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

All right. Thank you, everyone, for coming, and thanks to Gerard for doing so much for the conference. The only criticism is the color of the wristband. It could have been green to make us a little bit more optimistic. So many investors believe that many traditional financial institutions are manufacturing buggy whips in the age of the car. Not true for our next presenter. $7 billion market cap Ally Financial is 100 years old and a former subsidiary of General Motors. Ally is a leading auto lender, a or the, one of the 25 largest banks and the largest digital-only bank in the United States. Representing the company is Chief Financial Officer, Russ Hutchinson. Thank you for joining us. Russ was appointed CFO in July of this year. Prior to joining Ally, Russ spent a couple of decades at Goldman Sachs, most recently as COO for Global M&A and previously within the Investment Banking Division, advising clients in the financial services sector, including Ally. Welcome, Russ.

Great. Thanks. Thanks, Jonathan.

I guess we'll start off first on a culture [indiscernible] question. Russ, you joined Ally recently from Goldman. Just to kick things off, it would be helpful to talk us through your thought process. What about Ally peaked your interest, and why did you feel it was the right time to make a move?

Yes, it's a great question. I've got a long-standing interest in consumer finance and banking. As you pointed out, I worked at Goldman Sachs for more than 20 years. And I spent most of that time actually focused on the financial services sector, in particular, consumer finance and banking. And even before that, I'd spent a few years at BCG, again, focused on banking and consumer financial services, always from the advisory side though. And as you pointed out, I spent a long time covering Ally Financial as one of my clients. I had the honor and the privilege of working with Ally on its IPO many, many years ago. And so I look over the time that I spent in financial services as an adviser working with Ally as an outsider as an adviser. I just -- I developed a tremendous amount of admiration for what Ally has done in terms of the transformation. When you think about this company, as you pointed out, a more than 100-year history and until -- in the context of 100 years until fairly recently, a wholesale-financed, captive finance subsidiary, and it's really transformed itself into the leading digital bank in the country and also just a fantastic auto finance and insurance franchise. And so I just have a tremendous amount of respect for the transformation. I have a lot of admiration and respect for the management team, for the Board. I've gotten to know them both very well over the course of the last couple of decades. And so I'd say I'm coming into this just with a tremendous amount of admiration and respect for the team and for all that it's accomplished. I'd also say just having spent a couple of decades in financial services and working with a lot of the leading players as an adviser, I think I have an appreciation for where Ally sits today in terms of the strength of its balance sheet and the strength of its strategic position. I like to think about the company in terms of the moats that have been built around the core franchises, particularly the auto finance franchise, but also, quite frankly, around the retail bank. I just think where Ally sits today financially and strategically, I think it's just poised for a fantastic outlook. And I know we'll get into this in your questions, but I have a lot of conviction around getting to the 4% NIM that we've talked about before and getting this company to the mid-teens ROE that I think it's capable of.

Another high-level question. Ally has transformed both sides of the balance sheet, the past several years and the long-term outlook you provided is pretty compelling with leading positions across auto and insurance and digital banking. What is Ally focused on going forward? Do you feel like you have the right set of products and businesses? Or do you expect changes going forward?

Yes. Look, I'd say, first and foremost, we're focused on our customers, focused on our dealer customers, focused on our digital bank customers, focused on our corporate finance borrowers. That's first and foremost, that's kind of core to everything we do. We talked about our customer obsession about our Do It Right culture. I say those customers are really at the heart of that. And I think those are part of -- when we talk about our NIM trajectory and what we think we can do, part of that is just the strength of those relationships with dealers that allow us to drive price and credit and essentially drive the yield on our portfolio. It's part of the value proposition of our digital bank, which has allowed us in a very challenging year to continue to grow both our customer base as well as our deposit base. We're on track for a record year in terms of adding customers to our digital banking platform. And so I'd say a number -- first and foremost, we're really focused on kind of those core products. We're also focused quite frankly on -- and you've seen this, we're focused on credit, and you've seen us really kind of drive up the credit spectrum from an auto finance side. We're focused on cost. You've seen us take some proactive measures in terms of getting our costs under control and driving towards the cost targets that we've previously addressed. And we're focused on just kind of thinking about our capital and making sure we're allocating capital across our product set to optimize and to get to the best risk-adjusted returns for our investors. I'd say, as you think about kind of overall our product mix, our product strategy will really be focused on what drives value for our customers. And so you've seen on the dealer side of our business, we've invested in the growth of our insurance product, our SmartAuction product, our pass-through product, all centered around increasing our value to our dealer customers. On the banking side, you've really seen us focus on redirecting Ally Invest towards our deposit customers. So when you look at most of our new Ally Invest customers, they come from our deposit franchise. When you look at our mortgage originations, they're very much focused on our deposit customers, and we'll continue to look for ways to grow our product base, but really only in a way that deepens our relationships with our deposit customers. And so when you talk about our products and our product mix, I feel good about the product mix that we have today. And I'd say we'll continue to look for ways to kind of fine-tune it in terms of kind of directing the focus on deepening customer relationships and also being smart about capital allocation and optimization.

You mentioned margin. You provided a good deal of detail in your most recent earnings presentation regarding the rollover of the retail auto loan book and the prospective tailwinds to asset yields that, that will provide. Short-term rates put near-term pressure though, on deposit costs. Can you just give us some color on the trajectory of the net interest margin from here as we near the end of the tightening cycle? And if the margin moves back to 4% to 4.5%, what gives you confidence that you can be a 4% margin company over a multiyear horizon?

Great. It's a great question. And maybe I'll start with the yield side of it. In our third quarter earnings presentation, we provided an exhibit that just talked about the rollover in terms of we're currently originating our retail auto loan product at a 10.7% yield. The portfolio yield for what's on the books today in the third quarter was about 8.9%. And so there's just a natural rollover as older vintages written in a lower rate environment, roll off the book and as newer vintages roll on. And so that provides a natural tailwind in terms of our yield going forward. It's a natural tailwind. And part of it is enabled by the fact that we've been able to maintain these originations at this 10.7% level. And that's really a function of just the scale and the quality of the franchise we've built with dealers. We've pivoted our auto business over the course of the last year, where we're really focused on getting as much application volume as we can from our dealers. So we want to show up for them in size and in a way that supports their business and their profitability. Rather than have them send us a subset of their applications, we encourage them to send us as many applications as possible. It's driving our 2023 application volume to a record, probably. We'll probably end the year at about 13.5 million applications. That allows us to be selective, both in terms of pricing and credit, and that's what's really allowed us to drive our yields as high as we've driven them and create that tailwind that ultimately will support our NIM going forward. I'd say on the deposit side, there's no question, deposit competition has been challenging this year. The deposit market overall has been challenging. But our business has been really impressive in terms of its ability to deliver new customers and deposit balance growth over the course of the last year. And we've done it, quite frankly, offering what we think is a very attractive rate on our deposits, but it's not the highest rate. We're not the highest payer in terms of deposit pricing. So look, deposit competition is something we're watching very carefully. We're impressed by the Beta that we've achieved in the cycle so far, but there's no question there's a lot of competition in the market, and it's something that we're following very closely. But I'd say, as I think about -- as we kind of drill into margin, I think we have that natural tailwind that comes from just the portfolio turning over into the higher-yielding more recent vintages. And we showed a lot of discipline and a lot of success in our ability to drive deposit growth without having to pay top price.

In terms of returns, historically, the company has been a low teens ROTC company and [ higher ] during the pandemic. You've mentioned the sustainable mid-teens return target long term. Can you provide some context on what's driving your outlook and why that's sustainable?

Yes. Well, look, I think the starting point is NIM, which we spent a lot of time talking about. I think where the business is positioned right now on the auto side, we've got some added flexibility from kind of getting the application volume that we've got from the scale of our business. We've got, in effect, the ability to select both in terms of pricing and credit that we can move up and down the credit cycle, and we can be very opportunistic. And I think that gives us some durability around our overall yield and therefore, our NIM. I'd say we've made other changes to the business over the course of the last couple of years that are also helpful. On the fee side, we're driving $500 million per quarter of fee revenue from insurance, SmartAuction, our pass-through program, our growing credit card business. That's a permanent change of our business in terms of being able to drive $500 million per quarter, $2 billion annually of high-margin fee revenue through our business. Yes, we've also continued to grow in a very disciplined way our corporate finance and our credit card businesses, which again are high-return businesses that add to our ROE over time. And then on the expense side, we've taken proactive steps to cap the growth of our expenses over the course of the next year. And so I think it's the combination of kind of steps we've taken with the franchises to drive NIM, steps we've taken with our franchises to drive increased fee revenue and cost discipline that all kind of point us towards a lot of -- a high degree of confidence in terms of achieving our ROE targets. And I'd say, at the same time, we remain very focused, very focused on credit, which continues to be on track, and we're very focused on capital allocation in terms of directing our capital towards our highest return businesses. And so I'd say it's the mix of all those things that gives us a lot of confidence in our ROE.

In terms of deposits, you mentioned it's been very competitive. Your growth has been very strong. Retail deposits up to $140 billion, significant -- very significant percentage FDIC insured Beta of around 70%, consistent with kind of guidance and history. What are you seeing in terms of competition right now? And what do Betas look like in a stable rate scenario or a down rate scenario?

Great. Yes. So as you pointed out, we've demonstrated a 70% Beta on the way up. I think we've all been impressed with the strength of our franchise. I think it's clear to us that the banking consumer has chosen digital. And there is an increased awareness of rates and the value of rate in the deposit product overall. And so I think all of those trends point in our favor. I think the investments that we've made in terms of providing the tech, the customer service and products around our core savings deposit product create a stickiness and a deep relationship that I think will serve us -- that serve us well going in the forward. But as you pointed out, competition has intensified. And we've seen that competition in a few different ways. We've seen it from folks that look like us offering more of a direct banking-type platform. We've seen a number of players that have significant scale and have been, quite frankly, more aggressive than us in terms of pricing and in some cases, to fund growing floating rate credit card books. And on the other hand, we've seen traditional banks and private wealth management players arguably playing in a different part of the market, but we've seen them using, in particular, their CD products as a way of competing against money markets and other places where their clients park their money. So there's no question, competition has increased, but at the same time, I think it's in the context of this kind of broader shift in the consumer market, where I think people care more about their rate on deposits, and people are looking for digital solutions that are easy to use that give them a tremendous amount of customer service and that give them full -- that give them a spectrum of products. And so I think it's competitive, but I think there are a lot of things that point in our favor, quite frankly.

Much of the growth from -- in the deposit base from nothing to $140 billion occurred during a period of rates at or near 0. Now that the consumers are really aware of rate, is that a competitive advantage for the company or an opportunity going forward?

I think it's absolutely a competitive advantage. And we've seen it this year. We just -- we've seen it in our ability to grow our customer base at record levels and to grow our deposits even in an environment where a lot of the traditional bank players are much more challenged.

On auto pricing, if we can shift to auto pricing, which is the bulk of your earning assets, you mentioned a 95% Beta since the beginning of the tightening cycle. How does that compare to your expectations? And what are you expecting in terms of originated yield going forward?

Yes. Look, I think we have all at Ally been impressed by our ability not just to drive price, but also credit. And so it's impressive to us that we've been able to see the pricing being able to pass on a 95% Beta. But also to do that in the context -- in an environment where we're also driving curtailment on the underwriting side and really kind of driving the portfolio up credit at the same time. And we credit that to the scale of our franchise and also just the depth of our dealer relationships. A lot of our dealer relationships are relationships that we've had over multiple generations, literally multiple family generations. We've been there to support our dealers through good times and bad times through the financial crisis. We've been there. And I think our dealers really value that. We sit in the market now in a competitive environment where a number of regional banks, for whom auto finance is probably not their core product, not one of their most important focus, we've seen them back away. In some cases, we've seen them exit entirely. That deepens the moat around our dealer franchise. And I think just kind of adds to our long-term value as a partner to our dealers. So I feel great about what we've been able to do so far in terms of pricing on the dealer side. Yes, I'd also say I feel really great around the forward. I think the moat is deeper. And I think by -- through the pivot that we've made and with the application volume that we're seeing, it gives us more levers in terms of kind of being able to credit select up, down and be able to manage price opportunistically depending on how the competitive environment evolves. So look, I have no doubt, I'm sure a lot of the folks that have exited will, at some point in the future, try to reenter. I think that's challenging. I think it's -- I think this is a relationship business, and a lot of our success depends on the strong relationships we have with our dealers. And I think this cycle has only strengthened our relationships and again, deepen the moat around our business.

Can you just drill down a bit more into where Ally has historically competed the intersection of used and prime and how that's changing, especially with this -- in this economic -- period of economic uncertainty with competitors [ pulling ] back?

Yes. I think that's the right way to characterize us at the intersection of prime and used. And I'd say, historically, if you kind of dial it back a few years, I think the dealers were much more conscious of kind of what was typical Ally paper. And we've really retrained them to send us everything because we want to stand up for our dealers. We want to show up for them to support their business and ultimately their profitability as big as we can. And so that's kind of part of our drive to get the application volume that we've seen. I'd say it's still fair to characterize us as that intersection of prime and used. But I'd say kind of at that intersection, we've developed a little bit more flexibility to move upmarket or downmarket basically across the credit spectrum. And you've seen what we've done recently is we've moved up credit. We saw the opportunity, given the competitive environment we're in. And so you've seen it just in terms of the proportion of [ S-Tier ], our top credit tier paper in our originations over the course of this year. You've seen a meaningful uptick in terms of how much of that top credit quality paper we've originated versus other stuff. And that -- again, that's kind of a reflection of our ability through our dealer relationships and the application volume we see to be able to make that shift.

You've mentioned a couple of times the 13.5 million applications that you expect this year, which would be about $400 billion of potential loan volume. But you're guiding to $40 billion of originated volume for this year. How do we think about the volume that you see and don't originate any opportunities you have there? And then would you consider selling some production? And if so, how should we think of gain on sale there?

It's a great question. It's an opportunity-rich environment for us. 2022 originated $46 billion with less application volume. It's clear to us that there's the opportunity to originate more. We've been using these pass-through programs to be able to speak for more volume in credit tiers that we're not focused on right now for our balance sheet. And I think we would look opportunistically, and we are looking opportunistically at kind of other partnerships that would allow us to originate to sell or originate off balance sheet with through partners. But yes, we would only do it opportunistically. We would do it if it meets 2 conditions: one, it allows us to serve our dealers better; and two, it's financially attractive to us.

In terms of credit, I guess before we turn to credit, can you just quickly explain the difference between your front and back book, and why it's important to differentiate between the 2?

Yes. So when we think about credit, we look at it on a pretty granular level. We look at vintages. We look at, quite frankly, thousands of micro segments within that in terms of kind of how we think about the performance of our book. But let's focus on vintages over time. Look, I would say, over the course of 2023, we've really been tightening up underwriting, and we've been curtailing and cutting off segments that were underperforming. So we've made meaningful changes. And the most -- the way that's most visible is when you look at the proportion of our originations this year that are in the [ S-Tier ] top credit tier versus our other tiers. And so I'd separate the 2023 book from the older books, which, quite frankly, it's primarily the 2021 or the back half of 2021 in the 2022 books. But we're looking at all of these vintages. I'd say on the 2023 book, we're seeing significant improvement in credit performance as we analyze those vintages. It's still early days. Most of those books have been on the books for months. And so they're not at a point of maturity yet where we have a high degree of confidence in where they are. But so far, everything we've seen in the performance of those vintages has actually been quite good and support our view around our overall loss expectations for 2023. I'd say the 2022 vintages more challenging overall. Certainly, in the early days of those vintages, we saw performance that deviated from our expectations. But I'd say as those books -- as those vintages have matured with more months on book, we've actually seen really encouraging signs in terms of reduction in that deviation and their move towards expectation. And so overall, kind of taking the recent originations as well as some of the older vintages, all increases our confidence in achieving the 1.8% NCO rate for 2023 that we've discussed previously.

I guess that confidence, how does that and the trends shape your outlook for '24?

It's early to talk about 2024. I'd say, look, we feel encouraged so far about kind of what we're seeing and we've got a lot of conviction in 2023. But it's probably early for us to comment on 2024. That being said, we're going to continue to do our best to be as transparent as possible. And so as data emerges, we will absolutely be sure to share people kind of more details in terms of what we're seeing and how that translates into what we see for 2024.

Yes. In terms of the reserve levels for today, I guess, what type of environment auto values, unemployment, et cetera, are factored into the reserve?

Yes. So we reserve under CECL. So we're reserving for effectively the remaining life of our loans on book. So average kind of 1.9-year remaining life. We're reserving for that full life. And every loan we originate, we originate for its expected life. Under CECL, we also make relatively conservative assumptions around unemployment, in particular. So we -- for CECL reserves, we assume unemployment ticks up north of 4% next year and then eventually increases reverting to a mean just north of 6%. So we've got kind of a 6% mean reversion built into our CECL reserve level.

We've got a couple of more topics, and then we'll open it up. The -- I guess, expenses before you mentioned as part of the returns, the cost focus. In the past, you've grown mid- to high single digits and you're now guiding to 2%. Can you just talk a little bit about how you get there, how you're comfortable to manage expense growth at low single-digit numbers?

Yes. No, it's a great question. And we've talked about kind of 2% overall expense growth. Within that, if you exclude FDIC fees and some of the insurance costs that are just kind of related to whether it's weather or the sales cost of that business. If you exclude those, it's more like 1% that we've talked about for next year. And obviously, you can contrast that with kind of what we saw in 2023 and even in prior periods. I'd say a lot of what we saw in 2023 was driven by kind of normalization in terms of weather. So we saw a more normal level of the kind of storms that drive losses in our insurance business over the course of 2023. So I think hailstorms, wind storms, but not necessarily hurricanes because those -- generally, we get enough lead time to manage those. But we saw more of a normalization of that to kind of a historical norm versus 2022 where, quite frankly, we didn't see a lot of it. And so that's part of what drove the uptick in 2023, also normalization of credit, right? And so you've seen -- we talked about the 1.8% loss rate. That ripples through our cost base in terms of repossession and just the cost of servicing the book. And then at the application levels that we're seeing, obviously, we have -- there's some cost to us in terms of processing the volume of apps we're seeing. Now we think that cost is more than offset by the value we get on the pricing and credit side, but it is a cost that ripples through. And so all of those things impacted us in 2023, but they're kind of baked into our cost base. So we don't see kind of further escalation going forward. If you look over a longer time frame, Ally has invested a tremendous amount in terms of marketing and brand as well as in terms of our technology platform across a number of different areas. We've made those investments, and we think those investments are at scale. And so we think we're moving from investing to more of a maintenance mode. And so as you look over the course of 2024, yes, we think that gives us a lot more flexibility to manage cost. And then, of course, we took the proactive measures last month in terms of our reduction in force, which was difficult and challenging and hard to do, but probably saves us on the order of $80 million next year and going forward. And so obviously, helps significantly in terms of managing towards our expense target.

We're following the JPMorgan session, which Jeremy touched on regulation and proposals, which is an important topic right now is a Category 4 bank. How do the proposed rules impact Ally, and how are you preparing for them?

Yes, it's a great question. They're proposed rules, and I'm sure Jeremy commented on it. I think everyone in the industry is going to participate in the comment period. A lot of us are working through BPI, the one of the industry associations. And so Ally is, of course, part of all that as well. And look, maybe starting with Basel III end game, I'd say the most consequential part of that for us is AOCI. The incorporation of AOCI into our regulatory capital is probably the part that impacts us the most. We were expecting it. I'd say the transition period is very manageable for us. And so our expectation is that we can kind of manage through that AOCI opt-in over the course of the transition period pretty naturally. When you look at the impact from Basel III end game on RWA, it's not as impactful to us. We'll have increased RWA from operational risk based on the formulation that's been proposed. But then we'll also have a reduction in RWA from the way that, that retail auto loans are treated, and those 2 things offset each other, such that we think the overall impact of -- on RWA will be minimal. Long-term debt is another part of it. It doesn't affect, Jeremy, as much. But for us, Cat 4 banks, it is very impactful. The way it's been proposed now, it imposes a requirement on our holdco as well as on our bank subsidiary. Ally has historically funded all of our unsecured out of our holdco, not out of our bank. And so there -- if the regulation were to go through as proposed, there'd be some increased drag to us, in that we would need to do additional funding out of our holdco in order to meet the bank requirement. And obviously, there's a lot of moving pieces in terms of liquidity and assets in both entities that we'd have to work through. But that part of it obviously could be impactful in terms of creating some funding cost drag between what we're raising an unsecured versus where we're investing that.

Okay. I'll ask one question, and then hopefully, someone from the audience will ask about the CEO transition. So kind of a planted question. But I guess the final question would be just to wrap up, newly appointed CFO, what can you take away from your experience at Goldman as an investment banker advising Ally and other financial companies and apply it to this company and what are your -- the top priorities?

Yes. No, it's a great question. Within the Goldman ecosystem and as an investment banker, I grew up in an environment that was very much client focused. And so the client obsession at Ally is incredibly natural for me. Also, you obviously grew up in an environment that was very focused on execution and execution excellence. And so Ally's Do It Right culture, again, very natural transition for me. Over the course of the last few months, I've spent a ton of time with dealers. And I'd say, as a banker, obviously, I spent a lot of time covering corporate clients, whether it's entrepreneurs, wealthy families, corporate clients. And I'd say there are a lot of parallels between kind of covering clients and the way Ally covers dealers. And so look, I'd say there's a lot in my background at Goldman Sachs and as an investment banker that I think is really helpful. And really, I think, provides the background for a very kind of natural transition into Ally, given how Ally works and kind of how the culture at Ally has been established over the last several years. I'd also say, look, as an investment banker, having covered the landscape of financial services and consumer finance institutions, I think I have a unique perspective, and I think I have a unique appreciation for the strength of the management team, the Board and just the overall position of Ally in the market today. I sometimes run around Ally saying, I kind of came in with inside information in terms of kind of where the company is and the opportunity that's ahead of it. I think my background at Goldman has prepared me well and I think the perspective that it's given me, I think, has been helpful. And I'd say kind of 4 months into it, I am even more excited about Ally than I was when I joined. So it's been fantastic so far.

All right. We have 4.5 minutes for questions. If you could just keep it to one question.

I'll skip the CEO question, but just -- I think you've guided to net charge-offs kind of peaking fairly soon or possibly even this quarter, driven by some sort of fairly aggressive underwriting that happened during the pandemic. Can you talk about like confidence around that, sensitivities around that? Maybe also kind of throw in -- I may I'd add one question, right? I'll make it a very long question, sensitivities to used car prices as well.

Yes, sure. So I'm going to change the characterization a little bit because the concept of peaking is challenging to look at with seasonality. So we've guided towards 2.2% to 2.4% NCOs for fourth quarter. Part of that is just the natural seasonal uptick that we see kind of every fourth quarter. I'd say the rate of charge-offs that we expect for the fourth quarter, quite frankly, is consistent. Maybe it's a little above the 1.8% annualized rate, but it's pretty consistent with that. So it's not necessarily so much peaking, but rather kind of consistent with the overall 1.8% NCO expectation for the year. On used car prices, look, I'd say one -- first of all, we are delighted to see the strikes resolved. We think -- we're just delighted to see that. The strikes introduced volatility around used car pricing. And we've obviously kind of -- we're actually watching that very closely. But all that being said, we kind of stand by that 2.2% to 2.4% guidance for fourth quarter, kind of based on what we're seeing in used car prices and delinquencies. And we still feel very confident in getting to the 1.8% for the year.

Russ, can you check, this might be an odd question, but do you underwrite electric vehicle loans differently than traditional automobile loans? Is there a differential in those 2 markets?

Yes. There's not a lot of ton of difference in terms of how we go about it. There are some differences in terms of how we think about the residual value, and that certainly plays in particular, into the underwriting of lease. Yes, there's obviously nuances around the tax credit on the lease product as well. And you see it in our accounting, we take those tax credits to the tax line as opposed to through net interest income. But -- so they're slightly different economics. And yes, there's obviously different factors to think about in terms of understanding residual value. But fundamentally, no, it's not significantly different.

I guess I can ask you about the CEO transition. Based on the remarks during the call, it sounds like that news caught people by surprise. It has -- it was made clear, it has nothing to do with any sort of regulatory concerns or financial outlook. Just your thoughts about his decision and anything you can share on the transition?

Yes. It was a surprise, although I got to say, I can't fault the guy who leaves an institution that he loves to go work with his favorite client. I obviously did it. And so I totally get it. And I'd say with J.B., Rick Hendrick is like a mentor, like a father figure to him. He's worked with him for a number of years. He's close to the family. And J.B. is a car lover, a massive car lover. And so I think we always knew that this is the one call that he would take. And I think it came probably earlier than we all expected. But the outcome, not surprising, the timing, obviously surprising. And obviously, all these things have to be done in the right way as a public company. So it kind of had to be that way by definition. But look, I'd say, one, he's not leaving -- as he said, he's not leaving because of any issues or any disagreements with the Board or with management. We all love J.B. J.B. has and had the full support of our Board. So there's no issues there. This is a guy who loves an institution, is going to work for his favorite client, and I have a lot of sympathy for that. For me, personally, obviously, J.B. was a friend. I've known him for a long time, and it sucks to lose him as a CEO. We will still have him obviously, as a very important client. I came into Ally with knowing a lot of people on the management team, a lot of people on the Board, doesn't change anything about how I feel about Ally. I think I'm still as excited as I ever was. I just think there's a ton that we can do in terms of delivering for this company and reaching the targets that we've set out for it. And I feel as convicted, if not more convicted now than I did 4 months ago.

All right. Well, thank you, Russ, for coming here. I hope to see you next year.

Great. Thank you.