Thank you for being here at our thirtieth annual RBC Financial Institutions Conference. Starting my fireside chat sessions today with Russ from Ally Financial. Thank you for being here again, Russ. Appreciate it very much. Thanks, Jon. Thanks for having me. All right. Happy to be here. Good. Well, let's start at a high level. It's not like there isn't a lot going on, but let's start at a high level and step back and give us your view of the broader macro, how you'd characterize the current environment, and then just a little bit about how you would define, you know, ensuring that Ally is successful in this kind of an environment. Yeah, absolutely. It's a good question. Very topical. The macro is certainly dynamic right now. Maybe let me just start with what we're seeing. Our consumer continues to be resilient. You know, the trends that we've been talking about in terms of flow to loss, delinquency, severity, yeah, they all continue to be favorable. You know, we're really benefiting from a lot of the changes that we've made over the last few years to how we underwrite and how we service. You know, I'd say we continue to get great traction with our dealers. Our application volumes continue to be strong. It's giving us a great opportunity set, the opportunity to be selective around credit, as well as pricing. We continue to see strength in terms of originations. I'll say it's been particularly impressive, you know, as you look in particular over the last five or so months where you've seen new car sales down, but our application volumes and our origination volumes up, really bucking the trend and really showing just the strength of the dealer relationships that we have. You know, when I look at our commercial portfolio, you know, both commercial auto as well as corporate finance, we continue to see a continuation of the strong credit that we've been talking about for several quarters. You know, when we look at our Ally Bank, our digital bank, we continue to see really good momentum in terms of customer acquisition and strong retention. I'd say across, you know, all of our core franchises, we continue to see really strong momentum. You know, we don't have a roadmap that's any clearer than your roadmap in terms of figuring out what comes next in this macro environment. I will say the steps that we've taken, the choices that we've made in terms of focusing the business, you know, really put us in a position that's stronger than where we've been before. You know, maybe just on that, on focus, you know, we've really focused our business on our core franchises where, you know, we have the competitive advantage, we have relevant scale, we have long-standing relationships, we have a history of being committed to these businesses through cycles. We have a powerful brand that resonates with our customers. We've really focused the businesses on the places where we have competitive advantage. In the process, we've reduced risk, right? We've taken, you know, our unsecured lending books that carry a lot more credit risk. We've taken those off the table. We've reduced interest rate risk. We've put capital on the balance sheet. You know, we've exercised tremendous discipline around expenses. As we look across our businesses, we've just taken a number of steps to reduce risk, to streamline, and to put us in a position to navigate whatever comes next. We feel pretty good about the choices we've made. You know, when we think about the culture of Ally that we've got, it's a real asset to us. Our culture is very much focused and tuned to operating smarter, moving faster, delivering exceptional experiences for our customers. We feel pretty good about how we're prepared. As you think about how we've prepared the organization for what comes next, it really revolves around the power of focus and the culture that we've got. We think those things put us in a strong position in terms of navigating what comes next in terms of the macro. Okay. Just on the theme of what comes next, let's talk about AI a little bit. Right. It's emerged as a kind of a catalyst for change, positive and negative. Yep. How do you see it impacting your business? How are you preparing for some of these potential changes? Great. You know, at Ally, we have a legacy of innovation and disruption. It's part of who we are. It's a important part of our brand, and I think it positions us well with respect to AI because, you know, we see AI not just as an efficiency tool. It's certainly that. We see it in terms of efficiency. We also see it through the lens of an organization that's obsessive about our customer experience in terms of way of delivering better experiences for our customers. We are experimenting with AI across the platform. You know, we actually have a pilot in place right now where we're using AI in our servicing operation, focused right now on early-stage collection. We actually have a Ally virtual agent, trained on our data, trained in our way of communicating with our customers and doing business that's making outgoing early-stage collection calls. We're encouraged by the results. It gives us a lot of optimism about the ability to roll AI out more broadly across customer servicing and collections. Similarly across Ally, we've got use cases that we're working through across the organization. We've been using AI for call summarization for quite some time now, and we found it a real efficiency enhancer. You know, we've got an Ally.ai, yeah, basically an environment that we've set up and that we've made available to all 10,000 of our teammates, to be able to experiment and to learn on AI in a safe environment within Ally. You know, we're approaching AI, you know, it's efficiency, it's delivering a customer experience, but we're approaching it, you know, with a lens focused very much on risk management, with an eye on privacy and security. You know, and we think we're well prepared. We've spent the last couple of years centralizing our data on one platform. So we've got 90% of our data within our enterprise on one platform, and we've done that with an eye towards data governance, data quality, privacy, security, all the things that you'd expect from us given our do-it-right culture. We think that positions us well to really scale the use of AI across our organization. Again, you know, you know, we think our culture is well-suited to it. We think the fact that we're a focused organization and we're really focused on places where we can make investments and leverage those investments across businesses that are at scale positions us well to really be able to deploy AI not just for efficiency, but also to deliver better customer experiences. Okay. Good. Before we get into some of the numbers, just reflecting the last three years, Russ, that you've been at Ally, anything else you want to touch on in terms of positioning the company and some of the things that you're very focused on? Yeah, it's unbelievable that it's been nearly three years already, you know. I kind of picked up and moved my family from New York to Charlotte three years ago. I joined Ally with a bit of inside information. I had spent a couple decades covering the company as an investment banker. So I had a lot of relationships. I had a lot of admiration for the transformation that Ally had already executed, and for the quality of the team and the culture that was there. I'd say over the last three years, yeah, that sense of admiration has only grown. I'm particularly proud of the way that we've adjusted the strategy and really focused the organization. You know, that focus is paying off. I mean, if I look at 2025 in particular, our pre-tax income was up 55%. We added 120 basis points to our fully phased in CET1. We added 19% to our tangible book value per share. You look over the last three years, you know, we've consecutively, over three years, managed our controllable expenses to be flat or down. There's a lot to be proud of there in terms of the pivot and the results that are already being shown. I think we have a long road ahead of us of growing revenues, increasing profitability, and compounding book value per share. Okay. Thank you for that. Margin, obviously. Yeah ... a key topic for your company. It's really the one last piece of achieving, you know, that you need to achieve the mid-teens ROTCE. You've expressed confidence in the high 3% range. Yeah. What drives that conviction? How do you think about some of the external factors that could impact that? Yeah, it's a great question. Maybe just to start off, we have no news here. No change from the guidance that we provided back in January. Very much on track in terms of what we're seeing in the business. All the drivers that we've talked about before are still there and are playing out the way that we expect. You know, it's about our asset mix, you know, shifting towards higher yielding assets in retail auto loans, Corporate Finance, shifting away from lower yielding assets, mortgage loans, and some of the lower yielding Mortgage-Backed Securities that we'd put on before. As you pointed out, it's powered very much by what we see on the deposit pricing side by our march to a 60-something% beta over time. You know, all the same factors that we've talked about before are very much in place, and, you know, we really don't have any changes to the guidance that we provided back in January. Okay. One small nuance on lease terminations. It's a small piece of the balance sheet. Mm-hmm It has had an impact on the margin. Yeah. Any update on how we should think about that for the quarter? Yeah. No update from, you know, what we've said in January, so there's nothing new here as well. I think you're right in terms of the pressure that it puts on Net Interest Margin. As we said back in January, you know, we've thought about a wide range of scenarios, and we thought about that in providing the guidance that we provide in terms of full-year Net Interest Margin, and that's anticipated. You know, I would say, and this is probably reiterating some of the stuff we said back in January, but this is really limited to a few models, and these models have been impacted by the confluence of a few things. You know, the end of the EV lease tax credit. These are, you know, plug-in hybrid vehicles. A manufacturer recall, the discontinuation of these models by the manufacturer, and then heavy rebating on new vehicles. You know, all of those things together have impacted these models. You know, they're really kind of driving an impact to our lease gains. Again, you know, there's no new news here. This is, you know, this has already been discussed. It's covered in terms of how we think about our guide for the full year. On the return path, you talked about exiting 2026 in the mid-teens range. Level of comfort in that, and then once you get there, your confidence in the ability to sustain that. Yeah. We are absolutely, you know, on track and remain confident in our mid-teens trajectory. You know, as you've pointed out, we've talked about it historically in terms of three things, our net interest margin getting to high threes, our retail auto NCOs below 2% and control over our operating expenses. You know, retail auto NCOs, as you know from our guide, you know, we're currently operating in that below 2% area. In terms of operating expenses, as we've discussed, we're exercising a tremendous amount of discipline. We think we've checked the box on OpEx control. It really comes down to that net interest margin line. Now, as we've talked about before, there are a number of factors that impact our business in the near term and the medium term. They don't change where the business is going in terms of Net Interest Margin, but they certainly affect the trajectory. We've been really hesitant to call a particular quarter, just understanding that changes, for example, in Fed funds in a particular quarter could impact our Net Interest Margin. It doesn't change our confidence in terms of our march towards that trajectory. Okay. Just turning to auto competition, it feels like it's a more competitive space. Competitors are leaning back in. How does that impact your strategic approach? How are you balancing pricing and growth? Yeah, it's a great question. This is an attractive market. It's not surprising to us that our peers are coming in in force. That's not new, by the way. They've been really increasing their presence for the better part of a year now, and we've seen a couple of competitors in particular ramp up their volumes over the course of the last four quarters. There's nothing new there in terms of the competitive environment. It's a competitive environment that we've been dealing with for some time now. That being said, our business continues to show incredible resilience and great traction through our dealers. You know, we send our Dealer Financial Services colleagues out with a mission, basically, to help our dealer partners sell more cars and run better businesses. We ask our dealers to send us all their applications. You know, the fact that our application volume is up is testament to the traction that we have with our dealer partners. Our ability to take that application volume and turn it into originations that meet our targets in terms of risk and returns, again, testament to the strength of the platform that we've built. I take a look at, you know, the fourth quarter as a great example of the strength of the platform. New vehicle sales were down. Our application volume was up. Our originations volume was up. Our originated yield was resilient. You know, I'd say across every dimension we look at, our Dealer Financial Services platform continues to demonstrate just great traction with our dealers, that's translating into business outcomes. You know, competition is there. It's intense. It should be. It's a very attractive market. The benefit that we get from our long-standing dealer relationships, our commitment to this business through cycles is real, and it's showing in terms of the results that we're demonstrating. Okay. Good. On credit, you alluded to it a couple of minutes ago, but your guide for the year is 1.8%-2%. January, back in January, you talked about being at the midpoint of the range. Mm-hmm. Anything change in the last six weeks or so? Talk a little bit about the path and level of confidence to get back to the 1.6-1.8 over time. Great question. Again, nothing's changed, so no new news here. You know, we're continuing to see the favorable dynamics that we've been talking about for a few quarters now, in terms of flow to loss, delinquency, severity. We're continuing to benefit from the changes we've made to underwriting and to servicing. You know, as I think about that 1.8%-2%, it's a balanced range from our perspective. You know, we obviously spend a lot of time thinking about the midpoint of that range. You know, as we think about that range, and as we constructed it, you know, as you pointed out, we're originating at 1.6%-1.8%. You know, some of our recent vintages have been performing well relative to that. Some of the things that impact that range, look, you know, number one is we're continuing to benefit from portfolio turnover from some of those older vintages like 2022 and early 2023 that have struggled to the newer vintages like 2024 and 2025 that are performing much better and better than our expectations. If you kind of sit here right now, our 2022 vintage is probably still about 10% of the portfolio, and its contribution to losses is outsized relative to that. That's something that impacts us in terms of how we think about our NCO guide for this year. You know, the other piece of it is, you know, we're sitting here with unemployment in the mid-fours, and that's not a projection, that's just where we are. A year ago, we were in the low 4s, and so unemployment, you know, right now is where it sits, is probably about 30 basis points higher than where it was a year ago. As you can expect, that's something that impacts us as well on the credit side. That's anticipated. That's baked into our guide. We look at the 1.8-2% you know as a balanced guide that kind of balances both the upside you know and the downside risk from here. Again, calibrated you know kind of given the mix of loans by vintage that's in our portfolio and calibrated for a mid-4s unemployment rate. Obviously, the macro continues to be dynamic. You know, gas prices, inflation, unemployment, these are all things that could impact us. Our roadmap is no better, as I've said before, our roadmap is no better than yours, Jon. Again, I think with the changes that we've made to our underwriting and to our servicing, I think we're better positioned than we've ever been to be able to manage through a challenging macro. Okay. No change? No change. Okay. Anything on tax refunds? It's a very near-term topic and obviously impacts the consumer. Yeah. Anything that you're seeing so far? Yeah, to the extent that we see, you know, stimulus effects, whether it's from tax refunds or kind of other things done by the administration, those are obviously good for us. You know, on tax refunds in particular, the average refund so far is up about 11%, so that's helpful. It's not up as much as some people were thinking as we headed into tax return season. We'd heard estimates up 20-25%. You know, so obviously not up as much as some people had thought, but up meaningfully at about 11% so far. That's helpful, and you know, it's certainly something that we've thought about as we think about our outlook for NCOs for the year. Certainly to the extent that you see more stimulus effects from tax returns or from other things the administration pursues. Those are obviously things that could be helpful to us on the margin as we march through the year. Okay. Good. I want to get into funding and expenses in a second. Anything to note on Corporate Finance? That's obviously been a business where you've seen some momentum. It's also. Mm-hmm kind of in the spotlight as well. Can you give us any update? Yeah on your thoughts on that business? Yeah. You know, our Corporate Finance team, yeah, they've been at this for 27 years now, and they've managed through a lot of different cycles over the course of the last 27 years. They've got longstanding relationships similar to what we have on our Dealer Financial Services business. They're credit-focused people. It's a credit shop. We're really delighted by their approach to disciplined growth with really a firm hand on credit. There's nothing new to report in terms of our Corporate Finance business. It continues to perform consistent with how it's performed in the past. You know, our level of criticized assets and non-performers continue to be at historical lows. We feel pretty good about where that book is from a credit perspective. We feel great about everything that management team is doing to manage credit and to grow in a responsible way. I'll remind you know, whether it's on the auto side of the house or the Corporate Finance side of the house, we're not chasing growth, right? We're growing responsibly with a focus on risk and return. You know, one of the things that we put in place towards the end of last year is we put our share repurchase authorization back in place. We like having that there because it gives us another outlet for capital so that, you know, we're not in a position where we need to go chase growth. Speaking of growth, you're obviously, you seem a little bit more positive on the growth outlook. Can you talk a little bit about your funding objectives, talk about how the digital bank might roll into that and your overall plan for funding the growth? Yeah. Look, we've been really pleased with the momentum in our digital bank. You know, we talked earlier about customer acquisitions and customer retention. You all continue to be strong. You know, where we sit today, we're like 85%-90% deposit funded. In our view, that's more than core deposit funded. We've underutilized some of our alternative funding sources. And that gives us the luxury of being able to run that book for optimization as opposed to to stretching for growth in any way. As we think about that business going forward, we're happy with an outcome where the business grows marginally or even stays flat as the rest of our balance sheet grows and as we make more use of some of the other funding sources that we have available. We feel great about the momentum there. We feel even better about the strong position it puts us in with respect to liquidity and funding and allowing us to really be strategic about where and how we grow that business. Okay. On operating leverage, you had positive operating leverage last year. Your guidance implies you expect it for 2026 again. Talk about how you're approaching managing expenses and any drivers on the revenue side that you feel like might be underappreciated and you want to touch on. Yeah, it's another great question, Jon. You're right to point out, you know, positive operating leverage is something that's important to us, and it's something that we expect to continue going forward. It is a product of our culture and our focus. You know, when you kinda turn to the focus side, we've really focused our business on growing our earning assets, and we expect to demonstrate growing earning assets this year and expanding margins in terms of Net Interest Margin. We're growing in the assets that give us the most attractive margins from a risk-adjusted return perspective, and that's something that we expect to continue to feed into our P&L in terms of our results. We're also growing our other revenue. You know, we have an insurance business. We have SmartAuction. We have our pass-through programs. You know, all of those are showing strong momentum. As we look at our business, we've got a number of things driving revenue growth, earning asset growth, margin expansion, other revenue growth. We focus the business, and we've taken advantage of every opportunity to streamline. When we look at our expense base, you know, we've been able to manage controllable expenses flat or down for the last three years consecutively. We do have some modest growth in operating expenses as you look at the forward. Again, our expectation is to grow revenues faster than expenses. It's, you know, I'll kind of go back to this. Our expectation is, you know, we've got road ahead of us to continue to grow revenues and increase profitability. Again, that's an attractive bottom line result, and allows us to compound tangible book value per share growth. Okay. Great. On capital, your returns as they begin to improve, you're generating more capital. How are you thinking about the allocation of capital between growth and then returning capital back to shareholders? Again, no changes here from, you know, what we've said in January. Yeah, we're delighted to have the share repurchase authorization in place. I think you can see it as an expression of confidence from the management team, you know, as well as the board in terms of our trajectory and our ability to generate capital organically. It's a reflection of the capital that we've built over the course of the last year, and put on the balance sheet in terms of fully phased in CET1. You can take that as a vote of confidence, not just by management, but by the board as well. Nothing's changed with respect to our capital priorities. First and foremost, we wanna grow our core businesses, where it makes sense in terms of risk-adjusted return and margin. Yeah, that's our first priority. We wanna continue our trajectory in terms of lifting our fully phased in CET1 ratio. You know, obviously we have a dividend on preferred and common, and we expect to continue to meet those as well. When we think about capital, it is a story of and not or. We can do all those things and buy back stock. You know, we're happy to have reinitiated our share repurchases. We'll start low and slow, and our expectation is that, you know, as we continue to build capital organically, as we continue to march towards our management target in terms of fully phased in CET1, that we'll be able to grow the amount of capital that we allocate towards share repurchases. Again, we're not gonna do that at the expense of the core businesses. Where we see those attractive opportunities to grow the core, we're gonna focus on that first and foremost. We're delighted to have share repurchases, 'cause again, it gives us the luxury of not having to chase growth, but having that alternative use of capital. Just a subtlety on that topic on CET1, getting to your target. You've used credit risk transfers in the past. Any change to how you view these types of transactions to help you get to your targets? No, we continue to see them as an attractive source of capital. It's a low cost source of capital when you look at the regulatory Risk-Weighted Asset benefit that we get from executing those CRTs. You know, we did, you know, I think it was $9-$10 billion in notional volume last year. You know, we expect to continue to use CRTs going forward. We'll do it, you know, in a measured way. You know, we don't wanna put ourselves in a position where we feel like we have a dependency on the capital markets in order to continue to capitalize our business. We're very cognizant of the runoff of the existing CRT book, and managing our issuance so that we don't create a treadmill that we can't keep up with. Again, we see CRTs as an attractive source of capital. It's a low cost source of capital. You know, it's a tool that we expect to continue to deploy alongside other tools, to help build our capital ratios. Before we wrap up, Russ, anything else on the regulatory environment or the regulatory backdrop that's more accommodative? Anything else you wanna touch on in terms of potential changes to the capital framework? Look- Any other priorities? I think like everyone in the industry, we're anticipating that we'll hear something from the Fed in the next few weeks. We've been told, you know, before the end of the month, on Basel III. As you know, we've been managing towards that August 2023 or July 2023 proposal. We expect it's gonna be better than that. We don't know the details of it. We certainly don't have any better information than you do around what's coming our way, so we'll have to analyze that when it comes out. Our expectation is it'll be better. It'll be, you know, helpful to the industry and to us. Okay. Just about out of time. Anything else you want us to think about, as the quarter wraps up? It seems pretty consistent, but is there anything else? Yeah all like No. There's no news here versus what we said back in January. Yeah, no changes to our guidance. We are in execution mode. Our heads are down, our business is focused, and we're leveraging our culture, and yeah, that's where we are. Blocking and tackling every single day. Okay. Good. Thank you, Russ. I appreciate it. Great. Thanks, Jon.