Management’s Discussion and Analysis Ally Financial Inc. • Form 10-Q

Item 2.  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
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 recent 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
•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;
•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
•uncertainty about the future of LIBOR and any negative impacts that could
•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, corporate
finance, brokerage, and wealth management;
•our ability to develop capital plans that will receive non-objection from the
FRB and our ability to implement them, including any payment of dividends or
share repurchases;
•our ability to effectively manage capital or liquidity consistent with evolving
business or operational needs, risk-management standards, and regulatory or
supervisory requirements;
•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 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
•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
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Management's Discussion and Analysis
Ally Financial Inc. • Form 10-Q
•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
•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
•judicial, regulatory, or administrative investigations, proceedings, disputes,
or rulings that create uncertainty for, or are adverse to, us or the financial
services industry;
•the potential outcomes of legal and regulatory proceedings and governmental and
regulatory examinations, investigations, and other inquiries to which we are or
may be subject at any given time, and our ability to remediate regulatory
deficiencies on a timely basis and to otherwise absorb and address the
heightened scrutiny and expectations generally from supervisory and other
governmental authorities, the severity of remedies sought, such as enforcement
proceeds, and the potential collateral consequences arising from those outcomes;
•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 maintain secure and functional financial, accounting,
technology, data processing, or other operating systems or infrastructure,
including our capacity to withstand cyberattacks;
•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;
•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 and pandemics (such as adverse effects of the COVID-19 pandemic on us and
our customers, counterparties, employees, and third-party service providers);
•policies and other actions of governments to mitigate climate and related
environmental risks, as well as associated changes in the behavior and
preferences of businesses and consumers; or
•other assumptions, risks, or uncertainties described in the Risk Factors (Part
II, Item 1A herein), Management's Discussion and Analysis of Financial Condition
and Results of Operations (Part I, Item 2 herein), or the Notes to the Condensed
Consolidated Financial Statements (Part I, Item 1 herein) in this Quarterly
Report on Form 10-Q 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 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.
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Management's Discussion and Analysis
Ally Financial Inc. • Form 10-Q
Selected Financial Data
The selected historical financial information set forth below should be read in
conjunction with the MD&A, and our Condensed Consolidated Financial Statements
and the notes thereto. The historical financial information presented may not be
indicative of our future performance.
The following table presents selected Condensed Consolidated Statement of
Comprehensive Income and earnings per common share data.
                                                             Three months 

closed in September Nine months ended in September

                                                                         30,                                  30,
($ in millions, except per share data; shares in
thousands)                                                      2021              2020               2021              2020
Total financing revenue and other interest income           $   2,177          $  2,145          $   6,396          $  6,674
Total interest expense                                            444               770              1,499             2,599
Net depreciation expense on operating lease assets                139               175                384               675
Net financing revenue and other interest income                 1,594             1,200              4,513             3,400
Total other revenue                                               391               484              1,494             1,305
Total net revenue                                               1,985             1,684              6,007             4,705
Provision for credit losses                                        76               147                 31             1,337
Total noninterest expense                                       1,002               905              3,020             2,810

Profit from continuing operations before tax expense

                                                           907               632              2,956               558
Income tax expense from continuing operations                     195               156                549               159
Net income from continuing operations                             712               476              2,407               399

Profit (loss) from discontinued operations, net of tax

                                                                 -                 -                  1                (1)
Net income                                                  $     712       

$ 476 $ 2,408 $ 398
Net income from continuing operations attributable to ordinary shareholders

                                         $     683          $    476          $   2,378          $    399
Net income attributable to common stockholders              $     683          $    476          $   2,379          $    398
Basic earnings per common share (a):
Net income from continuing operations                       $    1.90          $   1.27          $    6.46          $   1.06
Net income                                                       1.90              1.27               6.46              1.06
Weighted-average common shares outstanding                    359,179           375,658            368,215           375,478

Diluted earnings per common share (a):
Net income from continuing operations                       $    1.89          $   1.26          $    6.41          $   1.06
Net income                                                       1.89              1.26               6.42              1.06
Weighted-average common shares outstanding                    361,855           377,011            370,745           376,659
Common share information:
Cash dividends declared per common share                    $    0.25          $   0.19          $    0.63          $   0.57
Period-end common shares outstanding                          349,599           373,857            349,599           373,857

(a)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.
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Management's Discussion and Analysis
Ally Financial Inc. • Form 10-Q
The following tables present selected Condensed Consolidated Balance Sheet and
ratio data.
September 30, ($ in millions)                   2021           2020
Selected period-end balance sheet data:
Total assets                                 $ 179,184      $ 185,270
Total deposit liabilities                    $ 139,444      $ 134,938
Long-term debt                               $  14,946      $  25,704
Preferred stock                              $   2,324      $       -
Total equity                                 $  17,289      $  14,126

                                                                Three months ended September 30,           Nine months ended September 30,
                                                                   2021                  2020                 2021                  2020
Financial ratios:
Return on average assets (a)                                          1.58  %              1.02  %               1.78  %              0.29  %
Return on average equity (a)                                         16.00  %             13.41  %              19.58  %              3.77  %
Equity to assets (a)                                                  9.85  %              7.62  %               9.10  %              7.75  %
Common dividend payout ratio (b)                                     13.16  %             14.96  %               9.75  %             53.77  %
Net interest spread (a) (c)                                           3.56  %              2.49  %               3.34  %              2.39  %
Net yield on interest-earning assets (a) (d)                          3.66  %              2.65  %               3.46  %              2.57  %

(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.
(c)Net interest spread represents the difference between the rate on total
interest-earning assets and the rate on total interest-bearing liabilities.
(d)Net yield on interest-earning assets represents annualized net financing
revenue and other interest income as a percentage of total interest-earning
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Management's Discussion and Analysis
Ally Financial Inc. • Form 10-Q
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 Note 17 to the Condensed Consolidated Financial Statements.
The following table presents selected regulatory capital data under U.S Basel
                                                                                September 30,
($ in millions)                                                                   2021                       2020
Common Equity Tier 1 capital ratio                                                  11.20  %                 10.36  %
Tier 1 capital ratio                                                                12.81  %                 12.11  %
Total capital ratio                                                                 14.56  %                 14.05  %
Tier 1 leverage ratio (to adjusted quarterly average assets) (a)                     9.99  %                  9.00  %
Total equity                                                                $      17,289                $  14,126
CECL phase-in adjustment (b)                                                        1,155                    1,212
Preferred stock (c)                                                                (2,324)                       -
Goodwill and certain other intangibles                                               (370)                    (387)
Deferred tax assets arising from net operating loss and tax credit
carryforwards (d)                                                                     (48)                     (17)
Other adjustments (e)                                                                 (32)                    (676)
Common Equity Tier 1 capital                                                       15,670                   14,258
Preferred stock (c)                                                                 2,324                        -
Trust preferred securities (c)                                                          -                    2,498

Other adjustments                                                                     (64)                     (88)
Tier 1 capital                                                                     17,930                   16,668

Eligible subordinated debt and other instruments classified as Tier 2

                                                                                     830                    1,035
Qualifying allowance for loan losses and other adjustments                          1,615                    1,634
Total capital                                                               $      20,375                $  19,337
Risk-weighted assets (f)                                                    $     139,957                $ 137,594

(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 have elected to delay recognizing the estimated impact of CECL on
regulatory capital until after a two-year deferral period, which for us extends
through December 31, 2021. Beginning on January 1, 2022, we will be 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. Refer to Note 17 to the Condensed
Consolidated Financial Statements for further information.
(c)In connection with our issuances of non-cumulative perpetual preferred stock
in the second and third quarter 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 12 to the Condensed Consolidated Financial Statements for additional
details about our redemptions of Series 2 TRUPS, and Note 14 to the Condensed
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
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Management's Discussion and Analysis
Ally Financial Inc. • Form 10-Q
Ally Financial Inc. (together with its consolidated subsidiaries unless the
context otherwise requires, Ally, the Company, we, us, or our) is a digital
financial-services company committed to its promise to "Do It Right" for its
consumer, commercial, and corporate customers. Ally is composed of an
industry-leading independent automotive finance and insurance operation, an
award-winning digital direct bank (Ally Bank, Member FDIC and Equal Housing
Lender, which offers mortgage lending, point-of-sale personal lending, and a
variety of deposit and other banking products), a corporate finance business for
equity sponsors and middle-market companies, and securities brokerage and
investment advisory services. A relentless ally for all things money, Ally helps
people save well and earn well, so they can spend for what matters. We are a
Delaware corporation and are registered as a BHC under the BHC Act, and an FHC
under the GLB Act.
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 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.
                                                         Three months ended September 30,                             Nine months ended September 30,
($ in millions)                           2021              2020           Favorable/(unfavorable) % change             2021              2020                 Favorable/(unfavorable) % change
Total net revenue
Dealer Financial Services
Automotive Finance                    $   1,390          $ 1,163                          20                        $   4,052          $ 3,279                                24
Insurance                                   297              346                         (14)                           1,050              947                                11
Mortgage Finance                             55               66                         (17)                             163              163                                 -
Corporate Finance                            93               84                          11                              300              248                                21
Corporate and Other                         150               25                          n/m                             442               68                                n/m
Total                                 $   1,985          $ 1,684                          18                        $   6,007          $ 4,705                                28
Income from continuing
operations before income tax
Dealer Financial Services
Automotive Finance                    $     825          $   566                          46                        $   2,545          $   722                                n/m
Insurance                                    24               78                         (69)                             252              101                                150
Mortgage Finance                              6               26                         (77)                              29               46                               (37)
Corporate Finance                            61               60                           2                              209               24                                n/m
Corporate and Other                          (9)             (98)                         91                              (79)            (335)                               76
Total                                 $     907          $   632                          44                        $   2,956          $   558                                n/m

n/m = not meaningful
•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. Dealer Financial Services comprises our Automotive Finance and
Insurance segments.
Our Automotive Finance operations include purchasing retail installment sales
contracts and operating leases from dealers, 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. Our dealer-centric business model,
value-added products and services, full-spectrum financing, and business
expertise proven over many credit cycles make us a premier automotive finance
company. Our success as an automotive finance provider is driven by the
consistent and broad range of products and services we offer to dealers. The
automotive marketplace is dynamic and evolving, including substantial
investments in electrification by automobile manufacturers and suppliers. Ally
remains focused on meeting the needs of both our dealer and consumer customers
and continuing to strengthen and expand upon our approximate 20,400 dealer
relationships. We continue to identify and cultivate relationships with
automotive retailers including those with leading eCommerce platforms. We also
operate Clearlane, our online direct-lending platform, which provides a digital
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. 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. Ally
provides automobile financing for hybrid and battery-electric vehicles
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Management's Discussion and Analysis
Ally Financial Inc. • Form 10-Q
today, and is well positioned to remain a leader in automotive financing as we
believe the vast majority of these vehicles will be sold through dealerships
with whom we have an established relationship.
The Growth channel was established to focus on developing dealer relationships
beyond those relationships that primarily were developed through our previous
role as a captive finance company for GM and Stellantis. The Growth channel was
expanded to include direct-to-consumer financing through Clearlane and other
channels and our arrangements with online automotive retailers. We have
established relationships with thousands of Growth channel dealers through our
customer-centric approach and specialized incentive programs designed to drive
loyalty amongst dealers to our products and services. The success of the Growth
channel has been a key enabler in evolving our business model from a focused
captive finance company to a leading market competitor. In this channel, we
currently have over 14,000 dealer relationships, of which approximately 77% are
franchised dealers (including brands such as Ford, Honda, Hyundai, Kia, Nissan,
Toyota, and others), or used vehicle only retailers with a national presence.
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 approximately 434,000 consumers and are the
VSC and protection plan provider for GM Canada and the VSC provider for Subaru
As a leading provider with a focus on offering dealers a broad range of consumer
F&I products, we offer VSCs, VMCs, and GAP products. We also underwrite selected
commercial insurance coverages, which primarily insure dealers' wholesale
vehicle inventory. 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.
•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.
Through our direct-to-consumer channel, which was introduced late in 2016, we
offer a variety of competitively priced jumbo and conforming fixed- and
adjustable-rate mortgage products through a third-party fulfillment provider.
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. 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. During
the nine months ended September 30, 2021, we originated $7.6 billion of mortgage
loans through our direct-to-consumer channel.
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 nine months ended September 30, 2021, we purchased $3.1 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.
During the third quarter of 2021, we announced the launch of RefiNow. RefiNow is
available to certain borrowers with a Fannie Mae-backed mortgage and provides a
home financing option to serve borrowers who may not qualify for other options.
•Our Corporate Finance operations primarily provide senior secured leveraged
cash flow and asset-based loans to mostly U.S.-based middle-market companies
owned by private equity sponsors, and loans to asset managers that primarily
provide leveraged loans. 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. While there continues to be a
significant level of liquidity and competition in the middle-market lending
space, we have continued to prudently grow our lending portfolio with a
disciplined focus on credit quality, including a greater emphasis on asset-based
loans. 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. Our
focus is on businesses owned by private equity sponsors with loans typically
used for leveraged buyouts, mergers and acquisitions, debt refinancing,
expansions, restructurings, and working capital. Additionally, our Lender
Finance business provides asset managers with partial funding for their
direct-lending activities. The portfolio is well diversified across multiple
industries including financials, services, manufacturing, distribution and other
specialty sectors. These specialty sectors include our Healthcare and Technology
Finance verticals. The Healthcare vertical provides financing across the
healthcare spectrum including services, pharmaceuticals,
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Management's Discussion and Analysis
Ally Financial Inc. • Form 10-Q
manufacturing, and medical devices and supplies. Our Technology Finance vertical
provides financing solutions to venture capital-backed, technology-based
companies. We also provide a commercial real estate product focused on lending
to skilled nursing facilities, senior housing, medical office buildings, and
•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 strategic investments, 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.
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.
Corporate and Other also includes the results of Ally Lending. Ally Lending
currently serves medical, retail, 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 segment, which was
launched in the second quarter of 2020, now represents nearly 45% of new
originations, and is expected to grow. We believe the market outlook for
point-of-sale lending provides attractive opportunities for future
diversification, including in the automotive servicing and vehicle upfit space.
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.

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