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

We're ready. Good morning, everyone. Thanks for joining us this morning. I'm here with Ally Financial. Ally, as everyone knows, is an automotive financing and insurance services business. We have presenting with us today, Russ Hutchinson. Russ has been at Ally since 2023. It's going by fast. Russ is CFO, and previously was at Goldman for more than 20 years, I believe.

Yes.

Yes. So Russ, thank you very much for coming to BAAB. We appreciate you making the time to come and talk to us. And look forward to hearing more about what's going on at Ally.

Great. Thanks, Ruth. Happy to be here.

Okay. So I'm going to just kind of start high level. And I think you've had very strong results this year after some challenges in previous year. So could we just kind of start from the very high level on where we finished Q3 and Q4? How does that kind of set us up for your 2026 outlook?

Yes, absolutely. It's a great question. Thank you. Look, I'd say we're really happy and really energized by the progress that was demonstrated through our Q2 and our Q3 results. They show strong momentum across all 3 of our Core Franchises, Dealer Financial Services, Corporate Finance and our digital bank. I think if you look at our Dealer Financial Services business, we're just getting really great traction with our dealers. It's showing through in terms of application volume and in terms of what we're originating. Our corporate finance business is showing disciplined year-over-year growth. And we have the leading digital bank in the country. So we feel great about just the level of momentum we're seeing. I'd say we're also really happy with where we're positioned. We think we're position to grow where we want to grow and to expand our profitability. And we've talked over the last year or so about the 3 main drivers of our profitability expansion story. Our NIM expansion to the high 3s. Our credit normalization to sub-2%, NCOs on retail auto loans and discipline around expenses and capital. And I think the results that we showed in the second and the third quarter showed progress across all 3 of those and should give everyone a lot of confidence in our ability to get to our mid-teens targets -- our mid-teens ROE targets over time. So we feel really great. And we look at this performance improvement, it's really been driven during a period in which we've also been paying a lot of attention to our risk exposure, credit, rate risk, and building capital. And so we think we've really positioned ourselves in a way that's going to help us navigate some of the uncertainty that we see around us now.

Great. Okay. So maybe you mentioned the drivers to the ROE. So let's turn to some of those drivers. The NIM expansion is central to the investment case. So the Fed cut rates just last week, I think it was last week. And it looks like there could be another rate cut even in December. So can you talk about how the NIM evolves from here? And with the lower rates, what that means to that high 3s target you have?

Yes, absolutely, Ruth. And you're absolutely right. NIM expansion is a really important part of our story. It's really an important part of our profitability expansion story, and it's really built off of the momentum that we have in our businesses. And so maybe I'd start. We're on track to our high 3s target. And you look at the expansion that we've seen in Q2 and Q3. It's driven by a lot of the things that we've been talking about for a while now. The asset rollover, the portfolio rollover on the asset side and do higher-yielding assets, portfolio mix optimization as we move more of our business towards our higher-yielding assets, and as we run off some of the lower-yielding assets on our balance sheet and then deposit repricing as rates move lower. All those things continue to be in place. Those are the primary drivers in terms of the NIM expansion that we've seen over the last couple of quarters and those things are all in place now. That being said, it's not a straight line, and we've always said it's not -- our NIM expansion is not a straight line. And in particular, we have sensitivity in the near term to reductions in Fed funds. And so we're going through a period now where the Fed is lowering the Fed funds rate. It's similar actually to what we saw last year. Remember last year, this time of year, we went through a period where September through December, the Fed took 100 basis points off rates. And what we're seeing now looks a lot like what we saw last year. So off of the first two cuts we saw in September and October, we're running at about a 40% beta. So we've taken 20 basis points off of our OSA pricing for cumulative 50 basis point reduction in Fed funds. That's similar to what we saw last year. If you looked at December of last year, we were running at about a 40% beta. And you'll know that the strong NIM expansion that we saw throughout 2025 was in large part driven by what we call the catch-up in beta. So as beta expanded from 40% at December of last year to 70% by the second quarter of last year, that was a large part of what drove our NIM expansion. And so our expectations are very similar this year in terms of how things play out. That is our betas kind of start in that 40% range and then expand over time. In terms of getting to our high 3s targets, a beta that ultimately settles it anywhere in the 60s would be sufficient to get us there, and that's certainly our expectation this time around. So we continue to feel great about our NIM expansion story. It's driven again by those fundamental things that we've been talking about for a while that have been in place and continue to be in place in terms of portfolio rollover, mix optimization and deposit pricing.

Okay. I guess the other area to touch on is on average assets. And I think you've talked about them being down for the year. But we've actually seen some growth happening. And I think you've also kind of adjusted that outlook to say that end of period would be -- would actually see some higher balance. So can you -- maybe just talk about the momentum you see and how that comes through to 2026?

Yes, absolutely. And this is a great example of how we're growing where we want to be growing. And so the growth is in our higher-yielding assets, our retail auto loans and our corporate finance book. And those are growing and they're growing in such a way that they outweigh their shrinkage from the businesses we're exiting. And so as many of you know, we exited our Card business earlier this year, and we've been running off our mortgage loan book as well. But fortunately, the growth that we've got in the business -- in the places where we want to grow is strong enough to offset the areas where we're exiting. And so as you pointed out, if you look on a point-to-point basis, our expectation is that our end of year earning assets will be approximately flat. Now just given the timing of exits and asset growth, on an average basis, we've guided to be down about 2%. As we think about the forward and we look at the momentum that we've got in our businesses and we start thinking forward in terms of what to expect in terms of growth, our expectation is our earning assets grow in the kind of low single digits. But the places where we really want to grow in retail auto and corporate finance -- if you back out the areas that we're exiting and winding down, those assets are growing a little faster than that, again, offset by some of the areas where we're shrinking.

Okay. So maybe we could pivot to competition because I think that there's been banks that have been more interested in the space. They tend to come in and come out, and it seems like this is a period where we are seeing -- more traditional banks come back into the auto space. Can you talk about what that looks like? And what that means for the competitive environment and yields?

Yes. No, you're absolutely right, Ruth. There's a history of banks entering and exiting the auto finance space over time. And you're absolutely right. Competition has intensified. We've seen more competition throughout this year, quite frankly. And that's a reflection of something we've known for a very long time that this is a really attractive asset class. And so it's really not surprising to us to see other banks that are anxious to grow in this area. What's interesting, though, is we are really well positioned with our Dealer Financial Services business. Really what sets us apart is we have a 100-year history in this business, we have deep and long-standing relationships with our dealers, and we have a really great value proposition for our dealers. We're all in. We originate across a broad spectrum, and we supplement that spectrum through our pass-through programs, which allow us to speak for an even wider swath of the credit spectrum. We help them with their businesses in a variety of ways. So we're in their F&I office with our insurance products. We finance their floor plan. We offer them access to our SmartAuction platform. We're there for our dealers in a number of ways to make their businesses better and ultimately, to help them sell more cars. And that value proposition resonates with our dealers. And so while we've seen heightened competition throughout the course of this year -- from a number of strong institutions, I'm proud to say, look, our application volume has set records every quarter this year, and it has translated into really strong originations, originations at attractive yields and with a great spread of risk. And so we're delighted with how our platform has performed and how it's set up to the competition. We think we have something that's differentiated and highly valued by our dealer partners.

Okay. So the other kind of area that I think to talk about is credit performance. And that's also part of the Ally improvement of normalization of auto credits. So you've mentioned that we saw in the third quarter results, so that's going the right way. The concern in the market is like we see these other players that are having problems. And so I think it'd be really interesting to hear your thoughts about what you think for Ally and what that looks like? And you've kind of already highlighted that it's normalizing, but how does that -- the industry kind of impact any of that for you?

Yes. No, it's a great question, Ruth. There's been a lot of press in the industry about losses. It's primarily been focused on the subprime customer. And this is not new news. We've talked about it extensively about a customer that's struggling with the impact of inflation. And with an employment picture that's been a bit spotty. That being said, maybe just to level set in terms of our book, it's a small part of our business. So it's probably 9% or 10% of our originations in a given quarter would be what we call subprime, so 6.40% and below, and less than 2% would be sub-5.40%. And so when we kind of look at our origination mix, it's really a very small part of our business that would fit into what we call subprime. And maybe just talking a little bit more about what we're seeing in our portfolio. We've taken a lot of steps over the last couple of years in terms of origination and pricing that have positioned us well to navigate those. As you pointed out, Ruth, our credit trends are improving, and that's driven by the vintage rollover as we move away from some of the older vintages that didn't have the benefit of a lot of the underwriting changes that we made over the course of 2023 and into the later vintages, the second half of '23, the '24 vintage, the '25 vintage, these vintages all have the benefit of a lot of those underwriting changes that we made a couple of years ago, and they're performing well. They're performing better than our expectations. And that vintage rollover is a big part of what's driving the improvement in our credit even with some of this industry noise that's out there. And then at the same time, we've made enhancements to our servicing strategies. And so that combination of vintage rollover and servicing strategy enhancement. That's really what's driving the improving picture for us going forward. All that being said, we live in an uncertain macro. And so while we have these benefits, we're also paying keen attention to what's going on in the macro and how that's impacting our book on a real-time basis. And so we've got a careful eye on credit. But as you pointed out, so far, credit trends continue to show real improvement. And that benefit that we're getting from vintage rollover and our servicing enhancements is outweighing the noise that we're seeing in the macro.

So Russ, is there any difference you can see in the -- your subprime book? I mean, I know you've also originated a lot more of the S prime. That's grown in your origination volumes. But if you kind of think about that 9% to 10% that you have at subprime, is there any new trend or anything to call out there?

No. It's -- when we cut our credit in the micro segments, we cut it quite finely. And we look at it on a vintage-by-vintage basis, we look at monthly vintages. Our subprime cohorts are performing better than our expectations. That being said, our expectations had already been informed by what we've been seeing coming out of the pandemic. And so our underwriting models, our pricing models had all been informed by that. And so we'd adjusted for what we're seeing. Again, what we're talking about today in terms of a subprime consumer, struggling with inflation in a shaky employment picture, this is not news. This is not new for us. This is something that we've been seeing for a couple of years, and we've been adjusting accordingly for it.

Okay. And then just kind of another topical news is the U.S. government shutdown. Is that -- has that shown up anywhere in either demand or credit or anything -- any comments around the U.S. government shutdown?

Yes. That's another cohort that we've been watching very closely. It's a pretty small cohort for us. It's less than 2% of our book, our federal government employees. But we've been watching it to see any signs. We've seen a slight uptick in people taking up extensions. But it's been very slight. And again, it's on such a small portion of the book that it's not something that's impactful to us.

Okay. So I know you mentioned this. I mean you've tightened underwriting a couple of years ago now. Has there been -- have you made any additional changes in underwriting?

Underwriting is a game of continuous improvement. So we are constantly tweaking our underwriting. As I said earlier, we look at our book on a micro segment basis, and we look at it based on monthly vintages. And so we're constantly looking at how each segment and each monthly vintage is performing relative to the expectations at the time when we price those loans and looking for micro segments that are performing better than our expectations and micro segments that are performing worse than our expectations. And so we're consistently -- we're continuously adjusting our pricing and our underwriting and our auto approvals in order to manage for what we're seeing real time in terms of the book. And so -- so we have. And so for example, a great example of this is on monthly payment size. Coming out of the pandemic, we tightened quite a bit around monthly payment size because we saw performance there that was underperforming our expectations from a credit perspective. As we dig in on a micro segment basis, we're funding pockets where you fund, for example, someone who actually has a low monthly payment size but reads higher risk based on other credit metrics. We're actually funding -- there are micro segments within there that actually outperform our expectations. And so we're looking at pockets where we can price differently and underwrite differently in order to capture those opportunities. But when you look at our underwriting on a whole, as you pointed out, north of 40% of our originations continue to be in our highest credit tier. And so when you look at our underwriting on a whole -- but it doesn't -- there's not going to be a noticeable change. But under the surface, we're doing a lot of work month-to-month, really analyzing every micro segment, analyzing every vintage and making continuous improvements as we go.

Okay. I'm going to pivot for a little bit, and I'm sure we'll get back to auto finance again. But I want to talk about the Corporate Finance business because there's also been some news flow around that with the NDFI exposure that you have and some other people having issues in that segment. So I think you have about $4 billion of exposure. Can you just spend a minute talking about where that exposure is? And how you think about that part of your portfolio?

Yes. So you're right, it's about $4 billion of exposure. It's in our Lender Finance business within our Corporate Finance business. And NDFI is a pretty broad category. And so everyone's NDFI looks different. Ours is again concentrated within this particular product. And again, it's about $4 billion. These loans are conservatively underwritten with conservative advance rates. And this is a business where we're serving private credit players that, in many cases, we've known for a long time. We've had long-standing relationships with them, and they're very well established. As we look at how we manage that business on a day-to-day basis, we have a number of protections in place in terms of just some of the procedures we go through. So we do obligor confirmations. We require independent audits. We do periodic UCC lean searches to make sure that our collateral is not double pledged. And then we have rights that kick in based on certain triggers and events that give us the ability to take control of collateral when things go awry. When you look at our Corporate Finance business overall, it's been a great business for us. It's running right now at about a 30% ROE. It's a business we've been in for 25 years and with the same team running the business. So really great continuity. Our credit losses on our Corporate Finance business have been less than 50 basis points on average. Year-to-date, we've had no credit losses. Now that's pretty fantastic, but it's not our expectation. We actually underwrite the business for losses. We expect losses and losses will come. But again, it's a business that we've run over multiple cycles and seen consistently strong credit performance. And so we feel pretty good about our business and our book.

And Russ, does -- is there any industry concentrations or specific focus areas?

No, it's a pretty good spread across different industries.

Okay. Maybe we could focus on some of the other revenue sources that you have because I think you've been trying to build out more fee-based revenues. Can you talk a little bit about those opportunities?

Yes, sure. I mean this is another example of really kind of leveraging the momentum of our businesses and growing where we want to grow, and growing in places that generate -- stable sources of revenue that are high margin and low capital intensity. And so you kind of look at the areas where we source other revenue. It's insurance, our SmartAuction platform. It's our pass-through program, and that's our Corporate Finance business as well. Now if you look over this year, our other revenue looks kind of flattish and that's as a result of our having exited the card business and the mortgage business. And so again, similar to the earning assets picture, this is an area where there's areas where we're leaning in where we feel like we have a strategic advantage and where they add to our profitability. And there are areas that we're exiting. And so once again, so on the insurance side, we're leveraging our relationships with dealers. We're already in the dealership. We have deep relationships there, and we're leveraging that relationship to drive insurance premium revenue, which again is high margin and low capital intensity. We're also leaning into those dealer relationships for our SmartAuction platform and for our pass-through program. Our pass-through program is great. It helps our dealers sell more cars. For the marginal credit that doesn't fit our balance sheet, we can still provide a solution to our dealer and help them sell that marginal car. And for us, it's a -- we create a source of servicing revenue going forward. So by being there, we're able to service that loan, we're able to see the credit performance on that loan, and we're able to book a nice stream of fee revenue over the remaining life of that loan.

And no credit exposure to it.

With no credit exposure, exactly. In the Corporate Finance business, our Corporate Finance business is a credit shop. We lead the majority of the deals, the overwhelming majority of the deals that we originate. And so that gives us a source of fee income through syndication fees that we can earn by syndicating out some of our exposures where they exceed our concentration limits. And so again, we've got a number of sources of fee income. We think they add to the quality of our overall revenue picture. And these are all areas that we're leaning into and that we're looking to grow over time. And so -- this year was kind of flattish again because you have the areas we're growing offset by the stuff we're exiting. But as we think about that going forward, you should think about that as a, call it, a mid-single digits growth area for us.

Okay. Why don't we switch to expenses. I think, again, talking about the 15% ROE project target. Expenses and disciplined expense management is a key part of getting that. So can you talk a little bit about areas of investing? Because I feel like there's always new technology, new opportunities to invest and how you balance that with keeping expenses -- expense growth moderate?

Yes, absolutely. And we are absolutely committed to expense discipline. As you pointed out, positive operating leverage is an important part of our margin improvement story. And so we're proud of the fact that we've actually reduced controllable expenses and pretty much held the line on expense levels over the course of the last couple of years. As we think about expenses, we're really taking the benefits of our power of focus strategy by focusing our business by simplifying it gives us opportunities to streamline. And so as we think about investment, it's really -- a lot of it is a self-help story that is getting leaner and more agile and more efficient with our simplified, more focused business model and then leveraging some of those savings in order to be able to invest in the business and really invest in the places where we really want to grow. There was also -- as well as covering necessary investments in things like cybersecurity, but then also freeing up capacity to invest in our customer experience, making sure that the customer experience that our digital banking clients see is best in class. So that's how we look at expenses. It's very much about basically kind of getting lean and agile with our focused strategy and then taking some of those savings and then investing in the places where we really want to grow and get better.

Do you have any big tech investment plans, any big initiatives or projects coming up? Or is it -- should we think about it as more kind of investment as usual?

Look, in terms of how it presents itself on our financials, it will look like investment as usual underneath all that. We're saving a lot of money and streamlining in various places, and we're making the necessary investments you'd expect us to make across cybersecurity. Like a number of folks, we have a number of important projects in the AI area where we're looking for areas where we can get even more efficient and more lean. But again, as we look at expenses, we're very much sourcing the investment for those expenses by being more efficient. And so when you look at our expense levels overall, it's still our expectation that we'll see expense growth that will be more like low single digits. Again, kind of sourcing the dollars we need for investment from -- basically from savings.

Okay. So I want to -- before we open up for questions, I want to ask about capital because that's been also an area of focus that you've been building capital. And if we look at your adjusted CET1, you're now at 8%, which is kind of getting, I think, towards your goal of 9%. Can you talk about kind of the trajectory to get to 9% and then the opportunity to start repurchasing shares because you are very -- you generate organic capital. So let's talk about that.

Yes. I think the things I really like about our capital trajectory over the course of this year is we've done a number of things at the same time. We've invested in growth of the core businesses, growing our retail auto loan, our corporate finance books. We've exercised disciplined around the places where we're not investing, where we're harvesting with the exit of card and the runoff of the mortgage book. And we've built capital and we've built a significant amount of capital over the course of the year. We've also been thoughtful and leverage tools like our CRT in order to optimize capital across our business. And so there are a lot of things that we really like about the way that we've generated capital over the course of the last year. And it's very much in sync with kind of how we think about capital, which is, first and foremost, the best use of capital, in our view, is always going to be in growing our core businesses, but growing them in a disciplined and thoughtful way with a keen eye on risk-adjusted return. We will not chase growth for the sake of chasing growth. But we do think where we have opportunities in our core businesses where we have competitive advantage to drive really attractive returns, that's the best use of our capital. And of course, we want to build our capital to get to and provide a buffer to that 9% target. And so those are our absolute clear priorities, and we're proud of the fact that this year-to-date really provides a great example of how we manage towards that. Now as we think about the go forward and we think about the capital we're generating in the business, particularly as our margins have improved versus the capital usage in our core businesses, there is a place as you think about our playbook for share repurchases going forward. And share repurchases are -- getting back to share repurchases is absolutely a priority for us. In terms of the timing of kind of when we start the share repurchase program, it will be very much informed by that same kind of hierarchy of uses that investment in the core business, building capital to a level that we feel comfortable and having organic capital generation that gives us visibility to getting to our targets of 9% plus on a fully phased-in basis. And so all those things feel pretty good. And again, all those things are going to inform the timing of when we come back to share repurchases. But I can assure you it's absolutely a priority, and it's a priority for the team to be responsible in terms of how we manage our shareholders' capital and really only to lean into growth where that growth makes sense and drives real value for our shareholders.

Okay. I'm going to poll the audience and see if there's any questions for Russ. We have one upfront.

Russ, thanks for your time coming here. Question just on how you're thinking about used car prices, how they're trajecting? There's been some news recently with some softness there and give us a sense as to how you're managing through that.

Yes. No, it's a great question. When we started this year and we gave our original guidance, we talked about some of the favorability we've seen and we've kind of really think about 3 variables. It's kind of entering delinquency rates, what flows to loss in a given period and then the support that we get from used car prices. And I'd say used car prices is one of the things that's actually been quite supportive and helpful to us as we move through the year. We still feel pretty good about the trajectory of used car prices today and as we kind of think about the forward. We still feel like there's shakiness, there is more volatility than you would expect in used car prices on a month-to-month basis just in terms of what's going on in the dealer lot. But again, I think we're well positioned to manage through that. And so far, we continue to feel pretty good about our trends. And certainly, in terms of credit, we continue to see that favorability that we've been talking about across all 3 of those variables, delinquency rates, flow to loss as well as used car prices.

Used car prices are still significantly above pre-pandemic level?

Yes. There's just a natural supply demand imbalance just given kind of what was being produced as we went through and came out of the pandemic versus where kind of vehicle demand is overall. And so there's still basically kind of a healthy supply-demand balance that certainly works towards our favor.

And what does the supply look like for the dealers today? I mean, is the new autos -- I know for a while, there was limited supply. Is that normalized?

Yes. Look, I'd say it is normalizing. And we all remember back in the days of 2021 and parts of '22, where you go into a dealer lot and you really didn't have a lot of choice. We're not living in that world. There's a healthy supply and a good choice on the dealer lot. That being said, inventory levels are lower than where they would have been pre-pandemic. And so there's -- and by the way, that's helpful for the dealers, right, to have enough inventory on hand that the customer has choice and can select the vehicle that's right for them, but not to be carrying a lot of excess inventory is a good place for the dealers to be. We have seen our inventories pick up a little bit over the course of the last couple of months, which again, is natural, and we expect to see dealer inventories ebb and flow. They've been running below our expectations for the -- for -- actually for a couple of quarters. And so seeing a little pickup is healthy, but I'd still characterize dealer inventory levels as in the historical context, pretty lean.

Russ, Jon Arfstrom from RBC. On the credit trends, you talked about the vintage impact. And I guess I'm curious how long do you think this year-over-year improvement in credit can last and how low could delinquencies and losses go? I mean are you close to a trough where the tension between yields and losses, you're there? Or do you think this can continue to improve over time?

No. I think we still got more runway on the vintage rollover story. As you kind of look at our book, I think by the end of this year, the '22 vintage will be about 10% of the book, but still driving some lost content. And then the first half of '23 is still a piece of it. And then obviously, we have some of the vintages prior to 2022. So we still have a sizable chunk that kind of needs to roll through. And when I think about how we underwrite, we underwrite to, call it, a [ 1.6, 1.8 ] target. And so I do think at some point, we kind of exhaust that when we're kind of operating within that target. But I do think we've still got some legs on the vintage rollover store.

Emily Ericksen from Citi. You talked about seeing some competition coming back right into the space that's obviously pretty attractive and completely appreciate the story around deep relationships with the dealers. But if we could just double click into what that competition means in terms of spreads and your ability to continue to originate high 9s or portfolio accretive yields? Have you seen any spread compression or how significant has it been as a product of that competition?

Got it. No, it's a great question, Emily. And maybe let me try and dissect it and take it in pieces. So -- maybe I'll start with originated yield versus portfolio yield. And I'd say, look, our originated yield in the quarter at 9.7% kind of came in about 10 basis points from the prior quarter. That was benchmark driven, and it is our expectation that as benchmark rates come down, our originated yield will similarly come down. It's not dollar for dollar. We were able to kind of manage it to a sub-100 beta. But we do expect, as benchmark rates come down, our originated yield will come down. That being said, there's still some -- our originated yield still exceeds our portfolio yield. And so we still have some of that kind of gravitational pull upwards in terms of our portfolio yield, but it abates. And obviously, you can kind of look at the forward curve and look at kind of what's happening with benchmark rates and how that could feed through the portfolio yield. And so we should -- that should run its course over time. But it's really important to point out, and this is where it gets to the important part of your question, the spread, right? And the spread to think about is the spread between our portfolio yield and our deposit yield. And so as rates come down and as our beta evolves on the deposit side, we'll continue to see very attractive spreads between our portfolio yield and our cost of deposits. Your question, you kind of started with competition, and competition has been strong all year. We saw a number of players come in really from the beginning of the year. And as I said before, our Dealer Financial Services platform is really differentiated and has really stood up to that competition. And maybe I'll just point out, even as we say over the course of October, as we've seen light vehicle sales moderate somewhat. Our application flow has continued to be strong, and our underlying originations through the months have continued to be strong. Our Dealer Financial Services business is showing well. And our value proposition to the dealers is really resonating in a way that's really helpful and differentiating for our business. So we feel great about our ability to drive opportunity at the top of the funnel. And that is ultimately what gives us the ability to use our analytics and our pricing to select the loans that we like for our balance sheet based on an attractive risk-adjusted return and ultimately deliver an attractive spread between our originations, our portfolio and our cost of deposits.

I think we can stop there. I think we're out of time. So Russ, thank you very much. Appreciate you coming.

Great. Thanks, Ruth.