There were no S&P 500 earnings reactions on Tuesday, but we want to tell you about an emerging leader in financials.
Ally Financial $ALLY is a diversified financial services company best known for two things: it's one of the largest auto lenders in the U.S., and it operates the nation's largest all-digital bank.
They sit at the intersection of consumer credit, dealer finance, insurance, and deposits, which gives them a unique funding advantage and a highly scalable model.
In simple terms, they take in low-cost digital deposits and deploy them into higher-yielding auto loans and commercial finance, while layering on insurance and fee income along the way.
Over the past year, that model has begun to operate as intended.
Credit trends are improving, margins are stabilizing, and returns are moving decisively higher.
In the most recent quarter, Ally delivered EPS of $1.18, more than doubling year-over-year.
Net interest margin continued to expand, retail auto credit metrics improved meaningfully, and capital ratios strengthened as the company executed a $5B credit risk transfer at the tightest spreads in its program history.
Just as importantly, Ally's deposit franchise remains a clear differentiator, with $142B in retail deposits, 92% FDIC insured, and customer growth now extending to 66 consecutive quarters.
That fundamental progress is evident in how the market has been reacting to earnings.
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