Ally Financial Inc.

Adjusted EPS was $1.21, up 22% year over year. Adjusted net revenue was $2.3 billion, up 10% year over year. Net financing revenue, excluding OID, was $1.7 billion, up 11% year over year, and adjusted other revenue was $573 million, up $42 million year over year. Provision expense was $430 million, up $46 million year over year; adjusted noninterest expense was $1.3 billion, up 5% year over year. NIM, excluding OID, was 3.63%, up 11 basis points sequentially. CET1 was 10.1%, up about 20 basis points year over year, and adjusted tangible book value per share was $42, up 13% over the past year. Retail auto originations were $13.3 billion, up 21% year over year; retail auto applications reached a record 4.6 million, up 17%. Consumer deposits were $144 billion, and Ally served 3.6 million customers, up 7% year over year. Consolidated net charge-offs were 111 basis points, down 10 basis points from the prior quarter and roughly flat year over year; retail auto net charge-offs were 157 basis points, down 40 basis points sequentially and down 18 basis points year over year. For 2026, Ally now expects average earning assets to be up 3% to 5% versus 2% to 4% previously, consolidated NCOs to be 1.2% to 1.3%, and NIM to remain 3.6% to 3.7% with potential to exit above the high end.

Michael Rhodes framed the quarter as evidence that Ally’s strategy is working, emphasizing a more focused company with greater earnings power, stronger resilience, and the ability to invest and return capital at the same time. He repeatedly pointed to broad-based momentum across dealer finance, insurance, corporate finance, and the digital bank, while saying the company is being “measured” because the macro backdrop remains unusually uncertain. His tone was confident but cautious: upbeat about the long-term direction, but clear that underwriting and growth decisions are being made conservatively in the near term.

Russell Hutchinson highlighted the mechanics behind the quarter: net financing revenue excluding OID rose 11% year over year, adjusted other revenue rose $42 million, and positive operating leverage came from 10% revenue growth versus 5% expense growth. He said the 3.63% NIM benefited from lower deposit costs, with cost of funds down 12 basis points sequentially and liquid deposit pricing reduced 20 basis points, and noted continued benefit from CD roll-offs. On capital, he cited CET1 of 10.1%, roughly 20 basis points higher than a year ago, completion of a fifth credit risk transfer that generated about 20 basis points of CET1 at execution, $1 billion of preferred issued at a 7.1% coupon, $148 million of share repurchases in the quarter, and a $0.30 quarterly dividend for Q3. He also said the heavy lifting on capital build is largely behind Ally and that the company expects to keep balancing growth investment with buybacks and dividends.

Analysts focused on retail auto credit, including why delinquencies remain elevated even as net charge-offs improved, and whether the higher S-tier mix in originations changes the credit outlook. Management said the first half of the year has shown strong credit performance, but delinquencies remain a watch item because consumers are still dealing with affordability pressure, gas prices, and a dynamic macro backdrop; they kept the retail auto NCO guide at 1.8% to 2.0% and said the midpoint remains the base case. Questions also centered on growth moderation, reserve builds, and the new corporate finance loss event; management said growth should moderate in the back half as it normalizes from unusually strong applications, reserve levels are appropriate given both portfolio performance and macro uncertainty, and the large healthcare loan charge-off was a one-off from a legacy vertical, with no other similar loans in the portfolio. On capital returns, Ally said repurchases should be viewed in the context of maintaining a target above 9% CET1 on a fully phased-in basis under the proposed rules, with buybacks remaining the residual after growth investment and dividends.