Ally earnings increased in the third quarter of 2026, with net income attributable to common shareholders rising 8% from a year earlier to $401 million. The preliminary results, announced October 20 for the quarter ended September 30, showed stronger revenue and auto lending, alongside higher credit-loss provisions.
Key Takeaways
- GAAP earnings per share rose 10% year over year to $1.30; adjusted earnings increased 16% to $1.34.
- Consumer auto originations grew 10%, but higher provisions and expenses reduced auto finance profit.
- Ally repurchased $178 million of shares and approved a higher fourth-quarter common dividend.
Table of Contents
- Ally earnings improve as financing revenue grows
- Auto lending growth brings higher reserve costs
- Deposit customers grow while balances slip
- Capital returns include a higher fourth-quarter dividend
- Conclusion
Ally earnings improve as financing revenue grows
Ally’s third-quarter 2026 earnings release showed total net revenue of $2.332 billion, up 8% from a year earlier. Net financing revenue increased by $164 million to $1.748 billion, while other revenue was unchanged at $584 million.
Net interest margin reached 3.62%, up 11 basis points year over year. Noninterest expense declined by $4 million to $1.236 billion, helping earnings rise despite a larger provision for credit losses.
Adjusted earnings of $1.34 per share compared with $1.15 a year earlier. This non-GAAP measure excludes selected items, including core original issue discount and changes in the fair value of equity securities, and supplements rather than replaces GAAP results.
| Item | Details |
|---|---|
| Retail auto net charge-off rate | 1.89%, up one basis point year over year |
| Retail auto delinquencies, 30+ days | 4.96%, up six basis points year over year, including non-accrual loans |
| Insurance pre-tax income | $80 million, up $1 million year over year |
| Corporate Finance pre-tax income | $98 million, up $3 million year over year |
Auto lending growth brings higher reserve costs
Consumer auto originations totaled $12.9 billion, supported by a record 4.8 million applications, up 20% year over year. Used-vehicle retail lending accounted for 64% of originations, and 44% of volume fell within Ally’s highest credit-quality tier.
The lending expansion did not translate into higher auto finance profit. Segment pre-tax income fell by $84 million to $337 million as higher credit provisions and noninterest expenses outweighed revenue growth.
Across the company, the provision for credit losses increased by $114 million to $529 million. Ally attributed the increase primarily to reserve builds associated with asset growth under current expected credit loss accounting. That distinguishes the additional reserve expense from losses already realized on loans.
Deposit customers grow while balances slip
Retail deposits totaled $141.9 billion, up $80 million from a year earlier but down $1.6 billion from the second quarter. Ally Bank nevertheless added 59,000 net new deposit customers, reaching 3.6 million and extending customer growth to a 70th consecutive quarter.
The average retail deposit portfolio yield declined to 3.05%, down 43 basis points year over year and seven basis points sequentially. Deposits represented 86% of Ally’s funding portfolio, while available liquidity totaled $61.2 billion.
Capital returns include a higher fourth-quarter dividend
Ally’s board approved a fourth-quarter 2026 common dividend of $0.35 per share, compared with the $0.30 per share paid in the third quarter. The company also completed $178 million of share repurchases during the quarter.
The common equity tier 1 capital ratio stood at 10.2%, up 10 basis points year over year. Ally completed a $6 billion retail auto credit risk transfer, its second such transaction in 2026, which generated approximately 25 basis points of capital-ratio benefit at issuance.
Conclusion
Ally’s third-quarter profit improved overall, although higher reserve costs reduced auto finance earnings as lending expanded. The next confirmed shareholder distribution is the approved $0.35-per-share common dividend for the fourth quarter of 2026.
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