EX-99.2 3 dfs033125ex992.htm EX-99.2 Document

DISCOVER FINANCIAL SERVICES Exhibit 99.2
EARNINGS SUMMARY
(unaudited, in millions, except per share statistics)
 Quarter Ended
 Mar 31, 2025Dec 31, 2024Sep 30, 2024Jun 30, 2024Mar 31, 2024Mar 31, 2025 vs.
Mar 31, 2024
EARNINGS SUMMARY       
Interest Income$4,801 $4,989 $5,112 $4,971 $4,948 ($147)(3 %)
Interest Expense1,243 1,359 1,457 1,447 1,461 (218)(15 %)
Net Interest Income3,558 3,630 3,655 3,524 3,487 71 2 %
Discount/Interchange Revenue1,037 1,157 1,142 1,153 1,024 13 1 %
Rewards Cost703 758 779 716 703 — — %
Discount and Interchange Revenue, net334 399 363 437 321 13 4 %
Protection Products Revenue42 43 42 42 42 — — %
Loan Fee Income204 200 214 205 200 4 2 %
Transaction Processing Revenue89 83 84 91 87 2 2 %
Other Income24 404 95 239 23 1 4 %
Total Non-Interest Income693 1,129 798 1,014 673 20 3 %
Revenue Net of Interest Expense4,251 4,759 4,453 4,538 4,160 91 2 %
Provision for Credit Losses1,244 1,202 1,473 739 1,497 (253)(17 %)
Employee Compensation and Benefits735 792 703 658 671 64 10 %
Marketing and Business Development246 299 263 258 250 (4)(2 %)
Information Processing & Communications180 208 197 167 163 17 10 %
Professional Fees289 363 323 296 292 (3)(1 %)
Premises and Equipment24 25 25 23 20 4 20 %
Other Expense89 168 277 336 148 (59)(40 %)
Total Operating Expense1,563 1,855 1,788 1,738 1,544 19 1 %
Income/ (Loss) Before Income Taxes1,444 1,702 1,192 2,061 1,119 325 29 %
Tax Expense340 411 322 538 268 72 27 %
Net Income/ (Loss)$1,104 $1,291 $870 $1,523 $851 $253 30 %
Net Income/ (Loss) Allocated to Common Stockholders$1,069 $1,284 $834 $1,515 $813 $256 31 %
Effective Tax Rate23.5 %24.1 %27.0 %26.1 %24.0 %
Net Interest Margin12.18 %11.96 %11.38 %11.17 %11.03 %115 bps
Operating Efficiency36.8 %39.0 %40.1 %38.3 %37.1 %(30)bps
ROE24 %29 %21 %40 %24 %
ROCE25 %31 %21 %43 %24 %
Capital Returned to Common Stockholders$180 $160 $155 $178 $180 $— — %
Payout Ratio17 %12 %19 %12 %22 %
Ending Common Shares Outstanding252 251 251 251 251 1 — %
Weighted Average Common Shares Outstanding252 251 251 251 250 2 1 %
Weighted Average Common Shares Outstanding (fully diluted)252 251 251 251 250 2 1 %
PER SHARE STATISTICS       
Basic EPS$4.25 $5.11 $3.32 $6.04 $3.25 $1.00 31 %
Diluted EPS$4.25 $5.11 $3.32 $6.03 $3.25 $1.00 31 %
Common Dividends Declared Per Share$0.70 $0.70 $0.70 $0.70 $0.70 $— — %
Common Stock Price (period end)$170.70 $173.23 $140.29 $130.81 $131.09 $39.61 30 %
Book Value per share $75.36 $71.32 $68.11 $63.76 $58.54 $16.82 29 %
  Note: See Glossary of Financial Terms for definitions of financial terms


DISCOVER FINANCIAL SERVICES
BALANCE SHEET SUMMARY
(unaudited, in millions)
 Quarter Ended  
 Mar 31, 2025Dec 31, 2024Sep 30, 2024Jun 30, 2024Mar 31, 2024Mar 31, 2025 vs.
Mar 31, 2024
BALANCE SHEET SUMMARY       
Assets       
Cash and Investment Securities$32,338 $28,552 $26,423 $24,405 $27,965 $4,373 16 %
Loans Held-for-Sale— — 8,484 10,145 — — — %
Loan Portfolio117,403 121,118 118,509 117,504 126,555 (9,152)(7 %)
Total Loan Receivables117,403 121,118 126,993 127,649 126,555 (9,152)(7 %)
Allowance for Credit Losses(8,108)(8,323)(8,512)(8,481)(9,258)1,150 12 %
Net Loan Receivables109,295 112,795 118,481 119,168 117,297 (8,002)(7 %)
Premises and Equipment, net1,080 1,072 1,085 1,087 1,107 (27)(2 %)
Goodwill and Intangible Assets, net255 255 255 255 255 — — %
Other Assets4,946 4,966 5,371 5,973 6,083 (1,137)(19 %)
Total Assets$147,914 $147,640 $151,615 $150,888 $152,707 ($4,793)(3 %)
Liabilities & Stockholders' Equity       
           Certificates of Deposits 1
28,800 29,296 30,296 25,881 25,921 2,879 11 %
           Savings, Money Market, and Other Deposits 1, 2
63,593 61,316 60,013 61,414 61,412 2,181 4 %
Total Direct to Consumer Deposits 1, 2
92,393 90,612 90,309 87,295 87,333 5,060 6 %
Brokered Deposits and Other Deposits15,827 16,397 19,543 21,055 23,097 (7,270)(31 %)
Deposits108,220 107,009 109,852 108,350 110,430 (2,210)(2 %)
   Securitized Borrowings 3
7,237 8,475 9,307 9,608 10,933 (3,696)(34 %)
   Other Borrowings 3
7,301 7,778 8,870 9,533 9,542 (2,241)(23 %)
Borrowings14,538 16,253 18,177 19,141 20,475 (5,937)(29 %)
Accrued Expenses and Other Liabilities6,193 6,452 6,477 7,387 7,132 (939)(13 %)
Total Liabilities128,951 129,714 134,506 134,878 138,037 (9,086)(7 %)
Total Equity18,963 17,926 17,109 16,010 14,670 4,293 29 %
Total Liabilities and Stockholders' Equity$147,914 $147,640 $151,615 $150,888 $152,707 ($4,793)(3 %)
LIQUIDITY       
Liquidity Portfolio$30,248 $27,325 $24,804 $22,371 $25,739 $4,509 18 %
Private Asset-backed Securitization Capacity3,500 3,500 2,750 3,500 3,500 — — %
Federal Home Loan Bank Borrowing Capacity4,870 4,679 3,853 3,383 3,087 1,783 58 %
Federal Reserve Discount Window 4
46,001 46,489 46,118 39,569 41,710 4,291 10 %
Undrawn Credit Facilities 4
54,371 54,668 52,721 46,452 48,297 6,074 13 %
Total Liquidity$84,619 $81,993$77,525$68,823$74,036$10,58314 %
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  
 Mar 31, 2025Dec 31, 2024Sep 30, 2024Jun 30, 2024Mar 31, 2024Mar 31, 2025 vs.
Mar 31, 2024
BALANCE SHEET STATISTICS       
Total Common Equity$17,907 $16,870 $16,053 $14,954 $13,614 $4,293 32 %
Total Common Equity/Total Assets12.1 %11.4 %10.6 %9.9 %8.9 %
Total Common Equity/Net Loans16.4 %15.0 %13.5 %12.5 %11.6 %
Tangible Assets$147,659 $147,385 $151,360 $150,633 $152,452 ($4,793)(3 %)
Tangible Common Equity  1
$17,652 $16,615 $15,798 $14,699 $13,359 $4,293 32 %
Tangible Common Equity/Tangible Assets  1
12.0 %11.3 %10.4 %9.8 %8.8 %
Tangible Common Equity/Net Loans  1
16.2 %14.7 %13.3 %12.3 %11.4 %
Tangible Common Equity per share  1
$70.14 $66.10 $62.89 $58.53 $53.31 $16.83 32 %
Basel III
Quarter Ended
REGULATORY CAPITAL RATIOS 2
Mar 31, 2025Dec 31, 2024Sep 30, 2024Jun 30, 2024Mar 31, 2024  
Total Risk Based Capital Ratio17.1 %16.5 %14.9 %14.2 %13.3 %  
Tier 1 Risk Based Capital Ratio15.6 %15.0 %13.4 %12.6 %11.7 %  
Tier 1 Leverage Ratio 12.8 %12.3 %11.4 %11.1 %10.1 %  
Common Equity Tier 1 Capital Ratio 14.7 %14.1 %12.5 %11.8 %10.9 %
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  
 Mar 31, 2025Dec 31, 2024Sep 30, 2024Jun 30, 2024Mar 31, 2024Mar 31, 2025 vs.
Mar 31, 2024
AVERAGE BALANCES       
Assets       
Cash and Investment Securities$29,641 $29,724 $24,023 $24,193 $25,662 $3,979 16 %
Restricted Cash951 399 641 590 558 393 70 %
Credit Card Loans100,088 101,059 100,290 99,584 100,310 (222)— %
Private Student Loans 1
— 1,458 9,631 10,304 10,577 (10,577)(100 %)
Personal Loans10,237 10,421 10,428 10,266 10,004 233 2 %
Other Loans8,170 7,826 7,358 6,829 6,235 1,935 31 %
Total Loans118,495 120,764 127,707 126,983 127,126 (8,631)(7 %)
Total Interest Earning Assets149,087 150,887 152,371 151,766 153,346 (4,259)(3 %)
Allowance for Credit Losses(8,321)(8,510)(8,480)(9,245)(9,279)958 10 %
Other Assets7,279 7,401 7,756 7,953 7,709 (430)(6 %)
Total Assets$148,045 $149,778 $151,647 $150,474 $151,776 ($3,731)(2 %)
Liabilities and Stockholders' Equity       
Non-Interest-bearing Direct to Consumer Deposits 2
$1,161 $1,103 $1,063 $1,071 $1,037 $124 12 %
                       Certificates of Deposits 2
28,859 29,634 27,839 25,906 25,625 3,234 13 %
                       Savings, Money Market, and Other Deposits 2
60,924 59,571 59,258 59,973 59,212 1,712 3 %
Interest-bearing Direct to Consumer Deposits 2
89,783 89,205 87,097 85,879 84,837 4,946 6 %
Brokered Deposits and Other Deposits15,944 17,515 20,189 21,631 23,792 (7,848)(33 %)
Total Interest-bearing Deposits105,727 106,720 107,286 107,510 108,629 (2,902)(3 %)
Securitized Borrowings 3
7,895 8,852 9,971 10,432 11,340 (3,445)(30 %)
Other Borrowings 3
7,630 8,098 9,416 9,521 9,572 (1,942)(20 %)
Total Interest-bearing Liabilities121,252 123,670 126,673 127,463 129,541 (8,289)(6 %)
Other Liabilities & Stockholders' Equity25,632 25,005 23,911 21,940 21,198 4,434 21 %
Total Liabilities and Stockholders' Equity$148,045 $149,778 $151,647 $150,474 $151,776 ($3,731)(2 %)
AVERAGE YIELD       
Assets       
Cash and Investment Securities4.17 %4.24 %4.46 %4.51 %4.51 %(34)bps
Restricted Cash4.56 %5.69 %5.73 %8.33 %7.03 %(247)bps
Credit Card Loans16.12 %16.22 %16.23 %15.99 %15.79 %33 bps
Private Student Loans 1
— %9.85 %10.08 %9.97 %10.04 %NM
Personal Loans13.95 %13.84 %13.72 %13.60 %13.40 %55 bps
Other Loans7.65 %7.50 %7.45 %7.45 %7.39 %26 bps
Total Loans15.35 %15.37 %15.06 %14.85 %14.71 %64 bps
Total Interest Earning Assets13.06 %13.15 %13.35 %13.18 %12.98 %8 bps
AVERAGE RATES
Liabilities and Stockholders' Equity       
                       Certificates of Deposits 2
4.39 %4.61 %4.67 %4.62 %4.53 %(14)bps
                       Savings, Money Market, and Other Deposits 2
3.76 %3.99 %4.27 %4.29 %4.35 %(59)bps
Interest-bearing Direct to Consumer Deposits 2
3.97 %4.19 %4.40 %4.39 %4.41 %(44)bps
Brokered Deposits and Other Deposits4.59 %4.76 %4.95 %4.85 %4.75 %(16)bps
Total Interest-bearing Deposits4.06 %4.29 %4.50 %4.48 %4.48 %(42)bps
Securitized Borrowings 3
4.40 %4.60 %4.81 %4.89 %4.71 %(31)bps
Other Borrowings 3
5.25 %5.24 %5.23 %5.12 %4.94 %31 bps
Total Interest-bearing Liabilities4.16 %4.37 %4.58 %4.56 %4.54 %(38)bps
Net Interest Margin12.18 %11.96 %11.38 %11.17 %11.03 %115 bps
Net Yield on Interest-earning Assets9.68 %9.57 %9.54 %9.34 %9.15 %53 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  
 Mar 31, 2025Dec 31, 2024Sep 30, 2024Jun 30, 2024Mar 31, 2024Mar 31, 2025 vs.
Mar 31, 2024
TOTAL LOAN RECEIVABLES       
Ending Loans  1
$117,403 $121,118 $126,993 $127,649 $126,555 ($9,152)(7 %)
Average Loans  1
$118,495 $120,764 $127,707 $126,983 $127,126 ($8,631)(7 %)
Interest Yield 1
15.35 %15.37 %15.06 %14.85 %14.71 %64 bps
Gross Principal Charge-off Rate 2
6.31 %5.77 %5.91 %5.77 %5.74 %57 bps
Net Principal Charge-off Rate 2
4.99 %4.64 %4.86 %4.83 %4.92 %7 bps
Delinquency Rate (30 or more days) 2
3.31 %3.48 %3.46 %3.33 %3.38 %(7)bps
Delinquency Rate (90 or more days) 2
1.65 %1.71 %1.65 %1.62 %1.64 %1 bps
Gross Principal Charge-off Dollars 2
$1,844 $1,730 $1,756 $1,820 $1,812 $32 2 %
Net Principal Charge-off Dollars 2
$1,459 $1,391 $1,442 $1,522 $1,556 ($97)(6 %)
Net Interest and Fee Charge-off Dollars 2
$360 $334 $335 $344 $348 $12 3 %
Loans Delinquent 30 or more days 2
$3,892 $4,216 $4,105 $3,917 $4,282 ($390)(9 %)
Loans Delinquent 90 or more days 2
$1,943 $2,071 $1,960 $1,903 $2,079 ($136)(7 %)
Allowance for Credit Losses (period end)$8,108 $8,323 $8,512 $8,481 $9,258 ($1,150)(12 %)
Reserve Change Build/ (Release) 3, 4
($215)($189)$31 ($777)($25)($190)
Reserve Rate 2
6.91 %6.87 %7.18 %7.22 %7.32 %(41)bps
CREDIT CARD LOANS       
Ending Loans$99,027 $102,786 $100,489 $100,066 $99,475 ($448)— %
Average Loans$100,088 $101,059 $100,290 $99,584 $100,310 ($222)— %
Interest Yield16.12 %16.22 %16.23 %15.99 %15.79 %33 bps
Gross Principal Charge-off Rate6.93 %6.28 %6.46 %6.66 %6.61 %32 bps
Net Principal Charge-off Rate5.47 %5.03 %5.28 %5.55 %5.66 %(19)bps
Delinquency Rate (30 or more days) 3.66 %3.84 %3.84 %3.69 %3.83 %(17)bps
Delinquency Rate (90 or more days) 1.87 %1.93 %1.87 %1.83 %1.95 %(8)bps
Gross Principal Charge-off Dollars$1,711 $1,596 $1,629 $1,648 $1,649 $62 4 %
Net Principal Charge-off Dollars$1,349 $1,278 $1,332 $1,373 $1,411 ($62)(4 %)
Loans Delinquent 30 or more days$3,622 $3,944 $3,857 $3,697 $3,810 ($188)(5)%
Loans Delinquent 90 or more days$1,852 $1,980 $1,883 $1,834 $1,941 ($89)(5 %)
Allowance for Credit Losses (period end)$7,186 $7,403 $7,586 $7,591 $7,541 ($355)(5 %)
Reserve Change Build/ (Release) 4
($217)($183)($5)$50 ($78)($139)
Reserve Rate7.26 %7.20 %7.55 %7.59 %7.58 %(32)bps
Total Discover Card Volume$52,410 $58,306 $56,593 $56,441 $53,239 ($829)(2 %)
Discover Card Sales Volume$49,305 $55,252 $53,380 $53,482 $50,137 ($832)(2 %)
Rewards Rate1.40 %1.35 %1.44 %1.32 %1.39 %1 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  
 Mar 31, 2025Dec 31, 2024Sep 30, 2024Jun 30, 2024Mar 31, 2024Mar 31, 2025 vs.
Mar 31, 2024
PRIVATE STUDENT LOANS 1
       
Organic Student Loans$— $— $8,101 $9,740 $10,050 ($10,050)(100 %)
Purchased Student Loans— — 383 405 430 (430)(100 %)
Total Private Student Loans$— $— $8,484 $10,145 $10,480 ($10,480)(100 %)
Interest Yield— %9.85 %10.08 %9.97 %10.04 %NM
Net Principal Charge-off Rate 2
N/AN/AN/A1.85 %1.58 %NM
Delinquency Rate (30 or more days) 2
N/AN/AN/AN/A2.59 %NM
Reserve Rate 3
N/AN/AN/AN/A8.29 %NM
PERSONAL LOANS       
Ending Loans$10,096 $10,314 $10,438 $10,321 $10,107 ($11)— %
Interest Yield13.95 %13.84 %13.72 %13.60 %13.40 %55 bps
Net Principal Charge-off Rate4.21 %4.24 %4.01 %3.98 %4.02 %19 bps
Delinquency Rate (30 or more days)1.68 %1.69 %1.66 %1.54 %1.46 %22 bps
Reserve Rate7.66 %7.56 %7.65 %7.68 %7.48 %18 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  
 Mar 31, 2025Dec 31, 2024Sep 30, 2024Jun 30, 2024Mar 31, 2024Mar 31, 2025 vs.
Mar 31, 2024
DIGITAL BANKING       
Interest Income$4,801 $4,989 $5,112 $4,971 $4,948 ($147)(3 %)
Interest Expense1,243 1,359 1,457 1,447 1,461 (218)(15 %)
Net Interest Income3,558 3,630 3,655 3,524 3,487 71 2 %
Non-Interest Income556 1,001 669 691 541 15 3 %
Revenue Net of Interest Expense4,114 4,631 4,324 4,215 4,028 86 2 %
Provision for Credit Losses1,244 1,202 1,473 739 1,497 (253)(17 %)
Total Operating Expense1,517 1,801 1,743 1,692 1,494 23 2 %
Income/ (Loss) Before Income Taxes$1,353 $1,628 $1,108 $1,784 $1,037 $316 30 %
Net Interest Margin12.18 %11.96 %11.38 %11.17 %11.03 %115 bps
Pretax Return on Loan Receivables4.63 %5.36 %3.45 %5.65 %3.28 %135 bps
Allowance for Credit Losses (period end)$8,108 $8,323 $8,512 $8,481 $9,258 ($1,150)(12 %)
Reserve Change Build/ (Release) ($215)($189)$31 ($777)($25)($190)
PAYMENT SERVICES       
Interest Income$— $— $— $— $— $— — %
Interest Expense— — — — — — — %
Net Interest Income— — — — — — — %
Non-Interest Income (Loss)137 128 129 323 132 5 4 %
Revenue Net of Interest Expense137 128 129 323 132 5 4 %
Provision for Credit Losses— — — — — — — %
Total Operating Expense46 54 45 46 50 (4)(8 %)
Income/ (Loss) Before Income Taxes$91 $74 $84 $277 $82 $9 11 %
TRANSACTIONS PROCESSED ON NETWORKS
Discover Network882 977 954 936 883 (1)— %
PULSE Network2,373 2,463 2,421 2,413 2,312 61 3 %
Total3,255 3,440 3,375 3,349 3,195 60 2 %
NETWORK VOLUME
PULSE Network$81,329 $84,900 $82,573 $81,749 $79,073 $2,256 3 %
Network Partners3,009 6,081 7,512 8,111 11,070 (8,061)(73 %)
Diners Club International 1
12,046 11,435 10,388 9,421 10,181 1,865 18 %
Total Payment Services96,384 102,416 100,473 99,281 100,324 (3,940)(4)%
Discover Network - Proprietary50,990 57,120 55,184 55,351 51,764 (774)(1)%
Total$147,374 $159,536 $155,657 $154,632 $152,088 ($4,714)(3)%
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
 Mar 31, 2025Dec 31, 2024Sep 30, 2024Jun 30, 2024Mar 31, 2024
GAAP Total Common Equity$17,907 $16,870 $16,053 $14,954 $13,614 
Less: Goodwill(255)(255)(255)(255)(255)
Less: Intangibles— — — — — 
Tangible Common Equity 1
$17,652 $16,615 $15,798 $14,699 $13,359 
GAAP Book Value Per Share$75.36 $71.32 $68.11 $63.76 $58.54 
Less: Goodwill(1.02)(1.02)(1.02)(1.02)(1.02)
Less: Intangibles— — — — — 
   Less: Preferred Stock(4.20)(4.20)(4.20)(4.21)(4.21)
Tangible Common Equity Per Share $70.14 $66.10 $62.89 $58.53 $53.31 
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