Good morning, everyone.
Welcome to the annual meeting for Ally Financial Inc. Our host for today's call is Franklin Hobbs. At this time, I'll turn it over to Mr. Hobbs, Ally Financial's Chairman of the Board, to begin the meeting. Mr. Hobbs, the floor is yours.
Morning, everyone. My name is Fritz Hobbs, Ally's Chairman of the Board and Chair of today's meeting. It's my pleasure to welcome you to the 26th Annual Meeting of Shareholders. We're glad you're here today, and we appreciate your support of Ally Financial. At this time, I'd like to recognize the director nominees. In addition to myself, we have Gunther Bright; William H. Cary, Chair of the Audit Committee; Mayree C. Clark; Kim Fennebresque, Chair of the Compensation, Nominating, and Governance Committee; Thomas Gibbons, Chair of the Risk Committee; Michelle Goldberg; Allan Merrill; David Reilly; Ally's Chief Executive Officer, Michael Rhodes; Brian Sharples, Chair of the Technology Committee; and Tracy Webber. As noted in the proxy statement for today's meeting, the board believes this group possesses the right mix of perspectives, backgrounds, skills, and experiences needed to fulfill the board's duties and oversee Ally's corporate strategy.
I'm pleased to introduce Tracy Webber, who has been newly nominated to our board and whose election will be voted on as part of today's meeting. Members of Ally's executive management team are here, also here with us today, including Hope Mehlman, Ally's Chief Legal and Corporate Affairs Officer and Corporate Secretary, who will serve as Secretary of today's meeting. I want to recognize Chris Montay from Deloitte & Touche, Ally's independent registered accounting firm. Mr. Montay has confirmed that he does not have separate statement to make but is available for questions. With that, I now call the meeting to order. Our first action will be to review and vote on items of the business for today's meeting. After voting on the proposals presented have been concluded, the official meeting will then be formally adjourned.
Ally's Chief Executive Officer, Michael Rhodes, will thereafter provide some remarks, and we will conclude with a question-and-answer session. I call your attention to the agenda and rules of conduct available on the meeting portal. I now ask Ms. Mehlman to lead us through the formalities for today's meeting.
Thank you, Mr. Chairman, good morning, everyone. Angela Kellums from American Election Services on behalf of Broadridge Financial Solutions has been appointed as the Inspector of Elections. I have received Ms. Kellums' written oath of office as Inspector, and she has presented me with evidence that notice of this meeting was properly given to all shareholders of record as of the close of business on the record date and there are shareholders represented at this meeting in person, including virtually or by proxy, holding a majority of the outstanding shares of stock entitled to vote on the business to be transacted, which is sufficient for a quorum, and for transacting the business of this meeting. Mr. Chairman, based on information provided by Ms. Kellums, I find that a quorum is present for the purpose of conducting business at this meeting.
All holders of the company's common stock as of the close of business on March 13th, 2026 are entitled to vote at this meeting, either in person or by proxy, on all business to come before the meeting. The polls were opened at the beginning of today's meeting for voting. If you have previously voted or submitted a proxy, it is not necessary for you to vote again unless you wish to change your vote. If there is any shareholder who has not authorized a proxy to vote and wishes to vote or change a vote previously cast, you may do so now. Shareholders who are eligible to vote at the meeting have a voting button available to them on the meeting portal.
Items to be considered at this meeting are the items set forth in detail in our notice of the 2026 Annual Meeting of Shareholders and Proxy Statement, each dated March 18th, 2026, and mailed or made available to Ally shareholders. I would encourage all shareholders to review this year's proxy statement as the company has made many meaningful enhancements for 2026, including new disclosures on artificial intelligence and quantum computing and how Ally is overseeing these new technologies. The proposals described in the 2026 notice and proxy statement are Proposal 1. The election of 12 director nominees. Proposal 2. An advisory vote on executive compensation. Proposal 3. The ratification of the engagement of Deloitte & Touche LLP as our independent registered public accounting firm for 2026. Proposal 4. The approval of the Ally Financial Inc. Incentive Compensation Omnibus Plan.
Proposal 5: the approval of the Ally Financial Inc. Employee Stock Purchase Plan. Proposal 6: a shareholder pro-proposal submitted by John Chevedden to reduce the threshold for shareholders to call a special meeting if properly presented. The board has recommended that shareholders vote in favor of proposals 1 through 5 and against proposal 6.
At this time, I'll recognize Mr. Chevedden for 2 minutes to present the shareholder proposal. Operator, please open the line for Mr. Chevedden.
Hello, this is John Chevedden, Proposal 6, give shareholders a reasonable ability to call for a special shareholder meeting. Shareholders ask our Board of Directors to take the steps necessary to amend the governing documents to give the owners a combined 10% of our outstanding common stock the power to call a special shareholder meeting. Such a shareholder meeting can be an easy to conduct online shareholder meeting. There shall be no poison pill, discriminatory type rule to require ownership of shares for a specific period of time in order for shares to participate in calling for a special shareholder meeting. To guard against Ally Board of Directors becoming complacent, shareholders need the ability to call a special shareholder meeting to help the board adopt new strategies when the need arises.
Ally Financial is a Delaware company, and shareholders in a Delaware company can have the right to call for a special shareholder meeting and the right to act by written consent. Ally shareholders have no right to act by written consent, which is all the more reason to have a more attainable right for Ally shareholders to call for a special shareholder meeting. The Ally concerned about requiring 10% of shares to call for a special shareholder meeting is unfounded. Shareholders at more than 100 companies have voted on a shareholder right to call for a special shareholder meeting, but not one of these companies have ever claimed that a special shareholder meeting ever actually took place at any company, anywhere that requires 15% or more of shares to call for a special shareholder meeting. Of course, companies want a 15% or higher figure.
Ally requires 25% because they know that at a 15% or higher figure means that a special meeting will never take place. A 15% or higher figure is a meaningless right based on historical data. Ally concludes with an appeal to shareholder distraction by claiming that Ally shareholders should simply be content that Ally has the usual governance practices that most other companies have. Please vote yes. Give shareholders a reasonable ability to call for a special shareholder meeting. Proposal 6.
Thank you. I'll now ask that Hope discuss the vote tabulation.
We will pause at this time to allow shareholders to conclude voting. I now announce that the polls for this meeting are closed, and I have received the preliminary results of the vote from the Inspector of Elections. Any votes received during the meeting will be tabulated and included in the final results by the Inspector of Election, which will be filed with the minutes of this meeting. The preliminary voting results are as follows. With respect to proposal 1, the election of directors, each director nominee is elected to the Board for a term ending at 2027 annual meeting of shareholders. Proposals 2 through 5 are each approved. Proposal 6, the shareholder proposal is not approved. The final voting results will be filed on a current report on Form 8-K within 4 business days from today.
The business for which this meeting has now been held is now complete, and I declare the meeting formally adjourned. I now invite Michael Rhodes, Ally's Chief Executive Officer, to provide some remarks. Following Michael's remarks, Sean Leary, Ally's Chief Financial Planning and Investor Relations Officer, will review any appropriate questions submitted by shareholders. Michael.
Thank you. Good morning, and thank you for joining Ally Financial's annual shareholder meeting. 2 years ago, I joined Ally and spent my first year listening and learning. That time taught me that Ally's path forward was a simpler, stronger, and more focused company. 1 year ago, we rolled out our strategy refresh internally. We called it Focus Forward. Focus means we're doubling down on the businesses and segments where we have clear competitive advantages, and forward represents our ambition to create something extraordinary and enduring from a position of strength. Today, I'm here to report that our strategic pivot is resonating, it's working, and momentum is building. Over the past year, we have moved from setting our strategy to executing against it. We are simplifying our businesses, we strengthened our foundations, and we're concentrating our efforts where Ally has clear competitive advantages.
At the core of the progress are our 3 market-leading franchises: Dealer Financial Services, Corporate Finance, and Ally Bank. These are businesses we know well, where we have relevant scale, differentiated capabilities, deep relationships, and are positioned to win. Each operates in large, fragmented markets with significant runway for disciplined growth. The momentum we're seeing today reinforces our conviction in the strength and durability of our model. You can see the momentum clearly across the core franchises. In Auto Finance, we processed a record number of application volumes last year, demonstrating the strength of our dealer-centric through the cycle model. In insurance, written premiums of $1.5 billion were an all-time record.
In Corporate Finance, we delivered strong profitability and growth, including a 28% return on equity and a 2nd consecutive year of 0 net charge-offs. In Ally Bank, we marked our 17th consecutive year of customer growth, reinforcing the durability of our digital-first franchise and funding base. This performance didn't happen by chance. It reflects deliberate choices and decisive actions to reduce complexity, sharpen priorities, and strengthen our balance sheet. We ceased mortgage originations and completed the sale of our credit card business. We've repositioned part of our securities portfolio to reduce interest rate risk. We held operating expenses flat for the 2nd year in a row, demonstrating real discipline despite inflationary pressures. We strengthened capital with our CET1 ratio increasing 40 basis points to 10.2%.
The capital strength enabled us to resume share repurchase in the fourth quarter with a $2 billion authorization, providing another lever for capital allocation as we drive long-term shareholder value. Importantly, we achieved all this while reinforcing our do-it-right culture, an ethos that underpins how we operate, how we manage risk, and how we execute. That culture is enabling us to operate more efficiently. In 2025, we deployed Ally.ai across the organization, helping our 10,000-plus teammates work smarter, move faster, and innovate responsibly. For the sixth consecutive year, we ranked in the top 10% globally for employee engagement. Fortune Magazine also named us as one of their 100 best companies to work for, USA Today recognized us as a top workplace, earning our highest ranking ever on both lists. That alignment matters.
When teammates understand the strategy and believe in the direction, execution accelerates. We also continue to show up for the communities we serve. We earned our 4th consecutive outstanding CRA rating, placing us in the top 15% of U.S. financial institutions. We deployed $1.34 billion in loans and investments supporting low and moderate-income communities. Our brand remains a differentiator as well, which has never been more important than it is in an AI-first era. In 2025, we announced a partnership with the WNBA, advancing our commitment to invest equally in men's and women's sports. Just last month, we reached that 50/50 media goal a full year ahead of schedule. Being a catalyst for change in the sports ecosystem isn't just the right thing, it's smart business.
Sports fans' favorability to Ally have a 6x higher conversion, and it's one of the reasons that customers choose Ally for our reputation at significantly higher rates than competitors. With that foundation in place, our path forward is clear, and we carried that momentum into 2026. First quarter adjusted earnings per share of $1.11 were up 90% versus 2025, reflecting that continued momentum across the core franchises. We focused on building upon that momentum to drive sustainable performance and ongoing improvement over time. In Auto Finance, as the largest bank auto lender in the marketplace, we have meaningful opportunity to grow while remaining disciplined. In Insurance, we continue to deepen dealer relationships and help them win in every aspect of their business.
In Corporate Finance, we're scaling a business with proven results, growing prudently while preserving the strong credit discipline that has delivered consistently strong profitability. At Ally Bank, as the nation's largest all-digital bank, we see significant runway to deepen relationships, increase primacy, and strengthen our durable funding base. Our deposit retention rates consistently exceed 95%, highlighting the loyalty of our engaged customer base. This is how we compound progress, by staying focused on what we do best and executing it exceptionally well. Before I close, I want to recognize our board, whose guidance and partnership have been invaluable as we've executed our refreshed strategy. Last year, we welcomed Gunther Bright, Michelle Goldberg, and Allan Merrill, who together bring deep expertise in financial services, public company leadership, and financial and venture capital markets.
I also want to thank Marjorie Magner for her leadership and service as she retired from the board in December. Finally, I'm pleased to welcome Tracy Webber to the board, who brings a great depth in digital and technology across multiple industries. As I wrap up, here's what I want shareholders to take away. First, we have 3 market-leading franchises with durable competitive advantages. Next, our differentiated model, brand, and culture set us apart as a category of 1. Our focused strategy is working and producing results, and we have a remarkable team executing with discipline and purpose. While macroeconomic conditions remain fluid, I remain confident we are well-positioned to adapt, execute, and deliver compelling, sustainable returns. Thank you to my Ally teammates for your commitment and passion for serving our customers. Thank you to our shareholders for your continued trust and investment in Ally.
Together, we are building something extraordinary.
Thank you, Michael. Shareholders who have logged into the virtual meeting using their control number can submit up to 2 questions. Please note that we may prioritize questions based on the broadest applicability to shareholders and may combine similar or related questions to provide answers as efficiently as possible. Also, we may not be able to provide answers to every question submitted, and we may not respond to questions that were already addressed as part of Michael's remarks. Questions not answered may be raised separately after the meeting by reaching out to our investor relations team. We will begin by addressing questions that were submitted in advance, and then we'll turn to questions submitted here today.
Michael, we have a few very similar questions, related to capital allocation that I'll just summarize as follows: How are you balancing your capital allocation priorities, and where do you see risks to executing on those priorities?
Well, Sean, thanks for that. Capital questions are always great questions for a financial service institution. Let me start by saying that we've been very clear about our capital allocation priorities, and it's each one of which is really focused on driving long-term shareholder value. Top priority is unambiguously deriving accretive organic growth in our core franchises. That's our top. We continue to see great opportunities across our franchises, be it Auto Finance, Corporate Finance, insurance. You really see it in, I think, in my remarks. The strength of our origination engines and everything we are doing, really underscores, you know, our ability to deploy capital very intelligently. With a great deposit franchise that positions us for profitable growth.
Given the strong capital generation of Ally, like ours is really a story of and rather than or with respect to capital management. In addition to supporting loan growth, we are confident in our ability to move capital ratios higher, which we did last year, and return capital to shareholders through dividends and share repurchases. If you just look at our first quarter, I think that actually shows these priorities well. See, in the first quarter, we had record application flow for the auto business and double-digit growth in originations on a year-over-year basis. In our Corporate Finance portfolio or business, we actually grew loans 6% just in that first quarter alone.
In addition to the growth on the asset side of the balance sheet, we were also able to execute $150 million in share repurchases in the quarter, and our CET ratio increased by 60 basis points. That's a great example of in the quarter, we executed all 3 of our priorities. I think we did it very, very well. In terms of risks, look, we remain nimble going forward and, you know, when you think about risk, and particularly inside of a bank, it's about being dynamic. We're not going to chase growth for growth's sake, but when the risk-adjusted returns are appropriate.
I think, as I mentioned last year, we had a $2 billion open-ended share repurchase. This just gives us a great flexibility in terms of how we allocate capital on a go-forward basis. The 3 priorities are growth, grow your capital base, and then return to capital shareholders. Sean, I hope that answers the question.
Thank you, Michael. At this point, Michael, I'm seeing no additional questions specific to the purpose of today's meeting that have been submitted.
Okay. Thank you for joining Ally's 2026 annual meeting of the shareholders. We appreciate your support and participation. That concludes today's meeting.
This now concludes the meeting. Thank you for joining, and have a pleasant day.