Financial Data and Key Metrics Changes - Adjusted EPS for 2025 was $3.81, up 62% year-over-year, with core ROTCE at 10.4%, an increase of over 300 basis points compared to 2024 [7][11] - Adjusted net revenue reached $8.5 billion, a 3% increase year-over-year, and a 6% increase when excluding the impact of the card sale [11][12] - CET1 ended the year at 10.2%, with a fully phased-in CET1 of 8.3%, up 120 basis points during the year [11][37] Business Line Data and Key Metrics Changes - Retail auto and corporate finance loans increased by 5% in 2025, driven by strong performance in core franchises [13] - Dealer Financial Services originated $43.7 billion in consumer loans, an 11% increase year-over-year, with a 9.7% origination yield [16] - Insurance written premiums exceeded $1.5 billion, marking a record for the company [18] Market Data and Key Metrics Changes - Retail deposit balances reached $144 billion, reinforcing the company's position as the largest all-digital direct bank in the U.S. [19] - The company served 3.5 million customers, marking the 17th consecutive year of customer growth [20] Company Strategy and Development Direction - The company undertook a strategic refresh in 2025, focusing on investing in areas with clear competitive advantages [6] - A $2 billion open-ended share repurchase authorization was announced, indicating confidence in future growth opportunities [14] - The company aims for organic growth while also considering share repurchases as a capital deployment option [15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2026, emphasizing the importance of bridging strategy to execution and focusing on strong volumes with appropriate margins [89] - The company remains cautious about macroeconomic uncertainties, particularly regarding the labor market and used vehicle values [95][101] - Management highlighted the importance of maintaining expense discipline while investing in core franchises and technology [91][96] Other Important Information - The company executed two credit risk transfer transactions totaling $10 billion in notional retail auto loans, enhancing capital efficiency [12] - Adjusted non-interest expense was approximately flat year-over-year, with controllable expenses down 1% [30] Q&A Session Summary Question: NIM progression and drivers - Management confirmed expectations for NIM to be down quarter-over-quarter in Q1 but expressed confidence in a strong exit trajectory for the year [70][72] Question: Retail auto coverage ratio and reserve releases - Management indicated that reserve releases are not factored into return expectations, focusing instead on prudent credit management [78][80] Question: 2026 guidance and risks - Management expressed optimism for 2026, highlighting strong fundamentals and the importance of monitoring macroeconomic factors [89][95] Question: Credit performance and delinquencies - Management acknowledged that while delinquencies are improving, macroeconomic factors like unemployment could impact future performance [102][104] Question: NIM upper bound and ROE expectations - Management clarified that achieving a high threes NIM is essential for reaching mid-teens ROE targets, with no changes needed in operational strategy [111][116]

Ally Financial (NYSE:ALLY) Q4 2025 Earnings call January 21, 2026 09:00 AM ET Company ParticipantsRyan Nash - Managing DirectorRussell Hutchinson - CFOJeffrey Adelson - Executive DirectorMichael G. Rhodes - CEOSean Leary - Chief Financial Planning and Investor Relations OfficerConference Call ParticipantsMoshe Orenbuch - Managing Director and Senior AnalystSanjay Sakhrani - Managing Director and Senior AnalystRobert Wildhack - Director, Equity Research AnalystMark DeVries - Director, Senior Research Analyst ...

Financial Data and Key Metrics Changes - Adjusted EPS for 2025 was $3.81, up 62% year-over-year [4] - Core ROTCE increased to 10.4%, up more than 300 basis points compared to 2024 [4] - Adjusted net revenue reached $8.5 billion, a 3% increase year-over-year, and a 6% increase when excluding the sale of the card business [5] - CET1 ended the year at 10.2%, with a fully phased-in CET1 of 8.3%, up 120 basis points in 2025 [5][19] Business Line Data and Key Metrics Changes - Retail auto and corporate finance loans grew by 5% in 2025, driven by strong performance in core franchises [6] - Dealer Financial Services originated $43.7 billion in consumer loans, an 11% increase year-over-year [8] - Insurance written premiums exceeded $1.5 billion, marking a record for the company [9] - Corporate finance achieved a 28% ROE with strong growth in the loan portfolio [9] Market Data and Key Metrics Changes - Retail deposit balances reached $144 billion, reinforcing the company's position as the largest all-digital direct bank in the U.S. [10] - The company served 3.5 million customers, marking the 17th consecutive year of customer growth [10] - Retail auto net charge-offs for the year were 1.97%, below the 2% mark, indicating strong credit performance [23] Company Strategy and Development Direction - The company undertook a strategic refresh in 2025, focusing on areas with clear competitive advantages [3] - A $2 billion open-ended share repurchase authorization was announced, indicating confidence in future growth [7] - The company aims to maintain expense discipline while investing in core businesses and technology [15][32] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2026, emphasizing the importance of bridging strategy to execution [46] - The company is focused on building strong volumes with appropriate margins and pricing in the auto franchise [47] - Management acknowledged macroeconomic uncertainties, particularly regarding the labor market and used vehicle prices [50][54] Other Important Information - The company executed two credit risk transfer transactions totaling $10 billion in notional retail auto loans [6] - Adjusted tangible book value per share increased by nearly 20% over the past year [20] Q&A Session Summary Question: NIM progression and drivers - Management confirmed expectations for NIM to be down quarter-over-quarter in Q1 but expressed confidence in a strong exit trajectory for the year [37][39] Question: Retail auto coverage ratio - Management indicated that reserve releases are not factored into return expectations, focusing instead on prudent credit management [41][44] Question: 2026 outlook and risks - Management highlighted optimism for 2026, with a focus on maintaining strong fundamentals and managing macroeconomic risks [46][50] Question: NIM upper bound and ROE expectations - Management clarified that achieving mid-teens ROE requires high threes NIM, sub-2% retail auto NCO rate, and disciplined capital and expense management [60]