EX-99.1 3 d918322dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

DISCOVER FINANCIAL SERVICES

EARNINGS SUMMARY

(unaudited, in millions, except per share statistics)

 

    Quarter Ended                 Twelve Months Ended              
    Dec 31,
2024		     Sep 30,
2024		     Jun 30,
2024		     Mar 31,
2024		     Dec 31,
2023		     Dec 31, 2024 vs.
Dec 31, 2023		     Dec 31,
2024		     Dec 31,
2023		     2024 vs. 2023  

EARNINGS SUMMARY

                      

Interest Income

   $ 4,989     $ 5,112     $ 4,971     $ 4,948     $ 4,868     $ 121       2 %    $ 20,020     $ 17,845     $ 2,175       12 % 

Interest Expense

     1,359       1,457       1,447       1,461       1,400       (41 )      (3 %)      5,724       4,746       978       21 % 
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

      

 

 

    

 

 

    

 

 

    

Net Interest Income

     3,630       3,655       3,524       3,487       3,468       162       5 %      14,296       13,099       1,197       9 % 

Discount/Interchange Revenue

     1,157       1,142       1,153       1,024       1,142       15       1 %      4,476       4,460       16       - % 

Rewards Cost

     758       779       716       703       788       (30 )      (4 %)      2,956       3,079       (123 )      (4 %) 
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

      

 

 

    

 

 

    

 

 

    

Discount and Interchange Revenue, net

     399       363       437       321       354       45       13 %      1,520       1,381       139       10 % 

Protection Products Revenue

     43       42       42       42       43       —        —  %      169       172       (3 )      (2 %) 

Loan Fee Income

     200       214       205       200       217       (17 )      (8 %)      819       763       56       7 % 

Transaction Processing Revenue

     83       84       91       87       82       1       1 %      345       303       42       14 % 

Other Income

     404       95       239       23       16       388       NM       761       76       685       NM  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

      

 

 

    

 

 

    

 

 

    

Total Non-Interest Income

     1,129       798       1,014       673       712       417       59 %      3,614       2,695       919       34 % 
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

      

 

 

    

 

 

    

 

 

    

Revenue Net of Interest Expense

     4,759       4,453       4,538       4,160       4,180       579       14 %      17,910       15,794       2,116       13 % 

Provision for Credit Losses

     1,202       1,473       739       1,497       1,909       (707 )      (37 %)      4,911       6,018       (1,107 )      (18 %) 

Employee Compensation and Benefits

     792       703       658       671       646       146       23 %      2,824       2,434       390       16 % 

Marketing and Business Development

     299       263       258       250       372       (73 )      (20 %)      1,070       1,164       (94 )      (8 %) 

Information Processing & Communications

     208       197       167       163       170       38       22 %      735       608       127       21 % 

Professional Fees

     363       323       296       292       312       51       16 %      1,274       1,041       233       22 % 

Premises and Equipment

     25       25       23       20       25       —        —  %      93       89       4       4 % 

Other Expense

     168       277       336       148       263       (95 )      (36 %)      929       803       126       16 % 
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

      

 

 

    

 

 

    

 

 

    

Total Operating Expense

     1,855       1,788       1,738       1,544       1,788       67       4 %      6,925       6,139       786       13 % 
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

      

 

 

    

 

 

    

 

 

    

Income/ (Loss) Before Income Taxes

     1,702       1,192       2,061       1,119       483       1,219       252 %      6,074       3,637       2,437       67 % 

Tax Expense

     411       322       538       268       117       294       251 %      1,539       841       698       83 % 
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

      

 

 

    

 

 

    

 

 

    

Net Income/ (Loss)

   $ 1,291     $ 870     $ 1,523     $ 851     $ 366     $ 925       253 %    $ 4,535     $ 2,796     $ 1,739       62 % 
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

      

 

 

    

 

 

    

 

 

    

Net Income/ (Loss) Allocated to Common Stockholders

   $ 1,284     $ 834     $ 1,515     $ 813     $ 364     $ 920       253 %    $ 4,446     $ 2,715     $ 1,731       64 % 
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

      

 

 

    

 

 

    

 

 

    

Effective Tax Rate

     24.1 %      27.0 %      26.1 %      24.0 %      24.0 %        25.3 %      23.1 %     

Net Interest Margin

     11.96 %      11.38 %      11.17 %      11.03 %      10.98 %      98   bps        11.38 %      11.07 %      31   bps   

Operating Efficiency

     39.0 %      40.1 %      38.3 %      37.1 %      42.8 %      (380 ) bps        38.7 %      38.9 %      (20 ) bps   

ROE

     29 %      21 %      40 %      24 %      10 %        28 %      20 %     

ROCE

     31 %      23 %      43 %      8 %      11 %        30 %      22 %     

Capital Returned to Common Stockholders

   $ 160     $ 155     $ 178     $ 180     $ 144     $ 16       11 %    $ 674     $ 2,541     ($ 1,867 )      (73 %) 

Payout Ratio

     12 %      19 %      12 %      22 %      40 %        15 %      94 %     

Ending Common Shares Outstanding

     251       251       251       251       250       1       —  %      251       250       1       —  % 

Weighted Average Common Shares Outstanding

     251       251       251       250       250       1       —  %      251       254       (3 )      (1 %) 

Weighted Average Common Shares Outstanding (fully diluted)

     251       251       251       250       250       1       —  %      251       254       (3 )      (1 %) 

PER SHARE STATISTICS

            

Basic EPS

   $ 5.11     $ 3.32     $ 6.04     $ 3.25     $ 1.45     $ 3.66       252 %    $ 17.72     $ 10.71     $ 7.01       65 % 

Diluted EPS

   $ 5.11     $ 3.32     $ 6.03     $ 3.25     $ 1.45     $ 3.66       252 %    $ 17.72     $ 10.70     $ 7.02       66 % 

Common Dividends Declared Per Share

   $ 0.70     $ 0.70     $ 0.70     $ 0.70     $ 0.70     $ —        —  %    $ 2.80     $ 2.70     $ 0.10       4 % 

Common Stock Price (period end)

   $ 173.23     $ 140.29     $ 130.81     $ 131.09     $ 112.40     $ 60.83       54 %    $ 173.23     $ 112.40     $ 60.83       54 % 

Book Value per share

   $ 71.32     $ 68.11     $ 63.76     $ 58.54     $ 56.92     $ 14.40       25 %    $ 71.32     $ 56.92     $ 14.40       25 % 

Note: See Glossary of Financial Terms for definitions of financial terms

DISCOVER FINANCIAL SERVICES

BALANCE SHEET SUMMARY

(unaudited, in millions)

 

     Quarter Ended              
     Dec 31,
2024		     Sep 30,
2024		     Jun 30,
2024		     Mar 31,
2024		     Dec 31,
2023		     Dec 31, 2024 vs.
Dec 31, 2023		  

BALANCE SHEET SUMMARY

               

Assets

               

Cash and Investment Securities

    $ 28,552     $ 26,423     $ 24,405     $ 27,965     $ 25,383     $ 3,169       12 % 

Loans Held-for-Sale

      —        8,484       10,145       —        —        —        —  % 

Loan Portfolio

      121,118       118,509       117,504       126,555       128,409       (7,291 )      (6 %) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Total Loan Receivables

      121,118       126,993       127,649       126,555       128,409       (7,291 )      (6 %) 

Allowance for Credit Losses

      (8,323 )      (8,512 )      (8,481 )      (9,258 )      (9,283 )      960       10 % 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Net Loan Receivables

      112,795       118,481       119,168       117,297       119,126       (6,331 )      (5 %) 

Premises and Equipment, net

      1,072       1,085       1,087       1,107       1,091       (19 )      (2 %) 

Goodwill and Intangible Assets, net

      255       255       255       255       255       —        —  % 

Other Assets

      4,966       5,371       5,973       6,083       5,858       (892 )      (15 %) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Total Assets

    $ 147,640     $ 151,615     $ 150,888     $ 152,707     $ 151,713     ($ 4,073 )      (3 %) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Liabilities & Stockholders’ Equity

               

Certificates of Deposits 1

      29,296       30,296       25,881       25,921       24,151       5,145       21 % 

Savings, Money Market, and Other Deposits 1, 2

      61,316       60,013       61,414       61,412       59,882       1,434       2 % 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Total Direct to Consumer Deposits 1, 2

      90,612       90,309       87,295       87,333       84,033       6,579       8 % 

Brokered Deposits and Other Deposits

      16,397       19,543       21,055       23,097       24,898       (8,501 )      (34 %) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Deposits

      107,009       109,852       108,350       110,430       108,931       (1,922 )      (2 %) 

Securitized Borrowings 3

      8,475       9,307       9,608       10,933       11,743       (3,268 )      (28 %) 

Other Borrowings 3

      7,778       8,870       9,533       9,542       9,588       (1,810 )      (19 %) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Borrowings

      16,253       18,177       19,141       20,475       21,331       (5,078 )      (24 %) 

Accrued Expenses and Other Liabilities

      6,452       6,477       7,387       7,132       7,216       (764 )      (11 %) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Total Liabilities

      129,714       134,506       134,878       138,037       137,478       (7,764 )      (6 %) 

Total Equity

      17,926       17,109       16,010       14,670       14,235       3,691       26 % 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Total Liabilities and Stockholders’ Equity

    $ 147,640     $ 151,615     $ 150,888     $ 152,707     $ 151,713     ($ 4,073 )      (3 %) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

LIQUIDITY

               

Liquidity Portfolio

    $ 27,325     $ 24,804     $ 22,371     $ 25,739     $ 23,254     $ 4,071       18 % 

Private Asset-backed Securitization Capacity

      3,500       2,750       3,500       3,500       2,750       750       27 % 

Federal Home Loan Bank Borrowing Capacity

      4,679       3,853       3,383       3,087       2,551       2,128       83 % 

Federal Reserve Discount Window 4

      46,489       46,118       39,569       41,710       41,199       5,290       13 % 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Undrawn Credit Facilities 4

      54,668       52,721       46,452       48,297       46,500       8,168       18 % 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Total Liquidity

    $ 81,993     $ 77,525     $ 68,823     $ 74,036     $ 69,754     $ 12,239       18 % 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

1 

Includes Affinity relationships

2 

Savings, Money Market, and Other Deposits and reflects both interest-bearing and non-interest bearing direct to consumer deposits

3 

Includes short-term and long-term borrowings

4 

Excludes investments pledged to the Federal Reserve, which is included within the liquidity portfolio

Note: See Glossary of Financial Terms for definitions of financial terms

DISCOVER FINANCIAL SERVICES

BALANCE SHEET STATISTICS

(unaudited, in millions)

 

     Quarter Ended     Dec 31, 2024 vs.  
     Dec 31, 2024     Sep 30, 2024     Jun 30, 2024     Mar 31, 2024     Dec 31, 2023     Dec 31, 2023  

BALANCE SHEET STATISTICS

               

Total Common Equity

    $ 16,870     $ 16,053     $ 14,954     $ 13,614     $ 13,179     $ 3,691       28 % 

Total Common Equity/Total Assets

      11.4 %      10.6 %      9.9 %      8.9 %      8.7 %     

Total Common Equity/Net Loans

      15.0 %      13.5 %      12.5 %      11.6 %      11.1 %     

Tangible Assets

    $ 147,385     $ 151,360     $ 150,633     $ 152,452     $ 151,458     ($ 4,073 )      (3 %) 

Tangible Common Equity 1

    $ 16,615     $ 15,798     $ 14,699     $ 13,359     $ 12,924     $ 3,691       29 % 

Tangible Common Equity/Tangible Assets 1

      11.3 %      10.4 %      9.8 %      8.8 %      8.5 %     

Tangible Common Equity/Net Loans 1

      14.7 %      13.3 %      12.3 %      11.4 %      10.8 %     

Tangible Common Equity per share 1

    $ 66.10     $ 62.89     $ 58.53     $ 53.31     $ 51.67     $ 14.43       28 % 
     Basel III
Quarter Ended		              

REGULATORY CAPITAL RATIOS 2

    Dec 31, 2024     Sep 30, 2024     Jun 30, 2024     Mar 31, 2024     Dec 31, 2023                

Total Risk Based Capital Ratio

      16.5 %      14.9 %      14.2 %      13.3 %      13.2 %     

Tier 1 Risk Based Capital Ratio

      15.0 %      13.4 %      12.6 %      11.7 %      11.6 %     

Tier 1 Leverage Ratio

      12.3 %      11.4 %      11.1 %      10.1 %      10.3 %     

Common Equity Tier 1 Capital Ratio

      14.1 %      12.5 %      11.8 %      10.9 %      10.8 %     

 

1 

Tangible Common Equity (“TCE”) is a non-GAAP measure. The Company believes TCE is a more meaningful measure to investors of the net asset value of the Company. For corresponding reconciliation of TCE to a GAAP financial measure see Reconciliation of GAAP to non-GAAP Data schedule

2 

Based on the final rule published September 30, 2020. Capital ratios reflect the impact of CECL reserves on regulatory capital with transition impacts

Note: See Glossary of Financial Terms for definitions of financial terms

DISCOVER FINANCIAL SERVICES

AVERAGE BALANCE SHEET

(unaudited, in millions)

 

    Quarter Ended     Dec 31, 2024 vs.  
    Dec 31, 2024     Sep 30, 2024     Jun 30, 2024     Mar 31, 2024     Dec 31, 2023     Dec 31, 2023  

AVERAGE BALANCES

              

Assets

              

Cash and Investment Securities

   $ 29,724     $ 24,023     $ 24,193     $ 25,662     $ 22,448     $ 7,276       32 % 

Restricted Cash

     399       641       590       558       104       295       NM  

Credit Card Loans

     101,059       100,290       99,584       100,310       99,610       1,449       1 % 

Private Student Loans 1

     1,458       9,631       10,304       10,577       10,369       (8,911 )      (86 %) 

Personal Loans

     10,421       10,428       10,266       10,004       9,754       667       7 % 

Other Loans

     7,826       7,358       6,829       6,235       5,654       2,172       38 % 
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Total Loans

     120,764       127,707       126,983       127,126       125,387       (4,623 )      (4 %) 
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Total Interest Earning Assets

     150,887       152,371       151,766       153,346       147,939       2,948       2 % 

Allowance for Credit Losses

     (8,510 )      (8,480 )      (9,245 )      (9,279 )      (8,668 )      158       2 % 

Other Assets

     7,401       7,756       7,953       7,709       7,462       (61 )      (1 %) 
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Total Assets

   $ 149,778     $ 151,647     $ 150,474     $ 151,776     $ 146,733     $ 3,045       2 % 
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Liabilities and Stockholders’ Equity

              

Non-Interest-bearing Direct to Consumer Deposits 2

   $ 1,103     $ 1,063     $ 1,071     $ 1,037     $ 987     $ 116       12 % 

Certificates of Deposits 2

     29,634       27,839       25,906       25,625       22,496       7,138       32 % 

Savings, Money Market, and Other Deposits 2

     59,571       59,258       59,973       59,212       58,766       805       1 % 
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Interest-bearing Direct to Consumer Deposits 2

     89,205       87,097       85,879       84,837       81,262       7,943       10 % 

Brokered Deposits and Other Deposits

     17,515       20,189       21,631       23,792       23,271       (5,756 )      (25 %) 
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Total Interest-bearing Deposits

     106,720       107,286       107,510       108,629       104,533       2,187       2 % 

Securitized Borrowings 3

     8,852       9,971       10,432       11,340       11,045       (2,193 )      (20 %) 

Other Borrowings 3

     8,098       9,416       9,521       9,572       9,228       (1,130 )      (12 %) 
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Total Interest-bearing Liabilities

     123,670       126,673       127,463       129,541       124,806       (1,136 )      (1 %) 

Other Liabilities & Stockholders’ Equity

     25,005       23,911       21,940       21,198       20,940       4,065       19 % 
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Total Liabilities and Stockholders’ Equity

   $ 149,778     $ 151,647     $ 150,474     $ 151,776     $ 146,733     $ 3,045       2 % 
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

AVERAGE YIELD

              

Assets

              

Cash and Investment Securities

     4.24 %      4.46 %      4.51 %      4.51 %      4.36 %      (12 ) bps   

Restricted Cash

     5.69 %      5.73 %      8.33 %      7.03 %      16.71 %      (1,102 ) bps   

Credit Card Loans

     16.22 %      16.23 %      15.99 %      15.79 %      15.63 %      59   bps   

Private Student Loans 1

     9.85 %      10.08 %      9.97 %      10.04 %      10.16 %      (31 ) bps   

Personal Loans

     13.84 %      13.72 %      13.60 %      13.40 %      13.20 %      64   bps   

Other Loans

     7.50 %      7.45 %      7.45 %      7.39 %      7.14 %      36   bps   

Total Loans

     15.37 %      15.06 %      14.85 %      14.71 %      14.61 %      76   bps   

Total Interest Earning Assets

     13.15 %      13.35 %      13.18 %      12.98 %      13.05 %      10   bps   

AVERAGE RATES

              

Liabilities and Stockholders’ Equity

              

Certificates of Deposits 2

     4.61 %      4.67 %      4.62 %      4.53 %      4.24 %      37   bps   

Savings, Money Market, and Other Deposits 2

     3.99 %      4.27 %      4.29 %      4.35 %      4.39 %      (40 ) bps   

Interest-bearing Direct to Consumer Deposits 2

     4.19 %      4.40 %      4.39 %      4.41 %      4.35 %      (16 ) bps   

Brokered Deposits and Other Deposits

     4.76 %      4.95 %      4.85 %      4.75 %      4.64 %      12   bps   

Total Interest-bearing Deposits

     4.29 %      4.50 %      4.48 %      4.48 %      4.41 %      (12 ) bps   

Securitized Borrowings 3

     4.60 %      4.81 %      4.89 %      4.71 %      4.68 %      (8 ) bps   

Other Borrowings 3

     5.24 %      5.23 %      5.12 %      4.94 %      4.55 %      69   bps   

Total Interest-bearing Liabilities

     4.37 %      4.58 %      4.56 %      4.54 %      4.45 %      (8 ) bps   

Net Interest Margin

     11.96 %      11.38 %      11.17 %      11.03 %      10.98 %      98   bps   

Net Yield on Interest-earning Assets

     9.57 %      9.54 %      9.34 %      9.15 %      9.30 %      27   bps   

 

1 

Private student loans were classified as held-for-sale effective June 30, 2024, and subsequently completed the sale during the fourth quarter of 2024

2 

Includes Affinity relationships

3 

Includes short-term and long-term borrowings

Note: See Glossary of Financial Terms for definitions of financial terms

DISCOVER FINANCIAL SERVICES

LOAN STATISTICS

(unaudited, in millions)

 

    Quarter Ended                 Twelve Months Ended              
    Dec 31,
2024		     Sep 30,
2024		     Jun 30,
2024		     Mar 31,
2024		     Dec 31,
2023		     Dec 31, 2024 vs.
Dec 31, 2023		     Dec 31, 2024     Dec 31, 2023     2024 vs. 2023  

TOTAL LOAN RECEIVABLES

                      

Ending Loans 1

   $ 121,118     $ 126,993     $ 127,649     $ 126,555     $ 128,409     ($ 7,291 )      (6 %)    $ 121,118     $ 128,409     ($ 7,291 )      (6 %) 

Average Loans 1

   $ 120,764     $ 127,707     $ 126,983     $ 127,126     $ 125,387     ($ 4,623 )      (4 %)    $ 125,638     $ 118,311     $ 7,327       6 % 

Interest Yield 1

     15.37 %      15.06 %      14.85 %      14.71 %      14.61 %      76   bps        14.99 %      14.33 %      66   bps   

Gross Principal Charge-off Rate 2

     5.77 %      5.91 %      5.77 %      5.74 %      4.82 %      95   bps        5.80 %      4.17 %      163   bps   

Net Principal Charge-off Rate 2

     4.64 %      4.86 %      4.83 %      4.92 %      4.11 %      53   bps        4.81 %      3.42 %      139   bps   

Delinquency Rate (30 or more days) 2

     3.48 %      3.46 %      3.33 %      3.38 %      3.45 %      3   bps        3.48 %      3.45 %      3   bps   

Delinquency Rate (90 or more days) 2

     1.71 %      1.65 %      1.62 %      1.64 %      1.59 %      12   bps        1.71 %      1.59 %      12   bps   

Gross Principal Charge-off Dollars 2

   $ 1,730     $ 1,756     $ 1,820     $ 1,812     $ 1,521     $ 209       14 %    $ 7,118     $ 4,927     $ 2,191       44 % 

Net Principal Charge-off Dollars 2

   $ 1,391     $ 1,442     $ 1,522     $ 1,556     $ 1,298     $ 93       7 %    $ 5,911     $ 4,042     $ 1,869       46 % 

Net Interest and Fee Charge-off Dollars 2

   $ 334     $ 335     $ 344     $ 348     $ 279     $ 55       20 %    $ 1,361     $ 873     $ 488       56 % 

Loans Delinquent 30 or more days 2

   $ 4,216     $ 4,105     $ 3,917     $ 4,282     $ 4,427     ($ 211 )      (5 %)    $ 4,216     $ 4,427     ($ 211 )      (5 %) 

Loans Delinquent 90 or more days 2

   $ 2,071     $ 1,960     $ 1,903     $ 2,079     $ 2,045     $ 26       1 %    $ 2,071     $ 2,045     $ 26       1 % 

Allowance for Credit Losses (period end)

   $ 8,323     $ 8,512     $ 8,481     $ 9,258     $ 9,283     ($ 960 )      (10 %)    $ 8,323     $ 9,283     ($ 960 )      (10 %) 

Reserve Change Build/ (Release) 3, 4

   ($ 189 )    $ 31     ($ 777 )    ($ 25 )    $ 618     ($ 807 )      ($ 960 )    $ 1,977     ($ 2,937 )   

Reserve Rate 2

     6.87 %      7.18 %      7.22 %      7.32 %      7.23 %      (36 ) bps        6.87 %      7.23 %      (36 ) bps   

CREDIT CARD LOANS

                      

Ending Loans

   $ 102,786     $ 100,489     $ 100,066     $ 99,475     $ 102,259     $ 527       1 %    $ 102,786     $ 102,259     $ 527       1 % 

Average Loans

   $ 101,059     $ 100,290     $ 99,584     $ 100,310     $ 99,610     $ 1,449       1 %    $ 100,313     $ 94,205     $ 6,108       6 % 

Interest Yield

     16.22 %      16.23 %      15.99 %      15.79 %      15.63 %      59   bps        16.06 %      15.33 %      73   bps   

Gross Principal Charge-off Rate

     6.28 %      6.46 %      6.66 %      6.61 %      5.50 %      78   bps        6.50 %      4.76 %      174   bps   

Net Principal Charge-off Rate

     5.03 %      5.28 %      5.55 %      5.66 %      4.68 %      35   bps        5.38 %      3.90 %      148   bps   

Delinquency Rate (30 or more days)

     3.84 %      3.84 %      3.69 %      3.83 %      3.87 %      (3 ) bps        3.84 %      3.87 %      (3 ) bps   

Delinquency Rate (90 or more days)

     1.93 %      1.87 %      1.83 %      1.95 %      1.87 %      6   bps        1.93 %      1.87 %      6   bps   

Gross Principal Charge-off Dollars

   $ 1,596     $ 1,629     $ 1,648     $ 1,649     $ 1,380     $ 216       16 %    $ 6,522     $ 4,481     $ 2,041       46 % 

Net Principal Charge-off Dollars

   $ 1,278     $ 1,332     $ 1,373     $ 1,411     $ 1,175     $ 103       9 %    $ 5,394     $ 3,674     $ 1,720       47 % 

Loans Delinquent 30 or more days

   $ 3,944     $ 3,857     $ 3,697     $ 3,810     $ 3,955     ($ 11 )      —  %    $ 3,944     $ 3,955     ($ 11 )      —  % 

Loans Delinquent 90 or more days

   $ 1,980     $ 1,883     $ 1,834     $ 1,941     $ 1,917     $ 63       3 %    $ 1,980     $ 1,917     $ 63       3 % 

Allowance for Credit Losses (period end)

   $ 7,403     $ 7,586     $ 7,591     $ 7,541     $ 7,619     ($ 216 )      (3 %)    $ 7,403     $ 7,619     ($ 216 )      (3 %) 

Reserve Change Build/ (Release) 4

   ($ 183 )    ($ 5 )    $ 50     ($ 78 )    $ 549     ($ 732 )      ($ 216 )    $ 1,802     ($ 2,018 )   

Reserve Rate

     7.20 %      7.55 %      7.59 %      7.58 %      7.45 %      (25 ) bps        7.20 %      7.45 %      (25 ) bps   

Total Discover Card Volume

   $ 58,306     $ 56,593     $ 56,441     $ 53,239     $ 60,917     ($ 2,611 )      (4 %)    $ 224,579     $ 232,785     ($ 8,206 )      (4 %) 

Discover Card Sales Volume

   $ 55,252     $ 53,380     $ 53,482     $ 50,137     $ 57,145     ($ 1,893 )      (3 %)    $ 212,251     $ 217,914     ($ 5,663 )      (3 %) 

Rewards Rate

     1.35 %      1.44 %      1.32 %      1.39 %      1.37 %      (2 ) bps        1.38 %      1.40 %      (2 ) bps   

 

1 

Total Loans includes private student loans, home equity and other loans

2 

Excludes loans classified as held-for-sale as of June 30, 2024

3 

Includes the adjustment to eliminate the allowance for credit losses upon classifying the private student loan portfolio as held-for-sale as of June 30, 2024

4 

Excludes any build/release of the liability for expected credit losses on unfunded commitments as the offset is recorded in accrued expenses and other liabilities in the Company’s condensed consolidated statements of financial condition

Note: See Glossary of Financial Terms for definitions of financial terms

DISCOVER FINANCIAL SERVICES

LOAN STATISTICS

(unaudited, in millions)

 

    Quarter Ended                 Twelve Months Ended              
    Dec 31,
2024		     Sep 30,
2024		     Jun 30,
2024		     Mar 31,
2024		     Dec 31,
2023		     Dec 31, 2024 vs.
Dec 31, 2023		     Dec 31,
2024		     Dec 31,
2023		     2024 vs. 2023  

PRIVATE STUDENT LOANS 1

                      

Organic Student Loans

   $ —      $ 8,101     $ 9,740     $ 10,050     $ 9,894     ($ 9,894 )      (100 %)    $ —      $ 9,894     ($ 9,894 )      (100 %) 

Purchased Student Loans

     —        383       405       430       458       (458 )      (100 %)      —        458       (458 )      (100 %) 
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

      

 

 

    

 

 

    

 

 

    

Total Private Student Loans

   $ —      $ 8,484     $ 10,145     $ 10,480     $ 10,352     ($ 10,352 )      (100 %)    $ —      $ 10,352     ($ 10,352 )      (100 %) 

Interest Yield

     9.85 %      10.08 %      9.97 %      10.04 %      10.16 %      (31 ) bps        10.02 %      9.95 %      7   bps   

Net Principal Charge-off Rate 2

     N/A       N/A       1.85 %      1.58 %      1.52 %      NM         1.72 %      1.29 %      43   bps   

Delinquency Rate (30 or more days) 2

     N/A       N/A       N/A       2.59 %      2.62 %      NM         N/A       2.62 %      NM    

Reserve Rate 3

     N/A       N/A       N/A       8.29 %      8.29 %      NM         N/A       8.29 %      NM    

PERSONAL LOANS

                      

Ending Loans

   $ 10,314     $ 10,438     $ 10,321     $ 10,107     $ 9,852     $ 462       5 %    $ 10,314     $ 9,852     $ 462       5 % 

Interest Yield

     13.84 %      13.72 %      13.60 %      13.40 %      13.20 %      64   bps        13.64 %      12.83 %      81   bps   

Net Principal Charge-off Rate

     4.24 %      4.01 %      3.98 %      4.02 %      3.39 %      85   bps        4.06 %      2.60 %      146   bps   

Delinquency Rate (30 or more days)

     1.69 %      1.66 %      1.54 %      1.46 %      1.45 %      24   bps        1.69 %      1.45 %      24   bps   

Reserve Rate

     7.56 %      7.65 %      7.68 %      7.48 %      7.33 %      23   bps        7.56 %      7.33 %      23   bps   

 

1 

Private student loans were classified as held-for-sale effective June 30, 2024, and subsequently completed the sale during the fourth quarter of 2024

2 

Excludes loans classified as held-for-sale as of June 30, 2024

3 

The allowance for credit losses was reversed upon classifying the private student loan portfolio as held-for-sale

Note: See Glossary of Financial Terms for definitions of financial terms

DISCOVER FINANCIAL SERVICES

SEGMENT RESULTS AND VOLUME STATISTICS

(unaudited, in millions)

 

     Quarter Ended     Dec 31, 2024 vs.     Twelve Months Ended              
     Dec 31, 2024     Sep 30, 2024     Jun 30, 2024     Mar 31, 2024     Dec 31, 2023     Dec 31, 2023     Dec 31, 2024     Dec 31, 2023     2024 vs. 2023  

DIGITAL BANKING

                       

Interest Income

    $ 4,989     $ 5,112     $ 4,971     $ 4,948     $ 4,868     $ 121       2 %    $ 20,020     $ 17,845     $ 2,175       12 % 

Interest Expense

      1,359       1,457       1,447       1,461       1,400       (41 )      (3 %)      5,724       4,746       978       21 % 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

      

 

 

    

 

 

    

 

 

    

Net Interest Income

      3,630       3,655       3,524       3,487       3,468       162       5 %      14,296       13,099       1,197       9 % 

Non-Interest Income

      1,001       669       691       541       595       406       68 %      2,902       2,245       657       29 % 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

      

 

 

    

 

 

    

 

 

    

Revenue Net of Interest Expense

      4,631       4,324       4,215       4,028       4,063       568       14 %      17,198       15,344       1,854       12 % 

Provision for Credit Losses

      1,202       1,473       739       1,497       1,909       (707 )      (37 %)      4,911       6,018       (1,107 )      (18 %) 

Total Operating Expense

      1,801       1,743       1,692       1,494       1,725       76       4 %      6,730       5,945       785       13 % 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

      

 

 

    

 

 

    

 

 

    

Income/ (Loss) Before Income Taxes

    $ 1,628     $ 1,108     $ 1,784     $ 1,037     $ 429     $ 1,199       279 %    $ 5,557     $ 3,381     $ 2,176       64 % 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

      

 

 

    

 

 

    

 

 

    

Net Interest Margin

      11.96 %      11.38 %      11.17 %      11.03 %      10.98 %      98   bps        11.38 %      11.07 %      31   bps   

Pretax Return on Loan Receivables

      5.36 %      3.45 %      5.65 %      3.28 %      1.35 %      401   bps        4.42 %      2.86 %      156   bps   

Allowance for Credit Losses (period end)

    $ 8,323     $ 8,512     $ 8,481     $ 9,258     $ 9,283     ($ 960 )      (10 %)    $ 8,323     $ 9,283     ($ 960 )      (10 %) 

Reserve Change Build/ (Release)

    ($ 189 )    $ 31     ($ 777 )    ($ 25 )    $ 618     ($ 807 )      ($ 960 )    $ 1,977     ($ 2,937 )   

PAYMENT SERVICES

                       

Interest Income

    $ —      $ —      $ —      $ —      $ —      $ —        —  %    $ —      $ —      $ —        —  % 

Interest Expense

      —        —        —       —        —        —       —  %      —       —        —        —  % 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

      

 

 

    

 

 

    

 

 

    

Net Interest Income

      —        —        —        —        —        —        —  %      —        —        —        —  % 

Non-Interest Income (Loss)

      128       129       323       132       117       11       9 %      712       450       262       58 % 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

      

 

 

    

 

 

    

 

 

    

Revenue Net of Interest Expense

      128       129       323       132       117       11       9 %      712       450       262       58 % 

Provision for Credit Losses

      —        —        —        —        —        —        —   %      —        —        —        —  % 

Total Operating Expense

      54       45       46       50       63       (9 )      (14 %)      195       194       1       1 % 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

      

 

 

    

 

 

    

 

 

    

Income/ (Loss) Before Income Taxes

    $ 74     $ 84     $ 277     $ 82     $ 54     $ 20       37 %    $ 517     $ 256     $ 261       102 % 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

      

 

 

    

 

 

    

 

 

    

TRANSACTIONS PROCESSED ON NETWORKS

                       

Discover Network

      977       954       936       883       974       3       —   %      3,750       3,728       22       1 % 

PULSE Network

      2,463       2,421       2,413       2,312       2,308       155       7 %      9,609       7,705       1,904       25 % 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

      

 

 

    

 

 

    

 

 

    

Total

      3,440       3,375       3,349       3,195       3,282       158       5 %      13,359       11,433       1,926       17 % 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

      

 

 

    

 

 

    

 

 

    

NETWORK VOLUME

                       

PULSE Network

    $ 84,900     $ 82,573     $ 81,749     $ 79,073     $ 79,194     $ 5,706       7 %    $ 328,295     $ 285,616     $ 42,679       15 % 

Network Partners

      6,081       7,512       8,111       11,070       8,736       (2,655 )      (30 %)      32,774       39,671       (6,897 )      (17 %) 

Diners Club International 1

      11,435       10,388       9,421       10,181       10,468       967       9 %      41,425       39,299       2,126       5 % 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

      

 

 

    

 

 

    

 

 

    

Total Payment Services

      102,416       100,473       99,281       100,324       98,398       4,018       4 %      402,494       364,586       37,908       10 % 

Discover Network - Proprietary

      57,120       55,184       55,351       51,764       58,419       (1,299 )      (2 )%      219,419       224,572       (5,153 )      (2 )% 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

      

 

 

    

 

 

    

 

 

    

Total

    $ 159,536     $ 155,657     $ 154,632     $ 152,088     $ 156,817     $ 2,719       2 %    $ 621,913     $ 589,158     $ 32,755       6 % 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

      

 

 

    

 

 

    

 

 

    

 

1 

Volume is derived from data provided by licencees for Diners Club branded cards issued outside of North America and is subject to subsequent revision or amendment

Note: See Glossary of Financial Terms for definitions of financial terms

DISCOVER FINANCIAL SERVICES - GLOSSARY OF FINANCIAL TERMS

Balance Sheet & Regulatory Capital Terms

Liquidity Portfolio represents cash and cash equivalents (excluding cash-in-process) and other investments

Regulatory Capital Ratios are preliminary

 

  •  

Total Risk Based Capital Ratio represents total capital divided by risk-weighted assets

 

  •  

Tier 1 Capital Ratio represents tier 1 capital divided by risk-weighted assets

 

  •  

Tier 1 Leverage Ratio represents tier 1 capital divided by average total assets

 

  •  

Common Equity Tier 1 Capital Ratio represents common equity tier 1 capital divided by risk weighted assets

Tangible Assets represents total assets less goodwill and intangibles

Tangible Common Equity (“TCE”), a non-GAAP financial measure, represents total common equity less goodwill and intangibles. The Company believes TCE is a meaningful measure to investors of the net asset value of the Company. For corresponding reconciliation of TCE to a GAAP financial measure, see Reconciliation of GAAP to Non-GAAP Data

Tangible Common Equity/Net Loans, a non-GAAP measure, represents TCE divided by total loans less the allowance for credit losses (period end)

Tangible Common Equity per Share, a non-GAAP measure, represents TCE divided by ending common shares outstanding

Tangible Common Equity/Tangible Assets, a non-GAAP measure, represents TCE divided by total assets less goodwill and intangibles

Undrawn Credit Facilities represents asset-backed conduit funding facilities and Federal Reserve discount window (excluding investments pledged to the Federal Reserve, which are included within the liquidity investment portfolio)

Credit Related Terms

Delinquency Rate (30 or more days) represents loans delinquent thirty days or more divided by ending loans (total or respective product loans, as appropriate)

Delinquency Rate (90 or more days) represents loans delinquent ninety days or more divided by ending loans (total or respective product loans, as appropriate)

Gross Principal Charge-off Rate represents gross principal charge-off dollars (annualized) divided by average loans for the reporting period (total or respective product loans, as appropriate)

Net Principal Charge-off Rate represents net principal charge-off dollars (annualized) divided by average loans for the reporting period (total or respective product loans, as appropriate)

Reserve Rate represents the allowance for credit losses divided by total loans (total or respective product loans, as appropriate)

Earnings and Shareholder Return Terms

Book Value per share represents total equity divided by ending common shares outstanding

Capital Returned to Common Stockholders represents common stock dividends declared and treasury share repurchases, excluding common stock issued under employee benefit plans and stock based compensation

Earnings Per Share represents net income allocated to common stockholders divided by the weighted average common shares outstanding

Interest Yield represents interest income on loan receivables (annualized) divided by average loans for the reporting period (total or respective product loans, as appropriate)

Net Income Allocated to Common Stockholders represents net income less preferred stock dividends and income allocated to participating securities

Net Interest Margin represents net interest income (annualized) divided by average total loans for the period

Net Yield on Interest Earning Assets represents net interest income (annualized) divided by average total interest earning assets for the period

Operating Efficiency represents total operating expense divided by revenue net of interest expense

Pretax Return on Loan Receivables represents income before income taxes (annualized) divided by total average loans for the period

Payout Ratio represents capital returned to common stockholders divided by net income allocated to common stockholders

Return on Common Equity represents net income available for common stockholders (annualized) divided by average total common equity for the reporting period

Return on Equity represents net income (annualized) divided by average total equity for the reporting period

Rewards Rate represents Credit Card rewards cost divided by Discover Card sales volume

Volume Terms

Discover Card Sales Volume represents Discover card activity related to sales net of returns

Discover Card Volume represents Discover card activity related to sales net of returns, balance transfers, cash advances and other activity

Discover Network Proprietary Volume represents gross Discover Card sales volume on the Discover Network

DISCOVER FINANCIAL SERVICES

RECONCILIATION OF GAAP TO NON-GAAP DATA

(unaudited, in millions)

 

     Quarter Ended  
     Dec 31,
2024		     Sep 30,
2024		     Jun 30,
2024		     Mar 31,
2024		     Dec 31,
2023		  

GAAP Total Common Equity

    $ 16,870     $ 16,053     $ 14,954     $ 13,614     $ 13,179  

Less: Goodwill

      (255 )      (255 )      (255 )      (255 )      (255 ) 

Less: Intangibles

      —        —        —        —        —   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Tangible Common Equity 1

    $ 16,615     $ 15,798     $ 14,699     $ 13,359     $ 12,924  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

GAAP Book Value Per Share

    $ 71.32     $ 68.11     $ 63.76     $ 58.54     $ 56.92  

Less: Goodwill

      (1.02 )      (1.02 )      (1.02 )      (1.02 )      (1.03 ) 

Less: Intangibles

      —        —        —        —        —   

Less: Preferred Stock

      (4.20 )      (4.20 )      (4.21 )      (4.21 )      (4.22 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Tangible Common Equity Per Share

    $ 66.10     $ 62.89     $ 58.53     $ 53.31     $ 51.67  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

1 

Tangible Common Equity (“TCE”), a non-GAAP financial measure, represents common equity less goodwill and intangibles. A reconciliation of TCE to common equity, a GAAP financial measure, is shown above. Other financial services companies may also use TCE and definitions may vary, so users of this information are advised to exercise caution in comparing TCE of different companies. TCE is included because management believes that common equity excluding goodwill and intangibles is a more meaningful measure to investors of the true net asset value of the Company

Note: See Glossary of Financial Terms for definitions of financial terms