Ally Financial Inc at Goldman Sachs U.S. Financial Services Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Ryan Nash - Goldman Sachs Group, Inc - Analyst : So maybe to kick it off, you had an announcement out this morning, buyback authorization. People have been eagerly anticipating this. Maybe just frame to us, one, how we got here? How you're thinking about the $2 billion of authorization in terms of the pace and magnitude of buybacks going forward?

Question: Ryan Nash - Goldman Sachs Group, Inc - Analyst : As a Giant fan, I'm not spiking any football. So but your response makes total sense. I appreciate the color. So over the past 12 to 18 months, you talked about in your first answer, you've taken significant steps to create a more focused organization. Can you discuss how this strategic shift has impacted your competitive positioning and why you believe simplifying the organization was the right move for Ally over the longer term?

Question: Ryan Nash - Goldman Sachs Group, Inc - Analyst : So no, super helpful. And as we approach year-end, it's clear Ally generated significant momentum over the course of the year. You talked about returns improving. Can you maybe just discuss your top priorities as we head into '26? And high level, how do you feel the business is positioned as we head into 2026?

Question: Ryan Nash - Goldman Sachs Group, Inc - Analyst : So you talked a little bit about Dealer Financial Services. Year-to-date, we've seen competition pick up in the auto market, but you've continued to deliver incredibly strong volume. I think you just referenced before. Maybe just talk about what you're seeing in the market? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 10, 2025 / 4:20PM, ALLY.N - Ally Financial Inc at Goldman Sachs U.S. Financial Services Conference How are you competing? And what gives you the confidence in your ability to continue to drive both volume and risk-adjusted returns that you're targeting?

Question: Ryan Nash - Goldman Sachs Group, Inc - Analyst : Got it. No, that makes total sense. Maybe you referenced earlier deposits. Ally Bank had, I think, over $140 billion in retail deposits. Talk about how the strategy has evolved, particularly since you've taken over in terms of customer targets? And what are you doing to grow or optimize the franchise at this point?

Question: Ryan Nash - Goldman Sachs Group, Inc - Analyst : So maybe just to round out the core franchises, let's spend a minute on Corporate Finance. You've been posting strong returns in the last couple of years. And as you articulated, it doesn't have a huge amount of overlap in the other businesses. Maybe just talk about what's your strategic view for its future? How does it fit in with the other businesses? And how do you see this complementing the broader balance sheet over the next few years?

Question: Ryan Nash - Goldman Sachs Group, Inc - Analyst : Maybe just a quick follow-up to that. Obviously, middle market lending has been increasingly competitive. What do you see as the unique strength? And what are you what steps are you taking to ensure that these returns you've seen over the 25 years can be preserved?

Question: Ryan Nash - Goldman Sachs Group, Inc - Analyst : So let's maybe shift gears and talk about returns. You've expressed confidence in recent times about achieving your mid-teens return target. I think it implies over $6 of EPS. What factors give you greater conviction today maybe versus a year ago, especially given the ongoing uncertainty in the operating environment?

Question: Ryan Nash - Goldman Sachs Group, Inc - Analyst : So maybe to dig in a little bit further on some of those building blocks you laid out, starting with the last one, the margin. As you said, Ally has obviously gone from a high 2s NIM on a trajectory to a high 3s NIM. Talk about the changes driving this? What are your expectations in the near term? And just what are you doing to sustain that type of margin?

Question: Ryan Nash - Goldman Sachs Group, Inc - Analyst : Got you. There continues to be a lot of focus on the health of the consumer, particularly the low end. How would you characterize what you're seeing? Are there any notable shifts in behavior that you're observing within your portfolio?

Question: Ryan Nash - Goldman Sachs Group, Inc - Analyst : Got you. No, that makes total sense. So you talked before you began the year with a wide range expectations on credit losses and you've sort of honed it in, and you've seen a lot of improvement here, particularly in the flow to loss. And I think a lot of that's been driven by the actions you've taken across the company to improve servicing. I'm sure we'll get formal guidance. I see Russ sitting there in early '26. But maybe just talk about the main drivers of credit performance as you look into 2026.

Question: Ryan Nash - Goldman Sachs Group, Inc - Analyst : Got you. That's helpful. So around three years ago, you began tightening underwriting. It's somewhat hard to see now because you've had such robust originations, but the amount of S-tier that you do, which is your highest quality still remains in the 40s. I think years ago, it was in the low 30s. Maybe just talk about what you're watching to decide when it makes sense to begin to unwind these furthers and over what time frame could we see this happen?

Question: Ryan Nash - Goldman Sachs Group, Inc - Analyst : A couple of more questions as we round out here, Michael. So you touched on the share buyback authorization at the onset. How are you more broadly thinking about capital allocation priorities over the longer term? And how are you balancing returning capital to shareholders but also making decisions to invest in the business?

Question: Ryan Nash - Goldman Sachs Group, Inc - Analyst : So shares continue to trade at a discount, maybe not as much after today to what one would expect for a company that is going to generate mid-teens returns on a sustainable basis. Maybe just talk, Michael, about as you go around and speak with investors, what are still the misperceptions that are out there? And what do you think the market is still missing about the overall story of the company? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 10, 2025 / 4:20PM, ALLY.N - Ally Financial Inc at Goldman Sachs U.S. Financial Services Conference

Question: Ryan Nash - Goldman Sachs Group, Inc - Analyst : No, that makes total sense. We spent a lot of time upfront talking about the simplification and focus of the organization. So I'm fairly confident that M&A is not part of the strategy at this point. But I'm wondering, assuming that there's no expectation, what are the things you could look to do to add to the franchise to enhance your strategic positioning if there's any of them?

Question: Ryan Nash - Goldman Sachs Group, Inc - Analyst : I guess before we run out of time here, you did give some guidance on the fourth quarter, stable-ish margin, losses of around 2% for the full year, average earning assets on a year-on-year basis to end relatively flat on an end-of-period basis. I guess now that we're two months into 4Q, any thoughts on either how the fourth quarter is progressing versus expectations or anything in particular in the last minute or so that you wanted to highlight?

Question: Ryan Nash - Goldman Sachs Group, Inc - Analyst : It sounds like it's going to be a really strong end to the year. So please join me in thanking Michael for his presentation.