Financial Data and Key Metrics Changes - Adjusted EPS increased by 166% year over year to $1.15 per share [5] - Core ROTCE was 15% on a headline basis and about 12% excluding the impact of AOCI [6] - Adjusted net revenue reached $2.2 billion, up 3% year over year, and 9% excluding the sale of the credit card business [6][19] - Net interest margin expanded to 3.55%, up 10 basis points quarter over quarter [6][21] - CET1 ratio of 10.1% equates to $4.5 billion of excess capital above regulatory minimum [7][24] Business Line Data and Key Metrics Changes - Dealer Financial Services reported consumer originations of $11.7 billion, driven by a record 4 million applications [10][30] - Insurance business recorded core pretax income of $52 million, up $6 million year over year [32] - Corporate Finance generated a 30% ROE with a 10% growth in the loan portfolio [12] Market Data and Key Metrics Changes - The digital bank ended the quarter with $142 billion in balances, serving 3.4 million customers [13] - 92% of deposits are FDIC insured, demonstrating the strength of the deposit base [13] Company Strategy and Development Direction - The company is focused on its core franchises, aiming for sustained growth and improved results [15] - The refresh strategy implemented in January has reshaped the organization into a more focused entity [4][5] - The company is leveraging its brand and culture to maintain a competitive edge in the market [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in credit performance, noting that consumer behaviors are better than expected despite macro uncertainties [45][46] - The company anticipates modest expansion in portfolio yield and expects full-year net charge-offs to be around 2% [37][38] - Management is committed to disciplined expense management and maintaining a strong capital position [20][25] Other Important Information - The company rolled out its proprietary AI platform, ally.ai, to enhance operational efficiency [8] - The company announced a quarterly common dividend of $0.30 per share, consistent with the prior quarter [26] Q&A Session Summary Question: Concerns about subprime auto and consumer credit trends - Management noted that credit performance metrics are better than expected and that underwriting standards have been tightened [45][46] Question: Expectations for net interest margin (NIM) trajectory - Management provided insights on NIM expansion, indicating it is influenced by Fed rate cuts and competitive market dynamics [48][50] Question: Update on flow to loss trends - Management confirmed that flow to loss rates remain favorable, with delinquency levels decreasing [57] Question: Earning asset expectations and liquidations - Management expects low single-digit growth in earning assets, driven by retail auto and corporate finance [68] Question: Future modifications to the business base - Management expressed satisfaction with the current business mix and indicated no immediate plans for significant changes [75][76] Question: Strength of origination and application volume - Management highlighted record application volumes and the impact of EV lease tax credits on origination strength [81][85]

Financial Data and Key Metrics Changes - Adjusted EPS increased by 166% year-over-year to $1.15 per share, reflecting significant earnings growth [4] - Core ROTCE was 15% on a headline basis and about 12% excluding the impact of AOCI [4] - Adjusted net revenue reached $2.2 billion, up 3% year-over-year, with a 9% increase when excluding the sale of the credit card business [4][12] - Net interest margin expanded to 3.55%, up 10 basis points quarter-over-quarter [4][15] - CET1 ratio of 10.1% equates to $4.5 billion of excess capital above regulatory minimum [4][18] Business Line Data and Key Metrics Changes - Dealer Financial Services reported consumer originations of $11.7 billion, driven by a record 4 million applications [7][24] - Insurance business recorded core pre-tax income of $52 million, up $6 million year-over-year, with total written premiums of $385 million [25] - Corporate finance generated a core pre-tax income of $95 million, reflecting a 30% return on equity [26] Market Data and Key Metrics Changes - The digital bank ended the quarter with $142 billion in balances, serving 3.4 million customers, with deposits representing nearly 90% of total funding [9] - Delinquency rates for retail auto improved to 4.9%, down 30 basis points year-over-year [21] - Consolidated net charge-off rate was 118 basis points, a decline of 32 basis points year-over-year [20] Company Strategy and Development Direction - The company has implemented a refreshed strategy focused on core franchises, resulting in sustained improvement and momentum [3][10] - The emphasis on disciplined expense management and capital allocation is expected to drive long-term value for shareholders [10][19] - The company aims to leverage its brand and culture to maintain competitive advantages in the market [5][6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in credit performance despite macroeconomic uncertainties, noting better-than-expected consumer behaviors [32][34] - The outlook for net interest margin is expected to migrate to the upper threes over time, influenced by Fed rate cuts [28] - Full-year net charge-offs are projected to be approximately 2% at the low end of the guidance, reflecting positive trends in credit performance [29] Other Important Information - The company rolled out its proprietary AI platform, ally.ai, to enhance operational efficiency [5] - The company announced a quarterly common dividend of $0.30 per share for Q4 2025, consistent with the prior quarter [19] Q&A Session Summary Question: Concerns about subprime auto and consumer credit trends - Management noted that consumer behaviors are better than expected and credit performance remains strong despite macro uncertainties [32][34] Question: Expectations for net interest margin trajectory - Management provided insights on NIM expansion, indicating a historical case study on beta evolution following Fed rate reductions [36][37] Question: Update on flow-to-loss trends - Management confirmed that flow-to-loss rates remain favorable, with delinquency levels continuing to decline [42] Question: Capital return potential and CET1 ratio - Management expressed confidence in capital progress and indicated that share repurchases remain a key priority as capital generation improves [43][45] Question: Earning asset expectations and growth - Management expects low single-digit growth in earning assets, driven by retail auto and corporate finance [49][53]