Good morning, everybody. My name is Jeff Adelson. I'm the consumer finance analyst here at Morgan Stanley. Before we get started, I'm just going to read some quick disclosures. For important disclosures, please see the Morgan Stanley Research Disclosure website at www.morganstanley.com/researchdisclosures. The taking of photographs and use of recording devices is also not allowed. If you have any questions, please reach out to your Morgan Stanley sales representative. So this morning, excited to welcome Russ Hutchinson, CFO at Ally to our conference. Russ, I think it's your first time here. Welcome.
Thanks, Jeff. Happy to be here. Thanks, everyone.
Maybe getting into it here, starting high level, we're approaching your one-year anniversary here at Ally. Can you discuss the first year you've had as CFO, and what do you think investors want to see from you and Ally going forward?
Yeah, absolutely. I've had a wonderful year. As many of you know, you know, I had the good fortune of working with Ally for many years, before I joined as an advisor to the company. So I had a lot of strong relationships with many members of the management team. I had a really strong appreciation for the culture at Ally, and for the transformation that's taken place, particularly over the course of the last decade or so that we've been a public company. Yeah, and I'd say, you know, after, you know, a year into the job, you know, I'd say my conviction for the company, my appreciation of the culture, you know, everything has just grown stronger. You know, it's been a really fantastic year. You know, my appreciation in particular for the strength of the core franchises is really strong.
You know, I think our auto franchise is the strongest out there. Our relationships with dealers are unparalleled, our depth in the industry, and the runway we've got in that business just on the basis of the strength of the franchise is amazing. I couldn't be happier with our deposit franchise. We are a relentless ally now to over three million customers. And I think that franchise has shown incredible resilience, you know, particularly over some of the trials and tribulations we've seen in the industry over the last 18 months. We've continued to grow the franchise, and, you know, again, I feel really great about how that sets us up for the future.
In terms of what I think investors expect to see from us over the next few years, I think they expect us to see us make good on the trajectory that we've promised. And, you know, I think we are uniquely positioned with an earnings ramp, you know, powered by, you know, kind of NIM expansion from the efforts that we're making on both sides of our balance sheet. I think they expect us to continue to aggressively manage our expense base, to manage our risk, and to grow our other revenue. And, you know, those are the things we're absolutely focused on. We're very focused on investing, again, in our valuable franchises.
One other area of focus for Ally of late has been the balance sheet. You know, you've emphasized optimizing the balance sheet with a focus on your highest returning businesses. Can you expand on the mix dynamics and how that drives increased profitability over time and maybe what the biggest areas of opportunity are for you to maybe lean into, de-emphasize, where do you see the balance sheet in the next five years?
Yeah, absolutely. You know, look, you know, I think, you know, as you look over the next few years, you can expect our balance sheet to be kind of somewhat flattish. But within that, you know, we're growing in the areas you'd want us to grow in. So our retail loan portfolio, our retail auto loan portfolio, is growing. Our corporate finance and credit card portfolios will grow, albeit in a controlled way. And at the same time, our mortgage portfolio and our securities portfolios are both shrinking. And so you can see, you know, effectively kind of shrinkage among some of the longer duration, lower yielding assets that are, you know, kind of, you know, not kind of linked strictly to our core franchises.
You'll see growth in the areas where we're strong that are, you know, tied to our franchise customers, the retail auto loan, the credit card, the corporate finance business. And, you know, those are all areas, you know, where we have a, you know, attractive risk-adjusted return assets, you know, kind of more yield and in areas where, you know, we've got a really great track record in terms of kind of managing through the risk. And so as you think about our balance sheet going forward, look for us to kind of support that expansion in net interest margin by moving our asset base towards our higher returning assets and away from some of the lower returning assets.
The balance sheet strategy obviously has some implications on NIM. You've called out a NIM trough in the first quarter. You're confident in NIM expansion happening this quarter. Is that playing out, and how meaningful is the expansion you're going to see this quarter? Then maybe beyond this quarter, you can speak to the drivers of the variability and that kind of 5-15 basis point link quarter expansion you've talked about over the rest of the year.
Yeah, no, Jeff, that's, that's a great point. And, and I'm glad you raised the 5-15 basis point quarter-over-quarter NIM expansion. We've, we've talked a lot about our net interest margin expansion trajectory. We've talked about it not being a straight line, but, you know, but, but we've talked about this range of kind of getting 5-15 basis points each quarter on a linked-quarter basis through the remainder of the year. And I think you're exactly right. We, you know, we troughed in the first quarter. I think second quarter will be towards the high end of that 5-15 basis points in terms of quarter-over-quarter NIM expansion.
You know, and that's, you know, that's on the back of continued momentum in terms of pricing on the auto side of the business, as well as some of the recent moves we've made on the deposit side of the business. So, you know, once again, kind of taking advantage of both sides of the balance sheet to drive that, that, that NIM expansion. And I'd say, look, on the, on the back of a, you know, a relatively strong NIM quarter, you know, as you think about the, how that plays out over the course of the, the rest of the year, you know, we've talked about exiting the year at 3.4%-3.5% NIM. It will be towards the high end of that range as well.
I think as you think about our trajectory through the medium term, you know, our path to 4% NIM is still very much intact. We're still looking at getting to that 4% NIM towards the end of 2025.
So towards the 15 basis points this quarter, you're also going to exit this year towards the high end of the 3.4-3.5. Does that change the timing of getting to the 4%? I know you just said you expect to get there by late 2025. I mean, what would have to happen to maybe, you know, not get there or what could even bring it more towards the mid part of 2025?
Yeah, I'm glad you kind of doubled down on that question. Because, you know, one thing I should talk about is, you know, we've talked about this before. You know, we think we've taken a lot of the interest rate risk, the risk around the Fed funds and kind of whether they cut, when they cut. We've taken a lot of the risk to our NIM trajectory for 2024 off the table through our hedging strategy. And so, you know, we feel really great about our exit rate under a range of different Fed scenarios. We are not reliant on the Fed to cut to get to the exit rate that we've talked about. You know, the path of cutting certainly affects the timing to kind of getting to that 4% at the end of 2025.
You know, but again, you know, we've taken steps through, you know, kind of both sides of the balance sheet as well as our hedging program to try and mitigate that risk. I'd say we feel pretty good about kind of where we are, in terms of getting to that 4% at the end of 2025. We've run a few different scenarios internally just around kind of different combinations of, you know, kind of cuts and timing, over the course of the next 18 months. We feel good across a range of scenarios about that timing and getting to that, getting to that 4%.
And just the hedging strategy, like, what's that look like over the next couple of quarters as you think about taking the risk off the table of the Fed cut?
Yeah, so we haven't really made any major changes, you know, certainly over, you know, over the last, you know, the last several months. We don't anticipate making any changes. I think we feel pretty good about where we are, and we feel pretty good about the protection that it's afforded us, you know, even as we've seen, you know, the rates trajectory move considerably from where we were at the very end of 2023 to where we are today.
One, you know, important component of what you just talked about is the deposit side. You know, you saw $3 billion of deposit growth in the first quarter. You've taken some proactive actions ahead of Fed easing, potentially Fed easing both on your OSA and your CD rates. What are the deposit trends you're seeing this quarter? You know, you tend to see a seasonal outflow in taxes. And what are your expectations for growth in 2024 or the rest of the year, as well as maybe the pricing strategy going forward?
Yeah, so we've been absolutely delighted with the progress of our deposit franchise. As many of you know, it's been a 15-year journey. And, you know, we're absolutely delighted by just kind of where we are, the traction we have with customers, the resilience we have. You know, we are fully funded by deposits at this point. And as I said earlier, you know, our balance sheet outlook is flattish, you know, over the next couple of years. And so you kind of put those two things together, and we're really, you know, really our deposit franchise really positions us to think more in terms of optimization rather than growth.
You know, we touched on this in April when we reported first-quarter earnings, but you know, our expectation is quarter-over-quarter, our deposit balances will be down due to seasonal tax outflows. You know, again, we're happy with that. You know, our expectation is over the course of 2024, our deposit balances will be, you know, kind of rather flattish. As you recall, you know, we came off of the first quarter with, you know, with kind of up $3 billion. So, you know, over the course of the year, our, you know, our deposit growth aspirations are pretty modest. Again, that's just a reflection of the fact that we're fully funded on deposits and our balance sheet isn't growing.
And so, you know, we feel really good about where we are from a funding perspective.
If we do look at that other side of the balance sheet in auto, you know, we are starting to hear some rumblings of increased competition. Are you noticing this yet, as you're out there in the field, in the market, and what are you seeing from your competitors? How can Ally also differentiate itself from the competition and maintain that recent market share you've been able to see as well as the pricing momentum that you've been able to see in that more prime S Tier?
Yeah, we have, you know, we've continued to originate retail auto loans at, you know, at an originated yield north of 10.5%. We've continued to originate, you know, more than 40% of our paper in our highest credit tier, the S Tier, you know, which again is just reflecting the fact that we've been able to take both price and move up credit, in the conditions that we have in the market. I'd say, Jeff, you're right. You know, we, we have seen, you know, we have seen some competitors start to, to come back. It's been primarily in the very super prime area where, you know, we don't compete as much. And so we really haven't seen any pressure, you know, in the areas where we compete.
You know, again, you know, I think, you know, we've taken this opportunity where a number of our competitors have either scaled back or exited. We've really taken this opportunity to deepen the moat around our businesses, to really just, you know, to really, quite frankly, just focus on our dealers, continue to deliver consistency, continue to be there for them, and to strengthen our relationships with them. You know, we think that gives us a durable and sustainable advantage in the market. We also think, you know, a lot of what's been driving our competitors to either scale back or exit, you know, these are not transient factors. It's predominantly, it's capital changes and the capital diets that many of our peers are under.
And while the timeline around those capital changes will kind of ebb and flow based on what's going on in D.C., you know, it's our expectation that those constraints are durable and will keep a lid on competition for quite some time. So we're happy to take advantage of this period, again, to continue to deepen that moat, continue to strengthen our relationships with dealers, continue to build on a multi-decade trajectory of supporting our dealers through good times and skinny times. You know, and again, you know, we feel pretty good about where we are from a competitive perspective.
Just one point of clarification, the 10.5 + 40% of origination, is that continuing through quarter to date, or is that more of a first quarter comment?
No, that's continuing through the quarter.
Okay.
Yeah.
One thing you've also talked about in maybe supporting the yield going forward is if the competition comes back, leaning a little bit back in towards the, you know, belly of the curve. Can you talk about what you think the timeline, the path is there, and you know, what could drive some of that shift? Does the credit outlook also have an impact there as well?
Yeah, no, that's a, that's a great point. It's something we've talked about before. You know, we're not doing that right now. You know, we, we really don't feel the need to, in the market. But you're right. It's, it's one of the, one of the levers that we have that gives us a lot of comfort around maintaining our yield is the fact that, you know, we are currently originating kind of north of 40% in that, in that upper S Tier. You know, if you kind of, we think of kind of a normal market, you know, we do 25%-30% in the S Tier.
And so, you know, there's an opportunity when we think the time is right to scale back some of the curtailments that we've made over the course of the last 18 months, and bring our mix kind of more in line with that norm. And you know, that has the ability of, you know, essentially giving us the opportunity to capture yield in order to preserve the margins that we're currently seeing in the business. And so, you know, we think that just speaks to the sustainability of our 4% NIM target, and our ability to maintain attractive margins going forward.
And related to that question on credit, you know, you have seen retail auto losses tick up in the first quarter, but your delinquency performance, on a formation year-over-year basis as well as a vintage basis continues to improve. What delinquency trends are you observing today, and how were those trends translated into the charge-off progression over the remainder of the year? Do you still see that charge-off peaking in the first half of the year?
Yeah, you know, it's a great question. And, you know, when you kind of dig in on credit, you know, what I'd say is, you know, as we look at credit on a vintage basis, a lot of the trends that we've talked about before, so seeing that 2023 vintage diverge from the 2022 vintage in a favorable way, we are continuing to see that when we look at delinquencies and NCOs on a vintage basis. You know, that being said, you know, the backbook, you know, predominantly the 2022 vintage continues to be challenging.
and so, you know, moving from first quarter to second quarter, just on the basis of seasonality, we would have normally expected to see a 50-60 basis point decrease, you know, in our NCO level, just again, seasonality going from first quarter to second quarter. You know, we're probably looking at the shallow end of that, just based on some of these challenges that we've seen in the 2022 vintage in particular. And I'd say that is a more challenging environment than I think we anticipated when we last spoke to the market, back in April. All that being said, you know, we've talked about a consolidated NCO rate for the year of 1.4%-1.5%.
We think we're still within that range, but towards the higher end of that range as you think about our annual kind of consolidated NCO rate. And so, you know, again, I'd say that, you know, we see very encouraging signs in the 2023 vintage as that continues to diverge from 2022, but that 2022 vintage continues to be a challenge. I'd say as we think about the forward, you know, we're right now, we're kind of sitting at a point where, you know, just given the age and the kind of the seasonal development of that 2022 vintage, the majority of our losses right now are coming from 2022. You know, as we make our way through the year, that shifts as we start to kind of exhaust the loss content in that vintage.
You know, more of the loss contribution comes from 2023 and ultimately from newer vintages. And so, you know, we think we're making our way through that, but it's clearly something again that kind of impacts the quarter. But, you know, again, on a consolidated basis, we think we're still within our range towards the higher end of that 1.4%-1.5% range. You know, we'll obviously come back after we see the close of the quarter and provide a very detailed summary of kind of what we're seeing in terms of credit. So we'll come back to you in July with that.
Shallower end of the seasonal decline, is that like a 20-30 decline? Is that how to think about it?
So, you know, we normally would see 50-60 basis points. So I think we'll be towards the shallower end of that 50-60 basis point range.
So less than 50 or 50? Okay. All right. All right. So then higher end of the 1.4%-1.5%, the to the 2% for the auto NCO rate is still about ballpark?
We'll, you know, we'll give a much more detailed update when we come back in July. I think we want to see how June, you know, we want to see how things look with the data on June.
Okay. Understood. I mean, if it were 50, that still seems like a pretty positive result. I would, so okay.
Yeah, I think, yeah, 50, you know, feels like a positive result. But look, if we were sitting here in July, we would have told you to expect 60.
Okay. Got it. Understood. Okay. And, any sort of early reason to how you're thinking about 2025 at this point? You've got that worst-performing vintage rolling off. Has the trajectory for that shifted 2025 at all?
No, I'd say, you know, we continue to expect, you know, kind of continued improvement in NCO levels as you go through 2025 and 2026. Again, it's basically as you kind of progress through the vintages and just looking at the amount of curtailment and the performance of the 2023s and the early read on the 2024s, we still feel pretty good about that continued improvement in NCO rates as you move through 2025 and 2026.
Okay. And I just want to remind folks in the room, if you have any questions, feel free to raise your hand and someone will come by with a mic at any time. So just feel free to raise your hand. Maybe just pivoting towards the other revenue side, that's been a really nice tailwind for you guys. You increased the guide there from 5%-10% up to 9%-12% for 2024. Can you just discuss really quickly the drivers behind that increase and how we should be thinking about the trajectory of that beyond 2024?
Yeah. No, look, you know, as we kind of look to deepen our relationships with dealers, we continue to get great traction with our insurance business, our SmartAuction business, our Pass-Through business. You know, these are all areas that add a tremendous amount of value for our dealers, helps them make their businesses better and more resilient. And they're also great businesses for us in that they drive other revenue at attractive margins. You know, some of that growth, the growth in the insurance business comes with expenses. In insurance, the insurance revenues and expenses are very much tied together. And so we encourage our insurance colleagues to really lean into the opportunity. We like the trade-off when we look at the revenues versus the expenses. It's a positive contribution.
You know, on the basis of the strong traction that we've got, you know, we raised the guidance when we spoke to everyone back in April. You know, I'm happy to say when you think about the quarter and for the year, we're towards the high end of that revised guidance. So again, continue to see really strong momentum across, you know, all of the fee-based businesses. You know, on the expense side, I kind of touched on this with insurance. And maybe I'll just hit that here quickly. Yeah, I'd say we're very much on track for the full year in terms of our original expense guidance. I'd say as you kind of think about the quarter, yeah, we expect kind of 3% up this quarter.
A lot of that driven by, by the insurance business, lesser extent the FDIC charges. Those are both what we consider to be, you know, kind of not within the controllable. So on a controllable basis for the quarter, we still expect to be down. And when we think about the full year, you know, our expectation is, you know, we'll be, you know, on a total expense basis, up less than 2%, on a controllable basis, down more than 1%. And so we continue to exercise our discipline around our controllable expenses, you know, really kind of modeling to kind of down this year on a controllable basis and kind of flattish as you think about, the next few years.
and, you know, at the same time, we continue to invest in particular in our insurance business and we'll see that reflected as you look at kind of the total expense basis, as those expenses kind of reflect that insurance investment.
So up 3% late quarter, but down on the controllable this quarter.
That's right. Yeah. Very much on track for our full year guidance.
Right. Okay. Anything else you want to maybe get out of the way on the quarter before we lose time at the end?
No, look, I think I've kind of hit at it, you know, NIM, you know, kind of for the quarter and for the exit rate for this year will be towards the high end of our guidance, other revenue towards the high end. Expenses very much on track. Credit will come back with the quarter with a more detailed review, but we're still within that 1.4-1.5 range that we've talked about before, albeit towards the high end. So I think we've kind of hit all the quarterly and kind of full year points.
Okay. Great. And then capital management's another, you know, big part of the story here. You did the sale of Ally Lending. You've been doing some loan deconsolidation. You also, I think, suggested some interest in credit risk transfers recently.
Yeah.
How do you plan to use CRTs at this point? How meaningful do you think that could be for your capital levels? And then, maybe just also touch upon your capital management overall and how you're thinking about the eventual path to turning on the buyback again.
Sure. So maybe just starting with credit risk transfer, as I'm sure many of you saw, we got approval from the Fed, I guess a little while ago. We really like the credit risk transfer as a lever to helping us manage capital. As you pointed out, yeah, we've pulled some other levers in terms of using the securitization markets to fully deconsolidate loans. And that's, you know, that's been a really useful tool as well. And you'll see some, you know, some of the stuff we've done in the first quarter, you know, we obviously done with a positive income effect, just showing the attractiveness of our loans in the market. You know, the credit risk transfer, the CRT, we like that in particular because we don't actually have to sell the loans.
So we, you know, we can take a reference portfolio of loans, and execute a CRT, and we can continue to hold those loans and benefit from what we believe are the very attractive economics of those loans, on our balance sheet. And what we effectively do is, you know, we issue a note, that kind of reflects the mezzanine risk on that portfolio. And we get a considerable amount of RWA relief for that. And so, you know, when we look at it in terms of a cost of capital, it's the cost on a mezzanine note that's call it 10%-ish of the reference portfolio, you know, versus an RWA benefit, you know, that's, you know, on the order of about two-thirds of the RWA on the reference portfolio.
And so when you kind of look at those two things together, it becomes a very attractive way for us to reduce RWA and, you know, effectively preserve capital that we can kind of deploy in our business and supporting our dealers. So we think this is a really important tool going forward, and we think it complements a number of the other tools that we've been using over the course of the last few quarters. So we're happy with it. You know, we'll kind of test and see and test and learn and kind of see what the market capacity is for this. But it's certainly something that we want to incorporate in our toolkit on a go-forward basis. And then, you know, I think you asked also about share repurchases.
You know, share repurchases, you know, kind of always on our minds. You know, important tool as we kind of think about capital return, something that we spend a lot of time talking about as a team. You know, our expectation is there are some regulatory changes coming down. You know, the precise details of those are still unclear to us, as well as the timing of any phase in. And so, you know, I think, you know, we expect we'll be in capital preservation mode as we kind of see how all of that unfolds. But it's certainly top of mind and it's certainly our desire to get back to, you know, using share repurchases as a capital return tool.
The way that we have in the past, I think, you know, Ally, I think we've always been very disciplined around capital management and we've, you know, been among the strongest users of share repurchases in the past. We certainly look forward to getting back to that. But again, I think we do that with, you know, kind of more visibility around just kind of the end state in terms of the regulatory capital rules and the timing.
While we're on the topic, just anything to note on the CCAR process later this month or?
We're, yeah, we made our submission and, I think the results are supposed to come at the end of the month. So we're looking forward to getting our results.
Okay. And as we think about the return profile for the business, you know, hitting your 4% NIM, mid-teens ROTCE, if, if I look at you where you sit today, it seems like that's pretty achievable by next year from where I'm, where I'm standing. How sustainable is this beyond next year? And do you think there's even a potential to over-earn given, you know, some of the favorable competitive dynamics you're seeing out there?
Yeah. Like, I think that, I think that's, that's a great question. We think it's completely sustainable. You know, we, we talked about some of the levers we have within the, the auto business in terms of the ability to, to dial back, you know, some of the, you know, some, some of the curtailment, and the move-up that we've made in, in terms of credit, you know, as a way of supporting the yield there. You know, that's certainly on the table. You know, again, I think we feel absolutely delighted by the strength of our deposit franchise and the opportunity that we have to optimize, you know, versus kind of how we've, how we've run the business in the past, really prioritizing growth. And so, you know, we, we, we feel, we feel really good about the trajectory and the sustainability of NIM going forward.
You know, we think the continued migration of the balance sheet again towards our higher yielding businesses across retail auto and corporate finance, and ultimately credit card, and the movement away from the lower yielding long-duration assets, the mortgage portfolio, and the securities portfolio. I think all of those things kind of speak to improved profitability. That traction that we have on the other revenue side through the insurance business, SmartAuction, and pass-through, you know, those are all very high-margin, low-capital-intensity businesses for us. And so we think we have a number of levers that are built into the business that give us, you know, not just a path to the 4% and the mid-teens ROE, but the ability to sustain that going forward.
You know, and obviously, you know, we'd love to overshoot and we'll do everything we possibly can to deliver on that.
Okay. And, you know, you also have a new CEO in place, Michael Rhodes. Anything you can share about his first month in the seat? Anything, you know, his views on the go-forward strategy and the financial algorithm you've, you've put out there?
Yeah. Look, I mean, I don't want to speak for Michael. You will all hear from Michael when we report our second quarter in July. And so you'll get a chance to meet him and get to know him. You know, he's met with a couple of our large investors already. And so we're starting to bring him out. You know, I, I'd say it's been fantastic the last 30 days. Michael just, he's got 30 years of banking experience and it absolutely shows. You know, just the depth of his knowledge across the business is actually really amazing and really refreshing. He also comes to us with a really healthy respect for the Ally culture.
You know, and I think, I think he's going to be a really, really positive contribution to the team. I think, you know, we're all just looking forward to working with Michael to do even better as we like to say at Ally. But yeah, we're all really excited. You know, we've spent a lot of time as a management team with Michael. I spent a bunch of time just kind of walking him through the financial plan. He's got a tremendous amount of respect for our core franchises, for the plan that we have in place and for the earnings ramp and the trajectory and the story that we've been talking about, you know, for the course of the last year. So I think it's, you know, I think we're going to focus on execution.
Again, I don't want to speak for Michael because, you know, all of you guys are going to get a chance to spend time with him over the coming quarter, starting with our second quarter.
Just, if we could go back really quick to the credit guide for the year, how has used car prices factored into that? And, you know, they've been moderating more recently. Has that been according to your expectations? I know they did rebound a little bit last quarter, which you highlighted. And is there anything else that's maybe factoring into why you think the late 2022 vintage is performing a little bit worse at this point outside of used car prices?
Yeah. So, you know, used car prices are interesting. They've been, you know, more kind of volatile, you know, over the course of the last 12 months. As you pointed out, they're kind of weak in the first quarter, recovered through the second quarter. You know, I'd say we came into this year expecting, you know, between December of 2023 and December of 2024, we'd see, you know, call it five percentage points of decline throughout the year. I'd say right now where we sit, used car prices are probably a couple percentage points ahead of where we expected them to be at this point of the year. Again, you know, our anticipation is that they'd be declining throughout the year.
And so we've seen some favorability in the second quarter that's been helpful to us. You know, but again, we, you know, it's still our expectation, you know, that we'll see that five percentage points of used car price decrease between December of last year and December next, the December of this year. You know, that would take us to about; we'd call it a 120 on the Ally Used Vehicle Index. What that basically means is it's basically a kind of 20% premium to kind of where we would have seen used car prices pre-pandemic.
Again, that view is a long-term view and it's informed by just what we see in terms of the dynamic between supply and demand of used vehicles, just kind of as we kind of forecast forward based on kind of lease returns and what was produced and kind of where the demand is. So, you know, again, you know, probably a percentage point or two favorable to where we thought we'd be, but that's on the, you know, with the backdrop of our expectation that used car prices through the year will decline by about five percentage points.
And there's been some recent reporting on, you know, consumers abandoning new car purchases. Not sure if that's overblown, but does that maybe support some of the dynamic in your, you know, used car price strategy as well?
Yeah. Look, you know, as you know, our you know, when you look at our origination business, it's kind of heavily skewed towards kind of used, like, you know, like prime kind of used customer. And so, you know, we certainly appreciate the strength that we're seeing, as we look at dealer lots. And you can kind of see it when you kind of look at month-over-month trends in terms of inventory levels. There's definitely some strength in used cars. I don't recall the specific stories, but it's probably a little bit exaggerated and overblown. But we, you know, we certainly appreciate just the strength in the used car market and being able to support our dealers, you know, for a product that's really important to their business right now.
And just maybe in the last minute, anything you want to leave investors here with today, to wrap up or about the Ally story? Anything you think that's misunderstood about the company at this point?
No, you know, I think we got a lot of it out. And, you know, we as a management team, we're very much focused on executing. We're focused on executing within our core franchises. And we have as much conviction as we've ever had around our 4% NIM trajectory and our mid-teens ROE. And, yeah, I'd say that's about all I got.
All right. Great. Well, I think we'll end it there. Thanks to us for coming to our conference this year and looking forward to having you in the future.
Awesome. Thanks, Jeff.
Thank you.