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

Good day, and thank you for standing by. Welcome to Ally Financial's Second Quarter 2026 Earnings Conference Call. [Operator Instructions]. Please be advised that today's conference is being recorded. I'd now like to hand the conference over to Sean Leary, Chief Financial Planning and Investor Relations Officer. Please go ahead.

Thank you, Elizabeth. Good morning, and welcome to Ally Financial's Second Quarter 2026 Earnings Call. This morning, our CEO, Michael Rhodes; and our CFO, Russ Hutchinson, will review Ally's results before taking questions. The presentation will reference can be found on the Investor Relations section of our website, ally.com. Forward-looking statements and risk factor language governing today's call are on Page 2. GAAP and non-GAAP measures pertaining to our operating performance and capital results are on Page 3. As a reminder, non-GAAP or core metrics are supplemental to and not a substitute for U.S. GAAP measures. Definitions and reconciliations can be found in the appendix. And with that, I'll turn the call over to Michael.

Thank you, Sean, and good morning, everyone. I appreciate you joining us today. Second quarter results were solid and reflect the progress we've made over the past several years to build a more focused, higher performing company. The strategic choices we've made are creating a franchise with a meaningfully greater earnings power. We are seeing that reflected not only in margin expansion and strong operating performance, but also our ability to invest for growth while simultaneously increasing capital returns to shareholders. Simply put, our results demonstrate our strategy backed by disciplined execution is working. The Ally today is fundamentally stronger. We believe this positions us well to further enhance profitability, support customers through economic cycles and create long-term shareholder value. For the second quarter, adjusted EPS of $1.21 was up 22% year-over-year while core ROTC increased to 11.8%. Adjusted net revenue of $2.3 billion increased 10% year-over-year, reflecting continued asset growth and further margin expansion. To the point, retail auto and corporate finance assets grew nearly $8 billion year-over-year, that's up 8% year-over-year, and NIM improved 11 basis points sequentially to 3.63%. Our balance sheet continued to strengthen during the quarter with CET1 increasing 20 basis points year-over-year. That strength is providing greater capital flexibility. Since announcing our authorization in December, we've returned more than $300 million to shareholders through share repurchases. Taken together, these results reflect improved earnings power increased capital flexibility and a company that is better positioned to perform through the economic cycles. Importantly, we are seeing broad-based momentum across the company with each of our core franchises, executing well and contributing to our performance. That momentum is supported by investments we've made to strengthen both the Ally brand and our culture. Our revitalized marketing campaign, Life Today is resonating with customers and highlighting the unique value proposition of Ally, meeting customers where life and money intersect in today's world. We continue to see encouraging results in brand health, awareness, engagement and industry-leading retention. Equally important, our culture remains a meaningful competitive advantage. Employee engagement scores improved again this year and ranked the top [indiscernible] companies nationally for the seventh consecutive year with particularly strong improvement across measures such as belief in our strategy. We believe highly engaged employees aligned around a clear strategy create better experiences for our customers and ultimately drive stronger business outcomes. With that, let's turn to Page 5 and discuss performance across our core franchises. Starting with Dealer Financial Services. Our dealer-centric through-the-cycle approach remain a key differentiator and a meaningful competitive advantage. Within Auto Finance, applications reached a record $4.6 million, increasing 17% from a year ago, validating our strong value proposition and strategic initiatives are resonating with dealers more than ever. This application volume supported originations of $13.3 billion, up 21% year-over-year, while maintaining approval and pull-through rates. Retail origination yield of 9.1% included 47% S-Tier, reflecting seasonal dynamics and our measured approach to navigating the current operating environment. Consumers have remained resilient, and we are encouraged by the credit performance across our portfolio. At the same time, we are mindful of the cumulative headwinds from ongoing inflationary pressures and an evolving macro backdrop. Insurance delivered another solid quarter, with written premiums of $382 million, up 9% year-over-year as we continue to demonstrate an ability to deepen relationships and highlight our unique full spectrum value proposition to dealers. In Corporate Finance, we delivered record pretax earnings and continue to see strong client demand and attractive opportunities for disciplined growth. The portfolio ended the quarter at $13.7 billion. That's up 25% from the prior year while generating a 32% return on equity. Our success is built on long-standing client relationships, deep underwriting expertise, speed of execution and the ability to provide certainty when our clients need it most. We remain focused on profitable growth while maintaining the credit discipline that has consistently differentiated this business. Now turning to the Digital Bank. Customer growth and engagement trends remained strong. Retail deposit balances ended the quarter at $144 billion with deposits representing 87% of total funding, and providing a stable and cost-efficient funding source for the company. We now serve 3.6 million customers, up 7% year-over-year and marking our 69th consecutive quarter of customer growth. Importantly, much of that growth is coming from younger consumers who are highly engaged in our digital platform. Nearly 70% of new accounts come from millennials and longer consumers typically beginning with average balances just under $10,000 and growing over time. As consumer preferences increasingly shift towards digital first experiences, we believe, Ally's trusted brand, national scale and low-cost operating model positions us exceptionally well for the future. Taken together, these results demonstrate the increasing strength of our core franchises. We're growing in businesses where we have clear competitive advantages, generate attractive returns and deepening customer relationships across the company. While there is more work ahead, we remain confident in our path forward. We believe the benefits of our strategic actions will continue to accumulate positioning Ally to deliver higher profitability and stronger returns over time. And just as importantly, those same actions are creating a more resilient company that we believe is well positioned to perform through economic cycles. And with that, I'll turn to Russ to discuss the quarter in more detail.

Thank you, Michael. I'll begin by walking through second quarter performance on Slide 6. Net financing revenue, excluding OID, of $1.7 billion was up 11% year-over-year. Balance sheet growth in our core portfolios and lower funding costs supported continued NII expansion. Adjusted other revenue of $573 million was up $42 million year-over-year as we continue to see momentum across our diversified revenue streams, insurance, smart auction and pass-through programs. Provision expense of $430 million was up $46 million year-over-year as CECL reserve builds associated with strong asset growth more than offset the improvement in the retail auto net charge-offs. Retail origination momentum was strong throughout 2Q, finishing nearly $1 billion higher than our initial expectations. The growth supported earnings beyond 2Q but drove $30 million of additional CECL build in the quarter. An $0.08 headwind to EPS. Adjusted noninterest expense of $1.3 billion was up 5% year-over-year, in line with expectations. As noted earlier, adjusted revenue was up 10% year-over-year, driving strong positive operating leverage as we have successfully executed on focused accretive growth in our core businesses and disciplined expense management. During the quarter, we recognized a $15 million expense related to the early redemption of our Series B preferred stock. This onetime charge reflects a strategic capital management action and given its nonrecurring nature, is excluded from adjusted results. Let's move to Slide 7 to discuss margin in detail. Net interest margin, excluding OID, of 3.63%, was up 11 basis points quarter-over-quarter, largely due to lower deposit costs. Retail auto portfolio yield, excluding the impact from hedges, was relatively flat sequentially and in line with our expectations. Average earning assets were up 6% year-over-year with growth concentrated in our highest returning assets, retail auto and corporate finance which on an end-of-period basis were up approximately 8% year-over-year. On the liability side, cost of funds decreased 12 basis points quarter-over-quarter, driven by disciplined deposit pricing actions through the first and second quarters. Retail deposit balances decreased $2.6 billion during the quarter, driven by seasonal tax outflows, in line with normal seasonality. We maintain access to a wide range of alternative funding sources, which complement retail deposits and allow us to fund accretive asset growth in the most efficient manner possible. During the quarter, we reduced liquid deposit pricing 20 basis points and reached a cumulative liquid deposit beta of 69%. We remain disciplined in how we price deposits, ensuring we continue to optimize customer growth and value and are encouraged by the performance we've seen. Deposit customers grew for a 69th consecutive quarter and are up 7% year-over-year, demonstrating the power of our brand in the market. I'll cover guidance later, but despite the movement in short-term rate expectations year-to-date, we remain confident in our path to a sustainable upper 3s margin over time. Structural momentum is evident in our accretive asset growth and efficient funding sources, each supporting continued NIM expansion. Turning to Page 8. CET1 of 10.1% is up approximately 20 basis points versus the prior year. While not final, under the current proposal for RSA, our CET1 would be above 9% when fully phasing in AOCI, and Erba would provide roughly 3 basis points of additional benefit. We'll continue to assess each proposal as we await potential refinement following the comment period. During the quarter, we completed our fifth credit risk transfer transaction generating approximately 20 basis points of CET1 at the time of execution reflecting continued demand for our retail auto assets in the market and another efficient way to manage capital. Additionally, we issued $1 billion of preferred stock at a 7.1% coupon. The proceeds from the transaction were used to support the redemption of our Series B preferred stock ahead of its reset on May 15. The issuance resulted in a $350 million decline in our preferred stock outstanding and favorable economics relative to the Series B reset rate. In the quarter, we executed $148 million of share repurchases and earlier this week, we announced our quarterly dividend of $0.30 for the third quarter of 2026, consistent with the prior quarter. We remain pleased with our ability to execute a story of and not or. We're delivering strong growth in core portfolios at attractive risk-adjusted returns. We've migrated capital ratios higher and repurchased nearly $300 million of shares year-to-date. At the end of the quarter, adjusted tangible book value per share was $42, up 13% over the past year. And when combined with our solid dividend yield, underscores our continued focus on delivering strong shareholder value. On Slide 9, we will review asset quality trends. Consolidated net charge-offs of 111 basis points were down 10 basis points versus prior quarter and roughly flat year-over-year. During the quarter, the consolidated NCO rate included the resolution of a corporate finance exposure. The loan was in nonaccrual since 2018, and we recorded a P&L benefit on this resolution as the specific reserves we had built exceeded our loss on the exposure. Within retail auto net charge-offs of 157 basis points were down 40 basis points quarter-over-quarter and down 18 basis points compared to a year ago, marking a sixth consecutive quarter of year-over-year improvement. On the top right of the page, 30-plus all-in delinquencies of 4.8% were down 8 basis points from the prior year. While the year-over-year improvement in NCOs widened given record flow to loss and supportive used values, the year-over-year improvement in delinquencies continues to moderate as expected. Portfolio performance has been solid year-to-date, but the macro backdrop remains dynamic. And while delinquency rates are down year-over-year, they remain a watch item along with used values and flow-to-loss rates. In total, we remain confident in the credit quality of the portfolio and our ability to be dynamic in underwriting, servicing and collections in the current operating environment. Turning to the bottom of the page on reserves. The consolidated coverage rate of 2.49% was down quarter-over-quarter driven by the specific reserve release and Corporate Finance previously mentioned. Retail auto coverage of 3.75% is flat to the prior quarter. Our coverage levels continue to balance consistent credit trends across our portfolios against broader macroeconomic uncertainty. Moving to Slide 10 to review auto segment highlights. Pretax income of $410 million was lower year-over-year primarily due to CECL reserve build associated with strong retail asset growth in the period. On the bottom left, we have highlighted the trajectory of retail auto portfolio yields. Excluding the impact from hedges, yields were down 2 basis points quarter-over-quarter. Second quarter originated yield of 9.1% was down approximately 50 basis points quarter-over-quarter as S-Tier increased to 47% of originations. The origination mix was influenced by normal seasonal trends, the measured posture we highlighted in April and a higher quality application mix, including stronger pull-through within those segments. As you recall, we had to credit mix and yield than we expected in 1Q, and we saw a pivot in the other direction this quarter with a cleaner mix and lower yield. The yield impact from higher S-Tier volume was partially offset by increased pricing on the like-for-like segments. Looking ahead, we expect SP to decline modestly from 2Q levels and settle in the low to mid-40s over time, which we expect will support originated yields absent moves and benchmark rates. On the bottom right of the page, $13.3 billion of consumer originations were up 21% year-over-year as we continue to benefit from deeper dealer relationships supporting application growth. Application volume remains the key to our success and highlights the strength of our franchise. Approval and pull-through rates remained consistent with prior quarters, but a wider top of the funnel provided incremental opportunities for accretive growth. Looking ahead, we remain confident in our ability to continue driving accretive growth, but we would expect the year-over-year growth rates to moderate in the back half of the year. Turning to insurance on Slide 11. Core pretax income was $24 million, up $26 million year-over-year. Total written premiums of $382 million were up $33 million year-over-year. While insurance losses of $208 million were up $5 million year-over-year. Insurance continues to drive capital efficient, diversified revenue and remains a key component of our long-term growth strategy. We continue to leverage synergies with auto finance to sustain momentum within the business and deepen our all-in dealer value proposition as we help them succeed in all aspects of their business. Turning to Corporate Finance on Slide 12. The business delivered another strong quarter with record pretax income and a 32% ROE. The team has a proven ability to deliver compelling returns while also driving strong growth as the portfolio is nearly $14 billion today, up 25% over the past year. Our long-standing relationships and deep underwriting expertise are the foundation of our differentiated risk management framework. Credit discipline underpins every decision we make, guiding our growth and is reflected in the performance of the portfolio. Credit has remained exceptionally strong with nonaccrual loans at historic lows. Results continue to showcase the durability of the franchise and our prioritization of credit risk management will drive accretive growth moving forward. I will provide a brief update on our outlook before moving to Q&A. First half performance has been solid, and we are updating a couple of aspects of the guide to reflect our latest view. We now expect average earning assets to be up 3% to 5% versus 2% to 4% previously. As our expansion of the top of the funnel has resulted in strong consumer auto originations alongside continued momentum with the corporate finance. As we've consistently emphasized, we are growing where we want to be growing while maintaining a disciplined underwriting posture to optimize risk-adjusted returns. This accretive growth will drive higher earnings over time, but it does present elevated reserve build under CECL in 2026. Additionally, we're tightening our range on consolidated NCOs, which we now expect will land between 1.2% and 1.3% compared to the 1.2% to 1.4% range we shared in January. Reflected within the guide for consolidated NCOs is our outlook for retail auto. As I mentioned previously, we're pleased with the credit performance through the first half of the year, and view the midpoint of our retail NCO guide as appropriate. With respect to margin, the guide remains 3.6% to 3.7% with the potential to exit the year above the high end of the range. While we continue to closely monitor the impacts of macroeconomic uncertainty and evolving interest rate expectations, which now include rate hikes this year, we are confident in our ability to deliver. The timing and magnitude of potential rate actions can influence margin for a period of time, but we remain confident in our ability to deliver on the full year guide. In total, our focused strategy and disciplined execution continue to drive improving operational and financial performance. While we have made significant progress, our focus remains on sustaining our momentum and executing on the meaningful opportunities ahead to deliver compelling long-term value for our shareholders. And with that, I'll turn it over to Sean for Q&A.

Thank you, Russ. As we head into Q&A, we do ask that participants limit yourself to one question and one follow-up. Elizabeth, please begin the Q&A.

[Operator Instructions]. Our first question comes from Robert Wildhack with Autonomous Research.

Maybe just start on retail auto and credit there. Net charge-offs were better than we were expecting and the year-over-year decline there is accelerating, but delinquencies are kind of like leveling out. And then add to that. You've got the quarter with a big spike in S-Tier volume. How does that all come together, both in the context of the 1.8% to 2% net charge-off guide this year? And then also like zooming out the 1.6% to 1.8% loss rate you've talked about bigger picture?

Great. Thanks for your question, Rob. It's a great question. And maybe I'll just start by saying we're pleased with performance and credit in the first half of this year. I think we've seen, as we mentioned earlier, we've seen record low levels of flow to loss rates, and we've seen good support from used vehicle prices, as you point out, yes, delinquencies have remained stubbornly high. Clearly, we're dealing with the consumer that is dealing with affordability. Gas prices also an issue. Overall, I'd say we still see this macro as dynamic and obviously taking a measured posture in response to that. All that being said, we're pleased with the credit performance in the first half of the year. And we're holding our guide at 1.8% to 2%, as you pointed out, we continue to think the midpoint of that range is an appropriate state case to center around. As we think about credit evolving in the back half of the year, again, the watch items that we're paying close attention to are obviously delinquency. But obviously, looking at lot loss rates and used vehicle prices just given the support we've seen in the first half of the year from those items. As we think about credit on a longer-term basis, as you pointed out, we've been originating in the 1.6% to 1.8% range the NCO rate that we print in a given quarter is an expression of multiple vintages as well as vintages that are at various stages of their life in terms of loss development. As we've said before, it's our expectation that we'll get there. We haven't given a time line to that. And as we've said before, that's the time line that has been to evolve over time. That's not something that we expect to get to in the next couple of quarters. You talked a little bit about S-Tier mix in your question. As we noted, as you look at second quarter, the originated portfolio in the second quarter. S-Tier was elevated, had some impact on yield during the quarter as well. I wouldn't read too much into that. Obviously, if you look at first quarter versus second quarter, first quarter, we saw the opposite of that. We saw a richer credit mix and a richer originated yield and we saw a pivot back in the second quarter, a lot of explanations for that. Number one, just normal seasonality. We expect to see a higher credit quality application pool in the second quarter versus the first quarter. We certainly saw that. As we talked about in April, we've got a measured posture with respect to credit. And so that's certainly something that we would have seen impacting the mix as well through the quarter. All that being said, broadly, approval rates and pull-through rates were consistent through the quarter. It's certainly our expectation as we evolve over time, we'll see that originated mix migrate to an S-Tier mix that's probably more in the low to mid-40s, again over time. So I wouldn't read too much into a single quarter's origination mix. We've seen that move from time to time. And as far as we see, we think the opportunity for that mix to kind of migrate back to normal, provide support for originated yield as we move forward.

Russ, I might just add something actually great that don't read 1 quarter. And if you take a step back and look at the consumer overall and on take a step back from our portfolio, we do see is that there's certain consumers which are certainly working through the higher cost that we're seeing in the system, particularly on a higher energy cost. Employment rates still are quite constructive. And so a dynamic you see is that consumers are basically triaging on a real-time basis kind of how they pay every single month and then what they're paying. And that can translate into delinquencies that I think we said in the last quarter that we were expecting the tax refunds have probably more of an impact on delinquency. We didn't quite see that. I think we're seeing customers in delinquency more. But as Russ said, the total loss rates have been quite constructive. And so we're actually encouraged by what we see in unflow to loss and feel very good about how the consumers are performing overall. And again, I just -- I went over 1 quarter's worth of origination mix this does move around quarter-to-quarter.

Our next question comes from Moshe Orenbuch with TD Cowen.

Great. Pretty impressive growth numbers. You did mention that you expected growth to moderate some. Could you talk about perhaps what is driving that? Is it what you're seeing from an application side? Is it the competitive dynamic? Just maybe just talk about that a little bit.

Great. Well, maybe I'll start by giving our Auto Team a ton of credit here for the traction that they've delivered with our dealer base. The application flow that we're seeing that's been really strong. And that's a credit to the relationships we developed. I'd say also we've retrained our dealers over the last couple of years to really send us all their applications and in the last couple of quarters, we've also aligned our dealer rewards program and our overall strategy in terms of how we think about commercial complex all aligned around incentivizing our dealers to send us all of their application volume. And so that strategy has been working out really well for us. We think it still has a runway ahead of it. And so our expectation is we'll continue to see strong applications grow, that strong application flow gives us an attractive opportunity set which we can really target to have, one, strong originations, obviously, in terms of volume, but also where we have the ability to manage yield and credit in order to target originations that deliver for us on a risk-adjusted basis. So a lot in there, but a lot of kind of what we see as the strength that's been really driving that growth in application volume and thereby fueling the growth that you see in origination volume.

Great. And I think the area in which the results kind of were lower than our expectation was purely in that reserve build area that you had noted, driven by that faster growth. As you look at that moderating growth? I think you mentioned that, that should have a more moderate build in reserves. Anything that you would kind of highlight in terms of the tenor? Obviously, you had high-quality loans originated this quarter, but anything that you would kind of point us to in terms of that reserve rate as we go forward?

Yes. Our overall reserve levels on the retail auto side at 3.75. They've held there that cares for a number of things. Obviously, we've continued to see good performance and improvement in terms of NPL levels and delinquency rates in terms of our own portfolio. At the same time, we're caring for a macro that's dynamic and has some degree of uncertainty into. As we've said previously, we don't plan around reserve releases as we think about our portfolio, our financials on a go-forward basis. But I'd say that the reserve rate that we have now, we think kind of cares for kind of both of the things that we're seeing in terms of performance in our current book, which we characterize as good as well as that macro uncertainty that we see in the background.

Our next question comes from Sanjay Sakhrani with KBW.

I guess I wanted to go back to the Star originations. I know you guys said not to read too much into it. But as we think about the NIM expectations, I think it actually improved despite you guys doing this. And it sounds like you're going to originate at a slightly higher run rate on S-Tier at least for the short run. Am I thinking about that correct? And maybe you could just talk about sort of what's driving that higher mix? Is it that there's these opportunities in front of you where there's a competitive void or some proprietary flow coming through? Just if you could help us with that, too, that would be great.

Yes. Thanks, Sanjay. It's a good question. Maybe I'll start with the S-Tier then I'll get to your question on the [indiscernible] across the NIM. On the S-Tier again, I wouldn't read too much into a quarter. There are a lot of things going on. I think there's that seasonality we pointed to earlier. Certainly, our measured posture with respect to credit played into it as well. But again, I wouldn't read too much into it. When you kind of think about the originated yield, I think it's important to point out that when we look at our originations on a like-for-like basis going from first quarter to second quarter, we increased price. So you saw the originated yield come down, but actually embedded in that is increased pricing on a like-for-like basis. But obviously, overpowered by the movement up in credit in terms of that cure mix moving from the low 40s to 47% over the course of the quarter. And so I think that ability to put price into the market is a good fund that I don't want the overlooked here. As you think about the forward in terms of how to think about our originated yield and how that translates into the portfolio yield I'd say one -- as you pointed out, we do expect that the mix will continue to move around. We'd expect on balance. It's going to migrate towards a lower S-Tier mix. We talked earlier about low to mid-40s, albeit over time. That provides some support, independent of benchmark rates that provide some support to the originated deal. As we think about portfolio yield, our expectation is it's going to be stable at current levels as you think about the next few quarters moving forward. The read-across to NIM, however, is a little bit different. We still continue to expect our NIM to increase. We showed a nice increase going from first quarter to second quarter. A lot of that is on the back of changes we made in deposit pricing over the course of first and second quarter. Those changes still have runway in the third quarter. As you think about kind of the last price change on a full quarter basis. We also continue to have a benefit from a NIM perspective from CD maturities as we have kind of higher-yielding CDs maturing and rolling into, for the most part, rolling into liquid deposits or other CDs at lower rates. And then on a long-term basis, we have a continued dynamic where we have low-yielding mortgage loans and lower-yielding mortgage-backed securities that continue to roll off our balance sheet. At the same time, we're really growing our higher-yielding retail auto loaning [indiscernible] portfolios. So there are a number of dynamics, some that play out stronger over the next quarter or 2, some that play out over a longer period of time that continue to contribute to that net interest margin expansion story that we've been talking about for some time.

And Russ, it's interesting to turn back at the -- sorry, Sanjay. [indiscernible] if you think about the kind of quarter origination mix, a lot of this stuff does work so well because of our top of the funnel at volumes. I know we talk about this a lot, but it's really incredibly powerful. And it's a real testament to what our teams are doing every single day because you see top the funnel increasing the high teens, it gives us the ability to constantly optimize our authorization this month might be during the next month might be different than the months after that. All that have been the case, if you look at our share of volume that we're actually capturing it keeps on increasing. So we keep on increasing more share with an optimized mix which is why we say, look, if the staff in these strategies aren't set it and forget it. We're always optimizing and looking at what the market has and where pricing is more pricing and risk match and the top of hotel volumes make all this possible. And it's a real testament [indiscernible] franchise and as of the team is to make this happen every single day.

100%. That's very encouraging. Michael, just to make sure I'm not missing something because I know you touched on it earlier, just this measured approach on growth and obviously, credit. It sounds like those are just sort of the broader back row trends. Nothing specifically that you're seeing inside your portfolio on how consumers are behaving, correct? Because the credit numbers look pretty good, just making sure.

The credit numbers are very good. And yes, we are being measured. And I know you've probably heard a cautious tone from us for the past 1.5 years, I feel it is ever since the tariffs came into place and they've been working through those. And now with oil prices and they kind of inflow on a day-to-day basis. And so right now, like the uncertainty in the environment just feels a lot higher than the normal steady-state uncertainty and -- and that kind of volatility, the beta around the environment is all the use words like measured. And it's reflecting some of the approaches that we're taking underwriting our volume creation. But we're building this business for the long term, and we think we're making the right decision every day given the fact that there's a lot of uncertainty in the environment. And when the environment hopefully settles down soon, then we'll hopefully stop sale measured a bit more. But between now and then, that is the world that we're living in. And like even just 3 weeks ago versus today, I mean, I think your conversations would have been different in and that has reflected in some of the lens we're using.

Our next question comes from Brian Foran with Truist.

Two questions on credit. Maybe to start on retail auto and Russ, I think you mentioned the vintage stuff you look at. I mean a while here, there's been this kind of built-in improvement because the '22 and '23 vintages are burning off, and then the '24 and '25 vintages are pretty consistent at better levels that you used to show us I wonder if you could just talk to that dynamic. First is the '22, '23 vintage burn off still a good guy? Or has that kind of played out? And then as you look at the '24,'25, I don't know if it's too early to look at any of the '26 originations. Are they all steady? Is there anywhere where you're seeing vintages improve or deteriorate from that kind of post '23 level?