Ally Financial Inc.

Good day and thank you for standing by. Welcome to the Ally Financial third quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 1 again. Please be advised that today's conference is being recorded. I'd now like to hand the conference over to Sean Leary, Head of Investor Relations. Please go ahead.

Thank you, Elizabeth. Good morning, and welcome to Ally Financial's third quarter 2024 earnings call. This morning, our CEO, Michael Rhodes, and our CFO, Russ Hutchinson, will review Ally's results before taking questions. The presentation we'll 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 slide two. GAAP and non-GAAP measures pertaining to our operating performance and capital results are on slide three. 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. Good morning, everyone, and thank you for joining the call. I'll begin on slide four. Before we get into the quarter, I want to share my perspective on a few key items. After almost six months in the role, I'm incredibly excited about the future of Ally, but recognize we face some earning challenges over the next few quarters. Russ will get into the details of this in a few moments. As for the future, I'm very encouraged by many of the underlying trends in our core businesses. We have outstanding franchises in dealer financial services, Ally Bank, and corporate finance. On the auto side, we continue to win business with compelling risk-adjusted margins and growth in our insurance business continues to create strong fee revenue. At the bank, deposits are contributing more margin than at any point in the company's history, and corporate finance is on pace for its highest annual earnings ever. In terms of financial results, Adjusted EPS of 95 cents includes significant tax credits within the period. This is related to EV lease volumes, which we'll cover shortly. That said, core pre-tax income of $108 million does not reflect what the company is capable of. We can do better. We continue to navigate a dynamic operating environment that includes volatility in interest rates, and a consumer that has been strained by cumulative inflationary pressures. The unique environment has contributed to more volatility in our near-term outlook, particularly on credit costs and margins. Stepping back from quarterly fluctuations, our medium-term outlook is predicated on a few simple drivers in which I have a lot of confidence. First, we have taken and continue to take action to reduce the lost content of our originations. We believe these actions will result in lower losses over time. Second, we have a liability-sensitive balance sheet heading into a falling rate environment. In addition, we're running off low-yielding assets that are a drag on margin today, so we continue to have momentum on both sides of the balance sheet. Now, we can't predict the exact path of Fed funds or when market rates for deposits will move, but we expect they will move lower, which will accelerate margin expansion. In addition to margin and credit improvements, we continue to be relentlessly focused on capital and expense discipline. I'm so proud of the way our team is driving controllable expenses down this year, following many years of increases. And we've been successful taking actions to move CET1 higher to ensure we support our customers and build excess capital. Rest assured, our focus on expenses and capital management will remain a top priority. We're looking very closely at resource allocation and will continue to prioritize what's in the best interest of our shareholders. So let's put it all together. Ally has a strong franchise position for margin expansion and revenue growth, combined with improving loss trends and tightly managed expenses and capital. I expect that this will translate into a mid-teens return over time. Let's turn to slide five and talk about our market-leading franchises. In auto, we decision 3.6 million consumer applications This gives us the ability to be selective in the loans we book in terms of pricing and credit. With respect to pricing, we generated $9.4 billion of consumer volume and our auto origination yield of 10.5% was consistent with prior quarter, despite a meaningful reduction in swap rates over the past several months. In terms of credit, We originated more than 40% of volume in our highest credit tier again this quarter. Our ability to sustain strong margins and consistent credit quality in a competitive market demonstrates the strength of this franchise. Insurance written premiums of $384 million represents a quarterly record since our IPO and highlight the opportunities we have in F&I and P&C products. Turning to Ally Bank, retail deposits of 141 billion are 92% FDIC insured, and we are proud to serve 3.3 million customers. We've been very intentional about creating a comprehensive value proposition that goes well beyond our consistently competitive rates. We offer best-in-class customer service and convenient digital experiences and over time have added additional features and products. And we've seen consistently high levels of satisfaction, engagement, and retention. The combination of a strong national brand and a comprehensive value proposition allows us to leverage our deposit franchise to drive NIM expansion from here. Given our funding needs, retail deposits declined $600 million within the quarter. which is in line with her expectations, as loan balances also declined on a linked quarter basis. Deposit customer growth remained strong, up 57,000 within the quarter. New accounts continue to show high levels of engagement, which should result in less price-sensitive balances in the portfolio. Corporate finance assets increased modestly quarter over quarter, and the portfolio continues to generate strong returns and solid credit performance. Within credit card, I'm pleased with how the team proactively managed risk, resulting in a decline in losses from the prior quarter. The business has an attractive cardholder base, a great digital experience, and is producing a double-digit risk-adjusting margin, even in this environment. Underlying business trends are strong, and our customer-centric approach positions us to continue winning in the marketplace. And with that, I'll turn it over to Russ.