Ally 2020 Annual Report

2020 annual report

ALLY FINANCIAL | 2020 ANNUAL REPORT

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OUR BUSINESS

A LEADER IN DIGITAL FINANCIAL SERVICES

Ally Financial Inc. (NYSE: ALLY) is a leading digital financial-services company with $182.2 billion in assets as of December 31, 2020. As a customer-centric 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 consumer, commercial, and corporate customers. We are one of the largest full-service automotive-finance operations in the country and offer a wide range of financial services and insurance products to automotive dealerships and consumers. Our award-winning digital direct bank (Ally Bank, Member FDIC and Equal Housing Lender) offers mortgage lending, point-of-sale personal lending, and a variety of deposit and other banking products, including savings, money-market, and checking accounts, certificates of deposit (CDs), and individual retirement accounts (IRAs). Additionally, we offer securities-brokerage and investmentadvisory services through Ally Invest. Our corporate finance business offers capital for equity sponsors and middle-market companies.

OUR VISION

BE A RELENTLESS ALLY FOR YOUR FINANCIAL WELL-BEING

Our commitment to our customers has been at the core of who we are for over 100 years. We're committed to constantly creating and reinventing with the purpose of making a real difference for our customers. That's why we offer award-winning online banking, rewarding credit and lending experiences, leading auto financing products and services and a growing wealth management and brokerage platform.

From Kiplinger's Personal Finance. ? 2020 The Kiplinger Washington Editors. All rights reserved. Used under license. From MONEY. ? 2020 Ad Practitioners, LLC. All rights reserved. Used under license.

table of contents

LETTER TO SHAREHOLDERS 5

STRONG AND GROWING BUSINESSES

7

LEADING WITH OUR CULTURE 9

STANDING FOR WHAT'S RIGHT11

STRATEGIC PRIORITIES12

THE ROAD AHEAD13

2020 FINANCIAL RESULTS

14

AUTOMOTIVE FINANCE16

INSURANCE18

CORPORATE FINANCE18

MORTGAGE FINANCE19

OUR VALUES IN ACTION

20

EMPLOYEES20

CUSTOMERS 21

COMMUNITIES22

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$6.7 billion

total net revenue

$182 billion total assets

8.5+ million total customers

$137 billion total deposits

$34 million contribution to Ally Charitable

Foundation

18,700+ dealer relationships

$35.1 billion consumer auto originations

dear shareholders,

2020 was a challenging and defining year for Ally and our country. The world navigated a public health crisis that altered global commerce, led to the loss of millions of jobs and exacerbated societal inequities. We faced the difficult realities of racial and social injustice that have persisted for far too long and require permanent change. However, we also saw the resolve of both individuals and businesses to speak out forcefully and unequivocally against these inequalities.

At Ally, I have been encouraged by the compassion and perseverance shown across our company. Our more than 9,500 employees rallied around each other and consistently demonstrated a collective desire to promote positive change. Within our company, we're having difficult conversations, enhancing our diversity and inclusion work, and allocating resources to our communities to address systemic racism and inequality.

Our performance in 2020 reflected the resilience of our business model when faced with difficult operating conditions. While the global pandemic, and the related increase in reserve for credit losses, temporarily decelerated our progress, it did not alter our strategic objectives nor our positive financial trajectory.

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As we head into a new year, signs of hope and unity have emerged. The dissemination of a COVID-19 vaccine is well underway, and the extensive fiscal and monetary response from policy makers acknowledges the gravity of the circumstances. The regulatory community enacted comprehensive actions that reinforced the safety and soundness of the financial system. The private sector has become increasingly engaged and focused on supporting the broader economic recovery while also prioritizing social change. These actions are encouraging ? and must continue as we move forward.

At Ally, our culture is based on our promise to `Do It Right.' These values, built on inclusivity and fairness, permeate everything we do and serve as a source of strength.

Last year provided an opportunity for us to live our values and support our stakeholders during a uniquely difficult time. As global health conditions began to worsen in March 2020, we took meaningful and decisive action to support our people, customers and communities.

In addition to rapidly mobilizing 99% of our company with work-from-home capabilities, we provided a financial assistance payment to all of our employees earning less than $100,000 and materially expanded health and family care benefits. For our customers, we proudly led the industry with comprehensive COVID-relief across products, while leveraging our industry-leading digital capabilities to meet the evolving needs of our customers. When our auto dealer customers needed us the most, we responded quickly and with purpose, successfully securing over $700 million of critical Paycheck Protection Program (PPP) funding for 99% of applications received over a matter of days.

Within our communities, we expanded our philanthropic initiatives, and established the Ally Charitable Foundation later in the year, an exciting milestone for Ally that will strengthen our ability to make lasting and meaningful positive change well into the future.

Throughout the turbulence of 2020, I was consistently impressed by our associates' dedication to serving our customers. As the largest digital-only bank in the country, our brand represents fairness, transparency and an obsession over the customer. This is how we differentiated ourselves against brick and mortar banks when we were established. It's so intrinsic to our strategy, it's in our name. This unwavering commitment to our customers drove our results last year, despite the challenges of the pandemic, and will propel our performance moving forward.

KEVIN LAMBERT Auto Data Analytics | Detroit, MI

"When COVID hit, my family faced serious hurdles that could have put our life into a tailspin. A furloughed spouse, young children to homeschool, two older parents who faced major medical issues ? it was one thing after another. What kept us sane and financially secure was Ally ? the benefits, the extra financial support, the caring that every one of my team members provided made a lasting impact on not just me, but every member of my family. Knowing I had that kind of support meant I could focus on my job and help our company support the millions of customers facing circumstances just like my own."

#ShareTheGood

In this year's letter, I will discuss how our businesses and people navigated a year defined by the unexpected. Trying times tend to bring clarity to what's most important, and throughout 2020, I challenged our associates to `focus on the good.' Our culture, among many things at Ally, best exemplified `the good.' With so many disheartening headlines, I was proud of how we supported one another and embraced new, and sometimes uncomfortable, ideas to become an even better, more inclusive company. This approach fueled the ongoing momentum we're experiencing across our businesses, enhanced by our sustainable competitive advantages, digital DNA and the consistent execution of our long-term strategic priorities.

STRONG AND GROWING BUSINESSES

The instability and uncertainty of 2020 represented an opportunity to demonstrate the power of our leading digital bank model and leading auto finance and insurance franchises. Our success was driven by an operating model that delivers results in a variety of economic and business cycles. Ally remains positioned for resiliency in the years ahead as we continue to invest in our platforms, diversify and scale our offerings, and find new and innovative solutions for our customers.

Within our auto dealer-facing businesses, we remained focused on offering compelling consumer and commercial products. We have broadened our reach, diversified our origination mix and expanded risk-adjusted returns. Our relationships with thousands of GM and Chrysler dealers, many of which are multi-generational, provided an ideal foundation from which to diversify our retail and commercial auto portfolio, as well as our vehicle floorplan insurance business. In 2020, we maintained a record 18,700+ dealer relationships across all fifty states, leading to 12.1 million decisioned applications and $35.1 billion of consumer origination volume.

We continued to augment dealer relationships with strategic partnerships, such as Carvana, resulting in increased originations and strong returns. We introduced new digitally based tools, streamlining user experiences and enhancing data-driven capabilities across our servicing, underwriting and SmartAuction platforms. We also leveraged our deep expertise in auto finance, including a significant accumulation of data, to improve efficiencies and reduce response times. At the end of the year, automated decisioning reached an all-time high, with more than two thirds of loan application approvals coming through that channel.

Ally remains positioned for resiliency in the years ahead as we continue to invest in our platforms, diversify and scale our offerings and find new and innovative solutions for our customers.

Our award-winning digital bank had its strongest deposit performance since inception, with $20.6 billion of retail deposit growth pushing total deposits to $137 billion. Existing customers drove over 50% of retail deposit balance growth, while customer retention remained at an industry-leading 96%. In recognition of our relentless focus on customers, we earned a number of accolades in 2020, including `Best Online Bank' by MONEY magazine for the 8th time in the past 10 years.

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TOTAL DEPOSITS

($ IN BILLIONS)

While the growth of our deposit franchise is a key contributor to our strong and improving financial results, our customer-centric approach helped build momentum across all our digital-offerings. Our expanded and improved range of products at Ally Invest and Ally Home resonated with existing deposit customers, with more than half of our brokerage account openings and mortgage volumes sourced from existing customers in the fourth quarter. This demonstrates the power of our franchise and represents an attractive organic growth opportunity as we move forward. Throughout the year, we introduced innovative digital tools, which aimed to help customers set and achieve their financial goals. In fact, over one million savings `buckets' were established at Ally Bank, acting as digital envelopes that helped our customers organize and analyze their money. We're passionate about being an ally for our customers' financial well-being and we were excited to see our customers looking to do more with us. Multi-product customer relationships increased 51% in 2020 and we're well positioned to deepen and expand relationships as we enhance our capabilities and leverage our leading brand. Our Ally Home direct-to-consumer mortgage platform had a record year with $4.7 billion of originations, evidence that our digital end-to-end offering continues to resonate with customers. As we enter the second year of our partnership with , we've improved average cycle times while reducing cost per funded loan. With $1.4 billion of originations in the fourth quarter, we have tremendous momentum as we look to further scale the business and improve efficiencies.

CHRISTIAN HALL Ally Invest | Charlotte, NC "In 2020, the world grappled with social injustices impacting us all. At Ally, I'm proud to work on the team that created safe spaces for the hard conversations that needed to be had. More than 4,000 employees participated in `Let's Talk About It' sessions to bridge understanding and work toward healing, and 1,000 teammates participated in our Juneteenth learning event. Those forums, combined with a very public commitment by our Board and senior-most leaders to stand up for our Black and Brown colleagues through words and deeds, made it clear our commitments are and will continue to be backed by actions that make an impact."

#ShareTheGood

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