Ally Financial raises dividend to 35 cents as third-quarter profit climbs

Ally Financial is handing shareholders a bigger dividend after a quarter of record auto-loan applications and higher earnings.

The lender said Tuesday its board approved a fourth-quarter common dividend of 35 cents a share, up from the 30 cents it paid in the third quarter. Ally also repurchased $178 million of stock during the quarter, according to its earnings release filed with an 8-K.

Third-quarter GAAP earnings rose 10% to $1.30 a share from $1.18 a year earlier, and adjusted EPS climbed 16% to $1.34 from $1.15. Net income attributable to common shareholders was $401 million, up from $371 million, while GAAP total net revenue grew 8% to $2.3 billion.

"Third quarter results provide another clear signal that our focused strategy is delivering results," CEO Michael Rhodes said in the release.

Wider margin, bigger reserves

Net financing revenue rose $164 million from a year ago to $1.7 billion. The net interest margin was 3.62%, and the margin excluding core original issue discount was 3.66%, both up 11 basis points.

The provision for credit losses rose $114 million to $529 million, which Ally attributed primarily to reserve builds tied to asset growth during the quarter. Noninterest expense slipped $4 million.

Auto lending stays busy

Consumer auto originations rose 10% to $12.9 billion on a record 4.8 million applications, up 20%. Used vehicles made up $8.2 billion, or 64%, of originations. The estimated yield on newly originated retail auto loans was 9.44%, with 44% of volume in Ally's highest credit quality tier.

Credit held roughly steady. The retail auto net charge-off rate was 1.89%, up 1 basis point from a year earlier, while delinquencies of 30 days or more rose 6 basis points to 4.96%.

Even so, the Auto Finance segment's pre-tax income fell $84 million to $337 million, which the company said was mainly due to higher provision expense from asset growth and higher noninterest expense. Corporate Finance earned $98 million before taxes, with a 22% return on equity, and Insurance pre-tax income edged up to $80 million.

Deposits and capital

Retail deposits totaled $141.9 billion, up $80 million from a year ago but down $1.6 billion from June. Ally Bank added 59,000 net new deposit customers, its 70th straight quarter of customer growth, bringing the total to 3.6 million.

The common equity Tier 1 ratio was 10.2%, up 10 basis points from a year ago. During the quarter Ally completed a $6 billion retail auto credit risk transfer, its second of 2026, which generated about 25 basis points of CET1 at issuance.

In investor slides filed with the 8-K, Ally said its revised 2026 outlook "reflects confidence in achieving or exceeding 2026 targets."

By the numbers

• GAAP EPS: $1.30, vs. $1.18
• Adjusted EPS: $1.34, vs. $1.15
• Fourth-quarter dividend: $0.35, up from $0.30
• Consumer auto originations: $12.9 billion, up 10%
• Retail auto net charge-offs: 1.89%
• Third-quarter buybacks: $178 million

Sources

1. Ally Financial Inc., Form 8-K (Item 2.02) with Exhibit 99.1 earnings release, Exhibit 99.2 investor presentation and Exhibit 99.3 financial supplement for the third quarter of 2026, filed Oct. 20, 2026, accession 0001193125-26-425698

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