GJM 2012.06.30 10Q
Table of Contents

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
þ
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2012, or
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                          to                         
Commission file number: 1-3754
ALLY FINANCIAL INC.
(Exact name of registrant as specified in its charter)
Delaware
 
38-0572512
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)
200 Renaissance Center
P.O. Box 200, Detroit, Michigan
48265-2000
(Address of principal executive offices)
(Zip Code)
(866) 710-4623
(Registrant’s telephone number, including area code)
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, and (2) has been subject to such filing for the past 90 days.
Yes þ                    No ¨
Indicate by checkmark whether the registrant has submitted electronically and posted on its corporate Web site, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for a shorter period that the registrant was required to submit and post such files).
Yes þ                    No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a nonaccelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer o
  
Accelerated filer o
  
Non-accelerated filer þ
 
Smaller reporting company o
 
  
(Do not check if a smaller reporting company)
 
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ¨                    No þ
At August 3, 2012, the number of shares outstanding of the Registrant’s common stock was 1,330,970 shares.

Table of Contents
INDEX
Ally Financial Inc. Ÿ Form 10-Q

 
 
Page
 
Item 1.
 
 
 
 
 
Item 2.
Item 3.
Item 4.
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.

Table of ContentsPART I — FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Statement of Comprehensive Income (unaudited)
Ally Financial Inc. • Form 10-Q

4
 
 
Three months ended June 30,
 
Six months ended June 30,
($ in millions)
 
2012
 
2011
 
2012
 
2011
Financing revenue and other interest income
 
 
 
 
 
 
 
 
Interest and fees on finance receivables and loans
 
$
1,691

 
$
1,675

 
$
3,369

 
$
3,296

Interest on loans held-for-sale
 
36

 
86

 
109

 
170

Interest on trading assets
 
2

 
3

 
13

 
6

Interest and dividends on available-for-sale investment securities
 
86

 
106

 
170

 
209

Interest-bearing cash
 
18

 
15

 
32

 
27

Operating leases
 
579

 
598

 
1,119

 
1,253

Total financing revenue and other interest income
 
2,412

 
2,483

 
4,812

 
4,961

Interest expense
 
 
 
 
 
 
 
 
Interest on deposits
 
184

 
171

 
370

 
337

Interest on short-term borrowings
 
60

 
87

 
135

 
179

Interest on long-term debt
 
1,068

 
1,331

 
2,245

 
2,737

Total interest expense
 
1,312

 
1,589

 
2,750

 
3,253

Depreciation expense on operating lease assets
 
318

 
176

 
611

 
446

Net financing revenue
 
782

 
718

 
1,451

 
1,262

Other revenue
 
 
 
 
 
 
 
 
Servicing fees
 
216

 
341

 
526

 
698

Servicing asset valuation and hedge activities, net
 
(73
)
 
(105
)
 
(64
)
 
(192
)
Total servicing income, net
 
143

 
236

 
462

 
506

Insurance premiums and service revenue earned
 
359

 
399

 
734

 
798

Gain on mortgage and automotive loans, net
 
134

 
116

 
260

 
206

Loss on extinguishment of debt
 
—

 
(25
)
 
—

 
(64
)
Other gain on investments, net
 
66

 
92

 
156

 
176

Other income, net of losses
 
226

 
239

 
503

 
443

Total other revenue
 
928

 
1,057

 
2,115

 
2,065

Total net revenue
 
1,710

 
1,775

 
3,566

 
3,327

Provision for loan losses
 
29

 
50

 
169

 
163

Noninterest expense
 
 
 
 
 
 
 
 
Compensation and benefits expense
 
389

 
415

 
864

 
839

Insurance losses and loss adjustment expenses
 
208

 
227

 
367

 
397

Other operating expenses
 
1,933

 
892

 
2,649

 
1,638

Total noninterest expense
 
2,530

 
1,534

 
3,880

 
2,874

(Loss) income from continuing operations before income tax expense
 
(849
)
 
191

 
(483
)
 
290

Income tax expense from continuing operations
 
15

 
83

 
79

 
13

Net (loss) income from continuing operations
 
(864
)
 
108

 
(562
)
 
277

(Loss) income from discontinued operations, net of tax
 
(34
)
 
5

 
(26
)
 
(18
)
Net (loss) income
 
(898
)
 
113

 
(588
)
 
259

Other comprehensive (loss) income, net of tax
 
(206
)
 
89

 
(19
)
 
64

Comprehensive (loss) income
 
$
(1,104
)
 
$
202

 
$
(607
)
 
$
323

Statement continues on the next page.
The Notes to the Condensed Consolidated Financial Statements (unaudited) are an integral part of these statements.

3
Table of Contents
Condensed Consolidated Statement of Comprehensive Income (unaudited)
Ally Financial Inc. • Form 10-Q

 
 
Three months ended June 30,
 
Six months ended June 30,
($ in millions except per share data)
 
2012
 
2011
 
2012
 
2011
Net loss attributable to common shareholders
 
 
 
 
 
 
 
 
Net (loss) income from continuing operations
 
$
(864
)
 
$
108

 
$
(562
)
 
$
277

Preferred stock dividends — U.S. Department of Treasury
 
(134
)
 
(134
)
 
(267
)
 
(267
)
Preferred stock dividends
 
(67
)
 
(57
)
 
(134
)
 
(127
)
Impact of preferred stock amendment (a)
 
—

 
—

 
—

 
32

Net loss from continuing operations attributable to common shareholders (b)
 
(1,065
)
 
(83
)
 
(963
)
 
(85
)
(Loss) income from discontinued operations, net of tax
 
(34
)
 
5

 
(26
)
 
(18
)
Net loss attributable to common shareholders
 
$
(1,099
)
 
$
(78
)
 
$
(989
)
 
$
(103
)
Basic weighted-average common shares outstanding
 
1,330,970

 
1,330,970

 
1,330,970

 
1,330,970

Diluted weighted-average common shares outstanding (b)
 
1,330,970

 
1,330,970

 
1,330,970

 
1,330,970

Basic earnings per common share
 
 
 
 
 
 
 
 
Net loss from continuing operations
 
$
(800
)
 
$
(62
)
 
$
(723
)
 
$
(64
)
(Loss) income from discontinued operations, net of tax
 
(25
)
 
4

 
(20
)
 
(14
)
Net loss
 
$
(825
)
 
$
(58
)
 
$
(743
)
 
$
(78
)
Diluted earnings per common share (b)
 
 
 
 
 
 
 
 
Net loss from continuing operations
 
$
(800
)
 
$
(62
)
 
$
(723
)
 
$
(64
)
(Loss) income from discontinued operations, net of tax
 
(25
)
 
4

 
(20
)
 
(14
)
Net loss
 
$
(825
)
 
$
(58
)
 
$
(743
)
 
$
(78
)
(a)
Refer to Note 20 to the Consolidated Financial Statements in our 2011 Annual Report on Form 10-K for further detail.
(b)
Due to the antidilutive effect of converting the Fixed Rate Cumulative Mandatorily Convertible Preferred Stock into common shares and the net loss attributable to common shareholders for the three months and six months ended June 30, 2012 and 2011, respectively, loss attributable to common shareholders and basic weighted-average common shares outstanding were used to calculate basic and diluted earnings per share.
The Notes to the Condensed Consolidated Financial Statements (unaudited) are an integral part of these statements.

4
Table of Contents
Condensed Consolidated Balance Sheet (unaudited)
Ally Financial Inc. • Form 10-Q


($ in millions)
 
June 30, 2012
 
December 31, 2011
Assets
 
 
 
 
Cash and cash equivalents
 
 
 
 
Noninterest-bearing
 
$
2,106

 
$
2,475

Interest-bearing
 
14,020

 
10,560

Total cash and cash equivalents
 
16,126

 
13,035

Trading assets
 
—

 
622

Investment securities
 
13,366

 
15,135

Loans held-for-sale, net ($1,377 and $3,919 fair value-elected)
 
2,000

 
8,557

Finance receivables and loans, net
 
 
 
 
Finance receivables and loans, net ($— and $835 fair value-elected)
 
119,913

 
114,755

Allowance for loan losses
 
(1,427
)
 
(1,503
)
Total finance receivables and loans, net
 
118,486

 
113,252

Investment in operating leases, net
 
11,197

 
9,275

Mortgage servicing rights
 
1,105

 
2,519

Premiums receivable and other insurance assets
 
1,887

 
1,853

Other assets
 
14,010

 
18,741

Assets of operations held-for-sale
 
383

 
1,070

Total assets
 
$
178,560

 
$
184,059

Liabilities
 
 
 
 
Deposit liabilities
 
 
 
 
Noninterest-bearing
 
$
2,411

 
$
2,029

Interest-bearing
 
45,581

 
43,021

Total deposit liabilities
 
47,992

 
45,050

Short-term borrowings
 
6,010

 
7,680

Long-term debt ($— and $830 fair value-elected)
 
91,096

 
92,794

Interest payable
 
1,552

 
1,587

Unearned insurance premiums and service revenue
 
2,631

 
2,576

Reserves for insurance losses and loss adjustment expenses
 
477

 
580

Accrued expenses and other liabilities ($— and $29 fair value-elected)
 
10,198

 
14,084

Liabilities of operations held-for-sale
 
241

 
337

Total liabilities
 
160,197

 
164,688

Equity
 
 
 
 
Common stock and paid-in capital
 
19,668

 
19,668

Mandatorily convertible preferred stock held by U.S. Department of Treasury
 
5,685

 
5,685

Preferred stock
 
1,255

 
1,255

Accumulated deficit
 
(8,313
)
 
(7,324
)
Accumulated other comprehensive income
 
68

 
87

Total equity
 
18,363

 
19,371

Total liabilities and equity
 
$
178,560

 
$
184,059

The Notes to the Condensed Consolidated Financial Statements (unaudited) are an integral part of these statements.

5
Table of Contents
Condensed Consolidated Balance Sheet (unaudited)
Ally Financial Inc. • Form 10-Q


The assets of consolidated variable interest entities, presented based upon the legal transfer of the underlying assets in order to reflect legal ownership, 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.
($ in millions)
 
June 30, 2012
 
December 31, 2011
Assets
 
 
 
 
Loans held-for-sale, net
 
$
—

 
$
9

Finance receivables and loans, net
 
 
 
 
Finance receivables and loans, net ($— and $835 fair value-elected)
 
39,330

 
40,935

Allowance for loan losses
 
(175
)
 
(210
)
Total finance receivables and loans, net
 
39,155

 
40,725

Investment in operating leases, net
 
4,686

 
4,389

Other assets
 
2,038

 
3,029

Total assets
 
$
45,879

 
$
48,152

 
 
 
 
 
Liabilities
 
 
 
 
Short-term borrowings
 
$
1,511

 
$
795

Long-term debt ($— and $830 fair value-elected)
 
32,016

 
33,143

Interest payable
 
6

 
14

Accrued expenses and other liabilities
 
90

 
405

Total liabilities
 
$
33,623

 
$
34,357

The Notes to the Condensed Consolidated Financial Statements (unaudited) are an integral part of these statements.

6
Table of Contents
Condensed Consolidated Statement of Changes in Equity (unaudited)
Ally Financial Inc. • Form 10-Q

($ in millions)
 
Common stock and
paid-in capital
 
Mandatorily convertible preferred
stock held by U.S.
Department of Treasury
 
Preferred
stock
 
Accumulated deficit
 
Accumulated other
comprehensive income
 
Total
equity
Balance at January 1, 2011
 
$
19,668

 
$
5,685

 
$
1,287

 
$
(6,410
)
 
$
259

 
$
20,489

Net income
 
 
 
 
 
 
 
259

 
 
 
259

Preferred stock dividends — U.S. Department of Treasury
 
 
 
 
 
 
 
(267
)
 
 
 
(267
)
Preferred stock dividends
 
 
 
 
 
 
 
(127
)
 
 
 
(127
)
Series A preferred stock amendment (a)
 
 
 
 
 
(32
)
 
32

 
 
 
—

Other comprehensive income, net of tax
 
 
 
 
 
 
 
 
 
64

 
64

Other (b)
 
 
 
 
 
 
 
5

 
 
 
5

Balance at June 30, 2011
 
$
19,668

 
$
5,685

 
$
1,255

 
$
(6,508
)
 
$
323

 
$
20,423

Balance at January 1, 2012
 
$
19,668

 
$
5,685

 
$
1,255

 
$
(7,324
)
 
$
87

 
$
19,371

Net loss
 
 
 
 
 
 
 
(588
)
 
 
 
(588
)
Preferred stock dividends — U.S. Department of Treasury
 
 
 
 
 
 
 
(267
)
 
 
 
(267
)
Preferred stock dividends
 
 
 
 
 
 
 
(134
)
 
 
 
(134
)
Other comprehensive loss, net of tax
 
 
 
 
 
 
 
 
 
(19
)
 
(19
)
Balance at June 30, 2012
 
$
19,668

 
$
5,685

 
$
1,255

 
$
(8,313
)
 
$
68

 
$
18,363

(a)
Refer to Note 20 to the Consolidated Financial Statements in our 2011 Annual Report on Form 10-K for further detail.
(b)
Represents a reduction of the estimated payment accrued for tax distributions as a result of the completion of the GMAC LLC U.S. Return of Partnership Income for the tax period January 1, 2009 through June 30, 2009.
The Notes to the Condensed Consolidated Financial Statements (unaudited) are an integral part of these statements.

7
Table of Contents
Condensed Consolidated Statement of Cash Flows (unaudited)
Ally Financial Inc. • Form 10-Q

Six months ended June 30, ($ in millions)
 
2012
 
2011
Operating activities
 
 
 
 
Net (loss) income
 
$
(588
)
 
$
259

Reconciliation of net (loss) income to net cash provided by operating activities
 
 
 
 
Depreciation and amortization
 
1,151

 
1,418

Other impairment
 
15

 
6

Changes in fair value of mortgage servicing rights
 
401

 
115

Provision for loan losses
 
169

 
163

Gain on sale of loans, net
 
(252
)
 
(215
)
Net gain on investment securities
 
(162
)
 
(183
)
Loss on extinguishment of debt
 
—

 
64

Originations and purchases of loans held-for-sale
 
(15,801
)
 
(25,874
)
Proceeds from sales and repayments of loans held-for-sale
 
17,499

 
29,166

Impairment and accruals related to Residential Capital, LLC deconsolidation
 
1,192

 
—

Net change in
 
 
 
 
Trading securities
 
595

 
(154
)
Deferred income taxes
 
(85
)
 
(66
)
Interest payable
 
130

 
(111
)
Other assets
 
1,028

 
(1,288
)
Other liabilities
 
(528
)
 
1,815

Other, net
 
176

 
(752
)
Net cash provided by operating activities
 
4,940

 
4,363

Investing activities
 
 
 
 
Purchases of available-for-sale securities
 
(6,758
)
 
(10,982
)
Proceeds from sales of available-for-sale securities
 
5,636

 
8,423

Proceeds from maturities of available-for-sale securities
 
2,792

 
2,386

Net increase in finance receivables and loans
 
(7,475
)
 
(8,669
)
Proceeds from sales of finance receivables and loans
 
1,978

 
1,346

Purchases of operating lease assets
 
(3,350
)
 
(3,817
)
Disposals of operating lease assets
 
892

 
3,621

Proceeds from sale of business units, net (a)
 
516

 
47

Net cash effect from deconsolidation of Residential Capital, LLC
 
(539
)
 
—

Other, net 
 
165

 
871

Net cash used in investing activities
 
(6,143
)
 
(6,774
)
Statement continues on the next page.
The Notes to the Condensed Consolidated Financial Statements (unaudited) are an integral part of these statements.

8
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Condensed Consolidated Statement of Cash Flows (unaudited)
Ally Financial Inc. • Form 10-Q

Six months ended June 30, ($ in millions)
 
2012
 
2011
Financing activities
 
 
 
 
Net change in short-term borrowings
 
(1,485
)
 
(227
)
Net increase in bank deposits
 
2,895

 
2,570

Proceeds from issuance of long-term debt
 
19,123

 
26,225

Repayments of long-term debt
 
(15,916
)
 
(22,951
)
Dividends paid
 
(401
)
 
(419
)
Other, net
 
78

 
551

Net cash provided by financing activities
 
4,294

 
5,749

Effect of exchange-rate changes on cash and cash equivalents
 
(39
)
 
(78
)
Net increase in cash and cash equivalents
 
3,052

 
3,260

Adjustment for change in cash and cash equivalents of operations held-for-sale (a) (b)
 
39

 
(29
)
Cash and cash equivalents at beginning of year
 
13,035

 
11,670

Cash and cash equivalents at June 30,
 
$
16,126

 
$
14,901

Supplemental disclosures
 
 
 
 
Cash paid for
 
 
 
 
Interest
 
$
2,563

 
$
2,886

Income taxes
 
273

 
471

Noncash items
 
 
 
 
Transfer of mortgage servicing rights into trading securities through certification
 
—

 
266

Other disclosures
 
 
 
 
Proceeds from sales and repayments of mortgage loans held-for-investment originally designated as held-for-sale
 
104

 
110

(a)
The amounts are net of cash and cash equivalents of $147 million at June 30, 2012, and $88 million at June 30, 2011, of business units at the time of disposition.
(b)
Cash flows of discontinued operations are reflected within operating, investing, and financing activities in the Condensed Consolidated Statement of Cash Flows. The cash balance of these operations is reported as assets of operations held-for-sale on the Condensed Consolidated Balance Sheet.
The Notes to the Condensed Consolidated Financial Statements (unaudited) are an integral part of these statements.

9
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Notes to Condensed Consolidated Financial Statements (unaudited)
Ally Financial Inc. • Form 10-Q



1.    Description of Business, Basis of Presentation, and Changes in Significant Accounting Policies
Ally Financial Inc. (formerly GMAC Inc. and referred to herein as Ally, we, our, or us) is a leading, independent, globally diversified, financial services firm. Founded in 1919, we are a leading automotive financial services company with over 90 years experience providing a broad array of financial products and services to automotive dealers and their customers. We became a bank holding company on December 24, 2008, under the Bank Holding Company Act of 1956, as amended. Our banking subsidiary, Ally Bank, is an indirect wholly owned subsidiary of Ally Financial Inc. and a leading franchise in the growing direct (online and telephonic) banking market.
Our accounting and reporting policies conform to accounting principles generally accepted in the United States of America (GAAP). Additionally, where applicable, the policies conform to the accounting and reporting guidelines prescribed by bank regulatory authorities. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and that affect income and expenses during the reporting period. 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.
The Condensed Consolidated Financial Statements at June 30, 2012, and for the three months and six months ended June 30, 2012, and 2011, are unaudited but reflect all adjustments that are, in management’s opinion, necessary for the fair presentation of the results for the interim periods presented. All such adjustments are of a normal recurring nature. These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements (and the related notes) included in our Annual Report on Form 10-K for the year ended December 31, 2011, as filed on February 28, 2012, with the U.S. Securities and Exchange Commission (SEC).
Residential Capital, LLC
On May 14, 2012 (the Petition Date), Residential Capital, LLC (ResCap) and certain of its wholly owned direct and indirect subsidiaries (collectively, the Debtors) filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York (Bankruptcy Court). In connection with the filings, Ally Financial Inc. and its direct and indirect subsidiaries and affiliates (excluding the Debtors and their direct and indirect subsidiaries) (collectively, AFI) reached an agreement with the Debtors and certain creditor constituencies on a prearranged Chapter 11 plan (the Plan).
In connection with the Plan, the Debtors expect to sell certain of their assets, consisting of the Debtors' mortgage origination and servicing business and certain other mortgage-related assets, to Nationstar Mortgage LLC and Berkshire Hathaway Inc., or one or more alternate purchasers with higher and better offers for such assets, under section 363 of the Bankruptcy Code. The Bankruptcy Court entered an order on June 28, 2012, approving Nationstar Mortgage LLC as stalking horse bidder for the Debtors' mortgage origination and servicing platform, and Berkshire Hathaway Inc. as stalking horse bidder for the Debtors' held-for-sale loan portfolio. The bid provided by Berkshire Hathaway Inc. supplanted the stalking horse bid provided by AFI that is described below. The Debtors' remaining assets are expected to be sold, wound down, or otherwise liquidated over time.
The contemplated Plan, which has not yet been filed with the Bankruptcy Court, is subject to Bankruptcy Court approval. The Plan is based on a settlement (the Settlement) between AFI and the Debtors under which, in exchange for the releases described below, AFI, among other things: (a) agreed to serve as the stalking horse bidder for the Debtors' held-for-sale loan portfolio, with a purchase price of approximately $1.6 billion (which, as noted above, was supplanted by Berkshire Hathaway Inc. pursuant to an order entered by the Bankruptcy Court on June 28, 2012); (b) will make a cash contribution to the Debtors' estates of $750 million that will enable certain recoveries to creditors of the Debtors' estates under the Plan; (c) provided the Debtors with a $220 million post-petition debtor-in-possession financing facility; (d) consented to the Debtors' use of cash collateral pledged to Ally-funded, pre-petition senior secured credit facilities; (e) agreed to enter into and perform a shared services agreement with the Debtors to enable the Debtors to continue to operate their businesses during their bankruptcy cases; (f) agreed to enter into and perform a transition services agreement with the purchaser of the Debtors' mortgage origination and servicing business to facilitate the sale of such assets; (g) continues to provide the Debtors with consumer lending origination support during their bankruptcy cases, including to allow implementation of the aforementioned asset sales; (h) provides the support necessary for the Debtors to satisfy certain regulatory obligations; and (i) agreed to provide indemnification of ResCap's current directors and officers. The Settlement, which is subject to Bankruptcy Court approval, provides for the release of all existing or potential causes of action between AFI and the Debtors, as well as a release of all existing or potential ResCap-related causes of action against AFI held by third parties.
Also ResCap has obtained support for the Plan from the ad hoc steering committee representing ResCap's junior secured notes (Ad Hoc Committee), as well as other certain noteholders, and as of the Petition Date, had affirmative support from entities holding $791 million of these notes, out of a total of approximately $2.1 billion. Additionally, institutional investors in residential mortgage-backed securities issued by ResCap's affiliates and holding more than 25 percent of at least one class in each of 290 securitizations agreed to support the Plan as of the Petition Date. To date, institutional investors holding more than 25 percent of at least one class in each of 336 securitizations have agreed to support the Plan. These 336 securitizations have an aggregate original principal balance of approximately $189 billion (out of a total of 392 outstanding securitizations with an original principal balance of $221 billion). The settlements reached are subject to Bankruptcy Court approval.
The Debtors have failed to satisfy certain milestone requirements in the Plan support agreements (the PSAs) with the Ad Hoc Committee and AFI, which relieves the Ad Hoc Committee and AFI of their obligations to perform under each of their respective PSAs. Notwithstanding

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Notes to Condensed Consolidated Financial Statements (unaudited)
Ally Financial Inc. • Form 10-Q


this, to date, AFI has continued to comply with its obligations under its PSAs. Furthermore, the Ad Hoc Committee has not indicated any intention to terminate its PSA.
On June 4, 2012, Berkshire Hathaway Inc. filed a motion in the Bankruptcy Court for the appointment of an independent examiner to investigate, among other things, certain of the Debtors' transactions with AFI occurring prior to the Petition Date, any claims the Debtors may hold against AFI's officers and directors, and any claims the Debtors propose to release under the Plan. On June 18, 2012, the Bankruptcy Court approved the appointment of an examiner and, subsequently, the United States Trustee for the Southern District of New York appointed former bankruptcy judge Arthur J. Gonzalez, Esq. as the examiner. On July 27, 2012, the Bankruptcy Court entered an order approving the scope of the examiner's investigation. The investigation will include, among other things: (a) all material pre-petition transactions between or among the Debtors and AFI, Cerberus Capital Management, L.P. and its subsidiaries and affiliates, and/or Ally Bank; (b) certain post-petition negotiations and transactions with the Debtors, including with respect to plan sponsor, plan support, and settlement agreements, the debtor-in-possession financing with AFI, the stalking horse asset purchase agreement with AFI, and the servicing agreement with Ally Bank; (c) all state and federal law claims or causes of action the Debtors propose to release as part of the Plan; and (d) the release of all existing or potential ResCap-related causes of action against AFI held by third parties. The examiner's preliminary estimate regarding the time necessary for the examiner to complete the examiner's investigation and related report is six months.
 As a result of the bankruptcy filing, effective May 14, 2012, we have deconsolidated ResCap from our financial statements and ResCap is prospectively accounted for using the cost method. Furthermore, circumstances indicated to us that as of May 14, 2012, our investment in ResCap would not be recoverable, and accordingly we recorded a full impairment of such investment. The deconsolidation resulted in the removal of the following assets, liabilities, and accumulated other comprehensive income items from our Condensed Consolidated Balance Sheet.
($ in millions)
 
May 13, 2012
Assets
 
 
Cash and cash equivalents
 
 
Noninterest-bearing
 
$
494

Interest-bearing
 
45

Total cash and cash equivalents
 
539

Trading assets
 
31

Loans held-for-sale, net
 
4,103

Finance receivables and loans, net
 
 
Finance receivables and loans, net
 
743

Allowance for loan losses
 
(9
)
Total finance receivables and loans, net
 
734

Mortgage servicing rights
 
1,130

Premiums receivable and other insurance assets
 
4

Other assets
 
5,365

Total assets
 
$
11,906

Liabilities
 
 
Short-term borrowings
 
$
788

Long-term debt
 
5,428

Interest payable
 
157

Reserves for insurance losses and loss adjustment expenses
 
89

Accrued expenses and other liabilities
 
5,002

Total liabilities
 
$
11,464

Accumulated other comprehensive income
 
 
Foreign currency translation adjustment
 
$
20


11
Table of Contents
Notes to Condensed Consolidated Financial Statements (unaudited)
Ally Financial Inc. • Form 10-Q


ResCap's results of operations have been removed from our Condensed Consolidated Financial Statements since May 14, 2012. As ResCap remains a wholly owned subsidiary of Ally as of June 30, 2012, and they do not meet the requirements of a discontinued operation, ResCap's results of operations continue to be included in our Condensed Consolidated Statement of Comprehensive Income for periods prior to May 14, 2012. Our Condensed Consolidated Statements of Comprehensive Income include the following for ResCap's results of operations (amounts presented are before the elimination of balances and transactions with Ally).
($ in millions)
 
Period from April 1, 2012 to May 13, 2012
 
Three months ended June 30, 2011
 
Period from January 1, 2012 to May 13, 2012
 
Six months ended June 30, 2011
Total net revenue
 
$
49

 
$
277

 
$
476

 
$
576

Provision for loan losses
 
1

 
1

 
—

 
7

Total noninterest expense
 
128

 
389

 
437

 
632

(Loss) income from continuing operations before income tax expense
 
(80
)
 
(113
)
 
39

 
(63
)
Income tax expense from continuing operations
 
2

 
—

 
7

 
9

Net (loss) income from continuing operations
 
$
(82
)
 
$
(113
)
 
$
32

 
$
(72
)
Based on our assessment of the effect of the deconsolidation of ResCap, obligations under the Plan, and other impacts related to the Chapter 11 filing, we recorded a charge of $1.2 billion during the three months ended June 30, 2012, within our other operating expenses. This charge primarily consists of the impairment of Ally's $442 million investment in ResCap and the $750 million cash contribution to be made by us to the Debtors' estate described above. As of June 30, 2012, we have $1.2 billion of financing due from ResCap, which is classified as Finance Receivables and Loans, net on our Condensed Consolidated Balance Sheet. We maintain no allowance or impairment against these receivables because management considers them to be fully collectible. At June 30, 2012, our hedging arrangements with ResCap were fully collateralized. Additionally, under a shared services agreement (SSA), each entity agreed to provide services to the other for a period of one year. The SSA will automatically renew each year unless either entity provides written notice of nonrenewal to the other party at least three months prior to the expiration. The SSA fees received by Ally and the expenses paid to the Debtors will be reflected within the Condensed Consolidated Statement of Comprehensive Income as a reduction or increase of noninterest expense. Because of the uncertain nature of the bankruptcy proceedings, we cannot predict the ultimate financial impact to Ally. Refer to Note 25 to the Condensed Consolidated Financial Statements for additional information regarding these bankruptcy proceedings.
International Businesses
We have determined to explore strategic alternatives for all of our international operations, which includes automotive finance, insurance, and banking and deposit operations. As of June 30, 2012, the businesses did not meet the requirements of a discontinued operation.
Significant Accounting Policies
Income Taxes
In calculating the provision for interim income taxes, in accordance with Accounting Standards Codification (ASC) 740, Income Taxes, we apply an estimated annual effective tax rate to year-to-date ordinary income. At the end of each interim period, we estimate the effective tax rate expected to be applicable for the full fiscal year. We exclude and record discretely the tax effect of unusual or infrequently occurring items, including, for example, changes in judgment about valuation allowances and effects of changes in tax law or rates. The provision for income taxes in tax jurisdictions with a projected full year or year-to-date loss for which a tax benefit cannot be realized are estimated using tax rates specific to that jurisdiction.
Refer to Note 1 to the Consolidated Financial Statements in our 2011 Annual Report on Form 10-K regarding additional significant accounting policies.
Recently Adopted Accounting Standards
Financial Services - Insurance - Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts (ASU 2010-26)
As of January 1, 2012, we adopted Accounting Standards Update (ASU) 2010-26, which amends ASC 944, Financial Services - Insurance. The amendments in this ASU specify which costs incurred in the acquisition of new and renewal insurance contracts should be capitalized. All other acquisition-related costs should be expensed as incurred. If the initial application of the amendments in this ASU results in the capitalization of acquisition costs that had not been previously capitalized, an entity may elect not to capitalize those types of costs. Both retrospective application and early adoption was permitted. We elected prospective application and did not early adopt the ASU. The adoption did not have a material impact to our consolidated financial condition or results of operations.

12
Table of Contents
Notes to Condensed Consolidated Financial Statements (unaudited)
Ally Financial Inc. • Form 10-Q


Fair Value Measurement - Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs (ASU 2011-04)
As of January 1, 2012, we adopted ASU 2011-04, which amends ASC 820, Fair Value Measurements. The amendments in this ASU clarify how to measure fair value and it contains new disclosure requirements to provide more transparency into Level 3 fair value measurements. It is intended to improve the comparability of fair value measurements presented and disclosed in financial statements prepared in accordance with U.S. GAAP and International Financial Reporting Standards (IFRS). The ASU must be applied prospectively. The adoption did not have a material impact to our consolidated financial condition or results of operations.
Intangibles-Goodwill and Other - Testing Goodwill for Impairment (ASU 2011-08)
As of January 1, 2012, we adopted ASU 2011-08, which amends ASC 350, Intangibles-Goodwill and Other. This ASU permits the option of performing a qualitative assessment before calculating the fair value of a reporting unit in step 1 of the goodwill impairment test. If it is determined, on the basis of qualitative factors, that the fair value of a reporting unit is more likely than not more than the carrying amount, the two-step impairment test would not be required. Otherwise, further evaluation under the existing two-step framework would be required. The adoption did not have a material impact to our consolidated financial condition or results of operation.
Recently Issued Accounting Standards
Balance Sheet - Disclosures about Offsetting Assets and Liabilities (ASU 2011-11)
In December 2011, the Financial Accounting Standards Board issued ASU 2011-11, which amends ASC 210, Balance Sheet. This ASU contains new disclosure requirements regarding the nature of an entity's rights of setoff and related arrangements associated with its financial instruments and derivative instruments. The new disclosures will give financial statement users information about both gross and net exposures. ASU 2011-11 is effective for us on January 1, 2013, and retrospective application is required. Since the guidance relates only to disclosures, adoption is not expected to have a material effect on our consolidated financial condition or results of operations.
2.     Discontinued and Held-for-sale Operations
We classify operations as discontinued when operations and cash flows will be eliminated from our ongoing operations and we do not expect to retain any significant continuing involvement in their operations after the respective sale transactions. For all periods presented, all of the operating results for these discontinued operations have been removed from continuing operations and presented separately as discontinued operations, net of tax, in the Condensed Consolidated Statement of Comprehensive Income. The Notes to the Condensed Consolidated Financial Statements have been adjusted to exclude discontinued operations unless otherwise noted.
Select Mortgage Operations
During the second quarter of 2012, we sold the Canadian mortgage operations of ResMor Trust.
Select Global Automotive Services — Insurance Operations
During the fourth quarter of 2011, we committed to sell our U.K.-based operations that provide vehicle service contracts and insurance products in Europe and Latin America. During the second quarter of 2011, we completed the sale of our U.K. consumer property and casualty insurance business.
Select Global Automotive Services — International Automotive Finance Operations
During the fourth quarter of 2011, we committed to sell our full-service leasing operations in Austria, Germany, Greece, Portugal, and Spain. During the first quarter of 2012, we completed the sale of our Venezuela operations.

13
Table of Contents
Notes to Condensed Consolidated Financial Statements (unaudited)
Ally Financial Inc. • Form 10-Q


Select Financial Information
Select financial information of discontinued operations is summarized below. The pretax income or loss, including direct costs to transact, includes any impairment recognized to present the operations at the lower-of-cost or fair value. Fair value was based on the estimated sales price, which could differ from the ultimate sales price due to the fluidity of ongoing negotiations, price volatility, changing interest rates, changing foreign-currency rates, and future economic conditions.
 
 
Three months ended June 30,
 
Six months ended June 30,
($ in millions)
 
2012
 
2011
 
2012
 
2011
Select Mortgage operations
 
 
 
 
 
 
 
 
Total net revenue
 
$
3

 
$
5

 
$
8

 
$
3

Pretax loss including direct costs to transact a sale
 
(10
)
 
(3
)
 
(10
)
 
(11
)
Tax benefit
 
—

 
(1
)
 
—

 
(3
)
Select Global Automotive Services — Insurance operations
 
 
 
 
 
 
 
 
Total net revenue
 
$
34

 
$
75

 
$
72

 
$
166

Pretax (loss) income including direct costs to transact a sale 
 
(32
)
 
9

 
(24
)
 
18

Tax expense
 
1

 
—

 
3

 
2

Select Global Automotive Services — International operations
 
 
 
 
 
 
 
 
Total net revenue
 
$
2

 
$
16

 
$
8

 
$
44

Pretax income (loss) including direct costs to transact a sale (a)
 
13

 
(3
)
 
15

 
(24
)
Tax expense (benefit)
 
4

 
(1
)
 
4

 
2

(a)
Includes certain income tax activity recognized by Corporate and Other.
Held-for-sale Operations
The assets and liabilities of operations held-for-sale are summarized below.
June 30, 2012 ($ in millions)
 
Select
Global Automotive Services –Insurance
operations (a)
 
Select
Global Automotive Services – International
operations (b)
 
Total
held-for-sale
operations
Assets
 
 
 
 
 
 
Cash and cash equivalents
 
 
 
 
 
 
Noninterest-bearing
 
$
2

 
$
27

 
$
29

Interest-bearing
 
76

 
6

 
82

Total cash and cash equivalents
 
78

 
33

 
111

Investment securities
 
177

 
—

 
177

Finance receivables and loans, net
 
—

 
3

 
3

Investment in operating leases, net
 
—

 
40

 
40

Premiums receivable and other insurance assets
 
74

 
—

 
74

Other assets
 
19

 
15

 
34

Impairment on assets of held-for-sale operations
 
(36
)
 
(20
)
 
(56
)
Total assets
 
$
312

 
$
71

 
$
383

Liabilities
 
 
 
 
 
 
Unearned insurance premiums and service revenue
 
$
130

 
$
—

 
$
130

Reserves for insurance losses and loss adjustment expenses
 
15

 
—

 
15

Accrued expenses and other liabilities
 
89

 
7

 
96

Total liabilities
 
$
234

 
$
7

 
$
241

(a)
Includes our U.K.-based operations that provide vehicle service contracts and insurance products.
(b)
Includes our full-service leasing operations in Austria, Germany, Greece, Portugal, and Spain.

14
Table of Contents
Notes to Condensed Consolidated Financial Statements (unaudited)
Ally Financial Inc. • Form 10-Q


December 31, 2011 ($ in millions)
 
Select
Mortgage
operations (a)
 
Select
Global Automotive Services –Insurance
operations (b)
 
Select
Global Automotive Services – International
operations (c)
 
Total
held-for-sale
operations
Assets
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
 
 
 
 
 
 
 
Noninterest-bearing
 
$
—

 
$
4

 
$
55

 
$
59

Interest-bearing
 
—

 
54

 
38

 
92

Total cash and cash equivalents
 
—

 
58

 
93

 
151

Investment securities
 
—

 
186

 
—

 
186

Loans held-for-sale, net
 
260

 
—

 
—

 
260

Finance receivables and loans, net
 
 
 
 
 
 
 
 
Finance receivables and loans, net
 
285

 
—

 
11

 
296

Allowance for loan losses
 
—

 
—

 
(1
)
 
(1
)
Total finance receivables and loans, net
 
285

 
—

 
10

 
295

Investment in operating leases, net
 
—

 
—

 
91

 
91

Premiums receivable and other insurance assets
 
—

 
77

 
—

 
77

Other assets
 
140

 
14

 
30

 
184

Impairment on assets of held-for-sale operations
 
—

 
—

 
(174
)
 
(174
)
Total assets
 
$
685

 
$
335

 
$
50

 
$
1,070

Liabilities
 
 
 
 
 
 
 
 
Unearned insurance premiums and service revenue
 
$
—

 
$
130

 
$
—

 
$
130

Reserves for insurance losses and loss adjustment expenses
 
—

 
17

 
—

 
17

Accrued expenses and other liabilities
 
80

 
82

 
28

 
190

Total liabilities
 
$
80

 
$
229

 
$
28

 
$
337

(a)
Includes the Canadian mortgage operations of ResMor Trust.
(b)
Includes our U.K.-based operations that provide vehicle service contracts and insurance products.
(c)
Includes the operations of Venezuela and our full-service leasing operations in Austria, Germany, Greece, Portugal, and Spain.

15
Table of Contents
Notes to Condensed Consolidated Financial Statements (unaudited)
Ally Financial Inc. • Form 10-Q


Recurring Fair Value
The following tables display the assets and liabilities of our held-for-sale operations measured at fair value on a recurring basis. Refer to Note 22 for descriptions of valuation methodologies used to measure material assets at fair value and details of the valuation models, key inputs to these models, and significant assumptions used.
 
 
Recurring fair value measurements
($ in millions)
 
Level 1  
 
Level 2  
 
Level 3  
 
Total  
June 30, 2012
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
Investment securities
 
 
 
 
 
 
 
 
Available-for-sale securities
 
 
 
 
 
 
 
 
Debt securities
 
 
 
 
 
 
 
 
Foreign government
 
$
177

 
$
—

 
$
—

 
$
177

Total assets
 
$
177

 
$
—

 
$
—

 
$
177

December 31, 2011
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
Investment securities
 
 
 
 
 
 
 
 
Available-for-sale securities
 
 
 
 
 
 
 
 
Debt securities
 
 
 
 
 
 
 
 
Foreign government
 
$
171

 
$
15

 
$
—

 
$
186

Other assets
 
 
 
 
 
 
 
 
Interest retained in financial asset sales
 
—

 
—

 
66

 
66

Total assets
 
$
171

 
$
15

 
$
66

 
$
252

3.     Other Income, Net of Losses
Details of other income, net of losses, were as follows.
 
 
Three months ended June 30,
 
Six months ended June 30,
($ in millions)
 
2012
 
2011
 
2012
 
2011
Mortgage processing fees and other mortgage income
 
$
113

 
$
44

 
$
237

 
$
88

Late charges and other administrative fees
 
32

 
24

 
63

 
57

Securitization income
 
22

 
123

 
23

 
151

Income from equity-method investments
 
18

 
20

 
47

 
42

Remarketing fees
 
17

 
31

 
37

 
68

Change due to fair value option elections (a)
 
(5
)
 
(22
)
 
(19
)
 
(39
)
Fair value adjustment on derivatives (b)
 
(44
)
 
(65
)
 
(33
)
 
(79
)
Other, net
 
73

 
84

 
148

 
155

Total other income, net of losses
 
$
226

 
$
239

 
$
503

 
$
443

(a)
Refer to Note 22 for a description of fair value option elections.
(b)
Refer to Note 20 for a description of derivative instruments and hedging activities.

16
Table of Contents
Notes to Condensed Consolidated Financial Statements (unaudited)
Ally Financial Inc. • Form 10-Q


4.     Other Operating Expenses
Details of other operating expenses were as follows.
 
 
Three months ended June 30,
 
Six months ended June 30,
($ in millions)
 
2012
 
2011
 
2012
 
2011
Impairment and accruals related to ResCap deconsolidation (a)
 
$
1,192

 
$
—

 
$
1,192

 
$
—

Technology and communications
 
109

 
115

 
235

 
234

Insurance commissions
 
107

 
116

 
219

 
234

Professional services
 
93

 
77

 
209

 
143

Regulatory penalties imposed for foreclosure-related matters
 
90

 
—

 
90

 
—

Lease and loan administration
 
64

 
45

 
110

 
89

Advertising and marketing
 
36

 
41

 
75

 
95

Regulatory and licensing fees
 
33

 
34

 
69

 
71

Premises and equipment depreciation
 
24

 
24

 
49

 
50

Occupancy
 
21

 
22

 
45

 
44

Vehicle remarketing and repossession
 
20

 
37

 
45

 
72

Mortgage representation and warranty obligation, net
 
18

 
184

 
37

 
210

State and local non-income taxes
 
5

 
35

 
29

 
66

Other
 
121

 
162

 
245

 
330

Total other operating expenses
 
$
1,933

 
$
892

 
$
2,649

 
$
1,638

(a)
For the three months and six months ended June 30, 2012, this charge primarily consists of the $442 million total impairment of our investment in ResCap and a $750 million cash contribution to be made by us to the Debtors' estate. Refer to Note 1 for more information regarding the Debtors' bankruptcy, deconsolidation, and this charge.
5.     Trading Assets
The composition of trading assets was as follows.
($ in millions)
 
June 30, 2012
 
December 31, 2011
Mortgage-backed residential trading securities
 
$
—

 
$
608

Trading derivatives
 
—

 
14

Total trading assets
 
$
—

 
$
622


17
Table of Contents
Notes to Condensed Consolidated Financial Statements (unaudited)
Ally Financial Inc. • Form 10-Q


6.     Investment Securities
Our portfolio of securities includes bonds, equity securities, asset- and mortgage-backed securities, interests in securitization trusts, and other investments. The cost, fair value, and gross unrealized gains and losses on available-for-sale securities were as follows.
 
 
June 30, 2012
 
December 31, 2011
 
 
Amortized cost
 
Gross unrealized
 
Fair
value
 
Amortized cost
 
Gross unrealized
 
Fair
value
($ in millions)
 
gains  
 
losses  
 
gains  
 
losses  
 
Available-for-sale securities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt securities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasury and federal agencies
 
$
874

 
$
3

 
$
—

 
$
877

 
$
1,535

 
$
13

 
$
(2
)
 
$
1,546

U.S. states and political subdivisions
 
—

 
—

 
—

 
—

 
1

 
—

 
—

 
1

Foreign government
 
831

 
18

 
—

 
849

 
765

 
20

 
(1
)
 
784

Mortgage-backed residential (a)
 
6,205

 
75

 
(25
)
 
6,255

 
7,266

 
87

 
(41
)
 
7,312

Asset-backed
 
2,497

 
38

 
(2
)
 
2,533

 
2,600

 
28

 
(13
)
 
2,615

Corporate debt
 
1,312

 
37

 
(6
)
 
1,343

 
1,486

 
23

 
(18
)
 
1,491

Other
 
353

 
—

 
—

 
353

 
326

 
1

 
—

 
327

Total debt securities 
 
12,072

 
171

 
(33
)
 
12,210

 
13,979

 
172

 
(75
)
 
14,076

Equity securities
 
1,306

 
22

 
(172
)
 
1,156

 
1,188

 
25

 
(154
)
 
1,059

Total available-for-sale securities (b)
 
$
13,378

 
$
193

 
$
(205
)
 
$
13,366

 
$
15,167

 
$
197

 
$
(229
)
 
$
15,135

(a)
Residential mortgage-backed securities include agency-backed bonds totaling $4,347 million and $6,114 million at June 30, 2012, and December 31, 2011, respectively.
(b)
Certain entities related to our Insurance operations are required to deposit securities with state regulatory authorities. These deposited securities totaled $15 million and $16 million at June 30, 2012, and December 31, 2011, respectively.

18
Table of Contents
Notes to Condensed Consolidated Financial Statements (unaudited)
Ally Financial Inc. • Form 10-Q


The maturity distribution of available-for-sale debt securities outstanding is summarized in the following tables. Prepayments may cause actual maturities to differ from scheduled 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 (a)
($ in millions)
 
Amount
 
Yield
 
Amount
 
Yield
 
Amount
 
Yield
 
Amount
 
Yield
 
Amount
 
Yield
June 30, 2012
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fair value of available-for-sale debt securities (b)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasury and federal agencies
 
$
877

 
0.8
%
 
$
151

 
0.8
%
 
$
725

 
0.8
%
 
$
1

 
1.5
%
 
$
—

 
—
%
U.S. states and political subdivisions
 
—

 
—

 
—

 
—

 


 
—

 
—

 
—

 
—

 
—

Foreign government
 
849

 
4.2

 
202

 
5.6

 
419

 
4.0

 
221

 
3.1

 
7

 
6.2

Mortgage-backed residential
 
6,255

 
2.8

 
1

 
4.6

 
—

 
—

 
209

 
2.4

 
6,045

 
2.8

Asset-backed
 
2,533

 
2.3

 
—

 
—

 
1,568

 
2.1

 
527

 
2.0

 
438

 
3.3

Corporate debt
 
1,343

 
5.2

 
9

 
6.9

 
615

 
4.5

 
604

 
6.2

 
115

 
3.8

Other
 
353

 
1.5

 
352

 
1.4

 
—

 
—

 
1

 
7.2

 
—

 
—

Total available-for-sale debt securities
 
$
12,210

 
2.8

 
$
715

 
2.5

 
$
3,327

 
2.4

 
$
1,563

 
3.6

 
$
6,605

 
2.8

Amortized cost of available-for-sale debt securities
 
$
12,072

 
 
 
$
713

 
 
 
$
3,293

 
 
 
$
1,528

 
 
 
$
6,538

 
 
December 31, 2011
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fair value of available-for-sale debt securities (b)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasury and federal agencies
 
$
1,546

 
0.9
%
 
$
231

</