Ally Financial Inc.

Ladies and gentlemen, thank you for standing by, and welcome to the Ally Financial's fourth quarter and full year 2020 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference to your speaker today, Daniel Elder of Investor Relations. Please go ahead, sir.

Thank you, Operator. We appreciate everyone joining us to review Ally Financial's fourth quarter and full year 2020 results this morning. We have JB, Jeff Brown, our CEO, and Jen LeClaire, our CFO, on the call to review results and take questions. Before beginning, I'll note the presentation we'll reference throughout the call can be found on the Ally Investor Relations website. On slide two, you'll find the forward-looking statements and risk factor language that will govern today's call. And on slides three and four, we've included several GAAP and non-GAAP or core measures pertaining to Ally's operating performance and capital results. These metrics are supplemental to and not a substitute for U.S. GAAP measures. Definitions and reconciliations can be found in the appendix. With that, I'll turn the call over to JB.

Great. Thank you, Daniel. Good morning, everyone, and thank you for joining the call today to review our fourth quarter and full year 2020 results. I'm going to start on slide number five. I am incredibly proud of the way our company and teammates responded during these challenging times. This past year presented one of the most complex operating environments in our company's history as COVID cases accelerated across all 50 states and that led to considerable uncertainty about the health and welfare of millions of people and businesses. The fiscal and monetary response from the government, combined with the private sector actions providing relief to those impacted, was necessary and still remains critically important to the recovery. Across our country, we also confronted the harsh realities of social injustices and racial disparity requiring difficult but necessary dialogue and an intensified call to action for everyone. Sadly, COVID appears to be further accelerating these disparities. As I shared across our company and with our board, the only way we permanently disrupt the flaws in our system is by each individual making the commitment to change now and after the headlines grow less frequent. And candidly, that's part of the reason I share it again today. While the year was full of challenges, signs of hope, have emerged as we are now taking a meaningful step forward in the fight against the virus with the rollout of vaccines. And I am proud of how companies and people are responding and recognizing the need for real and lasting social change. I hope America can unite, heal, and strengthen together. Further, the sacrifices and work of healthcare, service industry, and community-focused leaders and organizations is reason for optimism moving forward. At Ally, we build a culture based on doing it right, rooted in an authentic set of values and inclusivity. I believe we all have the opportunity to emerge from this difficult period with a greater appreciation for each other, for life, and with an emboldened focus on equality and inclusion. These elements of our cultural DNA serve as a huge source of strength and continuity across our stakeholders. Actions reinforcing our values included moving and maintaining 99% of our workforce to work from home while expanding health, family, and financial benefits, and utilizing our employee resource groups during critical moments to listen, share, and connect on a personal level. For our customers, we proudly led the industry with comprehensive COVID relief with post-deferral performance remaining strong. We continued expanding our digital products, technologies, and services aimed at meeting customer needs in new and innovative ways, something our modern, nimble, direct platform is well positioned for moving forward. And within our communities, we established the Ally Charitable Foundation, strengthening our ability to make lasting and meaningful change well into the future. And I am proud of how we demonstrated our humanity more than anything else. And as you'll see, that bettered our results. Across all of our businesses, we demonstrated our leading capabilities and growing momentum, which is reflected in our financial results and outlook. During a year of constant change, we maintained our long-term focus, something we've done for years as we position the company for ongoing success. Turning to slide number six, Full-year 2020 adjusted EPS of $3.03 and core ROTC of 9.1% demonstrated our ability to absorb a significant allowance build early in the year while still driving impressive business results and strong momentum. Revenues of $6.7 billion represented our highest annual result, growing 6% year-over-year while credit performance exceeded expectations. Jen will provide more detail on the quarter in a few moments, but pricing, flows, and credit all ended the year on solid footing, and we feel really good about the exit rate into the new year. Turning to our business and product offerings, across our growing base of nearly 9 million Ally customers, we focus on our relentless pursuit to provide differentiated, innovative products, services, and experience. Within auto finance, consumer volume of $35.1 billion was sourced from 12.1 million applications, results that were only modestly impacted by the COVID environment. As we move into 2021, we're well-positioned for an outlook that indicates rising new and used auto sales as demand persists, OEM production that should gradually replenish depleted inventories on dealer locks, and some normalization of used values from the record-setting levels we saw in the third quarter. Our retail origination yields remain solid, exceeding 7 percent for the full year, which reflects our dynamic underwriting approach. I can't emphasize how strong this performance is, and it sees margin expansion well into the future. From a credit perspective, net charge-offs of 96 basis points reinforced a resilient and disciplined consumer despite elevated unemployment and a challenging backdrop. Simply put, the combined impact of fiscal stimulus, digital collection tools, and proactive actions implemented this year have kept losses low. In our insurance business, we generated $1.2 billion in written premium in 2020, while our $6.3 billion investment portfolio produced over $200 million of investment income. The counter-cyclical aspects of this business are a powerful reminder of our ability to drive strong results in a variety of environments. Ally Bank was an early disruptor, and we built the largest direct bank in the U.S. by truly focusing on growth and retention of the customer. Our growing, scalable platform has generated over 10 years of customer and balance expansion and experienced record-setting growth in 2020. We ended the year with over $124 billion in retail balances and 2.25 million active customers, a six-fold increase over the past decade. Deposit growth continues to lower our cost of funds and serves as the gateway to Ally Bank in the expanded suite of all digital consumer finance products we offer. Trends accelerated this year across each of these products as depositors with a home or invest product grew to 8%, our fourth consecutive year of growth. Ally Home originations of $4.7 billion increased 74% year-over-year as we continue to expand and enhance our customer experience and take advantage of a strong refinance market. Ally Invest self-directed accounts of $406,000 expanded 17% year-over-year, while customer assets of $13.4 billion increased 70%. Ally lending volume of $503 million grew 75% while entering home improvement and retail verticals complementing our established healthcare offering. We now have over 1,800 provider relationships, a 60% increase from 2019. The opportunity across each of these digitally-driven products to grow and deepen customer relationships provides us with long-term organic growth runway. Our corporate finance segment generated strong results driven by experienced teams, focused execution, and prudent underwriting. Our $6 billion held-for-investment portfolio grew 6% year-over-year, while credit performance remained stable against a shifting backdrop. Over the past several years, we've generated steady growth while maintaining a disciplined underwriting approach. The outlook for each of these businesses continues to accelerate, reflecting years of steady, disciplined and consistent execution. I'm fully confident in our ability to keep driving meaningful value for our customers, communities and stakeholders in the years ahead. Turning to slide number seven, we highlighted some of the competitive advantages last quarter, and it bears repeating again on the strength and position of the company's core businesses. Within Otto, we're a full-service partner to 18,700 dealers. That's the highest level in the history of our company, reflecting growth from both established and emerging players. Scale of this magnitude provides us with broad market insights, It allows us to generate impressive volumes with attractive returns. Our industry-leading field teams, strong service levels, and expanding use of modernized tools and technology will continue to set us apart from the competition. Throughout the year, we streamlined user experiences and enhanced digital capabilities across our servicing, underwriting, and smart auction platforms. We continue to employ the use of advanced data analytics in 2020, leading to our fifth consecutive year of improved auto decision levels and reduced response times. Within insurance, our comprehensive protection products continue to enhance value for over 4,200 dealers and 2.6 million customers in the U.S. Within our consumer banking products, we differentiated through frictionless experiences built on data intelligence, innovative technologies, and mobile investments. New savings tools rolled out this year have been hugely popular, and we've crossed over 1 million consumer savings goals. We've made significant progress against our long-term strategic objectives in 2020 as ongoing consumer demand for digitally-based experiences accelerated. On slide number eight, trends across each of the quadrants demonstrates the near-term result of the long-term planning and execution. EPS in the upper left improved throughout the year, reaching a record level in Q4 driven by a combination of core revenue growth and diversified sources of income. Tangible book value in the bottom right grew year-over-year and quarter-over-quarter to $36.05 as our earnings more than offset the CECL day one impact of $2.70 and significant reserve build in the first quarter. Values, culture, and disciplined execution will continue to underpin our approach as we build upon this accelerating momentum in the years ahead. And with that, I'm going to pass it to Jen to go through all the detailed financial results.