Ally Financial Inc

Ally Financial capped a strong 2025 with a fourth-quarter earnings beat that extended its run to eight consecutive quarters of topping consensus EPS estimates, as improving credit quality and expanding margins offset a modest revenue shortfall. The company posted adjusted EPS of $1.09, beating the $1.02 consensus estimate by 6.54%, while revenue of $2.12 billion came in just under the $2.14 billion consensus by 0.94%, and fell 47.4% year over year, largely reflecting the strategic exits from credit cards and mortgage originations. The single biggest driver of the earnings beat was a sharp improvement in credit quality, with the consolidated net charge-off rate falling to 1.34% from 1.59% a year ago, reducing provision expense by $70 million year over year. Net interest margin expanded 18 basis points to 3.48%, aided by lower deposit funding costs. Management's confidence in the recovery was underscored by a newly authorized $2 billion buyback program, with Ally guiding 2026 NIM to 3.60% to 3.70%, retail auto NCOs of 1.8% to 2.0%, and average earning asset growth of 2% to 4%.