Ally Financial Q4 Earnings Call Highlights

Core Insights - Ally Financial reported a strong performance in 2025, with adjusted earnings per share of $3.81, a 62% increase year over year, and core return on tangible common equity (ROTCE) of 10.4%, up more than 300 basis points compared to 2024 [2][5] - The company executed strategic actions including exiting non-core businesses and repositioning its investment securities portfolio, which contributed to improved profitability and credit performance [3][5] Financial Performance - Adjusted net revenue for 2025 was $8.5 billion, reflecting a 3% year-over-year increase, or 6% when excluding the impact of the credit card business sale [2][5] - Retail auto originations reached $43.7 billion, an 11% increase, with 43% of the volume in the highest credit tier [5][6] - The digital bank ended the year with $144 billion in retail deposits, maintaining a customer base of 3.5 million, marking 17 consecutive years of growth [9] Credit and Risk Management - Retail auto net charge-offs (NCOs) for the fourth quarter were reported at 2.14%, down 20 basis points year over year, with full-year retail auto NCOs at 1.97%, below prior guidance [14] - The company processed a record 15.5 million applications, allowing for selective originations and maintaining underwriting discipline [6][8] 2026 Guidance - For 2026, Ally expects a net interest margin (NIM) of 3.6% to 3.7%, retail auto NCOs of 1.8% to 2.0%, and low single-digit growth in other revenue [4][18] - Expense growth is anticipated to be around 1%, with continued investments in AI, cyber, and customer experience [18] Capital Management - Ally ended 2025 with a Common Equity Tier 1 (CET1) ratio of 10.2% and announced a $2 billion share repurchase authorization [20][21] - The adjusted tangible book value per share increased nearly 20% over the past year, ending at $40 [21]