If You Ain't First, You're Last ...Meeting Takeaways

Research evidence excerpt

If You Ain't First, You're Last ...Meeting Takeaways

Consensus EPS Q1 .. .. $1.41 borrower demand, and well-contained credit. Our EPS estimates are

Q2 .. $1.26 $1.64 unchanged and we reiterate our Outperform rating and $54 TP.

Q3 .. $1.44 $1.73

Q4 .. $1.50 $1.70

CY .. $5.30 $6.48 Consumer resilient despite macro uncertainty. ALLY noted that the

company’s consumer base is broadly resilient and performing in line

with expectations. Spend trends have actually strengthened in select

1 Year Price History areas, and consumers remain nimble in modifying spend behavior

where needed. With that said, ALLY noted that affordability challenges

persist given elevated new/used vehicle prices and higher interest

rates. ALLY acknowledged the K-shaped economy, but noted subprime

is smaller contributor to exposures (10% <620 FICO; LSD % <540

FICO/deeper subprime). Flow-to-loss rates have declined meaningfully

versus pre-pandemic, representing what is likely a new normal as

opposed to a temporary lift. 1Q tax refunds were a modest tailwind

(+10-11%) but the seasonal DQ decline more so reflected traditional

seasonality as opposed to outsized debt paydown.

No change to 2-4% EA guidance for 2026. ALLY cited no change to

Source: FactSet its 2-4% average earning asset growth guide (EVR +3.9%). Retail auto

and corporate finance are expected to grow at a faster pace than the 2-

4%, with mortgage and securities maturities/roll-off partly offsetting.

Retail auto applications and originations both increased double-digits

YOY (16% and 13%, respectively) in 1Q, and are trending at a similar

pace through mid-June. ALLY sees ~$400-$500B annual applications

- allowing the bank to be selective about the fraction of loans put on the

book. S-Tier mix sits in the low-to-mid 40s (vs. ~30% historically) and