Ally Financial (ALLY) The BancAnalysts Association of Boston Conference 2026 summary

Focused Forward strategy

• Launched at the start of 2025, Focused Forward is supporting growth across auto finance, corporate finance and the retail bank, alongside higher profitability and resilience.

• Q3 pre-tax income and ROE rose versus Q3 two years earlier, supported by NIM expansion, higher other revenue, lower retail loan net charge-offs and expense discipline.

• Resilience has improved through higher capital, stronger earnings-based capital generation, reduced credit exposure after card and point-of-sale divestitures, and lower interest-rate risk.

• Mid-teens return remains the goal; management sees further runway after recent progress.

Credit performance and outlook

• Retail auto net charge-offs are tracking near the midpoint of the 1.8%–2% FY guide; credit trends have developed as expected through November.

• 2026 full-year originations are expected to resemble 2025, with a low-to-mid-40s S-tier mix; Q1 2026 was richer in both yield and credit, while Q2 was tighter.

• Delinquencies are higher, but lower flow to loss indicates consumers are moving between delinquency buckets; servicing improvements are helping manage credit.

• Weekly, granular underwriting adjustments aim to keep full-year vintages aligned with risk appetite and improve risk-adjusted returns.

Net interest margin and lease outlook

• Management expects continued NIM expansion toward the high-3% range, led by growth in higher-margin auto and corporate finance assets and runoff of mortgage loans and older, lower-yield securities.

• In a rising-rate cycle, floating-rate commercial assets and hedges respond first; deposit repricing follows over several quarters, with a 60%–70% deposit beta, while auto loan yields typically have an ~80% Fed funds beta.

• Lease losses pressured NIM in 2026, mainly on vehicles affected by Stellantis recalls; the broader lease book generated gains and performed well.

• Lease headwinds are expected to ease through 2027 and become immaterial in H2, as returns shift toward more diversified OEMs and vehicles with residual-value protection.

• Q3 core return on tangible common equity was 13% despite the lease-loss headwind.