Ally Financial Inc Q3 2025 Earnings Call Transcript

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

Question: Sanjay Sakhrani - Keefe Bruyette & Woods Inc - Analyst : Thank you, good morning. Obviously, lots of jitters around some of the cracks that we've seen in subprime auto and just broader consumer credit trends. Michael, it seems like your metrics don't necessarily suggest a lot of that. And I know you guys have gotten ahead by containing some of the growth and tightening your underwriting standards, but I'm just curious if you can comment on that and sort of how you see the path forward, and if you've seen any contagion, so to speak. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 17, 2025 / 1:00PM, ALLY.N - Q3 2025 Ally Financial Inc Earnings Call

Question: Sanjay Sakhrani - Keefe Bruyette & Woods Inc - Analyst : Thank you. And just a follow-up on the NIM, obviously, Russ, you gave us some sort of expectations on a go-forward basis with the push and pull of rates going lower. But just [so you know], that target of getting into the upper 3s -- I mean, like, over what timeline, if you assume the forward curve, do you anticipate getting there? And then just on that specific point, if we think about the yields component, we've heard about banks kind of reengaging with the market, I'm just curious if you guys are seeing any impact related to that. Thank you.

Question: Sanjay Sakhrani - Keefe Bruyette & Woods Inc - Analyst : Thank you, guys.

Question: Robert Wildhack - Bernstein Autonomous LLP - Analyst : Hey, guys. The past few quarters, you've called out favorable flow to loss trends. I was wondering if you could just give us a quick update on what you're seeing there most recently. Are they still as favorable as they were earlier in the year?

Question: Robert Wildhack - Bernstein Autonomous LLP - Analyst : Okay, great. And then if I look back, in the first quarter of 2020, you bought back stock with an 8.5% CET1 ratio that was kind of fully marked for CECL, obviously, higher than that on a reported basis. I appreciate that's not a perfectly comparable period to the present and, obviously, it depends on the final rule going forward. But is there any reason you could think of why that wouldn't be like at least a reasonable benchmark for the potential for capital return going forward here? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 17, 2025 / 1:00PM, ALLY.N - Q3 2025 Ally Financial Inc Earnings Call

Question: Robert Wildhack - Bernstein Autonomous LLP - Analyst : Okay, thanks.

Question: John Pancari - Evercore Inc - Analyst : Good morning. Just wanted to -- if I could get a little bit of color around your earning asset expectation, I know you had reiterated the down 2% this year. And I believe previously, you had indicated on a more normalized basis, which we believe would be more like 2026 that you could see the average earning assets up low single digits. So implying that inflection into next year, can you just give us that updated view there in terms of the components? Do you feel confident in that -- in the low single-digit pace that we could see next year and that inflection? And then maybe if you could also talk about liquidations that you might be seeing. I know you had indicated that refinancing pressure has picked up a little bit, although off of a low base. But just driven by some of the larger competitors in the space, I wanted to see if that's continuing if that poses any risk. Thanks.

Question: John Pancari - Evercore Inc - Analyst : Great, okay. Thanks for that, Russ, appreciate it. And then just one follow-up, just around the business base, Michael, I was just wondering if you can give a little color here. I know you made some real good progress in streamlining the business space. You talked about mortgage, talked about card exits and really focusing on your core strength in auto and commercial and Corporate Finance. Over time, do you see any additional modifications to the business base, either expansion into areas that you feel better about from a risk-adjusted return basis where you may not have critical mass now? I mean, just as you've had time now to work with this business mix, how do you view that evolving longer term?

Question: John Pancari - Evercore Inc - Analyst : Okay, great. Thanks for taking my question.

Question: Jeffrey Adelson - Morgan Stanley - Analyst : Hey, good morning, guys. Thanks for taking my questions. Just to sort of follow back up on the origination strength, this was the fastest growth you've seen here, I think, in almost four years. You obviously highlighted the record application volumes. But it does maybe seem like you're improving a little bit more than the application growth, which I think was 11% growth year over year. So could you just talk about maybe what's driving the strength of application here? Maybe what's giving you some confidence to lean in a little bit more here, and how you're getting that with even keeping your S-tier at 42% or above where it's been historically. And I think just also as a part of that lease also looks like it has some strength growing a lot faster than the rest of the loan origination book, so maybe comment on that. Thanks.

Question: Jeffrey Adelson - Morgan Stanley - Analyst : Okay, great. Thanks, Russ. And maybe just a follow-up on Sanjay's question around credit performance, at least one of your peers did see some accelerating DQs this past quarter. And I think there's been some similar commentary around pulling back on standards and tightening standards over the past few years, which you've talked about, obviously. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 17, 2025 / 1:00PM, ALLY.N - Q3 2025 Ally Financial Inc Earnings Call I guess, is there anything else you think you're doing different or what others are seeing that you're not at the low end of the spectrum? And just to maybe follow up on the servicing strategies, could you talk about how that's performing, maybe modification rate, and what the success rate has been of those coming off modification? Thanks.

Question: Jeffrey Adelson - Morgan Stanley - Analyst : Really appreciate that. Thanks, Russ.

Question: Moshe Orenbuch - Cowen and Company LLC - Analyst : Great, thanks. Maybe at the risk of talking again about the competitive environment, you were able to have very, very strong application volume. Are there things that you'll be doing in the future that would actually help the conversion and closing rates or, I mean, how do you sort of think about that? Like, is that something that we could look forward to at tail end of this year and into 2026?

Question: Moshe Orenbuch - Cowen and Company LLC - Analyst : Before you do that, Michael, could I just have one quick follow-up and obviously, let some of that time go? But just from a capital standpoint, you did the CRT transaction. Should we expect more or less of that, Russ, as we go into 2026, I guess, recognizing that there's the RWA of the assets that ran off in '25 were higher than the ones probably running into '26? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 17, 2025 / 1:00PM, ALLY.N - Q3 2025 Ally Financial Inc Earnings Call

Question: Moshe Orenbuch - Cowen and Company LLC - Analyst : Thanks so much.