- Key Insight: In spite of affordability problems and a war driving up gas prices, the auto credit picture for Ally Financial improved during the first quarter.
- Supporting Data: In the first three months of 2026, 60-plus-day delinquencies on Ally's auto loans dropped by $10 million year over year.
- Expert Quote: "I'm aware the environment is unusual, but I'm really pleased with our fundamentals and our recent performance," said Ally CEO Michael Rhodes.
Nationally, Americans are struggling to afford cars. But you wouldn't know that by reading Friday's earnings report from Ally Financial, one of the country's top auto lenders.
In the first quarter of 2026, 60-plus-day loan delinquencies and net charge-offs at Ally were down, while loan applications and originations were up. And all of this was during a period when a war in the Middle East sent gas prices soaring, and U.S. car owners increasingly fell behind on their loans.
"Affordability continues to be an issue for the U.S. consumer, and it is an acute issue in the area of car ownership," Russ Hutchinson, Ally's chief financial officer, told American Banker. "That being said, our positioning is really strong."
In the first three months of the year, net charge-offs for consumer auto loans fell to $424 million, down $21 million from the prior year. Sixty-plus-day delinquencies on Ally's auto loans dropped to $842 million, down $10 million from the same period a year ago.
Consumer auto loan originations, meanwhile, jumped to $11.5 billion, up 13% year over year.
The Detroit-based lender's performance stood in contrast to the national picture. In late 2025, American auto loan delinquencies rose to levels not seen since the global financial crisis, according to the
In addition, since late February, the war in Iran has caused a spike in fuel prices and many related costs. Last week, new data from the Bureau of Labor Statistics showed a
"We're respectful of what's going on in the macro and in the geopolitics," Hutchinson told American Banker. "There's a lot going on there, and we understand the need to be dynamic."
Somehow, Ally navigated its way through that macroeconomic environment and emerged stronger than Wall Street expected. Earnings per share for the $197 billion-asset bank were 93 cents, above analysts' consensus estimate of 90 cents, according to S&P.
Net income for the quarter was $319 million, up from a $225 million loss during the first quarter of 2025, when Ally was in the midst of
Net interest margin came out to 3.48%, up from 3.31% one year ago.
"Overall, this was a solid quarter as performance was consistent to better across the company," Jon Arfstrom, an analyst at RBC Global Markets, wrote in a research note. "We are encouraged by the continued net interest margin expansion, solid expense control, and clean credit."
Hutchinson credited a number of factors for Ally's nimble performance. One was the bank's underwriting standards, which Ally has
"I think our positioning now, from a risk perspective, is better than I think it's been in years," Hutchinson said. "The changes we've made to underwriting and servicing and to reducing credit risk across the organization are clearly paying off."
During the earnings call, Rhodes described Ally's "measured" approach, selectively booking higher-quality loans and "prioritizing discipline over volume." In that context, he said, the geopolitical challenges were less of a concern.
"You put all this stuff together, and you've got headwinds and tailwinds," Rhodes said. "I'm aware the environment is unusual, but I'm really pleased with our fundamentals and our recent performance."
