See which workplaces made this year's list.

2026_GPTW_best-places-by-industry-Financial_Services+Insurance-Ally_Financial_Inc.

Employees say:&nbsp;"Relationships matter and carry beyond current responsibilities to previous roles—it is comforting knowing people to continue to care about others even when they aren't actively working on projects or workstreams anymore. I recently received a health diagnosis, as did my child, and the response from those I shared this with was and continues to be supportive; I've never been made to feel like this will in any way impact their assessment of me as a valued colleague or someone with less reliability. I know this doesn't seem like a big deal, but I've worked other places and heard from those I know how often this doesn't happen and how perception changes abruptly with these circumstances."

Best Large Workplaces in Financial Services and Insurance

With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

Fortune 500

The 300 companies on this year’s list brought in over $12.5 trillion in revenue for the latest 12 months, with the median revenue figure at $24 billion.

America's Most Innovative Companies

This year's 100 Best Companies to Work For are rebuilding the social contract at work so people feel supported, trusted, and future-ready as they undergo that transition.

100 Best Places to Work 2026_Ally Financial Inc.

Employees say:"The culture within our team and the company broadly is one that enables and encourages people to be themselves while also pushing themselves to be even better than they were yesterday. This is done in a reinforcing and supportive way rather than being pushed/forced on people. We lift others on our team up in a non-competitive way. Everyone is treated with respect and everyone's voice is able to be heard."

Fortune 100 Best Companies to Work For

The companies on this annual list make a conscious effort to be supportive, inclusive workplaces.

2025 Best Large Workplaces for Women_Ally Financial Inc._US1__68a71ffe383bc91cadd06a8c_2

Employees say:"Ally truly cares about its employees and tries to find ways to help you when you have personal emergencies. Example: I was put on hospital bed rest a month before my twins were born. They were born 3 months early and had significant medical challenges. Ally not only made sure I kept my job in the midst of that life change, but that I had the resources I needed to get through it financially and emotionally. I will forever be grateful for the company I work for."

100 Best Large Workplaces for Women

2025_GPTW_FinancialServices_Large_Ally Financial Inc._US1__685d51ce023fa8a026342330_2

Employees say:"Ally is a uniquely great place to work because of its incredible workplace culture, where collaboration and innovation thrive. The support from both teammates and management fosters a positive and inclusive environment, making every challenge an opportunity for growth. With limitless opportunities to advance and continuously learn, Ally empowers employees to develop their skills and drive meaningful impact in their careers."

Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

The top companies on our list have one thing in common: Staff largely trust leadership to see them as well-rounded people and reward them for a job well done.

GPTW_100BestCompaniesToWorkFor_2025-Ally Financial Inc._US1__20241210214006_1

Employees say: "One of the things that is unique to Ally is its ownership mentality. Everyone here, regardless of level, are owners, and that makes a big difference in terms of the level of care each employee brings."

The 300 companies on this year’s list brought in over $12.6 trillion in revenue for the latest 12 months, with the median revenue figure at $22 billion.

2025 Best Large Workplaces for Parents_Ally Financial Inc._US1__68b9ad8e7757c3af0ca2bb8e_2

Employees say:"I love working here because I feel empowered to learn while doing. We create an environment where people don't work scared. They work with a lens of curiosity which helps keep egos in check and an emphasis on sharing learnings rather than keeping them to yourself."

Best Large Workplaces for Parents

GPTW_Financial_Services_and_Insurance_Large_2024-Ally Financial Inc._US1__20240712182200_3

Employees say:"It's important to me that I work for a place that supports local community and Ally does that. I feel proud to tell others I work there because they are a large part of the Charlotte community and support many different organizations."

Industries included in the sector are banks, insurance, and real estate companies.

Fortune Sector Leaders: Financials

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

Creating a more empathetic workplace looks like staying loyal to workers, emphasizing D&I initiatives, and paying well.

100 Best Companies 2024-Ally Financial Inc.

Ally Financial, a financial services company with the country’s largest all-digital bank and an auto financing business, was not immune from inflationary forces in autos and struggles with electric vehicle sales, as it slashed <a href="https://www.charlotteobserver.com/news/business/article280772820.html">5% of its workforce</a> in October. That followed the company raising its minimum wage to $23 in the fall of 2022, which was the second increase in the span of about a year. In January 2023, Ally began including pay ranges on job postings. In 2020, Ally launched its #OwnIt equity grant program, and it has now issued over 4 million shares to employees since its inception. Ally committed nearly $1 billion to affordable housing organizations in 2023, which includes investments, grants, and loans. Starting in 2021 and continuing through 2023, Ally gave $2 million in unrestricted grants and sponsorships to 16 minority-led nonprofits across Detroit and Charlotte through its Trust-Based Philanthropy program.

The 200 companies on this list are transforming industries from the inside out.

Building a culture of trust and transparency is essential to help everyone thrive, especially in rocky economic times.

100 BEST COMPANIES 2023-Ally Financial Inc.

The digital financial services company joins the Best Companies list for the first time in 2023. 
<ul> 
 	<li>In 2022, the Ally Charitable Foundation made a pledge of $5 million over five years to the Atrium Health Foundation to help support those from underrepresented backgrounds pursue careers in health care.</li> 
 	<li>This past year, the company followed through on its commitment to provide access to capital for Black and Hispanic communities by granting $33 million in loans and investments to minority and women-led organizations, including the 22 Fund, BetaBoom, and Raza Development Fund.</li> 
 	<li>Ally offers its workers eight hours of paid time off for volunteering each year, and in total employees gave more than 28,000 hours of volunteer work in 2022. Ally will also match up to $1,000 in personal donations from each employee to eligible non-profit.</li> 
 	<li>94% of employees feel good about the ways they “contribute to the community.”</li> 
 	<li>In 2023, Ally expanded its mental health coverage. Now every employee, their dependents, and household members can access up to 16 free counseling sessions with a therapist per person annually, regardless of their enrollment in an Ally medical plan.</li> 
</ul>

The 300 companies on this list are transforming industries from the inside out.

GPTW Financial Services & Insurance Large 2023-Ally Financial Inc

Employees say: 
 
"This is truly a people-first company that treats its employees as owners and rewards as such. Ally Financial celebrates diversity, equity, and inclusion and strives to have all employees make a difference in their community outside of their working roles."

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

GPTW Financial Services Industry Large 2022-Ally Financial Inc.

Employees say: 
 
“Ally overall is a great company to work for primarily because of the people that work there and the executives at the top. The culture at Ally is very inclusive and provides ample opportunity to give back to the community. The benefits and fair pay also make this a wonderful place to work.”

To determine millennials' workplace preferences, Fortune's research partner Great Place to Work analyzed feedback representing more than 6.1 million U.S. employees.

GPTW 2022 Millennials List Large-Ally Financial Inc.

100 Best Large Workplaces for Millennials

This year’s Fortune 500 marks the 68th running of the list.

This year’s Fortune 500 marks the 67th running of the list.

Ally is one of the largest car finance companies in the U.S., providing financing and leasing for 4.5 million customers annually. The company also has an online bank, Ally Bank, and offers home loans and securities-brokerage and investment advisory services under the name Ally Invest. The stock has produced an average return of 16% over the past five years.

This year's Fortune 500 marks the 66th running of the list.

F500-2020-273-Ally-Financial

The Detroit-based financial services company offers online banking, investing, auto finance services, and home loans.

This year's Fortune 500 marks the 65th running of the list.

This year's Fortune 500 marks the 64th running of the list.

This year's Fortune 500 marks the 63rd running of the list.

This year's Fortune 500 marks the 62nd running of the list.

This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

Best Workplaces For Parents

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Best Workplaces In Financial Services And Insurance

Ally Financial is a leading digital financial service and began operations in 1919 as GMAC, a lending arm of General Motors. It then rebranded to its current name in 2010 in the wake of the financial crisis. Ally’s major divisions include dealer services, corporate finance, insurance, and digital banking. In early 2025, it began winding down its mortgage operations. Its dealer services segment is the nation’s largest bank auto finance operation, and overall Ally Bank is the largest all-digital bank in the U.S.

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Ally Financial (ALLY): Company Profile, Stock Price, News, Rankings

legacy

Ally Financial

ally financial

Good day, and thank you for standing by. Welcome to the first quarter 2026 Ally Financial earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I'd now like to hand the conference over to Sean Leary, Chief Financial Planning and Investor Relations Officer. Please go ahead.

Thank you, Liz. Good morning and welcome to Ally Financial's first quarter 2026 earnings call. This morning, our CEO, Michael Rhodes, and our CFO, Russ Hutchinson, will review Ally's results before taking questions. The presentation we'll reference can be found in the Investor Relations section of our website, ally.com. Forward-looking statements and risk factor language governing today's call are on page two. GAAP and non-GAAP measures pertaining to our operating performance and capital results are on page three. As a reminder, non-GAAP or core metrics are supplemental to and not a substitute for U.S. GAAP measures. Definitions and reconciliations can be found in the appendix. With that, I'll turn the call over to Michael.

Thank you, Sean, and good morning, everyone. I appreciate you joining us today for our first quarter earnings call. In the last update, I noted my optimism for the path ahead. One quarter into 2026, our results confirm we're on the right path and support my confidence in our outlook, even as the macro environment remains dynamic. That confidence is grounded in the position of strength we carried into the year, driven by the actions to focus our business, streamline our operations, and increase our capital levels.

The Focused. Forward strategy we rolled out last year is simple and powerful. Focused means we're doubling down on the businesses and segments where we have clear competitive advantages. These are areas where we have long-standing relationships, differentiated capabilities, relevant scale, and a right to win. Forward reflects our ambition to create something extraordinary and sustainable from a position of strength.

Together, these principles have allowed us to streamline and sharpen our focus, building a business that is increasingly impactful and enduring. The results since our refresh last year provide unmistakable evidence it's working. Record application flow has enabled strong origination volume with accretive risk-adjusted returns. Record-written premium volume as we continue to leverage our insurance offering to deepen dealer relationships and help them win across their entire ecosystem.

Strong growth across the Corporate Finance portfolio while delivering an ROE of over 25% and maintain an unwavering focus on credit risk. Reinforced our position as the nation's leading all-digital direct bank as we continue to grow customers and increase engagement, providing stable, cost-efficient funding. The progress is real, and we remain committed to delivering even more. With that, let me cover some of the highlights from our first quarter.

Adjusted EPS of $1.11 was up 90% year-over-year. Core ROTCE of 11.1% was up 440 basis points versus 2025, reflecting the structurally high returns we're capable of generating. Margin of 3.52% was impacted by the lease headwinds we discussed last quarter, but we remain confident in our ability to deliver a sustainable upper 3% margin, the final lever of our mid-teens thesis. Adjusted net revenue of $2.2 billion was up 6% year-over-year and 12% when adjusting for the sale of Credit Card. Finally, CET1 of 10.1% was up roughly 60 basis points year-over-year. We're encouraged by the thoughtful Basel III proposal released a few weeks ago and the clarity it provides.

We appreciate the agency's efforts to modernize the capital rules and achieve a more streamlined framework that better aligns capital requirements with the risks inherent in our business. Specific to Ally, I view the proposal as being constructive and supporting our existing capital allocation priorities. We remain confident in our ability to identify creative opportunities for organic growth in our business, build CET1, and return capital to shareholders. The strategy is amplified by our brand and our culture. Our brand is an asset, one known for authenticity and impact.

Earlier this week, we announced that we met our 50/50 media pledge to spend equally in men's and women's sports. That's a year ahead of schedule and clear proof of the impact we can make. Women's sports have been experiencing remarkable growth in recent years, and we're incredibly proud to partner with and support those shaping the evolution.

The business outcomes of these investments have been encouraging, with our brand health at an all-time high and customer retention continuing to lead the industry. Our culture is based on an unwavering commitment to do it right and establishes an ethos for everything we do. In the first quarter, we were honored to be named to Fortune's 100 Best Companies to Work For, the highest ranking we've received and the fourth consecutive year being recognized.

Additionally, Newsweek included Ally on their list of the Most Trusted Companies. These recognitions reflect the kind of culture and customer centricity our team builds every day. What mattered even more was hearing directly from our teammates. Over 90% said that Ally is a great place to work and saw meaningful gains in trust in leadership and confidence in where we are headed. That tells me our strategy is resonating. We're aligned, focused, and executing in a way that employees can resonate with. That alignment is energizing, the momentum is real, and I am excited for what lies ahead.

With that, let's turn to page five and discuss the core franchises. Operational momentum within each of our core franchises remains strong, builds on the progress we delivered in 2025, and positions us for further improvement in financial performance. Our dealer-centric through the cycle approach remains a key differentiator, driving results across dealer financial services and reinforcing the strength of our relationships. 4.4 million applications reflect another record quarter. The scale and breadth of our product offerings and mutually beneficial dealer relationships remain key strategic advantages that drive strong application flow and enable us to be selective in what we originate.

The strength at the top of the funnel translates into solid origination performance with consumer originations of $11.5 billion, up 13% year-over-year, despite a decline in industry light vehicle sales and healthy competition. Importantly, with a focus on risk-adjusted returns, we are mindful of the economic environment and maintain a dynamic approach to underwriting. The benefit of the strong application flow extends beyond originations as we saw record volume and revenue from our pass-through programs this quarter.

Insurance is a critical lever contributing to the success of our dealer partners and our ability to win. That strength is translating to results with written premium of $389 million, marking a first quarter record for Ally. Growth continues to be fueled by leveraging synergies with the Auto Finance team as we highlight our all-in value proposition to support dealers across all aspects of their business.

In Corporate Finance, we delivered a 26% ROE while growing the portfolio to $13.7 billion, up roughly 6% quarter-over-quarter. While we continue to see accretive growth opportunities, credit remains central to how we operate. As we've cited previously, we serve as the lead agent for virtually all transactions, giving us the ability to own the diligence process, underwrite, and structure transactions appropriately.

Turning to Ally Bank, our customer-first approach sets us apart as we continue to benefit from the shift to digital channels. We ended the quarter with $146 billion in retail deposit balances, reinforcing our position as the largest all-digital direct bank in the U.S. Our focus remains on providing best-in-class products and services to drive customer growth and retention. We saw an improvement in customer acquisition the first quarter, and over the past year, we delivered 6% customer growth.

We see meaningful opportunity to continue deepening relationships with 3.5 million customers as we look to provide value extending beyond rate paid. The strength and stability of the portfolio remains critical to our success. Retail deposits continue to represent nearly 90% of total funding and 92% are FDIC insured. The franchise provides stable, low-cost funding source that enables our business to focus on prudent growth.

Let me finish where I opened up, and that's with optimism. Our path ahead is clear and compelling. Our core franchises are delivering and returns are moving higher. I'm encouraged by the progress and momentum, and while mindful of the dynamic operating environment, I'm optimistic for what remains ahead. With that, I'll turn it over to Russ to walk through the financials in more detail.

Thank you, Michael. I'll begin by walking through first quarter performance on slide six. Net financing revenue, excluding OID of $1.6 billion, was up 8% year-over-year and up 15% when excluding Credit Card in the prior year. We continue to benefit from strong performance across our core franchises, ongoing optimization of the balance sheet toward higher yielding assets and our disciplined approach to deposit pricing.

Adjusted other revenue of $572 million in the first quarter was flat year-over-year, despite an approximately $25 million headwind due to the sale of Credit Card. This momentum reflects the strength of our diversified revenue streams, which include Insurance, SmartAuction, and our pass-through programs. Adjusted provision expense of $474 million was down $23 million year-over-year, largely driven by continued improvement in Retail Auto NCOs and the exit from Credit Card.

Retail Auto NCOs declined 15 basis points year-over-year to 1.97%. Adjusted non-interest expense of $1.2 billion was down $85 million year-over-year, demonstrating our continued commitment to cost discipline, as well as reflecting the sale of Credit Card and historically elevated weather losses in March of last year. Let's move to slide seven to discuss margin in detail.

Net interest margin, excluding OID, was 3.52% as repricing of floating rate exposures and lower lease yields were offset by lower deposit costs. Retail Auto portfolio yield, excluding the impact from hedges, was flat sequentially, consistent with the expectations noted in January. Lease yield included a $10 million loss on lease terminations, given the headwinds on select plug-in hybrids we noted in January. We assess depreciation rates quarterly, and we accelerated depreciation on certain leases maturing in the near term, primarily due to these impacted models.

As a reminder, we expect our lease termination mix will start to shift next year. Approximately half of the leases we originated over the past two years have OEM residual value guarantees, while the other half reflect a more diversified mix of OEMs. This will continue to reduce lease gain and loss volatility over time.

On the liability side, cost of funds decreased 9 basis points quarter-over-quarter, largely driven by a 9 basis point decrease in deposit costs. Retail deposit balances increased to $2.6 billion, and we added 74,000 net new customers. Clear proof our brand and products resonate in the market. We remain disciplined on pricing through a key growth period, but given the strength of the portfolio, we were able to reduce liquid savings rates by 10 basis points in February, bringing our cumulative beta to 57%.

While not reflected in 1Q results, we just reduced liquid savings another 10 basis points, bringing our cumulative beta to 63%. Additionally, CD maturities remain a tailwind with approximately $18 billion in maturities in the first half of 2026, carrying a weighted average yield of nearly 4%. Looking ahead, we anticipate a decline in 2Q retail deposit balances given seasonal tax payments.

Our focus remains on customer growth trends and optimizing overall cost of funds. Average earning assets were up 2% year-over-year. Importantly, growth continues to be concentrated in our highest returning assets, Retail Auto and Corporate Finance. Those portfolios in aggregate were up 6% year-over-year. Momentum across the balance sheet supports my conviction in our path to a sustainable upper 3s% margin over time across a variety of rate environments.

Turning to page eight, CET1 of 10.1% was up approximately 60 basis points versus the prior year. Like Michael, I'm appreciative of our regulators' thoughtful approach to the revised Basel proposals and the clarity they provide. I look forward to continued engagement throughout the comment period. The proposals' improved alignment between capital requirements and fundamental risk in our business is encouraging.

Relative to current headline CET1 of 10.1%, the revised standardized approach would produce a CET1 ratio just above 9% when fully phasing in AOCI. That is nearly 100 basis points higher than where we would have landed under the 2023 proposal. In addition to the standardized approach, we continue to evaluate the expanded risk-based framework. As Michael noted, the proposals indicate a favorable outcome for Ally, and our capital allocation priorities remain the same.

We look forward to continuing to drive accretive growth in our core franchises, build capital, support our dividend, and repurchase shares. Earlier this week, we announced a quarterly dividend of $0.30 for the second quarter of 2026, which remains consistent with the prior quarter. We repurchased shares worth $147 million. Our open-ended buyback authorization continues to provide flexibility, enabling us to remain dynamic in any given quarter as buybacks complement the rest of our capital allocation framework.

At the end of the quarter, adjusted tangible book value per share reached an all-time high of $41, up nearly 14% over the past year and reflecting our ability to concurrently increase book value and returns. On slide nine, we will review asset quality trends. Consolidated net charge-offs of 121 basis points were down 13 basis points versus the prior quarter and down 29 basis points year-over-year.

Strength across our commercial portfolios continues to complement favorable trends in Retail Auto. Retail Auto net charge-offs of 197 basis points were down 17 basis points quarter-over-quarter and down 15 basis points compared to a year ago. 1Q marked the fifth consecutive quarter of year-over-year improvement in NCOs as we benefited from particularly strong used vehicle prices and record low flow to loss rates.

On the top right of the page, 30+ all-in delinquencies of 4.6% were down 17 basis points from the prior year, marking the fourth consecutive quarter of year-over-year improvement on an all-in basis. Industry data has shown that tax refunds increased roughly 11% year-over-year versus some earlier expectations for increases above 20%. Notwithstanding the increase in tax refunds and a dynamic macro, delinquency followed what we would consider to be a typical seasonal pattern during the quarter.

We've continued to see a resilient consumer, but given the evolving backdrop, we feel it's appropriate to remain measured. Turning to the bottom of the page on reserves. Consolidated coverage decreased 1 basis point this quarter to 2.53% given mix dynamics, while the Retail Auto coverage rate was flat at 3.75%. Retail Auto coverage levels continue to balance favorable credit results within our portfolio against macroeconomic uncertainty.

Across our commercial portfolios, credit performance remains strong with stable fundamentals. We continue to see accretive growth opportunities, but risk-adjusted returns remain our focus. We'll remain disciplined on both underwriting and pricing as growth is assessed through a credit-first lens. Moving to slide 10 to review Auto segment highlights. Pre-tax income of $336 million was lower year-over-year due mainly to CECL reserve build.

On the bottom left, we've highlighted the trajectory of Retail Auto portfolio yields.Excluding the impact from hedges, yields were flat quarter-over-quarter and up 16 basis points year-over-year. First quarter originated yield of 9.6% was relatively flat quarter-over-quarter, despite ongoing competition, coming in slightly favorable versus our original expectations. S-tier concentration declined to 41% in the period. We will remain dynamic as we optimize risk-adjusted returns across the credit spectrum.

On the bottom right of the page, $11.5 billion of consumer originations were enabled by an all-time record in consumer applications. Our strategic focus is on the top of the funnel and our all-in dealer-centric model. Originations were up 13% year-over-year, despite a continuation of strong competition and a decline in new and used industry sales. We remain disciplined in our approach to underwriting as we assess the potential impact of higher oil prices and lower consumer sentiment.

Our ability to actively calibrate our buy box with the evolving market will support accretive risk-adjusted returns over time. Turning to Insurance on slide 11. Core pre-tax income was $87 million, up $70 million year-over-year. Total written premiums of $389 million were up $4 million year-over-year. Insurance losses of $121 million were down $40 million, primarily due to lower weather losses given historic weather events in the prior year.

Insurance continues to drive capital-efficient, diversified revenue and remains a key component of our long-term growth strategy. We continue to leverage synergies with Auto Finance to drive momentum within the business and deepen our all-in value proposition as we help our dealer partners succeed in all aspects of their business.

Turning to Corporate Finance on slide 12. The business delivered another strong quarter with core pre-tax income of $94 million and a 26% ROE. We have continued to prudently grow the portfolio, which stands at nearly $14 billion today. Credit discipline is embedded in everything we do. It guides our growth and is reflected in the credit characteristics of the portfolio. Our strategy is built on long-standing relationships and deep underwriting familiarity, which we believe are advantages in managing risk.

Additionally, our differentiated funding profile enables us to structure transactions conservatively while generating accretive returns. Given headlines related to the private credit industry more broadly, we've added some metrics highlighting the strength of our portfolio. We've never recorded a loss since we entered the business in 2019, and no loan has ever been classified as criticized or placed on non-accrual. Our approach remains highly disciplined, anchored in conservative underwriting with loan-level detail, conservative advance rates, tight concentration limits, and eligibility requirements, along with the ability to revalue underlying collateral and reduce borrowing limits.

The portfolio is well-diversified, spanning nearly 1,200 obligors with an average advance rate of 60%, reinforcing our strong collateral position. Our exposure is intentionally concentrated with groups of high-quality, scaled asset managers with proven through-the-cycle performance. Our track record and ongoing prioritization of credit risk management give us confidence in our ability to drive accretive growth going forward.

I will briefly discuss our outlook on slide 13. Guidance remains consistent with what we shared three months ago. We are pleased with our execution during the quarter as we continue to capitalize on the momentum across our core franchises. While we are closely monitoring the impacts of macroeconomic uncertainty, we remain confident in our ability to deliver against our full-year guidance. As noted on the page, our baseline assumptions reflect the March 31st forward curve, which doesn't include a Fed funds cut until June of 2027.

Movement in benchmark rates may impact the timing and pace of future NIM expansion, but we remain confident in delivering a sustainable upper 3% margin over time across a range of rate environments. As Michael noted, we're encouraged by operational performance and improving financial results. Our Focused. Forward strategy is working. Our team remains intensely focused on advancing our progress through disciplined execution. I remain confident in our ability to deliver compelling long-term value for our shareholders. With that, I'll turn it over to Sean for Q&A.

Thank you, Russ. As we head into Q&A, we do ask that participants limit yourself to one question and one follow-up. Liz, please begin the Q&A.

Our first question comes from Ryan Nash with Goldman Sachs.

Hey, good morning, guys. Michael, maybe to kick it off, there's clearly a lot out there that the consumer is facing, whether it's volatile oil prices, other pieces of inflation, interest rates are not as low as people had hoped. When you think about all the things that are out there, can maybe just give us an update on what you're seeing on the consumer and what does that mean for your overall credit expectations going forward? Thank you.

One category. When you look at it all together, on the whole, it has yet to materially impact our business. Let me unpack that a bit more as I think about both today and looking ahead. Today, we see the continued behavior is resilient. I've mentioned this before in a couple conversations, is that there's a bit of a disconnect between consumer sentiment data and what we're seeing in our portfolio.

I'd also offer that today we continue to see opportunities to generate loans with attractive risk-adjusted returns. We like the business that we're booking. At the same time, I think you heard in the comments, we're choosing to be deliberately measured. If you look at the data from the quarter, auto originations or applications, I should say, are up 16% year-over-year. Our origination volumes are at a slightly more moderate pace.

We're prioritizing, I call it discipline over volume. I think the word you heard is that we're being measured, I think appropriately so. If I think about looking ahead, my ability, I think our ability to predict exactly how conditions unfold is probably no better than anyone else's. We stay really focused on what we control.

First of all, we remain anchored in our long-term strategy. I think the pivots that we took a year or so ago have really set us up well for this environment. Second, we run Ally with a strong data discipline, and we have lots of data. It's internal data, new origination data on the Autos side. Clearly, you look at portfolio data and vintage trends and loss severity and roll rates and skip rates and things like that. We also look at external data, macro data, savings rates, and income rates, and credit card delinquency and credit card minimum pay date and things like that.

When you put it all together on a go-forward basis, I think we're being measured in this environment. I think you saw from the quarter, we feel good about what we're delivering. You put all this stuff together, you got headwinds and tailwinds, but we feel good about what we're seeing in our portfolio. Overall, I'm aware the environment is unusual, but I'm really pleased with our fundamentals and our recent performance.

Got you. Maybe as my follow-up, Russ, you reiterated the NIM of 3.60%-3.70% despite the shift in rates, and you're assuming no cuts now. Can you maybe just talk about how the cadence of the margin has changed? Where do you see the exit run rate now? Maybe just talk about if you can continue to manage deposit costs lower similar to the cut that you made yesterday in this sort of stable rate environment. Thank you.

Great. Thanks, Ryan. Thank you for the question. There's a lot there. Let me try to break that down as best I can. I guess maybe where I'd start is, we've talked before about medium-term trends in our business in terms of the portfolio mix, in terms of our deposit pricing beta. All those things continue to be very much intact and give us confidence around our medium-term trajectory in terms of net interest margin.

As you know, the pace and magnitude of Fed funds changes can impact us, particularly in a given quarter. All those trends remain intact. As you pointed out, we've seen a shift in terms of Fed funds expectations. Our guidance is now based on an assumption that Fed funds will be flat through the rest of this year, and we've maintained our guide at 3.60%-3.70%.

I'd say that's just a reflection of the business performing as expected with recent cuts to our OSA rates. We're operating at a 63% beta. That's very much in the range that we've talked about before and that we've targeted for the business. When you think about the next couple of quarters, second quarter will have the benefit of the recent cut that we put through the system yesterday as well as the full-quarter impact of the cut that we made back in February, as well as CD maturities, which will continue throughout the year.

In the background, that ongoing portfolio mix migration as we run off lower-yielding mortgage securities and mortgage loans, and we continue to grow our higher-yielding Retail Auto loan book and Corporate Finance books. We continue to leverage the momentum that we have in both of those businesses. Once again, our overall outlook on NIM is unchanged. For the year, we expect 3.60%-3.70%, and as you do the mathematics on that very much implies that we exit the year at or above the high end of that range, and that continues to be our expectation. Again, as you know all too well, obviously, movements in rates can affect us in a given quarter, but the business has ways of offsetting that.

Our next question comes from Rob Wildhack with Autonomous Research.

Morning, guys. I guess I'll start on capital. The buyback came in better than we were modeling. Michael, you and Russ called out some of the benefits to Ally from the new proposal. If you add those things up, I guess, what kind of scope is there to maintain or even accelerate the current pace of buyback in the wake of the new rules?

Yeah, thanks. Maybe I'll start, and Michael, you can jump in. I guess first I'd reiterate the comments we made on the call. We're appreciative of these very thoughtful proposals. They are proposals. They're going to go through a comment period. I'm confident they'll get a lot of comments as we go through that. There may be some changes in terms of what the final rules look like.

With that as context, I'd say overall, our expectation, though, is that they're constructive and they'll be favorable for Ally, as we pointed out on the call. Our capital priorities remain unchanged. I do think the first quarter provides an interesting template, a good template for the way that we prioritize growth in the businesses that we're focused on growing. You saw that strong growth in Retail Auto, and Corporate Finance.

That is a priority for us is to ensure that we have the capital to support that growth. We are also prioritizing continuing to build our capital and to put a buffer on top of the effective kind of 9%+ CET1 ratio that you'd print if you fully phased in under the RSA. Then I'd say, obviously, it's supporting our dividend and continuing to buy back stock. I would say is, in terms of capital, we think of this as a story of and, not or, and that we can do all of these things at the same time, support the growth of our core businesses, build our capital, support our dividend, and buy back shares.

Okay, thanks. On the competitive environment in a couple of different areas, can you just unpack what you're seeing on the Retail Auto side? Obviously, there have been some newer or potential reentrance there. Similar question on deposits. You highlighted the 63% cumulative beta so far. Have there been any changes to what you're seeing competitively on the deposit side, too?

Yeah, I'll start on the Auto side. I'd say there really haven't been recent changes in the competitive environment. I think we've had four straight quarters, where I'd say we've seen this kind of higher level of competition than what we had seen coming out of the pandemic. It's been four straight quarters where we've continued to demonstrate momentum in our businesses. Our dealers are responding to the fact that we are a through-the-cycle partner. We support their businesses in a number of different ways.

We have long-standing and meaningful relationships. That, for us, has translated into strong application volume. You saw the record application volumes we had this quarter. That gives us an opportunity set, and we've been able to use that in order to originate. To originate at volumes that we like, credit, and at an originated yield that we like. I think we saw all those things come through in the first quarter.

Russ, on the deposit side, we're very pleased with what we're seeing. Recognize there's competition for deposit balances. Look, we believe we are in a relatively rarefied air in that we're a digital bank with a national brand, and there are not many who really tick that box. If you saw, we actually disclosed this quarter, our customer growth on a year-over-year basis was 6%.

In fact, in this environment, we're actually seeing our customer growth rates actually accelerating, not decelerating. Pricing aside, we like the margin we're getting in that business, and we like the new volume flows. New volume flows are, albeit they're lower balance customers, we actually like that dynamic. We're really pleased with what we're seeing there.

Absolutely. Thanks, Michael. The customer is clearly responding to a national brand, a top-notch digital experience, and competitive rates.

Our next question comes from Sanjay Sakhrani with KBW.

Thank you. Good morning. I guess I want to start on credit. Obviously, credit quality is doing pretty well. I'm curious, sort of as we think out on the reserve coverage, how should we see the progression as we've seen credit charge-offs come down and delinquencies sort of follow? Then Michael, I think you mentioned you're being measured or something like that. I'm just curious if, given the success you're having with credit, you might want to lean in a little bit more on growth as we move forward if the geopolitical stuff sort of subsides.

Maybe I'll start on the question around credit. Yeah, as you pointed out, we're pleased with what we're seeing in the book. When you look at first quarter, flow-to-loss rates were solid. We got some support from used vehicle prices. It translated into another quarter where NCOs are down on a year-over-year basis and DQs are also down on a year-over-year basis.

Yeah, once again, pleased with what we're seeing in our book. Michael pointed out earlier there's a lot going on in the macro. It's a very dynamic macro. We would consider ourselves to have a measured posture. You asked specifically about reserves. We held reserves flat at 3.75%. That's very much taking into account what we're seeing in the book. As well as the backdrop of a very dynamic macro.

As you can imagine, we have a thorough process that we go through every quarter as we go about setting reserves, taking into account what we're seeing in the book, some of the uncertainties that are in the macro, and the output of that process was holding reserves flat. As we think about our return ambitions going forward, as we think about our mid-teens, we don't predicate that on the idea of reserve releases. It's not something that we model. We look at the business very much on a steady-state basis.

You did hear we used the word measured. You often hear us talk also of being dynamic. Like in this environment with what we see today, measured is the appropriate word. As I said, we're very data dependent and as data ebbs and flows, we'll make some adjustments that we think is the best interest of the business to drive accretive business.

Got it. Maybe just on the application volume growth, I mean, obviously very strong. The originated yield also remains quite strong. Just going back to a little bit of the competition question, but also your success here. What's driving the success here in the application volume? I mean, is it just dealer penetration or is it more diversification across brands? I'm just curious how we should think about that success and then how it would translate into the defensibility of that yield, right? Because I think that's a really critical piece of the NIM progression on a go-forward basis.

Yeah. Let me kick this one off, and Russ, see if you have anything to add to this. In terms of the strength of our application flows, I could take you back. It was probably at the time last year when we announced what I call our strategic pivot, where we were going to sell the Credit Card business and stop originating mortgages and really focus on our core businesses.

We've been very intentional about that over the past year and really like what we're seeing. I just have to tip my hat to our teammates in dealer financial services, and particularly those who are the dealer-facing colleagues, because they're working, building the relationships every single day. As we do that, our dealers appreciate we're all in on them, and they appreciate the way we actually manage the relationships and that we're there to help them win.

That's translating into more volumes. The premise of this strategy, we call it Focused. Forward, is really leaning into things that we do very well. What I see in terms of application flows is really just the fruits of disciplined execution against that strategy. We feel very pleased with that. Anyway, and then in terms of yield, look, yield's going to ebb and flow with mix and there's seasonal factors that then kind of come into play. We like the yield that we saw in the first quarter. I mean, Russ, it probably might have been a little bit higher than we were expecting. I don't know, what do you think?

Yeah, I think it outperformed our expectations a little bit. As you pointed out, we expect to see the originated yield ebb and flow somewhat from quarter-to-quarter. Certainly as we look to first quarter to second quarter, there's generally been some seasonality there, which would drive that STR concentration a little higher in the second quarter and perhaps put a little pressure on yield.

Again, I wouldn't get hung up on yield in any particular quarter. I think the important point to look at is that strong application volume that we see gives us a lot of flexibility in terms of being able to really manage and be flexible and be dynamic with what we pull through in a given quarter in terms of volume and credit and originated yield.

Our next question comes from Brian Foran with Truist.

Oh, hi. Maybe on capital, you've got this note that you're still evaluating IRBA. Is there any thought that IRBA might be better than the 9.1% and it's worth opting in?

Ally Financial (ALLY) Q1 2026 Earnings Call Transcript

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