Slight Q2 EPS Miss on Reserve Build from Loan Growth; Credit and NIM Improve

Research evidence excerpt

Slight Q2 EPS Miss on Reserve Build from Loan Growth; Credit and NIM Improve

Diversified Financials: Consumer Finance

Ally Financial

TD SECURITIES (USA) LLC QUICK TAKE: EARNINGS UPDATE

July 21, 2026

Price: $45.52 (07/20/2026) Slight Q2 EPS Miss on Reserve Build from Loan

Price Target: $55.00 Growth; Credit and NIM Improve

BUY (1)

Moshe Orenbuch THE TD COWEN INSIGHT

646 562 1495

ALLY reported adj EPS of $1.21, below our $1.24 estimate and FS consensus of $1.22. The

moshe.orenbuch@tdsecurities.com

modest miss was driven by higher prov expense and non-interest expenses, partially offset by

Burç Okumuş higher other revenue and higher NII. Credit trends continued to improve, with retail auto NCOs

212 468 8443 declining 18 bps y/y, better than our est. However, CECL reserve build for auto loan growth

burc.okumus@tdsecurities.com

drove higher prov expense.

Key Data

Symbol NYSE: ALLY Overall, we view Q1 as neutral, as ALLY was modestly below both our and cons adj EPS

Market Cap $14.0B estimate, but NIM expansion and credit improvement continued. The adjusted EPS miss was

mainly driven by higher provision expense as a result of faster loan growth, as retail auto

NCOs of $344mm were below our $361mm estimate. Ally had a nearly $100mm reserve build

in the auto segment due to loan growth. Adj other revenue was slightly above our estimate,

while non-interest expense was also higher than our estimate.

Reported NIM was 3.59%, slightly below our 3.61% est, however, net interest income $ amount

was higher as average interest-earning assets were 2% above our expectation. ALLY also

increased its full-year guidance for average earning assets from 2%-4% y/y growth to 3%-5% y/

y growth. The NIM expansion was driven by improvement in deposit costs, which improved 14