Ally Financial Inc. (ALLY) Earnings Call Transcript & Summary

All right. Great. We're back. Up next, we are excited to have Ally Financial joining us once again this year. Ally has managed to have an outstanding year in the middle of a pandemic, growing retail auto loans, having its margins hold in and are poised to expand, and its credit has exceeded expectations. This has resulted in Ally being only 1 of 2 stocks that we cover out of 26 that is actually up year-to-date. Here to tell us what lies ahead is CEO, Jeff Brown. Today's presentation is going to be a fireside chat. So with that as a starter, first off, JB, welcome back. We're glad to have you again this year.

Thanks. Great to be with you, Ryan. I appreciate the opening remarks and continued support.

Absolutely. So maybe to just start big picture. So this year, I think, has been defined by the unexpected, starting with you guys had a really good financial outlook. And then, of course, the onset of the pandemic. So if we fast through -- forward a few months, we now have, it looks like, a few viable vaccines. But cases across the country are still going up a lot. So given that as a backdrop, can you just talk about Ally's priorities? What have you, as CEO, been most focused on? And what is the company trying to do to balance all the dynamics that are out there?

Sure. Well, I appreciate the question again. I appreciate being here. So obviously, unexpected is a perfect word to describe 2020. I don't think any of us envisioned we'd encounter a year like we encountered. And I think for us, recognized while the environment was changing pretty rapidly all around us. For us, we kept the priorities, honestly, pretty simple. And I think, for starters, a big focus on employee safety. And I think back to early March when we made the call to really migrate everyone work from home, and, still today, we have about 99% or north of 99% of our workforce operating from homes today. And so employee safety has been paramount throughout this entire pandemic. And really the simplicity behind that was, if you take care of your employees, they're going to be able to take care of our customers. And so that was a big focus upfront. And obviously, we launched one of the most comprehensive deferral programs, really at the onset of the pandemic, again. And I think there's been a tremendous amount of employee pride around that. I think employees are really excited and geared up for, not only what the company did for them to keep them in their jobs, working throughout this environment, keeping them protected, but also just the impact that we've had on our customer base that we do really believe will be long-lasting. So that was kind of the starting principle for the firm, and I'd say that's kind of carried all the way through. At the same time, I think we've had deep recognition that the environment around us was not going to slow. And I think, early on, Jenn, our CFO, our business leaders and myself, honestly, kind of looked at this as a bull case opportunity, both on auto. While everyone was sort of negative on the outlook for auto, we started saying, wait, how many people are going to continue using public transportation or going to ride an Uber's? Maybe there's actually a bull case to be made for auto out there. And then certainly, on the deposit side, I mean, we saw this being an acceleration of digital banking and all that played really well into us. So for us, we recognized the environment was filled with uncertainty, but it was kind of continue being out there, executing your long term mission, take care of your people, take care of your customers, that takes care of the rest. And so obviously, third quarter was a great quarter, really highest in kind of the history of the company, and I think we're poised to really do it again in the fourth quarter and then beyond into 2021. So it's been, though, a really disciplined strategy all the way from really 2014, 2015 to now, we've just kind of been focused on keep your head down, execute quarter-after-quarter, and the rest takes care of itself.

With that as a backdrop, you mentioned 2021. Can you maybe just talk about how you're feeling about the environment as we head into 2021? And for the duration of 2020, I think you have a banking sector that's focused on credit, loan growth and the impact of lower rates. Most -- pretty much every other -- you guys are still seeing strong credit performance. And Ally's net interest margin expansion and the implied earnings growth do stand out amongst the peers. So can you maybe just talk about your view on how Ally's position into 2021? And what are some of the key things that you're monitoring into next year?

Sure. So I think overall position really quite favorably. I mean having said that, we recognize there is a lot of uncertainty around us. As you pointed out, cases are still continuing to spike, about 15 million cases now in the U.S. And so we got to be mindful of that. And so we're focused on all that uncertainty that's out there. But when we step back and kind of think about the credit environment right now; one, the consumer entered 2020 in pretty good shape. And certainly, the amount of stimulus that's been put into the economy, whether that's fiscal stimulus, monetary stimulus, all the employee programs and paycheck protection programs have been put in place, have been really favorable to the consumer to date. So we have been pleasantly surprised, and we still see that continuing. Now I would tell you, Ryan, we are hopeful for more stimulus. We're hopeful that we're going to see more get done and that it's actually going to go into pockets of the U.S. consumer that needs it the most. Obviously, the service industry, hospitality, food, leisure, all that has been really negatively impacted. And we're also aware of certain sectors of the economy, certain geographies, certain demographics, minority communities, females, service-related industries, lower earners have been impacted disproportionately negatively. And so we got to be mindful of that. But overall, on credit, the consumer has held up exceptionally well. And again, everything we're seeing in kind of real-time trends is signaling the same. Obviously, the deferral program was a big step out there, but we were confident it would enable consumers to kind of get through the peak of the environment, and certainly prove the case. And now, at this point, about 99-plus percent of our customers are through that. So credit, right now, we're just cautiously optimistic and think that will continue. From a balance sheet perspective, and NIM specifically, I mean, a few things I'd point out. Obviously, in auto lending, I mean there's -- hopefully, this environment dispelled a lot of fears or misheld beliefs around auto lending. I mean, we're at kind of 10 quarters in a row where we've been booking new originations at around 7-plus percent or north. And so that's a very, very attractive asset class at this point in time. On the deposit side, obviously, deposit costs have continued to migrate down. And so you've got a really attractive spread there, particularly now that we're 80-plus percent deposit funded. Further, Jenn, our CFO; and Brad Brown, our Treasurer, have done a great job of being very opportunistic on liability management, and I would expect that to continue. We took advantage of FHLB's last quarter. And I think that will continue through time. So we've been very disciplined on liquidity management to also improve NIM going forward. On loan growth, we feel really good about auto sort of stabilized. Obviously, we're a big player in auto today. We don't want to necessarily see that book of business grow. But we are scaling in some of our newer businesses like Ally Home, Ally Lending, to a lesser degree, our Corporate Finance portfolio. So we feel good about loan growth, overall, that's out there. And so all of that, you got positive credit trends, you got positive NIM trends, you got sort of disciplined expense management going on across the house, leads to a really good outlook going forward. And so what are we worried about? I mean, again, we're very focused on -- there's a lot of uncertainty in the environment. We're focused on more stimulus getting into people's hands that need it the most. And so we're cautiously optimistic, but I think we've got a number of nice tailwinds that were certainly unique in the back half of 2020. They're going to continue or carry into '21 and beyond.

Thanks for all the color on that. So one of the things that we've heard this morning is just how the digitization has accelerated in the current environment. You talked about deposits. Ally Bank was founded as an all digital bank in 2009, and you've steadily grown digital consumer products in mortgage and brokerage and point of sale. Where do you see Ally's position in the span of traditional banks as well as some of these new emerging players, whether it's in the fintech or the neo-bank space, how do you think Ally fits into that ecosystem?

Yes. So I mean, super excited about our position. Inside the house, we like to talk about us being one of the original disruptors. And I think that mentality in that mindset continues inside of the corporation. So we recognize at the same time, let a lot of the big traditional banks that have large brick-and-mortar footprints are trying to become more and more digital. So we've got to continue investing and stay sharp and stay focused on taking care of the consumer. And we also recognize, within the fintech space, they're developing certainly a number of new technologies and ways to bank that are all around serving the customer more efficiently or more effectively. And I'd say, to be very clear, banks are doing that, banks are investing a lot of money, and banks are doing a pretty damn good job as well. And so I think our position relative to both, whether it's the banks, the traditional banks or relative to the fintechs, we feel really good. And so what are we really trying to do, create a frictionless universe experience for our customers. And so we've been very focused on mobile application, mobile design. You see more and more of the world going into mobile, even more than just sitting and clicking your computer. And so we've continued to invest there. But we feel really good about our overall positioning there. And we brought in some new talent, a new CIO this past year. Head of Digital came in about 2 years ago. And I think that's infused just kind of a different mentality and different way of thinking inside the company. But we think we're in a great position. We think our brand is really resonating well, particularly with consumers around being an innovative, all-digital bank.

You -- in the question before, you mentioned a handful of your newer businesses that you've been looking to scale. And you've been talking about the narrative of optimizing auto and deposits and scaling some of the newer businesses, whether it's Ally Home, Ally Lending or Ally Invest. Can you talk about maybe the progress you've made on each of these? And if you look out 2 to 3 years, where would you like to see each of these businesses grow to? And what should we be watching to track your progress?

Sure. So before I get into the new ones and what we call kind of the organic opportunities that we're really focused on, just within auto, we love our position today. We continue to optimize that book of business. We can talk more about that later if you want. But we're very comfortable with the size of the footprint there. On the deposit book, I mean, it's a great kind of gateway or entry product into the rest of the consumer universe that we're focused on right now. We're going to grow our retail book around $20 billion this year. So it's fabulous. I mean it's tremendous growth, but it also brings a tremendous amount of new customers in the door. And, to date, we're somewhere in the ballpark of about 45% of those new dollars are coming from new customers, which enables us to just kind of showcase the rest of the product set to these retail customers. And so on Ally Home, we're originating round numbers about $5 billion right now. I mean that could easily double over the next 2 to 3 years. And I think there's broader opportunity. And while we may say, well, geez, the low rate environment has certainly led to a lot of activity and refinancing activity, I don't see rates necessarily increasing on the long end anytime soon. So I think that opportunity is still out there. Obviously, a great partnership with Better.com, and that's enabling us to scale at an even faster clip. And I would expect more of that going forward. On Ally Invest, we're now at $11 billion in consumer assets there. It's been a tough business, but it's a great business. It's also complementary to what we see in the deposit side of the house. Ally Invest is about doubled in size over the past year, and about 50% of the Invest customers have relationships with the bank as well, with the deposit bank as well. So it's a great product set to have. Ideally, where do I want to see that business in kind of 4, 5 years out? Probably 3x or 4x an asset size. And so that's when you start to really see the economics of that business change shape and really scale differently. But we're really excited. Great new leadership in that business. That's really caused a great -- a nice acceleration over the past year. And then on Ally Lending, we continue to be intrigued by developments all over unsecured lending today. And certainly, point-of-sale plays a key role in that. Within Ally Lending, we're originating about $150 million to $200 million a quarter. So it's still relatively small in the scheme of things. That could easily scale up 3x or 4x, particularly in the demographics where we're focused on. If you look at home improvement, which has been a big boom this year, automotive lending, some on medical as well -- or the automotive lending tie in there of what we're looking to do with the business is really interesting. So we got to be prudent, we got to be focused on disciplined risk management, but that's another business that could continue to scale. And then finally, outside of the corporate world are -- excuse me, the consumer world is our corporate finance business, and that business has done really, really well even throughout 2020. And we would love to see that continuing to grow next year as well. So a lot of these organic opportunities we see as real meaningful opportunities to start moving the diversification needle, may not necessarily so much on the balance sheet, but certainly from the earnings stream as well.

Got it. Maybe to switch a little and talk a little bit about some of the more mature businesses. So we've seen you guys do a great job bringing down the cost of deposits. The industry is at about 50 to 60 basis points. I think you guys were at 60. We're all flushed with liquidity. Can you maybe just talk about Ally's pricing and growth priorities from here? I think you mentioned you're expecting about $20 billion of growth. You've already reached your core target of 80% plus. Just curious how all this fits together in your go-forward approach to that business?

Yes. So we love the deposit product, and it's probably a little bit of my treasure mentality coming out. The core liquidity is never a bad thing. And so we're going to continue growing the deposit book. And I think, at the same time, we've had this tremendous growth, we have been able to optimize cost to date. And so obviously, it's an $8 trillion industry balance perspective. That's up about 15% year-over-year. But I think, within the digital bank universe or direct bank universe, it's even higher. And so we're incredibly well positioned there. And again, yes, we should be around $20 billion of growth this year. I think we'll continue to bring in deposit customers, especially if they start to generate those multiproduct relationships, and especially as Jenn finds opportunities for further liability optimization elsewhere on the balance sheet. So we like being core funded. We've come a long, long way in 10 years since this journey began. But I think our foot remains on the gas. Now in terms of pricing, obviously, the university -- online savings account is kind of our bread and butter product. So where we've got the lion's share balances today, we've kind of hovered at around 60 basis points in pricing. There's probably another 5 or 10 basis points of opportunity there. But I think we're all kind of watching competitive dynamics. We're all watching flows. We feel good today, but there's probably still a little opportunity left there.

Got it. Maybe turning to auto and the ancillary insurance business. That's a business you guys have been in for over 100 years. While it's a mature business, you guys are the industry leader in it. So maybe just talk about what are your priorities here? How do you see balance sheet growth over time compared to today? I know you said you're not really looking to grow that that much. And where do you see these businesses going in the coming years?

Yes. So I'll start with auto. I mean, obviously, 100 years of history here, but we've gone through several quite dramatic transformations along the way. And in particular, even over the past 5, 10 years and what we've done. So today, our focus being much, much more on serving the dealers. I don't tend to worry so much about what's going on at the OEM. Our focus is really serving 18,500 dealers as effectively as we can and generating the most profitable type of business that we can generate. And so you've seen our shift grow more and more into the used space. And that's been a pretty nice trend. I mean, obviously, used pricing has held up. Used demand has been off the charts. And largely as a function of factories were shut down for a while and factories have sort of not caught up with demand. I mean, I look at our own dealer floorplan book. This time of the year, we would have expected somewhere in the neighborhood of $33 million, $34 billion in floorplan balances. We're covering around $20 million. And so there's still going to be a thirst or demand for cars that are out there. But as you know, Ryan, our book tends to churn pretty quickly. So auto is really around take care of the dealers continue to optimize the portfolio. And again, 10-plus quarters at 7% or more on new originated yields, it's a pretty darn attractive asset class. I don't worry about competition there. It's always been a hypercompetitive space, but I'm not overly concerned about any of the dynamics that we're seeing today, particularly the big players tend to all behave pretty rationally. And then on the insurance side, it's a nice component, a nice dual offering we have there. We've got new leadership over the past couple of years in our insurance business, and that's starting to help us think differently, scale differently. And so we like the positioning there. Going forward, you should see continued growth in written premiums, and we like the insurance product as a complement. There's also a number of other kind of interesting ways to think about the insurance universe in other adjacent product sets. And so nothing is imminent there, but that's another area that you could have as kind of an adjacent business or a tag-on into what we're doing traditionally in insurance today and the add-on into auto.

Maybe just thinking a little bit about the current environment in auto. You talked about 10 straight quarters of above 7%. Credit performance has held up exceptionally well this year. Maybe talk about why that's the case? And you said you don't really worry about the competitive dynamics because it's always intense. Do you expect it to intensify from here? And maybe just to add on to that, recently, there was news about GM regarding their bank charter intentions. Can you maybe just talk about how this, in any way, will impact Ally given as they are a close partner of yours?

Sure. So I mean, overall, on the auto portfolio itself, hey, 7% yield, very clean credit. I'm surprised that more people haven't really tried to come into the space, but it's not an easy market to enter into. You've got to have a lot of people. And I think back to 100 years of expertise and experience and really deep, deep relationships with our dealers enables us to see a tremendous amount of application flow and book a business that we want to have. And so we feel really good about our position there. We don't play in the super, super prime space because we don't think we can generate the most attractive risk-adjusted returns for us, but that is where others play. And so, for us, we like kind of being middle belly of the curve. It's been a very stable business, very good business for us. And there are other entrants in there. But again, everyone sort of fills their own niche and plays in their own space. As it relates to kind of the GM, GMF dynamic, I guess I smiled when I saw the announcement. And I never want to criticize somebody else and what they're going to do. But obviously, building a bank is a big task. And I don't think it really changes the way we look at GMF as a competitor. They do a lot of business today. They do a lot of good business for GM. But, for us, we're focused on what we can control, and I don't kind of worry about some of those demographics that are -- or other developments that are going on the side. If you ask me, what do you really -- what are the things you worry about on auto? I would say, by now, I would have hoped to have seen dealer floorplan balances more on the rise. And so I don't necessarily think it's a bad thing that balances are still off. I think it implies that the used environment is going to remain overly competitive and strong for quite some time. But I think, by now, all else equal, I would have expected to see balances migrating back to kind of traditional norms. And we're just not there yet. And so that's [indiscernible] I think, we've got to watch going into '21.

And as a follow-up to that, is it just the supply and demand dynamics that are not allowing to come back because clearly, as you said, used car sales are accelerating. I mean, people are changing the way I drive to work versus historically took public transportation. Is it just all of the above that's driving it? And what changes that to actually get people to come back in? What changes that to allow inventory levels to start building?

Yes. I mean I think factory's got to pump it more aggressively. And I do spend a lot of time talking due to the dealer universe. And Rick Hendrick, for example, a close relationship with ours and friend, and when I talk to his stores directly, I mean, they tell me their biggest challenge right now is just lack of new car inventory. So they'd have more to sell, but they just don't see it today because the factories aren't producing enough. And I think where I'd caution the OEMs to pay attention to this is, you're allowing a number of new players to emerge into this market space, which, honestly, is really good for Ally. I mean you look at our relationships we've developed with players like Carvana, and, in fact, spent time recently with Ernie Garcia, Jr. and Sr. And Carvana has been a great growth story, kind of capturing these new market trends, EchoPark and others, these large use operators are coming to the market, which, hey, is going to continue being a driving force there. So the OEMs need to get more focused here and I think start producing a few more cars. There is plenty of demand that's out there, but factories got to get back to work.

I wanted to switch gears a little bit and talk about credit and then used car prices. You built a lot of reserves in the first quarter. You've added a little bit since then. In terms of managing the pandemic, you mentioned you took a different approach by providing significant amount of accommodations. And I think you said 99% you're through now. Can you just talk about how your credit expectations have evolved during this year? How was Ally positioned for the range of outcomes? And within that, how -- as you said, how important is stimulus to the ultimate outcome of your borrowers in terms of the need to either build or release reserves?

Yes. So I mean, overall, very pleasantly surprised by the strength of credit performance overall. I mean, it's been quite strong. And obviously, we entered this year and kind of guiding the range of 1.4% to 1. 6% in charge-offs. Then right in the heat of COVID, we kind of upped that to 1. 8% to 2%, and I think Jen would tell you, it's plus or minus 1% now. And when we are carrying 4% reserves against that, obviously, we feel pretty darn good about how we're reserved for a variety of environments. Now for us, and the big question that always comes out there is, what about reserve releases? Are you thinking about that? And is that a possibility? Absolutely. But I think, given the amount of uncertainty that sits there today around the U.S. consumer, I think, we've all got to be cautious. We got to see, in particular, how the next 3, 4, 5 months really develop. And back to stimulus, stimulus would be an important factor and almost served as a bridge, right? If we get another wave of stimulus, you finally get vaccines really happening 4 to 5 months out, it could create a nice soft landing for the consumer. I was optimistic to see in Europe today, the first vaccines beginning. Hopefully, we're only a week away in the U.S. But we need that to accelerate and continue. And I think that will give us a more of a rosy outlook than we have today. And I don't want that to imply any negativity that's out there. I think it's just this balanced kind of cautious optimism that we have and recognizing the amount of uncertainty that sits there today.

So used car prices have held up incredibly well. And while it's not a huge driver of your business, obviously, it's an important input. And even though we've fallen a little bit the last 2 months, we're still at mid-teens year-to-date. So I guess, as you look ahead, I think your expectation is for used car prices to fall low single digits next year. Can you maybe just talk about what's driving your views on used car prices? And where Ally sees used volumes going from here? I think it would just be helpful to understand what you see as the upside downside scenarios for used car prices over the next 12 to 18 months?

Yes. I'd say, from a planning perspective, we tend to plan maybe a hair more conservatively in the space. And so I think Jenn would tell you if she was up here that we're planning around 3% to 4% used car price declines next year. I think there's probably a stronger bull case that's out there, particularly as inventory levels for new cars remain so well. I think the demand is going to be out there in the used car space. But our profit plan, we try to take a more conservative approach. And we recognize that there still is a lot of off-lease vehicles coming back into supply. And so largely, our call on used car pricing for the past few years has been a function of lots of supply coming into the market. What we've seen is all that supply and then some be readily absorbed. And so we're continuing to watch all those dynamics and watch all those trends. But right now, things feel pretty, pretty good. What could change? If you see people get back to work, factories start pumping cars, dealer lots get flooded with new car inventory, the days of deep discounting and incentives come back, that -- those would be some of the signs we've watched that used car softness is beginning. But I think we've got a number of months before we're even going to have to be thinking about that or encounter any of those concerns.

I wanted to switch the discussion to capital and strategic thoughts. And if I think about it, over the years, Ally did the TradeKing acquisition that you rebranded Ally Invest. You did HCS, which you subsequently rebranded. Then earlier this year, you announced the CardWorks acquisition, which, given the onset of the pandemic, fell through. Now you've stated a goal over the 12- to 24-month to focus more on your in-house capabilities, you announced franchises, can you maybe just talk about how your mindset around future acquisitions has changed? And what do you think your approach will be going forward?

Sure. So I mean, I think the near-term focus continues to be to scale up organically. I mean, we like the positioning of Ally Invest, of Ally Home, of Ally Lending. We really like what's going on and how we're optimizing the auto business and every -- all the trends we see in deposits. So I think we -- first and foremost, we see a lot of organic opportunity given the pieces we put in place. Having said that, we embrace a growth mindset, and we want to be positioned for that. And I think when we step back and think about Ally, overall, and we've had a number of banks come in and talk to us about large diversification strategies. And it's kind of what and why. I mean, so our framework, anytime we think about growth is, #1, is it a product set that we believe is right for the customer; and #2, do we believe it can generate an appropriate long-term return on capital for our shareholders. That's been the framework all along. Obviously, CardWorks was a big one. And I think the market certainly did not really care for that acquisition, that announcement, but -- and we understand that. Then it was another unfortunate casualty of COVID, but Don and his team have built a really good book of business, and it's a really interesting business. But we've got to evolve on from that. I think as we think through, M&A, could certainly be part of the horizon, but it's likely down the road. It's -- I don't think that's a near term priority. I think more of the near-term priority is scale up the businesses organically. We have that are incredibly well positioned. And then recognizing, again, uncertainty. We still are operating in the middle of a global pandemic. We've just got to be cautious in anything we do. But tying that all back to capital, which really where you started the question is, we do recognize that anything we do on the growth front, you got to deliver a high threshold. There's a high level that you got to cross before you deploy capital in that manner. Certainly, we thought we could see that in the opportunity we announced earlier this year. And so we'll continue to stay open for the future.

The bank has built a lot of capital. It looks like you're going to be over 10%. You've talked about a target of 9%. We're going to hear from the Fed in 10 days from now. Maybe talk about once any insights you have into that? And once we do return to a more normal environment, what are the priorities in terms of organic buybacks and other deployment actions? And how do you think about weighing the decisions across all those?

Sure. So I mean, we are carrying a lot of excess capital. We hope to begin returning a lot of that excess capital in short order. I think, not to continue beating this uncertainty theme, but a lot of us are going to be kind of wondering what comes out of the Fed a week from Friday, and what do we see in the CCAR results? I -- and also recognizing that change in a lot of DC administration there. And does that change regulatory priorities and focus and what's in vogue or not? So we think, from a pure kind of financial standpoint, a numerical standpoint, we are positioned to return a lot of capital to our shareholders. And that's what we'd like to do. I think we're all waiting to see whether the regulatory environment allows that. Obviously, the Fed had certain tests in place for the third and fourth quarter. Those were appropriate in light of the uncertainty. But I think now we all have a better belief from the state of the economy and the go-forward outlook on the economy. So I would hope that CCAR too allows the Fed to allow the banks to start returning capital, and we would love to do that in a very meaningful way. And whether it's 9% or slightly north of 9%, Ryan, I think we still see that as being the appropriate capital target for our institution, largely secured loans, a very, very clean balance sheet, a strong balance sheet. So we still think that's the right ZIP code for us to run.

And then you mentioned earlier that the fourth quarter was going well. I know, historically, you'd like to provide a quick update on the quarter when you present. I know you've mentioned uncertainty numerous times. So just any sense of how the quarter is going, originations, losses, margins. Any color you want to provide and then adding on to that, historically, you've talked about a low-teens return. Where do you think the return profile can go in '21 and beyond?

Sure. So in terms of fourth quarter, I'd say a continuation, if not a acceleration from what you saw in the third quarter. Core trends really across the board, look really strong, and there's probably some other factors that will contribute favorably to the fourth quarter. And so we feel really good about this being a strong close to the year. And then heading into 2021, I think, Jenn, at some point, after the turn of the calendar, will provide more delivered guidance. But we feel good at the overall outlook. And I think for us, mid-teens returns are in the short order, call it, over the course of the next 1 to 2 years on the horizon. So we really like the embedded tailwinds that exist inside the company today. And I think you'll see mid-teens returns shortly on the horizon. So feel really great about the positioning.

JB, we've got about a minute left. And in my opening remarks, I highlighted that mindful of the fact that Ally is one of the few stocks that's actually up year-to-date. But you've had very good execution in the last few years, strong performance this year. It sounds like you have a lot of confidence in the 2020 and '21 outlook, yet the stock is still trading a tiny bit below tangible book value. What do you see as the catalyst to close the valuation gap and actually see it expand? And as you are out meeting with investors, any big misperceptions that you think are still out there that the investor community is missing?

I mean I think, first and foremost, disciplined execution is what needs to continue to happen quarter-after-quarter, repeatable, steady, upward trajectory results. It's not always going to be a perfectly straight line. But that's what we're really paid to do. And so we'll continue to focus on that. I would hope that COVID in this past environment, recognizing that there was some unique stimulus put into the market has kind of dispelled some of the fears about there being a bubble in auto. I mean auto performance, whether it's yields you're originating, volumes you're targeting, credit performance has been off the charts good. And so the tone of the conversations that Jenn, in particular, and Daniel Eller, our Head of IR, have been having have shifted more into people realizing what an attractive asset class is. So I think we've got to keep our head down, scale the new organic businesses, take care of the customer, take care of our employees, and it should be a pretty attractive growth story for investors going forward.

Great. Well, we are out of time, but on behalf of myself and the investor community, thank you very much. We appreciate having you back. Look forward to talking to you in January and hopefully seeing you again here in person next year, and have a happy holiday season to you, Jenn, Daniel and the team.

Thanks, Ryan. You as well. Great. Happy holidays, everyone. Thank you.

Take care.