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.

Q2 2026

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Q4 2024

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 Q2 twenty twenty five Ally Financial Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. To ask a question during session, you will need to press 11 on your telephone.

You will then hear an automated message advising your hand is raised. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Sean Leary, Head of Investor Relations. Please go ahead.

Thank you, Daniel. Good morning and welcome to Ally Financial's second quarter twenty twenty five 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 Slide three. As a reminder, 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.

And with that, I'll turn the call over to Michael.

Thank you, Sean. Good morning, everyone, and thank you for joining us for our second quarter earnings call. Let's begin on page four. I'll start by saying that I'm encouraged and energized by the progress we've made as an organization over the first half of the year. Our sound strategic positioning and disciplined execution are contributing to an improved financial trajectory, which is clearly reflected in our second quarter results.

In the second quarter, Ally delivered adjusted earnings per share of $0.99 and core pretax income of $418,000,000 We achieved double digit year over year growth in both metrics, underscoring the benefits of a more focused, streamlined and purpose driven institution. Net interest margin, excluding core OID was 3.45, expanding 10 basis points quarter over quarter, that's more than offsetting the 20 basis point drag related to the sale of the credit card business. We continue to run off low yielding mortgages and securities and add higher yielding retail auto and corporate finance assets, funded by high quality, stable and low cost deposits. This structural remixing of the balance sheet sets the foundation for continued margin expansion going forward. Our first half trajectory reinforces my conviction in our ability to deliver compelling and sustainable returns over time.

We delivered a core ROTCE of 13.6 in the quarter. But as you know, AOCI reduces the ROE denominator. Excluding that benefit, we generated core ROTCE of 10%. I'm pleased with the progress we've made and I'm even more encouraged by the momentum we're building. We recognize there's significant opportunity ahead, and we are well positioned to capitalize on it.

As I reflect on the quarter, there are three key takeaways that I will expand on. First, our sharp strategic focus is transforming Ally into a stronger, more profitable institution. Second, the Ally brand continues to resonate deeply with our customers, building loyalty and trust. And third, our customer centric culture remains one of our greatest differentiators. Our strategy remains clear and is being executed with discipline by our over 10,000 colleagues across the organization.

Our three core franchises are meaningfully differentiated with tremendous runway and scale. The new business we're putting on the balance sheet today is expected to generate a mid teens return over its life. In Dealer Financial Services, we're booking new fixed rate retail auto loans at nearly 10% funded by core deposits below 4% with expected annual losses between 1.61.8%. DFS also continues to benefit from strong fee revenue driven by our pass through and smart auction adjacencies. Our Insurance business continues to benefit from natural auto related synergies, leading to robust written premium growth and investment revenue.

In Corporate Finance, our portfolio has attractive floating rate yields and we continue to see healthy fee income from syndications. This business continues to deliver strong returns across different credit cycles, anchored by seasoned leadership and disciplined underwriting. Altogether, these businesses backed by strong deposits franchise are positioned to deliver mid teens returns. And now to our brand. Whether through strategic partnerships, impactful marketing, or deep community partnerships, the Ally name stands as a brand that is synonymous with trust and purpose.

Our Net Promoter Score remains well above industry averages, reflecting the strength of the relationships we built. Our customers are our greatest brand advocates. Roughly 15% of new deposit clients are sourced from our refer a friend program. A strong trusted brand is a powerful growth multiplier, And we are seeing that every day through efficient customer acquisition, strong retention, and deeper engagement. And finally, few reflections on our culture.

Do it right is more than a slogan. It's a shared ethos that shapes how we serve our customers, support our teammates, and show up in the communities we serve. We invest deliberately in nurturing our culture, and our results are clear. In fact, just last week, our latest employee engagement survey ranked us in the top 10 of all companies for the sixth consecutive year, eight points above the financial services industry benchmark. Beyond attracting and retaining top talent, this level of engagement fuels performance.

It accelerates change and enhances the customer experience, which is reflected in our customer service satisfaction rating, which is holding strong around 90%. With that context in place, let's turn to page five to dive into operational results and performance trends this quarter. Within our auto finance business, consumer originations of $11,000,000,000 were driven by 3,900,000 applications, marking our highest quarterly application volume ever for the second consecutive quarter. This sustained momentum of application flows speaks to the strength of our dealer relationships and the scale of our franchise and reinforces our position as the top bank auto lender in the country. Our scale enables us to be highly selective of the loans we book, optimizing both pricing and credit decisioning.

Origination yields of 9.82% were up slightly versus the prior quarter and down 77 basis points from the prior year. Notably, this decrease was more modest than the decline in benchmark rates, highlighting the relative strength in our pricing position. 42% of our originations come from the highest credit quality tier, which will continue to support strong risk adjusted returns moving forward. This quarter marked the ninth consecutive with over 40% S tier mix in new origination volume. As we've outlined in previous calls, we expect our origination mix to normalize gradually over time.

Our ability to dynamically adjust both price and risk appetite gives us the flexibility to evolve alongside market conditions. Let's turn to insurance, where our average dealer inventory exposure rose by 23% year over year, driven by new relationship wins and tight integration with our auto finance business. We have 3,900,000 active policies outstanding, an increase of over 1,000,000 since our IPO. Our insurance team supports 7,000 dealers across The United States and Canada and with access to a broader network, we see meaningful opportunity to grow our footprint. I'm pleased with the strong performance and the alignment between our auto and insurance businesses, which enhances the value proposition we offer our dealer customers.

In Corporate Finance, we delivered another strong quarter, generating a 31% ROE. Our long standing relationships with financial sponsors have supported solid growth with attractive returns, all while maintaining disciplined risk management. We continue to see opportunities for prudent organic growth within our current verticals and are actively exploring new products and solutions to generate incremental accretive business. Turning to our digital bank, we remain focused on delivering best in class digital experiences that empower customers to save, invest, and spend with confidence. With no hidden fees, an award winning mobile app, nationwide ATM rebates and 20 fourseven access to live customer care, our customer first approach sets us apart.

This commitment earned us multiple accolades again this quarter for customer satisfaction. Our robust suite of digital tools is driving deeper engagement, fueling customer loyalty, and reducing rate sensitivity. We proudly serve an all time high of 3,400,000 customers, marking sixty five consecutive quarters of net customer growth. We ended the quarter with balances of 143,000,000,000 reinforcing our position as the nation's largest all digital bank. Overall, deposit balances were down approximately $3,000,000,000 quarter over quarter.

Now this is aligned with our April guidance largely due to seasonal tax outflows. For the year, we continue to expect relatively flat balances, which is sufficient to support the asset side of our balance sheet. At the June, we lowered liquid savings pricing an additional 10 basis points, representing a cumulative 70% beta since the start of Fed easing cycle in the second half of twenty twenty four. Deposits are the foundation of our funding profile, representing nearly 90% of total funding and 92% are FDIC insured, demonstrating both strength and stability of our deposit base. Now before I turn it over to Russ, I'd like to leave you with this.

If there's one thing to take away from today's call, it's that Ally's focused strategy is working and you're starting to see it in our results. We have three market leading franchises with tremendous runway backed by an industry leading brand and a culture that sets us apart. And with that, I'll turn it over to Russ.

Thank you, Michael, and good morning, everyone. Let's turn to Page six and walk through second quarter performance. Our financial results for the quarter reflect the closing of the sale of our credit card business on April 1. Accordingly, comparisons to both prior quarter and prior year impacted. Excluding core OID, net financing revenue totaled approximately $1,500,000,000 consistent with both the prior year and the prior quarter.

We're seeing strong momentum in our core franchises led by continued yield expansion in our retail auto portfolio, strategic remixing of the balance sheet towards higher yielding asset classes and the ongoing optimization of deposit pricing. On a quarter over quarter basis, this momentum more than offset the lost revenue from the sale of credit card. Turning to adjusted other revenue, which totaled $531,000,000 results were approximately flat year over year as the removal of fee income from credit card and the wind down of our direct to consumer mortgage origination platform was offset by growth from insurance, smart auction and our pass through programs. Adjusted provision expense of $384,000,000 was down 23% to the prior quarter and down 16% year over year, primarily driven by the sale of credit cards. In retail auto, the NCO rate declined six basis points year over year to 1.75%.

We are encouraged by the trends within the portfolio as vintage dynamics and servicing strategy enhancements continue to drive an improvement in losses. However, we remain mindful of macroeconomic uncertainty. I'll speak more about credit performance in a moment. Adjusted non interest expense was $1,300,000,000 down 4% sequentially and 2% to the prior year. Notably controllable expenses, which exclude insurance losses, commissions and FDIC fees were down for the seventh consecutive quarter underscoring our commitment to cost discipline.

We do not expect a year over year decline in controllable expenses next quarter driven by non recurring benefits recorded in 2024. However, we remain committed to prudent expense management going forward. In the quarter, we recognized tax expense of $84,000,000 resulting in an effective tax rate for the quarter of 19%. This rate was favorably impacted by a recent state law change that drove a revaluation of certain tax credits. Looking ahead, we continue to expect a normalized effective tax rate in the range of 22% to 23%.

However, discrete items may cause the effective rate to differ in any given quarter. On a GAAP basis, we generated earnings per share of $1.04 for the quarter. Adjusted earnings per share for the quarter was excluding OID was 3.45%, an increase of 10 basis points from the prior quarter. Margin expanded 30 basis points excluding the impact from the credit card sale, which was an approximate 20 basis point headwind in the quarter. On a quarter over quarter basis, NIM expansion was driven by the following: organic yield expansion in the retail auto loan portfolio normalization in retail auto lease yields following a loss on lease terminations in 1Q the benefit of securities repositioning transactions executed in March, deposit repricing across liquid savings and CDs and continued portfolio remixing to higher yielding retail auto and corporate finance assets.

Some of these factors that are now embedded in our run rate NIM will not contribute to additional NIM expansion going forward. The normalization of lease gains and execution of securities repositioning transactions added eight basis points to the linked quarter margin expansion in 2Q, but are not expected to contribute to additional NIM expansion from here. Also, saw benefits from elevated securities runoff as well as higher auto prepayments, particularly in lower yielding loans likely tied to the pull forward of new vehicle sales. We expect to see continued margin expansion from liquid savings and CD repricing going forward, albeit at a slower pace than we saw in 2Q. In retail auto, excluding the hedge, portfolio yield expanded eight basis points quarter over quarter to 9.19%.

As the lower yielding back book rolls down, we expect the portfolio yield to migrate towards originated yield over time. Turning to our retail auto lease portfolio, overall yield increased 119 basis points sequentially as lease remarketing gains normalized in line with our expectations. On the liability side, 2Q results reflected the full impact of reductions in liquid savings rates in the first quarter. In late June, we lowered liquid rates by 10 basis points to 3.5%, notably ahead of any upcoming Fed action, bringing cumulative liquid beta to 70%. Also in the quarter, we continue to benefit from a natural tailwind in CD repricing with $11,000,000,000 in maturities this quarter with strong retention and renewal rates.

We're pleased with the momentum of the franchise, stability of the portfolio and the pricing power today. As we've covered previously, Ally is liability sensitive over the medium term, but asset sensitive in the very near term, driven by floating rate commercial loan and pay fixed hedge exposure. As a result, reductions in Fed funds, particularly material reductions like we saw in late twenty twenty four are a headwind to margin expansion in the near term. I'll cover the outlook in more detail later, but we remain confident in our ability to deliver a full year NIM of 3.4 to 3.5%. More importantly, we maintain conviction in our ability to achieve a sustainable margin in the upper 3s over the medium term.

Turning to Page eight, our CET1 ratio of 9.9% represents more than $4,000,000,000 of excess capital above our SCB minimum. On a fully phased in basis for AOCI, CET1 for the period would have been 7.6%, an increase of 80 basis points from the prior year. Both measures include the 20 basis points of capital generated from the closing of the credit card transaction on April 1, a transaction that contributed 40 basis points of capital in total and enabled us to reposition a portion of the securities portfolio last quarter. While we did not execute a credit risk transfer transaction in the quarter, we continue to view CRT as an efficient way to generate excess capital that we will likely leverage in the second half of the year. Our capital management priorities remain unchanged.

We are deploying capital to drive accretive growth in our core franchises, while continuing to move our stated and fully phased in CET1 levels higher. In terms of capital distributions, earlier this week, we announced a quarterly dividend of $0.30 per share for the third quarter of twenty twenty five, consistent with the prior quarter. Buying back shares, particularly at the current valuation remains a key capital management priority. The combination of higher CET1 levels, improved returns and consistent organic capital generation are key factors that will determine the appropriate time to repurchase shares. Turning to book value at the bottom of the page, adjusted tangible book value per share of $37 increased 12% from the prior year.

Excluding the impacts of AOCI, adjusted tangible book value per share of $48 is up over 125% from 2014. We remain focused on growing tangible book value per share and driving shareholder value through disciplined capital management in the years ahead. Turning to Page nine, credit quality trends across all our lending portfolios remain encouraging. The consolidated net charge off rate was 110 basis points, a decline of 40 basis points to the prior quarter and a decrease of 16 basis points to the prior year. This quarter's consolidated net charge off rate reflects the impact of the card sale, which contributed to the year over year improvement.

In retail auto, the net charge off rate was 175 basis points, down 37 basis points sequentially and six basis points year over year. This marks the second consecutive quarter of year over year improvement, reflecting strong performance from recent vintages and continued enhancements to our digital servicing capabilities. That said, we remain mindful of the elevated level of uncertainty that we are currently navigating. Moving to the top right of the page, thirty plus day all in delinquencies of 4.88% represents the first year over year improvement in delinquency rates since 2021, a positive inflection point for credit performance. Since delinquency trends are a leading indicator of charge offs, this improvement reinforces our constructive view on the near term loss trajectory.

Vintage level delinquency performance trends are included in the supplemental section of the earnings presentation and are also disclosed in our 10 Q and 10 ks. We continue to observe stable and consistent delinquency performance trends across the 2022 and 2024 vintages and added the 2025 vintage to the disclosure. As we noted last quarter, the benefit of vintage rollover is clearly playing out in actuals. Looking holistically at credit measures, we remain encouraged by the performance of the portfolio and the effectiveness of our servicing strategies, but remain cautious of macroeconomic uncertainty going forward. Turning to the bottom of the page on reserves.

Consolidated coverage increased one basis point this quarter, while the retail auto coverage rate remained flat at 3.75%. As we guided last quarter, the increase in the consolidated coverage rate was due to mix dynamics. Our retail auto coverage levels continue to balance the favorable credit trends we're seeing, namely improved delinquency rates and recent turnover in the portfolio to higher quality vintages against an uncertain macroeconomic outlook and the expectation of worsening unemployment. As we've consistently said, we do not forecast reserve releases and they are not incorporated into our mid teens return guidance. Moving to our auto finance segment on Page 10.

Pretax income of $472,000,000 was $112,000,000 lower year over year, primarily driven by lower lease gains and a decline in commercial auto balances. Our lease remarketing performance improved quarter over quarter to approximately breakeven versus a loss in 1Q. Going forward, we expect remarketing performance to be less of a factor given the reduced volume of terminating units not covered by residual value guarantees. Commercial floor plan balances reflect industry trends and inventory levels, partly influenced by tariffs that likely pulled forward consumer demand. That said, while dealer inventory levels remain lower, increased sales activity and the financing of leaner inventories have continued to support overall dealer health and profitability.

As illustrated on the bottom left, retail auto portfolio yields excluding the impact from hedges increased eight basis points quarter over quarter. As we noted, the portfolio yield will continue to migrate towards originated yields through time. Originated yield of 9.82% was up two basis points quarter over quarter with 42% of all retail volume coming from our highest credit tier. Turning to our insurance business on Page 11. We recorded a core pre tax loss of $2,000,000 as higher losses more than offset strong growth in premiums and investment revenue.

Total written premiums of $349,000,000 were up $5,000,000 year over year and down $36,000,000 on a sequential basis. As a reminder, our annual excess of loss policy renews each April. This year's renewal came at a higher cost as we increased coverage levels in response to growth in the business. The associated premium paid for this policy is recognized as a reduction in written premium, which impacted results for the current period. Excluding the impact of excess of loss, written premiums increased 6% year over year.

We continue to see great momentum across the business. The year over year increase in losses was primarily driven by an increase in exposure. Inventory exposure increased by $9,000,000,000 or 23% to the prior year. But importantly, our weather loss ratio remains in line with the five year historical second quarter average. Our reinsurance program continues to materially reduce weather exposure within the book.

Looking ahead, our focus remains on leveraging relationships in auto finance and growing earned premiums over time. This remains a key driver of our long term capital efficient other revenue expansion. Corporate finance results are on Page 12. Core pre tax income of $96,000,000 reflected another strong quarter and translated to a 31% return on equity. Net financing revenue of $108,000,000 was up $4,000,000 quarter over quarter and down 4,000,000 year on year with the annual decline driven by lower amortized fee income.

End of period HFI loans ended at $11,000,000,000 an increase of $1,300,000,000 year over year reflecting our focus on prudently growing the business. We had no new non performing loans and recorded no new specific reserves, a leading indicator of stable credit. Criticized assets and non accrual loan exposures were 101% of the total portfolio near historically low levels. The team has leveraged its longstanding relationships with financial sponsors along with the strategic expansion of our product suite to drive accretive, responsible loan growth even in a competitive market. Turning to Page 13, I'll close with a brief update on our financial outlook.

We're pleased with the execution of our core franchises. Our financial performance through the first half of the year has been in line to better than we expected in January. On net interest margin, we have maintained our prior guidance range of 3.4% to 3.5%. We see a path to the upper half of that range based on current trends. Of course, the timing and magnitude of rate cuts will influence the exit rate given our near term asset sensitivity, but we remain confident that full year results will align with our guidance across a variety of interest rate scenarios.

Turning to credit. We are narrowing the range of our retail auto net charge off guidance by 10 basis points to a range of 2% to 2.15%, which results in a full year consolidated net charge off outlook of 1.35% to 1.45%. We're encouraged by the strong trends year to date and a solid 2Q delinquency exit, which together give us incremental confidence in near term portfolio behavior. That said, we continue to approach credit with caution and discipline given the current macroeconomic backdrop. Moving to average earning assets, we now anticipate balances to decline by around 2% year over year.

Through the first half of the year, floor plan balances have been lower than expected due to tariff related announcements following our January guidance. Dealer inventory trends are choppy and difficult to predict. However, floor plan balances are supporting healthier dealer fundamentals, reinforcing our confidence in the credit quality of the portfolio. So in total, some moving pieces to our full year financial guidance, but we're on track or ahead of our performance expectations for the year. With that, I'll turn it back to Michael for a wrap up.

Thank you, Russ. Before we turn to Q and A, I'd like to close by highlighting a few key points on our strategic positioning. We've taken deliberate and decisive actions to fortify the foundation of this institution. This includes solidifying our capital and liquidity positions and reducing interest rate risk and credit risk. We maintain over $4,000,000,000 in excess capital above our regulatory minimum and stress capital buffer.

And both headline and fully phased in CET1 are meaningfully up year over year. This despite absorbing the final CECL phase in, changing the accounting method for EV tax credits, and redeploying capital to reposition the securities portfolio. We bolstered our capital position through non core business sales, including our point of sale lending and credit card portfolios. We enhanced our toolkit with credit risk transfers, which we plan to continue to use opportunistically going forward. On the liquidity front, we maintain over $66,000,000,000 in available liquidity, representing 5.9 times uninsured balances.

Deposits represent 90% of our interest bearing liabilities and 92% are FDIC insured, both among the highest in the industry. These efficient, stable deposits remain a key component in our strategy and overall profitability, enabling Ally to generate compelling returns. The deposits platform has created a uniquely strong funding profile and is a key differentiator for Ally. We have also materially reduced interest rate risk through a combination of our hedging program, securities repositioning, and continued remixing of the loan portfolio. On the credit side, we proactively reduced risk and volatility by eliminating exposure to higher risk unsecured consumer credit.

Within retail auto, we made targeted underwriting enhancements to strengthen credit performance while preserving strong yields and risk adjusted returns. These steps position us well to navigate potential headwinds from tariff related affordability pressures to the resumptions of student loan repayments and broader consumer health dynamics. We also made significant investments in our collection strategies, introducing targeted digital capabilities that improve customer engagement and payment behaviors. Through it all, we remain committed to rigorous cost discipline with controllable expense declining for a seventh consecutive quarter. At the same time, we continue to invest with intention, allocating expense dollars to areas that drive revenue growth and expand operating leverage.

This includes our insurance business. We are focused on driving profitable written premium growth. We're also prioritizing investments across other critical areas, enhancing cyber defenses, advancing AI capabilities, and developing innovative products, tools, and solutions that elevate the customer experience. This focus on cost control will continue to be a core pillar of our strategy as we remain mindful on how we deploy every dollar of shareholder capital. So let's pull all this together.

The actions we've taken to improve returns and reduce risk have meaningfully strengthened our foundation. As a result, we believe we are in the strongest strategic position we've been in as a public company. And with that, I'd like

to turn over to Sean for Q and A. Thank you, Michael. As we head into Q and A, we do ask that participants limit yourself to one question and one follow-up. Daniel, please begin the Q and A.

And our first question comes from Sanjay Sakhrani with KBW. Your line is open.

Thank you. Good morning. My first question is on net interest margin. Obviously, good traction there. You've had a couple of headwinds and still saw very good performance in NIM.

Russ, I got sort of the guidance you gave for the second half. I'm just curious what could lead you to outperform that expectation or underperform that expectation, sort of what's baked into your assumptions for the rate outlook in the second half? And then just specific to the 4% NIM target, like what's the timeline now that from this point onwards to get there?

Great. Thanks for the question, Sanjay. Maybe I'll start with your question around kind of things that are driving the NIM outlook or the NIM guide for the year. And as we said on the call, second quarter expansion, particularly when you look at it, excluding the headwind from the card sale was particularly strong. And we had a number of items that are now baked into our NIM at $3.45, but that aren't expected to contribute to NIM expansion going forward.

And so as we think about NIM expansion in the remainder of the year, I think you need to factor that in. So for example, we got eight basis points from the combination of the securities repositionings that we did towards the end of first quarter as well as the benefit we got from the recovery in lease termination performance. And there were some good guys also that we saw throughout the quarter associated with securities repayments as well as some acceleration in retail auto loan repayments that we think skewed towards higher credit, lower yielding customers who may have been going into the dealership to get new vehicles ahead of the implementation of tariffs. So we saw some good guys in the quarter. We also saw we also, I would say, would continue to expect benefits from liquid deposit repricing and CD repricing going forward, but probably not as big as what we saw in the second quarter. And so as you'll recall, we had reduced rate on liquids by 20 basis points in the first quarter.

We saw the full effect of that in the second quarter. We also saw the benefit of CD repricing. So we had $23,000,000,000 of CDs reprice in the first half of the year with a repricing spread of about 100 basis points. We certainly expect to continue to benefit from both repricing on liquids and CDs, but smaller. And so you saw we had about a 10 basis point reduction in liquid pricing late in the second quarter.

We'll benefit from that in the third quarter. We added to the supplemental some of the stats around CD repricing. And so you can see the volume of CDs repricing in the second half is smaller. But in addition, that repricing spread is also smaller as we go forward. And so we'll continue to benefit from all that, albeit at a smaller pace.

As we think about the things that impact NIM positively or negatively with respect to our guide, as we've said before, we are asset sensitive in the very near term. We're liability sensitive in medium term. And so, to the extent that we see similar to what we saw last year in terms of frequent and significant cuts in the rate environment in a short period of time, that's something that's going to negatively impact us in the short term. As we think about what we factored into our rate outlook, we've considered a range of different paths for rates. Our base case assumes three cuts in the back half of this year and then additional cuts early in 2026.

That being said, our guide for this year for 2025 is relatively insensitive to those cuts depending on assuming that they come late in the year. But obviously, to the extent that we see more significant cuts that could impact us certainly in the short term. Similar to last year, we'd expect that over the medium term, we get the benefit from those cuts as we are liability sensitive. And so as we realize our full deposit beta. And I would also point out in the quarter with the last cut in liquid pricing, did realize our 70% deposit beta.

And so to the extent we saw bigger cuts than we expect, that's something we benefit from next year as well. Great. Last part of your question around the 4% guide. So post pro form a for the sale of card or post the sale of card, we're targeting towards the high threes, right? Remember, just taking into account that 20 basis point headwind from the card sale.

We still feel very confident and comfortable with that outlook. As we've said before, we're not going to put a particular quarter on it, given that near term asset sensitivity that we've discussed. But again, we feel great about achieving that guide. And we think the momentum that we showed at this quarter, and I think the confidence that's expressed in our guide for the rest of the year, I think both all speak to that confidence.

Thank you. Thank you for the detailed explanation. Michael, just one quick one for you. Obviously, credits seems better in control now with the 2022 and 2023 vintages kind of performing better. I'm just curious, do you feel like it might be time to lean in a little bit more towards growth?

Or do you feel pretty good where you guys are at right now? Just trying to think about if you could get an acceleration in growth as a result of the underwriting stuff that you guys have done. Thanks.

Yes. No, Sanjay, great question. And this is overall on credit. The phrase I would use is we're encouraged by the trajectory in terms of what we're seeing. Clearly, delinquency performance on a year over year basis, look at the individual buckets, you look at some of our roll rate trends where used car values are holding up, it's all pointed to something encouraging.

That being the case, think you've heard us say before, we're going to be very disciplined and prudent when it comes to unwinding and the curtailment that we've undertaken. And so we're going be a bit data informed. There's still a lot of uncertainty in the environment and we're you can never get perfect clarity on a go forward basis, I know that. But we're going to be prudent to be data informed is the way I would view it. And so nothing to call right now, but if and when, we make the changes, we'll certainly be transparent about that.

Thank you. Our next question comes from Jeff Adelson with Morgan Stanley. Your line is now open.

Hey, good morning. Thanks for taking my questions. I just wanted to circle back on your credit trends. They certainly seem to be improving and inflecting here. I know, Michael, you just talked about some of the roll rates and used car prices.

But I guess just affordability concerns aside over the longer or medium term, should we be expecting used car prices to continue to help credit over the back half of the year. And I guess, I think you are still evaluating whether you want to maybe pare back the S tier a little bit more and get some more yield. But what would be the consideration at hand or the benchmarks you'd look at before you decide you want to lean a little bit back more into that below S tier tranche?

Thanks, Jeff, and good morning. There's a lot in there to dissect in terms of that question. And so maybe I'll just start generally with our overall outlook around credit. And you mentioned used car prices. As we've said in prior discussions, think about credit in terms of kind of the given year in terms of really kind of three kind of broad variables.

Our overall delinquency rates are flow to loss. And then of course, as you pointed out, used car prices. And I'd say all three of those things play into our expectations for a given year. And as Michael and I pointed out on the call, delinquencies have improved, but we'd still characterize them as elevated. And so that's certainly something that factors into how we think about the outlook going forward.

Our flow to loss rates, obviously coming out of last year in the fourth quarter, so far this year have been really solid. And that's something that gives us a lot of encouragement. And we think that's a reflection of kind of the servicing strategy changes that we've made, as well as the vintage rollover to the newer vintages, kind of the '23, '24, and now the '25 vintages. And then as you pointed out, used car pricing has been strong. Part of that may in fact be related to the broader macro and tariffs in particular.

But as we think about our credit guide for the year, we're kind of looking at really all three of those variables. And we've seen some encouraging signs over the last six months and the fourth quarter of last year in terms of all of those. And I'd say, we're looking forward to kind of continuation of improvement in delinquencies, strong flow to loss and used car prices. And those things give us a lot of confidence with the guide that we have in front of us. As Michael pointed out, as we look at kind of real time decisions around how we underwrite in terms of new originations, it's very much it's data driven.

We're looking at recent vintage performance, and we're looking at a really granular level in terms of places where we kind of open and close and widen our approach on a micro segment basis.

Okay, great. Thanks, Russ. And if I could just sort of talk about capital return or ask about capital return. You've talked about the higher CET1 levels and consistent organic capital generation as a key factor in determining a return to share repurchase here. It does look like you're very close to that 10% CET1, which is a nice buffer from where you've targeted historically.

I know you still have that AOCI hit to deal with, but we've been asked by investors if next year's stress test is sort of the right barometer we'd be thinking about for capital return. Is that necessarily a gating factor you think about? Or maybe just talk a little bit about how you're thinking about capital return over the medium term here?

Sure. Look, think the increase in our capital ratios over the course of the last year has been really encouraging. And as you pointed out, seeing real progress both in terms of our stated CET1 as well as our fully phased in CET1, which gives us a lot of encouragement. We're clearly moving in the right direction. And that combined with just improvement in our overall margins and earning profile and our ability to generate capital organically, give us a lot of confidence around kind of getting to the point where we can look at share repurchases.

And as you know, that's a priority for this team. It's priority a for this company. As you think about the timing of that, we don't really think about it in terms of the stress test. I mean, if you look at our capital level now, at 9.9% CET1 versus CCAR requirement at 7.6%, we carry a considerable amount of excess capital related to that. And so we don't see that as a gating item.

And so we're really looking towards our fully phased in CET1 ratio and our organic capital generation just based on the strength of our earnings. Those are really the two things that we're looking at in terms of kind of getting to the point where we can repurchase shares.

Thank you. Our next question comes from Ryan Nash with Goldman Sachs. Your line is now open.

Hey, good morning, Michael. Good morning, Russ. Maybe just a follow-up on credit. So, it was good to see delinquencies, better delinquency performance, they're now down year over year. I guess sort of a two part question like, Russ, what will we need to see or what would it take to actually move the charge off rate range down?

And last quarter, you talked about shifting seasonality. Maybe just help us think about seasonality for the back half of the year on losses. Thank you.

Ally Financial (ALLY) Q2 2025 Earnings Call Transcript

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