Ally Financial misses second-quarter earnings forecasts despite higher revenue and profit (ALLY)

Shares edge lower after quarterly results

Ally Financial Inc. (NYSE:ALLY) reported second-quarter results on Tuesday, with adjusted earnings falling slightly short of Wall Street expectations despite stronger revenue and year-over-year profit growth.

The lender’s shares slipped 1.19% in pre-market trading following the announcement.

Adjusted earnings were $1.21 per share, below the analyst consensus estimate of $1.23. However, the figure represented a 22% increase from the same period last year.

Revenue and net interest income continue to improve

GAAP net income attributable to common shareholders rose 13% year over year to $367 million.

Total net revenue increased 10% to $2.3 billion, compared with $2.1 billion in the second quarter of 2025.

Net financing revenue climbed by $168 million from a year earlier to $1.7 billion, while net interest margin, excluding core original issue discount, expanded by 18 basis points to 3.63%.

“Our results through the first half of the year reflect the strength of our franchises and disciplined execution of our teammates,” said Chief Executive Officer Michael Rhodes.

Auto lending and insurance remain key growth drivers

Consumer auto originations totaled $13.3 billion during the quarter, supported by a record 4.6 million applications. The estimated retail auto originated yield reached 9.09%.

Retail auto net charge-offs improved to 1.57%, representing a decline of 18 basis points from a year earlier and marking the fifth consecutive quarter of year-over-year improvement.

Insurance written premiums increased 9% to $382 million, while the Corporate Finance division generated a 32% return on equity and maintained non-performing loans below 1% of its $13.7 billion held-for-investment portfolio.

Capital position remains solid

Provision for credit losses increased by $46 million year over year to $430 million, as reserve builds linked to portfolio growth offset improving credit quality. Noninterest expenses also increased by $57 million from the prior year.

Ally’s retail deposit base reached $143.6 billion, with the company adding 63,000 net new deposit customers during the quarter to bring its total customer base to 3.6 million.

The common equity tier 1 ratio improved to 10.1%, approximately 20 basis points higher than a year earlier.

During the quarter, Ally repurchased $148 million of its shares and declared a third-quarter common dividend of $0.30 per share.

Ally Financial stock price