Ally Financial third-quarter EPS rises to $1.30 from $1.18 a year earlier

Ally Financial Inc. (ALLY) said Tuesday that GAAP net income attributable to common shareholders rose to $401 million in the third quarter ended Sept. 30, 2026, up 8% from a year earlier. The results are preliminary and were furnished in a press release attached to a Form 8-K.

Here's how the company did:

• GAAP earnings per share: $1.30 vs. $1.18 a year earlier
• Adjusted EPS: $1.34 vs. $1.15 a year earlier
• GAAP total net revenue: $2,332 million vs. $2,168 million a year earlier
• Adjusted total net revenue: $2,346 million vs. $2,157 million a year earlier
• Pre-tax income: $567 million vs. $513 million a year earlier

Pre-tax income rose 11% from a year earlier. The company recorded no repositioning items in the quarter.

Adjusted EPS, which the company defines as GAAP EPS adjusted for items it does not view as reflecting operating performance, was up 16% from a year earlier.

Revenue, margin and credit costs

Net financing revenue was $1.7 billion, up $164 million year over year. Net interest margin was 3.62%, and net interest margin excluding core OID was 3.66%. Both were up 11 basis points from a year earlier.

Core OID is original issue discount amortization, a non-cash charge tied to discounted bonds from past debt exchanges. The company removes it from several of its adjusted measures.

Other revenue was flat year over year at $584 million. That included a $5 million increase in the fair value of equity securities, compared with a $27 million increase a year earlier. Adjusted other revenue was $579 million, up $22 million.

The company said adjusted other revenue benefited from momentum across its diversified revenue streams, including Insurance, SmartAuction and Passthrough programs.

The provision for credit losses rose $114 million year over year to $529 million. The company said the increase was primarily due to CECL reserve builds tied to asset growth during the quarter. CECL is the current expected credit loss standard for loan reserves.

Noninterest expense decreased $4 million year over year to $1,236 million.

Automotive finance

Automotive Finance pre-tax income was $337 million, down $84 million from a year earlier. The company said the decline was primarily driven by higher provision expense from strong asset growth and higher noninterest expense, partially offset by higher revenue.

Consumer auto originations were $12.9 billion, up 10% year over year. Consumer auto applications reached 4.8 million, up 20%.

The estimated retail auto originated yield was 9.44%, with 44% of volume in the highest credit quality tier.

Retail auto net charge-offs were 1.89%, up 1 basis point. A basis point is one-hundredth of a percentage point.

Retail auto delinquencies 30 or more days past due, including non-accrual loans, rose 6 basis points to 4.96%.

The retail auto portfolio yield, excluding hedges, declined 1 basis point to 9.20%.

Insurance, Corporate Finance and Corporate and Other

Insurance pre-tax income was $80 million, up $1 million. Written premiums were $388 million, up 1%. Insurance losses were $135 million, down $6 million.

Corporate Finance pre-tax income was $98 million, up $3 million, and its return on equity was 22%. Held-for-investment loans totaled $15.8 billion, all first lien, with non-accrual loans below 1%.

Corporate and Other posted pre-tax income of $52 million, compared with a loss of $82 million a year earlier.

AM Best reaffirmed its A rating for the insurance business during the quarter, the company said.

Capital, deposits and liquidity

The common equity tier 1 ratio was 10.2%, up 10 basis points year over year. The company executed a $6 billion retail auto credit risk transfer during the quarter, which it said generated about 25 basis points of capital at issuance.

The company repurchased $178 million of shares during the quarter.

The board approved a fourth-quarter 2026 common dividend of $0.35 per share. The company paid $0.30 per share during the quarter, unchanged from a year earlier.

Retail deposits were $141.9 billion, up $80 million year over year and down $1.6 billion from the prior quarter. Total deposits were $155.8 billion.

Ally Bank added 59 thousand net new deposit customers in the quarter, bringing its total to 3.6 million.

Total available liquidity was $61.2 billion, or 5.2 times uninsured deposit balances.

2026 outlook

The company said its revised 2026 outlook reflects confidence in achieving or exceeding its 2026 targets. The outlook calls for net interest margin excluding OID of 3.60% to 3.65%, adjusted other revenue up 2% to 4%, and adjusted noninterest expense flat to up 1%.

It also expects average earning assets to rise 5% to 6% and a tax rate of 20% to 22%. Retail auto net charge-offs are tracking toward the midpoint of a 1.8% to 2.0% range, and consolidated net charge-offs are tracking toward the low end of a 1.2% to 1.3% range.

The filing does not give the prior outlook figures, so the size of the revision cannot be measured from this document. The company said its forward-looking non-GAAP measures cannot be reconciled to GAAP without unreasonable effort.

The press release and supplemental materials, furnished as Exhibits 99.1 through 99.3, contain the full reconciliations of non-GAAP measures to GAAP results.