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

2026_GPTW_best-companies-for-women-Large-Ally_Financial_Inc

Employees say:"For nearly 30 years, Ally has been my home away from home—supportive through many personal and professional milestones. Professionally, I have felt empowered to share insights that improve my team or the broader organization, treated fairly, and recognized for my contributions. Over time, my leaders and mentors have provided the guidance and trust needed to pursue a self-directed career path, while also offering the flexibility to maintain a healthy balance between my professional and personal life. What makes this organization truly distinctive is its demonstrated commitment to employees, the community, and customers—values that are actively lived, not just stated."

100 Best Large Workplaces for Women

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

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."

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

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# Work Sites

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

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Ally Financial

ally financial

Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Dan Ignacio, Executive Director, Corporate FP&A and Investor Relations. Please go ahead.

Thank you, Daniel. Good morning and welcome to Ally Financial's third 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 reference can be found on the investor relations section of our website, ally.com.

Forward-looking statements and risk factor language governing today's call are on page 2. GAAP and non-GAAP measures pertaining to our operating performance and capital results are on page 3. As a reminder, non-GAAP or core metrics are supplemental to and not a substitute for US GAAP measures. Definitions and reconciliation can be found in the appendix. With that, I'll turn the call over to Michael.

Thank you, Dan, and good morning, everyone. I appreciate you joining us today for our third quarter earnings call. While I'll discuss the quarter in more detail in a moment, I'd like to take a step back and start with the bigger picture. We delivered another quarter of meaningful progress against the priorities we have laid out, and those results reflect a broader story unfolding across Ally. Ally is a stronger company today than it was just a few years ago.

We've made deliberate choices about where to invest and grow, and our results reinforce that we are on the right path. Over the past two years, retail, auto, and corporate finance assets have grown nearly 15%. Core ROTCE has increased from 5% to 13%. Retail NCOs have declined by more than 30 basis points. We have returned meaningful capital to shareholders while also building our capital base.

Taken together, we've built an Ally that is positioned to deliver stronger returns, greater resilience, and sustainable growth. Now let me be clear, this isn't the finish line, but I am proud of what we have achieved. Simply put, our strategy, backed by disciplined execution, is working. Moving to financial results, third quarter adjusted EPS of $1.34 was up 16% year-over-year.

Adjusted net revenue of $2.3 billion increased 9% year-over-year, and with non-interest expenses flat, we delivered another quarter of meaningful operating leverage. CET1 of 10.2% was up 10 basis points year-over-year, and we remain pleased with our ability to execute a story of and, not or. That is, we are growing our core businesses, maintaining strong capital levels, and returning capital to shareholders. Our Focus Forward strategy remains simple yet powerful.

Importantly, none of this happens without our people, and our differentiated brand and culture continue to amplify that strategy. Our teammates bring our promise to do it right to life every day with an unwavering commitment to show up for our customers, communities, and each other. Our Life Today campaign continues to highlight Ally's unique ability to meet customers where life and money intersect in today's world.

Building on our history of disruption and innovation, last month, we announced Loyally, our first-ever loyalty experience. Moving beyond complexity to deliver meaningful value through discounts and seamless experiences with the simple fee-free model our customers know and love. More importantly, initiatives like Loyally demonstrate the investments we're making to strengthen customer relationships and position Ally for the future. Ultimately, our focus is not on delivering compelling results in any single quarter.

It's about ensuring the progress we are delivering today translates into a company that is stronger, more resilient, and capable of generating higher returns for years to come. While I'm pleased with this quarter results, my conviction is grounded in the momentum we see across our franchise and the opportunities ahead of us. We know the path will not always be linear, but the direction is clear. With that, let's turn to slide 5.

Our market-leading franchises continue to be a source of strength, underpinned by deep customer relationships, differentiated capabilities, relevant scale, and disciplined execution that continue to position us well in the markets we compete. We continue to build on the momentum across each business, with execution translating to accretive growth and improved returns. In dealer financial services, our dealer-centric through the cycle approach is paying dividends.

In auto, we decisioned 4.8 million applications, up 20% year-over-year, as our refined go-to-market strategy continues to expand the top of the funnel and further our reach in our industry. That application flow translates to $12.9 billion of originations, up 10% year-over-year. As we leverage the scale and infrastructure we've built, the focus remains on maximizing risk-adjusted returns. That means pairing attractive growth with a disciplined credit posture.

Our data-driven approach to portfolio management and dynamic underwriting continues to translate into more durable credit performance. Importantly, consumers have continued to demonstrate resilience as they navigate an evolving macro backdrop. We remain encouraged by the performance we're seeing across the portfolio. Within insurance, written premiums of $388 million increased $3 million year-over-year, and a 75% increase year-over-year in conquest activity reflects continued momentum across the business.

Insurance continues to generate diversified, capital-efficient, accretive earnings, evidenced by a year-to-date ROE of approximately 30%. More broadly, our differentiated go-to-market strategy in dealer financial services allows us to support dealers across the entire ecosystem, strengthen relationships, expanding our opportunity set, and enhancing the value of the franchise. Corporate Finance delivered another impressive quarter, generating a 22% return on equity.

Our portfolio now stands at $15.8 billion, up 40% year-over-year. Non-accrual loans and criticized assets remain at historic lows, underscoring the credit-first mindset that's long defined our business. Our established partnerships, underwriting expertise, and speed and certainty of execution remain core strengths of the franchise and support attractive, consistent returns. At the digital bank, our differentiated value proposition and ability to provide exceptional products and experiences continues to drive customer growth that consistently outpaces industry averages.

We now serve 3.6 million customers, up 7% year-over-year, and marking our 70th consecutive quarter of growth. We continue to track highly engaged customers who skew towards Millennial and Gen Z. Our national brand, digital-first operating model, and unmatched experience position us exceptionally well as consumer preferences continue to evolve. In aggregate, these results reflect the strength of our franchises and the benefits of the investments we've made to expand products, build capabilities, and create long-term value.

We've been clear about what we have set out to accomplish, and our results today represent another step on our path to mid-teens returns. While that path may not always be linear, our conviction continues to grow. My confidence is based not only on this quarter's results, the momentum we see across our businesses, and the opportunities ahead of us. 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 third quarter performance on slide 6. Net financing revenue, excluding OID, of $1.8 billion was up 10% year-over-year. Growth was in our core portfolios and lower funding costs supported continued NII expansion. Adjusted other revenue of $579 million was up 4% year-over-year. We continue to see solid momentum across our diversified revenue streams: insurance, SmartAuction, and pass-through programs.

Provision expense of $529 million was up $114 million year-over-year, primarily due to CECL reserve builds associated with continuing strength in asset growth. Our retail auto portfolio grew to $2.4 billion in the quarter, which led to nearly $90 million of CECL reserve build in the period. Over time, this growth contributes to future earnings but presented a 3Q headwind of roughly $0.20 to EPS and 200 basis points to ROTCE.

We saw 9% operating leverage as adjusted non-interest expense of $1.2 billion was relatively flat year-over-year, reflecting ongoing discipline and weather losses which were slightly favorable to our baseline expectations. Let's move to slide seven to discuss margin in detail. Net interest margin, excluding OID, of 3.66% increased 3 basis points quarter-over-quarter as the full benefit of second quarter deposit pricing actions was largely offset by losses on lease termination.

Retail auto portfolio yields, excluding the impact from hedges of 9.2%, was down sequentially, but given current originated yields, we anticipate the portfolio yield to migrate higher over time. Consistent with commentary at an industry conference last month, lease yields in the quarter included a $16 million loss on lease terminations, reflecting continued pressure on Stellantis auction prices and residual values stemming from broader brand and recall-related overhang.

Given the current mix of our lease portfolio coming to termination, we expect the resulting pressure to persist into 4Q. Looking beyond that, we would expect the headwind to abate as we move through 2027 and the portfolio continues to shift towards a more diversified OEM mix. Importantly, since announcing our partnership with a pure battery electric OEM in March 2024, approximately half of our lease origination volume includes residual value guarantees, reducing the proportion of the portfolio subject to volatility and residual value.

We continue to deliver strong earning asset growth, supporting the ongoing remixing of our balance sheet into higher return assets. Average earning assets were up 7% year-over-year, with growth continuing to be concentrated in retail auto and corporate finance. Ending retail auto assets were up 8%, while corporate finance loans were up 40%.

Growth in these asset classes continues to replace the runoff of lower-yielding mortgages, providing a structural tailwind to net interest margin over time. On the liability side, cost of funds decreased 3 basis points quarter-over-quarter, driven by the full impact of deposit pricing actions taken during the second quarter.

Deposit customers grew for a 70th consecutive quarter and are up 70% year-over-year, reflective of the strength of our brand and unique value proposition that Michael highlighted earlier. Given the expectations for a series of Fed hikes, I want to provide color on how we expect our margin trajectory to unfold given the composition of our balance sheet. Movement in benchmark rates impacts the pace and magnitude of remaining NIM expansion to our upper 3s target. We remain confident across a range of Fed paths.

In the near term, our balance sheet is slightly asset sensitive as our roughly $60 billion in floating rate exposures reprice higher. That benefit moderates as our retail deposit portfolio reprices higher, ultimately influencing towards liability sensitive over the medium term. Over time, the retail auto portfolio reprices higher with benchmark rates supporting NIM expansion.

In addition, the tailwind from asset remixing will continue to drive margin expansion toward our upper 3s target. I will cover guidance in more detail later, but despite the evolving rate environment and near-term lease dynamics, we remain confident in the full year guide and a path to exit the year around the high end of the range we provided in January. Turning to page 8, CET1 of 10.2% is up approximately 10 basis points versus the prior year.

Under the current proposal for RSA, our CET1 would be 8.8% when fully phasing in AOCI, with ERBA providing roughly 30 basis points of additional benefit. During the quarter, we executed our second credit risk transfer of 2026, generating more than 25 basis points of CET1 at issuance. We continue to execute on the story of and.

We are supporting accretive, disciplined growth across our core franchises, maintaining healthy capital levels, and returning capital to shareholders. We have grown the retail auto and corporate finance portfolios 12% year-over-year and have repurchased nearly $500 million in shares over that period, further demonstrating our ability to deliver on our capital priorities. Earlier this week, we announced our quarterly dividend of $0.35 for the fourth quarter.

This was the first increase to our quarterly dividend since 2022, reflecting our improved earnings power, strengthened capital position, confidence in the path ahead, and commitment to returning capital to shareholders. Additionally, at the end of the quarter, adjusted tangible book value per share was $41, up 5% over the past year, underscoring our continued focus on delivering long-term shareholder value. Our capital levels were influenced by rate movements during the quarter.

However, the magnitude of that impact was mitigated by deliberate actions we have taken to lower our exposure to rate volatility. Over the past several years, we've proactively repositioned a portion of the securities portfolio, reinvested into shorter duration instruments, and continue to strategically hedge the balance sheet. Our strategic actions are working, resulting in a more resilient balance sheet and a more durable capital base. On slide nine, we'll review asset quality trends.

Consolidated net charge-offs of 117 basis points were up six basis points sequentially due to seasonality and were roughly flat year-over-year. Within retail auto, net charge-offs of 189 basis points were up 32 basis points quarter-over-quarter and roughly flat to a year ago. On the top right of the page, 30 plus all-in delinquencies of 4.96% were up six basis points from the prior year. Reserve detail is included at the bottom of the page.

The consolidated coverage rate of 2.49% was flat quarter-over-quarter, while retail auto coverage of 3.74% was down one basis point. Our coverage levels continue to balance stable credit trends across our portfolios against broader macroeconomic uncertainty. Consumer debt continued to demonstrate resilience that we monitor several factors, including persistent inflation, affordability pressures, elevated oil prices, and lower personal savings rates.

It is important to note that our underwriting approach is not static. We continuously leverage emerging data and insights to refine our buy box for the operating environment. We continuously curtail, reprice, and make changes to automated decisioning for segments we may like less and vice versa. While the portfolio is performing largely in line with our expectations, our late 2025 and early 2026 vintages are showing higher early life delinquency, which are being closely monitored.

We noted a richer origination mix in 1Q in terms of yield and credit, which comes with higher delinquency. The 2Q and 3Q vintages are comparatively tighter in yield and credit, which we expect to exhibit lower levels of delinquency. Vintage performance can fluctuate quarterly as we calibrate alongside evolving conditions in the market and with seasonal patterns.

That is why we think it's important to look at full year vintages which better reflect our discipline through the cycle approach. We remain confident in the full year guide and importantly, the portfolio overall. Moving to slide 10 to review auto segment highlights. Pre-tax income of $337 million was lower year-over-year, primarily due to CECL reserve builds associated with continued strong retail assets. On the bottom left, we've highlighted the trajectory of retail auto portfolio yields.

Excluding the impact from hedges, yields were slightly down quarter-over-quarter. Third quarter originated yield of 9.44% was up approximately 35 basis points quarter-over-quarter, reflecting continued pricing actions on like-for-like segments, higher benchmark rates, and a modest decline in FTR. We took pricing actions throughout 3Q, exiting the quarter with originated yields in the upper 9% range.

On the bottom right of the page, $12.9 billion of consumer originations were up 10% year-over-year, as we continue to benefit from our strategic efforts to align dealer incentives to drive record application flow. Sustained strength in application volume remains a key competitive advantage, and we continue to believe there is runway ahead. Our expansion at the top of the funnel is providing increased opportunities to assess credit, enabling us to be selective in underwriting to optimize risk-adjusted returns.

The application flow has enabled further growth in our pass-through program, where we generated a second consecutive quarter with more than $1 billion of off-balance-sheet origination volume. Given this momentum, we have grown our service portfolio, which contributes accretive fee income, evidenced by the 20% year-over-year increase in auto other revenue. Turning to insurance on slide 11. Core pre-tax income was $75 million, up $23 million year-over-year.

Total written premiums of $388 million were up $3 million year-over-year. Insurance losses of $135 million were down $6 million year-over-year. Insurance continues to provide durable, capital-efficient revenue and remains a key driver of our long-term growth strategy. We continue to leverage synergies with auto finances to sustain momentum within the business and deepen our Ally dealer value proposition, supporting our dealer partners in all aspects of their business.

Turning to corporate finance on slide 12. The business delivered another strong quarter with pre-tax income of $98 million and a 22% ROE. The team continues to demonstrate their ability to scale responsibly, with the portfolio ending the quarter at $15.8 billion, up 40% over the past year. Most of the growth during the quarter was driven by existing lending relationships, and we served as lead agent on nearly 90% of the commitments originated in the quarter.

The team exercises a conservative risk management approach supported by a relationship-based model grounded in a deep understanding of our clients' businesses. We are pleased with the momentum as we leverage a consistent strategy that focuses on disciplined credit risk management and has delivered annual losses of less than 30 basis points since our IPO. The portfolio is comprised of 100% first lien senior secured floating rate loans.

The power of our model is evident in the consistent credit performance of the portfolio, which remains strong, and in the compelling returns delivered by the business. On page 13, I will conclude with a brief update on our financial outlook. With only one quarter remaining, we are updating our outlook to provide a more defined range while continuing to reflect our confidence in achieving or exceeding all aspects of the full-year guide we laid out in January.

Despite an evolving rate environment, with fed funds expected to end the year roughly 100 basis points above our January guidance assumption, as well as acute lease residual pressures throughout the year, we continue to expect NIM to remain within our initial guide and are now expecting full-year NIM to fall between 3.6% and 3.65%.

As we look to the fourth quarter, we see NIM around 3.7%. Turning to other revenue, we are tightening our outlook to be up 2% to 4%, compared to our prior guide of flat to up 5%. Our outlook for retail NCOs remains consistent as we track toward the midpoint of our guidance range. At the consolidated level, this translates to an NCO rate at the low end of our guidance range and reflects the strong performance of our commercial portfolios.

Given our disciplined approach to expense management, adjusted non-interest expense is now expected to be flat to up 1%, slightly lower than the prior guide. Looking at growth, we have seen strong momentum in our retail auto and corporate finance originations. We are once again increasing the outlook for average earning asset growth.

We now anticipate 5% to 6% growth year-over-year, up from 3% to 5% previously and 2% to 4% at the start of the year. As a reminder, this growth carries CECL reserve build upfront. Our tax rate guidance remains unchanged, and we continue to expect our full-year rate to land in the 20% to 22% range. In total, our focused strategy and disciplined execution continue to drive improving operational and financial performance.

While we have made significant progress, our focus remains on sustaining our momentum and executing on the meaningful opportunities ahead to deliver compelling long-term value for our shareholders. With that, I will turn it over to Dan 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. Daniel, please begin the Q&A.

As a reminder, to ask a question, please press *11 on your telephone and wait for your name to be announced. To withdraw your question, please press *11 again. Please stand by while we compile the Q&A roster. Our first question comes from Ryan Nash with Goldman Sachs. Your line is open.

Good morning, Ryan. Thanks for joining us.

Good morning, Russ. Clearly you guys had a strong PPNR performance this quarter. However, we did see delinquencies slip from down year-over-year to up, and charge-offs seem to be tracking with the middle of year guidance. Russ, I know we'll get formal guidance at some point next year, but maybe just talk about the pluses and minuses on credit into 2027, whether it's around the vintages.

I know you highlighted pieces of late 2025 and early 2026 or it's other factors. Do you expect to make progress towards your long-term target of 1.6% to 1.8%, or do you think we could go sideways or even increase given the recent portfolio trends? Thank you.

Great. Thanks, Ryan. Thanks for your question. Very good question as usual. Maybe as I start out, I'd just like to say, first of all, we're pleased to see the portfolio performing this year according to our expectations. We started the year, we talked about a guide of 1.8%-2%. We're very much performing towards the middle of the guide, which is exactly where we pointed people.

If you think about flow to loss and used vehicle prices, we talked earlier in the year about the support that we were getting from favorable flow to loss and strong used car prices in the market. We also talked at the time about the fact that we expected those factors to continue to be supportive, but less supportive as we worked through the year. That's played out pretty much as we expected.

We talked about earlier in the year the fact that we expected the year-over-year comparisons to look much like they did in the third quarter, with NCOs flattening out and with the possibility of delinquencies being off a touch. As far as we're concerned, as we see the portfolio playing out, it's playing out very much as we expected it to play out.

You mentioned vintages, and I know vintages will get a lot of attention when we release the Q in a little bit. As we've said before, we look at the portfolio overall performing according to expectations. When we look at the 2025 and 2026 vintages, from a delinquency perspective, they're moving ahead of the 2024s.

As we said before, that said 2024 vintage performed better than expectation, so we expected to see some normalization in terms of the performance of the 2025 and 2026 vintages. We underwrote for that. As you look at, and as we said in the prepared remarks a couple of minutes ago, if you look at the 2025 and 2026 vintages a little bit more closely, we are seeing elevated delinquency in the late 2025 and early 2026 vintages.

I just remind you, we try to focus people on the annual vintages. Quarter-to-quarter, there's a lot that goes on. For example, as I look at the first quarter 2026 vintage, even at the time we originated it, we talked pretty transparently about the fact that it was rich, both in terms of credit content as well as in terms of yield.

When we reported back in April, we talked about a measured posture given a lot of what was going on, as well as seasonal dynamics that would drive our origination mix cleaner as we moved through the year. That's certainly what played out as we moved through second quarter and third quarter. As we look at the vintages, we understand people will spend a lot of time looking at those curves, but from our perspective,

they're playing out very much as expected, just given the credit content that we have in those various vintages. I remind you, as you think about full year 2026, we very much pointed people towards the expectation that we're going to originate an S-tier mix that's probably in the low to mid-40s, and that's still very much our expectation.

As we look forward, we're again pleased to see credit evolving through 2026 in line with our expectations, and again, in line with the midpoint of the range that we provided back in January. Now, as you pointed out, it's early to give 2027 guidance. We learn a lot as we move through the course of the fourth quarter, and as you know from prior years, we typically provide guidance early in 2027.

So in January, we provide guidance for 2027, having the benefit of all the stuff that we learn going through the closeout of the year. We expect to learn a lot. We're certainly not going to give 2027 guidance right now at this point. But I would say, just kind of sitting here today, our expectation is for 2027 to look a lot like 2026 from an NCO perspective.

Now, you mentioned in your question our origination appetite, our kind of 1.6% to 1.8% range, and the trajectory and the timeline that moves towards that. I just want to make sure I remind you that our approach to underwriting is pretty dynamic as you'd expect. As we mentioned earlier in the prepared remarks, we're constantly looking at our origination mix and looking at our portfolio on a pretty granular segmented basis.

We're looking for pretty granular segments where we either curtail or we reprice, or in some cases, we just make changes to automated decisioning in order to readjust the composition of our book. As we think about our risk appetite in that 1.6% to 1.8% range, I would say if you look over the course of certainly the later part of 2025, you look at where we're originating today, we're very much originating towards the higher end of that appetite.

When I think about the trajectory to get- So from where we're operating today in 2026, to getting under or getting into that range, we don't expect a step function change just given the proximity there. We expect it to be more of a drift. Michael pointed this out in his remarks earlier, when we talk about a drift, it's not necessarily a straight line. We could be impacted positively or negatively in any given quarter just based on the seasoning of various vintages as well as what's playing out in the macro.

Got it. That was a great color, Russ. Just speaking of color, I think you gave a lot of color earlier on how to think about the impact of hikes. Obviously, expectations of rates have moved a lot with three more hikes in the curve. I guess based on what you know today, do you think the negatives over the next four or five quarters outweigh the positives? Do you expect the NIM to take a step back before taking a step forward, and then eventually making meaningful progress? Or can you hold the line? Maybe just discuss the key drivers and what you think it'll mean for the margin over the next few quarters. Thank you again.

It's another great question, Ryan, and I do appreciate your questions seem to follow the path of your note earlier this morning that you published.

Yeah. I'm going to go back to something I said in the prepared remarks. Maybe before I start there, maybe just to start, nothing's changed from our perspective as we think about our trajectory towards a high threes NIM. Going back to my remarks more specifically and about fourth quarter, we pointed you towards an exit rate for 2026 that's around the high end of the range that we gave at the beginning of the year, the 3.6% to 3.7%.

Obviously, as you pointed out, a lot's changed over the course of the year in terms of the rate trajectory. We've talked about headwinds we have related to Stellantis vehicles coming back from lease as well. That certainly costs us more than a few basis points over the course of this quarter. Again, I want to make sure you understand.

When we talk about the stuff, when I point you towards the high end of the range, it's not pointing you towards basis point precision in terms of where we expect to end up, because you know as well as I do on $1.8 million of net financing revenue in a given quarter, $4 million can move us a basis point in one quarter. I don't want you to put a too high degree of precision on where we are. What I do want you to understand is the direction, right? As Michael pointed out earlier, this is one of those areas where it's not going to be a straight line, but the direction is pretty clear.

When I think about the direction, the things that are driving our NIM upwards on a sustainable basis, it's really what's going on in our business on both the asset and the liability side. The way we've remixed our liability mix towards deposits, the way that we're exercising discipline in the pricing on the deposit side of our book, then it's on the asset side as we're moving our balance sheet more towards our higher-earning assets.

You've seen that strong growth in retail auto and corporate finance continue to run off of the mortgage book, as well as lower yielding legacy mortgage securities. We continue to move our balance sheet towards a place that's going to support higher net interest margin on a go-forward basis.

I don't want the quarter-to-quarter volatility or the quarter-to-quarter moves of a few basis points here or there to change your perception of what's going on a longer-term basis. If I look at 3Q26 versus 3Q24, and I look at net interest margin up 34 basis points, obviously a lot's changed in the way we run our business and how we manage our rate risk.

If I look at it in terms of risk-adjusted margin, net interest margin minus consolidated NCOs, we're up 67 basis points on a risk-adjusted spread basis over the course of the last two years. I think that's important to point out as you think about Michael's comment earlier about the fact it's not a straight line, but the direction's pretty clear. I think we continue to feel pretty good about our medium-term objective of getting to a high threes NIM.

Thank you. Our next question comes from Rob Wildhack with Autonomous Research. Your line is open.

Hi, guys. To start on competition in retail auto, I just wonder what you're seeing there. I know some peers have called out heightened competition pressuring returns. Others have said something different. I just wanted to get your latest thoughts on how you're seeing that, and if there's any difference across income or credit cohorts. Is the competitive environment in any way a driver in the early delinquency formation you're seeing in the late 2025 and early 2026 originations?

Great. Thanks, Rob. Great question. From a competitive perspective, we haven't noticed any measurable changes in the competitive dynamic. Our business continues to have a ton of traction. We've got longstanding relationships with our dealers. They have rewarded us through application flow. You can see over the course of the last several quarters, we've continued to bring really strong application flow.

Ally Financial (ALLY) Q3 2026 Earnings Call Transcript

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