automotive

Consumer
mortgage

Consumer
other

Total
consumer

Commercial

Total

Allowance at January 1, 2021

2,902

Charge-offs (a)

Recoveries

Net charge-offs

Provision due to change in portfolio size

Provision due to incremental charge-offs

Provision due to all other factors

Total provision for credit losses

Other (b)

(923)

686

(237)

182

237

(315)

104

—

Allowance at December 31, 2021

2,769

(6)

(7)

(11)

(14)

(30)

(28)

181

(46)

163

221

3,008

(959)

701

(258)

367

258

(372)

253

275

(22)

(11)

(34)

(12)

(2)

3,283

(981)

712

(269)

378

269

(406)

241

3,017

250

3,267

Net charge-offs to average finance receivables
and loans outstanding for the year ended
December 31, 2021

Allowance for loan losses to total nonperforming

finance receivables and loans at
December 31, 2021 (c)

Nonaccrual loans to finance receivables and loans

outstanding at December 31, 2021

Ratio of allowance for loan losses to annualized

net charge-offs at December 31, 2021

0.3 %

— %

3.3 %

0.3 %

— %

0.2 %

256.8 %

30.9 %

n/m

255.7 %

97.8 %

227.4 %

1.4 %

0.5 %

0.8 %

1.2 %

1.1 %

1.2 %

11.6

(3.7)

4.1

11.6

24.3

12.1

n/m= not meaningful
(a) Refer to Note 1 to the Consolidated Financial Statements for information regarding our charge-off policies.
(b)

Includes $12 million of allowance for credit losses recognized on PCD loans acquired in the Ally Credit Card acquisition. Refer to Note 2 to the
Consolidated Financial Statements for additional details.

(c) 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 allowance for consumer loan losses as of December 31, 2022, increased $456 million compared to December 31, 2021, reflecting an
increase of $251 million in the consumer automotive allowance, along with an increase of $205 million in the consumer other allowance. The
increase in our consumer automotive allowance was primarily driven by portfolio growth. The increase in the consumer other allowance was
primarily driven by the establishment of reserves related to the Ally Credit Card acquisition, as well as continued growth in Ally Lending and
Ally Credit Card.

The allowance for commercial loan losses as of December 31, 2022, decreased $12 million compared to December 31, 2021. The
decrease was primarily driven by reserve declines associated with continued improvements to the macroeconomic environment following the
onset of the COVID-19 pandemic.

Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-K

Provision for Loan Losses

The following table summarizes the provision for loan losses by loan portfolio class.

Year ended December 31, ($ in millions)

Consumer automotive

Consumer mortgage

Mortgage Finance

Mortgage — Legacy

Total consumer mortgage

Consumer other

Personal Lending

Credit Card

Total consumer other

Total consumer

Commercial

Commercial and industrial

Automotive

Other

Commercial real estate

Total commercial

Total provision for loan losses (a)

2022

2021

2020

1,036

104

1,194

(11)

(8)

161

165

326

1,354

(5)

(1)

(13)

(14)

108

163

253

(30)

(21)

(12)

(17)

(10)

—

1,246

150

193

1,396

241

1,439

(a) Excludes $3 million of provision for credit losses related to our reserve for unfunded commitments during the year ended December 31, 2022.

The provision for consumer credit losses increased $1.1 billion for the year ended December 31, 2022, compared to the year ended

December 31, 2021. The increase in provision for consumer credit losses for the year ended December 31, 2022, was primarily driven by
higher net charge-offs, and reserve reductions during the year ended December 31, 2021, associated with improvements to the
macroeconomic environment following the onset of the COVID-19 pandemic.

The provision for commercial credit losses increased $54 million for the year ended December 31, 2022, compared to the year ended
December 31, 2021. For the year ended December 31, 2022, the increase in provision for commercial credit losses was primarily driven by
higher provisions on specific exposures and reserve increases associated with portfolio growth within our Corporate Finance operations.

Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-K

Allowance for Loan Losses by Type

The following table summarizes the allocation of the allowance for loan losses by loan portfolio class.

December 31, ($ in millions)

Consumer automotive

Consumer mortgage

Mortgage Finance

Mortgage — Legacy

Total consumer mortgage

Consumer other

Personal Lending

Credit Card

Total consumer other

Total consumer loans

Commercial

Commercial and industrial

Automotive

Other

Commercial real estate

Total commercial loans

2022

2021

Allowance
for loan
losses

3,020

Allowance
as a % of
loans
outstanding

Allowance as
a % of total
allowance for
loan losses

Allowance
for loan
losses

Allowance as
a % of
loans
outstanding

Allowance as
a % of total
allowance for
loan losses

3.6 %

81.4 % $

2,769

3.5 %

84.8 %

194

232

426

3,473

188

238

0.1

1.8

0.1

9.8

14.5

11.9

3.3

0.1

2.1

0.7

0.8

2.7

0.6

0.1

0.7

5.2

6.3

11.5

93.6

0.4

5.0

1.0

6.4

102

119

221

3,017

198

250

100.0 % $

3,267

0.1

2.1

0.1

10.2

12.4

11.3

3.1

0.1

2.9

0.8

1.0

2.7

0.6

0.2

0.8

3.1

3.6

6.7

92.3

0.4

6.1

1.2

7.7

100.0 %

Total allowance for loan losses

3,711

Insurance/Underwriting Risk

Underwriting risk represents the risk of loss or of adverse change in the value of insurance liabilities due to inadequate pricing and
reserving assumptions. Insurance risk also includes event risk, which is synonymous with pure risk, or hazard risk, and presents no chance of
gain, only of loss. The underwriting of our products, or the assumption of insurance risk through reinsurance, includes an assessment of the
risk to determine acceptability and categorization for appropriate pricing. The acceptability of a particular risk is based on expected losses,
expenses, and other factors specific to the product in question. For example, with respect to VSCs, considerations include the quality of the
vehicles produced, the price of replacement parts, repair labor rates, and new model introductions. 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. 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. Where underwriting and risk acceptance is delegated to third parties, we will consider the appropriateness of the third party’s
underwriting guidelines and their ability to evaluate and assess risks within the context of those guidelines and routinely monitor
arrangements with such parties.

To support risk mitigation activities, we utilize a system of controls and governance including the use of a risk appetite framework to

govern the amount and types of insurance risks we take, including the consideration of concentration risks, volatility of products, and a
number of other factors. 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. Losses for these events may be compared to prior claims experience, expected claims, or loss
expenses from similar incidents to assess the reasonableness of incurred losses. For business assumed through reinsurance, we may rely on
third parties for claim adjudication or the estimation of unpaid losses and loss adjustment expenses. Reliance on third parties inherently
includes certain risks and uncertainties that are unique relative to our direct insurance lines of business, which may include lags in reporting or
different assessments of reserve adequacy. In order to mitigate such risks, we regularly review the performance of such business assumed
through reinsurance and our carried loss reserves may differ from reserves reported to us from third parties if deemed appropriate.

In some instances, reinsurance is used to reduce the risk associated with volatile business lines, such as catastrophe risk in vehicle
inventory insurance. Our vehicle inventory insurance product is covered by aggregate excess-of-loss protection, which provides coverage for

Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-K

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. The level of reinsurance utilized will depend on the
assessment of market pricing for such protection, the size and composition of our insured risks and our overall risk appetite. In certain cases,
we choose not to obtain reinsurance protection if the cost is perceived to outweigh the benefits of such protection.

In accordance with industry and accounting practices and applicable insurance laws and regulatory requirements, we maintain loss
reserves for reported losses, losses incurred but not reported, loss adjustment expenses, and unearned premium reserves for contracts in force.
The adequacy of our estimated reserves and changes to the estimated values of reserves are routinely monitored by credentialed actuaries. Our
reserves are regularly reviewed by management and subject to various governance and controls; however, since the reserves are estimates
based on numerous assumptions, the ultimate liability may differ from the amount estimated.

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.

The impact of changes in benchmark interest rates on our assets and liabilities (interest rate risk) represents an exposure to market risk

and can affect interest rate sensitivities and cash flows when compared to our expectations. We primarily use interest rate derivatives to
manage our interest rate risk exposure.

During 2022, the Federal Reserve increased the federal funds target range to 4.25–4.50% to address the elevated inflation levels. FRB

officials have signaled that further increases are expected in 2023. As of December 31, 2022, we remain liability sensitive and expect
increasing interest rates to have a negative impact to our near-term net interest income.

The fair value of our spread-sensitive assets is also exposed to spread risk. Spread is the amount of additional return over the benchmark
interest rates that an investor would demand for taking exposure to primarily credit and liquidity risk of an instrument. Generally, an increase
in spreads would result in a decrease in fair value measurement.

We are also exposed to foreign-currency risk primarily from Canadian denominated assets and liabilities. We enter into foreign currency

hedges to mitigate foreign exchange risk.

We have exposure to changes in the value of equity securities. We have exposure to equity securities with readily determinable fair
values primarily related to our Insurance operations. For such equity securities, we use equity derivatives to manage our exposure to equity
price fluctuations.

In addition, we are exposed to changes in the value of other nonmarketable equity investments without readily determinable fair market

values, which may cause volatility in our earnings. This includes our investment in BMC Holdco as described in the section above titled
Primary Business Lines.

•

During 2021, we sold a portion of our investment in BMC Holdco for proceeds of $45 million and realized gains totaling
$38 million. In addition, during 2021, BMC Holdco and Aurora announced several agreements relevant to the valuation of our
remaining investment in BMC Holdco.

◦

BMC Holdco entered into a merger agreement (together with all 2021 amendments, the Merger Agreement) with Aurora
that provides for our remaining investment in BMC Holdco to be converted into publicly traded common stock of the
entity surviving the merger. The Merger Agreement established a price per share reflecting a pre-money equity valuation
of approximately $6.9 billion for BMC Holdco and included an Agreement End Date (as defined in the Merger
Agreement) of September 30, 2022.

BMC Holdco and Aurora entered into a bridge note purchase agreement with investors to issue debt (the Notes) that
converts into publicly traded common stock of the entity surviving the merger as contemplated by the Merger Agreement.

During the third quarter of 2022, BMC Holdco and Aurora announced a further amendment of the Merger Agreement that extends
the Agreement End Date to March 8, 2023. Contemporaneously, BMC Holdco and Aurora entered into a letter agreement with one
of its existing investors that, in part and subject to specified conditions, (i) extends the maturity date of the investor’s Notes to
March 8, 2023, and (ii) without limiting the investor’s rights under the bridge note purchase agreement, if the merger has not been
consummated by the maturity date of the Notes, provides the investor with an option to alternatively exchange its Notes for Class B
common stock and preferred stock of BMC Holdco at specified valuations.

Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-K

30, 2024, if necessary to provide sufficient time for the merger to be consummated, (ii) defers the maturity date of the investor’s
Notes to September 30, 2023, and (iii) without limiting the investor’s rights under the bridge note purchase agreement, if the merger
has not been consummated by the maturity date of the Notes, provides the investor with an option to alternatively exchange its
Notes for Class B common stock and Series D equivalent preferred stock of BMC Holdco at specified valuations.

The letter agreement entered into during the third quarter of 2022 was a triggering event to assess our remaining investment in BMC

Holdco for impairment. We recognized an impairment charge on this investment of $136 million during the third quarter of 2022. As of
December 31, 2022, both the cost basis at acquisition and the carrying value of this investment were $19 million. The carrying value of this
investment reflects cumulative upward adjustments of $136 million and cumulative downward adjustments (including impairment) of
$136 million since acquisition. Refer to the section titled Risk Factors in Part I, Item 1A for additional information regarding risk associated
with the valuation of our nonmarketable equity investments and Note 13 to the Consolidated Financial Statements for additional information.

During the year ended December 31, 2022, we recorded $4.0 billion of net unrealized losses on our available-for-sale securities,
primarily due to an increase in market interest rates. These unrealized losses are recorded in other comprehensive income within our
Consolidated Statement of Income, and are generally not realized unless we decide to sell the securities prior to their stated maturity date. If
held until maturity, we would recapture the par value of the securities and not realize any losses associated with changes in interest rates.
During the year ended December 31, 2022, management determined that there were no expected credit losses for securities in an unrealized
loss position. Refer to Note 8 and Note 18 to the Consolidated Financial Statements for additional information.

The composition of our balance sheet, including shorter-duration consumer automotive loans and variable-rate commercial loans, along
with our primary funding source of retail deposits, partially mitigates market risk. Additionally, we maintain risk-management controls that
measure and monitor market risk using a variety of analytical techniques including market value and sensitivity analysis. Refer to Note 21 to
the Consolidated Financial Statements for additional information.

LIBOR Transition

We continue to monitor regulatory, legislative, and industry developments surrounding the LIBOR transition and the impact of those

developments to us. In March 2021, the United Kingdom Financial Conduct Authority, which regulates LIBOR’s administrator, announced
that U.S. dollar LIBOR settings (other than the 1-week and 2-month U.S. dollar LIBOR settings) will cease to be provided or cease to be
representative after June 30, 2023. The publication of the 1-week and 2-month U.S. dollar LIBOR settings ceased to be provided or ceased to
be representative as of December 31, 2021. The LIBOR Act, enacted in March 2022, provides a uniform approach for replacing LIBOR as a
reference interest rate in tough legacy contracts—that is, contracts that do not include effective fallback provisions—when LIBOR is no
longer published or is no longer representative. Under the LIBOR Act, references to the most common tenors of LIBOR in these contracts
will be replaced as a matter of law, without the need to be amended by the parties, to instead reference benchmark interest rates based on
SOFR that will be identified by the FRB. The FRB issued a final rule effective February 27, 2023, to implement the LIBOR Act. Ally
continues to evaluate the effects of the LIBOR Act and the FRB’s final rule on Ally’s LIBOR-linked contracts, which remain uncertain. U.S.
banking regulators have stated that safe-and-sound practices include conducting the due diligence necessary to ensure that alternative rate
selections are appropriate for the supervised institution’s products, risk profile, risk management capabilities, customer and funding needs,
and operational capabilities. This due diligence includes understanding how the chosen reference rate is constructed and being aware of any
fragilities associated with that rate and the markets that underlie it.

The discontinuation of LIBOR or LIBOR-based rates presents risks to our business, as further described in the section titled Risk Factors

in Part I, Item 1A of this report. In recognition of the significance of LIBOR cessation, in July 2018, Ally formed an enterprise-wide LIBOR
transition program that devotes numerous resources throughout all levels of the organization to facilitate the transition to alternative reference
rates. Our program spans impacted business lines and functions to evaluate risks associated with the transition, while taking into account
specific considerations related to our customers, products and instruments, and counterparty exposures. Through this program, we continue to
plan for and guide the transition away from LIBOR to alternative reference rates, and evaluate the impacts and potential impacts to our
existing and future contracts with customers and counterparties, financial forecasts, operational processes, technology, modeling, and vendor
relationships. Our program is also subject to the governance and oversight of our Board through the RC and certain executive committees,
including the ALCO and the ERMC.

We continue to make progress on our transition efforts, including developing new products and agreements that utilize alternative
reference rates, such as Prime and SOFR, and engaging our commercial customers with transitioning their existing financing agreements from
LIBOR to alternative rates, as appropriate. During 2022, we accelerated our efforts of transitioning existing bilateral commercial automotive
lending arrangements from LIBOR to Prime, continued originating corporate-finance loans using SOFR, and did not enter into new contracts
that use U.S. dollar LIBOR as a reference rate, in alignment with the November 2020 guidance and subsequent clarifications from U.S.
banking regulators.

Our ongoing LIBOR transition program includes monitoring of our operations and the progress of our broader transition efforts. As part

of this, we collect and analyze business-line level data about our LIBOR exposure on a monthly basis. Our exposure to LIBOR-based
contracts is significantly concentrated within certain of our finance receivables and loans, primarily related to corporate-finance and
commercial automotive loans. We also have a smaller portfolio of adjustable-rate mortgage loans that utilize contracts containing LIBOR-
based reference rates. As of December 31, 2022, we had a notional amount of $7.4 billion of loan exposure that references LIBOR, compared
to $35.6 billion as of December 31, 2021. These notional amounts included approximately $3.5 billion and $13.2 billion of associated

Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-K

LIBOR-based loans outstanding as of December 31, 2022, and 2021, respectively. We are planning to transition our remaining exposure to
alternative rates prior to the cessation of the remaining U.S. dollar LIBOR tenors, which will no longer be published after June 30, 2023.

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. The analysis assumes adverse instantaneous, parallel shifts in market-exchange rates, interest rate yield curves, and
equity prices. Additionally, since only adverse fair value impacts are included, the natural offset between asset and liability rate sensitivities
that arise within a diversified balance sheet, such as ours, may not be considered.

December 31, ($ in millions)

Financial instruments exposed to changes in:

Interest rates

Estimated fair value

Effect of 10% adverse change in rates

Foreign-currency exchange rates

Estimated fair value

Effect of 10% adverse change in rates

Equity prices

Estimated fair value

Effect of 10% decrease in prices

2022

2021

(a)

394

(10)

(a)

437

(11)

819 (b) $

1,408

(79)

(126)

(a) Refer to the section below titled Net Financing Revenue Sensitivity Analysis for information on the interest rate sensitivity of our financial instruments.
(b) Primarily includes $681 million and $1.1 billion of equity securities at December 31, 2022, and December 31, 2021, respectively, and $123 million and
$260 million of equity securities without a readily determinable fair value at December 31, 2022, and December 31, 2021, respectively. 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. We actively monitor the level of exposure to

movements in interest rates and take actions to mitigate adverse impacts these movements may have on future earnings. We use a sensitivity
analysis of net financing revenue as our primary metric to measure and manage the interest rate risk of our financial instruments.

We prepare forward-looking baseline forecasts of net financing revenue taking into consideration anticipated future business growth,

asset/liability positioning, and interest rates based on the implied forward curve. The analysis is highly dependent upon a variety of
assumptions including the repricing characteristics of retail deposits with both contractual and non-contractual maturities. We continually
monitor industry and competitive repricing activity along with other market factors when contemplating deposit pricing assumptions.

Simulations are then used to assess changes in net financing revenue in multiple interest rate scenarios relative to the baseline forecast.

The changes in net financing revenue relative to the baseline are defined as the sensitivity. Our simulations incorporate contractual cash flows
and repricing characteristics for all assets, liabilities, and off-balance sheet exposures and incorporate the effects of changing interest rates on
the prepayment and attrition rates of certain assets and liabilities. Our simulation does not assume any specific future actions are taken to
mitigate the impacts of changing interest rates.

The net financing revenue simulations measure the potential change in our pretax net financing revenue over the following 12 months.

We test a number of alternative rate scenarios, including immediate and gradual parallel shocks to the implied market forward
curve. Management also evaluates nonparallel shocks to interest rates and stresses to certain term points on the yield curve in isolation to
capture and monitor a number of risk types. Relative to our baseline forecast, our net financing revenue over the next 12 months is expected
to increase by $217 million if interest rates remain unchanged due to expected increases in the federal funds rate, resulting in an inversion of
the yield curve.

The following table presents the pretax dollar impact to baseline forecasted net financing revenue over the next 12 months assuming

various shocks to the implied market forward curve as of December 31, 2022, and December 31, 2021.

December 31, 2022

December 31, 2021

Gradual (a)

Instantaneous

Gradual (a)

Instantaneous

($ in millions)

(21)

(76) $

(37)

n/m

(169)

(37)

n/m

Change in interest rates

+200 basis points

+100 basis points

-100 basis points

n/m = not meaningful
(a) Gradual changes in interest rates are recognized over 12 months.

Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-K

Since December 31, 2021, the implied forward rate curve has increased, flattened, and inverted as market expectations for short-term

interest rates have increased more than long-term rates. The impact of this change is reflected in our baseline net financing revenue
projections. As of December 31, 2022, we remain liability sensitive to a parallel instantaneous move in interest rates, as the assumed repricing
of our assets and pay-fixed swap position is more than offset by assumed repricing of our liabilities.

Our exposure to the downward interest rate shock scenario as of December 31, 2021, is not provided because many interest rates were at

or near historical lows, limiting our model’s ability to reprice lower.

Our risk position is influenced by the impact of hedging activity, which primarily consists of interest rate swaps designated as fair value
hedges of certain fixed-rate assets and fixed-rate debt instruments, and pay-fixed interest rate swaps designated as cash flow hedges of certain
floating-rate debt instruments. We also have the ability to use interest rate floor contracts designated as cash flow hedges on certain floating-
rate assets. The size, maturity, and mix of our hedging activities are adjusted as our balance sheet, ALM objectives, and 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.

Operating Lease Residual Risk Management

We are exposed to residual risk on vehicles in the consumer operating lease portfolio. This operating lease residual risk represents the

possibility that the actual proceeds realized upon the sale of returned vehicles will be lower than the projection of these values used in
establishing the pricing at lease inception. Our operating lease portfolio, net of accumulated depreciation was $10.4 billion and $10.9 billion
as of December 31, 2022, and December 31, 2021, respectively. The expected lease residual value of our operating lease portfolio at
scheduled termination was $8.3 billion and $8.6 billion as of December 31, 2022, and December 31, 2021, respectively. For information on
our valuation of automotive operating lease residuals including periodic revisions through adjustments to depreciation expense based on
current and forecasted market conditions, refer to the section titled Critical Accounting Estimates—Valuation of Automotive Operating Lease
Assets and Residuals within this MD&A.

•

Priced residual value projections — At contract inception, we determine pricing based on the projected residual value of the leased
vehicle. This evaluation uses a proprietary model, which includes variables such as age, expected mileage, seasonality, segment
factors, vehicle type, economic indicators, production cycle, automotive manufacturer incentives, and unanticipated shifts in used
vehicle supply, as well as expert judgment. This internally generated data is compared against third-party, independent data for
reasonableness. Periodically, we revise the projected value of the leased vehicle at termination based on current market conditions
and adjust depreciation expense over the remaining life of the contract as necessary. 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. Vehicles can be remarketed through auction (internet and physical), sale to dealer, sale to
lessee, and other methods. 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. General economic conditions, used vehicle supply and
demand, and new vehicle availability and market prices heavily influence used vehicle prices.

Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-K

Operating Lease Vehicle Terminations and Remarketing

The following table summarizes the volume of operating lease terminations and average gain per vehicle, as well as our methods of

vehicle sales at lease termination, stated as a percentage of total operating lease vehicle disposals.

Year ended December 31,

Off-lease vehicles terminated (in units)

Average gain per vehicle ($ per unit)

Method of vehicle sales

Sale to dealer, lessee, and other

Auction

Internet

Physical

2022

2021

2020

110,634

127,708

106,601

1,533

2,693

1,193

88 %

64 %

37 %

We recognized an average gain per vehicle of $1,533 for the year ended December 31, 2022, compared to an average gain per vehicle of

$2,693 and $1,193 in 2021 and 2020, respectively. The number of off-lease vehicles remarketed during the year ended December 31, 2022,
decreased 13%, compared to 2021, reflecting the normalization of termination volume to pre-COVID-19 levels. The decrease in remarketing
performance was primarily due to a shift in off-lease vehicle disposition channel mix. The remarketing channel mix for dealer and lessee
buyouts increased during the year ended December 31, 2022, primarily due to supply constraints increasing dealer demand for off-lease
vehicles, as well as increases in new vehicle prices that are causing a shift in consumer preference. The shift in off-lease vehicle disposition
may limit our ability to optimize remarketing proceeds, but it is expected to moderate in the near term in connection with declining used
vehicle values, which would soften any resulting adverse impacts to remarketing performance.

Operating Lease Portfolio Mix

We monitor the concentration of our outstanding operating leases. Our exposure to Stellantis vehicles represented approximately 78%

and 81% of our operating lease units as of December 31, 2022, and 2021, respectively.

The following table presents the mix of operating lease assets by vehicle type, based on volume of units outstanding.

December 31,

Sport utility vehicle

Truck

Car

Business/Strategic Risk

2022

2021

2020

63 %

59 %

57 %

Business/strategic risk is embedded in every facet of our organization and is one of our primary risk types. It is the risk resulting from the

pursuit of business activities that turn out to be unsuccessful due to a variety of both controllable and non-controllable factors. We aim to
mitigate this risk within our business lines through portfolio diversification, product innovations to meet ever-changing customer
expectations, risk assessment on all new products and services prior to launch, monitoring of the execution of our strategic and capital plan,
and a focus on efficiency and cost control.

Our strategic plan is reviewed and approved annually by our Board, as are the capital plan and financial business plan. With oversight by
our Board, executive management seeks to execute our strategic plan within the risk appetite approved by the RC. The executive management
team continuously monitors business performance throughout the year to assess strategic risk and identify early warning signals so that risks
can be proactively managed. Executive management regularly reviews actual performance versus the plan, updates our Board via reporting
routines, and implements changes as deemed appropriate.

Significant strategic actions, such as capital actions, material acquisitions or divestitures, and recovery and resolution plans are reviewed
and approved by our Board as required. At the business level, as we introduce new products and services, we proactively assess the impact on
our risk profile and then monitor performance relative to expectations for a period of time commensurate with the risk-based assessment.
With oversight by our Board, executive management evaluates changes to the financial forecast and risk, capital, and liquidity positions
throughout the year and takes actions to mitigate risks accordingly.

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 may result
from many of our activities, including those related to the management of our business/strategic, operational, and credit risks.

We maintain an enterprise-wide Reputation Risk Management program that establishes the requirements for managing reputation risk.
We manage reputation risk through established policies and controls in our businesses and risk-management processes to mitigate reputation
risks in a timely manner through proactive monitoring and identification of potential reputation risk events. We have established processes

Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-K

and procedures to respond to events that give rise to reputation risk, including educating individuals and organizations that influence public
opinion, external communication strategies to mitigate the risk, and informing key stakeholders of potential reputation risks. Primary
responsibility for the identification, escalation, and resolution of reputation risk issues resides with our business lines.

Our “LEAD” core values and “Do it Right” philosophy further strengthen our efforts to mitigate reputational risks by promoting a
transparent culture so that any associate, at any time, can and should call attention to risks that need to be addressed and taken into account.
Our organization and governance structures provide oversight of reputation risks, and key risk indicators are reported regularly and directly to
management and the RC, which provide primary oversight of reputation risk.

Operational Risk

Operational risk is the risk of loss or harm arising from inadequate or failed processes or systems, human factors, or external events and

is inherent in all of our risk-generating activities. Such risk can manifest in various ways, including errors, business interruptions, and
inappropriate behavior of employees, and can potentially result in financial losses and other damage to us. 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. Fraud can occur internally (for example, employees) or
externally (for example, criminal activity, third-party suppliers).

Human capital risk — The risk caused by high turnover, inadequate or improper staffing levels, departure/unavailability of key
personnel, or inadequate training and includes our exposure to worker’s compensation and employment litigation.

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.

• Model risk — The potential for adverse consequences from decisions based on incorrect or misused model assumptions, inputs,

outputs, and reports. This risk may include fundamental errors within the model that produce inaccurate outputs or that the model is
used incorrectly or inappropriately.

•

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. This includes a supplier’s failure to comply with information technology requirements, information
and physical security, laws, rules, regulations, and legal agreements.

To monitor and mitigate such risk, we maintain a system of policies and a control framework designed to provide a sound and well-

controlled operational environment. This framework employs practices and tools designed to maintain risk identification, risk governance,
risk and control assessment, risk testing and monitoring, and transparency through risk reporting mechanisms. The goal is to maintain
operational risk at appropriate levels based on our financial strength, the characteristics of the businesses and the markets in which we
operate, and the related competitive and regulatory environment.

Information Technology/Cybersecurity Risk

Information technology/cybersecurity risk includes risk 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.

We and our service providers rely extensively on communications, data-management, and other operating systems and infrastructure to

conduct our business and operations. Failures or disruptions to these systems, including cloud-based services, or infrastructure from
cyberattacks or other events may impede our ability to conduct business and operations and may result in business, reputational, financial,
regulatory, or other harm.

We and other financial institutions continue to be the target of various cyberattacks, including through the introduction of malware,
phishing attacks, denial-of-service, or other security breaches, as part of an effort to disrupt the operations of financial institutions or obtain
confidential, proprietary, or other information or assets of Ally, our customers, employees, or other third parties with whom we transact.

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. We recognize that cyber-related risks continue
to evolve and have become increasingly sophisticated, and as a result we continuously evaluate the adequacy of our preventive and detective
measures.

In order to help mitigate cybersecurity risks, we devote substantial resources to protect us from cyber-related incidents. We regularly
assess vulnerabilities and threats to our environment utilizing various resources including independent third-party assessments to evaluate

Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-K

whether our layered system of controls effectively mitigates risk. Additionally, we engage external expertise to perform comprehensive
institutional-wide simulations for senior management, which evaluates our preparedness to respond to crisis events, including cybersecurity
threats.

We also invest in new technologies and infrastructure in order to respond to evolving risks within our environment. We continue to
partner with other industry peers in order to share knowledge and information to further our security environment and invest in training and
employee awareness to cyber-related risks. Additionally, as a further protective measure, we maintain insurance coverage that, subject to
terms and conditions, may cover certain aspects of cybersecurity and information risks; however, such insurance may not be sufficient to
cover all losses. Management monitors operational metrics and data surrounding cybersecurity operations, and the organization monitors
compliance with established limits in connection with our risk appetite. Senior leadership regularly reviews, questions, and challenges such
information.

The Technology Committee assists the Board in overseeing information-technology and information-security risks (including
cybersecurity risk) and our management of them commensurate with our structure, risk profile, complexity, activities, and size. Our RC
reviews reports and other information from the Technology Committee in approving our information-technology and information-security
risk appetite and otherwise exercising oversight of our independent risk-management program. Our Board and the AC also undertake reviews
as appropriate. The Information Technology Risk Committee is responsible for supporting the Chief Risk Officer’s oversight of our
management of cybersecurity and other risks involving our communications, data-management, and other operating systems and
infrastructure. Additionally, our cybersecurity program is regularly assessed by Audit Services, which reports directly to the AC. The business
lines are also actively engaged in overseeing the service providers that supply or support the operating systems and infrastructure on which we
depend and, with effective challenge from the independent risk-management function, managing related operational and other risks.

Notwithstanding these risk and control initiatives, we may incur losses attributable to information technology/cybersecurity risk from
time to time, and there can be no assurance these losses will not be incurred in the future or will not be substantial. For further information on
cybersecurity, technology, systems, and infrastructure, refer to the section titled Risk Factors in Part I, Item 1A of this report.

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). Examples of such risks include compliance with regulations set forth by banking
agencies including fair and responsible banking, anti-money laundering, or community reinvestment act, risks associated with offering our
products or services, or risks associated with deviating from internal policies and procedures including those that are established to promote
sound risk-management and internal-control practices. Compliance risk also includes fiduciary risk, which includes risks arising from our
duty to exercise loyalty, act in the best interest of our clients, and care for assets according to an appropriate standard of care. This risk
generally exists to the extent that we exercise discretion in managing assets on behalf of a customer.

We recognize that an effective compliance program, which includes driving a culture of compliance, plays a key role in managing and
overseeing compliance risk and that a proactive compliance environment and program are essential to help meet various legal, regulatory, or
other requirements or expectations. 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. The Chief Compliance Officer has the authority and responsibility for the oversight and administration of our
consumer and customer-related compliance program, which includes ongoing reporting of compliance-associated risk matters to our Board,
the RC, and various management committees established to govern compliance-related risks. The Compliance Risk Management Committee,
established by the Chief Compliance Officer, serves to facilitate the management of consumer and customer-related compliance risk,
including matters impacting products, geographies, and services. 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.

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.

Management is responsible for driving a culture that is consistent with our “LEAD” core values and “Do it Right” philosophy. We

maintain an enterprise-wide Conduct Risk Management program that establishes the requirements for managing conduct risk.

Under our governance framework, incentive compensation is subject to review and recoupment so as to appropriately consider and not
encourage imprudent risk-taking. 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.

We manage conduct risk through a variety of enterprise programs, policies, and procedures. Associates complete required training at on-
boarding, and annually thereafter, to affirm their compliance with our Code of Conduct and Ethics. Training programs and other resources set

Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-K

expectations surrounding appropriate conduct, ethical behavior, and a culture of compliance with applicable laws, regulations, policies, and
standards. Officers and employees are expected to take personal responsibility for maintaining the highest standards of honesty,
trustworthiness, and ethical behavior; to understand and manage the risks associated with their positions; and to escalate concerns about risk
management (including reporting of potential violations of the Code of Conduct and Ethics, our policies, or other laws and regulations).
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.
The Ethics Hotline (independently managed, available to associates 24 hours a day, 7 days a week) and Open-Door Process provide additional
avenues for employees to report concerns or incidents of potential misconduct. Human Resources, Employee Relations, and Enterprise Fraud,
Security, and Investigations have established processes and procedures for investigating and addressing cases of potential fraud or employee
misconduct.

Climate-Related Risk

We have identified and defined climate-related risk as an emerging risk. Pursuant to our risk-management framework, emerging risks

include those that have yet to create a material impact or would only arise during stressful or unlikely circumstances.

Climate-related risk is generally categorized into two major categories: (1) risk related to the transition to a lower-carbon economy
(transition risk) and (2) risk related to the physical impacts of climate change. Transition risk considers how changes in policy, technology,
and market preference could pose operational, financial, and reputational risk to companies. Physical risk from climate change can be acute or
chronic. Acute physical risk refers to risks that are event-driven such as increased severity of extreme weather events, including tornadoes,
hurricanes, or floods. Chronic physical risks refer to long-term shifts in climate patterns, such as sustained higher temperatures, that may, for
example, cause sea levels to rise. We manage risks related to the physical impacts of climate change through the active engagement of our
business continuity program, which is intended to limit disruptions during acute climate-related events. Additionally, we use excess of loss
reinsurance to help mitigate risk of weather losses within our P&C business for our vehicle inventory program. We also use loss control
techniques such as storm path monitoring to assist dealers in preparing for severe weather help to mitigate loss potential.

As the impacts of climate change become more evident, we have recognized (1) the importance of understanding, preparing for and

taking timely preventive action against potentially material climate-change impacts, (2) increasing investor demand for consistent and
comparable climate-change risk data, (3) changing federal policy focus as a result of rejoining the Paris Climate Agreement and an increase in
regulatory discussion about potential requirements and oversight, and (4) that Ally’s commitment to “Do It Right” extends to the conservation
of environmental resources to promote a sustainable future for our customers, employees, stockholders, and the communities in which we live
and operate. Specifically, Ally has:

•

Defined climate-related risk as an emerging risk within our risk-management framework.

Appointed a Sustainability Risk Executive reporting to our Chief Risk Officer and established a sustainability office staffed with
employees focused on adopting sustainability measures and developing and executing a comprehensive enterprise strategy on
climate-related risks and opportunities.

Included sustainability and climate-related matters in executive level forums and Board education.

Completed a formal ESG Stakeholder Assessment in 2021 that included customers, investors, community partners, local
governments and employees to gain perspective on ESG priorities and their importance to Ally.

Committed to developing a comprehensive enterprise environmental sustainability strategy focusing on greater data collection,
aggregation and analysis, with the goal of aligning with the recommendations from the Task Force on Climate-related Financial
Disclosures in assessing and reporting on our exposures to climate-related risks and opportunities consistent with the financial
industry.

Performed our annual assessment and calculation of our greenhouse gas emissions including Scope 1 emissions (direct emissions
from owned or controlled sources), Scope 2 emissions (indirect emissions from the generation of purchased electricity, steam,
heating and cooling consumed by the company), and relevant Scope 3 emissions (all other indirect emissions that occur in the
company’s value chain) for 2021.

Executed Ally’s operational carbon neutrality strategy for 2021 Scope 1 and 2 emissions through a combined purchase of carbon
offsets and Green-e Energy Certified renewable energy credits.

Submitted our annual CDP (formally the Carbon Disclosure Project) climate change questionnaire for 2021.

Prioritized sustainable facilities by purchasing or leasing LEED certified buildings that accounted for approximately 40% of the
total square footage in Ally facilities as of December 31, 2022.

Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-K

•

Activated the “Green Teams” initiative in the fourth quarter of 2021 to engage Ally employees in support of environmental
volunteer opportunities within local communities where Ally operates. Completed over 2,300 volunteer hours during the year ended
December 31, 2022.

Refer to the section titled Risk Factors in Part I, Item 1A of this report for information on climate-related risks.

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. Our primary objective is
to maintain cost-effective, stable and diverse sources of funding capable of sustaining the organization throughout all market cycles. Sources
of funding include both retail and brokered deposits and secured and unsecured market-based funding across various maturity, interest rate,
and investor profiles. Additional liquidity is available through a pool of unencumbered highly liquid securities, repurchase agreements, and
advances from the FHLB of Pittsburgh.

We define liquidity risk as the risk that an institution’s financial condition or overall safety and soundness is adversely affected by the

actual or perceived inability to liquidate assets or obtain adequate funding or to easily unwind or offset specific exposures without
significantly lowering market prices because of inadequate market depth or market disruptions. Liquidity risk can arise from a variety of
institution-specific or market-related events that could have a negative impact on cash flows available to the organization. Effective
management of liquidity risk positions an organization to meet cash flow obligations caused by unanticipated events. Managing liquidity
needs and contingent funding exposures has proven essential to the solvency of financial institutions.

The ALCO, chaired by the Corporate Treasurer, is responsible for overseeing our funding and liquidity strategies. Corporate Treasury is
responsible for managing our liquidity positions within limits approved by ALCO, the ERMC, and the RC. As part of managing liquidity risk,
Corporate Treasury prepares monthly forecasts depicting anticipated funding needs and sources of funds, executes our funding strategies, and
manages liquidity under normal as well as more severely stressed macroeconomic environments. Oversight and monitoring of liquidity risk
are provided by Independent Risk Management.

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 2025). Refer to Note 15 to the Consolidated Financial Statements for a summary of the scheduled maturity of
long-term debt as of December 31, 2022. In recent years, we have become less reliant on market-based funding, reducing our exposure to
disruptions in wholesale funding markets.

Funding Strategy

Liquidity and ongoing profitability are largely dependent on the timely and cost-effective access to retail deposits and funding in various
segments of the capital markets. We focus on maintaining diversified funding sources across a broad base of depositors, lenders, and investors
to meet liquidity needs throughout different economic cycles, including periods of financial distress. These funding sources include retail and
brokered deposits, public and private asset-backed securitizations, unsecured debt, FHLB advances, and repurchase agreements. Our access to
diversified funding sources enhances funding flexibility and results in a more cost-effective funding strategy over the long term. We evaluate
funding markets on an ongoing basis to achieve an appropriate balance of unsecured and secured funding sources and maturity profiles.

We manage our funding to achieve a well-balanced portfolio across a spectrum of risk, maturity, and cost-of-funds characteristics.
Optimizing funding at Ally Bank continues to be a key part of our long-term liquidity strategy. We optimize our funding sources at Ally Bank
by prioritizing retail deposits, maintaining active securitization programs, managing a prudent maturity profile of our brokered deposit
portfolio, utilizing repurchase agreements, and continuing to access funds from the FHLB.

Essentially all asset originations are directed to Ally Bank to reduce parent company exposures and funding requirements, and to utilize

our growing consumer deposit-taking capabilities. This allows us to use bank funding for substantially all our automotive finance and other
assets and to provide a sustainable long-term funding channel for the business, while also improving the cost of funds for the enterprise.

Liquidity Risk Management

Multiple metrics are used to measure liquidity risk, manage the liquidity position, identify related trends, and monitor these trends and
metrics against established limits. These metrics include comprehensive stress tests that measure the sufficiency of the liquidity portfolio over
stressed horizons ranging from overnight to 12 months, stability ratios that measure longer-term structural liquidity, and concentration ratios
that enable prudent funding diversification. In addition, we have established internal management routines designed to review all aspects of
liquidity and funding plans, evaluate the adequacy of liquidity buffers, review stress testing results, and assist management in the execution of
its funding strategy and risk-management accountabilities.

Our liquidity stress testing is designed to allow us to operate our businesses and to meet our contractual and contingent obligations,
including unsecured debt maturities, for at least 12 months, assuming our normal access to funding is disrupted by severe market-wide and
enterprise-specific events. We maintain available liquidity in the form of cash and unencumbered highly liquid securities. 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.

Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-K

The following table summarizes our total available liquidity.

December 31, ($ in millions)

Unencumbered highly liquid securities (a)

Liquid cash and equivalents

Total available liquidity

(a)

Includes unencumbered U.S. federal government, U.S. agency, and highly liquid corporate debt securities.

Recent Funding Developments

Key funding highlights from January 1, 2022, to date were as follows:

2022

2021

22,155

5,111

27,266

26,767

4,426

31,193

•

During 2022, we accessed the unsecured debt capital markets and raised $1.5 billion through the issuance of senior notes, which
provided additional liquidity at Ally Financial Inc. Additionally, we had $1.1 billion of unsecured debt mature during the year
ended December 31, 2022.

Our total deposit base increased $10.7 billion during 2022, to $152.3 billion as of December 31, 2022.

During the year ended December 31, 2022, the balance of outstanding short-term and long-term FHLB advances grew by
$1.9 billion and decreased by $1.0 billion, respectively.

During 2022, we raised $2.5 billion through the completion of term securitization transactions backed by consumer automotive
loans.

Funding Sources

The following table summarizes our sources of funding and the amount outstanding under each category for the periods shown.

December 31, ($ in millions)

Deposits

Debt

Secured financings

Institutional term debt

Retail term notes

Total debt (a)

On-balance-sheet funding

% Share of funding

2022

2021

2022

2021

152,297

141,558

10,124

9,678

359

20,161

7,619

9,194

216

17,029

—

Total on-balance-sheet funding

172,458

158,587

100

(a)

Includes hedge basis adjustments as described in Note 21 to the Consolidated Financial Statements.

Refer to Note 15 to the Consolidated Financial Statements for a summary of the scheduled maturity of long-term debt at December 31,

2022.

Deposits

Ally Bank is a digital direct bank with no branch network that obtains retail deposits directly from customers. We offer competitive rates

and fees on a full spectrum of retail deposit products, including online savings accounts, money-market demand accounts, CDs, interest-
bearing checking accounts, trust accounts, and IRAs. Our primary funding source is retail deposits, which provide us with stable, low-cost
funding. We believe retail deposits are less sensitive to interest rate changes, market volatility, or changes in credit ratings when compared to
other funding sources. Retail deposits constituted 80% of our total funding sources at December 31, 2022. In addition, we utilize brokered
deposits, which are obtained through third-party intermediaries.

Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-K

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.

Total primary retail deposit customers (in thousands)

2,681

2,597

2,546

2,518

2,476

December 31,
2022

September 30,
2022

June 30,
2022

March 31,
2022

December 31,
2021

Deposits ($ in millions)

Retail

Brokered

Other (a)

Total deposits

137,684 $

133,878 $

131,155 $

135,978 $

134,672

12,590

2,023

9,617

2,256

6,962

2,284

4,049

2,448

4,669

2,217

152,297 $

145,751 $

140,401 $

142,475 $

141,558

(a) Other deposits include mortgage escrow and other deposits. Additionally, other deposits also include a deposit related to Ally Invest customer cash

balances deposited at Ally Bank by a third party of $1.8 billion as of December 31, 2022, $2.0 billion as of September 30, 2022, $2.1 billion as of both
June 30, 2022, and December 31, 2021, and $2.3 billion as of March 31, 2022.

During the year ended December 31, 2022, our total deposit base increased $10.7 billion and we added approximately 205,000 retail

deposit customers, ending with approximately 2.7 million retail deposit customers as of December 31, 2022. Total retail deposits increased
$3.0 billion during the year ended December 31, 2022, bringing the total retail deposits portfolio to $137.7 billion as of December 31, 2022.
The increase during the year ended December 31, 2022, was primarily driven by an increase in retail deposit customers, as well as higher
deposit rates. Additionally, brokered deposits increased $7.9 billion during the year ended December 31, 2022. Overall, strong customer
acquisition and retention rates, reflecting the strength of the brand, continue to deliver a favorable funding mix.

We continue to advance our digital capabilities and deliver incremental value to our retail deposit customers beyond competitive rates.

We have continued to deliver enhancements—such as our smart savings tools—improving our customer’s digital banking experience and
providing unique opportunities to organize and build their savings. In May 2021, we eliminated all overdraft fees across our retail deposit
products for all customers. In January 2022, we announced Ally CoverDraft service, which provides a no fee overdraft allowance to our
qualifying customers on debit transactions subject to a certain amount. In September 2022, we announced early direct deposit, an account
feature that allows customers to access qualifying direct deposits up to two days in advance of receipt. These changes are examples of our
“Do It Right” commitment for our customers.

We continue to be recognized for the experience and value we provide our customers. In 2021, Ally Bank’s checking account earned
national Bank On certification from the CFE Fund. The organization recognized Ally’s existing checking account, which goes above and
beyond CFE criteria, for providing lower- and moderate-income consumers with a safe, affordable path to join the financial mainstream and
achieve financial stability. In April 2022, Forbes named Ally to its “World’s Best Banks” list, and in June 2022, Kiplinger named Ally Bank
to its “Best Internet Banks” list for the sixth consecutive year. In September 2022, The Wall Street Journal named Ally Bank the “Best
Overall Online Bank.” In November 2022, MONEY® Magazine named Ally to its “Best Online Bank” list for the fifth consecutive year, as
well as the tenth time in the past twelve years. For additional information on our deposit funding by type, refer to Note 14 to the Consolidated
Financial Statements.

Securitizations and Secured Financings

In addition to building a larger deposit base in recent years, we maintain a presence in the securitization markets to finance our

automotive loan portfolios. Securitizations and secured funding transactions, collectively referred to as securitization transactions due to their
similarities, allow us to convert our automotive-finance receivables into cash earlier than what would have occurred in the normal course of
business.

As part of these securitization transactions, we sell assets to various SPEs in exchange for the proceeds from the issuance of debt and
other beneficial interests in the assets. The activities of the SPEs are generally limited to acquiring the assets, issuing and making payments on
the debt, paying related expenses, and periodically reporting to investors.

These SPEs are separate legal entities that assume the risks and rewards of ownership of the receivables they hold. The assets of the
SPEs are not available to satisfy our claims or those of our creditors. In addition, the SPEs do not invest in our equity or in the equity of any
of our affiliates. Our economic exposure related to the SPEs is generally limited to cash reserves, retained interests, and customary
representation, warranty, and covenant provisions. We manage securitization execution risk by maintaining a diverse domestic and foreign
investor base.

We typically agree to service the assets transferred in our securitization transactions for a fee, and we may be entitled to other related
fees. The total amount of servicing fees earned is disclosed in Note 5 to the Consolidated Financial Statements. We may also retain a portion
of senior and subordinated interests issued by the SPEs. Subordinate interests typically provide credit support to the more highly rated senior
interest in a securitization transaction and may be subject to all or a portion of the first-loss position related to the sold assets.

These securitization transactions may meet the criteria to be accounted for as off-balance-sheet securitization transactions if we do not

hold a potentially significant economic interest or do not provide servicing or asset management functions for the financial assets held by the
securitization entity. Our securitization transactions may not meet the required criteria to be accounted for as off-balance-sheet securitization

Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-K

transactions; therefore, they are accounted for as secured borrowings. We did not have any off-balance sheet securitization exposures at
December 31, 2022. For information regarding our securitization activities, refer to Note 1 and Note 11 to the Consolidated Financial
Statements.

During 2022, we raised $2.5 billion through the completion of term securitization transactions backed by consumer automotive loans.

We have access to funding through advances with the FHLB. These advances are primarily secured by consumer and commercial
mortgage finance receivables and loans and investment securities. As of December 31, 2022, we had pledged $27.0 billion of assets to the
FHLB resulting in $18.3 billion in total funding capacity with $7.2 billion of debt outstanding.

At December 31, 2022, $39.3 billion of our total assets were restricted as collateral for the payment of debt obligations accounted for as

secured borrowings. Refer to Note 15 to the Consolidated Financial Statements for further discussion.

Unsecured Financings

We have short-term and long-term unsecured debt outstanding from retail term note programs. These programs are composed of callable

fixed-rate instruments with fixed maturity dates. There were $359 million of retail term notes outstanding at December 31, 2022. The
remainder of our unsecured debt is composed of institutional term debt. In 2022, we accessed the unsecured debt capital markets and raised
$1.5 billion through the issuance of senior notes. Refer to Note 15 to the Consolidated Financial Statements for additional information about
our outstanding short-term borrowings and long-term unsecured debt.

Other Secured and Unsecured Short-term Borrowings

We have access to repurchase agreements. A repurchase agreement is a transaction in which the firm sells financial instruments to a
buyer, typically in exchange for cash, and simultaneously enters into an agreement to repurchase the same or substantially the same financial
instruments from the buyer at a stated price plus accrued interest at a future date. The securities sold in repurchase agreements include U.S.
government and federal agency obligations. As of December 31, 2022, we had $499 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. However, the

FRB is not a primary source of funding for day-to-day business. Instead, it is a liquidity source that can be accessed in stressed environments
or periods of market disruption. We had assets pledged and restricted as collateral to the FRB totaling $2.4 billion as of December 31, 2022.
We had no debt outstanding with the FRB as of December 31, 2022.

Guaranteed Securities

Certain senior notes (collectively, the Guaranteed Notes) issued by Ally Financial Inc. (referred to within this section as the Parent) are
unconditionally guaranteed on a joint and several basis by IB Finance, a subsidiary of the Parent and the direct parent of Ally Bank, and Ally
US LLC, a subsidiary of the Parent (together, the Guarantors, and the guarantee provided by each such Guarantor, the Note Guarantees). The
Guarantors are primary obligors with respect to payment when due, whether at maturity, by acceleration or otherwise, of all payment
obligations of the Parent in respect of the Guaranteed Notes pursuant to the terms of the applicable indenture. At both December 31, 2022,
and December 31, 2021, the outstanding principal balance of the Guaranteed Notes was $2.0 billion, with the last scheduled maturity to take
place in 2031.

The Note Guarantees rank equally in right of payment with the applicable Guarantor’s existing and future unsubordinated unsecured
indebtedness and are subordinate to any secured indebtedness of the applicable Guarantor to the extent of the value of the assets securing such
indebtedness. 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.

The Note Guarantees and all other obligations of the Guarantors will terminate and be of no further force or effect (i) upon a permissible

sale, disposition, or other transfer (including through merger or consolidation) of a majority of the equity interests (including any sale,
disposition or other transfer following which the applicable Guarantor is no longer a subsidiary of the Parent), of the applicable Guarantor, or
(ii) upon the discharge of the Parent’s obligations related to the Guaranteed Notes.

Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-K

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.

Year ended December 31, ($ in millions)

Net financing loss and other interest income (a)

Dividends from bank subsidiaries

Dividends from nonbank subsidiaries

Total other revenue

Total net revenue

Provision for credit losses

Total noninterest expense

Income (loss) from continuing operations before income tax benefit

Income tax benefit from continuing operations (b)

Net income from continuing operations

Loss from discontinued operations, net of tax

Net income (c)

2022

2021

2020

(1,000) $

(1,070) $

(1,049)

3,150

103

2,254

(32)

665

1,621

(253)

1,874

(1)

3,450

243

2,650

(106)

650

2,106

(412)

2,518

(5)

1,873

2,513

1,150

367

534

(68)

693

(91)

(300)

209

(1)

208

(a) Net financing loss and other interest income is primarily driven by interest expense on long-term debt. Refer to Note 15 to the Consolidated Financial

Statements for further discussion.

(b) There is a significant variation in the customary relationship between pretax income (loss) and income tax benefit due to our accounting policy elections

and consolidated tax adjustments. The income tax benefit excludes tax effects on dividends from subsidiaries.

December 31, ($ in millions)

Total assets (a)

Total liabilities

(a) Excludes investments in all nonguarantor subsidiaries.

Cash Flows

2022

2021

5,467

10,996

5,737

11,304

The following summarizes the activity reflected in the Consolidated Statement of Cash Flows. While this information may be helpful to

highlight certain macro trends and business strategies, the cash flow analysis may not be as helpful when analyzing changes in our net
earnings and net assets. 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 $6.2 billion and $4.0 billion for the years ended December 31, 2022, and 2021,
respectively. Activity increased year-over-year, as higher net financing revenue and other interest income more than offset higher interest
expense. Refer to the Consolidated Results of Operations section of this MD&A for further discussion.

Net cash used in investing activities was $17.3 billion and $11.1 billion for the years ended December 31, 2022, and 2021, respectively.
The change was primarily due to an increase of $10.8 billion in net cash outflows related to higher originations of loans held-for-investment,
driven by higher financed transaction amounts. This was partially offset by an increase of $3.5 billion in net cash inflows related to available-
for-sale securities.

Net cash provided by financing activities for the year ended December 31, 2022, was $11.6 billion, compared to net cash used in

financing activities of $3.8 billion for the same period in 2021. The change was primarily attributable to an increase in deposits of
$6.2 billion, an increase in net cash inflows related to short-term borrowings of $4.5 billion, and an increase in net cash inflows from the
issuance of long-term debt of $4.1 billion. Refer to the above section titled Recent Funding Developments for further information.

Capital Planning and Stress Tests

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

Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-K

The Tailoring Rules align capital planning, supervisory stress testing, and stress capital buffer requirements for large banking

organizations like Ally. As a Category IV firm, Ally is expected to have the ability to elect to participate in the supervisory stress test—and
receive a correspondingly updated stress capital buffer requirement—in a year in which Ally would not generally be subject to the
supervisory stress test. Refer to the section titled Basel Capital Framework in Note 20 to the Consolidated Financial Statements for further
discussion about our stress capital buffer requirements. During a year in which Ally does not undergo a supervisory stress test, we would
receive an updated stress capital buffer requirement only to reflect our updated planned common-stock dividends. Ally did not elect to
participate in the 2021 or 2023 supervisory stress test but was subject to the 2022 supervisory stress test.

We submitted our 2021 capital plan on April 5, 2021, which included planned capital distributions to common stockholders through

share repurchases and cash dividends and other capital actions over the nine-quarter planning horizon. On January 11, 2021, our Board
authorized a stock-repurchase program, permitting us to repurchase up to $1.6 billion of our common stock from time to time from the first
quarter of 2021 through the fourth quarter of 2021 subject to restrictions imposed by the FRB. On July 12, 2021, our Board authorized an
increase in the maximum amount of this stock-repurchase program, from $1.6 billion to $2.0 billion. During the second quarter of 2021, we
issued $1.35 billion of Series B Preferred Stock and $1.0 billion of Series C Preferred Stock, both of which qualify as additional Tier 1 capital
under U.S. Basel III. The proceeds from these issuances were used to redeem a portion of the Series 2 TRUPS then outstanding. Refer to Note
17 to the Consolidated Financial Statements for additional details about these instruments and capital actions. In June 2021, we submitted an
updated capital plan to the FRB reflecting these capital actions and increases in our stock-repurchase program and common-stock dividend.
This updated capital plan was used by the FRB to recalculate Ally’s final stress capital buffer requirement, which was announced in August
2021 and remained unchanged at 3.5%. We submitted our 2022 capital plan to the FRB on April 5, 2022. Ally received an updated
preliminary stress capital buffer requirement from the FRB in June 2022, which was determined to be 2.5%. The updated 2.5% stress capital
buffer requirement was finalized in August 2022 and became effective on October 1, 2022.

On January 10, 2022, our Board authorized a stock-repurchase program, permitting us to repurchase up to $2.0 billion of our common
stock from time to time from the first quarter of 2022 through the fourth quarter of 2022 subject to restrictions imposed by the FRB, and an
increase in our cash dividend on common stock from $0.25 per share for the fourth quarter of 2021 to $0.30 per share for the first quarter of
2022. During the year ended December 31, 2022, we repurchased $1.65 billion of common stock under our stock-repurchase program. Since
the commencement of our initial stock-repurchase program in the third quarter of 2016, we have reduced the number of outstanding shares of
our common stock by 38%, from 484 million as of June 30, 2016, to 299 million as of December 31, 2022. Our ability to make capital
distributions, including our ability to pay dividends or repurchase shares of our common stock, will continue to be subject to the FRB’s
review and our internal governance requirements, including approval by our Board. The amount and size of any future dividends and share
repurchases also will be subject to various factors, including Ally’s capital and liquidity positions, accounting and regulatory considerations
(including any restrictions that may be imposed by the FRB), 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.

100

Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-K

Regulatory Capital

We became subject to U.S. Basel III on January 1, 2015, although a number of its provisions—including capital buffers and certain

regulatory capital deductions—were subject to phase-in periods. For further information on U.S. Basel III, refer to the section titled
Regulation and Supervision in Part I, Item 1 of this report, and Note 20 to the Consolidated Financial Statements. The following table presents
selected regulatory capital data under U.S Basel III.

December 31, ($ in millions)

Common Equity Tier 1 capital ratio

Tier 1 capital ratio

Total capital ratio

Tier 1 leverage ratio (to adjusted quarterly average assets) (a)

Total equity

CECL phase-in adjustment (b)

Preferred stock (c)

Goodwill and certain other intangibles

Deferred tax assets arising from net operating loss and tax credit carryforwards (d)

Other adjustments (e)

Common Equity Tier 1 capital

Preferred stock (c)

Other adjustments

Tier 1 capital

Qualifying subordinated debt and other instruments qualifying as Tier 2

Qualifying allowance for loan losses and other adjustments

Total capital

Risk-weighted assets (f)

2022

2021

9.27 %

10.72 %

12.21 %

8.65 %

10.34 %

11.89 %

13.47 %

9.67 %

$ 12,859

$ 17,050

887

(2,324)

(902)

(4)

4,076

14,592

2,324

(49)

16,867

416

1,926

1,183

(2,324)

(941)

(2)

177

15,143

2,324

(64)

17,403

623

1,698

$ 19,209

$ 19,724

$ 157,346

$ 146,399

(a) Tier 1 leverage ratio equals Tier 1 capital divided by adjusted quarterly average total assets, which both reflect adjustments for disallowed goodwill,

certain intangible assets, and disallowed deferred tax assets.

(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

(c)

December 31, 2021. Beginning on January 1, 2022, we phased in 25% of the previously deferred estimated capital impact of CECL, with an additional
25% to be phased in at the beginning of each subsequent year until fully phased in by the first quarter of 2025. Refer to Note 20 to the Consolidated
Financial Statements for further information.
In connection with our issuances of non-cumulative perpetual preferred stock in the second and third quarters of 2021, we redeemed a portion of the
Series 2 TRUPS outstanding. In September 2021, we announced our intent to redeem the remaining shares of the Series 2 TRUPS outstanding without
issuing a replacement capital instrument. The redemption was effectuated on October 15, 2021. Refer to Note 15 to the Consolidated Financial Statements
for additional details about our issuances of non-cumulative perpetual preferred stock.
(d) Contains deferred tax assets required to be deducted from capital under U.S. Basel III.
(e)

Primarily 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.

Credit Ratings

The cost and availability of unsecured financing are influenced by credit ratings, which are intended to be an indicator of the

creditworthiness of a particular company, security, or obligation. Lower ratings result in higher borrowing costs and reduced access to capital
markets. 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).

101

Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-K

Nationally recognized statistical rating organizations rate substantially all our debt. The following table summarizes our current ratings

and outlook by the respective nationally recognized rating agencies.

Rating agency

Fitch (a)

Moody’s (b)

S&P (c)

DBRS (d)

Short-term

Senior unsecured
debt

P-3

A-3

R-2 (high)

BBB-

Baa3

BBB-

BBB

Outlook

Stable

Fitch affirmed our senior unsecured debt rating of BBB-, short-term rating of F3, and our outlook of Stable on March 24, 2022.

(a)
(b) Moody’s upgraded our senior unsecured rating to Baa3 from Ba1, upgraded our short-term rating to P-3 from Non-Prime and changed the outlook to

(c)

Stable from Rating Under Review on August 27, 2021.
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.

(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 February 18, 2022.

As illustrated by the issuer ratings above, as of December 31, 2022, Ally holds an investment-grade rating from all the respective

nationally recognized rating agencies.

Rating agencies indicate that they base their ratings on many quantitative and qualitative factors, which may include capital adequacy,

liquidity, asset quality, business mix, level and quality of earnings, and the current operating, legislative, and regulatory environment. Rating
agencies themselves could make or be required to make substantial changes to their ratings policies and practices—particularly in response to
legislative and regulatory changes. Potential changes in rating methodology, as well as in the legislative and regulatory environment, and the
timing of those changes could impact our ratings, which as noted above could increase our borrowing costs and reduce our access to capital.

A credit rating is not a recommendation to buy, sell, or hold securities, and the ratings are subject to revision or withdrawal at any time

by the assigning rating agency. Each rating should be evaluated independently of any other rating.

Insurance Financial Strength Ratings

Substantially all of our Insurance operations have an FSR and an ICR from A.M. Best. 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 October 27, 2022, A.M. Best affirmed the FSR for Ally Insurance Group of A- (excellent), affirmed the ICR of a-, and
maintained a Stable outlook.

Critical Accounting Estimates

Accounting policies are integral to understanding our Management’s Discussion and Analysis of Financial Condition and Results of
Operations. The preparation of financial statements in accordance with U.S. GAAP requires management to make certain judgments and
assumptions, on the basis of information available at the time of the financial statements, in determining accounting estimates used in the
preparation of these statements. Our significant accounting policies are described in Note 1 to the Consolidated Financial Statements. Certain
of our critical accounting policies requiring significant management assumptions and judgment are described in this section. An accounting
estimate is considered critical if the estimate requires management to make assumptions about matters that were highly uncertain at the time
the accounting estimate was made. If actual results differ from our judgments and assumptions, then it may have an adverse impact on the
results of operations and cash flows. Our management has discussed the development, selection, and disclosure of these critical accounting
estimates with the Audit Committee of our Board, and the Audit Committee has reviewed our disclosure relating to these estimates.

Allowance for Loan Losses

We maintain an allowance for loan losses (the allowance) to reflect the net amount expected to be collected from our lending portfolios.
The allowance is maintained at a level that management considers to be adequate based upon ongoing quarterly assessments and evaluations
using relevant available information. The allowance is measured using statistically estimated models that are designed to correlate customer
and collateral quality, as well as certain macroeconomic variables to expected future credit losses. The macroeconomic data used in the
models is based on forecasted variables for the next 12 months. Beyond this forecast period, we revert to a historical average for each of the
variables on a straight-line basis over 24 months. Our baseline macroeconomic forecast is consistent with the 50th percentile in a distribution
of possible economic outcomes.

The consumer portfolio segments consist of loans that generally share similar risk characteristics within our Automotive Finance
operations, Mortgage Finance operations, and our personal lending and credit card operations, both of which are included within Corporate
and Other. For additional information regarding the allowance calculation for the consumer portfolio segments, refer to Note 1 to the
Consolidated Financial Statements.

102

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 commercial
portfolio segment, refer to Note 1 to the Consolidated Financial Statements.

The determination of the allowance is influenced by numerous assumptions and factors that may materially affect estimates of loss. The

critical assumptions underlying the allowance include: (i) segmentation of each portfolio based on common risk characteristics; (ii) the
development of reasonable and supportable forecasts of future macroeconomic conditions; and (iii) evaluation by management of borrower,
collateral, and geographic information. Management monitors the adequacy of the allowance and makes adjustments as the assumptions in the
underlying analyses change to reflect an estimate of expected lifetime loan losses at the reporting date, based on the best information available
at that time.

The allowance reflects management’s estimate of expected credit losses over the contractual term of our lending portfolio and involves

significant judgment, which could materially affect the provision for credit losses and, therefore, net income. For additional information
regarding our portfolio segments and classes, allowance for loan losses, and other credit quality indicators, refer to Note 9 to the Consolidated
Financial Statements.

Macroeconomic Sensitivity Analysis

We perform a sensitivity analysis using scenarios derived from widely published macroeconomic forecasts to quantify the sensitivity of

our baseline forecast to alternative changes in macroeconomic conditions. 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.

As of December 31, 2022, results of this sensitivity analysis indicate that the downside scenario would increase our allowance for loan
losses by 8% and the alternative unfavorable scenario would increase our allowance for loan losses by 11%. These results are estimates that
are directly tied to the timing, severity, and duration of changes in the independently and instantaneously shocked macroeconomic scenario.
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, future government and management actions, and other
quantitative and qualitative information and adjustments. Therefore, this sensitivity analysis is hypothetical and is not intended to represent
our expectation of changes in our estimate of expected credit losses due to a change in the macroeconomic environment.

Valuation of Automotive Operating Lease Assets and Residuals

We have significant investments in vehicles in our operating lease portfolio. In accounting for operating leases, management must make
a determination at the beginning of the operating lease contract of the estimated realizable value (i.e., residual value) of the vehicle at the end
of the lease. This evaluation is primarily based on a proprietary model, which includes variables such as age of the vehicle, expected mileage,
seasonality, segment factors, vehicle type, economic indicators, production cycle, automotive manufacturer incentives, and shifts in used
vehicle supply. This internally generated data is compared against third-party, independent data for reasonableness. The customer is obligated
to make payments during the term of the lease for the difference between the purchase price and the contract residual value plus rental
charges. However, since the customer is not obligated to purchase the vehicle at the end of the contract, we are exposed to a risk of loss to the
extent the value of the vehicle is below the residual value estimated at contract inception. For additional information regarding residual value,
refer to Note 1 to the Consolidated Financial Statements.

To account for residual risk, we depreciate automotive operating lease assets to expected realizable value on a straight-line basis over the

lease term. The estimated realizable value is initially based on the expected residual value established at contract inception. Periodically, we
review the projected value of the leased vehicle at termination based on current market conditions, and other relevant data points, and adjust
depreciation expense as necessary over the remaining term of the lease. Management periodically performs a detailed review of the estimated
realizable value of vehicles to assess the appropriateness of the carrying value of operating lease assets. Impairment of operating lease assets
is assessed upon the occurrence of a triggering event. Triggering events are systemic, observed events impacting the used vehicle market such
as shocks to oil and gas prices that may indicate impairment of the operating lease asset. For additional information regarding operating lease
impairment, refer to Note 1 to the Consolidated Financial Statements.

Our depreciation methodology for operating lease assets considers management’s expectation of the value of the vehicles upon lease
termination, which is based on numerous assumptions and factors influencing used vehicle values. The critical assumptions underlying the
estimated carrying value of automotive operating lease assets include: (i) estimated market value information obtained and used by
management in estimating residual values, (ii) proper identification and estimation of business conditions, (iii) our remarketing abilities, and
(iv) automotive manufacturer vehicle and marketing programs. Changes in these assumptions could have a significant impact on the operating
lease residual value.

103

Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-K

Lessees have the first opportunity to purchase the off-lease vehicle at the end of the lease term for the price stated in the lease agreement.

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 realized values of our leased vehicles were to decline 1% below our estimated realizable values, we would
incur $82 million of incremental depreciation expense over the remaining life of our operating lease portfolio. This is based on the improbable
event that all vehicles were remarketed at auction due to lessees and dealers foregoing their purchase options.

Fair Value of Financial Instruments

We use fair value measurements to record fair value adjustments to certain instruments and to determine fair value disclosures. Refer to
Note 24 to the Consolidated Financial Statements for a description of valuation methodologies used to measure material assets and liabilities
at fair value and details of the valuation models, key inputs to those models, and significant assumptions utilized. We follow the fair value
hierarchy set forth in Note 24 to the Consolidated Financial Statements in order to prioritize the inputs utilized to measure fair value. We
review and modify, as necessary, our fair value hierarchy classifications on a quarterly basis, which can result in reclassifications between
hierarchy levels.

We have numerous internal controls in place to address risks inherent in estimating fair value measurements. Significant fair value
measurements are subject to detailed analytics and management review and approval. We have an established risk management policy and
model validation program. This model validation program establishes a controlled environment for the development, implementation, and
operation of models used to generate fair value measurements and change procedures. Further, this program uses a risk-based approach to
determine the frequency at which models are to be independently reviewed and validated. Additionally, a wide array of operational controls
governs fair value measurements, including controls over the inputs into and the outputs from the fair value measurement models. For
example, we backtest the internal assumptions used within models against actual performance. We also monitor the market for recent trades,
market surveys, or other market information that may be used to benchmark model inputs or outputs. Certain valuations will also be
benchmarked to market indices when appropriate and available. We have scheduled model or input recalibrations that occur on a periodic
basis but will recalibrate earlier if significant variances are observed as part of the backtesting or benchmarking noted above.

Considerable judgment is used in forming conclusions from market observable data used to estimate our Level 2 fair value

measurements and in estimating inputs to our internal valuation models used to estimate our Level 3 fair value measurements. Level 3 inputs
such as interest rate movements, prepayment speeds, credit losses, and discount rates are inherently difficult to estimate. Changes to these
inputs can have a significant effect on fair value measurements and amounts that could be realized. Refer to the section titled Fair Value
Sensitivity Analysis within this MD&A for a sensitivity analysis of changes in interest rates, foreign-currency exchange rates, and equity
prices.

Determination of Provision for Income Taxes

Our income tax expense, deferred tax assets and liabilities, and reserves for unrecognized tax benefits reflect management’s best

assessment of estimated current and future taxes to be paid. We are subject to income taxes predominantly in the United States. We file
income tax returns in approximately 50 jurisdictions: federal, state, and local. The laws and regulations of each jurisdiction are complex and
may be subject to different interpretations. Significant judgments and estimates are required in determining consolidated income tax expense
for each jurisdiction. Our interpretations of tax laws are subject to audits by various jurisdictions. Potential difference in the interpretation or
changes in the tax laws may result in additional accrual of income tax expense or benefit, which could be material to our reported results. We
consistently monitor new and reassess existing tax laws for changes and adjust our tax estimates accordingly.

Our provision for income taxes is comprised of current and deferred income taxes. Deferred income taxes arise from temporary

differences between the tax and financial statement recognition of revenue and expense. In evaluating our ability to recover our deferred tax
assets within the jurisdiction from which they arise, we consider all available positive and negative evidence, including scheduled reversals of
deferred tax liabilities, projected future taxable income, tax planning strategies, and recent results of operations. In projecting future taxable
income, we begin with historical results adjusted for changes in accounting policies and incorporate assumptions about the amount of future
state, federal, and foreign pretax operating income, the reversal of temporary differences, and the implementation of feasible and prudent tax
planning strategies. These assumptions about future taxable income require significant judgment and are consistent with the plans and
estimates we are using to manage the underlying businesses. In evaluating the objective evidence that historical results provide, we consider
three years of cumulative operating income (loss).

As of each reporting date, we consider existing evidence, both positive and negative, that could impact our view with regard to future

realization of deferred tax assets. We currently hold deferred tax asset attributes related to net operating tax loss and foreign tax credit
carryforwards. We perform regular assessments to determine whether our tax attributes are realizable. As of December 31, 2022, we continue
to believe it is more likely than not that the benefit for certain foreign tax credit carryforwards and state net operating loss carryforwards will
not be realized. In recognition of this risk, we continue to provide a partial valuation allowance on these deferred tax assets relating to these
carryforwards and it is reasonably possible that the valuation allowance may change in the next 12 months.

For additional information regarding our provision for income taxes, refer to Note 22 to the Consolidated Financial Statements.

Recently Issued Accounting Standards

Refer to Note 1 to the Consolidated Financial Statements for further information related to recently adopted accounting standards.

104

Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-K

Statistical Tables

The accompanying supplemental information should be read in conjunction with the more detailed information, including our

Consolidated Financial Statements and the notes thereto, which appears elsewhere in this Annual Report.

Net Interest Margin Table

The following table presents an analysis of net yield on interest-earning assets (or net interest margin) excluding discontinued operations

for the periods shown.

Year ended December 31, ($ in millions)

Average
balance (a)

Assets

2022

Interest
income/
interest
expense

2021

Interest
income/
interest
expense

2020

Interest
income/
interest
expense

Yield/
rate

Average
balance (a)

Yield/
rate

Average
balance (a)

Interest-bearing cash and cash equivalents

3,886

1.38 % $

12,855

0.12 % $

13,985

Investment securities (b)

Loans held-for-sale, net

Finance receivables and loans, net (b) (c)

Investment in operating leases, net (d)

Other earning assets

Total interest-earning assets

Noninterest-bearing cash and cash

equivalents

Other assets

Allowance for loan losses

Total assets

Liabilities and equity

33,527

616

128,178

10,656

870

804

8,099

682

177,733

9,707

2.40

5.06

6.32

6.41

4.27

5.46

416

10,442

(3,439)

35,100

487

114,420

10,518

693

579

6,468

980

1.65

3.77

5.65

9.32

2.92

4.64

174,073

8,081

514

9,098

(3,193)

31,539

399

692

120,991

6,581

9,264

977

584

177,155

7,946

473

8,021

(3,149)

185,152

180,492

182,500

Yield/
rate

0.20 %

2.20

4.33

5.44

6.30

4.43

4.49

Interest-bearing deposit liabilities (b)

142,987

$ 1,987

1.39 % $

138,947

$ 1,045

0.75 % $

129,092

$ 1,952

1.51 %

Short-term borrowings

Long-term debt (b)

4,292

16,683

107

763

Total interest-bearing liabilities

163,962

2,857

Noninterest-bearing deposit liabilities

193

2.49

4.58

1.74

201

17,620

156,768

157

860

1,906

0.31

4.88

1.22

3,721

29,058

161,871

146

1,249

3,243

1.12

4.30

2.00

Total funding sources

Other liabilities (e)

Total liabilities

Total equity

Total liabilities and equity

185,152

Net financing revenue and other interest

income

Net interest spread (f)

Net yield on interest-earning assets (g)

164,155

2,857

1.74

156,925

1,906

1.22

162,017

3,243

2.00

— n/m

6,606

170,761

14,391

6,855

163,780

16,712

180,492

n/m

6,195

168,212

14,288

182,500

— n/m

$ 6,850

$ 6,167

$ 4,703

3.72 %

3.85 %

3.42 %

3.54 %

2.49 %

2.65 %

n/m = not meaningful
(a) Average balances are calculated using an average daily balance methodology.
(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) Yield includes gains on the sale of off-lease vehicles of $170 million, $344 million, and $127 million, for the years ended December 31, 2022, 2021, and
2020, respectively. Excluding gains on the sale of off-lease vehicles, the annualized yield would be 4.81%, 6.05%, and 4.93%, for the years ended
December 31, 2022, 2021, and 2020, respectively.

(e) Represents interest expense on tax liabilities included in other liabilities on the Consolidated Balance Sheet. The interest expense on tax liabilities is
included in the net yield on interest-earning assets and excluded from the interest spread. For more information on our accounting policies regarding
income taxes, refer to Note 1 to the Consolidated Financial Statements.

(f) Net interest spread represents the difference between the rate on total interest-earning assets and the rate on total interest-bearing liabilities.
(g) Net yield on interest-earning assets represents net financing revenue and other interest income as a percentage of total interest-earning assets.

105

Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-K

The following table presents an analysis of the changes in net financing revenue and other interest income, volume, and rate.

Year ended December 31, ($ in millions)

Volume

Yield/rate

Total

Volume

Yield/rate

Total

2022 vs. 2021
(Decrease) increase due to (a)

2021 vs. 2020
(Decrease) increase due to (a)

Assets

Interest-bearing cash and cash equivalents

(10) $

(2) $

(11) $

Investment securities

Loans held-for-sale, net

Finance receivables and loans, net

Investment in operating leases, net

Other earning assets

Total interest-earning assets

Liabilities

(26)

778

Interest-bearing deposit liabilities

30 $

Short-term borrowings

Long-term debt

Total interest-bearing liabilities

Other liabilities

Net financing revenue and other interest income

(46)

n/m

251

853

(311)

912

(51)

n/m

225

1,631

(298)

1,626

942

106

(97)

951

(8)

683

(357)

(13)

(191)

(3)

244

317

(10)

149 $

(1,056) $

(40)

(492)

(1)

103

(13)

(113)

396

(23)

135

(907)

(41)

(389)

n/m

(1,337)

1,464

n/m = not meaningful
(a) Changes in interest not solely due to volume or yield/rate are allocated in proportion to the absolute dollar amount of change in volume and yield/rate.

106

Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-K

Finance Receivables and Loans

The tables below show the maturity of the finance receivables and loans portfolio and the distribution between fixed and floating interest

rates based on the stated terms of the loan agreements. This portfolio is reported based on amortized cost.

December 31, 2022 ($ in millions)

Due in one
year or less (a)

Due after one
year through
five years

Due after five
years through
fifteen years

Due after
fifteen years

Total (b)

Consumer automotive (c) (d)

963

41,056

41,787

83,846

Consumer mortgage

Mortgage Finance

Mortgage — Legacy

Total consumer mortgage

Consumer other

Personal Lending (e)

Credit Card

Total consumer other

Total consumer

Commercial

Commercial and industrial

Automotive

Other

Commercial real estate

Total commercial

—

1,599

1,660

2,627

13,307

471

339

14,117

773

—

773

41,839

524

7,879

2,660

11,063

602

167

769

1,153

—

1,153

43,709

764

795

2,380

3,939

18,834

118

18,952

—

19,445

290

19,735

1,990

1,599

3,589

18,995

107,170

—

14,595

9,154

5,389

29,138

136,308

Total finance receivables and loans

16,744

52,902

47,648

19,014

Includes loans with revolving terms (for example, wholesale floorplan loans, which are included within commercial and industrial, and credit cards).

(a)
(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 $560 million related to

basis adjustments for loans in closed portfolios with active hedges under the portfolio layer method at December 31, 2022. These basis adjustments would
be allocated to the amortized cost of specific loans within the pool if the hedge was dedesignated. Refer to Note 21 to the Consolidated Financial
Statements for additional information.
Includes RV loans. RV lending was discontinued in 2018.
Includes $3 million of finance receivables for which we have elected the fair value option.

(d)
(e)

107

Management’s Discussion and Analysis

Ally Financial Inc. • Form 10-K

December 31, 2022 ($ in millions)

Consumer automotive (b)

Consumer mortgage

Mortgage Finance

Mortgage — Legacy

Total consumer mortgage

Consumer other

Personal Lending

Total consumer other

Total consumer

Commercial

Commercial and industrial

Automotive

Other

Commercial real estate

Total commercial

Loans due after one year (a)

Loans at fixed
interest rates

Loans at
variable
interest rates

Total

82,883

— $

82,883

19,035

19,105

1,929

103,917

910

3,801

4,774

410

216

626

—

626

378

8,620

1,249

10,247

19,445

286

19,731

1,929

104,543

1,288

8,683

5,050

15,021

119,564

Total finance receivables and loans

108,691

10,873

(a) Loan maturities are based on the remaining maturities under contractual terms.
(b) Certain consumer automotive loans are included in fair value hedging relationships. The amortized cost excludes a liability of $560 million related to

Deposit Liabilities

The following table presents the average balances and interest rates paid for our deposit liabilities.

Year ended December 31, ($ in millions)

Noninterest-bearing deposits

Interest-bearing deposits

Savings, money market, and checking accounts

Certificates of deposit (b)

Total deposit liabilities

2022

2021

Average
balance (a)

Average
deposit rate

Average
balance (a)

Average
deposit rate

193

— % $

157

— %

105,798

37,189

143,180

1.36

1.47

1.39

93,651

45,296

139,104

0.48

1.32

0.75

(a) Average balances are calculated using an average daily balance methodology.
(b)

Includes brokered certificates of deposit average balance of $5.5 billion as of both December 31, 2022, and 2021.

The following table presents the amounts of uninsured certificates of deposit, segregated by time remaining until maturity.

December 31, 2022 ($ in millions)

Three months
or less

Over three months
through
six months

Over six months
through
twelve months

Over
twelve months

Total

Uninsured certificates of deposit

306

314

2,133

1,477

4,230

As of December 31, 2022, we had $15.2 billion of deposit liabilities that are estimated to be uninsured. In some instances, deposits in

excess of federal insurance limits may be insured based upon the number of account owners, beneficiaries, and accounts held.

108

Quantitative and Qualitative Disclosures about Market Risk

Ally Financial Inc. • Form 10-K

Item 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.

109

Management’s Report on Internal Control over Financial Reporting

Ally Financial Inc. • Form 10-K

Item 8. Financial Statements and Supplementary Data

Ally management is responsible for establishing and maintaining effective internal control over financial reporting. The Company’s
internal control over financial reporting is a process designed under the supervision of the Company’s Chief Executive Officer and Chief
Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of published financial
statements in accordance with generally accepted accounting principles.

The Company’s internal control over financial reporting includes policies and procedures that (1) pertain to the maintenance of records
that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of the Consolidated Financial Statements in conformity with
generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with
authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection
of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the Consolidated Financial
Statements.

Because of its inherent limitations, internal control over financial reporting can provide only reasonable assurance and may not prevent

or detect misstatements. Further, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may
become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

Management conducted, under the supervision of the Company’s Chief Executive Officer and Chief Financial Officer, an evaluation of

the effectiveness of the Company’s internal control over financial reporting based on the framework in Internal Control — Integrated
Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, commonly referred to as the
“COSO” criteria.

Based on the assessment performed, management concluded that as of December 31, 2022, Ally’s internal control over financial

reporting was effective based on the COSO criteria.

The effectiveness of our internal controls over financial reporting as of December 31, 2022, has been audited by Deloitte & Touche LLP,

an independent registered public accounting firm, as stated in their report which is included herein.

/S/ JEFFREY J. BROWN

Jeffrey J. Brown

Chief Executive Officer

February 24, 2023

/S/ BRADLEY J. BROWN

Bradley J. Brown

Corporate Treasurer and Interim Chief Financial Officer

February 24, 2023

110

Report of Independent Registered Public Accounting Firm

To the stockholders and the Board of Directors of Ally Financial Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Ally Financial Inc. and subsidiaries (the “Company”) as of December

31, 2022 and 2021, the related consolidated statements of income, comprehensive income, changes in equity, and cash flows for each of the
three years in the period ended December 31, 2022, and the related notes (collectively referred to as the “financial statements”). In our
opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and
2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity
with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB),

the Company’s internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control —
Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated
February 24, 2023, expressed an unqualified opinion on the Company’s internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the
Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be
independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the
Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits
included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and
performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and
disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis
for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was
communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the
financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit
matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical
audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Allowance for Loan Losses — Consumer Automotive Portfolio — Refer to Notes 1 and 9 to the financial statements
Critical Audit Matter Description

The allowance for loan losses (“allowance”) is management’s estimate of expected credit losses in the lending portfolio. The consumer
automotive portfolio represents 61% of the total finance receivables and loans balance and the amount of the allowance associated with the
consumer automotive portfolio is based on its relevant risk characteristics and represents 81% of the total allowance of the Company. The
determination of the appropriate level of the allowance for the consumer automotive portfolio inherently involves a high degree of
subjectivity and requires significant estimates of current credit risks using both quantitative and qualitative analyses.

The allowance is maintained at a level that management considers to be adequate based upon ongoing quarterly assessments and

evaluations using relevant available information, which includes both internal and external sources, relating to past events, current conditions,
and reasonable and supportable forecasts of future economic conditions. The Company uses a proprietary statistical model to estimate the
quantitative component of the consumer automotive allowance. In addition, management takes into consideration relevant qualitative factors
that have occurred but are not yet reflected in the model estimate.

Auditing certain aspects of the allowance, including the (1) model methodology, (2) model accuracy, (3) model assumptions, (4)

selection of relevant risk characteristics, (5) interpretation of the results, and (6) use of qualitative adjustments, involves especially subjective
and complex judgment. Given the calculation of the allowance requires significant judgment in determining the estimate, performing audit
procedures to evaluate the reasonableness of management’s estimate of the allowance requires a high degree of auditor judgment and an
increased extent of effort, including the need to involve our credit specialists.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the specific aspects of the consumer automotive allowance described above included the following,

among others:

• We tested the effectiveness of controls over the Company’s (1) model methodology, (2) model accuracy, (3) model assumptions, (4)

selection of relevant risk characteristics, (5) interpretation of the results, and (6) use of qualitative adjustments.

111

Report of Independent Registered Public Accounting Firm

• With the assistance of our credit specialists, we evaluated the reasonableness of the (1) model methodology, (2) model accuracy, (3)

model assumptions, (4) selection of relevant risk characteristics, (5) interpretation of the results, and (6) use of qualitative
adjustments.

• We tested the Company’s model performance evaluation methods and computational accuracy of the model with the assistance of

our credit specialists.

• We tested the accuracy and completeness of key risk characteristics input into the model by agreeing to source information.
• We evaluated the Company’s method for determining qualitative adjustments to the model estimate by testing on a sample basis

(and, where applicable, recalculating) the (1) key assumptions, (2) input data, and (3) reasonableness of any changes in assumptions
compared to prior periods.

/S/ DELOITTE & TOUCHE LLP

Deloitte & Touche LLP

Detroit, Michigan

February 24, 2023

We have served as the Company’s auditor since at least 1936; however, an earlier year could not be reliably determined.

112

Report of Independent Registered Public Accounting Firm

To the stockholders and the Board of Directors of Ally Financial Inc.

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of Ally Financial Inc. and subsidiaries (the “Company”) as of December 31,
2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations
of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over
financial reporting as of December 31, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by
COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB),

the consolidated financial statements as of and for the year ended December 31, 2022, of the Company and our report dated February 24,
2023, expressed an unqualified opinion on those financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of
the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over
Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our
audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in
accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the
PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to

obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit
included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and
evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we
considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of

financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of
records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide
reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally
accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of
management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of
any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions,
or that the degree of compliance with the policies or procedures may deteriorate.

/S/ DELOITTE & TOUCHE LLP

Deloitte & Touche LLP

Detroit, Michigan

February 24, 2023

113

Consolidated Statement of Income

Ally Financial Inc. • Form 10-K

Year ended December 31, ($ in millions)

Financing revenue and other interest income

Interest and fees on finance receivables and loans

Interest on loans held-for-sale

Interest and dividends on investment securities and other earning assets

Interest on cash and cash equivalents

Operating leases

Total financing revenue and other interest income

Interest expense

Interest on deposits

Interest on short-term borrowings

Interest on long-term debt

Interest on other

Total interest expense

Net depreciation expense on operating lease assets

Net financing revenue and other interest income

Other revenue

Insurance premiums and service revenue earned

Gain on mortgage and automotive loans, net

Loss on extinguishment of debt

Other (loss) gain on investments, net

Other income, net of losses

Total other revenue

Total net revenue

Provision for credit losses

Noninterest expense

Compensation and benefits expense

Insurance losses and loss adjustment expenses

Goodwill impairment

Other operating expenses

Total noninterest expense

Income from continuing operations before income tax expense

Income tax expense from continuing operations

Net income from continuing operations

Loss from discontinued operations, net of tax

Net income

Statement continues on the next page.

The Notes to the Consolidated Financial Statements are an integral part of these statements.

2022

2021

2020

8,099

6,468

6,581

841

1,596

10,621

600

1,550

8,651

1,987

1,045

107

763

—

2,857

914

6,850

1,151

—

(120)

495

1,578

8,428

1,399

1,900

280

—

2,507

4,687

2,342

627

1,715

860

1,914

570

6,167

1,117

(136)

285

686

2,039

8,206

241

1,643

261

—

2,206

4,110

3,855

790

3,065

736

1,435

8,797

1,952

1,249

—

3,243

851

4,703

1,103

110

(102)

307

565

1,983

6,686

1,439

1,376

363

2,044

3,833

1,414

328

1,086

(1)

(5)

(1)

1,714

3,060

1,085

114

Consolidated Statement of Income

Ally Financial Inc. • Form 10-K

Year ended December 31, ($ in millions, except per share data; shares in thousands) (a)

2022

2021

2020

Net income from continuing operations attributable to common stockholders

Loss from discontinued operations, net of tax

Net income attributable to common stockholders

Basic weighted-average common shares outstanding (b)

Diluted weighted-average common shares outstanding (b) (c)

Basic earnings per common share

Net income from continuing operations

Loss from discontinued operations, net of tax

Net income

Diluted earnings per common share

Net income from continuing operations

Loss from discontinued operations, net of tax

Net income

Cash dividends declared per common share

1,605

(1)

1,604

316,690

318,629

5.07

—

5.06

5.04

—

5.03

1.20

3,008

(5)

3,003

362,583

365,180

8.30

(0.01)

8.28

8.24

(0.01)

8.22

0.88

1,086

(1)

1,085

375,629

377,101

2.89

—

2.89

2.88

—

2.88

0.76

Figures in the table may not recalculate exactly due to rounding. Earnings per share is calculated based on unrounded numbers.
Includes shares related to share-based compensation that vested but were not yet issued.

(a)
(b)
(c) During the year ended December 31, 2020, there were 0.8 million in shares underlying share-based awards excluded because their inclusion would have

been antidilutive. There were no antidilutive shares during the years ended December 31, 2022, and 2021.

Refer to Note 19 for additional earnings per share information. The Notes to the Consolidated Financial Statements are an integral part of
these statements.

115

Consolidated Statement of Comprehensive (Loss) Income

Ally Financial Inc. • Form 10-K

Year ended December 31, ($ in millions)

Net income

Other comprehensive (loss) income, net of tax

Investment securities

Net unrealized (losses) gains arising during the period

Less: Net realized gains reclassified to net income

Net change

Translation adjustments

Net unrealized (losses) gains arising during the period

Net investment hedges

Net unrealized gains (losses) arising during the period

Translation adjustments and net investment hedges, net change

Cash flow hedges

Net unrealized (losses) gains arising during the period

Less: Net realized gains reclassified to net income

Net change

Defined benefit pension plans

Net unrealized gains (losses) arising during the period

Less: Net realized losses reclassified to net income

Net change

Other comprehensive (loss) income, net of tax

Comprehensive (loss) income

The Notes to the Consolidated Financial Statements are an integral part of these statements.

2022

2021

2020

1,714

3,060

1,085

(3,982)

(4,000)

(8)

(1)

(2)

(17)

(115)

117

(656)

(735)

—

(47)

(8)

(1)

(7)

564

132

432

(3)

—

129

(4)

—

(4)

(3,901)

(789)

(2,187) $

2,271

508

1,593

116

Consolidated Balance Sheet

Ally Financial Inc. • Form 10-K

December 31, ($ in millions, except share data)

2022

2021

Assets

Cash and cash equivalents

Noninterest-bearing

Interest-bearing

Total cash and cash equivalents

Equity securities

Available-for-sale securities (amortized cost of $34,863 and $33,650) (a)

Held-to-maturity securities (fair value of $884 and $1,204)

Loans held-for-sale, net

Finance receivables and loans, net

Finance receivables and loans, net of unearned income

Allowance for loan losses

Total finance receivables and loans, net

Investment in operating leases, net

Premiums receivable and other insurance assets

Other assets

Total assets

Liabilities

Deposit liabilities

Noninterest-bearing

Interest-bearing

Total deposit liabilities

Short-term borrowings

Long-term debt

Interest payable

Unearned insurance premiums and service revenue

Accrued expenses and other liabilities

Total liabilities

Commitments and contingencies (refer to Note 28 and Note 29)

Equity

Common stock and paid-in capital ($0.01 par value, shares authorized 1,100,000,000; issued 507,682,838 and

504,521,535; and outstanding 299,324,357 and 337,940,636)

Preferred stock

Accumulated deficit

Accumulated other comprehensive loss

Treasury stock, at cost (208,358,481 and 166,580,899 shares)

Total equity

Total liabilities and equity

(a) Refer to Note 8 for discussion of investment securities pledged as collateral.

Statement continues on the next page.

The Notes to the Consolidated Financial Statements are an integral part of these statements.

117

542

5,029

5,571

681

29,541

1,062

654

502

4,560

5,062

1,102

33,587

1,170

549

135,748

122,268

(3,711)

(3,267)

132,037

10,444

2,698

9,138

119,001

10,862

2,724

8,057

191,826

182,114

185

150

152,112

152,297

2,399

17,762

408

3,453

2,648

141,408

141,558

—

17,029

210

3,514

2,753

178,967

165,064

21,816

2,324

(384)

(4,059)

(6,838)

12,859

21,671

2,324

(1,599)

(158)

(5,188)

17,050

191,826

182,114

Consolidated Balance Sheet

Ally Financial Inc. • Form 10-K

The assets of consolidated variable interest entities that can be used only to settle obligations of the consolidated variable interest entities

and the liabilities of these entities for which creditors (or beneficial interest holders) do not have recourse to our general credit were as
follows.

December 31, ($ in millions)

Assets

Finance receivables and loans, net

Consumer automotive

Consumer other (a)

Allowance for loan losses

Total finance receivables and loans, net

Other assets

Total assets

Liabilities

Long-term debt

Accrued expenses and other liabilities

Total liabilities

(a) Comprised of credit card finance receivables and loans, net.

The Notes to the Consolidated Financial Statements are an integral part of these statements.

2022

2021

9,547

6,871

—

(336)

9,211

645

9,856

2,436

2,441

353

(278)

6,946

563

7,509

1,337

1,339

118

Consolidated Statement of Changes in Equity

Ally Financial Inc. • Form 10-K

Common
stock and
paid-in
capital

Preferred
stock

Accumulated
deficit

Accumulated
other
comprehensive
income (loss)

Treasury
stock

Total
equity

21,438

— $

(4,057) $

123

(3,088) $

14,416

($ in millions)

Balance at December 31, 2019
Cumulative effect of changes in accounting

principles, net of tax

Adoption of Accounting Standards Update

2016-13

Balance at January 1, 2020

21,438

—

Net income

Share-based compensation

Other comprehensive income

Common stock repurchases

Common stock dividends ($0.76 per share)

106

(1,017)

(5,074)

1,085

(289)

123

(3,088)

508

(106)

(1,017)

13,399

1,085

106

508

(106)

(289)

Balance at December 31, 2020

21,544

— $

(4,278) $

631

(3,194) $

14,703

Net income
Net proceeds from issuance of Series B

preferred stock

Net proceeds from issuance of Series C

preferred stock

Preferred stock dividends — Series B

Preferred stock dividends — Series C

Share-based compensation

Other comprehensive loss

Common stock repurchases

Common stock dividends ($0.88 per share)

1,335

989

127

3,060

(36)

(21)

(324)

3,060

1,335

989

(36)

(21)

127

(789)

(1,994)

(324)

(789)

(1,994)

Balance at December 31, 2021

21,671

2,324

(1,599) $

(158) $

(5,188) $

17,050

Net income

Preferred stock dividends — Series B

Preferred stock dividends — Series C

Share-based compensation

Other comprehensive loss

Common stock repurchases

Common stock dividends ($1.20 per share)

145

1,714

(63)

(47)

(389)

1,714

(63)

(47)

145

(3,901)

(1,650)

(389)

(3,901)

(1,650)

Balance at December 31, 2022

21,816

2,324

(384) $

(4,059) $

(6,838) $

12,859

The Notes to the Consolidated Financial Statements are an integral part of these statements.

119

Consolidated Statement of Cash Flows

Ally Financial Inc. • Form 10-K

Year ended December 31, ($ in millions)

2022

2021

2020

Operating activities

Net income

Reconciliation of net income to net cash provided by operating activities

Depreciation and amortization

Goodwill impairment

Provision for credit losses

Gain on mortgage and automotive loans, net

Other loss (gain) on investments, net

Loss on extinguishment of debt

Originations and purchases of loans held-for-sale

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

Net change in

Deferred income taxes

Interest payable

Other assets

Other liabilities

Other, net

Net cash provided by operating activities

Investing activities

Purchases of equity securities

Proceeds from sales of equity securities

Purchases of available-for-sale securities

Proceeds from sales of available-for-sale securities

Proceeds from repayments of available-for-sale securities

Purchases of held-to-maturity securities

Proceeds from repayments of held-to-maturity securities

1,714

3,060

1,085

1,327

—

1,399

(52)

120

—

(3,907)

3,774

553

198

957

(103)

267

6,247

(539)

846

1,261

—

241

(87)

(285)

136

(4,255)

4,107

120

(204)

(302)

356

(106)

1,550

1,439

(110)

(307)

102

(3,199)

3,161

242

(229)

(93)

4,042

3,739

(1,346)

1,508

(1,219)

1,087

(6,723)

(21,557)

(17,377)

820

4,276

(47)

154

5,745

10,724

(292)

372

6,563

11,903

(154)

457

Purchases of finance receivables and loans held-for-investment

(7,165)

(6,756)

(7,020)

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

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

Purchases of operating lease assets

Disposals of operating lease assets

Acquisitions, net of cash acquired

Net change in nonmarketable equity investments

Other, net

(7,927)

(3,532)

3,023

—

(531)

376

2,896

(5,120)

3,438

(699)

(443)

Net cash (used in) provided by investing activities

(17,263)

(11,098)

Statement continues on the next page.

The Notes to the Consolidated Financial Statements are an integral part of these statements.

506

15,353

(4,320)

2,681

—

417

(450)

8,427

120

Consolidated Statement of Cash Flows

Ally Financial Inc. • Form 10-K

Year ended December 31, ($ in millions)

Financing activities

Net change in short-term borrowings

Net increase in deposits

Proceeds from issuance of long-term debt

Repayments of long-term debt

Purchases of land and buildings in satisfaction of finance lease liabilities

Repurchases of common stock

Preferred stock issuance

Trust preferred securities redemption

Common stock dividends paid

Preferred stock dividends paid

Net cash provided by (used in) financing activities

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

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

Cash and cash equivalents and restricted cash at beginning of year

Cash and cash equivalents and restricted cash at December 31,

Supplemental disclosures

Cash paid (received) for

Interest

Income taxes

Noncash items

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

Additions of property and equipment

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

Transfer of equity-method investments to equity securities

Transfer of nonmarketable equity investments to equity securities

In-kind distribution from equity-method investee

Equity consideration received in exchange for restructured loans

Decrease in held-to-maturity securities due to the consolidation of a VIE

Increase in held-for-investment loans and other, net, due to the consolidation of a VIE

Increase in collateralized borrowings, net, due to the consolidation of a VIE

2022

2021

2020

2,399

10,703

7,125

(6,464)

(44)

(1,650)

—

(384)

(110)

(2,136)

4,511

2,997

(6,068)

(391)

(1,994)

2,324

(2,710)

(324)

(57)

11,575

(3,848)

(7)

552

5,670

—

(10,904)

16,574

(3,395)

16,262

3,660

(16,107)

—

(106)
—
—

(289)
—

12,194

4,380

6,222

5,670

16,574

2,583

2,033

3,366

(425)

1,292

120

—

136

414

—

75
—

495

—

226

224

214

The following table provides a reconciliation of cash and cash equivalents and restricted cash from the Consolidated Balance Sheet to the

Consolidated Statement of Cash Flows.

December 31, ($ in millions)

Cash and cash equivalents on the Consolidated Balance Sheet

Restricted cash included in other assets on the Consolidated Balance Sheet (a)

Total cash and cash equivalents and restricted cash in the Consolidated Statement of Cash Flows

2022

2021

5,571

651

6,222

5,062

608

5,670

(a) Restricted cash balances relate primarily to our securitization arrangements. Refer to Note 13 for additional details describing the nature of restricted cash

balances.

The Notes to the Consolidated Financial Statements are an integral part of these statements.

121

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

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

Ally Financial Inc. (together with its consolidated subsidiaries unless the context otherwise requires, Ally, the Company, we, us, or our)

Consolidation and Basis of Presentation

The Consolidated Financial Statements include the accounts of the parent and its consolidated subsidiaries, of which it is deemed to
possess control, after eliminating intercompany balances and transactions, and include all VIEs in which we are the primary beneficiary.
Refer to Note 11 for further details on our VIEs. Other entities in which we have invested and have the ability to exercise significant influence
over operating and financial policies of the investee, but upon which we do not possess control, are accounted for using the equity method of
accounting within the financial statements and are therefore not consolidated. Our accounting and reporting policies conform to U.S. GAAP.
Additionally, where applicable, the policies conform to the accounting and reporting guidelines prescribed by bank regulatory authorities.
Certain reclassifications may have been made to the prior periods’ financial statements and notes to conform to the current period’s
presentation, which did not have a material impact on our Consolidated Financial Statements.

We operate our international subsidiaries in a similar manner as we operate in the United States of America (U.S. or United States),
subject to local laws or other circumstances that may cause us to modify our procedures accordingly. The financial statements of subsidiaries
that operate outside of the United States generally are measured using the local currency as the functional currency.

Use of Estimates and Assumptions

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and the related disclosure, including those of contingent assets and liabilities at the date of
the financial statements. It also includes estimates related to the income and expenses during the reporting period and the related disclosures.
In developing the estimates and assumptions, management uses all available evidence; however, actual results could differ because of
uncertainties associated with estimating the amounts, timing, and likelihood of possible outcomes. Our most significant estimates pertain to
the allowance for loan losses, the valuations of automotive operating lease assets and residuals, the fair value of financial instruments, and the
determination of the provision for income taxes.

122

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

Significant Accounting Policies
Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, cash on deposit at other financial institutions, cash items in process of collection, and

certain highly liquid investments with original maturities of three months or less from the date of purchase. The book value of cash
equivalents approximates fair value because of the short maturities of these instruments and the insignificant risk they present to changes in
value with respect to changes in interest rates. We may hold securities with original maturities of three months or less from the date of
purchase that are held as part of a longer-term investment strategy and classify them as investment securities. Cash and cash equivalents with
legal restrictions limiting our ability to withdraw and use the funds are considered restricted cash and restricted cash equivalents and are
presented as other assets on our Consolidated Balance Sheet.

Investments

Our investment portfolio includes various debt and equity securities. Debt securities are classified based on management’s intent to sell

or hold the security. We classify debt securities as held-to-maturity only when we have both the intent and ability to hold the securities to
maturity. We classify debt securities as trading when the securities are acquired for the purpose of selling or holding them for a short period of
time. Debt securities not classified as either held-to-maturity or trading are classified as available-for-sale. We do not hold any debt securities
classified as trading.

Our available-for-sale securities are carried at fair value with unrealized gains and losses included in accumulated other comprehensive

income, while our held-to-maturity securities are carried at amortized cost.

We establish an allowance for credit losses for lifetime expected credit losses on our held-to-maturity securities, as necessary. The
estimate of expected credit losses considers historical credit loss information that is adjusted for current conditions and reasonable and
supportable forecasts. Accrued interest receivable on held-to-maturity securities is excluded from the estimate of credit losses. Our held-to-
maturity securities portfolio is mostly composed of residential mortgage-backed debt securities that are issued by U.S. government entities
and agencies. These securities are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major ratings
agencies, and have a long history of zero credit losses and therefore generally do not require an allowance for credit losses.

We regularly assess our available-for-sale securities for impairment. When the amortized cost basis of an available-for-sale security
exceeds its fair value, the security is impaired. If we determine that we intend to sell, or it is more likely than not that we will be required to
sell the security before recovery of the amortized cost basis, any previously recorded allowance for credit losses is written off and the
security’s amortized cost basis is written down to fair value at the reporting date, with any incremental impairment recorded through earnings.

Alternatively, if we do not intend to sell, or it is not more likely than not that we will be required to sell the security before anticipated
recovery of the amortized cost basis, we evaluate, among other factors, the magnitude of the decline in fair value, the financial health of and
business outlook for the issuer, and the performance of the underlying assets for interests in securitized assets to determine if a credit loss has
occurred.

The present value of expected future cash flows are compared to the security’s amortized cost basis to measure the credit loss component
of the impairment after determining a credit loss has occurred. If the present value of expected cash flows is less than the amortized cost basis,
we record an allowance for credit losses for that difference. The amount of credit loss is limited to the difference between the security’s
amortized cost basis and its fair value. Any remaining impairment that is considered a noncredit loss is recorded in other comprehensive
income. Changes in the allowance for credit losses are recorded as provision for, or reversal of, provision for credit losses.

Accrued interest receivable on available-for-sale securities is excluded from the estimate of credit losses.

Premiums and discounts on debt securities are generally amortized over the stated maturity of the security as an adjustment to investment

yield. Premiums on debt securities that have non-contingent call features that are callable at fixed prices on preset dates are amortized to the
earliest call date as an adjustment to investment yield.

A debt security is placed on nonaccrual status at the time any principal or interest payments become 90 days past due. The receivable for

interest income that is accrued but not collected is reversed against interest income when the debt security is placed on nonaccrual status.

Our investments in equity securities include securities that are recognized at fair value and equity securities that are recognized using

other measurement principles.

Equity securities that have a readily determinable fair value are recorded at fair value with changes in fair value recorded in earnings and

reported in other gain on investments, net in our Consolidated Statement of Income. These investments are included in equity securities on
our Consolidated Balance Sheet. In some instances, we may account for equity securities using the net asset value practical expedient to
estimate fair value. Refer to Note 24 for further information on equity securities that are held at fair value.

Our equity securities recognized using other measurement principles include investments in FHLB and FRB stock held to meet

regulatory requirements, equity investments related to LIHTCs and the CRA, which do not have a readily determinable fair value, and other
equity investments that do not have a readily determinable fair value. Our LIHTC investments are accounted for using the proportional
amortization method of accounting for qualified affordable housing investments. Our obligations related to unfunded commitments for our

123

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

LIHTC investments are included in other liabilities. The majority of our other CRA investments are accounted for using the equity method of
accounting. Our investments in LIHTCs and other CRA investments are included in investments in qualified affordable housing projects and
equity-method investments, respectively, within other assets on our Consolidated Balance Sheet. Our investments in FHLB and FRB stock are
carried at cost, less impairment, if any. Our remaining investments in equity securities are recorded at cost, less impairment and adjusted for
observable price changes under the measurement alternative provided under U.S. GAAP. These investments, along with our investments in
FHLB and FRB stock, are included in nonmarketable equity investments in other assets on our Consolidated Balance Sheet. Investments
recorded under the measurement alternative are also reviewed at each reporting period to determine if any adjustments are required for
observable price changes in identical or similar securities of the same issuer. As conditions warrant, we review these investments, as well as
investments in FHLB and FRB stock, for impairment and adjust the carrying value of the investment if it is deemed to be impaired.
Adjustments related to observable price changes or impairment on securities using the measurement alternative and FHLB and FRB stock are
recorded in earnings and reported in other income, net of losses in our Consolidated Statement of Income.

Realized gains and losses on the sale of debt securities and equity securities with a readily determinable fair value are determined using

the specific identification method and are reported in other (loss) gain on investments, net in our Consolidated Statement of Income.

Finance Receivables and Loans

We initially classify finance receivables and loans as either loans held-for-sale or loans held-for-investment based on management’s
assessment of our intent and ability to hold the loans for the foreseeable future or until maturity. Management’s view of the foreseeable future
is based on the longest reliable forecasted period, including events known when performing periodic evaluations. Management’s intent and
ability with respect to certain loans may change from time to time depending on a number of factors, for example, economic, liquidity, and
capital conditions. In order to reclassify loans to held-for-sale, management must have the intent to sell the loans and must reasonably identify
the specific loans to be sold.

Loans classified as held-for-sale are presented as loans held-for-sale, net on our Consolidated Balance Sheet and are carried at the lower
of their net carrying value or fair value, unless the fair value option was elected, in which case those loans are carried at fair value. For loans
originated as held-for-sale for which we have not elected the fair value option, loan origination fees and costs are included in the initial
carrying value. For held-for-sale loans for which we have elected the fair value option, loan origination fees and costs are recognized in
earnings when earned or incurred. We have elected the fair value option for conforming mortgage direct-to-consumer originations for which
we have a commitment to sell. The interest rate lock commitment that we enter into for a mortgage loan originated as held-for-sale and certain
forward commitments are considered derivatives, which are carried at fair value on our Consolidated Balance Sheet. We have elected the fair
value option to measure our nonderivative forward commitments. Changes in the fair value of our interest rate lock commitments, derivative
forward commitments, and nonderivative forward commitments related to mortgage loans originated as held-for-sale, as well as changes in
the carrying value of loans classified as held-for-sale, are reported through gain on mortgage and automotive loans, net in our Consolidated
Statement of Income. Interest income on our loans classified as held-for-sale is recognized based upon the contractual rate of interest on the
loan and the unpaid principal balance. We report accrued interest receivable on our loans classified as held-for-sale in other assets on our
Consolidated Balance Sheet.

We have also elected the fair value option for certain loans within our consumer other portfolio segment. Changes in fair value related to

these loans are reported through other income, net of losses in our Consolidated Statement of Income.

Loans classified as held-for-investment are presented as finance receivables and loans, net on our Consolidated Balance Sheet. Finance

receivables and loans are reported at their amortized cost basis, which includes the principal amount outstanding, net of unamortized deferred
fees and costs on originated loans, unamortized premiums and discounts on purchased loans, unamortized basis adjustments arising from the
designation of finance receivables and loans as the hedged item in qualifying fair value hedge relationships, and cumulative principal net
charge-offs. We refer to the amortized cost basis less the allowance for loan losses as the net carrying value in finance receivables and loans.
Unearned rate support received from an automotive manufacturer on certain automotive loans, deferred origination fees and costs, and
premiums and discounts on purchased loans, are amortized over the contractual life of the related finance receivable or loan using the
effective interest method. We make various incentive payments for consumer automotive loan originations to automotive dealers and account
for these payments as direct loan origination costs. Additionally, we make incentive payments to certain commercial automobile wholesale
borrowers and account for these payments as a reduction to interest income in the period they are earned. Interest income on our finance
receivables and loans is recognized based on the contractual rate of interest plus the amortization of deferred amounts using the effective
interest method, except for origination fees and costs on our credit card loans, which amortize straight line over a twelve-month period. In
addition, annual fees on credit cards are amortized into other income, net of losses over a twelve-month period. We report accrued interest
receivable on our finance receivables and loans in other assets on our Consolidated Balance Sheet, except for billed interest on our credit card
loans, which is included in finance receivables and loans, net. Loan commitment fees are generally deferred and amortized over the
commitment period. For information on finance receivables and loans, refer to Note 9.

We have elected to exclude accrued interest receivable from the measurement of our allowance for loan losses for each class of financing

receivables, except for billed interest on our credit card loans which is included within finance receivables and loans, net. We have also
elected to write-off accrued interest receivable by reversing interest income when loans are placed on nonaccrual status for each class of
finance receivable. This includes the reversal of the billed interest on credit card loans that occurs at the time of charge-off, which is initially
included in the measurement of our allowance for loan losses.

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Our portfolio segments are based on the level at which we develop and document our methodology for determining the allowance for
loan losses. Additionally, the classes of finance receivables are based on several factors, including the method for monitoring and assessing
credit risk, the method of measuring carrying value, and the risk characteristics of the finance receivable. Based on an evaluation of our
process for developing the allowance for loan losses, including the nature and extent of exposure to credit risk arising from finance
receivables, we have determined our portfolio segments to be consumer automotive, consumer mortgage, consumer other, and commercial.

•

Consumer automotive — Consists of retail automotive financing for new and used vehicles.

Consumer mortgage — Consists of the following classes of finance receivables.

◦ Mortgage Finance — Consists of consumer first-lien mortgages from our ongoing mortgage operations including direct-
to-consumer originations, refinancing of high-quality jumbo mortgages and LMI mortgages, and bulk acquisitions.

◦ Mortgage — Legacy — Consists of consumer mortgage assets originated prior to January 1, 2009, including first-lien

mortgages, subordinate-lien mortgages, and home equity mortgages.

•

Consumer other — Consists of the following classes of finance receivables.

•

Personal Lending — Consists of unsecured consumer lending from point-of-sale financing.

Credit Card — Consists of consumer credit card loans.

•

Commercial — Consists of the following classes of finance receivables.

◦

Commercial and Industrial

▪

Automotive — Consists of financing operations to fund dealer purchases of new and used vehicles through
wholesale floorplan financing. Additional commercial offerings include automotive dealer term loans, revolving
lines, and dealer fleet financing.

Other — Consists primarily of senior secured leveraged asset-based and cash flow loans related to our
corporate-finance business.

◦

Commercial Real Estate — Consists of term loans primarily secured by dealership land and buildings, and other
commercial lending secured by real estate.

Nonaccrual Loans

Generally, we recognize loans of all classes as past due when they are 30 days delinquent on making a contractually required payment,

and loans are placed on nonaccrual status when principal or interest has been delinquent for at least 90 days, or when full collection is not
expected. Interest income recognition is suspended when finance receivables and loans are placed on nonaccrual status. Additionally,
amortization of premiums and discounts and deferred fees and costs ceases when finance receivables and loans are placed on nonaccrual.
Exceptions include commercial real estate loans that are placed on nonaccrual status when delinquent for 60 days or when full collection is
not probable, if sooner. Additionally, our policy is to generally place all loans that have been modified in a TDR on nonaccrual status until the
loan has been brought fully current, the collection of contractual principal and interest is reasonably assured, and six consecutive months of
repayment performance is achieved. In certain cases, if a borrower has been current up to the time of the modification and repayment of the
debt subsequent to the modification is reasonably assured, we may choose to continue to accrue interest on the loan.

Nonperforming loans on nonaccrual status are reported in Note 9. For all of our portfolio segments, the receivable for interest income

that is accrued, but not collected, at the date finance receivables and loans are placed on nonaccrual status is reversed against interest income
and subsequently recognized only to the extent it is received in cash or until it qualifies for return to accrual status. However, for credit card
loans, billed interest is included in the receivables balance and therefore is not reversed against interest income until the loan is charged-off.
Where there is doubt regarding the ultimate collectability of loan principal, all cash received is applied to reduce the carrying value of such
loans. Generally, finance receivables and loans are restored to accrual status only when contractually current and the collection of future
payments is reasonably assured.

Troubled Debt Restructurings

When the terms of finance receivables or loans are modified, consideration must be given as to whether or not the modification results in

a TDR. A modification is considered to be a TDR when both the borrower is experiencing financial difficulty and we grant a concession to
the borrower. These considerations require significant judgment and vary by portfolio segment. In all cases, the cumulative impacts of all
modifications are considered at the time of the most recent modification.

For consumer loans of all classes, various qualitative factors are utilized for assessing the financial difficulty of the borrower. These

factors include, but are not limited to, the borrower’s default status on any of its debts, bankruptcy, and recent changes in financial
circumstances (for instance, loss of employment). A concession has been granted when, as a result of the modification, we do not expect to
collect all amounts due under the original loan terms, including interest accrued at the original contract rate. Types of modifications that may
be considered concessions include, but are not limited to, extensions of terms at a rate that does not constitute a market rate, a reduction,

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deferral or forgiveness of principal or interest owed, and loans that have been discharged in bankruptcy proceedings and have not been
reaffirmed by the borrower.

In addition to the modifications noted above, in our consumer automotive portfolio segment of loans we also provide extensions or
deferrals of payments to borrowers whom we deem to be experiencing only temporary financial difficulty. In these cases, there are limits
within our operational policies to minimize the number of times a loan can be extended, as well as limits to the length of each extension,
including a cumulative cap over the life of the loan. If these limits are breached, the modification is considered a TDR as noted in the
following paragraph. Before offering an extension or deferral, we evaluate the capacity of the customer to make the scheduled payments after
the deferral period. During the deferral period, we continue to accrue interest on the loan as part of the deferral agreement. We grant these
extensions or deferrals when we expect to collect all amounts due including interest accrued at the original contract rate.

A restructuring that results in only a delay in payment that is deemed to be insignificant is not a concession and the modification is not
considered to be a TDR. In order to assess whether a restructuring that results in a delay in payment is insignificant, we consider the amount
of the restructured payments subject to delay in conjunction with the unpaid principal balance or the collateral value of the loan, whether or
not the delay is significant with respect to the frequency of payments under the original contract, or the loan’s original expected duration. In
the cases where payment extensions on our automotive loan portfolio cumulatively extend beyond 90 days and are more than 10% of the
original contractual term or where the cumulative payment extension is beyond 180 days, we deem the delay in payment to be more than
insignificant, and as such, classify these types of modifications as TDRs. Otherwise, the modifications do not represent a concessionary
modification and accordingly, they are not classified as TDRs. Refer to Note 9 for additional information.

For commercial loans of all classes, similar qualitative factors are considered when assessing the financial difficulty of the borrower. In
addition to the factors noted above, consideration is also given to the borrower’s forecasted ability to service the debt in accordance with the
contractual terms, possible regulatory actions, and other potential business disruptions (for example, the loss of a significant customer or other
revenue stream). Consideration of a concession is also similar for commercial loans. In addition to the factors noted above, consideration is
also given to whether additional guarantees or collateral have been provided.

For all loans, TDR classification typically results from our loss mitigation activities. For loans held-for-investment that are not carried at

fair value and are TDRs, impairment is typically measured based on the difference between the amortized cost basis of the loan and the
present value of the expected future cash flows of the loan. The present value is calculated using the loan’s original effective interest rate, as
opposed to the interest rate specified within the restructuring. The loan may also be measured for impairment based on the fair value of the
underlying collateral less costs to sell for loans that are collateral dependent. We recognize impairment by either establishing a valuation
allowance or recording a charge-off.

The financial impacts of modifications that meet the definition of a TDR are reported in the period in which they are identified as TDRs.
Additionally, if a loan that is classified as a TDR redefaults within 12 months of the modification, we are required to disclose the instances of
redefault. For the purpose of this disclosure, we have determined that a loan is considered to have redefaulted when the loan meets the
requirements for evaluation under our charge-off policy except for commercial loans where redefault is defined as 90 days past due.
Nonaccrual loans may return to accrual status as discussed in the preceding nonaccrual loans section, at which time, the normal accrual of
interest income resumes.

Net Charge-offs

We disclose the measurement of net charge-offs as the amount of gross charge-offs recognized less recoveries received. Gross charge-

offs reflect the amount of the amortized cost basis directly written-off. Generally, we recognize recoveries when they are received and record
them as an increase to the allowance for loan losses.

As a general rule, consumer automotive loans are fully charged off once a loan becomes 120 days past due. In instances where upon
becoming 120 days past due repossession is assured and in process, consumer automotive loans are written down to estimated collateral
value, less costs to sell. In our consumer mortgage portfolio segment, first-lien mortgages and a subset of our home equity portfolio that are
secured by real estate in a first-lien position are written down to the estimated fair value of the collateral, less costs to sell, once a mortgage
loan becomes 180 days past due. Consumer mortgage loans that represent second-lien positions are charged off at 180 days past due. In our
consumer other segment, loans within our personal lending class of receivables are charged off at 120 days past due and loans in our credit
card class of receivables are charged off at 180 days past due. Within 60 days of receipt of notification of filing from the bankruptcy court, or
within the time frames noted above, consumer automotive and first-lien consumer mortgage loans in bankruptcy are written down to their
expected future cash flows, which is generally fair value of the collateral, less costs to sell, and second-lien consumer mortgage loans and
other consumer loans are fully charged-off, unless it can be clearly demonstrated that repayment is likely to occur. Regardless of other
timelines noted within this policy, loans are considered collateral dependent when the borrower is experiencing financial difficulty and
repayment of the loan is expected to only be through sale or operation of the collateral. Collateral dependent loans are charged-off to the
estimated fair value of the underlying collateral, less costs to sell when foreclosure or repossession proceedings begin.

Commercial loans are individually evaluated and are written down to the estimated fair value of the collateral less costs to sell when
collectability of the recorded balance is in doubt. Generally, all commercial loans are charged-off when it becomes unlikely that the borrower
is willing or able to repay the remaining balance of the loan and any underlying collateral is not sufficient to recover the outstanding principal.
Collateral dependent loans are charged-off to the fair market value of collateral less costs to sell when appropriate. Non-collateral dependent
loans are fully charged-off.

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Allowance for Loan Losses

The allowance for loan losses (the allowance) is deducted from, or added to, the loan’s amortized cost basis to present the net amount
expected to be collected from our lending portfolios. We estimate the allowance using relevant available information, which includes both
internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Additions and reductions to
the allowance are charged to current period earnings through the provision for credit losses and amounts determined to be uncollectible are
charged directly against the allowance, net of amounts recovered on previously charged-off accounts. Expected recoveries do not exceed the
total of amounts previously charged-off and amounts expected to be charged-off.

Expected credit losses are estimated over the contractual term of the loans, adjusted for expected prepayments when appropriate. The

contractual term excludes expected extensions or renewals, unless the extension or renewal option is included in the original or modified
contract at the reporting date and we are not able to unconditionally cancel the option. Expected loan modifications are also not included in
the contractual term, unless we have a reasonable expectation at period end that a TDR will be executed with a borrower.

For the purpose of calculating portfolio-level reserves, we have grouped our loans into four portfolio segments: consumer automotive,
consumer mortgage, consumer other, and commercial. The allowance is measured on a collective basis using statistical models when loans
have similar risk characteristics. These statistical models are designed to correlate certain macroeconomic variables to expected future credit
losses. The macroeconomic data used in the models are based on forecasted factors for the next 12-months. These forecasted variables are
derived from both internal and external sources. Beyond this forecasted period, we revert each variable to a historical average. This reversion
to the mean is performed on a straight-line basis over 24 months. The historical average is calculated using historical data beginning in
January 2008 through the current period.

Loans that do not share similar risk characteristics are evaluated on an individual basis and are not included in the collective evaluation.

The allowance calculation is supplemented with qualitative overlays that take into consideration current portfolio and asset-level factors,
such as the impacts of changes in underwriting standards, collections and account management effectiveness, geographic concentrations, and
economic events that have occurred but are not yet reflected in the quantitative model component. Qualitative adjustments are documented,
reviewed, and approved through our established risk governance processes and follow regulatory guidance.

Management also considers the need for a reserve on unfunded nonderivative loan commitments across our portfolio segments, including

lines of credit and standby letters of credit. We estimate expected credit losses over the contractual period in which we are exposed to credit
risk, unless we have the option to unconditionally cancel the obligation. Expected credit losses on the commitments include consideration of
the likelihood that funding will occur under the commitment and an estimate of expected credit losses on amounts expected to be funded over
the estimated life. The reserve for unfunded loan commitments is recorded within other liabilities on our Consolidated Balance Sheet.
Provision for credit losses related to our reserve for unfunded commitments is recorded within provision for credit losses on our Consolidated
Statement of Income. Refer to Note 28 for information on our unfunded loan commitments.

Consumer Automotive

The allowance within the consumer automotive portfolio segment is calculated using proprietary statistical models and other risk

indicators applied to pools of loans with similar risk characteristics, including credit bureau score and LTV ratios.

The model generates projections of default rates, prepayment rates, loss severity rates, and recovery rates using macroeconomic and
historical loan data. These projections are used to develop transition scenarios to predict the portfolio’s migration from the current or past-due
status to various future states over the life of the loan. While the macroeconomic data that is used to calculate expected credit losses includes
light vehicle sales and state-level real personal income, state-level unemployment rates are the most impactful macroeconomic factors in
calculating expected lifetime credit losses. The loss severity within the consumer automotive portfolio segment is impacted by the market
values of vehicles that are repossessed. Vehicle market values are affected by numerous factors including vehicle supply, the condition of the
vehicle upon repossession, the overall price and volatility of fuel, consumer preference related to specific vehicle segments, and other factors.
The model output is aggregated to calculate expected lifetime gross credit losses, net of expected recoveries.

Consumer Mortgage

The allowance within the consumer mortgage portfolio segment is calculated by using statistical models based on pools of loans with

similar risk characteristics, including credit score, LTV, loan age, documentation type, product type, and loan purpose.

Expected losses are statistically derived based on a suite of behavioral based transition models. This transition framework predicts

various stages of delinquency, default, and voluntary prepayment over the course of the life of the loan. The transition probability is a
function of certain loan and borrower characteristics, including factors, such as loan balance and term, the borrower’s credit score, LTV
ratios, and economic variables, as well as consideration of historical factors such as loss frequency and severity. When a default event is
predicted, a severity model is applied to estimate future loan losses. Loss severity within the consumer mortgage portfolio segment is
impacted by the market values of foreclosed properties, which is affected by numerous factors, including geographic considerations and the
condition of the foreclosed property. Macroeconomic data that is used to calculate expected credit losses includes certain interest rates and
home price indices. The model output is aggregated to calculate expected lifetime credit losses.

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Consumer Other

The allowance within the personal lending receivables class is calculated by using a vintage analysis that analyzes historical performance

for groups of loans with similar risk characteristics, including vintage level historical balance paydown rates and delinquency and roll rate
behaviors by risk tier and product type, to arrive at an estimate of expected lifetime credit losses. The risk tier segmentation is based upon
borrower risk characteristics, including credit score and past performance history, as well as certain loan specific characteristics, such as loan
type and origination year.

The allowance within our credit card receivables class is calculated by using a statistical model that considers loan-specific and

economy-wide factors to project default events, positive closure, EAD, and LGD events across all active loans in the portfolio.
Macroeconomic data that is used to calculate expected credit losses include state and national-level unemployment rate, revolving consumer
credit, and retail sales. Estimated expected lifetime credit losses are the summation of the simulated losses and recoveries for all credit card
loans in the portfolio.

Commercial Loans

The allowance within the commercial loan portfolio segment is calculated using an expected loss framework that uses historical loss

experience, concentrations, macroeconomic factors, and performance trends. The determination of the allowance is influenced by numerous
assumptions and factors that may materially affect estimates of loss, including changes to the PD, LGD, and EAD. PD factors are determined
based on our historical performance data, which considers ongoing reviews of the financial performance of borrowers within our portfolio,
including cash flow, debt-service coverage ratio, and an assessment of borrowers’ industry and future prospects. The determination of PD also
incorporates historical loss experience and, when necessary, macroeconomic information obtained from external sources. LGD factors
consider the type of collateral, relative LTV ratios, and historical loss information. In addition, LGD factors may be influenced by
macroeconomic information and situations in which automotive manufacturers repurchase vehicles used as collateral to secure the loans in
default situations. EAD factors are derived from outstanding balance levels, including estimated prepayment assumptions based on historical
experience.

Refer to Note 9 for information on the allowance for loan losses.

Variable Interest Entities and Securitizations

A legal entity is considered a VIE if, by design, has any of the following characteristics: the equity at risk is insufficient for the entity to

finance its activities without additional subordinated financial support or, as a group, the holders of the equity investment at risk lack the
ability to directly or indirectly make decisions about the entity’s activities that most significantly impact economic performance through
voting or similar rights, do not have the obligation to absorb the expected losses, do not have the right to receive expected residual returns of
the entity, or do not have voting rights that are proportionate to their interests and substantially all the activities are conducted on behalf of an
investor with a disproportionately small voting interest.

For all VIEs in which we are involved, we assess whether we are the primary beneficiary of the VIE on an ongoing basis. In

circumstances where we have both the power to direct the activities that most significantly impact the VIEs’ performance and the obligation
to absorb losses or the right to receive the benefits of the VIE that could be significant, we would conclude that we are the primary beneficiary
of the VIE, and would consolidate the VIE (also referred to as on-balance sheet). In situations where we are not deemed to be the primary
beneficiary of the VIE, we do not consolidate the VIE and only recognize our interests in the VIE (also referred to as off-balance sheet).

We are involved in securitizations that typically involve the use of VIEs. For information regarding our securitization activities, refer to

Note 11.

In the case of a consolidated on-balance-sheet VIE used for a securitization, the underlying assets remain on our Consolidated Balance
Sheet with the corresponding obligations to third-party beneficial interest holders reflected as debt. We recognize income on the assets and
interest expense on the debt issued by the VIE on an accrual basis. We reserve for expected losses on the assets primarily under CECL.
Consolidation of the VIE precludes us from recording an accounting sale on the transaction.

In securitizations where we are not determined to be the primary beneficiary of the VIE, we must determine whether we achieve a sale

for accounting purposes. To achieve a sale for accounting purposes, the financial assets being transferred must be legally isolated, not be
constrained by restrictions from further transfer, and be deemed to be beyond our control. We would deem the transaction to be an off-
balance-sheet securitization if the preceding three criteria for sale accounting are met. If we were to fail any of these three criteria for sale
accounting, the transfer would be accounted for as a secured borrowing, consistent with the preceding paragraph regarding on-balance sheet
VIEs.

The gain or loss recognized on off-balance-sheet securitizations take into consideration any assets received or liabilities assumed,
including any retained interests, and servicing assets or liabilities (if applicable), which are initially recorded at fair value at the date of sale.
Upon the sale of the financial assets, we recognize a gain or loss on sale for the difference between the assets and liabilities recognized, and
the assets derecognized. The financial assets obtained from off-balance-sheet securitizations are primarily reported as cash or if applicable,
retained interests. Retained interests are classified as securities or as other assets depending on their form and structure. The estimate of the
fair value of the retained interests and servicing requires us to exercise significant judgment about the timing and amount of future cash flows
from the interests. For a discussion on fair value estimates, refer to Note 24.

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Gains or losses on off-balance-sheet securitizations are reported in gain on mortgage and automotive loans, net, in our Consolidated

Statement of Income.

We retain the right to service our consumer and commercial automotive loan securitizations. We may receive servicing fees for off-
balance-sheet securitizations based on the securitized asset balances and certain ancillary fees, all of which are reported in other income, net
of losses in the Consolidated Statement of Income. Typically, the fee we are paid for servicing represents adequate compensation, and
consequently, does not result in the recognition of a servicing asset or liability.

Repossessed and Foreclosed Assets

Assets securing our finance receivables and loans are classified as repossessed and foreclosed and included in other assets when physical

possession of the collateral is taken, which includes the transfer of title through foreclosure or other similar proceedings. Repossessed and
foreclosed assets are initially recognized at the lower of the outstanding balance of the loan at the time of repossession or foreclosure or the
fair value of the asset less estimated costs to sell. Losses on the initial revaluation of repossessed and foreclosed assets (and generally,
declines in value shortly after repossession or foreclosure) are recognized as a charge-off of the allowance for loan losses. Subsequent
declines in value are charged to other operating expenses.

Lease Accounting

At contract inception, we determine whether the contract is or contains a lease based on the terms and conditions of the contract. Refer to
Investment in Operating Leases below for leases in which we are the lessor. Lease contracts for which we are the lessee are recognized on our
Consolidated Balance Sheet as ROU assets and lease liabilities. Lease liabilities and their corresponding ROU assets are initially recorded
based on the present value of the future lease payments over the expected lease term. We utilize our incremental borrowing rate, which is the
rate we would incur to borrow on a collateralized basis over a similar term on an amount equal to the lease payments in a similar economic
environment since the interest rate implicit in the lease contract is typically not readily determinable. The ROU asset also includes initial
direct costs paid less lease incentives received from the lessor. Our lease contracts are generally classified as operating and, as a result, we
recognize a single lease cost within other operating expenses on the income statement on a straight-line basis over the lease term.

Our leases primarily consist of property-leases and fleet vehicle leases. Our property-lease agreements generally contain a lease
component, which includes the right to use the real estate, and non-lease components, which generally include utilities and common area
maintenance services. We elected the practical expedient to account for the lease and non-lease components in our property leases as a single
lease component for recognition and measurement of our ROU assets and lease liabilities. Our property leases that include variable-rent
payments made during the lease term that are not based on a rate or index, are excluded from the measurement of the ROU assets and lease
liabilities, and are recognized as a component of variable lease expense as incurred. We have elected not to recognize ROU assets and lease
liabilities on property-leases with terms of one year or less. Our fleet vehicle leases also include a lease component, which includes the right
to use the vehicle, and non-lease components, which include maintenance, fuel, and administrative services. However, we have elected to
account for the lease and non-lease components in our fleet vehicle leases separately. Accordingly, the non-lease components are excluded
from the measurement of the ROU asset and lease liability and are recognized as other operating expenses as incurred.

Investment in Operating Leases

Investment in operating leases, net, represents the vehicles that are underlying our automotive operating lease contracts where we are the
lessor and is reported at cost, less accumulated depreciation and net of impairment charges, if any, and origination fees or costs. Depreciation
of vehicles is recorded on a straight-line basis to an estimated residual value over the lease term. Manufacturer support payments that we
receive upfront are treated as a reduction to the cost-basis in the underlying operating lease asset, which has the effect of reducing
depreciation expense over the life of the contract. Income from operating lease assets including lease origination fees, net of lease origination
costs, is recognized as operating lease revenue on a straight-line basis over the scheduled lease term. We have elected to exclude sales taxes
collected from the lessee from our consideration in the lease contract and from variable lease payments that are not included in contract
consideration. We accrue rental income on our operating leases when collection is reasonably assured. We generally discontinue the accrual
of revenue on operating leases at the time an account is determined to be uncollectible, which we determine to be the earliest of (i) the time of
repossession, (ii) within 60 days of bankruptcy notification, unless it can be clearly demonstrated that repayment is likely to occur, or (iii)
greater than 120 days past due.

We have significant investments in the residual values of the assets in our operating lease portfolio. The residual values represent an

estimate of the values of the assets at the end of the lease contracts. At contract inception, we determine pricing based on the projected
residual value of the leased vehicle. This evaluation is primarily based on a proprietary model, which includes variables such as age, expected
mileage, seasonality, segment factors, vehicle type, economic indicators, production cycle, automotive manufacturer incentives, and shifts in
used vehicle supply. This internally generated data is compared against third-party, independent data for reasonableness. Realization of the
residual values is dependent on our future ability to market the vehicles under the prevailing market conditions. Over the life of the lease, we
evaluate the adequacy of our estimate of the residual value and may make adjustments to the depreciation rates to the extent the expected
value of the vehicle at lease termination changes meaningfully. In addition to estimating the residual value at lease termination, we also
evaluate the current value of the operating lease asset and test for impairment to the extent necessary when there is an indication of
impairment based on market considerations and portfolio characteristics. Impairment is determined to exist if the fair value of the leased asset
is less than carrying value and it is determined that the net carrying value is not recoverable. The net carrying value of a leased asset is not
recoverable if it exceeds the sum of the undiscounted expected future cash flows expected to result from the operating lease payments and the
estimated residual value upon eventual disposition. If our operating lease assets are considered to be impaired, the impairment is measured as

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the amount by which the carrying amount of the assets exceeds the fair value as estimated by discounted cash flows. No impairment was
recognized in 2022, 2021, or 2020.

When a leased vehicle is returned to us, either at the end of the lease term or through repossession, the asset is reclassified from
investment in operating leases, net, to other assets and recorded at the lower-of-cost or estimated fair value, less costs to sell, on our
Consolidated Balance Sheet. Any losses recognized at this time are recorded as depreciation expense. Subsequent decline in value and any
gain or loss recognized at the time of sale is recognized as a remarketing gain or loss and presented as a component of depreciation expense.

Impairment of Long-lived Assets

The net carrying values of long-lived assets (including property and equipment) are evaluated for impairment whenever events or
changes in circumstances indicate that their net carrying values may exceed undiscounted future net cash flows. Long-lived assets are
considered impaired when the carrying amount is deemed unrecoverable and the carrying amount exceeds fair value. Recoverability is
measured by comparing the net carrying amount to future net undiscounted cash flows expected to be generated by the assets. If these assets
are considered to be impaired, the impairment is measured as the amount by which the net carrying amount of the assets exceeds the fair value
using a discounted cash flow method. No material impairment was recognized in 2022, 2021, or 2020.

An impairment test on an asset group to be sold or otherwise disposed of, is performed upon occurrence of a triggering event or when
certain criteria are met (for example, the asset is planned to be disposed of within 12 months, appropriate levels of authority have approved
the sale, there is an active program to locate a buyer, etc.), which cause the disposal group to be classified as held-for-sale. Long-lived assets
held-for-sale are recorded at the lower of their carrying amount or estimated fair value less cost to sell. If the net carrying value of the assets
held-for-sale exceeds the fair value less cost to sell, we recognize an impairment loss based on the excess of the net carrying amount over the
fair value of the assets less cost to sell.

Property and Equipment

Property and equipment stated at cost, net of accumulated depreciation and amortization, are reported in other assets on our Consolidated

Balance Sheet. Included in property and equipment are certain buildings, furniture and fixtures, leasehold improvements, IT hardware and
software, capitalized software costs, and assets under construction. We begin depreciating these assets when they are ready for their intended
use, except for assets under construction, which begin depreciating when they are ready to be placed into service. Depreciation is recorded on
a straight-line basis over the estimated useful lives of the assets, which generally ranges from three to thirty years depending on the asset
class. Capitalized software is generally amortized on a straight-line basis over its useful life, which generally ranges from three to five years.
Capitalized software that is not expected to provide substantive service potential or for which development costs significantly exceed the
amount originally expected is considered impaired and written down to fair value. Software expenditures that are considered general,
administrative, or of a maintenance nature are expensed as incurred.

Goodwill and Other Intangibles

Goodwill and intangible assets, net of accumulated amortization, are reported in other assets in our Consolidated Balance Sheet.

Our intangible assets primarily consist of acquired customer relationships and developed technology, and are amortized using a straight-
line methodology over their estimated useful lives. We review intangible assets with a definite useful life for impairment whenever events or
changes in circumstances indicate that the carrying amount of the asset may not be recoverable. If it is determined the carrying amount of the
asset is not recoverable, an impairment charge is recorded.

Goodwill represents the excess of the cost of an acquisition over the fair value of net assets acquired, including identifiable intangibles.
We allocate goodwill to applicable reporting units based on the relative fair value of the other net assets allocated to those reporting units at
the time of the acquisition. In the event we restructure our business, we may reallocate goodwill. We test goodwill for impairment annually as
of July 31 of each year, or more frequently if events and changes in circumstances indicate that it is more likely than not that impairment
exists. In certain situations, we may perform a qualitative assessment to test goodwill for impairment. We may also decide to bypass the
qualitative assessment and perform a quantitative assessment. If we perform the qualitative assessment to test goodwill for impairment and
conclude that it is more likely than not that the reporting unit’s fair value is greater than its carrying value, then the quantitative assessment is
not required. However, if we perform the qualitative assessment and determine that it is more likely than not that a reporting unit’s fair value
is less than its carrying value, then we must perform the quantitative assessment. The quantitative assessment requires us to compare the fair
value of each of the reporting units to their respective carrying value. The fair value of the reporting units in our quantitative assessment is
determined based on various analyses including discounted cash flow projections using assumptions a market participant would use. If the fair
value of a reporting unit exceeds its carrying amount, goodwill is not considered impaired. If the carrying amount of a reporting unit exceeds
its fair value, a goodwill impairment loss is recorded for the excess of the carrying value of the reporting unit over its fair value.

Unearned Insurance Premiums and Service Revenue

Insurance premiums, net of premiums ceded to reinsurers, and service revenue are earned over the terms of the policies. The portion of

premiums and service revenue written applicable to the unexpired terms of the policies is recorded as unearned insurance premiums or
unearned service revenue. For vehicle service, GAP, and maintenance contracts, premiums and service revenues are earned on a basis
proportionate to the anticipated cost emergence. For additional information related to these contracts, refer to Note 3. For other short duration
contracts, premiums and service revenue are earned on a pro rata basis. For further information, refer to Note 4.

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Ally Financial Inc. • Form 10-K

Deferred Insurance Policy Acquisition Costs

Incremental direct costs incurred to originate a policy are deferred and recorded in premiums receivable and other insurance assets on our

Consolidated Balance Sheet. These costs primarily include commissions paid to dealers to originate these policies and vary with the
production of business. Deferred policy acquisition costs are amortized over the terms of the related policies and service contracts on the same
basis as premiums and service revenue are earned. We group costs incurred for acquiring like contracts and consider anticipated investment
income in determining the recoverability of these costs.

Reserves for Insurance Losses and Loss Adjustment Expenses

Reserves for insurance losses and loss adjustment expenses are reported in accrued expenses and other liabilities on our Consolidated

Balance Sheet. They are established for the unpaid cost of insured events that have occurred as of a point in time. More specifically, the
reserves for insurance losses and loss adjustment expenses represent the accumulation of estimates for both reported losses and those
incurred, but not reported, including loss adjustment expenses relating to direct insurance and assumed reinsurance agreements.

We use a combination of methods commonly used in the insurance industry, including the chain ladder development factor, expected
loss, BF, and frequency and severity methods to determine the ultimate losses for an individual business line as well as accident year basis
depending on the maturity of the accident period and business-line specifics. These methodologies are based on different assumptions and use
various inputs to develop alternative estimates of losses. The chain ladder development factor is used for more mature years while the
expected loss, BF, and frequency and severity methods are used for less mature years. Both paid and incurred loss and loss adjustment
expenses are reviewed where available and a weighted average of estimates or a single method may be considered in selecting the final
estimate for an individual accident period. We did not change our methodology for developing reserves for insurance losses for the year
ended December 31, 2022.

Estimates for salvage and subrogation recoverable are recognized in accordance with historical patterns and netted against the provision

for insurance losses and loss adjustment expenses. Reserves are established for each product-type at the lowest meaningful level of
homogeneous data. Since the reserves are based on estimates, the ultimate liability may vary from these estimates. The estimates are regularly
reviewed and adjustments, which can potentially be significant, are included in earnings in the period in which they are deemed necessary.

Legal and Regulatory Reserves

Liabilities for legal and regulatory matters are accrued and established when those matters present loss contingencies that are both
probable and estimable, with a corresponding amount recorded to other operating expenses in the Consolidated Statement of Income. In cases
where we have an accrual for losses, we include an estimate for probable and estimable legal expenses related to the case. If, at the time of
evaluation, the loss contingency related to a legal or regulatory matter is not both probable and estimable, we do not establish a liability for
the contingency. We continue to monitor legal and regulatory matters for further developments that could affect the requirement to establish a
liability or that may impact the amount of a previously established liability. There may be exposure to loss in excess of any amounts
recognized. For certain other matters where the risk of loss is determined to be reasonably possible, estimable, and material to the financial
statements, disclosure regarding details of the matter and an estimated range of loss is required. The estimated range of possible loss does not
represent our maximum loss exposure. We also disclose matters that are deemed probable or reasonably possible, material to the financial
statements, but for which an estimated range of loss is not possible to determine. While we believe our reserves are adequate, the outcome of
legal and regulatory proceedings is extremely difficult to predict, and we may settle claims or be subject to judgments for amounts that differ
from our estimates. For information regarding the nature of all material contingencies, refer to Note 29.

Earnings per Common Share

We compute basic earnings per common share by dividing net income from continuing operations attributable to common stockholders
after deducting dividends on preferred stock by the weighted-average number of common shares outstanding during the period. We compute
diluted earnings per common share by dividing net income from continuing operations after deducting dividends on preferred stock by the
weighted-average number of common shares outstanding during the period plus the dilution resulting from incremental shares that would
have been outstanding if dilutive potential common shares had been issued (assuming it does not have the effect of antidilution), if applicable.

Derivative Instruments and Hedging Activities

We use derivative instruments primarily for risk management purposes. We do not use derivative instruments for speculative purposes.

Certain of our derivative instruments are designated as accounting hedges in qualifying relationships, whereas other derivative instruments
have not been designated as accounting hedges. In accordance with applicable accounting standards, all derivative instruments, whether
designated as accounting hedges or not, are recorded on the balance sheet as assets or liabilities and measured at fair value. We have elected
to report the fair value of derivative assets and liabilities on a gross basis—including the fair value for the right to reclaim cash collateral or
the obligation to return cash collateral—arising from instruments executed with the same counterparty under a master netting arrangement
where we do not have the intent to offset. For additional information on derivative instruments and hedging activities, refer to Note 21.

At the inception of a qualifying hedge accounting relationship, we designate each qualifying relationship as a hedge of the fair value of a

specifically identified asset or liability or portfolio of assets (fair value hedge); as a hedge of the variability of cash flows to be received or
paid, or forecasted to be received or paid, related to a recognized asset or liability (cash flow hedge); or as a hedge of the foreign-currency
exposure of a net investment in a foreign operation (net investment hedge). We formally document all relationships between hedging
instruments and hedged items, as well as the risk management objectives for undertaking such hedge transactions. Both at hedge inception

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Ally Financial Inc. • Form 10-K

and on an ongoing basis, we formally assess whether the derivatives that are used in hedging relationships are highly effective in offsetting
changes in fair values or cash flows of hedged items.

Changes in the fair value of derivative instruments qualifying as fair value hedges, along with the gain or loss on the hedged asset or

liability attributable to the hedged risk, are recorded in current period earnings. For non-portfolio layer method hedges, the hedge basis (the
amount of the change in fair value) is added to (or subtracted from) the carrying amount of the hedged item. For portfolio layer method
hedges, the hedge basis does not adjust the carrying value of the hedged item and is instead maintained on a closed portfolio basis. For
qualifying cash flow hedges, changes in the fair value of the derivative financial instruments are recorded in accumulated other
comprehensive income and recognized in the income statement when the hedged cash flows affect earnings. For a qualifying net investment
hedge, the gain or loss is reported in accumulated other comprehensive income as part of the cumulative translation adjustment.

Hedge accounting treatment is no longer applied if a derivative financial instrument is terminated, the hedge designation is removed, or
the derivative instrument is assessed to no longer be highly effective. For terminated fair value hedges, the hedge basis remains as part of the
basis of the hedged asset or liability and is recognized into income over the remaining life of the asset or liability. For terminated portfolio
layer method hedges, the hedge basis associated with the discontinued portion of the hedged item is allocated to the remaining individual
assets within the closed portfolio that supported the discontinued hedged layer and is recognized into income over the remaining life of those
assets. For terminated cash flow hedges, the changes in fair value of the derivative instrument remain in accumulated other comprehensive
income and are recognized in the income statement when the hedged cash flows affect earnings. However, if it is probable that the forecasted
cash flows will not occur within a specified period, any changes in fair value of the derivative financial instrument remaining in accumulated
other comprehensive income are reclassified into earnings immediately. Any previously recognized gain or loss for a net investment hedge
continues to remain in accumulated other comprehensive income until earnings are impacted by a sale or liquidation of the associated foreign
operation. In all instances, after hedge accounting is no longer applied, any subsequent changes in fair value of the derivative instrument will
be recorded into earnings.

Changes in the fair value of derivative financial instruments held for risk management purposes that are not designated as accounting

hedges under GAAP (economic hedge) are reported in current period earnings.

Income Taxes

Our income tax expense, deferred tax assets and liabilities, and reserves for unrecognized tax benefits reflect management’s best
assessment of estimated current and future taxes to be paid. We are subject to income taxes predominantly in the United States. Significant
judgments and estimates are required in determining the consolidated income tax expense.

Deferred income taxes arise from temporary differences between the tax and financial statement recognition of revenue and expense.
Deferred tax assets are reduced by a valuation allowance, if based on the weight of all available evidence, it is more likely than not, that some
or all of the deferred tax assets will not be realized.

We use the portfolio approach with respect to reclassification of stranded income tax effects in accumulated other comprehensive

income.

We recognize the financial statement effects of uncertain income tax positions when it is more likely than not, based on the technical

merits, that the position will be sustained upon examination. Also, we recognize accrued interest and penalties related to liabilities for
uncertain income tax positions in interest expense and other operating expenses, respectively. For additional information regarding our
provision for income taxes, refer to Note 22.

Share-based Compensation

Our compensation and benefits expenses include the cost of share-based awards issued to employees. For equity classified share-based
awards, compensation cost is ratably charged to expense based on the grant date fair value of the awards over the applicable service periods.
For liability classified share-based awards, the associated liability is measured quarterly at fair value based on our share price and services
rendered at the time of measurement until the awards are paid, with changes in fair value charged to compensation expense in the period in
which the change occurs. We have made an accounting policy election to account for forfeitures of share-based awards as they occur. Refer to
Note 23 for a discussion of our share-based compensation plans.

Foreign Exchange

Foreign-denominated assets and liabilities resulting from foreign-currency transactions are valued using period-end foreign-exchange

rates and the results of operations and cash flows are determined using approximate weighted average exchange rates for the period.
Translation adjustments are related to foreign subsidiaries using local currency as their functional currency and are reported as a separate
component of accumulated other comprehensive income. Translation gains or losses are reclassified to earnings upon the substantial sale or
liquidation of our investments in foreign operations. We may elect to enter into foreign-currency derivatives to mitigate our exposure to
changes in foreign-exchange rates. Refer to the Derivative Instruments and Hedging Activities section above for a discussion of our hedging
activities of the foreign-currency exposure of a net investment in a foreign operation.

132

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

Recently Adopted Accounting Standards
Fair Value Hedging—Portfolio Layer Method (ASU 2022-01)

In the third quarter of 2022, we adopted ASU 2022-01, Derivatives and Hedging (Topic 815): Fair Value Hedging—Portfolio Layer
Method. The amendments in this guidance expand the current last-of-layer method to allow multiple hedged layers of a single closed portfolio
and allow hedge accounting to be achieved using different types of derivatives and layering techniques, including the use of amortizing swaps
with clarification that such a trade would be viewed as being a single layer. Under this expanded scope, both prepayable and nonprepayable
financial assets may be included in a single closed portfolio hedge. This update also provides clarifications to breach requirements and
disclosures. As a result of these changes, the last-of-layer method has been renamed the portfolio layer method. No cumulative-effect
adjustment to the opening balance of retained earnings was required upon adoption of these amendments. The amendments related to
disclosures were applied on a prospective basis.

Recently Issued Accounting Standards
Troubled Debt Restructurings and Vintage Disclosures (ASU 2022-02)

In March 2022, the FASB issued ASU 2022-02, Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and

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

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

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

2. Acquisitions

On December 1, 2021, we acquired 100% of the equity of Fair Square Financial Holdings LLC and its subsidiaries, including Fair
Square Financial LLC (collectively, Fair Square) for $741 million in cash. Fair Square, which we rebranded Ally Credit Card, is a digital-
first, credit-card company that operates in the United States. Fair Square operates as a wholly owned subsidiary of Ally. We applied the
acquisition method of accounting to this transaction, which generally requires the initial recognition of assets acquired, including identifiable
intangible assets, and liabilities assumed at their respective fair value. Goodwill is recognized as the excess of the acquisition price after the
recognition of the net assets, including the identifiable intangible assets. Beginning in December 2021, financial information related to Fair
Square is included within Corporate and Other.

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Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

The following table summarizes the allocation of cash consideration paid for Fair Square and the amounts of the identifiable assets

acquired and liabilities assumed at the acquisition date.

($ in millions)

Purchase price

Cash consideration

Allocation of purchase price to net assets acquired

Finance receivables and loans (a)

Intangible assets (b)

Cash and short-term investments

Other assets

Debt

Other liabilities

Goodwill

741

870

(765)

(29)

479

(a)

Included $22 million of PCD loans that have experienced a more-than-insignificant deterioration of credit quality since origination. We recognized an
initial allowance for loan losses of $12 million on these PCD loans.

(b) The weighted average amortization period on the acquired intangible assets is 7 years. Refer to Note 1 and Note 13 for further information on our

intangible assets.

The goodwill of $479 million arising from the acquisition consists largely of expected growth of the business as we leverage the Ally

brand and our marketing capabilities to scale the acquired credit card provider and expand the suite of financial products we offer to our
existing growing customer base. The goodwill recognized is generally expected to be amortized for income tax purposes over a 15-year
period. Refer to Note 13 for the carrying amount of goodwill at the beginning and end of the reporting period.

3. Revenue from Contracts with Customers

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

The following is a description of our primary revenue sources that are derived from contracts with customers. Revenue from contracts
with customers is recognized when control of the promised goods or services is transferred to our customers, and in an amount that reflects
the consideration that we expect to receive in exchange for those goods or services. For information regarding our revenue recognition
policies outside the scope of the revenue recognition principles of ASC Topic 606, Revenue from Contracts with Customers, refer to Note 1.

•

Noninsurance contracts — We sell VSCs that offer owners mechanical repair protection and roadside assistance for new and used
vehicles beyond the manufacturer’s new vehicle limited warranty. We sell GAP contracts that protect the customer against having
to pay certain amounts to a lender above the fair market value of their vehicle if the vehicle is damaged and declared a total loss or
stolen. We also sell VMCs that provide coverage for certain agreed-upon services, such as oil changes and tire rotations, over the
coverage period. We receive payment in full at the inception of each of these contracts. Our performance obligation for these
contracts is satisfied over the term of the contract and we recognize revenue over the contract term on a basis proportionate to the
anticipated incurrence of costs, as we believe this is the most appropriate method to measure progress towards satisfaction of the
performance obligation. This revenue is recorded within insurance premiums and service revenue earned in our Consolidated
Statement of Income, while associated cancellation and transfer fees are recorded as other income.

Sale of off-lease vehicles — When a customer’s vehicle lease matures, the customer has the option of purchasing or returning the
vehicle. If the vehicle is returned to us, we obtain possession with the intent to sell through SmartAuction—our online auction
platform, our dealer channel, or through various other physical auctions. Our performance obligation is satisfied and the
remarketing gain or loss is recognized when control of the vehicle has passed to the buyer, which coincides with the sale date. 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 on operating lease assets in our Consolidated Statement of Income.

Remarketing fee income — In addition to using SmartAuction as a remarketing channel for our returned lease vehicles, we
maintain the SmartAuction internet auction site and administer the auction process for third-party use. We earn a service fee from
dealers for every third-party vehicle sold through SmartAuction. Our performance obligation is to provide the online marketplace
for used vehicle transactions to be consummated. This obligation is satisfied and revenue is recognized when control of the vehicle

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Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

has passed to the buyer, which coincides with the sale date. This revenue is recorded as remarketing fees within other income in our
Consolidated Statement of Income.

Brokerage commissions and other revenues through Ally Invest — We charge fees to customers related to their use of certain
services on our Ally Invest digital wealth management and online brokerage platform. These fees include commissions on low-
priced securities, option contracts, certain other security types, account service fees, account management fees on professional
portfolio management services, and other ancillary fees. Commissions on customer-directed trades and account service fees are
based on published fee schedules and are generated from a customer option to purchase the services offered under the contract.
These options do not represent a material right and are only considered a contract when the customer executes their option to
purchase these services. Based on this, the term of the contract does not extend beyond the services provided, and accordingly
revenue is recognized upon the completion of our performance obligation, which we view as the successful execution of the trade or
service. Revenue on professional portfolio management services is calculated monthly based upon a fixed percentage of the client’s
assets under management. Due to the fact that this revenue stream is composed of variable consideration that is based on factors
outside of our control, we have deemed this revenue as constrained and we are unable to estimate the initial transaction price at the
inception of the contract. We have elected to use the practical expedient under GAAP to recognize revenue monthly based on the
amount we are able to invoice the customer. Additionally, we earn revenue when we route customers’ orders to market makers, who
then execute customers’ trades. The market makers compensate us for the right to fill the customers’ orders. We also earn revenue
from a fee-sharing agreement with our clearing broker related to the interest income the clearing broker earns on customer cash
balances, securities lending, and margin loans made to our customers. We concluded the initial transaction price is exclusively
variable consideration and, based on the nature of our performance obligation to allow the clearing broker to collect interest income
from cash deposits and customer loans from our customers, we are unable to determine the amount of revenue to be recognized
until the total customer cash balance or the total interest income recognized on margin loans has been determined, which occurs
monthly. These revenue streams are recorded as other income in our Consolidated Statement of Income.

Brokered/agent commissions through Insurance operations — We have agreements with third parties to offer various vehicle
protection products to consumers. We also have agreements with third-party insurers to offer various insurance coverages to
dealers. Our performance obligation for these arrangements is satisfied when a customer or dealer has purchased a vehicle
protection product or an insurance policy through the third-party provider. In determining the initial transaction price for these
agreements, we noted that revenue on brokered/agent commissions is based on the volume of vehicle protection product contracts
sold or a percentage of insurance premium written, which is not known to us at the inception of the agreements with these third-
party providers. We concluded the initial transaction price is exclusively variable consideration and, based on the nature of the
performance obligation, we are unable to determine the amount of revenue we will record until the customer purchases a vehicle
protection product or a dealer purchases an insurance policy from the third-party provider. Once we are notified of vehicle
protection product sales or insurance policies issued by the third-party providers, we record the commission earned as insurance
premiums and service revenues earned in our Consolidated Statement of Income.

Banking fees and interchange income — We charge depositors various account service fees including those for outgoing wires,
excessive transactions, stop payments, and returned deposits. These fees are generated from a customer option to purchase services
offered under the contract. These options do not represent a material right and are only considered a contract in accordance with the
revenue recognition principles when the customer exercises their option to purchase these account services. Based on this, the term
for our contracts with customers is considered day-to-day, and the contract does not extend beyond the services already provided. In
May 2021, we eliminated all overdraft fees for Ally Bank deposit accounts. Revenue derived from deposit account fees is recorded
at the point in time we perform the requested service, and is recorded as other income in our Consolidated Statement of Income. As
a debit and credit card issuer, we also generate interchange fee income from merchants during debit and credit card transactions and
incur certain corresponding charges from merchant card networks. For debit card transactions, our performance obligation is
satisfied when we have initiated the payment of funds from a customer’s account to a merchant through our contractual agreements
with the merchant card networks. For credit card transactions, our performance obligation is satisfied at the time each transaction is
captured for settlement with the interchange networks. Interchange fees are reported net of processing fees and customer rewards as
other income in our Consolidated Statement of Income.

Other revenue — Other revenue primarily includes service revenue related to various account management functions and fee
income derived from third-party lenders arranged through our online automotive lender exchange. These revenue streams are
recorded as other income in our Consolidated Statement of Income.

•

135

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

The following table presents a disaggregated view of our revenue from contracts with customers included in other revenue that falls

within the scope of the revenue recognition principles of ASC Topic 606, Revenue from Contracts with Customers.

Year ended December 31, ($ in millions)

2022

Revenue from contracts with customers

Automotive
Finance
operations

Insurance
operations

Mortgage
Finance
operations

Corporate
Finance
operations

Corporate
and Other

Consolidated

Noninsurance contracts (a) (b) (c)

— $

655

— $

Remarketing fee income

Brokerage commissions and other revenue

Banking fees and interchange income (d) (e)

Brokered/agent commissions

Other

Total revenue from contracts with customers

All other revenue

Total other revenue (f)

2021

Revenue from contracts with customers

Noninsurance contracts (a) (b) (c)

Remarketing fee income

Brokerage commissions and other revenue

Banking fees and interchange income (d) (e)

Brokered/agent commissions

Other

Total revenue from contracts with customers

All other revenue

Total other revenue (f)

2020

Revenue from contracts with customers

Noninsurance contracts (a) (b) (c)

Remarketing fee income

Brokerage commissions and other revenue

Banking fees and interchange income

Brokered/agent commissions

Other

Total revenue from contracts with customers

All other revenue

Total other revenue (f)

107

—

127

179

306

—

669

354

1,023

—

122

—

112

(12)

100

1,578

655

107

908

670

— $

627

— $

107

—

129

122

251

—

643

702

1,345

—

128

141

221

627

107

852

1,187

2,039

— $

584

— $

584

—

116

204

—

601

733

1,334

—

102

—

234

298

753

1,230

1,983

(a) We had opening balances of $3.1 billion, $3.0 billion, and $2.9 billion in unearned revenue associated with outstanding contracts at January 1, 2022,
2021, and 2020 respectively, and $939 million, $909 million, and $866 million of these balances were recognized as insurance premiums and service
revenue earned in our Consolidated Statement of Income during the years ended December 31, 2022, 2021, and 2020, respectively.

(b) At December 31, 2022, we had unearned revenue of $3.0 billion associated with outstanding contracts, and with respect to this balance we expect to
recognize revenue of $883 million in 2023, $747 million in 2024, $565 million in 2025, $384 million in 2026, and $402 million thereafter. We had
unearned revenue of $3.1 billion and $3.0 billion associated with outstanding contracts at December 31, 2021, and 2020, respectively.

(c) We had deferred insurance assets of $1.8 billion at both December 31, 2022, and 2020, and $1.9 billion at December 31, 2021. We recognized $564

million, $537 million, and $498 million of expense during the years ended December 31, 2022, 2021, and 2020, respectively.

(d) Effective May 25, 2021, we eliminated all overdraft fees for Ally Bank deposit accounts.
(e)

Interchange income is reported net of customer rewards. Customer rewards expense was $14 million and $1 million for the years ended December 31,
2022, and 2021, respectively.

(f) Represents a component of total net revenue. Refer to Note 26 for further information on our reportable operating segments.

136

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

In addition to the components of other revenue presented above, as part of our Automotive Finance operations, we recognized net
remarketing gains of $170 million, $344 million, and $127 million for the years ended December 31, 2022, 2021, and 2020, respectively, on
the sale of off-lease vehicles. These gains are included in depreciation expense on operating lease assets in our Consolidated Statement of
Income.

Insurance Premiums and Service Revenue
The following table is a summary of insurance premiums and service revenue written and earned.

Year ended December 31, ($ in millions)

Written

Earned

Written

Earned

Written

Earned

2022

2021

2020

Insurance premiums

Direct

Assumed

Gross insurance premiums

Ceded

Net insurance premiums

Service revenue

388

379

397

389

438

430

(216)

214

889

408

(211)

197

954

412

(200)

212

985

397

(205)

192

925

441

(211)

230

999

429

432

(208)

224

879

Insurance premiums and service revenue written

and earned

1,103

1,151

1,197

1,117

1,229

1,103

5. Other Income, Net of Losses

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

Year ended December 31, ($ in millions)

Late charges and other administrative fees

Remarketing fees

Income from equity-method investments

(Loss) gain on nonmarketable equity investments, net (a)

Other, net

Total other income, net of losses

(a) Refer to Note 13 for further information on our nonmarketable equity investments.

2022

2021

2020

162

107

102

(132)

256

495

123

107

132

142

182

686

161

139

565

137

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

6. Reserves for Insurance Losses and Loss Adjustment Expenses

The following table shows incurred claims and allocated loss adjustment expenses, net of reinsurance.

For the years ended December 31, ($ in millions)

(unaudited supplementary information)

December 31, 2022
($ in millions)
Total of
incurred-but-
not-reported
liabilities plus
expected
development on
reported claims
(a)

Cumulative
number of
reported
claims (a)

Accident
year

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

Total

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

376 $

365 $

370 $

369 $

368 $

390

389

274

388

271

326

388

272

327

310

388

272

328

314

271

388

272

328

315

272

303

388

272

328

315

272

306

343

388

272

328

315

273

305

339

243

368

388

272

328

315

273

305

339

237

258

—

672,284

525,298

342,280

476,056

481,750

506,449

542,314

494,382

493,222

483,742

$ 3,083

(a) Claims are reported on a claimant basis. Claimant is defined as one vehicle for GAP products, one repair for VSCs and VMCs, one dealership for dealer

inventory products, and per individual/coverage for run-off personal automotive products.

The following table shows cumulative paid claims and allocated loss adjustment expenses, net of reinsurance.

Accident year

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

For the years ended December 31, ($ in millions)

(unaudited supplementary information)

347 $

364 $

366 $

368 $

369

388

252

388

272

302

388

272

327

289

388

272

328

315

245

388

272

328

315

273

278

368

388

272

328

315

273

306

313

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

Total

All outstanding liabilities for loss
and allocated loss adjustment
expenses before 2013, net of
reinsurance

Reserves for insurance losses and

allocated loss adjustment
expenses, net of reinsurance

368 $

388

272

328

315

273

305

339

213

368

388

272

328

315

273

305

339

236

225

3,049

138

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

The following table shows the average annual percentage payout of incurred claims by age, net of reinsurance. The information

presented is unaudited supplementary information.

Year

Percentage payout of incurred claims

92.3 % 7.5 % 0.1 % 0.1 % — % — % — % — % — % — %

The following table shows a reconciliation of the disclosures of incurred and paid claims development to the reserves for insurance

losses and loss adjustment expenses.

December 31, ($ in millions)

Reserves for insurance losses and loss adjustment expenses, net of reinsurance

Total reinsurance recoverable on unpaid claims

Unallocated loss adjustment expenses

Total gross reserves for insurance losses and loss adjustment expenses

2022

2021

2020

119

122

129

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

($ in millions)

2022

2021

2020

Total gross reserves for insurance losses and loss adjustment expenses at January 1,

122

129

Less: Reinsurance recoverable

Net reserves for insurance losses and loss adjustment expenses at January 1,

Net insurance losses and loss adjustment expenses incurred related to:

Current year

Prior years (a)

Total net insurance losses and loss adjustment expenses incurred

Net insurance losses and loss adjustment expenses paid or payable related to:

Current year

Prior years

Total net insurance losses and loss adjustment expenses paid or payable

Net reserves for insurance losses and loss adjustment expenses at December 31,

Plus: Reinsurance recoverable

282

(2)

280

(246)

(28)

(274)

259

261

(229)

(30)

(259)

Total gross reserves for insurance losses and loss adjustment expenses at December 31,

119

122

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

7. Other Operating Expenses

Details of other operating expenses were as follows.

122

360

363

(328)

(30)

(358)

129

Year ended December 31, ($ in millions)

2022

2021

2020

Insurance commissions

Technology and communications

Advertising and marketing

Lease and loan administration

Professional services

Property and equipment depreciation

Regulatory and licensing fees

Vehicle remarketing and repossession

Amortization of intangible assets (a)

Charitable contributions (b)

Other

Total other operating expenses

(a) Refer to Note 1 and Note 13 for further information on our intangible assets.
(b)

Includes contributions made to the Ally Charitable Foundation, a nonconsolidated entity.

139

610

406

366

201

173

165

119

329

562

345

241

222

146

153

305

2,507

2,206

517

314

171

203

118

136

355

2,044

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

Investment Securities
Our investment portfolio includes various debt and equity securities. Our debt securities, which are classified as available-for-sale or

held-to-maturity, include government securities, corporate bonds, asset-backed securities, and mortgage-backed securities. The cost, fair
value, and gross unrealized gains and losses on available-for-sale and held-to-maturity securities were as follows.

December 31, ($ in millions)

Available-for-sale securities

Debt securities

2022

2021

Amortized
cost

Gross unrealized

gains

losses

Fair
value

Amortized
cost

Gross unrealized

gains

losses

Fair
value

U.S. Treasury and federal agencies

2,272

$ — $

(256) $ 2,016

2,173

U.S. States and political subdivisions

Foreign government

841

158

Agency mortgage-backed residential (a)

19,668

Mortgage-backed residential

Agency mortgage-backed commercial (a)

Asset-backed

Corporate debt

Total available-for-sale

securities (b) (c) (d) (e) (f)

Held-to-maturity securities

Debt securities

5,154

4,380

459

1,931

34,863

—

(82)

(12)

760

146

841

157

(20) $ 2,155

(4)

(2)

864

157

(3,038)

16,633

19,044

219

(224)

19,039

(855)

(845)

(26)

(213)

4,299

3,535

433

1,719

4,448

4,573

536

1,878

(34)

(113)

(3)

(21)

4,425

4,526

534

1,887

$ (5,327) $ 29,541

33,650

358

(421) $ 33,587

Agency mortgage-backed residential

Total held-to-maturity securities (f) (g)

1,062

$ — $

(178) $

1,062

$ — $

(178) $

884

1,170

(14) $ 1,204

(a)

Fair value includes a $12 million liability for agency mortgage-backed residential securities and a $15 million asset for agency mortgage-backed
commercial securities related to basis adjustments for securities in closed portfolios with active hedges under the portfolio layer method at December 31,
2022. These basis adjustments would be allocated to the amortized cost of specific securities within the pool if the hedge was dedesignated. Refer to Note
21 for additional information.

(b) Certain available-for-sale securities are included in fair value hedging relationships. Refer to Note 21 for additional information.
(c) Certain entities related to our Insurance operations are required to deposit securities with state regulatory authorities. These deposited securities totaled

$12 million and $13 million at December 31, 2022, and December 31, 2021, respectively.

(d) Available-for-sale securities with a fair value of $3.9 billion and $203 million were pledged as collateral at December 31, 2022, and December 31, 2021,
respectively. This primarily included $3.0 billion pledged to secure advances from the FHLB at December 31, 2022. This also included securities pledged
for other purposes as required by contractual obligations or law, under which agreements we granted the counterparty the right to sell or pledge $899
million and $203 million of the underlying available-for-sale securities at December 31, 2022, and December 31, 2021, respectively.

(e) Totals do not include accrued interest receivable, which was $91 million and $84 million at December 31, 2022, and December 31, 2021, respectively.

(f)

Accrued interest receivable is included in other assets on our Consolidated Balance Sheet.
There was no allowance for credit losses recorded at both December 31, 2022, or December 31, 2021, as management determined that there were no
expected credit losses in our portfolio of available-for-sale and held-to-maturity securities.

(g) Totals do not include accrued interest receivable, which was $2 million and $3 million at December 31, 2022, and December 31, 2021, respectively.

Accrued interest receivable is included in other assets on our Consolidated Balance Sheet.

140

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

The maturity distribution of debt securities outstanding is summarized in the following tables based upon contractual maturities. Call or

prepayment options may cause actual maturities to differ from contractual maturities.

Total

Due in one year or
less

Due after one year
through five years

Due after five
years through ten
years

Due after ten
years

Amount

Yield

Amount

Yield

Amount

Yield

Amount

Yield

Amount

Yield

($ in millions)

December 31, 2022

Fair value of available-for-sale

securities (a)

U.S. Treasury and federal agencies

2,016

1.6 % $

— — % $

716

1.3 % $

1,300

1.7 % $

— — %

U.S. States and political subdivisions

Foreign government

760

146

Agency mortgage-backed residential (b)

16,633

Mortgage-backed residential

Agency mortgage-backed commercial (b)

Asset-backed

Corporate debt

4,299

3,535

433

1,719

Total available-for-sale securities

$ 29,541

3.2

1.8

2.6

2.8

2.2

1.7

2.4

2.5

$ 34,863

2.7

0.8

— —

2.4

2.3

125

126

2.7

1.8

— —

3.1

1.7

2.3

1.9

401

912

2,229

2,403

3.3

1.9

2.0

2.9

2.1

1.8

2.6

2.1

112

1,234

705

3,476

4,048

562

3.2

— —

2.6

2.8

2.1

3.5

4.9

2.6

16,606

4,285

2,235

$ 23,711

$ 28,286

1,062

2.8 % $

2.8

— — % $

1,062

2.8 %

— —

1,062

2.8

Amortized cost of available-for-sale

securities

Amortized cost of held-to-maturity

securities

Agency mortgage-backed residential

Total held-to-maturity securities

December 31, 2021

Fair value of available-for-sale

securities (a)

U.S. Treasury and federal agencies

2,155

1.1 % $

288

1.0 % $

525

0.9 % $

1,342

1.2 % $

— — %

U.S. States and political subdivisions

Foreign government

864

157

Agency mortgage-backed residential

19,039

Mortgage-backed residential

Agency mortgage-backed commercial

Asset-backed

Corporate debt

4,425

4,526

534

1,887

Total available-for-sale securities

$ 33,587

3.0

1.9

2.5

2.6

1.9

2.3

Amortized cost of available-for-sale

securities

Amortized cost of held-to-maturity

securities

$ 33,650

1.6

2.1

— —

2.9

1.3

370

368

2.8

2.0

— —

2.4

2.0

2.3

1.9

350

830

1,905

1,893

3.3

1.8

2.0

2.9

2.4

1.5

2.3

2.0

128

1,578

175

994

4,324

4,291

633

3.0

— —

2.5

2.6

1.7

3.4

2.5

2.4

19,013

4,402

2,922

$ 26,988

$ 27,098

Agency mortgage-backed residential

Total held-to-maturity securities

1,170

2.8 % $

2.8

— — % $

1,170

2.8 %

— —

1,170

2.8

(a) Yield is calculated using the effective yield of each security at the end of the period, weighted based on the market value. The effective yield considers the

contractual coupon and amortized cost, and excludes expected capital gains and losses.

(b) Fair value includes a $12 million liability for agency mortgage-backed residential securities and a $15 million asset for agency mortgage-backed

commercial securities related to basis adjustments for securities in closed portfolios with active hedges under the portfolio layer method at December 31,
2022. These basis adjustments would be allocated to the amortized cost of specific securities within the pool if the hedge was dedesignated. Refer to Note
21 for additional information.

The balances of cash equivalents were $18 million and $40 million at December 31, 2022, and December 31, 2021, respectively, and

were composed primarily of money-market funds and short-term securities, including U.S. Treasury bills.

141

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

The following table presents interest and dividends on investment securities.

Year ended December 31, ($ in millions)

Taxable interest

Taxable dividends

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

Interest and dividends on investment securities

2022

2021

2020

765

533

804

579

654

692

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

equity securities held during the period.

Year ended December 31, ($ in millions)

Available-for-sale securities

Gross realized gains

Gross realized losses (a)

Net realized gain on available-for-sale securities

Net realized gain on equity securities

Net unrealized (loss) gain on equity securities

Other (loss) gain on investments, net

2022

2021

2020

—

(215)

102

—

102

190

(7)

(120) $

285

173

(2)

171

107

307

(a) Certain available-for-sale securities were sold at a loss during the year ended December 31, 2020, as a result of identifiable market or credit events, or a
loss was realized based on corporate actions outside of our control (such as a call by the issuer). Any such sales were made in accordance with our risk-
management policies and practices.

The following table presents the credit quality of our held-to-maturity securities, based on the latest available information as of

December 31, 2022, and December 31, 2021. The credit ratings are sourced from nationally recognized statistical rating organizations, which
include S&P, Moody’s, and Fitch. The ratings presented are a composite of the ratings sourced from the agencies or, if the ratings cannot be
sourced from the agencies, are based on the asset type of the particular security. All our held-to-maturity securities were current in their
payment of principal and interest as of both December 31, 2022, and December 31, 2021. We have not recorded any interest income reversals
on our held-to-maturity securities during the years ended December 31, 2022, or 2021.

December 31, ($ in millions)

Debt securities

Agency mortgage-backed residential

Total held-to-maturity securities

2022

2021

Total (a)

1,062

1,170

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

142

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

The following table summarizes available-for-sale securities in an unrealized loss position, which we evaluated to determine if a credit
loss exists requiring the recognition of an allowance for credit losses. For additional information on our methodology, refer to Note 1. As of
December 31, 2022, and December 31, 2021, we did not have the intent to sell the available-for-sale securities with an unrealized loss
position and we do not believe it is more likely than not that we will be required to sell these securities before recovery of their amortized cost
basis. We have not recorded any interest income reversals on our available-for-sale securities during the years ended December 31, 2022, or
2021.

2022

2021

Less than 12 months

12 months or longer

Less than 12 months

12 months or longer

Fair
value

Unrealized
loss

Fair
value

Unrealized
loss

Fair
value

Unrealized
loss

Fair
value

Unrealized
loss

December 31, ($ in millions)

Available-for-sale securities

Debt securities

U.S. Treasury and federal

agencies

U.S. States and political

subdivisions

Foreign government

Agency mortgage-backed

residential (a)

Mortgage-backed residential

Agency mortgage-backed

commercial (a)

Asset-backed

Corporate debt

529

(68) $ 1,487

(188) $ 1,682

(20) $

— $

547

7,472

1,985

996

162

782

(55)

(4)

(892)

(289)

135

8,978

2,287

(124)

2,535

(4)

(67)

272

895

(27)

(8)

160

(2,146)

12,244

(566)

3,243

(721)

(22)

(146)

2,553

360

970

(3)

(2)

(223)

(34)

(70)

(3)

(18)

749

—

(1)

—

(1)

—

(43)

—

(3)

(48)

Total available-for-sale securities

$ 12,548

(1,503) $ 16,660

(3,824) $ 21,288

(373) $

896

(a) Amounts include a $12 million liability for agency mortgage-backed residential securities and a $15 million asset for agency mortgage-backed

During the years ended December 31, 2022, and 2021, management determined that there were no expected credit losses for securities in

an unrealized loss position. This analysis considered a variety of factors including, but not limited to, performance indicators of the issuer,
default rates, industry analyst reports, credit ratings, and other relevant information, which indicated that contractual cash flows are expected
to occur. As a result of this evaluation, management determined that no credit reserves were required at December 31, 2022, or December 31,
2021.

143

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

9. Finance Receivables and Loans, Net

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

December 31, ($ in millions)

Consumer automotive (a)

Consumer mortgage

Mortgage Finance (b)

Mortgage — Legacy (c)

Total consumer mortgage

Consumer other

Personal Lending (d)

Credit Card (e)

Total consumer other

Total consumer

Commercial

Commercial and industrial

Automotive

Other

Commercial real estate

Total commercial

Total finance receivables and loans (f) (g)

2022

2021

83,286

78,252

19,445

290

19,735

1,990

1,599

3,589

17,644

368

18,012

1,009

953

1,962

106,610

98,226

14,595

9,154

5,389

29,138

12,229

6,874

4,939

24,042

135,748

122,268

(a) Certain finance receivables and loans are included in fair value hedging relationships. Refer to Note 21 for additional information.
(b)

Includes loans originated as interest-only mortgage loans of $3 million and $5 million at December 31, 2022, and December 31, 2021, respectively, of
which all have exited the interest-only period.
Includes loans originated as interest-only mortgage loans of $17 million and $21 million at December 31, 2022, and December 31, 2021, respectively, of
which all have exited the interest-only period.
Includes $3 million and $7 million of finance receivables at December 31, 2022, and December 31, 2021, respectively, for which we have elected the fair
value option.

(c)

(d)

(e) Refer to Note 2 for information regarding our acquisition of Ally Credit Card.
(f)

Totals include net unearned income, unamortized premiums and discounts, and deferred fees and costs of $2.3 billion at both December 31, 2022, and
December 31, 2021.

(g) Totals do not include accrued interest receivable, which was $707 million and $514 million at December 31, 2022, and December 31, 2021, respectively.
Accrued interest receivable is included in other assets on our Consolidated Balance Sheet. Billed interest on our credit card loans is included within
finance receivables and loans, net.

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, 2022, and 2021, respectively.

($ in millions)

Allowance at January 1, 2022

Charge-offs (b)

Recoveries

Net charge-offs

Provision for credit losses (c)

Other

Consumer
automotive

Consumer
mortgage

Consumer
other (a)

Commercial

Total

2,769

221

250

3,267

(1,434)

649

(785)

1,036

—

(3)

(8)

(1)

(133)

(121)

326

—

(58)

(55)

(1,628)

676

(952)

1,396

—

Allowance at December 31, 2022

3,020

426

238

3,711

(a) Excludes $7 million and $3 million of finance receivables and loans at January 1, 2022, and December 31, 2022, respectively, for which we have elected

the fair value option and incorporate no allowance for loan losses.
(b) Refer to Note 1 for information regarding our charge-off policies.
(c) Excludes $3 million of provision for credit losses related to our reserve for unfunded commitments. The liability related to the reserve for unfunded

commitments is included in accrued expenses and other liabilities on our Consolidated Balance Sheet.

144

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

($ in millions)

Allowance at January 1, 2021

Charge-offs (b)

Recoveries

Net charge-offs

Provision for credit losses (c)

Other (d)

Consumer
automotive

Consumer
mortgage

Consumer
other (a)

Commercial

Total

2,902

275

3,283

(923)

686

(237)

104

—

(6)

(14)

(30)

(28)

163

(22)

(11)

(12)

(2)

(981)

712

(269)

241

221

250

3,267

Allowance at December 31, 2021

2,769

(a) Excludes $8 million and $7 million of finance receivables and loans at January 1, 2021, and December 31, 2021, respectively, for which we have elected

the fair value option and incorporate no allowance for loan losses.
(b) Refer to Note 1 for information regarding our charge-off policies.
(c) Consumer other includes $97 million of provision for credit losses recorded to establish an initial reserve on loans acquired in the Ally Credit Card

acquisition.

(d) Consumer other includes $12 million of allowance for credit losses recognized on PCD loans acquired in the Ally Credit Card acquisition. Refer to Note 2

for additional details.

The following table presents information about sales of finance receivables and loans and transfers of finance receivables and loans from

held-for-investment to held-for-sale based on net carrying value.

Year ended December 31, ($ in millions)

Consumer automotive

Consumer mortgage

Total sales and transfers

2022

2021

—

414

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

of purchase.

Year ended December 31, ($ in millions)

Consumer automotive

Consumer mortgage

Consumer other (a)

Commercial

Total purchases of finance receivables and loans (b)

2022

2021

4,092

2,781

—

2,506

3,853

882

6,891

7,247

(a) During the year ended December 31, 2021, we obtained $882 million of finance receivables and loans from our acquisition of Ally Credit Card. For

additional information on our acquisition, refer to Note 2.

(b) Excludes $12 million and $14 million of finance receivables and loans purchased during the years ended December 31, 2022, and December 31, 2021,

respectively, for which we have elected the fair value option.

145

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

Nonaccrual Loans

The following tables present the amortized cost of our finance receivables and loans on nonaccrual status. All consumer or commercial

finance receivables and loans that were 90 days or more past due were on nonaccrual status as of December 31, 2022, and December 31,
2021.

($ in millions)

Consumer automotive

Consumer mortgage

Mortgage Finance

Mortgage — Legacy

Total consumer mortgage

Consumer other

Personal Lending

Credit Card

Total consumer other

Total consumer

Commercial

Commercial and industrial

Automotive

Other

Commercial real estate

Total commercial

Total finance receivables and loans

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

December 31, 2022

Nonaccrual
status at
Jan. 1, 2022

Nonaccrual
status

Nonaccrual
with no
allowance (a)

1,078

1,187

445

—

1,179

1,292

484

221

257

157

—

162

—

1,436

1,454

519

146

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

($ in millions)

Consumer automotive

Consumer mortgage

Mortgage Finance

Mortgage — Legacy

Total consumer mortgage

Consumer other

Personal Lending

Credit Card

Total consumer other

Total consumer

Commercial

Commercial and industrial

Automotive

Other

Commercial real estate

Total commercial

Total finance receivables and loans

December 31, 2021

Nonaccrual
status at
Jan. 1, 2021

Nonaccrual
status

Nonaccrual
with no
allowance (a)

1,256

1,078

423

102

—

1,361

1,179

485

116

161

221

257

1,522

1,436

568

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

We recorded interest income from cash payments associated with finance receivables and loans on nonaccrual status of $13 million for

both the years ended December 31, 2022, and 2021.

147

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

Credit Quality Indicators

We evaluate the credit quality of our consumer loan portfolio based on the aging status of the loan and by payment activity. Loan

delinquency reporting is generally based upon borrower payment activity, relative to the contractual terms of the loan.

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

delinquency status and origination year.

Origination year

2022

2021

2020

2019

2018

2017 and
prior

Revolving
loans

Revolving
loans
converted
to term

Total

$ 36,127 $ 22,102 $ 10,341 $ 6,451 $ 3,237 $ 1,890 $

— $

80,148

December 31, 2022
($ in millions)

Consumer automotive

Current

30–59 days past due

60–89 days past due

90 or more days past due

707

207

878

324

111

370

135

284

165

120

Total consumer automotive (a)

37,114

23,415

10,893

6,872

3,480

2,072

Consumer mortgage

Mortgage Finance

Current

30–59 days past due

60–89 days past due

90 or more days past due

2,292

10,893

1,946

815

577

2,805

—

Total Mortgage Finance

2,309

10,927

1,950

821

590

2,848

Mortgage — Legacy

Current

30–59 days past due

60–89 days past due

90 or more days past due

Total Mortgage — Legacy

—

Total consumer mortgage

2,309

10,927

1,950

821

590

2,922

Consumer other

Personal Lending

Current

30–59 days past due

60–89 days past due

90 or more days past due

1,492

392

Total Personal Lending (b)

1,523

408

Credit Card

Current

30–59 days past due

60–89 days past due

90 or more days past due

Total Credit Card

Total consumer other

Total consumer

—

1,523

408

—

191

—

195

—

1,518

1,599

—

2,524

858

316

83,846

19,328

19,445

271

290

19,735

1,938

1,987

1,518

1,599

3,586

$ 40,946 $ 34,750 $ 12,893 $ 7,698 $ 4,071 $ 4,994 $

1,794 $

21 $

107,167

(a) Certain consumer automotive loans are included in fair value hedging relationships. The amortized cost excludes a liability of $560 million related to

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

148

Origination year

2021

2020

2019

2018

2017

2016 and
prior

Revolving
loans

Revolving
loans
converted to
term

Total

$ 35,222 $ 17,218 $ 11,512 $ 6,692 $ 3,403 $ 1,911 $

— $

75,958

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

December 31, 2021
($ in millions)

Consumer automotive

Current

30–59 days past due

60–89 days past due

90 or more days past due

424

115

353

114

334

108

226

139

101

Total consumer automotive

35,802

17,736

12,010

7,028

3,610

2,066

Consumer mortgage

Mortgage Finance

Current

10,169

2,212

977

744

1,041

2,363

30–59 days past due

60–89 days past due

90 or more days past due

—

Total Mortgage Finance

10,227

2,215

986

767

1,050

2,399

Mortgage — Legacy

Current

30–59 days past due

60–89 days past due

90 or more days past due

Total Mortgage — Legacy

—

Total consumer mortgage

10,227

2,215

986

767

1,050

2,496

Consumer other

Personal Lending

Current

30–59 days past due

60–89 days past due

90 or more days past due

821

133

Total Personal Lending (a)

840

137

Credit Card

Current

30–59 days past due

60–89 days past due

90 or more days past due

Total Credit Card

Total consumer other

Total consumer

—

840

137

—

238

—

244

—

932

953

—

1,577

476

241

78,252

17,506

17,644

340

368

18,012

978

1,002

932

953

1,955

$ 46,869 $ 20,088 $ 13,015 $ 7,800 $ 4,661 $ 4,562 $

1,197 $

27 $

98,219

(a) Excludes $7 million of finance receivables at December 31, 2021, for which we have elected the fair value option.

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

•

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

149

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

•

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

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

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

December 31, 2022
($ in millions)

Commercial

Commercial and industrial

Automotive

Pass

Special mention

Substandard

Total automotive

Other

Pass

Special mention

Substandard

Doubtful

Loss

Total other

Origination year

2022

2021

2020

2019

2018

2017 and
prior

Revolving
loans

Revolving
loans
converted
to term

Total

640 $

211 $

132 $

78 $

28 $

34 $

12,327 $

— $

13,450

—

663

594

177

—

258

469

158

—

132

607

175

—

419

—

771

627

786

629

101

—

133

128

139

—

425

716

—

716

1,016

13,370

5,344

278

—

1,117

14,595

7,709

1,093

262

5,678

137

9,154

—

5,336

5,389

Commercial real estate

Pass

Special mention

1,481

1,118

—

Total commercial real estate

1,481

1,150

951

953

679

698

369

—

369

Total commercial

$ 2,915 $ 2,035 $ 1,871 $ 1,406 $

508 $ 1,196 $

19,057 $

150 $

29,138

150

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

December 31, 2021
($ in millions)

Commercial

Commercial and industrial

Automotive

Pass

Special mention

Substandard

Total automotive

Other

Pass

Special mention

Substandard

Doubtful

Total other

Commercial real estate

Pass

Special mention

Substandard

Origination year

2021

2020

2019

2018

2017

2016 and
prior

Revolving
loans

Revolving
loans
converted to
term

Total

347 $

190 $

112 $

49 $

23 $

56 $

10,741 $

— $

11,518

—

354

739

—

754

192

448

169

—

639

1,298

1,060

—

119

374

—

565

107

873

—

902

604

—

611

—

140

—

249

342

—

360

—

122

299

653

679

589

11,371

4,032

—

668

12,229

5,929

543

376

4,138

123

6,874

—

4,841

4,939

Total commercial real estate

1,311

1,065

Total commercial

$ 2,419 $ 1,896 $ 1,586 $

783 $

663 $ 1,052 $

15,512 $

131 $

24,042

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

($ in millions)

December 31, 2022

Commercial

Commercial and industrial

Automotive

Other

Commercial real estate

Total commercial

December 31, 2021

Commercial

Commercial and industrial

Automotive

Other

Commercial real estate

Total commercial

Troubled Debt Restructurings

30–59 days
past due

60–89 days
past due

90 days
or more
past due

Total
past due

Current

Total finance
receivables and
loans

— $

14,595

—

— $

—

9,151

5,389

29,135

— $

12,229

—

— $

—

6,873

4,939

24,041

14,595

9,154

5,389

29,138

12,229

6,874

4,939

24,042

TDRs are loan modifications where concessions were granted to borrowers experiencing financial difficulties. For consumer automotive

loans, we may offer several types of assistance to aid our customers, including payment extensions and rewrites of the loan terms.
Additionally, for mortgage loans, as part of certain programs, we offer mortgage loan modifications to qualified borrowers. These programs
are in place to provide support to our mortgage customers in financial distress, including principal forgiveness, maturity extensions,
delinquent interest capitalization, and changes to contractual interest rates. Total TDRs recorded at amortized cost were $2.4 billion at both
December 31, 2022, and 2021, and $2.2 billion at December 31, 2020.

151

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

Total commitments to lend additional funds to borrowers whose terms had been modified in a TDR were $61 million, $18 million, and

$14 million at December 31, 2022, 2021, and 2020, respectively. Refer to Note 1 for additional information.

The following tables present information related to finance receivables and loans recorded at amortized cost modified in connection with

a TDR during the period.

Year ended December 31, ($ in millions)

2022

Consumer automotive

Consumer mortgage

Mortgage Finance

Mortgage — Legacy

Total consumer mortgage

Consumer other

Credit Card

Total consumer other

Total consumer

Commercial

Commercial and industrial

Other

Total commercial

Total finance receivables and loans

Year ended December 31, ($ in millions)

2021

Consumer automotive

Consumer mortgage

Mortgage Finance

Mortgage — Legacy

Total consumer mortgage

Consumer other

Credit Card

Total consumer other

Total consumer

Commercial

Commercial and industrial

Automotive

Other

Commercial real estate

Total commercial

Pre-
modification
amortized
cost basis

Post-
modification
amortized
cost basis

Number
of loans

49,773

831

805

2,853

52,657

849

461

823

466

52,662

1,310

1,289

Pre-
modification
amortized
cost basis

Post-
modification
amortized
cost basis

Number of
loans

77,991

1,395

1,371

113

—

78,158

1,419

1,395

Total finance receivables and loans

78,162

1,458

1,434

152

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

Year ended December 31, ($ in millions)

2020

Consumer automotive

Consumer mortgage

Mortgage Finance

Mortgage — Legacy

Total consumer mortgage

Total consumer

Commercial

Commercial and industrial

Automotive

Other

Total commercial

Total finance receivables and loans

Pre-
modification
amortized
cost basis

Post-
modification
amortized
cost basis

Number of
loans

114,595

1,908

1,835

115

114,710

1,937

1,864

126

114,718

2,063

101

1,965

153

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

The following table presents information about finance receivables and loans recorded at amortized cost that have redefaulted during the

reporting period and were within 12 months or less of being modified as a TDR. Redefault is when finance receivables and loans meet the
requirements for evaluation under our charge-off policy (refer to Note 1 for additional information) except for commercial finance receivables
and loans, where redefault is defined as 90 days past due.

Year ended December 31, ($ in millions)

Number of
loans

Amortized
cost

Charge-
off amount

2022

Consumer automotive

Consumer mortgage

Mortgage Finance

Total consumer mortgage

Consumer other

Credit Card

Total consumer other

Total consumer

Commercial

Commercial and industrial

Other

Total commercial

Total finance receivables and loans

2021

Consumer automotive

Consumer mortgage

Mortgage Finance

Mortgage — Legacy

Total consumer mortgage

Total consumer finance receivables and loans

Total finance receivables and loans

2020

Consumer automotive

Consumer mortgage

Mortgage Finance

Mortgage — Legacy

Total consumer mortgage

Total consumer finance receivables and loans

Total finance receivables and loans

Concentration Risk
Consumer

9,227

143

457

—

9,688

145

9,689

9,295

9,300

10,070

10,072

146

119

—

119

104

—

104

—

154

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

The following table shows the percentage of consumer automotive, consumer mortgage, and consumer other finance receivables and

loans by state concentration based on amortized cost.

December 31,

California

Texas

Florida

Pennsylvania

Georgia

North Carolina

Illinois

New York

New Jersey

Ohio

2022 (a)

2021

Consumer
automotive

Consumer
mortgage

Consumer
other (b)

Consumer
automotive

Consumer
mortgage

Consumer
other (b)

8.7 %

38.8 %

8.4 %

8.7 %

39.6 %

9.4 %

13.6

9.5

4.5

4.1

3.5

3.6

3.2

3.4

7.3

6.6

2.1

2.9

1.9

2.8

1.9

2.4

0.4

7.7

7.8

4.6

3.5

4.6

4.3

4.8

3.6

13.0

9.3

4.4

4.0

4.1

3.7

3.3

3.0

3.4

7.3

6.3

2.3

3.0

1.6

3.1

2.1

2.5

0.5

7.4

8.4

4.5

3.4

4.4

5.5

3.4

3.9

Other United States

Total consumer loans

41.8

32.9

47.1

43.1

31.7

46.3

100.0 %

Presentation is in descending order as a percentage of total consumer finance receivables and loans at December 31, 2022.

(a)
(b) Excludes $3 million and $7 million of finance receivables at December 31, 2022, and December 31, 2021, respectively, for which we have elected the fair

value option.

Commercial Real Estate

The commercial real estate portfolio consists of finance receivables and loans issued primarily to automotive dealers. The following table

presents the percentage of total commercial real estate finance receivables and loans by state concentration based on amortized cost.

December 31,

Florida

Texas

California

New York

North Carolina

Michigan

Ohio

Georgia

Utah

Illinois

Other United States

Total commercial real estate finance receivables and loans

Commercial Criticized Exposure

2022

2021

17.9 %

14.9

16.4 %

13.9

8.4

6.3

5.3

4.2

3.1

2.9

2.7

8.3

3.8

5.8

3.4

3.3

3.0

2.9

30.1

33.4

100.0 %

Finance receivables and loans classified as special mention, substandard, or doubtful are reported as criticized. These classifications are

155

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

The following table presents the percentage of total commercial criticized finance receivables and loans by industry concentration based

on amortized cost.

December 31,

Industry

Automotive

Chemicals

Electronics

Other

Total commercial criticized finance receivables and loans

10. Leasing
Ally as the Lessee

2022

2021

53.4 %

50.8 %

14.7

11.9

20.0

14.4

3.6

31.2

100.0 %

We have operating leases for certain of our corporate facilities, which have remaining lease terms of 8 months to 8 years. Most of the
property leases have fixed payment terms with annual fixed-escalation clauses and include options to extend the leases for periods that range
from 1 to 15 years. Some of those lease agreements also include options to terminate the leases approximately 6 years after the
commencement of the leases. We have not included any of these term extensions or termination provisions in our estimates of the lease term,
as we do not consider it reasonably certain that the options will be exercised.

We also have operating leases for a fleet of vehicles that is used by our sales force for business purposes, with noncancelable lease terms

of 367 days. Thereafter, the leases are month-to-month, up to a maximum of 48 months from inception.

During the years ended December 31, 2022, and December 31, 2021, we paid $38 million and $51 million in cash for amounts included

in the measurement of lease liabilities at December 31, 2022, and December 31, 2021, respectively. These amounts are included in net cash
provided by operating activities in the Consolidated Statement of Cash Flows. During the years ended December 31, 2022, and December 31,
2021, we obtained $41 million and $361 million, respectively, of ROU assets in exchange for new lease liabilities. As of December 31, 2022,
the weighted-average remaining lease term of our operating lease portfolio was 5 years, and the weighted-average discount rate was 2.57%,
compared to 6 years and 1.96% as of December 31, 2021.

The following table presents future minimum rental payments we are required to make under operating leases that have commenced as

of December 31, 2022, and that have noncancelable lease terms expiring after December 31, 2022.

Year ended December 31, ($ in millions)

2023

2024

2025

2026

2027

2028 and thereafter

Total undiscounted cash flows

Difference between undiscounted cash flows and discounted cash flows

Total lease liability

147

(10)

137

In March 2021, we commenced the lease for a new corporate facility in Charlotte, North Carolina, which included an underlying
purchase option. We provided notice of our intent to exercise the purchase option in April 2021, and executed on the purchase agreement in
July 2021. Additionally, we agreed to lease a portion of this corporate facility in exchange for $13 million in future lease payments over a ten-
year lease term. During the year ended December 31, 2022, we recognized $1 million of income associated with this lease agreement.

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

156

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

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

Year ended December 31, ($ in millions)

Operating lease expense

Variable lease expense

Total lease expense, net (a)

(a)

Included in other operating expenses in our Consolidated Statement of Income.

Ally as the Lessor
Investment in Operating Leases

2022

2021

2020

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

When we acquire a consumer operating lease, we assume ownership of the vehicle from the dealer. We require that property damage,
bodily injury, collision, and comprehensive insurance be obtained by the lessee on all consumer operating leases. Neither the consumer nor
the dealer is responsible for the value of the vehicle at the time of lease termination. When vehicles are not purchased by customers or the
receiving dealer at scheduled lease termination, the vehicle is returned to us for remarketing. We generally bear the risk of loss to the extent
the value of a leased vehicle upon remarketing is below the expected residual value. At termination, our actual sales proceeds from
remarketing the vehicle may be higher or lower than the estimated residual value resulting in a gain or loss on remarketing, which is included
in net depreciation expense on operating lease assets in our Consolidated Statement of Income. Excessive mileage or excessive wear and tear
on the vehicle during the lease may impact the sales proceeds received upon remarketing. As of December 31, 2022, and December 31, 2021,
consumer operating leases with a carrying value, net of accumulated depreciation, of $56 million and $165 million, respectively, were
covered by a residual value guarantee of 15% of the manufacturer’s suggested retail price.

157

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

The following table details our investment in operating leases.

Year ended December 31, ($ in millions)

Vehicles

Accumulated depreciation

Investment in operating leases, net

2022

2021

12,304

(1,860)

10,444

12,384

(1,522)

10,862

The following table presents future minimum rental payments we have the right to receive under operating leases with noncancelable

lease terms expiring after December 31, 2022.

Year ended December 31, ($ in millions)

2023

2024

2025

2026

2027

Total lease payments from operating leases

1,529

964

445

105

3,051

We recognized operating lease revenue of $1.6 billion for both the years ended, December 31, 2022, and 2021, and $1.4 billion for the

year ended December 31, 2020. Depreciation expense on operating lease assets includes net remarketing gains recognized on the sale of
operating lease assets. The following table summarizes the components of depreciation expense on operating lease assets.

Year ended December 31, ($ in millions)

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

Remarketing gains, net

Net depreciation expense on operating lease assets

2022

2021

2020

1,084

(170)

914

(344)

570

978

(127)

851

(a)

Includes variable lease payments related to excess mileage and excessive wear and tear on vehicles of $7 million during the year ended December 31,
2022, $16 million during the year ended December 31, 2021, and $23 million during the year ended December 31, 2020.

Finance Leases

In our Automotive Finance operations, we also hold automotive leases that require finance lease treatment as prescribed by ASC Topic

842, Leases. Our total gross investment in finance leases, which is included in finance receivables and loans, net, on our Consolidated
Balance Sheet was $481 million and $470 million as of December 31, 2022, and December 31, 2021, respectively. This includes lease
payment receivables of $468 million and $457 million at December 31, 2022, and December 31, 2021, respectively, and unguaranteed
residual assets of $13 million at both December 31, 2022, and 2021. Interest income on finance lease receivables was $30 million for the year
ended December 31, 2022, and $27 million for the year ended December 31, 2021, and is included in interest and fees on finance receivables
and loans in our Consolidated Statement of Income.

The following table presents future minimum rental payments we have the right to receive under finance leases with noncancelable lease

terms expiring after December 31, 2022.

Year ended December 31, ($ in millions)

2023

2024

2025

2026

2027

2028 and thereafter

Total undiscounted cash flows

Difference between undiscounted cash flows and discounted cash flows

Present value of lease payments recorded as lease receivable

11. Securitizations and Variable Interest Entities
Overview

166

132

116

520

(53)

467

We securitize, transfer, and service consumer automotive loans. We often securitize these loans (also referred to as financial assets) using

SPEs. An SPE is a legal entity that is designed to fulfill a specified limited need of the sponsor. Our principal use of SPEs is to obtain

158

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

liquidity by securitizing certain of our financial assets. SPEs are often VIEs and may or may not be included on our Consolidated Balance
Sheet. Additionally, we opportunistically sell consumer automotive and credit card whole-loans to SPEs where we have a continuing
involvement.

Securitizations

In executing a securitization, we typically sell pools of financial assets to a wholly owned, bankruptcy-remote SPE, which then transfers

the financial assets to a separate, transaction-specific SPE for cash, and typically, other retained interests. The SPE is funded through the
issuance of beneficial interests, which could take the form of notes or residual interests and can be sold to investors or retained by us. We
typically hold retained beneficial interests in our securitizations including, but not limited to, retained notes, certificated residual interests, as
well as certain noncertificated interests retained from the sale of automotive finance receivables. If sold, the beneficial interests only entitle
the investors to specified cash flows generated from the underlying securitized assets. If retained, the interests provide credit enhancement to
the SPE as they may absorb credit losses or other cash shortfalls and may represent a form of significant continuing economic interests. In
addition to providing a source of liquidity and cost-efficient funding, securitizing these financial assets also reduces our credit exposure to the
borrowers beyond any economic interest we may retain.

The SPEs are limited to specific activities by their respective legal documents, but are generally allowed to acquire the financial assets,
to issue beneficial interests to investors to fund the acquisition of the financial assets, and to enter into interest rate hedges to mitigate certain
risks related to the financial assets or beneficial interests of the entity. A servicer, who is generally us, is appointed pursuant to the underlying
legal documents to service the assets the SPE holds and the beneficial interests it issues. Servicing functions include, but are not limited to,
general collections activity on current and noncurrent accounts, loss mitigation efforts including repossession and sale of collateral, as well as
preparing and furnishing statements summarizing the asset and beneficial interest performance. These servicing responsibilities constitute
continued involvement in the transferred financial assets.

Cash flows from the securitized financial assets represent the sole source for payment of distributions on the beneficial interests issued

by the SPE and for payments to the parties that perform services for the SPE, such as the servicer or the trustee.

We generally hold certain conditional repurchase options specific to securitizations that allow us to repurchase assets from the

securitization entity. The majority of the securitizations provide us, as servicer, with a call option that allows us to repurchase the remaining
transferred financial assets or redeem outstanding beneficial interests at our discretion once the asset pool reaches a predefined level, which
represents the point where servicing becomes administratively burdensome (a clean-up call option). The repurchase price is typically the
securitization balance of the assets plus accrued interest when applicable. We generally have discretion regarding when or if we will exercise
these options, but we would do so only when it is in our best interest.

Other than our customary representation, warranty, and covenant provisions, these securitizations are nonrecourse to us, thereby

transferring the risk of future credit losses to the extent the beneficial interests in the SPEs are held by third parties. Representation, warranty,
and certain covenant provisions generally require us to repurchase assets or indemnify the investor or other party for incurred losses to the
extent it is determined that the assets were ineligible or were otherwise defective at the time of sale, or otherwise not in compliance with the
ongoing covenant obligations. We did not provide any noncontractual financial support to any of these entities during 2022 or 2021. However
in 2020, we voluntarily provided cumulative support of less than $1 million to our commercial securitization entity. This entity was
temporarily impacted by our COVID-19 deferral program provided to commercial automotive customers.

Variable Interest Entities

The VIEs included on the Consolidated Balance Sheet represent SPEs where we are deemed to be the primary beneficiary, primarily due

to our servicing activities and our beneficial interests in the VIE that could be potentially significant. We determine whether we have a
potentially significant beneficial interest in the VIE based on the consideration of both qualitative and quantitative factors regarding the
nature, size, and form of our involvement in the VIE. The third-party investors in the obligations of consolidated VIEs have legal recourse
only to the assets of the VIEs and do not have such recourse to us, except for the customary representation, warranty, and covenant
provisions. In addition, the cash flows from the assets are restricted only to pay such liabilities. Thus, our economic exposure to loss from
outstanding third-party financing related to consolidated VIEs is limited to the carrying value of the consolidated VIE assets. Generally, all
assets of consolidated VIEs are restricted for the beneficial interest holders. For additional information regarding our significant accounting
policies for consolidated VIEs, refer to the Variable Interest Entities and Securitizations section of Note 1.

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

The pretax gain on sales of financial assets into nonconsolidated VIEs was $1 million for the year ended December 31, 2022. We had no

pretax gains or losses on sales of financial assets into nonconsolidated VIEs during the years ended December 31, 2021, or 2020. For

159

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

additional information regarding our significant accounting policies for nonconsolidated VIEs, refer to the Variable Interest Entities and
Securitizations section of Note 1.

We provide long-term guarantee contracts to investors in certain nonconsolidated affordable housing entities and have extended a line of

credit to provide liquidity. Since we do not have control over the entities or the power to make decisions, we do not consolidate the entities
and our involvement is limited to the guarantee and the line of credit.

We are involved with various other nonconsolidated equity investments, including affordable housing entities and venture capital funds

and loan funds. We do not consolidate these entities and our involvement is limited to our outstanding investment, additional capital
committed to these funds plus any previously recognized low-income housing tax credits that are subject to recapture.

The following table presents our involvement in consolidated and nonconsolidated VIEs in which we hold variable interests. We have

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

December 31, ($ in millions)

2022

On-balance sheet variable interest entities

Carrying value
of total assets

Carrying value
of total
liabilities

Assets sold to
nonconsolidated
VIEs (a)

Maximum exposure to
loss in nonconsolidated
VIEs

Consumer automotive

20,415 (b) $

2,553 (c) $

— $

—

Off-balance sheet variable interest entities

Consumer automotive

Consumer other (e)

Commercial other

Total

2021

On-balance sheet variable interest entities

Consumer automotive

Consumer other (e)

Off-balance sheet variable interest entities

Commercial other

Total

—

2,199 (f)

873 (g)

227

103

—

22,614

3,426

330

18,158 (b) $

1,162 (c) $

— $

318

300

1,814 (f)

726 (g)

—

20,290

2,188

— $

227 (d)

103

2,767 (h)

3,097

—

2,416 (h)

2,416

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

(b)

(c)

VIEs.
Includes $10.6 billion and $11.0 billion of assets that were not encumbered by VIE beneficial interests held by third parties at December 31, 2022, and
December 31, 2021, respectively. Ally or consolidated affiliates hold the interests in these assets.
Includes $113 million and $124 million of liabilities that were not obligations to third-party beneficial interest holders at December 31, 2022, and
December 31, 2021, respectively.

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

(e) Represents balances from our credit card business.
(f) Amounts are classified as other assets except for $38 million and $8 million classified as equity securities at December 31, 2022, and December 31, 2021,

respectively.

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

160

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

Cash Flows with Nonconsolidated Special-Purpose Entities

The following table summarizes cash flows received and paid related to SPEs and asset-backed financings where the transfer is

accounted for as a sale and we have a continuing involvement with the transferred consumer automotive and credit card assets (for
example, servicing) that were outstanding during the years ended December 31, 2022, 2021, and 2020. Additionally, this table contains
information regarding cash flows received from and paid to nonconsolidated SPEs that existed during each period.

Year ended December 31, ($ in millions)

Consumer automotive

2022

2021

2020

Cash proceeds from transfers completed during the period

238

— $

Cash flows received on retained interests in securitization entities

Servicing fees

Cash disbursements for repurchases during the period

Consumer other (a)

Cash proceeds from transfers completed during the period

Servicing fees

Total

(a) Represents activity from our credit card business.

Delinquencies and Net Credit Losses

—

137

—

389

—

(2)

—

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

December 31, ($ in millions)

Whole-loan sales (a)

Consumer automotive

Consumer other

Total

Total amount

Amount 60 days or more
past due

2022

2021

2022

2021

227

103

330

— $

—

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

investors.

Year ended December 31, ($ in millions)

Whole-loan sales (a)

Consumer other

Total

Net credit losses

2022

2021

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

Affordable Housing Investments

We have investments in various limited partnerships that sponsor affordable housing projects, which meet the definition of a VIE. The

purpose of these investments is to achieve a satisfactory return on capital through the receipt of LIHTC and to assist us in achieving goals
associated with the CRA. Our affordable housing investments are accounted for using the proportional amortization method of accounting,
which recognizes the amortized cost of the investment as a component of income tax expense.

The following table summarizes information about our affordable housing investments.

Year ended December 31, ($ in millions)

Affordable housing tax credits and other tax benefits (a)

Tax credit amortization expense recognized as a component of income tax expense

2022

2021

2020

177

147

144

118

109

(a) There were no impairment losses recognized during the years ended December 31, 2022, 2021, and 2020, resulting from the forfeiture or ineligibility of

tax credits or other circumstances.

161

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

Our investment in qualified affordable housing projects was $1.6 billion and $1.4 billion at December 31, 2022, and December 31, 2021,

respectively, and is included within other assets on our Consolidated Balance Sheet. Additionally, unfunded commitments to provide
additional capital to investees in qualified affordable housing projects were $869 million and $724 million at December 31, 2022, and
December 31, 2021, respectively, and are included within accrued expenses and other liabilities on our Consolidated Balance Sheet.
Substantially all of the unfunded commitments at December 31, 2022, are expected to be paid out within the next five years.

12. Premiums Receivable and Other Insurance Assets

Premiums receivable and other insurance assets consisted of the following.

December 31, ($ in millions)

Prepaid reinsurance premiums

Reinsurance recoverable on unpaid losses

Reinsurance recoverable on paid losses

Premiums receivable

Deferred policy acquisition costs

2022

2021

553

549

114

1,933

1,974

2,724

Total premiums receivable and other insurance assets

2,698

13. Other Assets

The components of other assets were as follows.

December 31, ($ in millions)

Property and equipment at cost

Accumulated depreciation

Net property and equipment

Investment in qualified affordable housing projects

Net deferred tax assets

Nonmarketable equity investments

Goodwill

Accrued interest, fees, and rent receivables

Equity-method investments (a)

Restricted cash held for securitization trusts (b)

Other accounts receivable

Operating lease right-of-use assets

Net intangible assets

Restricted cash and cash equivalents (c)

Other assets

Total other assets

2022

2021

2,352

2,139

(1,076)

1,276

1,596

1,087

842

822

786

608

585

164

111

(955)

1,184

1,378

254

998

822

600

472

516

127

148

129

1,097

9,138

1,337

8,057

(a)
(b)

(c)

Primarily relates to investments made in connection with our CRA program.
Includes restricted cash collected from customer payments on securitized receivables, which are distributed by us to investors as payments on the related
secured debt, and cash reserve deposits utilized as a form of credit enhancement for various securitization transactions.
Primarily represents a number of arrangements with third parties where certain restrictions are placed on balances we hold due to collateral agreements
associated with operational processes with a third-party bank, or letter of credit arrangements and corresponding collateral requirements.

162

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

The total carrying value of the nonmarketable equity investments held at December 31, 2022, and December 31, 2021, including

cumulative unrealized gains and losses was as follows.

December 31, ($ in millions)

FHLB stock

FRB stock

Equity investments without a readily determinable fair value

Cost basis at acquisition

Adjustments

Upward adjustments

Downward adjustments (including impairment)

Carrying amount, equity investments without a readily determinable fair value

Nonmarketable equity investments

2022

2021

318

401

177

(143)

123

842

289

449

183

(12)

260

998

During the years ended December 31, 2022, and 2021, unrealized gains and losses included in the carrying value of the nonmarketable

equity investments still held as of December 31, 2022, and 2021, were as follows.

Year ended December 31, ($ in millions)

Upward adjustments

Downward adjustments (including impairment) (a)

2022

2021

(138)

(1)

(a) No impairment on FHLB and FRB stock was recognized during the years ended December 31, 2022, and 2021.

Total (loss) gain on nonmarketable equity investments, net, which includes both realized and unrealized gains and losses, was a loss of

$132 million for the year ended December 31, 2022, compared to a gain of $142 million for the year ended December 31, 2021.

The downward adjustments (including impairment) during the year ended December 31, 2022, was primarily driven by an impairment in

our investment in the parent of BMC (BMC Holdco).

•

◦

On February 7, 2023, Aurora announced the filing of a definitive proxy statement to hold a special meeting of its shareholders on
February 24, 2023, to extend the date by which Aurora must consummate an initial business combination under its articles of
association from March 8, 2023, to September 30, 2023, or any earlier date determined by its board. On the same day, Aurora also
announced its entry into a second letter agreement with BMC Holdco and the existing investor that, in part and subject to specified
conditions, (i) obligates Aurora and BMC Holdco to use reasonable best efforts to obtain shareholder approval of the extension
proposal, to extend the Agreement End Date to September 30, 2023, prior to that approval, and to further extend that date to March
30, 2024, if necessary to provide sufficient time for the merger to be consummated, (ii) defers the maturity date of the investor’s
Notes to September 30, 2023, and (iii) without limiting the investor’s rights under the bridge note purchase agreement, if the merger
has not been consummated by the maturity date of the Notes, provides the investor with an option to alternatively exchange its
Notes for Class B common stock and Series D equivalent preferred stock of BMC Holdco at specified valuations.

163

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

The letter agreement entered into during the third quarter of 2022 was a triggering event to assess our remaining investment in BMC

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

($ in millions)

Goodwill at December 31, 2020

Goodwill acquired

Goodwill at December 31, 2021

Goodwill acquired

Goodwill at December 31, 2022

Automotive
Finance
operations

Insurance
operations

Corporate
and Other (a)

Total

—

296

479

775

—

775

343

479

822

—

822

(a)

Includes $479 million of goodwill associated with Ally Credit Card at both December 31, 2022, and December 31, 2021, and $153 million of goodwill
associated with Ally Lending at both December 31, 2022, and December 31, 2021, and $143 million of goodwill associated with Ally Invest at both
December 31, 2022, and December 31, 2021.

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

December 31, ($ in millions)

Technology

Customer lists

Purchased credit card relationships

Trademarks

Total intangible assets

2022 (a)

2021

Gross
intangible
assets

Accumulated
amortization

Net carrying
value

Gross
intangible
assets

Accumulated
amortization

Net carrying
value

122

(53) $

122

(36) $

(51)

(4)

(1)

(42)

—

207

(109) $

207

(78) $

129

(a) We expect to recognize amortization expense of $26 million and $19 million for the years ended December 31, 2023, and 2024, respectively, and

$14 million for each of the years ended December 31, 2025, 2026, and 2027.

14. Deposit Liabilities

Deposit liabilities consisted of the following.

December 31, ($ in millions)

Noninterest-bearing deposits

Interest-bearing deposits

Savings, money market, and checking accounts

Certificates of deposit

Total deposit liabilities

2022

2021

185

150

110,776

41,336

102,455

38,953

152,297

141,558

At December 31, 2022, and December 31, 2021, certificates of deposit included $5.6 billion and $7.2 billion, respectively, of those in

denominations in excess of $250 thousand federal insurance limits.

The following table presents the scheduled maturity of total certificates of deposit at December 31, 2022.

($ in millions)

Due in 2023

Due in 2024

Due in 2025

Due in 2026

Due in 2027

Total certificates of deposit (a)

26,072

10,341

3,143

863

917

41,336

(a)

Includes $4.2 billion of certificates of deposit that are estimated to be uninsured. In some instances, certificates of deposits in excess of federal insurance
limits may be insured based upon the number of account owners, beneficiaries, and accounts held.

164

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

15. Debt
Short-Term Borrowings

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

2022

2021

December 31, ($ in millions)

Federal Home Loan Bank

Securities sold under agreements to repurchase

Total short-term borrowings

Weighted average interest rate (b)

Unsecured

Secured (a)

— $

—

— $

1,900

499

2,399

Total

1,900

499

2,399

4.5 %

Unsecured

Secured (a)

Total

— $

—

— $

—

— $

—

— %

(a) Refer to the section below titled Long-Term Debt for further details on assets restricted as collateral for payment of the related debt.
(b) Based on the debt outstanding and the interest rate at December 31 of each year.

We periodically enter into term repurchase agreements—short-term borrowing agreements in which we sell securities to one or more

investors while simultaneously committing to repurchase them at a specified future date, at the stated price plus accrued interest. As of
December 31, 2022, the securities sold under agreements to repurchase consisted of $499 million of agency mortgage-backed residential debt
securities. The repurchase agreements are set to mature within 31 to 60 days. Refer to Note 8 and Note 21 for further details.

The primary risk associated with these repurchase agreements is that the counterparty will be unable to perform under the terms of the

contract. As the borrower, we are exposed to the excess market value of the securities pledged over the amount borrowed. Daily mark-to-
market collateral management is designed to limit this risk to the initial margin. However, should a counterparty declare bankruptcy or
become insolvent, we may incur additional delays and costs. In some instances, we may place or receive cash collateral with counterparties
under collateral arrangements associated with our repurchase agreements. At December 31, 2022, we placed cash collateral of $1 million
subsequent to the execution of the repurchase agreements, and we did not receive any collateral. At December 31, 2021, we did not place or
receive any collateral.

165

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

Long-Term Debt

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

December 31, ($ in millions)

Amount

Interest rate

Weighted
average stated
interest rate (a)

Due date
range

2022

Unsecured debt

Fixed rate (b)

Hedge basis adjustments (c)

Total unsecured debt

Secured debt

Fixed rate

Variable rate (d)

Hedge basis adjustment (c)

Total secured debt (e) (f)

Total long-term debt

2021

Unsecured debt

Fixed rate (b)

Hedge basis adjustments (c)

Total unsecured debt

Secured debt

Fixed rate

Variable rate (d)

Hedge basis adjustment (c)

Total secured debt (e) (f)

Total long-term debt

9,929

108

10,037

0.60–8.00%

5.08 %

2023–2032

7,603

118

7,725

0.72–5.29%

2.71 %

2023–2027

17,762

9,297

113

9,410

0.60–8.00%

4.87 %

2022–2031

7,502

120

(3)

7,619

0.72–6.86%

2.14 %

2022–2025

17,029

(a) Based on the debt outstanding and the interest rate at December 31 of each year excluding any impacts of interest rate hedges.
(b)
(c) Represents the basis adjustment associated with the application of hedge accounting on certain of our long-term debt positions. Refer to Note 21 for

Includes subordinated debt of $1.0 billion at both December 31, 2022, and 2021.

additional information.

(d) Represents long-term debt that does not have a stated interest rate.
(e)
(f)

Includes $2.4 billion and $1.3 billion of VIE secured debt at December 31, 2022, and 2021, respectively.
Includes advances from the FHLB of Pittsburgh of $5.3 billion and $6.3 billion at December 31, 2022, and 2021, respectively.

December 31, ($ in millions)

Unsecured

Secured

Total

Unsecured

Secured

Total

2022

2021

Long-term debt (a)

Due within one year

Due after one year

Total long-term debt

2,023

8,014

10,037

2,395

5,330

7,725

4,418

13,344

17,762

1,028

8,382

9,410

4,841

2,778

7,619

5,869

11,160

17,029

(a)

Includes basis adjustments related to the application of hedge accounting. Refer to Note 21 for additional information.

To achieve the desired balance between fixed- and variable-rate debt, we may utilize interest rate swap agreements. These derivative

financial instruments have the effect of synthetically converting our fixed-rate debt into variable-rate obligations. As of December 31, 2022,
we had $2.5 billion of interest rate swap agreements outstanding. We did not have any derivative financial instruments that synthetically
converted fixed-rate debt into variable-rate obligations or variable-rate debt into fixed-rate obligations at December 31, 2021.

166

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

The following table presents the scheduled remaining maturity of long-term debt at December 31, 2022, assuming no early redemptions

will occur. The amounts below include adjustments to the carrying value resulting from the application of hedge accounting. The actual
payment of secured debt may vary based on the payment activity of the related pledged assets.

($ in millions)

Unsecured

Long-term debt

Original issue discount

Total unsecured

Secured

Long-term debt

Total long-term debt

2023

2024

2025

2026

2027

2028 and
thereafter

Total

2,084

1,474

2,471

1,539

3,328

10,919

(61)

2,023

(68)

1,406

(73)

2,398

2,395

2,930

1,420

4,418

4,336

3,818

(82)

(59)

894

835

(93)

1,446

(505)

2,823

(882)

10,037

7,725

1,522

2,833

17,762

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

December 31, ($ in millions)

Consumer mortgage finance receivables

Consumer automotive finance receivables

Commercial finance receivables

Investment securities (a)

Credit card receivables

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

Secured debt (e)

2022

2021

19,771

17,941

11,759

4,210

3,525

—

9,122

—

347

39,265

10,124

27,420

7,619

(a) A portion of the restricted investment securities at December 31, 2022, was restricted under repurchase agreements. Refer to the section above titled

Short-Term Borrowings for information on the repurchase agreements.

(b) All restricted assets are those of Ally Bank.
(c) Ally Bank has an advance agreement with the FHLB, and had assets pledged to secure borrowings that were restricted as collateral to the FHLB totaling

$27.0 billion and $18.0 billion at December 31, 2022, and December 31, 2021, respectively. These assets were composed primarily of consumer mortgage
finance receivables and loans. Ally Bank has access to the FRB Discount Window and had assets pledged and restricted as collateral to the FRB totaling
$2.4 billion at both December 31, 2022, and December 31, 2021. These assets were composed of consumer automotive finance receivables and loans.
Availability under these programs is only for the operations of Ally Bank and cannot be used to fund the operations or liabilities of Ally or its other
subsidiaries.

(d) Excludes restricted cash and cash reserves for securitization trusts recorded within other assets on the Consolidated Balance Sheet. Refer to Note 13 for

additional information.
Includes $2.4 billion of short-term borrowings at December 31, 2022.

(e)

16. Accrued Expenses and Other Liabilities

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

December 31, ($ in millions)

Unfunded commitments for investment in qualified affordable housing projects

Accounts payable

Employee compensation and benefits

Deferred revenue

Operating lease liabilities

Reserves for insurance losses and loss adjustment expenses

Other liabilities

Total accrued expenses and other liabilities

2022

2021

869

435

424

169

137

119

495

724

584

512

176

175

122

460

2,648

2,753

167

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

17. Equity
Common Stock

The following table presents changes in the number of shares issued and outstanding.

(shares in thousands) (a)

Common stock

Total issued at January 1,

New issuances

Employee benefits and compensation plans

Total issued at December 31,

Treasury balance at January 1,

Repurchase of common stock (b)

Total treasury stock at December 31,

Total outstanding at December 31,

2022

2021

2020

504,522

501,237

496,958

3,161

3,284

4,279

507,683

504,522

501,237

(166,581)

(126,563)

(122,626)

(41,778)

(40,018)

(3,937)

(208,358)

(166,581)

(126,563)

299,324

337,941

374,674

(a)

(b)

Figures in the table may not recalculate exactly due to rounding. Number of shares issued, in treasury, and outstanding are calculated based on unrounded
numbers.
Includes shares of common stock withheld to cover income taxes owed by participants in our share-based incentive plans. Refer to the section titled
Capital Planning and Stress Tests in Note 20 for additional information regarding our common-stock-repurchase program.

Preferred Stock
Series B Preferred Stock

In April 2021, we issued 1,350,000 shares of 4.700% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series B, with $0.01
par value and liquidation preference of $1,000 per share. Proceeds from the offering were used to redeem a portion of our 8.125% Fixed Rate/
Floating Rate Trust Preferred Securities, Series 2 of GMAC Capital Trust I. Dividends on shares of the Series B Preferred Stock are
discretionary and are not cumulative. Holders of the Series B Preferred Stock will be entitled to receive, if, when and as declared by our
Board, or a duly authorized committee of the Board, out of legally available assets, non-cumulative cash dividends quarterly in arrears on
February 15, May 15, August 15 and November 15 of each year, beginning on August 15, 2021. Dividends will accrue (i) from the date of
original issue to, but excluding, May 15, 2026, at a fixed rate of 4.700% per annum and (ii) from, and including, May 15, 2026, during each
five-year reset period, at a rate per annum equal to the five-year treasury rate as of the most recent reset dividend determination date plus
3.868% on the liquidation preference amount of $1,000 per share. So long as any share of Series B Preferred Stock remains outstanding,
unless the dividends for the most recently completed dividend period have been paid in full, or set aside for payment, on all outstanding
shares of Series B Preferred Stock, we will be prohibited, subject to certain specified exceptions, from (i) declaring or paying any dividends or
making any distributions with respect to any stock that ranks on a parity basis with, or junior in interest to, the Series B Preferred Stock or (ii)
repurchasing, redeeming, or otherwise acquiring for consideration, directly or indirectly, any stock that ranks on a parity basis with, or junior
in interest to, the Series B Preferred Stock.

The holders of the Series B Preferred Stock do not have voting rights other than those set forth in the certificate of designations for the
Series B Preferred Stock included in Ally’s Certificate of Incorporation. The Series B Preferred Stock does not have a stated maturity date,
and will be perpetual unless redeemed at Ally’s option. Ally is not required to redeem the Series B Preferred Stock and holders of the Series B
Preferred Stock have no right to require Ally to redeem their shares. Ally may, at its option, redeem the shares of Series B Preferred stock (i)
in whole or in part, on any dividend payment date on or after May 15, 2026, or (ii) in whole, but not in part, at any time within 90 days
following a regulatory capital treatment event. In the event of any liquidation, dissolution or winding up of the affairs of Ally, holders of the
Series B Preferred Stock will be entitled to receive the liquidation amount per share of Series B Preferred Stock and an amount equal to all
declared, but unpaid dividends declared prior to the date of payment out of assets available for distribution, before any distribution is made for
holders of stock that ranks junior in interest to the Series B Preferred Stock, subject to the rights of Ally’s creditors.

168

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

Series C Preferred Stock

In June 2021, we issued 1,000,000 shares of 4.700% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series C, with $0.01

par value and liquidation preference of $1,000 per share. Proceeds from the offering were used to redeem a portion of our 8.125% Fixed Rate/
Floating Rate Trust Preferred Securities, Series 2 of GMAC Capital Trust I. Dividends on shares of the Series C Preferred Stock are
discretionary and are not cumulative. Holders of the Series C Preferred Stock will be entitled to receive, if, when and as declared by our
Board, or a duly authorized committee of the Board, out of legally available assets, non-cumulative cash dividends quarterly in arrears on
February 15, May 15, August 15 and November 15 of each year, beginning on August 15, 2021. Dividends will accrue (i) from the date of
original issue to, but excluding, May 15, 2028, at a fixed rate of 4.700% per annum and (ii) from, and including, May 15, 2028, during each
seven-year reset period, at a rate per annum equal to the seven-year treasury rate as of the most recent reset dividend determination date plus
3.481% on the liquidation preference amount of $1,000 per share. So long as any share of Series C Preferred Stock remains outstanding,
unless the dividends for the most recently completed dividend period have been paid in full, or set aside for payment, on all outstanding
shares of Series C Preferred Stock, we will be prohibited, subject to certain specified exceptions, from (i) declaring or paying any dividends or
making any distributions with respect to any stock that ranks on a parity basis with, or junior in interest to, the Series C Preferred Stock or (ii)
repurchasing, redeeming, or otherwise acquiring for consideration, directly or indirectly, any stock that ranks on a parity basis with, or junior
in interest to, the Series C Preferred Stock.

The holders of the Series C Preferred Stock do not have voting rights other than those set forth in the certificate of designations for the
Series C Preferred Stock included in Ally’s Certificate of Incorporation. The Series C Preferred Stock does not have a stated maturity date,
and will be perpetual unless redeemed at Ally’s option. Ally is not required to redeem the Series C Preferred Stock and holders of the Series C
Preferred Stock have no right to require Ally to redeem their shares. Ally may, at its option, redeem the shares of Series C Preferred stock (i)
in whole or in part, on any dividend payment date on or after May 15, 2028, or (ii) in whole, but not in part, at any time within 90 days
following a regulatory capital treatment event. In the event of any liquidation, dissolution or winding up of the affairs of Ally, holders of the
Series C Preferred Stock will be entitled to receive the liquidation amount per share of Series C Preferred Stock and an amount equal to all
declared, but unpaid dividends declared prior to the date of payment out of assets available for distribution, before any distribution is made for
holders of stock that ranks junior in interest to the Series C Preferred Stock, subject to the rights of Ally’s creditors.

The following table summarizes information about our preferred stock.

Series B preferred stock (a)

Issuance date

Carrying value ($ in millions)

Par value (per share)

Liquidation preference (per share)

Number of shares authorized

Number of shares issued and outstanding

Dividend/coupon

Prior to May 15, 2026
On and after May 15, 2026

Series C preferred stock (a)

Issuance date

Carrying value ($ in millions)

Par value (per share)

Liquidation preference (per share)

Number of shares authorized

Number of shares issued and outstanding

Dividend/coupon

Prior to May 15, 2028
On and after May 15, 2028

December 31, 2022

April 22, 2021

1,335

0.01

1,000

1,350,000

4.700%

Five Year Treasury
+ 3.868%

June 2, 2021

989

0.01

1,000

1,000,000

4.700%

Seven Year Treasury
+ 3.481%

(a) We may, at our option, redeem the Series B and Series C shares on any dividend payment date on or after May 15, 2026, or May 15, 2028, respectively,

or at any time within 90 days following a regulatory event that precludes the instruments from being included in additional Tier 1 capital.

169

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

18. Accumulated Other Comprehensive Loss

The following tables present changes, net of tax, in each component of accumulated other comprehensive loss.

($ in millions)

Balance at January 1, 2020

Net change

Balance at December 31, 2020

Net change

Balance at December 31, 2021

Net change

Unrealized
gains (losses)
on investment
securities (a)

Translation
adjustments and
net investment
hedges (b)

Cash flow
hedges (b)

Defined
benefit
pension
plans

Accumulated
other
comprehensive
income (loss)

208

432

640

(735)

(95)

(4,000)

—

(1)

(47)

(17)

(106) $

(4)

(110)

(7)

(117)

117

Balance at December 31, 2022

(4,095) $

— $

(a) Represents the after-tax difference between the fair value and amortized cost of our available-for-sale securities portfolio.
(b) For additional information on derivative instruments and hedging activities, refer to Note 21.

Our qualified defined benefit pension plan was frozen in 2006. As of December 31, 2021, we disclosed our intention to settle the

qualified defined benefit pension plan in the future. During 2022, we executed our plan to settle the liability in two phases: (1) a single, lump-
sum payment window program; and (2) the purchase of an annuity contract from an independent insurance company for the remainder of the
liability. The independent insurance company has assumed the obligation to pay the outstanding accrued benefits to the participants and
beneficiaries of the plan. As a result of this action, we realized a loss of $115 million upon reclassification from accumulated other
comprehensive loss, which included $71 million of compensation and benefits expense and $44 million of income tax expense, which
included $61 million of realized stranded tax effects.

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

Year ended December 31, 2022 ($ in millions)

Before tax

Tax effect

After tax

Investment securities

Net unrealized losses arising during the period

(5,222)

1,240

(3,982)

Less: Net realized gains reclassified to income from continuing operations

23 (a)

(5) (b)

Net change

Translation adjustments

Net unrealized losses arising during the period

Net investment hedges (c)

Net unrealized gains arising during the period

Cash flow hedges (c)

Net unrealized losses arising during the period

Less: Net realized gains reclassified to income from continuing operations

Net change

Defined benefit pension plans

Net unrealized gains arising during the period

Less: Net realized losses reclassified to income from continuing operations

Net change

Other comprehensive loss

(5,245)

1,245

(10)

(2)

21 (d)

(23)

(71) (e)

(1)

—

(6) (b)

—

(44) (b)

(5,197)

1,296

(3,901)

(a)
(b)
(c)
(d)
(e)

Includes gains reclassified to other gain on investments, net in our Consolidated Statement of Income.
Includes amounts reclassified to income tax expense from continuing operations in our Consolidated Statement of Income.
For additional information on derivative instruments and hedging activities, refer to Note 21.
Includes gains reclassified to interest and fees on finance receivables and loans in our Consolidated Statement of Income.
Includes losses reclassified to compensation and benefits expense in our Consolidated Statement of Income as a result of the settlement of our qualified
defined benefit pension plan.

170

123

508

631

(789)

(158)

(3,901)

(4,059)

(4,000)

(8)

(2)

(17)

(115)

117

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

Year ended December 31, 2021 ($ in millions)

Before tax

Tax effect

After tax

Investment securities

Net unrealized losses arising during the period

(859)

203

Less: Net realized gains reclassified to income from continuing operations

Net change

Cash flow hedges (c)

102 (a)

(961)

(23) (b)

226

Less: Net realized gains reclassified to income from continuing operations

61 (d)

(14) (b)

Defined benefit pension plans

Net unrealized losses arising during the period

Less: Net realized losses reclassified to income from continuing operations

Net change

Other comprehensive loss

(11)

(1)

(10)

(1,032)

— (b)

243

(a)
(b)
(c)
(d)

(656)

(735)

(8)

(1)

(7)

(789)

Year ended December 31, 2020 ($ in millions)

Before tax

Tax effect

After tax

Investment securities

Net unrealized gains arising during the period

737

(173)

Less: Net realized gains reclassified to income from continuing operations

Net change

Translation adjustments

Net unrealized gains arising during the period

Net investment hedges (c)

Net unrealized losses arising during the period

Cash flow hedges (c)

Net unrealized gains arising during the period

Less: Net realized gains reclassified to income from continuing operations

Net change

Defined benefit pension plans

Net unrealized losses arising during the period

Other comprehensive income

171 (a)

566

(39) (b)

(134)

(4)

169

64 (d)

105

(5)

666

(1)

(40)

(15) (b)

(25)

(158)

(a)
(b)
(c)
(d)

564

132

432

(3)

129

(4)

508

171

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

19. Earnings per Common Share

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

Year ended December 31, ($ in millions, except per share data; shares in thousands) (a)

2022

2021

2020

Net income from continuing operations

Preferred stock dividends — Series B

Preferred stock dividends — Series C

Net income from continuing operations attributable to common stockholders

Loss from discontinued operations, net of tax

Net income attributable to common stockholders

Basic weighted-average common shares outstanding (b)

Diluted weighted-average common shares outstanding (b) (c)

Basic earnings per common share

Net income from continuing operations

Loss from discontinued operations, net of tax

Net income

Diluted earnings per common share

Net income from continuing operations

Loss from discontinued operations, net of tax

Net income

1,715

3,065

1,086

(63)

(47)

1,605

(1)

1,604

316,690

318,629

5.07

—

5.06

5.04

—

5.03

(36)

(21)

3,008

(5)

3,003

362,583

365,180

8.30

(0.01)

8.28

8.24

(0.01)

8.22

—

1,086

(1)

1,085

375,629

377,101

2.89

—

2.89

2.88

—

2.88

(a)
(b)
(c) During the year ended December 31, 2020, there were 0.8 million in shares underlying share-based awards excluded because their inclusion would have

been antidilutive. There were no antidilutive shares during the years ended December 31, 2022, and 2021.

20. Regulatory Capital and Other Regulatory Matters

Ally is subject to enhanced prudential standards that have been established by the FRB under the Dodd-Frank Act, as amended by the

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

Basel Capital Framework

The FRB and other U.S. banking agencies have adopted risk-based and leverage capital rules that establish minimum capital-to-asset

ratios for BHCs, like Ally, and depository institutions, like Ally Bank.

172

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

Under U.S. Basel III, Ally and Ally Bank must maintain a minimum Common Equity Tier 1 risk-based capital ratio of 4.5%, a minimum

Failure to satisfy regulatory-capital requirements could result in significant sanctions—such as bars or other limits on capital

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

Under FDICIA and the PCA framework, insured depository institutions such as Ally Bank must be well capitalized or, with a waiver

from the FDIC, adequately capitalized in order to accept brokered deposits, and even adequately capitalized institutions are subject to some
restrictions on the rates they may offer for brokered deposits. Brokered deposits totaled $12.6 billion at December 31, 2022, which
represented 8.3% of Ally Bank’s total deposits.

173

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

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

($ in millions)

Capital ratios

Common Equity Tier 1 (to risk-weighted assets)

Ally Financial Inc.

Ally Bank

Tier 1 (to risk-weighted assets)

Ally Financial Inc.

Ally Bank

Total (to risk-weighted assets)

Ally Financial Inc.

Ally Bank

Tier 1 leverage (to adjusted quarterly average

assets) (c)

Ally Financial Inc.

Ally Bank

December 31, 2022

December 31, 2021

Amount

Ratio

Amount

Ratio

Required
minimum (a)

Well-
capitalized
minimum

14,592

9.27 % $

15,143

10.34 %

17,011

11.38

17,253

12.39

4.50 %

4.50

(b)

6.50 %

16,867

10.72 % $

17,403

11.89 %

6.00 %

17,011

11.38

17,253

12.39

6.00

8.00

19,209

12.21 % $

19,724

13.47 %

8.00 %

10.00 %

18,888

12.64

18,995

13.64

8.00

10.00

16,867

8.65 % $

17,403

9.67 %

17,011

9.23

17,253

10.12

4.00 %

4.00

(b)

5.00 %

(a)

In addition to the minimum risk-based capital requirements for the Common Equity Tier 1 capital, Tier 1 capital, and total capital ratios, Ally was
required to maintain a minimum capital conservation buffer of 2.5% and 3.5% at December 31, 2022, and December 31, 2021, respectively, and Ally
Bank was required to maintain a minimum capital conservation buffer of 2.5% at both December 31, 2022, and December 31, 2021.

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

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

On January 1, 2020, we adopted CECL. Refer to Note 1 for additional information about our allowance for loan losses accounting
policy. Under a rule finalized by the FRB and other U.S. banking agencies in 2020, we delayed recognizing the estimated impact of CECL on
regulatory capital until after a two-year deferral period, which for us extended through December 31, 2021. Beginning on January 1, 2022, we
were required to phase in 25% of the previously deferred estimated capital impact of CECL, with an additional 25% to be phased in at the
beginning of each subsequent year until fully phased in by the first quarter of 2025. The estimated impact of CECL on regulatory capital that
we deferred and began phasing in on January 1, 2022, is generally calculated as the entire day-one impact at adoption plus 25% of the
subsequent change in allowance during the two-year deferral period. As of December 31, 2022, the total deferred impact on Common Equity
Tier 1 capital related to our adoption of CECL was $887 million.

Capital Planning and Stress Tests

The Tailoring Rules align capital planning, supervisory stress testing, and stress capital buffer requirements for large banking

organizations like Ally. As a Category IV firm, Ally is expected to have the ability to elect to participate in the supervisory stress test—and
receive a correspondingly updated stress capital buffer requirement—in a year in which Ally would not generally be subject to the
supervisory stress test. Refer to the section titled Basel Capital Framework above for further discussion about our stress capital buffer
requirements. During a year in which Ally does not undergo a supervisory stress test, we would receive an updated stress capital buffer
requirement only to reflect our updated planned common-stock dividends. Ally did not elect to participate in the 2021 or 2023 supervisory
stress test but was subject to the 2022 supervisory stress test.

We submitted our 2021 capital plan on April 5, 2021, which included planned capital distributions to common stockholders through

share repurchases and cash dividends and other capital actions over the nine-quarter planning horizon. On January 11, 2021, our Board

174

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

authorized a stock-repurchase program, permitting us to repurchase up to $1.6 billion of our common stock from time to time from the first
quarter of 2021 through the fourth quarter of 2021 subject to restrictions imposed by the FRB. On July 12, 2021, our Board authorized an
increase in the maximum amount of this stock-repurchase program, from $1.6 billion to $2.0 billion. During the second quarter of 2021, we
issued $1.35 billion of Series B Preferred Stock and $1.0 billion of Series C Preferred Stock, both of which qualify as additional Tier 1 capital
under U.S. Basel III. The proceeds from these issuances were used to redeem a portion of the Series 2 TRUPS then outstanding. Refer to Note
17 for additional details about these instruments and capital actions. In June 2021, we submitted an updated capital plan to the FRB reflecting
these capital actions and increases in our stock-repurchase program and common-stock dividend. This updated capital plan was used by the
FRB to recalculate Ally’s final stress capital buffer requirement, which was announced in August 2021 and remained unchanged at 3.5%. We
submitted our 2022 capital plan to the FRB on April 5, 2022. Ally received an updated preliminary stress capital buffer requirement from the
FRB in June 2022, which was determined to be 2.5%. The updated 2.5% stress capital buffer requirement was finalized in August 2022 and
became effective on October 1, 2022.

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

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

2021

First quarter

Second quarter

Third quarter

Fourth quarter

2022

First quarter

Second quarter

Third quarter

Fourth quarter

Common stock repurchased
during period (a)

Number of common shares
outstanding

Approximate
dollar value

Number of
shares

Beginning
of period

End of
period

Cash
dividends
declared per
common
share (b)

219

502

679

594

584

600

415

5,276

9,641

13,055

12,046

12,548

15,031

12,468

1,731

374,674

371,805

362,639

349,599

337,941

327,306

312,781

300,335

371,805

362,639

349,599

337,941

327,306

312,781

300,335

299,324

0.19

0.25

0.30

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

(a)
(b) On January 17, 2023, our Board declared a quarterly cash dividend of $0.30 per share on all common stock, payable on February 15, 2023, to

stockholders of record at the close of business on February 1, 2023. Refer to Note 30 for further information regarding this common-stock dividend.

175

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

Depository Institutions

Ally Bank is a member of the Federal Reserve System and is subject to regulation, supervision, and examination by the FRB, the UDFI,
the FDIC, and the CFPB. Ally Bank is an insured depository institution and, as such, is required to file periodic reports with the FDIC about
its financial condition. Total assets of Ally Bank were $181.9 billion and $172.8 billion at December 31, 2022, and 2021, respectively.
Federal and Utah law place a number of conditions, limits, and other restrictions on dividends and other capital distributions that may be paid
by Ally Bank to IB Finance and thus indirectly to Ally. Dividends or other distributions made by Ally Bank indirectly to Ally were
$3.2 billion and $3.5 billion in 2022 and 2021, respectively.

Under rules of the FDIC, Ally Bank is required to periodically submit to the FDIC a resolution plan (commonly known as a living will)
that would enable the FDIC, as receiver, to resolve Ally Bank in the event of its insolvency under the FDI Act in a manner that ensures that
depositors receive access to their insured deposits within one business day of Ally Bank’s failure (two business days if the failure occurs on a
day other than Friday), maximizes the net present value return from the sale or disposition of its assets, and minimizes the amount of any loss
realized by creditors in the resolution. In June 2021, the FDIC issued a Statement on Resolution Plans for Insured Depository Institutions,
which in part establishes a three-year filing cycle for banks with $100 billion or more in total assets like Ally Bank. Ally Bank submitted its
most recent resolution plan on December 1, 2022, which is now under review by the FDIC for a period of up to 12 months.

Insurance Companies

Some of our insurance operations—including in the United States, Canada, and Bermuda—are subject to certain minimum aggregate

capital requirements, net asset and dividend restrictions, and rules and regulations promulgated by various U.S. and foreign regulatory
agencies. Under state and foreign insurance laws, dividend distributions may be made only from statutory unassigned surplus with approvals
required from applicable regulatory authorities for dividends in excess of statutory limitations. At December 31, 2022, the maximum dividend
that could be paid by the U.S. insurance subsidiaries over the next 12 months without prior statutory approval was $101 million.

21. Derivative Instruments and Hedging Activities

We enter into derivative instruments, which may include interest rate swaps, foreign-currency forwards, equity options, and interest rate

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

Interest Rate Risk

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

Derivatives qualifying for hedge accounting treatment can include receive-fixed swaps designated as fair value hedges of specific fixed-

rate unsecured debt obligations, receive-fixed swaps designated as fair value hedges of specific fixed-rate FHLB advances, pay-fixed swaps
designated as fair value hedges of securities within our available-for-sale portfolio, and pay-fixed swaps designated as fair value hedges of
fixed-rate held-for-investment consumer automotive loan assets. Other derivatives qualifying for hedge accounting consist of interest rate
floor contracts designated as cash flow hedges of the expected future cash flows in the form of interest receipts on a portion of our dealer
floorplan commercial loans, as well as pay-fixed swaps designated as cash flow hedges of the expected future cash flows in the form of
interest payments on deposit liabilities and other forecasted transactions.

We execute economic hedges, which may consist of interest rate swaps, interest rate caps, forwards, and options to mitigate interest rate

risk.

We also enter into interest rate lock commitments and forward commitments that are executed as part of our mortgage business that meet

the accounting definition of a derivative.

Foreign Exchange Risk

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

foreign-currency exposures.

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

Investment Risk

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

176

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

Credit Risk

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

Counterparty Credit Risk

Derivative financial instruments contain an element of credit risk if counterparties are unable to meet the terms of the agreements. Credit

risk associated with derivative financial instruments is measured as the net replacement cost should the counterparties that owe us under the
contract completely fail to perform under the terms of those contracts, assuming no recoveries of underlying collateral as measured by the
market value of the derivative financial instrument.

We manage our risk to financial counterparties through internal credit analysis, limits, and monitoring. Additionally, derivatives and

repurchase agreements are entered into with approved counterparties using industry standard agreements.

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

We also execute certain derivatives, such as interest rate swaps, with clearinghouses, which requires us to post and receive collateral. For

these clearinghouse derivatives, these payments are recognized as settlements rather than collateral.

Certain derivative instruments contain provisions that require us to either post additional collateral or immediately settle any outstanding
liability balances upon the occurrence of a specified credit-risk-related event. No such specified credit-risk-related events occurred during the
years ended December 31, 2022, 2021, or 2020.

We placed cash and noncash collateral totaling $2 million and $384 million, respectively, supporting our derivative positions at
December 31, 2022, compared to $2 million and $203 million of cash and noncash collateral at December 31, 2021, in accounts maintained
by counterparties. These amounts include noncash collateral placed at clearinghouses and exclude cash and noncash collateral pledged under
repurchase agreements. The receivables for cash collateral placed are included on our Consolidated Balance Sheet in other assets. We granted
our counterparties the right to sell or pledge the noncash collateral.

We received cash collateral from counterparties totaling $23 million and $4 million in accounts maintained by counterparties at
December 31, 2022, and 2021, respectively. These amounts exclude cash and noncash collateral pledged under repurchase agreements. The
payables for cash collateral received are included on our Consolidated Balance Sheet in accrued expenses and other liabilities.

177

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

Balance Sheet Presentation

The following table summarizes the amounts of derivative instruments reported on our Consolidated Balance Sheet. The amounts are

presented on a gross basis, are segregated by derivatives that are designated and qualifying as hedging instruments or those that are not, and
are further segregated by type of contract within those two categories.

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

Notional amounts are reference amounts from which contractual obligations are derived and are not recorded on the balance sheet. In our

view, derivative notional is not an accurate measure of our derivative exposure when viewed in isolation from other factors, such as market
rate fluctuations and counterparty credit risk.

December 31, ($ in millions)

Derivatives designated as accounting hedges

Interest rate contracts

Swaps

Purchased options

Foreign exchange contracts

Forwards

Total derivatives designated as accounting hedges

Derivatives not designated as accounting hedges

Interest rate contracts

Futures and forwards

Written options

Total interest rate risk

Foreign exchange contracts

Futures and forwards

Total foreign exchange risk

Credit contracts (a)

Other credit derivatives

Total credit risk

Equity contracts

Written options

Purchased options

Total equity risk

Total derivatives not designated as accounting

hedges

Total derivatives

2022

2021

Derivative contracts in a

receivable
position

payable
position

Notional
amount

receivable
position

payable
position

Notional
amount

— $

30,619

— $

17,039

—

2,800

151

33,570

116

147

n/a

—

263

33,833

—

171

17,210

223

580

803

154

n/a

—

959

18,169

n/a = not applicable
(a) The maximum potential amount of undiscounted future payments that could be required under these credit derivatives was $82 million and $119 million

as of December 31, 2022, and December 31, 2021, respectively.

178

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

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

hedges.

Carrying amount of the
hedged items

Cumulative amount of fair value hedging adjustment
included in the carrying amount of the hedged items

Total

Discontinued (a)

December 31, ($ in millions)

2022

2021

2022

2021

2022

2021

Assets

Available-for-sale securities (b)

11,265

5,119

(180) $

(14) $

(181) $

Finance receivables and loans, net (c)

46,390

44,098

(617)

(37)

(57)

(30)

Liabilities

Long-term debt

7,697

7,213

112

110

120

110

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

amounts reported in the total hedging adjustment.

(b) These amounts include the amortized cost basis and unallocated basis adjustments of closed portfolios of available-for-sale securities used to designate

hedging relationships in which the hedged item is the stated amount of assets in the closed portfolios anticipated to be outstanding for the designated
hedge period. At December 31, 2022, and December 31, 2021, the amortized cost basis and unallocated basis adjustments of the closed portfolios used in
these hedging relationships was $10.0 billion and $3.9 billion, respectively, of which $9.7 billion and $1.6 billion, respectively, represents the amortized
cost basis and unallocated basis adjustments of closed portfolios designated in an active hedge relationship. At December 31, 2022, and December 31,
2021, the total cumulative basis adjustments associated with these hedging relationships was a $135 million liability and a $6 million liability,
respectively, of which the portion related to discontinued hedging relationships was a $138 million liability and a $20 million liability, respectively. At
December 31, 2022, and December 31, 2021, the notional amounts of the designated hedged items were $4.0 billion and $1.2 billion, respectively, with
cumulative basis adjustments of a $3 million asset and a $14 million asset, respectively, which would be allocated across the entire remaining closed pool
upon termination or maturity of the hedge relationship. Refer to Note 8 for a reconciliation of the amortized cost and fair value of available-for-sale
securities.

(c) These amounts include the carrying value of closed portfolios of loan receivables used to designate hedging relationships in which the hedged item is the
stated amount of assets in the closed portfolios anticipated to be outstanding for the designated hedge period. At December 31, 2022, and December 31,
2021, the carrying value of the closed portfolios used in these hedging relationships was $46.4 billion and $44.1 billion, respectively, of which $46.1
billion and $43.5 billion, respectively, represents the carrying value of closed portfolios designated in an active hedge relationship. At December 31,
2022, and December 31, 2021, the total cumulative basis adjustments associated with these hedging relationships was a $617 million liability and a
$37 million liability, respectively, of which the portion related to discontinued hedging relationships was a $57 million liability and a $46 million asset,
respectively. At December 31, 2022, and December 31, 2021, the notional amounts of the designated hedged items were $22.8 billion and $15.6 billion,
respectively, with cumulative basis adjustments of a $560 million liability and an $82 million liability, respectively, which would be allocated across the
entire remaining closed pool upon termination or maturity of the hedge relationship.

Statement of Income Presentation

The following table summarizes the location and amounts of gains and losses on derivative instruments not designated as accounting

hedges reported in our Consolidated Statement of Income.

Year ended December 31, ($ in millions)

Gain (loss) recognized in earnings

Interest rate contracts

Gain (loss) on mortgage and automotive loans, net

Other income, net of losses

Total interest rate contracts

Foreign exchange contracts

Other operating expenses

Total foreign exchange contracts

Credit contracts

Interest and fees on finance receivables and loans

Other income, net of losses

Total credit contracts

Total gain (loss) recognized in earnings

2022

2021

2020

—

(2)

(12) $

(4)

(1)

—

(24)

(10)

(19)

(29)

(7)

(4)

(1)

(5)

(29) $

(41)

179

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

The following table summarizes the location and amounts of gains and losses on derivative instruments designated as qualifying fair

value and cash flow hedges reported in our Consolidated Statement of Income.

Year ended December 31, ($ in millions)

2022

2021

2020

2022

2021

2020

2022

2021

2020

2022

2021

2020

Interest and fees on
finance receivables and
loans

Interest and dividends on
investment securities and
other earning assets

Interest on deposits

Interest on long-term debt

Gain (loss) on fair value hedging

relationships

Interest rate contracts

Hedged fixed-rate unsecured debt

$ — $ — $ — $ — $ — $ — $ — $ — $ — $

1 $

68 $ (135)

Derivatives designated as hedging

instruments on fixed-rate
unsecured debt

Hedged fixed-rate FHLB advances
Derivatives designated as hedging
instruments on fixed-rate FHLB
advances

Hedged available-for-sale securities

Derivatives designated as hedging

instruments on available-for-sale
securities

Hedged fixed-rate consumer automotive

loans
Derivatives designated as hedging

instruments on fixed-rate
consumer automotive loans

Total gain on fair value hedging

relationships

Gain (loss) on cash flow hedging

relationships

Interest rate contracts

Hedged deposit liabilities

Reclassified from accumulated other

comprehensive income into
income

Hedged variable-rate commercial loans
Reclassified from accumulated other

comprehensive income into
income

Reclassified from accumulated other

comprehensive income into
income as a result of a forecasted
transaction being probable not to
occur

Other hedged forecasted transactions

Reclassified from accumulated other

comprehensive income into
income

Total gain (loss) on cash flow hedging

relationships

Total amounts presented in the

—

(599)

(215)

139

599

215

(139)

—

(185)

—

(40)

185

—

(38)

—

(1)

(5)

(68)

—

135

—

(1)

(8)

—

(1)

—

21 $

62 $

$ — $ — $ — $ — $

(1) $

(8) $

(1) $ — $ —

Consolidated Statement of Income

$ 8,099 $ 6,468 $ 6,581

$ 841 $ 600 $ 736

$ 1,987 $ 1,045 $ 1,952

$ 763 $ 860 $ 1,249

During the next 12 months, we estimate $14 million of gains will be reclassified into pretax earnings from derivatives designated as

cash flow hedges.

180

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

The following table summarizes the location and amounts of gains and losses related to interest and amortization on derivative

instruments designated as qualifying fair value and cash flow hedges reported in our Consolidated Statement of Income.

Year ended December 31, ($ in millions)

2022

2021

2020

2022

2021

2020

2022

2021

2020

Interest and fees on
finance receivables and
loans

Interest and dividends on
investment securities and
other earning assets

Interest on long-term debt

Gain (loss) on fair value hedging relationships

Interest rate contracts

Amortization of deferred unsecured debt basis adjustments

$ — $ — $ — $ — $ — $ — $

5 $

4 $

Interest for qualifying accounting hedges of unsecured debt

Amortization of deferred secured debt basis adjustments (FHLB

advances)

Amortization of deferred basis adjustments of available-for-sale

securities

Interest for qualifying accounting hedges of available-for-sale

securities

Amortization of deferred loan basis adjustments

—

(46)

(49)

Interest for qualifying accounting hedges of consumer automotive

loans held for investment

129

(122)

(121)

—

(1)

—

(4)

(6)

—

(7)

(6)

—

(3)

(13)

(22)

—

Total gain (loss) on fair value hedging relationships
Gain on cash flow hedging relationships
Interest rate contracts

$ 147 $ (168) $ (170) $

16 $

(10) $

(13) $

3 $

(4) $

(10)

Interest for qualifying accounting hedges of variable-rate commercial

loans

Total gain on cash flow hedging relationships

$ — $ — $

$ — $ — $ — $ — $ — $ —

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

Year ended December 31, ($ in millions)

Interest rate contracts

2022

2021

2020

(Loss) gain recognized in other comprehensive loss

(23) $

(61) $

105

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

Year ended December 31, ($ in millions)

Foreign exchange contracts (a) (b)

2022

2021

2020

Gain (loss) recognized in other comprehensive loss

— $

(4)

(a) There were no amounts excluded from effectiveness testing for the years ended December 31, 2022, 2021, or 2020.
(b) Gains and losses reclassified from accumulated other comprehensive loss are reported as other income, net of losses, in the Consolidated Statement of

Income. There were no amounts reclassified for the years ended December 31, 2022, 2021, or 2020.

181

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

22. Income Taxes

The significant components of income tax expense from continuing operations were as follows.

Year ended December 31, ($ in millions)

Current income tax expense

U.S. federal

Foreign

State and local

Total current expense

Deferred income tax expense (benefit)

U.S. federal

Foreign

State and local

Total deferred expense

Other tax expense (a)

shown in the following table.

Year ended December 31, ($ in millions)

Statutory U.S. federal tax expense

Change in tax resulting from

State and local income taxes, net of federal income tax benefit

Tax credits, excluding expirations

Settlement of qualified defined benefit pension plan

Valuation allowance change, excluding expirations

Nondeductible expenses

Other, net

2022

2021

2020

493

(1)

553

502

168

674

151

—

(35)

116

—

2022

2021

2020

492

810

297

(73)

(15)

106

(58)

—

(78)

(20)

—

280

(39)

242

—

328

(29)

—

(3)

(10)

328

Total income tax expense from continuing operations

627

790

(a) Represents the realization of stranded tax amounts, under the portfolio method, connected to our qualified defined benefit pension plan that was settled

during the year ended December 31, 2022. These stranded tax amounts had accumulated in other comprehensive loss over time. Refer to Note 18 for
additional information.

A reconciliation of income tax expense from continuing operations with the amounts at the statutory U.S. federal income tax rate is

Total income tax expense from continuing operations

627

790

For the year ended December 31, 2022, consolidated income tax expense from continuing operations was largely driven by pretax

earnings, the settlement of our qualified defined benefit pension plan, and an increase of the valuation allowance on foreign tax credit
carryforwards, partially offset by an income tax benefit related to various tax credits. The increase in the valuation allowance was primarily
driven by a reduction in forecasted foreign-sourced income caused by revised estimates from certain previously executed and forecasted
securitization transactions. During 2022, we lowered our income tax benefit from these securitization transactions due to the
recharacterization of certain income that was previously foreign-sourced income as domestically sourced and higher interest expense
assumptions. For the year ended December 31, 2021, consolidated income tax expense from continuing operations was largely driven by
pretax earnings for the year, partially offset by an income tax benefit from the release of valuation allowance on foreign tax credit
carryforwards during the second quarter of 2021. The release of valuation allowance was primarily driven by an increase in forecasted
foreign-sourced income related to our capacity to engage in certain securitization transactions and the market demand from investors related
to these transactions, coupled with the anticipated timing of the forecasted expiration of foreign tax credit carryforwards, resulting in a
nonrecurring tax benefit. For the year ended December 31, 2020, consolidated income tax expense from continuing operations was largely
driven by pretax earnings for the year.

182

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

The significant components of deferred tax assets and liabilities are reflected in the following table.

December 31, ($ in millions)

Deferred tax assets

2022

2021

Adjustments to available-for-sale securities, equity securities, and hedging transactions (a)

1,095

Tax credit carryforwards

Adjustments to loan value

U.S. federal tax loss carryforwards (b)

State and local taxes

Other

Gross deferred tax assets

Valuation allowance (c)

Deferred tax assets, net of valuation allowance

Deferred tax liabilities

Lease transactions

Deferred acquisition costs

Other

Gross deferred tax liabilities

Net deferred tax assets (d)

960

822

428

310

470

4,085

(644)

3,441

1,831

394

145

2,370

1,071

124

1,014

920

256

233

480

3,027

(839)

2,188

1,385

403

156

1,944

244

(a) Amounts primarily include $1.0 billion and $104 million of deferred tax assets related to available-for-sale securities at December 31, 2022, and 2021,

respectively.

(b) Primarily the result of a 100% bonus depreciation election for 2022 and 2021 operating lease originations.
(c) The valuation allowance decreased $195 million to $644 million at December 31, 2022, as a result of a $249 million reduction related to the expiration of
foreign tax credit carryforwards, partially offset by an increase of $54 million predominantly related to a reduction in forecasted foreign-sourced income.
(d) Amounts include $1.1 billion and $254 million of net deferred tax assets included in other assets on our Consolidated Balance Sheet for tax jurisdictions
in a total net deferred tax asset position, and $16 million and $10 million included in accrued expenses and other liabilities on our Consolidated Balance
Sheet for tax jurisdictions in a total net deferred tax liability position at December 31, 2022, and 2021, respectively.

As of each reporting date, we consider existing evidence, both positive and negative, that could impact our view with regard to future

realization of deferred tax assets. We continue to believe it is more likely than not that the benefit for certain foreign tax credit carryforwards
and state net operating loss carryforwards will not be realized. In recognition of this risk, we continue to provide a partial valuation allowance
on the deferred tax assets relating to these carryforwards and it is reasonably possible that the valuation allowance may change in the next 12
months.

The following table summarizes net deferred tax assets including related valuation allowances at December 31, 2022.

($ in millions)

Tax credit carryforwards

Foreign tax credits

General business credits

Total tax credit carryforwards

Tax loss carryforwards

Net operating losses — federal

Net operating losses — state

Total U.S. federal and state tax loss carryforwards

Other net deferred tax assets

Deferred tax
asset

Valuation
allowance

Net deferred tax
asset

Years of
expiration

765

195

960

428

166 (a)

594

161

(517)

—

(517)

—

(127)

—

248

195

443

428

467

161

2023–2032

2023–2042

2027–Indefinite

2023–Indefinite

n/a

Net deferred tax assets (liabilities)

1,715

(644)

1,071

n/a = not applicable
(a)

State net operating loss carryforwards are included in the state and local taxes and other liabilities totals disclosed in our deferred inventory table above.

As of December 31, 2022, we have recognized negligible deferred tax liabilities for incremental U.S. federal taxes that stem from

temporary differences related to investment in foreign subsidiaries or corporate joint ventures as there is no assertion of indefinite
reinvestment outside of the United States.

183

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

The following table provides a reconciliation of the beginning and ending amount of unrecognized tax benefits.

($ in millions)

Balance at January 1,

Additions based on tax positions related to the current year

Additions for tax positions of prior years

Reductions for tax positions of prior years

Settlements

Expiration of statute of limitations

Balance at December 31,

2022

2021

2020

—

(2)

(7)

—

(7)

—

Included in the unrecognized tax benefits balances are some items, the recognition of which would not affect the effective tax rate, such

as the tax effect of certain temporary differences and the portion of gross state unrecognized tax benefits that would be offset by the tax
benefit of the associated U.S. federal deduction. The balance of unrecognized tax benefits that, if recognized, would affect our effective tax
rate is $36 million for the year ended December 31, 2022, and $42 million for both of the years ended December 31, 2021, and 2020.

We recognize accrued interest and penalties related to uncertain income tax positions in interest expense and other operating expenses,

respectively. For the year ended December 31, 2022, the cumulative accrued balance for interest and penalties was $3 million and penalties of
$2 million were accrued during the year. For both of the years ended December 31, 2021, and 2020, the cumulative accrued balance for
interest and penalties was $1 million or less and interest and penalties of less than $1 million were accrued each year.

It is reasonably possible that the unrecognized tax benefits will decrease by up to $45 million over the next 12 months if certain tax

matters ultimately settle with the applicable taxing jurisdictions.

We file tax returns in the U.S. federal jurisdiction and various states and foreign jurisdictions. Our most significant operations are in the

United States and Canada. The oldest tax years that remain subject to examination for those jurisdictions are 2019 and 2011, respectively.

23. Share-based Compensation Plans

Awards of equity-based compensation to our named executive officers and other employees are governed by the Company’s ICP, which
was approved by the Company’s stockholders and amended and restated effective as of May 4, 2021. These awards primarily take the form of
(1) stock-settled and cash-settled PSUs that vest in whole on the third anniversary of the grant date, subject to the achievement of applicable
performance goals and continued employment through that time, and (2) stock-settled RSUs that vest one-third on each of the first, second,
and third anniversaries of the grant date, in each case, subject to continued employment through that time. Other awards—such as those
granted under our #OwnIt Annual Grant Program—may take the form of RSUs that vest in whole on the third anniversary of the grant date,
subject to continued employment through that time. For PSUs and RSUs, any dividends declared over the vesting period are accumulated and
paid at or after the time of settlement. All awards under the ICP are structured to align with the Company’s performance, prudent but not
excessive risk-taking, long-term value creation for our stockholders, and other elements of our compensation philosophy. Awards also
typically include provisions that address vesting and settlement in the case of a qualifying termination or retirement. The ICP is administered
by the Compensation, Nominating, and Governance Committee of our Board.

At December 31, 2022, we had approximately 39.8 million shares available for future grants of equity-based awards under the ICP.
Equity-based awards that settle in Ally common stock are classified as equity awards under GAAP, and the cost of the awards is ratably
charged to compensation and benefits expense in our Consolidated Statement of Income over their applicable service period based on the
grant date fair value of Ally common stock. Equity-based awards that settle in cash are subject to liability accounting, with the expense
adjusted to fair value based on changes in the share price of Ally common stock up to the settlement date. We had non-vested stock-settled
and cash-settled PSUs and RSUs outstanding of approximately 5.1 million and 0.6 million, respectively, at December 31, 2022. We
recognized expense related to PSUs and RSUs of $100 million, $140 million, and $80 million for the years ended December 31, 2022, 2021,
and 2020, respectively.

The following table presents the changes in outstanding non-vested PSUs and RSUs activity for share-settled awards during 2022.

(in thousands, except per share data)

RSUs and PSUs

Outstanding non-vested at January 1, 2022

Granted

Vested

Forfeited

Outstanding non-vested at December 31, 2022

184

Number of
units

Weighted-average
grant date fair
value per share

4,568

3,130

(2,136)

(474)

5,088

36.27

45.50

37.66

42.03

40.83

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

24. Fair Value
Fair Value Measurements

For purposes of this disclosure, fair value is defined as the exchange price that would be received to sell an asset or paid to transfer a

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

U.S. GAAP specifies a three-level hierarchy that is used when measuring and disclosing fair value. The fair value hierarchy gives the

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

Level 1

Level 2

Level 3

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

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

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

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

The following are descriptions of the valuation methodologies used to measure material assets and liabilities at fair value and details of

the valuation models, key inputs to those models, and significant assumptions utilized.

•

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

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

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

We also execute OTC and centrally cleared derivative contracts, such as interest rate swaps, foreign-currency denominated

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

We also enter into interest rate lock commitments and forward commitments that are executed as part of our mortgage

business, certain of which meet the accounting definition of a derivative and therefore are recorded as derivatives on our
Consolidated Balance Sheet. Interest rate lock commitments are valued using internal pricing models with unobservable inputs, so
they are classified as Level 3.

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

185

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

example, forward interest rates) and internally developed inputs (for example, prepayment speeds, delinquency levels, and expected
credit losses). These liabilities are valued using internal loss models with unobservable inputs, and are classified as Level 3.

We are required to consider all aspects of nonperformance risk, including our own credit standing, when measuring fair value

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

186

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

Recurring Fair Value

The following tables display the assets and liabilities measured at fair value on a recurring basis including financial instruments elected

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

December 31, 2022 ($ in millions)

Assets

Investment securities

Equity securities (a) (b)

Available-for-sale securities

Debt securities

U.S. Treasury and federal agencies

U.S. States and political subdivisions

Foreign government

Agency mortgage-backed residential

Mortgage-backed residential

Agency mortgage-backed commercial

Asset-backed

Corporate debt

Total available-for-sale securities

Mortgage loans held-for-sale (c)

Finance receivables and loans, net

Consumer other (c)

Other assets

Derivative contracts in a receivable position

Interest rate

Equity contracts

Total derivative contracts in a receivable position

Total assets

Liabilities

Accrued expenses and other liabilities

Derivative contracts in a payable position

Foreign currency

Credit contracts

Equity contracts

Total derivative contracts in a payable position

Total liabilities

Recurring fair value measurements

Level 1

Level 2

Level 3

Total

642

— $

643

2,016

—

756

107

16,633

4,299

3,535

433

1,719

2,055

27,482

—

2,698

27,517

—

2,016

760

146

16,633

4,299

3,535

433

1,719

29,541

30,223

— $

—

— $

—

(a) Our direct investment in any one industry did not exceed 15%.
(b) Excludes $38 million of equity securities that are measured at fair value using the net asset value practical expedient and therefore are not classified in the

fair value hierarchy.

187

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

December 31, 2021 ($ in millions)

Assets

Investment securities

Equity securities (a)

Available-for-sale securities

Debt securities

U.S. Treasury and federal agencies

U.S. States and political subdivisions

Foreign government

Agency mortgage-backed residential

Mortgage-backed residential

Agency mortgage-backed commercial

Asset-backed

Corporate debt

Total available-for-sale securities

Mortgage loans held-for-sale (b)

Finance receivables and loans, net

Consumer other (b)

Other assets

Derivative contracts in a receivable position

Interest rate

Equity contracts

Total derivative contracts in a receivable position

Total assets

Liabilities

Accrued expenses and other liabilities

Derivative contracts in a payable position

Interest rate

Foreign currency

Credit contracts

Equity contracts

Total derivative contracts in a payable position

Total liabilities

(a) Our direct investment in any one industry did not exceed 8%.
(b) Carried at fair value due to fair value option elections.

Recurring fair value measurements

Level 1

Level 2

Level 3

Total

1,093

— $

1,102

2,155

—

855

138

19,039

4,425

4,526

534

1,887

2,174

31,404

—

3,268

31,485

— $

—

2,155

864

157

19,039

4,425

4,526

534

1,887

33,587

34,783

188

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

The following tables present the reconciliation for all Level 3 assets and liabilities measured at fair value on a recurring basis. We often

economically hedge the fair value change of our assets or liabilities with derivatives and other financial instruments. The Level 3 items
presented below may be hedged by derivatives and other financial instruments that are classified as Level 1 or Level 2. Thus, the following
tables do not fully reflect the impact of our risk-management activities.

($ in millions)

Assets

Equity securities (a)

Available-for-sale
securities

Mortgage loans
held-for-sale (b) (c)

Finance receivables
and loans, net (b) (d)

2022

2021

2022

2021

2022

2021

2022

2021

Fair value at January 1,

9 $

— $

7 $

Net realized/unrealized gains (losses)

Included in earnings

Included in OCI

Purchases

Sales

Issuances

Settlements

Transfers into Level 3

Transfers out of Level 3 (e)

Fair value at December 31,

Net unrealized gains still held at December 31,

Included in earnings

Included in OCI

—

(9)

—

(3)

—

(11)

—

2,640

— (2,693)

—

(102)

(1)

—

(15)

—

1 $

4 $

— $

3 $

— $

—

— $

—

— $

—

(17)

—

(a) Net realized/unrealized gains are reported as other gain on investments, net, in the Consolidated Statement of Income.
(b) Carried at fair value due to fair value option elections.
(c) Net realized/unrealized gains are reported as gain on mortgage and automotive loans, net, in the Consolidated Statement of Income.
(d) Net realized/unrealized (losses) gains are reported as other income, net of losses, in the Consolidated Statement of Income.
(e) During the year ended December 31, 2021, mortgage loans held for sale were transferred out of Level 3 and into Level 2 of the fair value hierarchy. This
transfer reflects that the underlying assets are valued based on observable prices in an active market for similar assets, and is deemed to have occurred at
the end of the third quarter of 2021.

189

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

($ in millions)

Liabilities

Fair value at January 1,

Net realized/unrealized (gains) losses

Included in earnings

Included in OCI

Purchases

Sales

Issuances

Settlements

Transfers into Level 3

Transfers out of Level 3 (b) (c)

Fair value at December 31,

Net unrealized (gains) losses still held at December 31,

Included in earnings

Included in OCI

Derivative liabilities, net
of derivative assets (a)

2022

2021

(5)

—

(19)

—

(11) $

—

(1)

—

(a) Net realized/unrealized (gains) losses are reported as gain on mortgage and automotive loans, net, and other income, net of losses, in the Consolidated

Statement of Income.

(b) Represents the settlement value of interest rate derivative assets that are transferred to loans held-for-sale within Level 2 of the fair value hierarchy during

the year ended December 31, 2022.

(c) During the year ended December 31, 2021, certain derivative assets were transferred out of Level 3 and into Level 2 of the fair value hierarchy. This

transfer reflects that the underlying assets are valued based on observable prices in an active market for similar assets, and is deemed to have occurred at
the end of the third quarter of 2021.

190

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

Nonrecurring Fair Value

We may be required to measure certain assets and liabilities at fair value from time to time. These periodic fair value measures typically

result from the application of lower-of-cost or fair value accounting or certain impairment measures. These items would constitute
nonrecurring fair value measures.

The following tables display assets and liabilities measured at fair value on a nonrecurring basis and still held at December 31, 2022, and

December 31, 2021, respectively. The amounts are generally as of the end of each period presented, which approximate the fair value
measurements that occurred during each period.

December 31, 2022 ($ in millions)

Level 1 Level 2 Level 3

Total

Nonrecurring fair value
measurements

Lower-of-
cost-or-fair-
value reserve,
valuation
reserve, or
cumulative
adjustments

Total gain
(loss)
included in
earnings

Assets

Loans held-for-sale, net

Commercial finance receivables and loans, net (b)

Automotive

Other

Total commercial finance receivables and loans, net

Other assets

Nonmarketable equity investments

Repossessed and foreclosed assets (c)

$ — $ — $

641

—

Total assets

$ — $ — $

700

—

(89)

—

(86)

n/m (a)

n/m

n/m = not meaningful
(a) We consider the applicable valuation allowance, allowance for loan losses, or cumulative adjustments to be the most relevant indicator of the impact on

earnings caused by the fair value measurement. Accordingly, the table above excludes total gains and losses included in earnings for these items. The
carrying values are inclusive of the respective valuation reserve, loan loss allowance, or cumulative adjustment.

(b) Represents collateral-dependent loans held for investment for which a nonrecurring measurement was made. The related allowance for loan losses

represents the cumulative fair value adjustments for those specific receivables.

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

December 31, 2021 ($ in millions)

Assets

Loans held-for-sale, net

Commercial finance receivables and loans, net (b)

Automotive

Other

Total commercial finance receivables and loans, net

Other assets

Nonmarketable equity investments

Repossessed and foreclosed assets (c)

Nonrecurring fair value measurements

Level 1

Level 2

Level 3

Total

Lower-of-cost-
or-fair-value
reserve,
valuation
reserve, or
cumulative
adjustments

Total gain
(loss)
included in
earnings

$ — $ — $

468

—

112

116

112

116

—

(65)

(5)

—

(70)

n/m (a)

n/m

Total assets

$ — $ — $

595

n/m = not meaningful
(a) We consider the applicable valuation allowance, allowance for loan losses, or cumulative adjustments to be the most relevant indicator of the impact on

(b) Represents collateral-dependent loans held for investment for which a nonrecurring measurement was made. The related allowance for loan losses

represents the cumulative fair value adjustments for those specific receivables.

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

191

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

Fair Value Option for Financial Assets

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

Fair Value of Financial Instruments

The following table presents the carrying and estimated fair value of financial instruments, except for those recorded at fair value on a

recurring basis presented in the previous section of this note titled Recurring Fair Value. When possible, we use quoted market prices to
determine fair value. Where quoted market prices are not available, the fair value is internally derived based on appropriate valuation
methodologies with respect to the amount and timing of future cash flows and estimated discount rates. However, considerable judgment is
required in interpreting current market data to develop the market assumptions and inputs necessary to estimate fair value. As such, the actual
amount received to sell an asset or the amount paid to settle a liability could differ from our estimates. Fair value information presented herein
was based on information available at December 31, 2022, and December 31, 2021.

($ in millions)

December 31, 2022

Financial assets

Held-to-maturity securities

Loans held-for-sale, net

Finance receivables and loans, net

FHLB/FRB stock (a)

Financial liabilities

Deposit liabilities

Short-term borrowings

Long-term debt

December 31, 2021

Financial assets

Held-to-maturity securities

Loans held-for-sale, net

Finance receivables and loans, net

FHLB/FRB stock (a)

Financial liabilities

Deposit liabilities

Long-term debt

Carrying
value

Level 1

Level 2

Level 3

Total

Estimated fair value

1,062

— $

884

— $

641

132,034

719

—

719

884

641

133,856

—

719

42,336

— $

41,909

2,399

17,762

—

12,989

2,417

5,263

2,417

18,252

1,170

— $

1,204

— $

469

118,994

738

—

738

469

1,204

469

126,044

—

738

40,953

17,029

— $

—

— $

41,164

12,637

6,892

41,164

19,529

(a)

Included in other assets on our Consolidated Balance Sheet.

In addition to the financial instruments presented in the above table, we have various financial instruments for which the carrying value

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

25. Offsetting Assets and Liabilities

Our derivative contracts and repurchase/reverse repurchase transactions are supported by qualifying master netting and master

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

192

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

To further mitigate the risk of counterparty default related to derivative instruments, we maintain collateral agreements with certain

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

In certain instances, as it relates to our derivative instruments, we have the option to report derivative assets and liabilities as well as
assets and liabilities associated with cash collateral received or delivered that is governed by a master netting agreement on a net basis as long
as certain qualifying criteria are met. Similarly, for our repurchase/reverse repurchase transactions, we have the option to report recognized
assets and liabilities subject to a master netting agreement on a net basis if certain qualifying criteria are met. At December 31, 2022, these
instruments are reported as gross assets and gross liabilities on the Consolidated Balance Sheet. For additional information on derivative
instruments and hedging activities, refer to Note 21.

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

December 31, ($ in millions)

2022

Assets

Derivative assets in net asset positions

Total assets

Liabilities

Derivative liabilities in net liability

positions

Derivative liabilities in net asset positions

Derivative liabilities with no offsetting

arrangements

Securities sold under agreements to

repurchase (d)

Total liabilities

2021

Assets

Derivative assets in net asset positions

Derivative assets with no offsetting

arrangements

Total assets

Liabilities

Derivative liabilities in net liability

positions

Derivative liabilities in net asset positions

Derivative liabilities with no offsetting

arrangements

Total liabilities

Gross
amounts of
recognized
assets/
liabilities

Gross
amounts
offset on the
Consolidated
Balance
Sheet

Net amounts
of assets/
liabilities
presented on
the
Consolidated
Balance Sheet

Gross amounts not offset on
the Consolidated Balance
Sheet

Financial
instruments

Collateral
(a) (b) (c)

Net
amount

499

541

— $

—

— $

—

— $

—

— $

499

541

(1) $

— $

(1)

—

(1) $

—

(1) $

(22) $

(1) $

—

(499)

(500) $

—

— $

—

— $

—

— $

(2) $

(1)

—

(1) $

(2) $

(a)

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

(b) Amounts disclosed are limited to the financial asset or liability balance and, accordingly, exclude excess collateral received or pledged and noncash

collateral received. We do not record noncash collateral received on our Consolidated Balance Sheet unless certain conditions are met.

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

collateral received under these agreements.

(d) For additional information on securities sold under agreements to repurchase, refer to Note 15.

193

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

26. Segment Information

Operating segments are defined as components of an enterprise that engage in business activity from which revenues are earned and
expenses incurred for which discrete financial information is available that is evaluated regularly by our chief operating decision maker in
deciding how to allocate resources and in assessing performance.

We report our results of operations on a business-line basis through four operating segments: Automotive Finance operations, Insurance
operations, Mortgage Finance operations, and Corporate Finance operations, with the remaining activity reported in Corporate and Other. The
operating segments are determined based on the products and services offered, and reflect the manner in which financial information is
currently evaluated by management. The following is a description of each of our reportable operating segments.

Dealer Financial Services

Dealer Financial Services comprises the following two segments.

•

Automotive Finance operations — One of the largest full-service automotive finance operations in the United States providing
automotive financing services to consumers, automotive dealers and retailers, companies, and municipalities. Our automotive
finance services include providing retail installment sales contracts, loans and operating leases, offering term loans to dealers,
financing dealer floorplans and other lines of credit to dealers, warehouse lines to automotive retailers, fleet financing, providing
financing to companies and municipalities for the purchase or lease of vehicles, and vehicle-remarketing services.

Insurance operations — A complementary automotive-focused business offering both consumer finance protection and insurance
products sold primarily through the automotive dealer channel, and commercial insurance products sold directly to dealers. As part
of our focus on offering dealers a broad range of consumer financial and insurance products, we provide VSCs, VMCs, and GAP
products. We also underwrite select commercial insurance coverages, which primarily insure dealers’ vehicle inventory.

Mortgage Finance operations

Our held-for-investment portfolio includes our direct-to-consumer Ally Home mortgage offering and bulk purchases of high-quality
jumbo and LMI mortgage loans originated by third parties. Through our direct-to-consumer channel, we offer a variety of competitively
priced jumbo and conforming fixed- and adjustable-rate mortgage products through a third party. Through the bulk loan channel, we purchase
loans from several qualified sellers on a servicing-released basis, allowing us to directly oversee servicing activities and manage refinancing
through our direct-to-consumer channel.

Corporate Finance operations

Our Corporate Finance operations provide senior secured leveraged asset-based and cash flow loans to mostly U.S.-based middle-market

companies, with a focus on businesses owned by private equity sponsors. These loans are typically used for leveraged buyouts, refinancing
and recapitalizations, mergers and acquisitions, growth, turnarounds, and debtor-in-possession financings. We also provide, through our
Lender Finance business, nonbank wholesale-funded managers with partial funding for their direct-lending activities, which is principally
leveraged loans. Additionally, we offer a commercial real estate product to serve companies in the healthcare industry.

Corporate and Other

Corporate and Other primarily consists of centralized corporate treasury activities, such as management of the cash and corporate
investment securities and loan portfolios, short- and long-term debt, retail and brokered deposit liabilities, derivative instruments, original
issue discount, and the residual impacts of our corporate FTP and treasury ALM activities. Corporate and Other also includes certain equity
investments, which primarily consist of FHLB and FRB stock—as well as other equity investments through Ally Ventures, our strategic
investment business—and the management of our legacy mortgage portfolio, which primarily consists of loans originated prior to January 1,
2009, and reclassifications and eliminations between the reportable operating segments. Financial results related to Ally Invest, our digital
brokerage and wealth management offering, Ally Lending, our point-of-sale financing business, Ally Credit Card, and CRA loans and related
investments are also included within Corporate and Other.

We utilize an FTP methodology for the majority of our business operations. The FTP methodology assigns charge rates and credit rates
to classes of assets and liabilities on a match funded basis, aligned with the expected duration and the benchmark rate curve plus an assumed
credit spread. Match funding allocates interest income and interest expense to these reportable segments so their respective results are
insulated from interest rate risk. This methodology is consistent with our ALM practices, which includes managing interest rate risk centrally
at a corporate level. The net residual impact of the FTP methodology is included within the results of Corporate and Other.

The information presented in our reportable operating segments is based in part on internal allocations and methodologies, including a

COH methodology, which involves management judgment. COH methodology is used for measuring the profit and loss of our reportable
operating segments. We have various enterprise functions, such as technology, marketing, finance, compliance, internal audit, and risk.
Operating expenses from the enterprise functions are either directly allocated to the reportable operating segment, indirectly allocated to the
reportable operating segment utilizing the COH methodology, or remain in Corporate and Other. COH methodology considers the reportable
operating segment expense base and enterprise function expenses. The reportable operating segment expense base is used to determine the
allocation mix. This mix is applied to the allocable expenses in Corporate and Other to determine the COH for the respective reportable
operating segment. Allocable enterprise function costs are primarily technology and marketing expenses. Generally, costs that remain within

194

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

Corporate and Other that are not allocated to our reportable operating segments include marketing sponsorships, treasury and other corporate
activities, and charitable contributions.

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

Automotive
Finance
operations

Insurance
operations

Mortgage
Finance
operations

Corporate
Finance
operations

Corporate
and Other

Consolidated (a)

Year ended December 31, ($ in millions)

2022

Net financing revenue and other interest

income

Other revenue

Total net revenue

Provision for credit losses

Total noninterest expense

Income (loss) from continuing operations

before income tax expense

Total assets

2021

Net financing revenue and other interest

income

Other revenue

Total net revenue

Provision for credit losses

Total noninterest expense

Income (loss) from continuing operations

before income tax expense

Total assets

2020

Net financing revenue and other interest

income (loss)

Other revenue

Total net revenue

Provision for credit losses

Total noninterest expense

5,224

221

306

5,530

1,036

2,244

2,250

111,463

1,023

1,112

—

1,150

(38) $

248

190

8,659

19,529

5,209

124

251

5,460

2,023

1,345

1,404

—

1,061

218

(1)

187

3,384

103,653

343

9,381

17,847

4,284

204

4,488

1,236

1,967

1,334

1,376

—

1,092

118

102

220

160

14,889

334

122

456

131

282

10,544

308

128

436

116

982

100

1,082

317

972

6,850

1,578

8,428

1,399

4,687

(207) $

41,631

2,342

191,826

467

221

688

151

723

6,167

2,039

8,206

241

4,110

282

7,950

(186) $

43,283

3,855

182,114

299

(40) $

344

149

107

298

258

507

4,703

1,983

6,686

1,439

3,833

6,108

(296) $

47,237

1,414

182,165

Income (loss) from continuing operations

before income tax expense

Total assets

1,285

104,794

284

9,137

(a) Net financing revenue and other interest income after the provision for credit losses totaled $5.5 billion, $5.9 billion, and $3.3 billion for the years ended

December 31, 2022, 2021, and 2020, respectively.

195

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

27. Parent Company Condensed Financial Information

The following tables present standalone condensed financial statements for Ally Financial Inc. (referred to within this section as the

Parent). These condensed statements are provided in accordance with SEC rules, which require disclosure when the restricted net assets of
consolidated subsidiaries exceed 25% of consolidated net assets, and should be read in conjunction with the Consolidated Financial
Statements and the accompanying Notes to the Consolidated Financial Statements. For purposes of these condensed financial statements, the
Parent’s wholly owned subsidiaries are presented in accordance with the equity method of accounting.

Condensed Statement of Comprehensive (Loss) Income

Year ended December 31, ($ in millions)

Net financing loss and other interest income (a)

Dividends from bank subsidiaries

Dividends from nonbank subsidiaries

Total other revenue

Total net revenue

Provision for credit losses

Total noninterest expense

Income (loss) from continuing operations before income tax benefit and undistributed

(loss) income of subsidiaries

Income tax benefit from continuing operations (b)

Net income from continuing operations

Loss from discontinued operations, net of tax

Equity in undistributed earnings of subsidiaries

Net income

Other comprehensive (loss) income, net of tax

Comprehensive (loss) income

2022

2021

2020

(1,000) $

(1,070) $

(1,049)

3,150

103

2,254

(32)

665

1,621

(253)

1,874

(1)

(159)

1,714

(3,901)

3,450

243

2,650

(106)

650

2,106

(412)

2,518

(5)

547

3,060

(789)

(2,187) $

2,271

1,150

367

534

(68)

693

(91)

(300)

209

(1)

877

1,085

508

1,593

(a) Net financing loss and other interest income is primarily driven by interest expense on long-term debt. Refer to Note 15 for further discussion.
(b) There is a significant variation in the customary relationship between pretax income (loss) and income tax benefit due to our accounting policy elections

and consolidated tax adjustments. The income tax benefit excludes tax effects on dividends from subsidiaries.

196

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

Condensed Balance Sheet

December 31, ($ in millions)

Assets

Cash and cash equivalents (a)

Equity securities

Finance receivables and loans, net of unearned income

Allowance for loan losses

Total finance receivables and loans, net

Investments in subsidiaries

Bank subsidiaries

Nonbank subsidiaries

Intercompany receivables from subsidiaries

Investment in operating leases, net

Other assets

Total assets

Liabilities and equity

Long-term debt (b)

Interest payable

Intercompany debt to subsidiaries

Intercompany payables to subsidiaries

Accrued expenses and other liabilities

Total liabilities

Total equity

Total liabilities and equity

2022

2021

3,333

3,647

—

560

583

13,197

5,191

223

1,307

23,855

10,035

545

291

10,996

12,859

23,855

663

689

16,728

5,890

216

1,157

28,354

9,410

1,040

669

11,304

17,050

28,354

(a)

(b)

Includes $3.3 billion and $3.6 billion deposited by the Parent at Ally Bank as of December 31, 2022, and 2021, respectively. These funds are available to
the Parent for liquidity purposes.
Includes $2.0 billion of the outstanding principal balance of senior notes fully and unconditionally guaranteed by subsidiaries of the Parent as of both
December 31, 2022, and 2021.

197

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

Condensed Statement of Cash Flows

Year ended December 31, ($ in millions)

Operating activities

Net cash provided by operating activities

Investing activities

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

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

Net change in loans — intercompany

Purchases of equity securities

Proceeds from sales of equity securities

Disposals of operating lease assets

Capital contributions to subsidiaries

Returns of contributed capital

Net change in nonmarketable equity investments

Other, net

Net cash provided by investing activities

Financing activities

Net change in short-term borrowings

Proceeds from issuance of long-term debt

Repayments of long-term debt

Net change in debt — intercompany

Repurchase of common stock

Preferred stock issuance

Trust preferred securities redemption

Common stock dividends paid

Preferred stock dividends paid

Net cash used in financing activities

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

Cash and cash equivalents and restricted cash at beginning of year

2022

2021

2020

1,733

3,753

848

(7)

(65)

—

(27)

378

189

(10)

(8)

—

646

—

(2,136)

1,655

(1,088)

(496)

(1,650)

—

(384)

(110)

(2,073)

(314)

3,680

765

(777)

(336)

(1,994)

2,324

(2,710)

(324)

(57)

(5,245)

(846)

4,526

1,187

601

(36)

—

(8)

(7)

(15)

1,746

(445)

2,885

(2,444)

169

(106)

—

(290)

—

(231)

2,363

2,163

4,526

Cash and cash equivalents and restricted cash at end of year

3,366

3,680

The following table provides a reconciliation of cash and cash equivalents and restricted cash from the Condensed Balance Sheet to the

Condensed Statement of Cash Flows.

Year ended December 31, ($ in millions)

Cash and cash equivalents on the Condensed Balance Sheet

Restricted cash included in other assets on the Condensed Balance Sheet (a)

Total cash and cash equivalents and restricted cash in the Condensed Statement of Cash Flows

2022

2021

3,333

3,366

3,647

3,680

(a) Restricted cash balances relate primarily to Ally securitization arrangements. Refer to Note 13 for additional details describing the nature of restricted

cash balances.

198

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

28. Guarantees and Commitments
Guarantees

Guarantees are defined as contracts or indemnification agreements that contingently require us to make payments to third parties based
on changes in the underlying agreements with the guaranteed parties. The following summarizes our outstanding guarantees, including those
of our discontinued operations, made to third parties on our Consolidated Balance Sheet, for the periods shown.

December 31, ($ in millions)

2022

2021

Maximum
liability

Carrying value
of liability

Maximum
liability

Carrying value
of liability

Standby letters of credit and other guarantees

272

234

Our Corporate Finance operations has exposure to standby letters of credit that represent irrevocable guarantees of payment of specified

financial obligations. Third-party beneficiaries primarily accept standby letters of credit as insurance in the event of nonperformance by our
borrowers. Our borrowers may request letters of credit under their revolving loan facility up to a certain sub-limit amount. We may also
require collateral to be posted by our borrowers. We received $12 million of cash collateral related to these letters of credit at December 31,
2022. Expiration dates on letters of credit range from certain ongoing commitments that will expire during the upcoming year to terms of
several years for certain letters of credit. If the beneficiary draws under a letter of credit, we will be liable to the beneficiary for payment of
the amount drawn under such letter of credit, with our recourse being a charge to the borrower’s loan facility or transfer of ownership to us of
the related collateral. As many of these commitments are subject to borrowing base agreements and other restrictive covenants or may expire
without being fully drawn, the stated amounts of the letters of credit are not necessarily indicative of future cash requirements.

In connection with our Ally Invest wealth management business, we introduce customer securities accounts to a clearing broker, which

clears and maintains custody of all customer assets and account activity. We are responsible for obtaining from each customer funds or
securities as are required to be deposited or maintained in their accounts. As a result, we are liable for any loss, liability, damage, cost, or
expense incurred or sustained by the clearing broker as a result of the failure of any customer to timely make payments or deposits of
securities to satisfy their contractual obligations. In addition, customer securities activities are transacted on either a cash or margin basis. In
margin transactions, we may extend credit to the customer, through our clearing broker, subject to various regulatory rules and margin lending
practices, collateralized by cash and securities in the customer’s account. In connection with these activities, we also execute customer
transactions involving the sale of securities not yet purchased. These transactions may expose us to credit risk in the event the customer’s
assets are not sufficient to fully cover losses, which the customer may incur. In the event the customer fails to satisfy its obligations, we will
purchase or sell financial instruments in the customer’s account in order to fulfill the customer’s obligations. The maximum potential
exposure under these arrangements is difficult to estimate; however, the potential for us to incur material losses pursuant to these
arrangements is remote.

Commitments
Financing Commitments

The contractual commitments were as follows.

December 31, ($ in millions)

Unused revolving credit line commitments and other (a)

Commitments to provide capital to investees (b)

Construction-lending commitments (c)

Home equity lines of credit (d)

Mortgage loan origination commitments (e)

2022

2021

9,156

1,112

178

145

6,337

1,069

168

708

(a) The unused portion of revolving lines of credit reset at prevailing market rates and, approximate fair value.
(b) We are committed to contribute capital to certain investees.
(c) We are committed to fund the remaining unused balance while loans are in the construction period.
(d) We are committed to fund the remaining unused balances on home equity lines of credit.
(e) Commitments with mortgage loan applicants in which the loan terms, including interest rate and price, are guaranteed for a designated period of time

subject to the completion of underwriting procedures.

Revolving credit line commitments contain an element of credit risk. We manage the credit risk for unused revolving credit line

commitments by applying the same credit policies in making commitments as we do for extending loans.

The information presented above excludes the unused portion of commitments that are unconditionally cancelable by us. We had

$23.6 billion and $26.7 billion of unfunded commitments related to unconditionally cancelable arrangements at December 31, 2022, and
2021, respectively, which primarily consisted of wholesale floorplan financing and consumer credit card lines.

Lease Commitments

For details about our future minimum payments under operating leases with noncancelable lease terms, refer to Note 10.

199

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

Contractual Commitments

We have entered into multiple agreements for sponsorship, information technology, voice and communication technology, and related

maintenance. Many of the agreements are subject to variable price provisions, fixed or minimum price provisions, and termination or renewal
provisions. The following table presents our total future payment obligations expiring after December 31, 2022.

Year ended December 31, ($ in millions)

2023

2024

2025

2026

2027

2028 and thereafter

Total future payment obligations

29. Contingencies and Other Risks
Concentration with GM and Stellantis

176

380

While we continue to diversify our automotive finance and insurance businesses and expand into other financial services, GM and
Stellantis dealers and their retail customers continue to constitute a significant portion of our customer base. GM, Stellantis, and their captive
finance companies compete vigorously with us and could take further actions that negatively impact the amount of business that we do with
GM and Stellantis dealers and their customers.

A significant adverse change in GM’s or Stellantis’ business—including, for example, in the production or sale of GM or Stellantis
vehicles, the quality or resale value of GM or Stellantis vehicles, GM’s or Stellantis’ relationships with its key suppliers, or the rate or volume
of recalls of GM or Stellantis vehicles—could negatively impact our GM and Stellantis dealer and retail customer bases and the value of
collateral securing our extensions of credit to them. Any future reductions in GM and Stellantis business that we are not able to offset could
adversely affect our business and financial results.

Legal Matters and Other Contingencies

Ally and its subsidiaries, including Ally Bank, also are or may be subject to potential liability under other contingent exposures,

including indemnification, tax, self-insurance, and other miscellaneous contingencies.

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

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

200

Notes to Consolidated Financial Statements

Ally Financial Inc. • Form 10-K

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

30. Subsequent Events
Declaration of Common Dividend

On January 17, 2023, our Board declared a quarterly cash dividend of $0.30 per share on all common stock. The dividend was paid on

February 15, 2023, to stockholders of record at the close of business on February 1, 2023.

Unsecured Debt Issuance

On February 13, 2023, we accessed the unsecured debt capital markets and issued $500 million of subordinated notes, which provided

additional liquidity at Ally Financial Inc. and qualify as Tier 2 capital under U.S. Basel III. The notes are scheduled to mature in 2033.

201

Ally Financial Inc. • Form 10-K

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures, as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended

(the Exchange Act), designed to ensure that information required to be disclosed in reports filed under the Exchange Act is recorded,
processed, summarized, and reported within the specified time periods. Our disclosure controls and procedures are also designed to ensure
that information required to be disclosed in the reports we file and submit under the Exchange Act is accumulated and communicated to
management, including our Chief Executive Officer (Principal Executive Officer) and Interim Chief Financial Officer (Principal Financial
Officer), to allow for timely decisions regarding required disclosure. There are inherent limitations to the effectiveness of any system of
internal control including the possibility of human error or the circumvention or overriding of controls through individual actions or collusion.
A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s
objectives will be met.

As of the end of the period covered by this report, our Principal Executive Officer and Principal Financial Officer evaluated, with the

participation of our management, the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the
Exchange Act) and concluded that our disclosure controls and procedures were effective.

Changes in Internal Control over Financial Reporting

In the normal course of business, we review our controls and procedures and make enhancements or modifications intended to support
the quality of our financial reporting. There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) of
the Exchange Act) that occurred during the quarter ended December 31, 2022, that have materially affected, or were reasonably likely to
materially affect, our internal control over financial reporting.

Management’s Report on Internal Control over Financial Reporting
Management’s Report on Internal Control over Financial Reporting is included in Item 8, Financial Statements and Supplementary Data, and
is incorporated herein by reference. The Report of Independent Registered Public Accounting Firm on Internal Control over Financial
Reporting also is included in Item 8, Financial Statements and Supplementary Data, and incorporated herein by reference.

Item 9B. Other Information

None.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

None.

202

Part III

Ally Financial Inc. • Form 10-K

Item 10. Directors, Executive Officers, and Corporate Governance
Executive Officers and Other Significant Employees

Bradley J. Brown — Interim Chief Financial Officer of Ally Financial Inc. since October 2022 and Corporate Treasurer since November

2013. As the Interim Chief Financial Officer, Mr. Brown, 57, is responsible for oversight of Ally’s finance, accounting, investor relations,
supply chain, and modeling and analytics functions in addition to his Corporate Treasurer role where he oversees Ally’s capital, liquidity,
asset/liability and interest rate risk management, as well as Ally Bank’s securities and derivatives portfolios. He joined Ally in June 2011, and
previously served as a structured funding executive with responsibility for the strategy, planning, and execution of securitizations and
structured funding globally. Prior to joining Ally, Mr. Brown spent 14 years at Bank of America, including three years in Corporate Treasury,
where he was responsible for structured funding and capital strategies, and 11 years in investment banking at Bank of America Merrill Lynch.
Mr. Brown joined Bank of America in 1997 from PricewaterhouseCoopers, where he served money center banking clients in New York City
and Charlotte. Mr. Brown earned Bachelor degrees in Business Administration and Accounting from Flagler College and a Master of
Business Administration degree from the John H. Sykes College of Business at University of Tampa. Mr. Brown is a certified public
accountant and he serves on the Board of Trustees for Flagler College and as a Director on the Board for Communities in Schools Charlotte-
Mecklenburg.

Jeffrey J. Brown — Named Chief Executive Officer of Ally Financial Inc. in February 2015, and also serves on its Board of Directors.

Mr. Brown, 49, is driving Ally’s evolution as a leading digital financial services company. Under his leadership, Ally is building on its
strengths in automotive financing, retail deposits, and corporate financing, as well as diversifying its offerings to include digital wealth
management and online brokerage, mortgage products, point-of-sale lending, and credit card. Mr. Brown has deep financial services
experience, previously serving in a variety of executive leadership positions at Ally and other leading financial institutions. Prior to being
named CEO, Mr. Brown was President and CEO of Ally’s Dealer Financial Services business where he oversaw the automotive finance,
insurance, and automotive servicing operations. Mr. Brown joined Ally in March 2009 as Corporate Treasurer and, in 2011, was named
Executive Vice President of Finance and Corporate Planning, leading finance, treasury, and corporate strategy initiatives. Mr. Brown received
a bachelor’s degree in economics from Clemson University and an executive master’s degree in business from Queens University in
Charlotte. He serves on the board of the Clemson University Foundation and is Chairman of the Queens University of Charlotte Board of
Trustees. Mr. Brown previously served as president of the Federal Advisory Council (FAC) for 2021. In 2018, he was appointed by the Board
of Directors of the Federal Reserve Bank of Chicago as representative for the Seventh Federal Reserve District - he completed four years of
service in 2021. Passionate about diversity and inclusion, he joined the first 150 members of the CEO Action for Diversity & Inclusion
pledge, advancing diversity and inclusion in the workplace as a competitive and societal issue. In 2022, Mr. Brown was named Banker of the
Year by American Banker. Additionally, Mr. Brown was honored as CEO of the year by the Thurgood Marshall College Fund in 2019. He
received a 2016 Father of the Year award by the Father’s Day Council and benefiting the American Diabetes Association for his commitment
to family, career and community. He is also a member of the Charlotte Executive Leadership Council, which focuses on improving economic
mobility and education issues in Mecklenburg County, N.C. Mr. Brown joined the Charlotte Sports Foundation Board for 2022.

David J. DeBrunner — Vice President, Controller, and Chief Accounting Officer of Ally since September 2007. In this role, Mr.
DeBrunner, 56, is responsible for all accounting, tax, financial reporting, financial controls, and strategic sourcing and supply chain. Prior to
joining Ally, Mr. DeBrunner spent 15 years at Fifth Third Bancorp, where he most recently held the title of senior vice president, chief
accounting officer, and controller. His responsibilities included accounting, financial controls and systems, financial reporting, and finance
shared services. Prior to serving as the chief accounting officer, he served as the chief financial officer of their commercial division and held
various finance and operational leadership positions throughout the company beginning in 1992. Prior to joining Fifth Third, he worked in
audit services for Deloitte in their Chicago and Cincinnati offices. Mr. DeBrunner earned a bachelor’s degree in accounting from the Kelley
School of Business at Indiana University. He is a member of the American Institute of Certified Public Accountants and the Ohio Society of
Public Accountants. He is a board member and past Chairman of the Board of Directors for the Detroit Institute for Children, which provides
services for Michigan’s children with special needs and their families. He also serves on the Family Leadership Council of the Indiana
University Kelley School of Business.

Diane E. Morais — President, Consumer & Commercial Banking Products at Ally Bank since March 2017. Ms. Morais, 57, is

responsible for driving the growth, profitability, and digital evolution of Ally’s consumer and commercial banking division. She has oversight
of the Deposits, Online Brokerage and Wealth Management, Mortgage, Ally Lending, Credit Card, and corporate-finance businesses. In
addition, Ms. Morais oversees the company’s customer care channels, as well as the CRA program. Ms. Morais was instrumental in the
creation and launch of the Ally brand in 2009. Under Ms. Morais’ leadership, Ally Bank has achieved double-digit retail deposit growth each
year, and now has 2.7 million customers and approximately $138 billion in retail deposits. Ally has received numerous third-party accolades,
including being named “Best Online Bank” in America by Money® Magazine, as well as “Best Internet Bank” and “Best for Millennials” by
Kiplinger’s Personal Finance. Prior to holding key leadership positions of increasing responsibility at Ally, Ms. Morais achieved a number of
significant professional accomplishments in the financial services sector. During a career spanning 12 years at Bank of America, she served in
senior roles in deposit and debit products, national customer experience, card services marketing, and consumer mortgage vendor
management. Ms. Morais also spent nine years at Citibank’s credit card division in a variety of marketing, risk, and finance roles. A native of
Pittsburgh, PA, Ms. Morais holds a bachelor’s degree from Pennsylvania State University. She is a member of the Board of Directors for
Junior Achievement of Central Carolinas, Charlotte Center City Partners, and YMCA of Greater Charlotte. Ms. Morais has been named to
American Banker Magazine’s ‘25 Most Powerful Women in Banking’ list for the eighth consecutive year. Ms. Morais was also named one of
the top 25 outstanding business women in the Charlotte Business Journal’s 2018 Women in Business Awards. She is active in the Charlotte

203

Ally Financial Inc. • Form 10-K

community, serving as an ‘Executive in Residence’ for Queens University and volunteers for Habitat for Humanity, Dress for Success, and
the Salvation Army.

Jason E. Schugel — Chief Risk Officer of Ally since April 2018. In this role, Mr. Schugel, 49, has overall responsibility for execution of
Ally’s independent risk management. He has responsibility for the enterprise risk-management framework, establishment of risk-management
processes, ensuring that Ally targets an appropriate balance between risk and return, mitigating unnecessary risk, and protecting the
company’s financial returns. Mr. Schugel was previously deputy chief risk officer for the company since 2017, leading various risk-
management activities. Prior to that role, he was general auditor for Ally, responsible for the company’s internal audit function as well as
administrative oversight for Ally’s loan review function. He joined Ally in 2009, overseeing the company’s financial planning and analysis
team, which is responsible for Ally’s financial performance reporting, enterprise-wide forecasting, and planning. He also served as lead
finance executive for Ally’s global functions. Before joining Ally, he was vice president of financial planning and analysis, and investor
relations at LendingTree, LLC. Prior to that, he worked in investment banking for Wachovia and began his career at First Plus Financial,
specializing in mergers and acquisitions. He earned a bachelor’s degree in business administration from Southern Methodist University in
Dallas and a master’s degree in business administration from the Babcock Graduate School of Management at Wake Forest University. Mr.
Schugel is the Chairman of the board of the Allegro Foundation, an organization that is a champion for children with disabilities.

Scott A. Stengel — General Counsel of Ally since May 2016. Mr. Stengel, 51, oversees all of Ally’s legal affairs and is also responsible

for Ally’s corporate-secretarial and government-relations functions. He joined Ally from Kansas City, Mo.-based UMB Financial
Corporation, where he served as executive vice president, general counsel, and corporate secretary. Before that, he was a partner at King &
Spalding LLP and Orrick, Herrington & Sutcliffe LLP in Washington, DC, with a practice focused on banking, capital markets, and
government relations. He began his career as a law clerk to the Honorable Douglas O. Tice, Jr. in Richmond, Va. He received a bachelor’s
degree in economics, with highest honors, from the University of Notre Dame and a juris doctorate, magna cum laude, from the Notre Dame
Law School. He is an active supporter of Roof Above in Charlotte, NC.

Douglas R. Timmerman — President of Dealer Financial Services of Ally since August 2021. In this role, Mr. Timmerman, 60, is
responsible for deepening Ally’s relationships with more than 23,000 dealer customers and further optimizing the full spectrum of automotive
finance and insurance services for dealer and consumer customers. Previously, he was president of Automotive Finance since 2018, and
served as president of Ally’s Insurance business since 2014. Mr. Timmerman’s thirty-plus years at Ally, spanning leadership positions across
the automotive finance and insurance business, make his understanding of this dynamic industry unparalleled. Prior to leading the insurance
business, Mr. Timmerman was Vice President of Automotive Finance for the southeast region in Atlanta. In that capacity, he was responsible
for sales, risk management, and portfolio management for more than 4,000 dealer relationships across 11 states. Since joining Ally in 1986,
he has held a variety of leadership roles in different areas including commercial lending, consumer lending, collections, sales, and marketing.
His experience also includes a broad geographical reach, holding assignments that have touched nearly every state. The Nebraska native
began his career with Ally shortly after earning his master’s degree in business administration from the University of Nebraska. He also holds
a bachelor’s degree from the University of Nebraska. Mr. Timmerman supports several organizations and research efforts associated with
finding a cure for Type 1 diabetes. He is an active volunteer and supporter of Children’s Hospital of Atlanta and the Juvenile Diabetes
Research Foundation.

Additional Information

Additional information in response to this Item 10 can be found in the Company’s 2023 Proxy Statement under “Proposal 1 — Election

of Directors,” “The Board’s Leadership Structure,” “Code of Conduct and Ethics,” and “Transactions with Related Persons.” That
information is incorporated into this item by reference.

204

Ally Financial Inc. • Form 10-K

Item 11. Executive Compensation

Items in response to this Item 11 can be found in the Company’s 2023 Proxy Statement under “Executive Compensation.” That

information is incorporated into this item by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters

The following table provides information about the securities authorized for issuance under our equity compensation plans as of

December 31, 2022.

(1)
Number of securities to be
issued upon exercise of
outstanding options, warrants
and rights (a)
(in thousands)

(2)
Weighted-average exercise
price of outstanding options,
warrants and rights

(3)
Number of securities remaining
available for further issuance
under equity compensation
plans (excluding securities
reflected in column (1)) (b)
(in thousands)

7,633

—

32,146

Plan category

Equity compensation plans

approved by security holders

Total

(a)

(b)

Includes restricted stock units outstanding under the Incentive Compensation Plan and deferred stock units outstanding under the Non-Employee
Directors Equity Compensation Plan.
Includes 26,386,286 securities available for issuance under the plans identified in (a) above and 5,759,703 securities available for issuance under Ally’s
Employee Stock Purchase Plan.

Additional items required by this Item 12 can be found in the Company’s 2023 Proxy Statement under “Security Ownership of Certain

Beneficial Owners,” and “Executive Compensation.” That information is incorporated into this item by reference.

Item 13. Certain Relationships and Related Transactions, and Director Independence

Items in response to this Item 13 can be found in the Company’s 2023 Proxy Statement under “Director Qualifications and

Responsibilities,” “Code of Conduct and Ethics,” and “Transactions with Related Persons.” That information is incorporated into this item by
reference.

Item 14. Principal Accountant Fees and Services

Information about aggregate fees billed to us by our principal accountant, Deloitte & Touche LLP (PCAOB ID No. 34) for services
performed can be found in the Company’s 2023 Proxy Statement under “Audit Committee Report.” That information is incorporated into this
item by reference.

205

Part IV

Ally Financial Inc. • Form 10-K

Item 15. Exhibits and Financial Statement Schedules

The exhibits listed on the accompanying Index of Exhibits are filed or incorporated by reference as a part of this report. This Index is

incorporated herein by reference. Certain financial statements schedules have been omitted because prescribed information has been
incorporated into the Consolidated Financial Statements or notes thereto.

Exhibit
3.1

Description
Form of Amended and Restated Certificate of Incorporation

3.2

4.1

4.1.1

4.1.2

4.1.3

4.1.4

4.1.5

4.2

4.2.1

4.2.2

4.2.3

4.2.4

4.3

4.3.1

4.3.2

4.3.3

4.3.4

Ally Financial Inc. Amended and Restated Bylaws

Form of Indenture dated as of July 1, 1982, between the
Company and Bank of New York (Successor Trustee to
Morgan Guaranty Trust Company of New York), relating to
Debt Securities

Form of First Supplemental Indenture dated as of
April 1, 1986, supplementing the Indenture designated as
Exhibit 4.1

Form of Second Supplemental Indenture dated as of
June 15, 1987, supplementing the Indenture designated as
Exhibit 4.1

Form of Third Supplemental Indenture dated as of
September 30, 1996, supplementing the Indenture
designated as Exhibit 4.1

Form of Fourth Supplemental Indenture dated as of
January 1, 1998, supplementing the Indenture designated as
Exhibit 4.1

Form of Fifth Supplemental Indenture dated as of
September 30, 1998, supplementing the Indenture
designated as Exhibit 4.1

Form of Indenture dated as of September 24, 1996, between
the Company and The Chase Manhattan Bank, Trustee,
relating to Term Notes

Form of First Supplemental Indenture dated as of
January 1, 1998, supplementing the Indenture designated as
Exhibit 4.2

Method of Filing
Filed as Exhibit 3.1 to the Company’s Current Report on
Form 8-K dated as of March 14, 2014, (File No. 1-3754),
incorporated herein by reference.

Filed as Exhibit 3.1 to the Company’s Current Report on
Form 8-K dated as of October 11, 2019, (File No. 1-3754),
incorporated herein by reference.

Filed as Exhibit 4(a) to the Company’s Registration
Statement No. 2-75115, incorporated herein by reference.

Filed as Exhibit 4(g) to the Company’s Registration
Statement No. 33-4653, incorporated herein by reference.

Filed as Exhibit 4(h) to the Company’s Registration
Statement No. 33-15236, incorporated herein by reference.

Filed as Exhibit 4(i) to the Company’s Registration
Statement No. 333-33183, incorporated herein by reference.

Filed as Exhibit 4(j) to the Company’s Registration
Statement No. 333-48705, incorporated herein by reference.

Filed as Exhibit 4(k) to the Company’s Registration
Statement No. 333-75463, incorporated herein by reference.

Filed as Exhibit 4 to the Company’s Registration Statement
No. 333-12023, incorporated herein by reference.

Filed as Exhibit 4(a)(1) to the Company’s Registration
Statement No. 333-48207, incorporated herein by reference.

Form of Second Supplemental Indenture dated as of
June 20, 2006, supplementing the Indenture designated as
Exhibit 4.2

Filed as Exhibit 4(a)(2) to the Company’s Registration
Statement No. 333-136021, incorporated herein by
reference.

Form of Third Supplemental Indenture dated as of August
24, 2012, supplementing the Indenture designated as
Exhibit 4.2

Filed as Exhibit 4.1.3 to the Company’s Registration
Statement No. 333-183535, incorporated herein by
reference.

Form of Fourth Supplemental Indenture dated as of August
24, 2012, supplementing the Indenture designated as
Exhibit 4.2

Filed as Exhibit 4.1.4 to the Company’s Registration
Statement No. 333-183535, incorporated herein by
reference.

Form of Indenture dated as of October 15, 1985, between
the Company and U.S. Bank Trust (Successor Trustee to
Comerica Bank), relating to Demand Notes

Form of First Supplemental Indenture dated as of
April 1, 1986, supplementing the Indenture designated as
Exhibit 4.3

Form of Second Supplemental Indenture dated as of
June 24, 1986, supplementing the Indenture designated as
Exhibit 4.3

Form of Third Supplemental Indenture dated as of
February 15, 1987, supplementing the Indenture designated
as Exhibit 4.3

Form of Fourth Supplemental Indenture dated as of
December 1, 1988, supplementing the Indenture designated
as Exhibit 4.3

Filed as Exhibit 4 to the Company’s Registration Statement
No. 2-99057, incorporated herein by reference.

Filed as Exhibit 4(a) to the Company’s Registration
Statement No. 33-4661, incorporated herein by reference.

Filed as Exhibit 4(b) to the Company’s Registration
Statement No. 33-6717, incorporated herein by reference.

Filed as Exhibit 4(c) to the Company’s Registration
Statement No. 33-12059, incorporated herein by reference.

Filed as Exhibit 4(d) to the Company’s Registration
Statement No. 33-26057, incorporated herein by reference.

206

4.3.6

4.3.7

4.3.8

4.4

4.5

4.6

4.7

4.8

4.9

4.10

4.11

4.12

4.13

4.14

4.15

Ally Financial Inc. • Form 10-K

Exhibit
4.3.5

Description
Form of Fifth Supplemental Indenture dated as of
October 2, 1989, supplementing the Indenture designated as
Exhibit 4.3

Method of Filing
Filed as Exhibit 4(e) to the Company’s Registration
Statement No. 33-31596, incorporated herein by reference.

Form of Sixth Supplemental Indenture dated as of
January 1, 1998, supplementing the Indenture designated as
Exhibit 4.3

Form of Seventh Supplemental Indenture dated as of
June 9, 1998, supplementing the Indenture designated as
Exhibit 4.3

Filed as Exhibit 4(f) to the Company’s Registration
Statement No. 333-56431, incorporated herein by reference.

Filed as Exhibit 4(g) to the Company’s Registration
Statement No. 333-56431, incorporated herein by reference.

Form of Eighth Supplemental Indenture dated as of January
4, 2012, supplementing the Indenture designated as
Exhibit 4.3

Filed as Exhibit 4.1.8 to the Company’s Registration
Statement No. 333-178919, incorporated herein by
reference.

Indenture, dated as of December 31, 2008, between the
Company and The Bank of New York Mellon, Trustee

Filed as Exhibit 4.2 to the Company’s Current Report on
Form 8-K dated as of January 2, 2009, (File No. 1-3754),
incorporated herein by reference.

Amended and Restated Indenture, dated March 1, 2011,
between the Company and The Bank of New York Mellon,
Trustee

Filed as Exhibit 4.2 to the Company’s Current Report on
Form 8-K dated as of March 4, 2011, (File No. 1-3754),
incorporated herein by reference.

Form of Guarantee Agreement related to Ally Financial Inc.
Senior Unsecured Guaranteed Notes

Form of Fixed Rate Senior Unsecured Note

Form of Floating Rate Senior Unsecured Note

Filed as Exhibit 4.10 to the Company’s Registration
Statement No. 333-193070, incorporated herein by
reference.

Filed as Exhibit 4.8 to the Company’s Registration
Statement No. 333-193070, incorporated herein by
reference.

Filed as Exhibit 4.9 to the Company’s Registration
Statement No. 333-193070, incorporated herein by
reference.

Form of Subordinated Indenture to be entered into between
the Company and The Bank of New York Mellon, as
Trustee

Filed as Exhibit 4.11 to the Company’s Registration
Statement No. 333-193070, incorporated herein by
reference.

Form of Subordinated Note

Included in Exhibit 4.9.

Second Amended and Restated Declaration of Trust by and
between the trustees of each series of GMAC Capital Trust
I, Ally Financial Inc., as Sponsor, and by the holders, from
time to time, of undivided beneficial interests in the relevant
series of GMAC Capital Trust I, dated as of March 1, 2011

Series 2 Trust Preferred Securities Guarantee Agreement
between Ally Financial Inc. and The Bank of New York
Mellon, dated as of March 1, 2011

Indenture, dated as of November 20, 2015, between the
Company and The Bank of New York Mellon, Trustee

Form of Subordinated Note

Description of Securities

4.16

Form of Fixed Rate Senior Unsecured Note

4.17

Form of Fixed Rate Senior Unsecured Note

4.18

Form of Fixed Rate Senior Unsecured Note

Filed as Exhibit 4.1 to the Company’s Current Report on
Form 8-K dated as of March 4, 2011, (File No. 1-3754),
incorporated herein by reference.

Filed as Exhibit 4.3 to the Company’s Current Report on
Form 8-K dated as of March 4, 2011, (File No. 1-3754),
incorporated herein by reference.

Filed as Exhibit 4.1 to the Company’s Current Report on
Form 8-K dated as of November 20, 2015,
(File No. 1-3754), incorporated herein by reference.

Included in Exhibit 4.13.

Filed as Exhibit 4.15 to the Company’s Annual Report for
the period ended December 31, 2019, on Form 10-K (File
No. 1-3754), incorporated herein by reference.
Filed as Exhibit 4.2 to the Company’s Current Report on
Form 8-K dated as of April 8, 2020, (File No. 1-3754),
incorporated herein by reference.

Filed as Exhibit 4.2 to the Company’s Current Report on
Form 8-K dated as of June 3, 2020 (File No. 1-3754),
incorporated herein by reference.

Filed as Exhibit 4.2 to the Company’s Current Report on
Form 8-K dated as of September 18, 2020, (File No.
1-3754), incorporated herein by reference.

10
10.1

Ally Financial Inc. Incentive Compensation Plan
Ally Financial Inc. Annual Incentive Plan

Filed herewith.
Filed herewith.

207

Ally Financial Inc. • Form 10-K

Exhibit
10.2

Description
Ally Financial Inc. Employee Stock Purchase Plan

10.3

10.4

10.5

10.6

10.7

10.8

10.9

Ally Financial Inc. Non-Employee Directors Equity
Compensation Plan
Ally Financial Inc. Severance Plan, Plan Document and
Summary Plan Description

Ally Financial Inc. Non-Employee Directors Deferred
Compensation Plan

Form of Award Agreement related to the issuance of
Performance Stock Units (Section 16 Executive Officers)

Form of Award Agreement related to the issuance of
Performance Stock Units

Form of Award Agreement related to the issuance of
Restricted Stock Units

Form of Award Agreement related to the issuance of Key
Contributor Stock Units

10.10

Transition Services and Release Agreement

22.1

23.1

31.1

31.2

101

Ally Financial Inc. Subsidiaries as of December 31, 2022

Subsidiary Guarantors

Consent of Independent Registered Public Accounting Firm

Certification of Principal Executive Officer pursuant to
Rule 13a-14(a)/15d-14(a)

Certification of Principal Financial Officer pursuant to
Rule 13a-14(a)/15d-14(a)

Certification of Principal Executive Officer and Principal
Financial Officer pursuant to 18 U.S.C. Section 1350

The following information from our 2022 Annual Report on
Form 10-K, formatted in Inline XBRL: (i) Consolidated
Statement of Income, (ii) Consolidated Statement of
Comprehensive Income, (iii) Consolidated Balance Sheet,
(iv) Consolidated Statement of Changes in Equity, (v)
Consolidated Statement of Cash Flows, and (vi) the Notes to
the Consolidated Financial Statements.

Method of Filing
Filed as Exhibit 10.4 to the Company’s Annual Report for
the period ended December 31, 2021, on Form 10-K (File
No. 1-3754), incorporated herein by reference.
Filed herewith.

Filed as Exhibit 10.6 to the Company’s Annual Report for
the period ended December 31, 2018, on Form 10-K (File
No. 1-3754), incorporated herein by reference.

Filed as Exhibit 10.6 to the Company’s Annual Report for
the period ended December 31, 2021, (File No. 1-3754),
incorporated herein by reference.

Filed as Exhibit 10.8 to the Company’s Annual Report for
the period ended December 31, 2020, (File No. 1-3754),
incorporated herein by reference.
Filed as Exhibit 10.9 to the Company’s Annual Report for
the period ended December 31, 2020, (File No. 1-3754),
incorporated herein by reference.
Filed as Exhibit 10.10 to the Company’s Annual Report for
the period ended December 31, 2020, (File No. 1-3754),
incorporated herein by reference.
Filed as Exhibit 10.11 to the Company’s Annual Report for
the period ended December 31, 2020, (File No. 1-3754),
incorporated herein by reference.
Filed as Exhibit 10.1 to the Company’s Current Report on
Form 8-K dated as of October 15, 2022 (File No. 1-3754),
incorporated herein by reference.
Filed herewith.

Filed as Exhibit 22 to the Company’s Quarterly Report for
the period ended March 31, 2020, on Form 10-Q (File No.
1-3754), incorporated herein by reference.
Filed herewith.

Filed herewith.

104

The cover page of our 2022 Annual Report on Form 10-K,
(formatted in Inline XBRL and contained in Exhibit 101)

Filed herewith.

Item 16. Form 10-K Summary

None.

208

Ally Financial Inc. • Form 10-K

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Annual

Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized, this 24th day of February, 2023.

Ally Financial Inc.
(Registrant)

/S/ JEFFREY J. BROWN

Jeffrey J. Brown

Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has been signed below by the

following persons on behalf of the Registrant and in the capacities indicated, this 24th day of February, 2023.

/S/ JEFFREY J. BROWN

Jeffrey J. Brown

Chief Executive Officer

/S/ DAVID J. DEBRUNNER

David J. DeBrunner

Vice President, Controller, and Chief Accounting Officer

/S/ BRADLEY J. BROWN

Bradley J. Brown

Corporate Treasurer and Interim Chief Financial Officer

209

/S/ FRANKLIN W. HOBBS

Franklin W. Hobbs
Ally Chairman

/S/ KENNETH J. BACON

Kenneth J. Bacon
Director

/S/ MAUREEN A. BREAKIRON-EVANS

Maureen A. Breakiron-Evans
Director

/S/ JEFFREY J. BROWN

Jeffrey J. Brown
Chief Executive Officer and Director

/S/ WILLIAM H. CARY

William H. Cary
Director

/S/ MAYREE C. CLARK

Mayree C. Clark
Director

/S/ KIM S. FENNEBRESQUE

Kim S. Fennebresque
Director

/S/ MELISSA GOLDMAN

Melissa Goldman
Director

/S/ MARJORIE MAGNER

Marjorie Magner
Director

/S/ DAVID REILLY

David Reilly
Director

/S/ BRIAN H. SHARPLES

Brian H. Sharples
Director

/S/ MICHAEL F. STEIB

Michael F. Steib
Director

Ally Financial Inc. • Form 10-K

210

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Company
information.

Headquarters

Ally Financial Inc.

Ally Detroit Center

500 Woodward Ave.

Detroit, MI 48226

www.ally.com

Corporate Center

Ally Charlotte Center

601 South Tryon St.

Charlotte, NC 28202

Investor Relations

1-866-710-4623

investor.relations@ally.com

ally.com/about/investor

Sean Leary

Executive Director

Investor Relations

704-444-4830

sean.leary@ally.com

First Class/Registered/
Certiﬁed Mail

Computershare Investor Services

P.O. Box 43078

Providence, RI 02940-3078

Courier Services

Computershare Investor Services

150 Royall Street - Street 101

Canton, MA 02021

Media Relations

media.ally.com

Twitter: @ally