Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2023 | Oct. 20, 2023 | |
Cover [Abstract] | ||
Document type | 10-Q | |
Document quarterly report | true | |
Document period end date | Sep. 30, 2023 | |
Document transition report | false | |
Entity file number | 001-33378 | |
Entity registrant name | DISCOVER FINANCIAL SERVICES | |
Entity incorporation, state | DE | |
Entity tax identification number | 36-2517428 | |
Entity address, address line one | 2500 Lake Cook Road | |
Entity address, city or town | Riverwoods | |
Entity address, state or province | IL | |
Entity address, postal zip code | 60015 | |
Entity phone number, city area code | 224 | |
Entity phone number, local phone number | 405-0900 | |
Title of 12(b) security | Common Stock, par value $0.01 per share | |
Trading symbol | DFS | |
Security exchange name | NYSE | |
Entity current reporting status | Yes | |
Entity interactive data current | Yes | |
Entity filer category | Large Accelerated Filer | |
Smaller reporting company | false | |
Emerging growth company | false | |
Entity shell company | false | |
Entity common stock, shares outstanding | 250,057,955 | |
Entity central index key | 0001393612 | |
Current fiscal year end date | --12-31 | |
Document fiscal year focus | 2023 | |
Document fiscal period focus | Q3 | |
Amendment flag | false |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Financial Condition - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Assets | ||
Cash and cash equivalents | $ 9,194 | $ 8,856 |
Restricted cash | 39 | 41 |
Investment securities (includes available-for-sale securities of $13,079 and $11,987 reported at fair value with associated amortized cost of $13,447 and $12,167 at September 30, 2023 and December 31, 2022, respectively) | 13,336 | 12,208 |
Loan receivables | ||
Loan receivables | 122,676 | 112,120 |
Allowance for credit losses | (8,665) | (7,374) |
Net loan receivables | 114,011 | 104,746 |
Premises and equipment, net | 1,084 | 1,003 |
Goodwill | 255 | 255 |
Other assets | 5,513 | 4,597 |
Total assets | 143,432 | 131,706 |
Deposits | ||
Interest-bearing deposit accounts | 102,638 | 90,151 |
Non-interest bearing deposit accounts | 1,381 | 1,485 |
Total deposits | 104,019 | 91,636 |
Long-term borrowings | 19,467 | 20,108 |
Accrued expenses and other liabilities | 5,710 | 5,618 |
Total liabilities | 129,196 | 117,362 |
Commitments, contingencies and guarantees (Notes 9, 12 and 13) | ||
Stockholders' Equity | ||
Common stock, par value $0.01 per share; 2,000,000,000 shares authorized; 570,780,616 and 569,689,007 shares issued at September 30, 2023 and December 31, 2022, respectively | 6 | 6 |
Preferred stock, par value $0.01 per share; 200,000,000 shares authorized; 10,700 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively | 1,056 | 1,056 |
Additional paid-in capital | 4,520 | 4,468 |
Retained earnings | 30,236 | 28,207 |
Accumulated other comprehensive loss | (573) | (339) |
Treasury stock, at cost; 320,724,371 and 302,305,216 shares at September 30, 2023 and December 31, 2022, respectively | (21,009) | (19,054) |
Total stockholders' equity | 14,236 | 14,344 |
Total liabilities and stockholders' equity | 143,432 | 131,706 |
Variable Interest Entity, Primary Beneficiary [Member] | ||
Assets | ||
Restricted cash | 39 | 41 |
Loan receivables | ||
Loan receivables | 24,946 | 25,937 |
Allowance for credit losses | (1,129) | (1,152) |
Other assets | 4 | 3 |
Deposits | ||
Long-term borrowings | 10,889 | 10,259 |
Accrued expenses and other liabilities | $ 17 | $ 14 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Financial Condition (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 | |
Statement of Financial Position [Abstract] | |||
Available-for-sale investment securities, fair value | [1] | $ 13,079 | $ 11,987 |
Available-for-sale investment securities, amortized cost | [1] | $ 13,447 | $ 12,167 |
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 | |
Common Stock, Shares Authorized | 2,000,000,000 | 2,000,000,000 | |
Common Stock, Shares, Issued | 570,780,616 | 569,689,007 | |
Preferred stock, par or stated value per Share | $ 0.01 | $ 0.01 | |
Preferred Stock, Shares Authorized | 200,000,000 | 200,000,000 | |
Preferred Stock, Shares Issued | 10,700 | 10,700 | |
Preferred Stock, Shares Outstanding | 10,700 | 10,700 | |
Treasury Stock, Common, Shares | 320,724,371 | 302,305,216 | |
[1]Available-for-sale investment securities are reported at fair value. |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Income - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Interest income | ||||
Credit card loans | $ 3,726 | $ 2,783 | $ 10,513 | $ 7,475 |
Other loans | 653 | 476 | 1,823 | 1,343 |
Investment securities | 120 | 35 | 327 | 104 |
Other interest income | 111 | 63 | 314 | 86 |
Total interest income | 4,610 | 3,357 | 12,977 | 9,008 |
Interest expense | ||||
Deposits | 1,061 | 345 | 2,722 | 658 |
Short-term borrowings | 2 | 1 | 2 | 2 |
Long-term borrowings | 225 | 168 | 622 | 416 |
Total interest expense | 1,288 | 514 | 3,346 | 1,076 |
Net interest income | 3,322 | 2,843 | 9,631 | 7,932 |
Provision for credit losses | 1,702 | 773 | 4,109 | 1,476 |
Net interest income after provision for credit losses | 1,620 | 2,070 | 5,522 | 6,456 |
Other income | ||||
Discount and interchange revenue, net | 377 | 335 | 1,077 | 1,023 |
Protection products revenue | 42 | 42 | 129 | 128 |
Loan fee income | 194 | 168 | 546 | 450 |
Transaction processing revenue | 82 | 65 | 221 | 183 |
Gains (losses) on equity investments | 6 | (4) | (11) | (208) |
Other income | 21 | 19 | 71 | 64 |
Total other income | 722 | 625 | 2,033 | 1,640 |
Other expense | ||||
Employee compensation and benefits | 575 | 551 | 1,788 | 1,566 |
Marketing and business development | 283 | 276 | 792 | 722 |
Information processing and communications | 149 | 124 | 438 | 370 |
Professional fees | 281 | 241 | 729 | 607 |
Premises and equipment | 22 | 22 | 64 | 70 |
Other expense | 144 | 154 | 430 | 386 |
Total other expense | 1,454 | 1,368 | 4,241 | 3,721 |
Income before income taxes | 888 | 1,327 | 3,314 | 4,375 |
Income tax expense | 205 | 314 | 762 | 1,026 |
Net income | 683 | 1,013 | 2,552 | 3,349 |
Net income allocated to common stockholders | $ 647 | $ 975 | $ 2,473 | $ 3,267 |
Basic earnings per common share | $ 2.59 | $ 3.57 | $ 9.70 | $ 11.70 |
Diluted earnings per common share | $ 2.59 | $ 3.56 | $ 9.69 | $ 11.69 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 683 | $ 1,013 | $ 2,552 | $ 3,349 |
Other comprehensive loss, net of tax | ||||
Unrealized losses on available-for-sale investment securities, net of tax | (83) | (100) | (142) | (262) |
Unrealized (losses) gains on cash flow hedges, net of tax | (20) | (2) | (92) | 3 |
Other comprehensive loss | (103) | (102) | (234) | (259) |
Comprehensive income | $ 580 | $ 911 | $ 2,318 | $ 3,090 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Millions | Total | Cumulative Effect, Period of Adoption, Adjustment | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Retained Earnings [Member] Cumulative Effect, Period of Adoption, Adjustment | Accumulated Other Comprehensive (Loss) Income [Member] | Treasury Stock, Common | Series C Preferred Stock [Member] | Series C Preferred Stock [Member] Retained Earnings [Member] | Series D Preferred Stock | Series D Preferred Stock Retained Earnings [Member] |
Preferred stock, shares outstanding, balance at beginning of period (in shares) at Dec. 31, 2021 | 11,000 | ||||||||||||
Common stock, shares outstanding, balance at beginning of period (in shares) at Dec. 31, 2021 | 568,831,000 | ||||||||||||
Stockholders' equity, balance at beginning of period at Dec. 31, 2021 | $ 13,180 | $ 1,056 | $ 6 | $ 4,369 | $ 24,538 | $ (94) | $ (16,695) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||
Net income | 3,349 | 3,349 | |||||||||||
Other comprehensive loss | (259) | (259) | |||||||||||
Purchases of treasury stock | (1,757) | (1,757) | |||||||||||
Common stock issued under employee benefit plans (in shares) | 80,000 | ||||||||||||
Common stock issued under employee benefit plans | 7 | $ 0 | 7 | ||||||||||
Shares Issued, Shares, Share-based Payment Arrangement, after Forfeiture | 726,000 | ||||||||||||
Common stock issued and stock-based compensation expense | 68 | $ 0 | 68 | ||||||||||
Dividends — common stock | (478) | (478) | |||||||||||
Dividends — preferred stock | $ (31) | $ (31) | $ (31) | $ (31) | |||||||||
Preferred stock, shares outstanding, balance at end of period (in shares) at Sep. 30, 2022 | 11,000 | ||||||||||||
Common stock, shares outstanding, balance at end of period (in shares) at Sep. 30, 2022 | 569,637,000 | ||||||||||||
Stockholders' equity, balance at end of period at Sep. 30, 2022 | 14,048 | $ 1,056 | $ 6 | 4,444 | 27,347 | (353) | (18,452) | ||||||
Preferred stock, shares outstanding, balance at beginning of period (in shares) at Jun. 30, 2022 | 11,000 | ||||||||||||
Common stock, shares outstanding, balance at beginning of period (in shares) at Jun. 30, 2022 | 569,564,000 | ||||||||||||
Stockholders' equity, balance at beginning of period at Jun. 30, 2022 | 13,519 | $ 1,056 | $ 6 | 4,417 | 26,531 | (251) | (18,240) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||
Net income | 1,013 | 1,013 | |||||||||||
Other comprehensive loss | (102) | (102) | |||||||||||
Purchases of treasury stock | (212) | (212) | |||||||||||
Common stock issued under employee benefit plans (in shares) | 31,000 | ||||||||||||
Common stock issued under employee benefit plans | 2 | $ 0 | 2 | ||||||||||
Shares Issued, Shares, Share-based Payment Arrangement, after Forfeiture | 42,000 | ||||||||||||
Common stock issued and stock-based compensation expense | 25 | $ 0 | 25 | ||||||||||
Dividends — common stock | (166) | (166) | |||||||||||
Dividends — preferred stock | (15) | (15) | (16) | (16) | |||||||||
Preferred stock, shares outstanding, balance at end of period (in shares) at Sep. 30, 2022 | 11,000 | ||||||||||||
Common stock, shares outstanding, balance at end of period (in shares) at Sep. 30, 2022 | 569,637,000 | ||||||||||||
Stockholders' equity, balance at end of period at Sep. 30, 2022 | $ 14,048 | $ 1,056 | $ 6 | 4,444 | 27,347 | (353) | (18,452) | ||||||
Preferred stock, shares outstanding, balance at beginning of period (in shares) at Dec. 31, 2022 | 10,700 | 11,000 | |||||||||||
Common stock, shares outstanding, balance at beginning of period (in shares) at Dec. 31, 2022 | 569,689,000 | ||||||||||||
Stockholders' equity, balance at beginning of period at Dec. 31, 2022 | $ 14,344 | $ 1,056 | $ 6 | 4,468 | 28,207 | (339) | (19,054) | ||||||
Stockholders' equity, balance at beginning of period (Accounting Standards Update 2022-02) at Dec. 31, 2022 | $ 52 | $ 52 | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||
Net income | 2,552 | 2,552 | |||||||||||
Other comprehensive loss | (234) | (234) | |||||||||||
Purchases of treasury stock | (1,955) | (1,955) | |||||||||||
Common stock issued under employee benefit plans (in shares) | 90,000 | ||||||||||||
Common stock issued under employee benefit plans | 9 | $ 0 | 9 | ||||||||||
Shares Issued, Shares, Share-based Payment Arrangement, after Forfeiture | 1,002,000 | ||||||||||||
Common stock issued and stock-based compensation expense | 43 | $ 0 | 43 | ||||||||||
Dividends — common stock | $ (513) | (513) | |||||||||||
Dividends — preferred stock | (31) | (31) | (31) | (31) | |||||||||
Preferred stock, shares outstanding, balance at end of period (in shares) at Sep. 30, 2023 | 10,700 | 11,000 | |||||||||||
Common stock, shares outstanding, balance at end of period (in shares) at Sep. 30, 2023 | 570,781,000 | ||||||||||||
Stockholders' equity, balance at end of period at Sep. 30, 2023 | $ 14,236 | $ 1,056 | $ 6 | 4,520 | 30,236 | (573) | (21,009) | ||||||
Preferred stock, shares outstanding, balance at beginning of period (in shares) at Jun. 30, 2023 | 11,000 | ||||||||||||
Common stock, shares outstanding, balance at beginning of period (in shares) at Jun. 30, 2023 | 570,628,000 | ||||||||||||
Stockholders' equity, balance at beginning of period at Jun. 30, 2023 | 13,856 | $ 1,056 | $ 6 | 4,508 | 29,761 | (470) | (21,005) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||
Net income | 683 | 683 | |||||||||||
Other comprehensive loss | (103) | (103) | |||||||||||
Purchases of treasury stock | (4) | (4) | |||||||||||
Common stock issued under employee benefit plans (in shares) | 32,000 | ||||||||||||
Common stock issued under employee benefit plans | 3 | $ 0 | 3 | ||||||||||
Shares Issued, Shares, Share-based Payment Arrangement, after Forfeiture | 121,000 | ||||||||||||
Common stock issued and stock-based compensation expense | 9 | $ 0 | 9 | ||||||||||
Dividends — common stock | $ (177) | (177) | |||||||||||
Dividends — preferred stock | $ (15) | $ (15) | $ (16) | $ (16) | |||||||||
Preferred stock, shares outstanding, balance at end of period (in shares) at Sep. 30, 2023 | 10,700 | 11,000 | |||||||||||
Common stock, shares outstanding, balance at end of period (in shares) at Sep. 30, 2023 | 570,781,000 | ||||||||||||
Stockholders' equity, balance at end of period at Sep. 30, 2023 | $ 14,236 | $ 1,056 | $ 6 | $ 4,520 | $ 30,236 | $ (573) | $ (21,009) |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Dividends declared, common stock (dollars per share) | $ 0.70 | $ 0.60 | $ 2 | $ 1.70 |
Series C Preferred Stock [Member] | ||||
Dividends declared, preferred stock (dollars per share) | 2,750 | 2,750 | 5,500 | 5,500 |
Series D Preferred Stock | ||||
Dividends declared, preferred stock (dollars per share) | $ 3,062.5 | $ 3,062.5 | $ 6,125 | $ 6,125 |
Condensed Consolidated Statem_7
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows provided by operating activities | ||
Net income | $ 2,552 | $ 3,349 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Provision for credit losses | 4,109 | 1,476 |
Deferred income taxes | (470) | (317) |
Depreciation and amortization | 354 | 424 |
Amortization of deferred revenues | (335) | (261) |
Net losses on investments and other assets | 40 | 246 |
Other, net | 63 | 73 |
Changes in assets and liabilities: | ||
Increase in other assets | (436) | (350) |
(Decrease) increase in accrued expenses and other liabilities | (190) | 325 |
Net cash provided by operating activities | 5,687 | 4,965 |
Cash flows provided by (used for) investing activities | ||
Maturities of available-for-sale investment securities | 1,431 | 1,677 |
Purchases of available-for-sale investment securities | (2,627) | (2,001) |
Maturities of held-to-maturity investment securities | 12 | 26 |
Purchases of held-to-maturity investment securities | (49) | (40) |
Net change in principal on loans originated for investment | (13,145) | (12,297) |
Proceeds from the sale of other investments | 4 | 325 |
Purchases of other investments | (60) | (135) |
Purchases of premises and equipment | (235) | (178) |
Net cash used for investing activities | (14,669) | (12,623) |
Cash flows provided by (used for) financing activities | ||
Net change in short-term borrowings | 0 | (1,750) |
Net change in deposits | 12,348 | 10,482 |
Proceeds from issuance of securitized debt | 2,232 | 4,626 |
Maturities and repayment of securitized debt | (1,489) | (2,566) |
Proceeds from issuance of other long-term borrowings | 523 | 0 |
Maturities and repayments of other long-term borrowings | (1,808) | (322) |
Proceeds from issuance of common stock | 9 | 7 |
Purchases of treasury stock | (1,937) | (1,757) |
Dividends paid on common and preferred stock | (560) | (524) |
Net cash provided by financing activities | 9,318 | 8,196 |
Net increase in cash, cash equivalents and restricted cash | 336 | 538 |
Cash, cash equivalents and restricted cash, at the beginning of the period | 8,897 | 11,332 |
Cash, cash equivalents and restricted cash, at the end of the period | 9,233 | 11,870 |
Reconciliation of cash, cash equivalents and restricted cash | ||
Cash and cash equivalents | 9,194 | 10,004 |
Restricted cash | $ 39 | $ 1,866 |
Background and Basis of Present
Background and Basis of Presentation | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Background and Basis of Presentation | Background and Basis of Presentation Description of Business Discover Financial Services ("DFS" or the "Company") is a digital banking and payment services company. The Company is a bank holding company under the Bank Holding Company Act of 1956 and a financial holding company under the Gramm-Leach-Bliley Act. Therefore, the Company is subject to oversight, regulation and examination by the Board of Governors of the Federal Reserve System (the "Federal Reserve"). The Company provides digital banking products and services and payment services through its subsidiaries. The Company offers its customers credit card loans, private student loans, personal loans, home loans and deposit products. The Company also operates the Discover Network, the PULSE network ("PULSE") and Diners Club International ("Diners Club"), collectively known as the Discover Global Network. The Discover Network processes transactions for Discover-branded credit and debit cards and provides payment transaction processing and settlement services. PULSE operates an electronic funds transfer network, providing financial institutions issuing debit cards on the PULSE network with access to ATMs domestically and internationally, as well as merchant acceptance throughout the United States of America ("U.S.") for debit card transactions. Diners Club is a global payments network of licensees, which are generally financial institutions, that issue Diners Club branded credit and charge cards and/or provide card acceptance services. The Company manages its business activities in two segments, Digital Banking and Payment Services, based on the products and services provided. See Note 16: Segment Disclosures for a detailed description of each segment's operations and the allocation conventions used in business segment reporting. Basis of Presentation The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. ("GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete consolidated financial statements. In the opinion of management, the financial statements reflect all adjustments necessary for the fair presentation of results for the interim period. All such adjustments are of a normal, recurring nature. The preparation of financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and related disclosures. These estimates are based on information available as of the date of the condensed consolidated financial statements. The Company believes that the estimates used in the preparation of the condensed consolidated financial statements are reasonable. Actual results could differ from these estimates. These interim condensed consolidated financial statements should be read in conjunction with the Company's 2022 audited consolidated financial statements filed with the Company's annual report on Form 10-K for the year ended December 31, 2022. Immaterial Restatement of Prior Period Financial Statements As reported in the second quarter of 2023, beginning in 2007, the Company incorrectly classified certain credit card accounts into its highest merchant and merchant acquirer pricing tier. The Company determined the revenue impact of the incorrect card product classification was immaterial to the consolidated financial statements for all impacted prior periods. For comparative purposes, the Company has made these corrections to the consolidated financial statements for the prior periods presented in this Form 10-Q. Additionally, prior period amounts in the applicable notes to the consolidated financial statements have been corrected. The impacts of the misclassification and subsequent corrections are contained entirely within the Digital Banking segment. See Note 18: Immaterial Restatement of Prior Period Financial Statements for additional information and quantification of the prior period restatement impacts. Recently Issued Accounting Pronouncement (Not Yet Adopted) In March 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-02, Investments—Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method . The ASU expands the use of the proportional amortization method of accounting for tax credit investments. Currently, the method is limited to Low Income Housing Tax Credit investments. Under the amended guidance, use of proportional amortization will be available to any qualifying tax credit investments, including but not limited to investments in New Markets Tax Credit and Renewable Energy Tax Credit programs. The amendments in the ASU are to be applied on a retrospective or modified retrospective basis. The ASU is effective for the Company on January 1, 2024. Management does not expect the amendments to have a material impact on the Company’s consolidated financial statements. |
Investments
Investments | 9 Months Ended |
Sep. 30, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments The Company's investment securities consist of the following (dollars in millions): September 30, December 31, U.S. Treasury (1) and U.S. GSE (2) securities $ 12,606 $ 11,423 Residential mortgage-backed securities - Agency (3) 730 785 Total investment securities $ 13,336 $ 12,208 (1) Includes $285 million and $97 million of U.S. Treasury securities pledged as swap collateral as of September 30, 2023 and December 31, 2022, respectively. (2) Consists of a security issued by the Federal Home Loan Bank. (3) Consists of securities issued by Fannie Mae, Freddie Mac, or Ginnie Mae. The amortized cost, gross unrealized gains and losses and fair value of available-for-sale and held-to-maturity investment securities are as follows (dollars in millions): Amortized Gross Gross Fair Value At September 30, 2023 Available-for-Sale Investment Securities (1) U.S. Treasury and U.S. GSE securities $ 12,942 $ — $ (336) $ 12,606 Residential mortgage-backed securities - Agency 505 — (32) 473 Total available-for-sale investment securities $ 13,447 $ — $ (368) $ 13,079 Held-to-Maturity Investment Securities (2) Residential mortgage-backed securities - Agency (3) $ 257 $ — $ (31) $ 226 Total held-to-maturity investment securities $ 257 $ — $ (31) $ 226 At December 31, 2022 Available-for-Sale Investment Securities (1) U.S. Treasury and U.S. GSE securities $ 11,580 $ 21 $ (178) $ 11,423 Residential mortgage-backed securities - Agency 587 — (23) 564 Total available-for-sale investment securities $ 12,167 $ 21 $ (201) $ 11,987 Held-to-Maturity Investment Securities (2) Residential mortgage-backed securities - Agency (3) $ 221 $ — $ (22) $ 199 Total held-to-maturity investment securities $ 221 $ — $ (22) $ 199 (1) Available-for-sale investment securities are reported at fair value. (2) Held-to-maturity investment securities are reported at amortized cost. (3) Amounts represent residential mortgage-backed securities ("RMBS") that were classified as held-to-maturity as they were entered into as a part of the Company's community reinvestment initiatives. The Company invests in U.S. Treasury obligations and securities issued by government agencies and government-sponsored enterprises of the U.S. ("U.S. GSEs"), which have long histories with no credit losses and are explicitly or implicitly guaranteed by the U.S. federal government. Therefore, management has concluded that there is no expectation of non-payment on its investment securities and does not record an allowance for credit losses on these investments. In addition, the Company does not have the intent to sell any available-for-sale securities in an unrealized loss position and does not believe it is more likely than not that it will be required to sell any such security before recovery of its amortized cost basis. The following table provides information about available-for-sale investment securities with aggregate gross unrealized losses and the length of time that individual investment securities have been in a continuous unrealized loss position (dollars in millions): Number of Securities in a Loss Position Less than 12 months More than 12 months Fair Unrealized Fair Unrealized At September 30, 2023 Available-for-Sale Investment Securities U.S. Treasury and U.S. GSE securities 203 $ 8,314 $ (205) $ 4,292 $ (131) Residential mortgage-backed securities - Agency 31 $ — $ — $ 473 $ (32) At December 31, 2022 Available-for-Sale Investment Securities U.S. Treasury and U.S. GSE securities 123 $ 9,060 $ (175) $ 106 $ (3) Residential mortgage-backed securities - Agency 34 $ 559 $ (22) $ 5 $ (1) There were no proceeds from sales or recognized gains or losses on available-for-sale securities during the three and nine months ended September 30, 2023 and 2022. See Note 8: Accumulated Other Comprehensive Income for unrealized gains and losses on available-for-sale securities during the three and nine months ended September 30, 2023 and 2022. Maturities of available-for-sale debt securities and held-to-maturity debt securities are provided in the following table (dollars in millions): At September 30, 2023 One Year After One After Five After Ten Total Available-for-Sale Investment Securities — Amortized Cost U.S. Treasury and U.S. GSE securities $ 1,874 $ 10,747 $ 321 $ — $ 12,942 Residential mortgage-backed securities - Agency (1) 1 76 33 395 505 Total available-for-sale investment securities $ 1,875 $ 10,823 $ 354 $ 395 $ 13,447 Held-to-Maturity Investment Securities — Amortized Cost Residential mortgage-backed securities - Agency (1) $ — $ — $ — $ 257 $ 257 Total held-to-maturity investment securities $ — $ — $ — $ 257 $ 257 Available-for-Sale Investment Securities — Fair Values U.S. Treasury and U.S. GSE securities $ 1,842 $ 10,449 $ 315 $ — $ 12,606 Residential mortgage-backed securities - Agency (1) 1 72 31 369 473 Total available-for-sale investment securities $ 1,843 $ 10,521 $ 346 $ 369 $ 13,079 Held-to-Maturity Investment Securities — Fair Values Residential mortgage-backed securities - Agency (1) $ — $ — $ — $ 226 $ 226 Total held-to-maturity investment securities $ — $ — $ — $ 226 $ 226 (1) Maturities of RMBS are reflective of the contractual maturities of the investment. Other Investments As a part of the Company's community reinvestment initiatives, the Company has made equity investments in certain limited partnerships and limited liability companies that finance the construction and rehabilitation of affordable rental housing and stimulate economic development in low- to moderate-income communities. These investments are accounted for using the equity method of accounting and are recorded within other assets. The related commitment for future investments is recorded in accrued expenses and other liabilities within the condensed consolidated statements of financial condition. The portion of each investment's operating results allocable to the Company reduces the carrying value of the investments and is recorded in other expense within the condensed consolidated statements of income. The Company further reduces the carrying value of the investments by recognizing any amounts that are in excess of future net tax benefits in other expense. The Company earns a return primarily through tax credits allocated to the affordable housing projects and the community revitalization projects. The Company does not consolidate these investments as the Company does not have a controlling financial interest in the investee entities. As of September 30, 2023 and December 31, 2022, the Company had outstanding investments in these entities of $426 million and $416 million, respectively, and related contingent liabilities for unconditional and legally binding delayed equity contributions of $126 million and $111 million, respectively. Of the above outstanding equity investments, the Company had $395 million and $375 million of investments related to affordable housing projects as of September 30, 2023 and December 31, 2022, respectively, which had $120 million and $100 million of related contingent liabilities for unconditional and legally binding delayed equity contributions, respectively. The Company holds non-controlling equity positions in several payment services entities and third-party venture capital funds which invest in such entities. Most of the direct investments in such entities are not subject to equity method accounting because the Company does not have significant influence over the investee. The Company's investments in third-party venture capital funds represent limited partnership interests and are accounted for under the equity method. The common or preferred equity securities that the Company holds typically do not have readily determinable fair values. As a result, these investments are carried at cost minus impairment, if any. As of September 30, 2023 and December 31, 2022, the carrying value of these investments, which are recorded within other assets on the Company's condensed consolidated statements of financial condition, was $34 million and $39 million, respectively. The Company also holds non-controlling equity positions in payment services entities that have publicly traded stock and therefore have readily determinable fair values. As a result, these investments are carried at fair value based on the quoted share prices. As of September 30, 2023 and December 31, 2022, the carrying value of these investments, which are recorded within other assets on the Company's condensed consolidated statements of financial condition, was $39 million and $41 million, respectively. During the three and nine months ended September 30, 2023, the Company recognized a $6 million net gain and an $11 million net loss, respectively, on the condensed consolidated statements of income related to these investments. The Company recognized net losses of $5 million and $212 million during the three and nine months ended September 30, 2022, respectively. |
Loan Receivables
Loan Receivables | 9 Months Ended |
Sep. 30, 2023 | |
Receivables [Abstract] | |
Financing Receivables [Text Block] | Loan Receivables The Company has two loan portfolio segments: credit card loans and other loans. The Company's classes of receivables within the two portfolio segments are depicted in the following table (dollars in millions): September 30, December 31, Credit card loans (1)(2) $ 97,389 $ 90,113 Other loans (3) Private student loans (4) 10,448 10,308 Personal loans 9,559 7,998 Other loans 5,280 3,701 Total other loans 25,287 22,007 Total loan receivables 122,676 112,120 Allowance for credit losses (8,665) (7,374) Net loan receivables $ 114,011 $ 104,746 (1) Amounts include carrying values of $13.9 billion and $13.5 billion underlying investors' interest in trust debt at September 30, 2023 and December 31, 2022, respectively, and $10.9 billion and $12.2 billion in seller's interest at September 30, 2023 and December 31, 2022, respectively. See Note 4: Credit Card and Private Student Loan Securitization Activities for additional information. (2) Unbilled accrued interest receivable on credit card loans, which is presented as part of other assets in the Company's condensed consolidated statements of financial condition, was $663 million and $611 million at September 30, 2023 and December 31, 2022, respectively. (3) Accrued interest receivable on private student, personal and other loans, which is presented as part of other assets in the Company's condensed consolidated statements of financial condition, was $573 million, $62 million and $18 million, respectively, at September 30, 2023 and $468 million, $49 million and $11 million, respectively, at December 31, 2022. (4) Private student loans in repayment were $5.8 billion and $6.0 billion at September 30, 2023 and December 31, 2022, respectively. Credit Quality Indicators As part of credit risk management activities, on an ongoing basis, the Company reviews information related to the performance of a customer's account with the Company and information from credit bureaus, such as FICO or other credit scores, relating to the customer's broader credit performance. The Company actively monitors key credit quality indicators, including FICO scores and delinquency status, for credit card, private student and personal loans. These indicators are important to understand the overall credit performance of the Company's customers and their ability to repay. FICO scores are generally obtained at the origination of the account and are refreshed monthly or quarterly thereafter to assist in predicting customer behavior. Historically, the Company has noted that accounts with FICO scores below 660 have larger delinquencies and credit losses than those with higher credit scores. The following table provides the distribution of the amortized cost basis (excluding accrued interest receivable presented in other assets) by the most recent FICO scores available for the Company's customers for credit card, private student and personal loan receivables (dollars in millions): Credit Risk Profile by FICO Score September 30, 2023 December 31, 2022 660 and Above Less than 660 660 and Above Less than 660 $ % $ % $ % $ % Credit card loans $ 78,585 81 % $ 18,804 19 % $ 73,827 82 % $ 16,286 18 % Private student loans by origination year (1)(2) 2023 $ 833 93 % $ 58 7 % 2022 1,528 95 % 78 5 % $ 1,172 94 % $ 77 6 % 2021 1,511 95 % 82 5 % 1,668 95 % 81 5 % 2020 1,213 95 % 69 5 % 1,365 95 % 65 5 % 2019 1,069 94 % 71 6 % 1,221 95 % 67 5 % Prior 3,674 93 % 262 7 % 4,306 94 % 286 6 % Total private student loans $ 9,828 94 % $ 620 6 % $ 9,732 94 % $ 576 6 % Personal loans by origination year 2023 $ 4,172 99 % $ 50 1 % 2022 2,988 95 % 172 5 % $ 4,270 98 % $ 77 2 % 2021 1,242 93 % 95 7 % 1,958 96 % 91 4 % 2020 437 93 % 32 7 % 790 95 % 40 5 % 2019 219 90 % 25 10 % 444 92 % 38 8 % Prior 104 82 % 23 18 % 249 86 % 41 14 % Total personal loans $ 9,162 96 % $ 397 4 % $ 7,711 96 % $ 287 4 % (1) A majority of private student loan originations occur in the third quarter and disbursements can span multiple calendar years. (2) FICO score represents the higher credit score of the cosigner or borrower. Delinquencies are an indicator of credit quality at a point in time. A loan balance is considered delinquent when contractual payments on the loan become 30 days past due. The amortized cost basis (excluding accrued interest receivable presented in other assets) of delinquent loans in the Company's loan portfolio is shown below for credit card, private student and personal loan receivables (dollars in millions): September 30, 2023 December 31, 2022 30-89 Days 90 or Total Past 30-89 Days 90 or Total Past Credit card loans $ 1,797 $ 1,527 $ 3,324 $ 1,250 $ 1,028 $ 2,278 Private student loans by origination year (1) 2023 $ — $ — $ — 2022 8 1 9 $ — $ — $ — 2021 20 5 25 6 1 7 2020 23 6 29 14 3 17 2019 28 8 36 19 5 24 Prior 129 45 174 128 36 164 Total private student loans $ 208 $ 65 $ 273 $ 167 $ 45 $ 212 Personal loans by origination year 2023 $ 13 $ 3 $ 16 2022 40 14 54 $ 12 $ 3 $ 15 2021 20 7 27 15 6 21 2020 7 2 9 8 2 10 2019 5 2 7 6 2 8 Prior 4 2 6 6 3 9 Total personal loans $ 89 $ 30 $ 119 $ 47 $ 16 $ 63 (1) Private student loans may include a deferment period, during which borrowers are not required to make payments while enrolled in school at least half time as determined by the school. During a deferment period, these loans do not advance into delinquency. Allowance for Credit Losses The following tables provide changes in the Company's allowance for credit losses (dollars in millions): For the Three Months Ended September 30, 2023 Credit Card Loans Private Student Loans Personal Loans Other Loans Total Loans Balance at June 30, 2023 $ 6,525 $ 849 $ 622 $ 68 $ 8,064 Additions Provision for credit losses (1) 1,518 52 93 8 1,671 Deductions Charge-offs (1,171) (40) (76) — (1,287) Recoveries 198 5 14 — 217 Net charge-offs (973) (35) (62) — (1,070) Balance at September 30, 2023 $ 7,070 $ 866 $ 653 $ 76 $ 8,665 For the Three Months Ended September 30, 2022 Credit Card Loans Private Student Loans Personal Loans Other Loans Total Loans Balance at June 30, 2022 $ 5,307 $ 832 $ 572 $ 46 $ 6,757 Additions Provision for credit losses (1) 649 20 69 5 743 Deductions Charge-offs (592) (29) (38) — (659) Recoveries 197 6 17 — 220 Net charge-offs (395) (23) (21) — (439) Balance at September 30, 2022 $ 5,561 $ 829 $ 620 $ 51 $ 7,061 For the Nine Months Ended September 30, 2023 Credit Card Loans Private Student Loans Personal Loans Other Loans Total Loans Balance at December 31, 2022 $ 5,883 $ 839 $ 595 $ 57 $ 7,374 Cumulative effect of ASU No. 2022-02 adoption (2) (66) — (2) — (68) Balance at January 1, 2023 5,817 839 593 57 7,306 Additions Provision for credit losses (1) 3,752 121 211 19 4,103 Deductions Charge-offs (3,101) (111) (194) — (3,406) Recoveries 602 17 43 — 662 Net charge-offs (2,499) (94) (151) — (2,744) Balance at September 30, 2023 $ 7,070 $ 866 $ 653 $ 76 $ 8,665 For the Nine Months Ended September 30, 2022 Credit Card Loans Private Student Loans Personal Loans Other Loans Total Loans Balance at December 31, 2021 $ 5,273 $ 843 $ 662 $ 44 $ 6,822 Additions Provision for credit losses (1) 1,395 54 19 7 1,475 Deductions Charge-offs (1,720) (86) (115) — (1,921) Recoveries 613 18 54 — 685 Net charge-offs (1,107) (68) (61) — (1,236) Balance at September 30, 2022 $ 5,561 $ 829 $ 620 $ 51 $ 7,061 (1) Excludes a $31 million and $30 million adjustment of the liability for expected credit losses on unfunded commitments for the three months ended September 30, 2023 and 2022, respectively, and $6 million and $1 million for the nine months ended September 30, 2023 and 2022, respectively, as the liability is recorded in accrued expenses and other liabilities in the Company's condensed consolidated statements of financial condition. (2) Represents the adjustment to the allowance for credit losses as a result of the adoption of ASU No. 2022-02 on January 1, 2023, which eliminated the requirement to apply discounted cash flow measurements for certain troubled debt restructurings. The allowance for credit losses was approximately $8.7 billion at September 30, 2023, which reflects a $601 million build over June 30, 2023, and a $1.3 billion build from December 31, 2022. The build in the allowance for credit losses for the three and nine months ended September 30, 2023 was primarily driven by loan growth, increasing delinquencies, and macroeconomic variables impacting household cash flows. The allowance estimation process begins with a loss forecast that uses certain macroeconomic variables and multiple macroeconomic scenarios among its inputs. In estimating the allowance at September 30, 2023, the Company used a macroeconomic forecast that projected the following weighted average amounts: (i) unemployment rate ending 2023 at 3.8% and peaking at 4.2% in the fourth quarter of 2024 and (ii) 2.02% growth rate in real gross domestic product in 2023. In estimating expected credit losses, the Company considered the uncertainties associated with borrower behavior and payment trends, as well as recent and expected macroeconomic conditions, such as high consumer price inflation and the fiscal and monetary policy responses to that inflation. The Federal Reserve raised its federal funds rate target range substantially during 2022 and the first three quarters of 2023 in an effort to slow economic growth and reduce inflation. Although real GDP growth and labor market conditions have exceeded most economists’ expectations this year, restrictive monetary policy, as manifested in relatively high interest rates, typically precedes weaker consumer credit conditions caused by rising unemployment as economic growth slows. Credit performance in the Company's lending portfolios has evolved in line with its expectations this year, but may weaken if the economy fails to avert a recession in response to tighter credit conditions or other factors. The Company assessed the prospects for various macroeconomic outcomes in setting its allowance for credit losses. The forecast period the Company deemed to be reasonable and supportable was 18 months for all periods presented. The 18 months reasonable and supportable forecast period was deemed appropriate given the current economic conditions. For all periods presented, the Company determined that a reversion period of 12 months was appropriate for the same reason. The Company applied a weighted reversion method to provide a more reasonable transition to historical losses for all loan products for all periods presented. The net charge-offs for credit card loans, private student loans and personal loans increased for the three and nine months ended September 30, 2023, when compared to the same periods in 2022, primarily due to portfolio seasoning. Net charge-offs of principal are recorded against the allowance for credit losses, as shown in the preceding table. Information regarding net charge-offs of interest and fee revenues on credit card and other loans is as follows (dollars in millions): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Interest and fees accrued subsequently charged-off, net of recoveries (recorded as a reduction of interest income) $ 176 $ 74 $ 460 $ 209 Fees accrued subsequently charged-off, net of recoveries (recorded as a reduction to other income) $ 47 $ 24 $ 134 $ 68 Gross principal charge-offs of the Company's loan portfolio are presented in the table below, on a year-to-date basis, for credit card, private student and personal loan receivables (dollars in millions): For the Nine Months Ended September 30, 2023 Credit card loans $ 3,101 Private student loans by origination year 2023 $ — 2022 2 2021 11 2020 15 2019 17 Prior 66 Total private student loans $ 111 Personal loans by origination year 2023 $ 5 2022 74 2021 58 2020 26 2019 19 Prior 12 Total personal loans $ 194 Delinquent and Non-Accruing Loans The amortized cost basis (excluding accrued interest receivable presented in other assets) of delinquent and non-accruing loans in the Company's loan portfolio is shown below for each class of loan receivables (dollars in millions): (1) 30-89 Days 90 or Total Past 90 or Total Non-accruing (2) At September 30, 2023 Credit card loans $ 1,797 $ 1,527 $ 3,324 $ 1,460 $ 226 Other loans Private student loans 208 65 273 66 8 Personal loans 89 30 119 29 7 Other loans 25 15 40 4 27 Total other loans 322 110 432 99 42 Total loan receivables $ 2,119 $ 1,637 $ 3,756 $ 1,559 $ 268 At December 31, 2022 Credit card loans $ 1,250 $ 1,028 $ 2,278 $ 1,003 $ 176 Other loans Private student loans 167 45 212 45 8 Personal loans 47 16 63 16 7 Other loans 13 12 25 1 23 Total other loans 227 73 300 62 38 Total loan receivables $ 1,477 $ 1,101 $ 2,578 $ 1,065 $ 214 (1) The payment status of both modified and unmodified loans is included in this table. (2) The Company estimates that the gross interest income that would have been recorded under the original terms of non-accruing credit card loans was $11 million and $6 million for the three months ended September 30, 2023 and 2022, respectively, and $29 million and $17 million for the nine months ended September 30, 2023 and 2022, respectively. The Company does not separately track the amount of gross interest income that would have been recorded under the original terms of loans. Instead, the Company estimated this amount based on customers' current balances and most recent interest rates. Loan Modifications to Borrowers Experiencing Financial Difficulty The Company has internal loan modification programs that provide relief to credit card, private student and personal loan borrowers who are experiencing financial hardship. The internal loan modification programs include both temporary and permanent programs, which vary by product. External loan modification programs, through third party consumer credit counseling agencies, are also available for credit card and personal loans. Those programs feature interest rate reductions, payment delays, term extensions, or a combination thereof. For credit card customers, the Company offers both temporary and permanent hardship programs. The temporary hardship programs consist of an interest rate reduction lasting for a period no longer than 12 months. Charging privileges on these accounts are generally suspended while in the program. However, if the customer meets certain criteria, charging privileges may be reinstated following completion of the program. The permanent modification program involves closing the account, changing the structure of the loan to a fixed payment loan with a maturity no longer than 72 months and reducing the interest rate on the loan. The permanent modification program does not typically provide for the forgiveness of unpaid principal, but may allow for the reversal of certain unpaid interest or fee assessments. The Company also makes permanent loan modifications for customers who request financial assistance through external sources, such as a consumer credit counseling agency program. These loans typically receive a reduced interest rate, typically continue to be subject to the original minimum payment terms and do not normally include waiver of unpaid principal, interest or fees. To assist private student loan borrowers who are experiencing temporary financial difficulties but are willing to resume making payments, the Company may offer a payment delay (in the form of hardship forbearance or a temporary payment reduction), or a temporary interest rate reduction. Typically programs are offered up to six consecutive months at one time with a lifetime usage cap, most commonly, of 12 months. For personal loan customers, the Company offers various payment programs, including temporary and permanent programs, in certain situations. The temporary programs normally consist of reducing the minimum payment for no longer than 12 months and, in certain circumstances, the interest rate on the loan is reduced. The permanent programs involve extending the loan term and, in certain circumstances, reducing the interest rate on the loan. The total term of the loan, including modification, may not exceed nine years. The Company also allows permanent loan modifications for customers who request financial assistance through external sources, similar to the credit card customers discussed above. Payments are modified based on the new terms agreed upon with the credit counseling agency. In addition to the programs described above, the Company will in certain cases accept partial payment in full satisfaction of the outstanding receivable. This is a form of principal forgiveness also known as a settlement. The difference between the loan balance and the amount received in settlement is recorded as a charge-off. The Company monitors borrower performance after using payment programs or forbearance. The Company believes the programs are useful in assisting customers experiencing financial difficulties and allowing them to make timely payments. In addition to helping customers with their credit needs, these programs are designed to maximize collections and ultimately the Company’s profitability. The Company plans to continue to use payment programs to provide relief to customers experiencing financial difficulties. ASU No. 2022-02, Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures , became effective for the Company on January 1, 2023. The new guidance eliminated Subtopic 310-40, Troubled Debt Restructurings , and implemented enhanced disclosure requirements regarding loan modifications to borrowers experiencing financial difficulty. The new disclosures are required to be applied on a prospective basis. There will be no comparative disclosures to prior periods until such time as both periods disclosed are subject to the new guidance. The following table provides the period-end amortized cost basis, by modification category, of loans to borrowers experiencing financial difficulty that entered a modification program during the period (dollars in millions). Some of the loans presented in the table below may no longer be enrolled in a program at period-end: For the Three Months Ended September 30, For the Nine Months Ended September 30, (1) 2023 2023 Credit card loans (2)(3) Interest rate reduction $ 685 $ 1,712 Total credit card loans (4) $ 685 $ 1,712 % of total class of financing receivables 0.70 % 1.76 % Private student loans (2) Payment delay (5) $ 12 $ 32 Interest rate reduction and payment delay (5) 28 74 Total private student loans (4) $ 40 $ 106 % of total class of financing receivables 0.38 % 1.01 % Personal loans (2) Payment delay (5) $ 4 $ 8 Term extension (6) 9 24 Interest rate reduction and payment delay (5) 21 48 Interest rate reduction and term extension (6) 9 22 Total personal loans (4) $ 43 $ 102 % of total class of financing receivables 0.45 % 1.07 % (1) The current quarter-to-date enrollment figures, when aggregated with previously disclosed quarter-to-date amounts, will not equal the year-to-date amounts in this table because all year-to-date enrollments are presented using the current period-end amortized cost basis. (2) Accrued interest receivable (including unbilled accrued interest receivable for credit card loans) on modified loans to borrowers experiencing financial difficulty, which is presented as part of other assets in the Company's condensed consolidated statements of financial condition, was immaterial at September 30, 2023. (3) Accounts that entered a credit card loan modification program include $120 million and $302 million that were converted from revolving line-of-credit arrangements to term loans during the three and nine months ended September 30, 2023, respectively. (4) For settlements, the amortized cost basis is zero at period-end and therefore there is no amount reported for principal forgiveness in the table above. See financial effects table below for principal forgiveness to borrowers experiencing financial difficulty. (5) The Company defines a payment delay as a temporary reduction in payments below the original contractually required payment amounts (e.g., interest only payments). The Company's credit card loan modification programs do not result in an other than insignificant delay in payment. (6) The Company defines term extensions as only those modifications for which the maturity date is extended beyond the original contractual maturity date by virtue of a change in terms other than a payment delay as defined above. Modifications to credit card loans are not considered term extensions because credit card loans do not have a fixed repayment term. The only non-cancellable commitments the Company has to lend additional funds to borrowers experiencing financial difficulty relate to certain private student loans. As of September 30, 2023, the amount of such commitments associated with loans modified during the periods presented was immaterial. The following table provides information on the financial effects of loan modifications to borrowers experiencing financial difficulty, by modification type, made during the period (dollars in millions): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2023 Credit card loans Weighted-average interest rate reduction 13.84 % 13.68 % Principal forgiven $ 35 $ 81 Interest and fees forgiven (1) $ 30 $ 77 Private student loans Weighted-average interest rate reduction 8.94 % 8.77 % Payment delay duration (in months) (2) 6 to 12 6 to 12 Principal forgiven $ — $ — Personal loans Weighted-average interest rate reduction 12.30 % 12.01 % Weighted-average term extension (in months) 38 38 Payment delay duration (in months) (2) 6 to 12 6 to 12 Principal forgiven $ — $ — (1) Represents the amount of interest and fees forgiven resulting from accounts entering into a credit card loan modification program and pre-charge off settlements. Interest and fees forgiven are reversed against the respective line items in the consolidated statements of income. (2) For private student loan payment delays, the Company offers up to six consecutive months of delay and most commonly limits assistance to a life of loan maximum of 12 months. For personal loan payment delays, the Company limits this assistance to a life of loan maximum of 12 months. Loan receivables that have been modified are subject to the same requirements for the accrual of expected credit loss over their expected remaining lives as for unmodified loans. The allowance for credit losses incorporates modeling of historical loss data and thereby captures the higher risk associated with modified loans to borrowers experiencing financial difficulty based on their account attributes. The following table presents the payment status and period-end amortized cost basis, by class of loan receivable, of loans that were modified on or after January 1, 2023 to borrowers experiencing financial difficulty (dollars in millions): (1) Current 30-89 Days 90 or At September 30, 2023 Credit card loans $ 1,399 $ 190 $ 123 Private student loans 92 11 2 Personal loans 81 13 8 Total $ 1,572 $ 214 $ 133 (1) This table includes any loan that entered a modification program during the period without regard to whether it remained in a modification program as of the reporting date. The following table presents the defaulted amount and period-end amortized cost basis, by modification category, of loans that defaulted during the period and were modified on or after January 1, 2023 through the end of the reporting period to borrowers experiencing financial difficulty (dollars in millions): For the Three Months Ended September 30, 2023 For the Nine Months Ended September 30, 2023 Defaulted Amount (1) Period-end Amortized Cost Basis Defaulted Amount (1) Period-end Amortized Cost Basis Credit card loans Interest rate reduction $ 120 $ 96 $ 203 $ 124 Total credit card loans $ 120 $ 96 $ 203 $ 124 (1) For purposes of this disclosure, a loan is considered to be defaulted when it is 60 days or more delinquent at month end and has advanced two stages of delinquency subsequent to modification. Loans that entered a modification program in any stage of delinquency but did not experience a further payment default are included in the payment status table above but are not counted as defaulted for purposes of this disclosure. The defaulted amounts and period-end amortized cost basis of private student loans and personal loans modified on or after January 1, 2023 to borrowers experiencing financial difficulty which subsequently defaulted were immaterial for the three and nine months ended September 30, 2023. Troubled Debt Restructurings (Prior to 2023) Prior to t he adoption of ASU 2022-02, the Company considered a modified loan in which a concession had been granted to the borrower to be a TDR based generally on the cumulative length of the concession period and credit quality of the borrower. Due to differences between the legacy TDR requirements and current loan modification disclosure requirements, information presented in the disclosures below is not directly comparable to the disclosures under the current guidance. To evaluate the primary financial effects that resulted from credit card loans entering into a TDR program during the three and nine months ended September 30, 2022, the Company quantified the amount by which interest and fees were reduced during the periods. During the three and nine months ended September 30, 2022 , the Company forgave approximately $7 million and $20 million of interest and fees resulting from accounts entering into a credit card loan TDR program. The following table provides information on loans that entered a TDR program during the period (dollars in millions): For the Three Months Ended September 30, 2022 For the Nine Months Ended September 30, 2022 Number of Accounts Balances Number of Accounts Balances Accounts that entered a TDR program during the period Credit card loans (1) 63,803 $ 414 167,655 $ 1,071 Private student loans 1,863 $ 36 5,141 $ 96 Personal loans 1,799 $ 25 4,561 $ 62 (1) Accounts that entered a credit card TDR program include $80 million and $225 million that were converted from revolving line-of-credit arrangements to term loans during the three and nine months ended September 30, 2022, respectively. The following table presents the carrying value of loans that experienced a default during the period that had been modified in a TDR during the 15 months preceding the end of each period (dollars in millions): For the Three Months Ended September 30, 2022 For the Nine Months Ended September 30, 2022 Number of Accounts Aggregated Outstanding Balances Upon Default Number of Accounts Aggregated Outstanding Balances Upon Default TDRs that subsequently defaulted Credit card loans (1)(2) 7,784 $ 38 18,022 $ 89 Private student loans (3) 391 $ 7 658 $ 12 Personal loans (2) 606 $ 9 1,142 $ 16 (1) For credit card loans that default from a temporary loan modification program, accounts revert back to the pre-modification terms and charging privileges remain suspended in most cases. (2) For credit card loans and personal loans, a customer defaults from a loan modification program after either two consecutive missed payments or at charge-off, depending on the program. The outstanding balance upon default is generally the loan balance at the end of the month prior to default. (3) For student loans, a customer defaults from a loan modification after they are 60 or more days delinquent. The outstanding balance upon default is generally the loan balance at the end of the month prior to default. Of the account balances that defaulted as shown above for the three months ended September 30, 2022, approximately 60%, and for the nine months ended September 30, 2022, approximately 62%, of the total balances were charged off at the end of the month in which they defaulted from a TDR program. For the three and nine months ended September 30, 2022, for accounts that had defaulted from a TDR program and had not been subsequently charged off, the balances were included in the allowance for credit loss analysis. |
Credit Card and Private Student
Credit Card and Private Student Loan Securitization Activities | 9 Months Ended |
Sep. 30, 2023 | |
Variable Interest Entities Disclosure [Abstract] | |
Credit Card and Private Student Loan Securitization Activities | Credit Card and Private Student Loan Securitization Activities The Company's securitizations are accounted for as secured borrowings and the related trusts are treated as consolidated subsidiaries of the Company. For a description of the Company's principles of consolidation with respect to VIEs, see Note 1: Background and Basis of Presentation to the consolidated financial statements in the Company's annual report on Form 10-K for the year ended December 31, 2022. Credit Card Securitization Activities The Company accesses the term asset securitization market through Discover Card Master Trust I ("DCMT") and Discover Card Execution Note Trust ("DCENT"). Credit card loan receivables are transferred into DCMT and beneficial interests in DCMT are transferred into DCENT. DCENT issues debt securities to investors that are reported primarily in long-term borrowings. The DCENT debt structure consists of four classes of securities (DiscoverSeries Class A, B, C and D notes), with the most senior class generally receiving a triple-A rating. To issue senior, higher-rated classes of notes, it is necessary to obtain the appropriate amount of credit enhancement, generally through the issuance of junior, lower-rated or more highly subordinated classes of notes. Wholly-owned subsidiaries of Discover Bank hold the subordinated classes of notes. The Company is exposed to credit risk associated with trust receivables as of the balance sheet date through the retention of these subordinated interests. The estimate of expected credit losses on trust receivables is included in the allowance for credit losses estimate. The Company's retained interests in the trust's assets, consisting of investments in DCENT notes held by subsidiaries of Discover Bank, constitute intercompany positions that are eliminated in the preparation of the Company's condensed consolidated statements of financial condition. Upon transfer of credit card loan receivables to the trust, the receivables and certain cash flows derived from them become restricted for use in meeting obligations to the trust's creditors. Further, the transferred credit card loan receivables are owned by the trust and are not available to the Company's third-party creditors. The trusts have ownership of cash balances, the amounts of which are reported in restricted cash within the Company's condensed consolidated statements of financial condition. Except for the seller's interest in trust receivables, the Company's interests in trust assets are generally subordinate to the interests of third-party investors in trust debt and, as such, may not be realized by the Company if needed to absorb deficiencies in cash flows that are allocated to those investors. Apart from the restricted assets related to securitization activities, the investors and the securitization trusts have no recourse to the Company's other assets or the Company's general credit for a shortage in cash flows. The carrying values of these restricted assets, which are presented on the Company's condensed consolidated statements of financial condition as relating to securitization activities, are shown in the following table (dollars in millions): September 30, December 31, Restricted cash $ 31 $ 33 Investors' interests held by third-party investors 10,975 10,200 Investors' interests held by wholly-owned subsidiaries of Discover Bank 2,918 3,341 Seller's interest 10,898 12,220 Loan receivables (1) 24,791 25,761 Allowance for credit losses allocated to securitized loan receivables (1) (1,129) (1,152) Net loan receivables 23,662 24,609 Other assets 3 2 Carrying value of assets of consolidated variable interest entities $ 23,696 $ 24,644 (1) The Company maintains its allowance for credit losses at an amount equal to lifetime expected credit losses associated with all loan receivables, which includes all loan receivables in the trusts. Therefore, the credit risk associated with the transferred receivables is fully reflected on the Company's statements of financial condition in accordance with GAAP. The debt securities issued by the consolidated trusts are subject to credit, payment and interest rate risks on the transferred credit card loan receivables. To protect investors in the securities, there are certain features or triggering events that will cause an early amortization of the debt securities, including triggers related to the impact of the performance of the trust receivables on the availability and adequacy of cash flows to meet contractual requirements. As of September 30, 2023, no economic or other early amortization events have occurred. The Company continues to own and service the accounts that generate the loan receivables held by the trusts. Discover Bank receives servicing fees from the trusts based on a percentage of the monthly investor principal balance outstanding. Although the fee income to Discover Bank offsets the fee expense to the trusts and thus is eliminated in consolidation, failure to service the transferred loan receivables in accordance with contractual requirements could lead to a termination of the servicing rights and the loss of future servicing income, net of related expenses. Private Student Loan Securitization Activities The Company's private student loan trust receivables reported in loan receivables and the related debt issued by the trust reported in long-term borrowings were immaterial as of September 30, 2023 and December 31, 2022. The amounts are included, together with amounts related to the Company's credit card securitizations, in the supplemental information about assets and liabilities of consolidated variable interest entities, which is presented with the Company's condensed consolidated statements of financial condition. |
Deposits
Deposits | 9 Months Ended |
Sep. 30, 2023 | |
Deposits [Abstract] | |
Deposits | Deposits The Company obtains deposits from consumers directly or through affinity relationships ("direct-to-consumer deposits"). Additionally, the Company obtains deposits through third-party securities brokerage firms that offer the Company's deposits to their customers ("brokered deposits"). Direct-to-consumer deposit products include savings accounts, certificates of deposit, money market accounts, IRA savings accounts, IRA certificates of deposit and checking accounts. Brokered deposit products include certificates of deposit and sweep accounts. Customer deposits held with Discover Bank are currently insured for up to $250,000 per account holder through the Federal Deposit Insurance Corporation (“FDIC”). At September 30, 2023 and December 31, 2022, the Company had approximately $5.9 billion and $8.9 billion of uninsured deposits, respectively. The decrease in uninsured deposits reported was primarily driven by leveraging technological capabilities, beginning in the first quarter of 2023, enabling improved application of deposit account ownership attributes in deriving this amount. The amounts of uninsured deposits above were estimated based on the same methodologies and assumptions used for Discover Bank’s regulatory reporting at each respective balance sheet date. The following table summarizes certificates of deposits maturing over the remainder of this year, over each of the next four years and thereafter (dollars in millions): At September 30, 2023 2023 $ 5,274 2024 17,743 2025 7,070 2026 3,626 2027 4,258 Thereafter 2,777 Total $ 40,748 |
Long-Term Borrowings
Long-Term Borrowings | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Borrowings and Weighted Average Interest Rates | Long-Term Borrowings Long-term borrowings consist of borrowings having original maturities of one year or more. The following table provides a summary of the Company's long-term borrowings and weighted-average interest rates on outstanding balances (dollars in millions): September 30, 2023 December 31, 2022 Maturity Interest Weighted-Average Interest Rate Outstanding Amount Outstanding Amount Securitized Debt Fixed-rate asset-backed securities (1) 2024-2026 0.58% - 5.03% 3.17% $ 9,895 $ 8,401 Floating-rate asset-backed securities (2) 2024 6.05% 6.05% 925 1,774 Total Discover Card Master Trust I and Discover Card Execution Note Trust 10,820 10,175 Floating-rate asset-backed security (3)(4) 2031 9.50% 9.50% 69 84 Total private student loan securitization trust 69 84 Total long-term borrowings - owed to securitization investors 10,889 10,259 Discover Financial Services (Parent Company) Fixed-rate senior notes 2024-2032 3.75% - 6.70% 4.68% 3,335 3,333 Fixed-rate retail notes 2023-2031 3.00% - 4.40% 3.80% 147 154 Discover Bank Fixed-rate senior bank notes (1) 2024-2030 2.45% - 4.65% 3.53% 3,548 5,348 Fixed-rate subordinated bank notes 2028 5.97% 5.97% 500 489 Fixed-rate Federal Home Loan Bank advances 2030 4.77% - 4.82% 4.82% 523 — Floating-rate Federal Home Loan Bank advance (5) 2023 5.54% 5.54% 525 525 Total long-term borrowings $ 19,467 $ 20,108 (1) The Company uses interest rate swaps to hedge portions of these long-term borrowings against changes in fair value attributable to changes in the applicable benchmark interest rates. The use of these interest rate swaps impacts the carrying value of the debt. See Note 15: Derivatives and Hedging Activities. (2) DCENT floating-rate asset-backed securities include issuances with the following interest rate terms: 1-month Term SOFR + 0.11448% Tenor Spread Adjustment + 60 basis points as of September 30, 2023. (3) The private student loan securitization trust floating-rate asset-backed security includes an issuance with the following interest rate term: Prime rate + 100 basis points as of September 30, 2023. (4) Repayment of this debt is dependent upon the timing of principal and interest payments on the underlying private student loans. The date shown represents the final maturity date. (5) The floating-rate Federal Home Loan Bank (“FHLB”) advance includes the following interest rate term: SOFR + 23 basis points as of September 30, 2023. The following table summarizes long-term borrowings maturing over the remainder of this year, over each of the next four years and thereafter (dollars in millions): September 30, 2023 2023 $ 532 2024 3,727 2025 6,086 2026 4,854 2027 1,000 Thereafter 3,268 Total $ 19,467 As a member of the FHLB of Chicago, the Company has access to both short- and long-term advance structures with maturities ranging from overnight to 30 years. As of September 30, 2023, the Company had total committed borrowing capacity of $3.3 billion based on the amount and type of assets pledged, of which the outstanding balance was comprised of $1.0 billion in long-term advances. As of December 31, 2022, the Company had total committed borrowing capacity of $2.2 billion based on the amount and type of assets pledged, of which the outstanding balance was comprised solely of a $525 million long-term advance. These advances are presented as short- or long-term borrowings on the condensed consolidated statements of financial condition as appropriate. Additionally, the Company has access to committed borrowing capacity through private securitizations to support the funding of its credit card loan receivables. As of September 30, 2023 and December 31, 2022, the total commitment of secured credit facilities through private providers was $3.5 billion, none of which was drawn. Access to the unused portions of the secured credit facilities is subject to the terms of the agreements with each of the providers. The secured credit facilities have various expirations in 2025. Borrowings outstanding under each facility bear interest at a margin above the Term Secured Overnight Financing Rate ("SOFR") or the asset-backed commercial paper costs of each provider. The terms of each agreement provide for a commitment fee to be paid on the unused capacity and include various affirmative and negative covenants, including performance metrics and legal requirements similar to those required to issue any term securitization transaction. |
Preferred Stock (Notes)
Preferred Stock (Notes) | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Preferred Stock | Preferred Stock The table below presents a summary of the Company's non-cumulative perpetual preferred stock that is outstanding at September 30, 2023 (dollars in millions, except per depositary share amounts): Series Description Initial Issuance Date Liquidation Preference and Redemption Price per Depositary Share (1) Per Annum Dividend Rate in effect at September 30, 2023 Total Depositary Shares Authorized, Issued and Outstanding Carrying Value September 30, 2023 December 31, 2022 September 30, 2023 December 31, 2022 C (2)(3)(4) Fixed-to-Floating Rate 10/31/2017 $ 1,000 5.500 % 570,000 570,000 $ 563 $ 563 D (2)(5)(6) Fixed-Rate Reset 6/22/2020 $ 1,000 6.125 % 500,000 500,000 493 493 Total Preferred Stock 1,070,000 1,070,000 $ 1,056 $ 1,056 (1) Redeemable at the redemption price plus declared and unpaid dividends. (2) Issued as depositary shares, each representing 1/100 th interest in a share of the corresponding series of preferred stock. Each preferred share has a par value of $0.01. (3) Redeemable at the Company’s option, subject to regulatory approval, either (i) in whole or in part on any dividend payment date on or after October 30, 2027, or (ii) in whole but not in part, at any time within 90 days following a regulatory capital treatment event (as defined in the certificate of designations for the Series C preferred stock). (4) Any dividends declared are payable semi-annually in arrears at a rate of 5.500% per annum until October 30, 2027. Thereafter, dividends declared will be payable quarterly in arrears at a floating rate equal to 3-month Term SOFR plus a spread of 3.338% per annum. (5) Redeemable at the Company’s option, subject to regulatory approval, either (i) in whole or in part during the three-month period prior to, and including, each reset date (as defined in the certificate of designations for the Series D preferred stock) or (ii) in whole but not in part, at any time within 90 days following a regulatory capital treatment event (as defined in the certificate of designations for the Series D Preferred Stock). (6) Any dividends declared are payable semi-annually in arrears at a rate of 6.125% per annum until September 23, 2025, after which the dividend rate will reset every 5 years to a fixed annual rate equal to the 5-year Treasury plus a spread of 5.783%. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 9 Months Ended |
Sep. 30, 2023 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Income | Accumulated Other Comprehensive Income Changes in each component of accumulated other comprehensive income ("AOCI") were as follows (dollars in millions): Unrealized (Losses) Gains on Available-for-Sale Investment Securities, Net of Tax Losses on Cash Flow Hedges, Net of Tax Losses on Pension Plan, Net of Tax AOCI For the Three Months Ended September 30, 2023 Balance at June 30, 2023 $ (195) $ (86) $ (189) $ (470) Net change (83) (20) — (103) Balance at September 30, 2023 $ (278) $ (106) $ (189) $ (573) For the Three Months Ended September 30, 2022 Balance at June 30, 2022 $ (48) $ (4) $ (199) $ (251) Net change (100) (2) — (102) Balance at September 30, 2022 $ (148) $ (6) $ (199) $ (353) For the Nine Months Ended September 30, 2023 Balance at December 31, 2022 $ (136) $ (14) $ (189) $ (339) Net change (142) (92) — (234) Balance at September 30, 2023 $ (278) $ (106) $ (189) $ (573) For the Nine Months Ended September 30, 2022 Balance at December 31, 2021 $ 114 $ (9) $ (199) $ (94) Net change (262) 3 — (259) Balance at September 30, 2022 $ (148) $ (6) $ (199) $ (353) The following table presents each component of other comprehensive income ("OCI") before reclassifications and amounts reclassified from AOCI for each component of OCI before- and after-tax (dollars in millions): Before Tax Tax Benefit (Expense) Net of Tax For the Three Months Ended September 30, 2023 Available-for-Sale Investment Securities Net unrealized holding losses arising during the period $ (111) $ 28 $ (83) Net change $ (111) $ 28 $ (83) Cash Flow Hedges Net unrealized losses arising during the period $ (55) $ 13 $ (42) Amounts reclassified from AOCI 29 (7) 22 Net change $ (26) $ 6 $ (20) For the Three Months Ended September 30, 2022 Available-for-Sale Investment Securities Net unrealized holding losses arising during the period $ (133) $ 33 $ (100) Net change $ (133) $ 33 $ (100) Cash Flow Hedges Net unrealized losses arising during the period $ (4) $ 1 $ (3) Amounts reclassified from AOCI 2 (1) 1 Net change $ (2) $ — $ (2) For the Nine Months Ended September 30, 2023 Available-for-Sale Investment Securities Net unrealized holding losses arising during the period $ (188) $ 46 $ (142) Net change $ (188) $ 46 $ (142) Cash Flow Hedges Net unrealized losses arising during the period $ (172) $ 42 $ (130) Amounts reclassified from AOCI 50 (12) 38 Net change $ (122) $ 30 $ (92) For the Nine Months Ended September 30, 2022 Available-for-Sale Investment Securities Net unrealized holding losses arising during the period $ (346) $ 84 $ (262) Net change $ (346) $ 84 $ (262) Cash Flow Hedges Net unrealized losses arising during the period $ (2) $ — $ (2) Amounts reclassified from AOCI 4 1 5 Net change $ 2 $ 1 $ 3 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The following table presents the calculation of the Company's effective income tax rate (dollars in millions): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Income before income taxes $ 888 $ 1,327 $ 3,314 $ 4,375 Income tax expense $ 205 $ 314 $ 762 $ 1,026 Effective income tax rate 23.1 % 23.7 % 23.0 % 23.5 % The Company is subject to examination by the Internal Revenue Service and tax authorities in various state, local and foreign tax jurisdictions. The Company's federal income tax filings are open to examinations for the tax years ended December 31, 2019 and forward. The Company regularly assesses the likelihood of additional assessments or settlements in each of the taxing jurisdictions. At this time, the potential change in unrecognized tax benefits is expected to be immaterial over the next 12 months. The Company believes that its reserves are sufficient to cover any tax, penalties and interest that would result from such examinations. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The following table presents the calculation of basic and diluted earnings per share ("EPS") (dollars and shares in millions, except per share amounts): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Numerator Net income $ 683 $ 1,013 $ 2,552 $ 3,349 Preferred stock dividends (31) (31) (62) (62) Net income available to common stockholders 652 982 2,490 3,287 Income allocated to participating securities (5) (7) (17) (20) Net income allocated to common stockholders $ 647 $ 975 $ 2,473 $ 3,267 Denominator Weighted-average shares of common stock outstanding 250 273 255 279 Effect of dilutive common stock equivalents — 1 — — Weighted-average shares of common stock outstanding and common stock equivalents 250 274 255 279 Basic earnings per common share $ 2.59 $ 3.57 $ 9.70 $ 11.70 Diluted earnings per common share $ 2.59 $ 3.56 $ 9.69 $ 11.69 Anti-dilutive securities were not material and had no impact on the computation of diluted EPS for the three or nine months ended September 30, 2023 and 2022. |
Capital Adequacy
Capital Adequacy | 9 Months Ended |
Sep. 30, 2023 | |
Broker-Dealer, Net Capital Requirement, SEC Regulation [Abstract] | |
Capital Adequacy | Capital Adequacy DFS is subject to the capital adequacy guidelines of the Federal Reserve. Discover Bank, the Company's banking subsidiary, is subject to various regulatory capital requirements as administered by the FDIC. Failure to meet minimum capital requirements can result in the initiation of certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could limit the Company's business activities and have a direct material effect on the financial condition and operating results of DFS and Discover Bank. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, DFS and Discover Bank must meet specific risk-based capital requirements and leverage ratios that involve quantitative measures of assets, liabilities and certain off-balance sheet items, as calculated under regulatory guidelines. Capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. DFS and Discover Bank are subject to regulatory and capital rules issued by the Federal Reserve and FDIC, respectively, under the Basel Committee's December 2010 framework ("Basel III rules"). Under the Basel III rules, DFS and Discover Bank are classified as "standardized approach" entities. Standardized approach entities are defined as U.S. banking organizations with consolidated total assets over $50 billion but not exceeding $250 billion and consolidated total on-balance sheet foreign exposure less than $10 billion. In accordance with the final rule on the impact of current expected credit losses ("CECL") on regulatory capital, the Company has elected to phase in the impact over three years beginning in 2022. Accordingly, the Company's Common Equity Tier 1 ("CET1") capital ratios are higher than they otherwise would have been. The Company's CET1 capital ratios will continue to be favorably impacted by this election over the phase-in period, which ends December 31, 2024. As of September 30, 2023 and December 31, 2022, DFS and Discover Bank met all Basel III minimum capital ratio requirements to which they were subject. DFS and Discover Bank also met the requirements to be considered "well-capitalized" under Regulation Y and prompt corrective action rules, respectively. There have been no conditions or events that management believes have changed DFS' or Discover Bank's category. To be categorized as "well-capitalized", DFS and Discover Bank must maintain minimum capital ratios outlined in the table below. The following table shows the actual capital amounts and ratios of DFS and Discover Bank and comparisons of each to the regulatory minimum and "well-capitalized" requirements (dollars in millions): Actual Minimum Capital Capital Requirements Amount Ratio (1) Amount Ratio Amount (2) Ratio (2) September 30, 2023 Total capital (to risk-weighted assets) Discover Financial Services $ 17,667 14.1 % $ 10,040 ≥8.0% $ 12,550 ≥10.0% Discover Bank $ 16,691 13.5 % $ 9,912 ≥8.0% $ 12,390 ≥10.0% Tier 1 capital (to risk-weighted assets) Discover Financial Services $ 15,627 12.5 % $ 7,530 ≥6.0% $ 7,530 ≥6.0% Discover Bank $ 13,821 11.2 % $ 7,434 ≥6.0% $ 9,912 ≥8.0% Tier 1 capital (to average assets) Discover Financial Services $ 15,627 11.0 % $ 5,678 ≥4.0% N/A N/A Discover Bank $ 13,821 9.9 % $ 5,596 ≥4.0% $ 6,995 ≥5.0% Common Equity Tier 1 (to risk-weighted assets) Discover Financial Services $ 14,572 11.6 % $ 5,647 ≥4.5% N/A N/A Discover Bank $ 13,821 11.2 % $ 5,575 ≥4.5% $ 8,053 ≥6.5% December 31, 2022 Total capital (to risk-weighted assets) Discover Financial Services (3) $ 18,004 15.8 % $ 9,139 ≥8.0% $ 11,424 ≥10.0% Discover Bank $ 16,579 14.7 % $ 9,015 ≥8.0% $ 11,268 ≥10.0% Tier 1 capital (to risk-weighted assets) Discover Financial Services (3) $ 16,039 14.0 % $ 6,854 ≥6.0% $ 6,854 ≥6.0% Discover Bank $ 13,683 12.1 % $ 6,761 ≥6.0% $ 9,015 ≥8.0% Tier 1 capital (to average assets) Discover Financial Services (3) $ 16,039 12.5 % $ 5,147 ≥4.0% N/A N/A Discover Bank $ 13,683 10.8 % $ 5,086 ≥4.0% $ 6,357 ≥5.0% Common Equity Tier 1 (to risk-weighted assets) Discover Financial Services (3) $ 14,983 13.1 % $ 5,141 ≥4.5% N/A N/A Discover Bank $ 13,683 12.1 % $ 5,071 ≥4.5% $ 7,324 ≥6.5% (1) Capital ratios are calculated based on the Basel III standardized approach rules, subject to applicable transition provisions, including CECL transition provisions. (2) The Basel III rules do not establish well-capitalized thresholds for these measures for bank holding companies. Existing well-capitalized thresholds established in the Federal Reserve's Regulation Y have been included where available. (3) Capital amounts and ratios have been updated to reflect the impact of the restatement described in Note 18: Immaterial Restatement of Prior Period Financial Statements . |
Commitments, Contingencies and
Commitments, Contingencies and Guarantees | 9 Months Ended |
Sep. 30, 2023 | |
Commitments Contingencies and Guarantees [Abstract] | |
Commitments, Contingencies and Guarantees | Commitments, Contingencies and Guarantees In the normal course of business, the Company enters into a number of off-balance sheet commitments, transactions and obligations under guarantee arrangements that expose the Company to varying degrees of risk. The Company's commitments, contingencies and guarantee relationships are described below. Commitments Unused Credit Arrangements At September 30, 2023, the Company had unused credit arrangements for loans of approximately $231.8 billion. Such arrangements arise primarily from agreements with customers for unused lines of credit on certain credit cards and certain other loan products, provided there is no violation of conditions in the related agreements. These arrangements, substantially all of which the Company can terminate at any time and which do not necessarily represent future cash requirements, are periodically reviewed based on account usage, customer creditworthiness, loan qualification and the cost of capital. As the Company’s credit card loans are unconditionally cancellable, no liability for expected credit losses is required for unused lines of credit. For all other loans, the Company records a liability for expected credit losses for unfunded commitments, which is presented as part of accrued expenses and other liabilities in the consolidated statements of financial condition. Contingencies See Note 13: Litigation and Regulatory Matters for a description of potential liability arising from pending litigation or regulatory proceedings involving the Company. Guarantees The Company has obligations under certain guarantee arrangements, including contracts, indemnification agreements and representations and warranties, which contingently require the Company to make payments to the guaranteed party based on changes in an underlying asset, liability or equity security of a guaranteed party, rate or index. Also included as guarantees are contracts that contingently require the Company to make payments to a guaranteed party based on another entity's failure to perform under an agreement. The Company's use of guarantees is disclosed below by type of guarantee. Securitizations Representations and Warranties As part of the Company's financing activities, the Company provides representations and warranties that certain assets pledged as collateral in secured borrowing arrangements conform to specified guidelines. Due diligence is performed by the Company, which is intended to ensure that asset guideline qualifications are met. If the assets pledged as collateral do not meet certain conforming guidelines, the Company may be required to replace, repurchase or sell such assets. In its credit card securitization activities, the Company would replace nonconforming receivables through the allocation of excess seller's interest or from additional transfers from the unrestricted pool of receivables. If the Company could not add enough receivables to satisfy the requirement, an early amortization (or repayment) of investors' interests would be triggered. In its student loan securitizations, the Company would generally repurchase the loans from the trust at the outstanding principal amount plus interest. The maximum potential amount of future payments the Company could be required to make would be equal to the current outstanding balances of third-party investor interests in credit card asset-backed securities and the principal amount of any private student loan secured borrowings, plus any unpaid interest for the corresponding secured borrowings. The Company has recorded substantially all of the maximum potential amount of future payments in long-term borrowings on the Company's condensed consolidated statements of financial condition. The Company has not recorded any incremental contingent liability associated with its secured borrowing representations and warranties. Management believes that the probability of having to replace, repurchase or sell assets pledged as collateral under secured borrowing arrangements, including an early amortization event, is low. Counterparty Settlement Guarantees Diners Club and DFS Services LLC (on behalf of PULSE) have various counterparty exposures, which are listed below: • Merchant Guarantee . Diners Club has entered into contractual relationships with certain international merchants, which generally include travel-related businesses, for the benefit of all Diners Club licensees. The licensees hold the primary liability to settle the transactions of their customers with these merchants. However, Diners Club retains a counterparty exposure if a licensee fails to meet its financial payment obligation to one of these merchants. • ATM Guarantee. PULSE entered into contractual relationships with certain international ATM acquirers in which DFS Services LLC retains counterparty exposure if an issuer fails to fulfill its settlement obligation. • Global Network Alliance Guarantee . Discover Network, Diners Club and PULSE have entered into contractual relationships with certain international payment networks in which DFS Services LLC retains the counterparty exposure if a network fails to fulfill its settlement obligation. The maximum potential amount of future payments related to such contingent obligations is dependent upon the transaction volume processed between the time a potential counterparty defaults on its settlement and the time at which the Company disables the settlement of any further transactions for the defaulting party. The Company has some contractual remedies to offset these counterparty settlement exposures (such as letters of credit or pledged deposits), however, there is no limitation on the maximum amount the Company may be liable to pay. The actual amount of the potential exposure cannot be quantified as the Company cannot determine whether particular counterparties will fail to meet their settlement obligations. In the event all licensees and/or issuers were to become unable to settle their transactions, the Company estimates its maximum potential counterparty exposures to these settlement guarantees would be approximately $90 million as of September 30, 2023. The Company believes that the estimated amounts of maximum potential future payments are not representative of the Company's actual potential loss exposure given Diners Club's and PULSE's insignificant historical losses from these counterparty exposures. As of September 30, 2023, the Company had not recorded any contingent liability in the condensed consolidated financial statements for these counterparty exposures and management believes that the probability of any payments under these arrangements is low. Discover Network Merchant Chargeback Guarantees The Company operates the Discover Network, issues payment cards and permits third parties to issue payment cards. The Company is contingently liable for certain transactions processed on the Discover Network in the event of a dispute between the payment card customer and a merchant. The contingent liability arises if the disputed transaction involves a merchant or merchant acquirer with whom the Discover Network has a direct relationship. If a dispute is resolved in the customer's favor, the Discover Network will credit or refund the disputed amount to the Discover Network card issuer, who in turn credits its customer's account. The Discover Network will then charge back the disputed amount of the payment card transaction to the merchant or merchant acquirer, where permitted by the applicable agreement, to seek recovery of amounts already paid to the merchant for payment card transactions. If the Discover Network is unable to collect the amount subject to dispute from the merchant or merchant acquirer (e.g., in the event of merchant default or dissolution or after expiration of the time period for chargebacks in the applicable agreement), the Discover Network will bear the loss for the amount credited or refunded to the customer. In most instances, a loss by the Discover Network is unlikely to arise in connection with payments on card transactions because most products or services are delivered when purchased and credits are issued by merchants on returned items in a timely fashion, thus minimizing the likelihood of cardholder disputes with respect to amounts paid by the Discover Network. However, where the product or service is not scheduled to be provided to the customer until a later date following the purchase, the likelihood of a contingent payment obligation by the Discover Network increases. Losses related to merchant chargebacks were not material for the three and nine months ended September 30, 2023 and 2022. The maximum potential amount of obligations of the Discover Network arising from such contingent obligations is estimated to be the portion of the total Discover Network transaction volume processed to date for which timely and valid disputes may be raised under applicable law and relevant issuer and customer agreements. There is no limitation on the maximum amount the Company may be liable to pay to issuers. However, the Company believes that such amount is not representative of the Company's actual potential loss exposure based on the Company's historical experience. The actual amount of the potential exposure cannot be quantified as the Company cannot determine whether the current or cumulative transaction volumes may include or result in disputed transactions. The following table summarizes certain information regarding merchant chargeback guarantees (dollars in millions): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Aggregate sales transaction volume (1) $ 65,490 $ 66,766 $ 192,173 $ 189,505 (1) Represents transactions processed on the Discover Network for which a potential liability exists that, in aggregate, can differ from credit card sales volume. The Company did not record any contingent liability in the condensed consolidated financial statements for merchant chargeback guarantees as of September 30, 2023 and December 31, 2022. The Company mitigates the risk of potential loss exposure by withholding settlement from merchants, obtaining third-party guarantees, or obtaining escrow deposits or letters of credit from certain merchant acquirers or merchants that are considered a higher risk due to various factors such as time delays in the delivery of products or services. As of September 30, 2023 and December 31, 2022, the Company had escrow deposits and settlement withholdings of $10 million and $11 million, respectively, which are recorded in interest-bearing deposit accounts and accrued expenses and other liabilities on the Company's condensed consolidated statements of financial condition. |
Litigation and Regulatory Matte
Litigation and Regulatory Matters | 9 Months Ended |
Sep. 30, 2023 | |
Loss Contingency [Abstract] | |
Litigation and Regulatory Matters | Litigation and Regulatory Matters In the normal course of business, from time to time, the Company has been named as a defendant in various legal actions, including arbitrations, class actions and other litigation, arising in connection with its activities. Certain of the actual or threatened legal actions include claims for substantial compensatory and/or punitive damages or claims for indeterminate amounts of damages. The litigation process is not predictable and can lead to unexpected results. The Company contests liability and/or the amount of damages as appropriate in each pending matter. The Company has historically offered its customers an arbitration clause in its customer agreements. The arbitration clause allows the Company and its customers to quickly and economically resolve disputes. Additionally, the arbitration clause has in some instances limited the costs of, and the Company's exposure to, litigation. Future legal and regulatory challenges and prohibitions may cause the Company to discontinue its offering and use of such clauses. From time to time, the Company is involved in legal actions challenging its arbitration clause. Bills may be periodically introduced in Congress to directly or indirectly prohibit the use of pre-dispute arbitration clauses. The Company is also involved, from time to time, in other reviews, investigations and proceedings (both formal and informal) by governmental agencies regarding the Company's business including, among other matters, consumer regulatory, accounting, tax and other operational matters. The investigations and proceedings may result in significant adverse judgments, settlements, fines, penalties, injunctions, decreases in regulatory ratings, customer restitution or other relief. These outcomes could materially impact the Company's condensed consolidated financial statements, increase its cost of operations, or limit the Company's ability to execute its business strategies and engage in certain business activities. Certain subsidiaries of the Company are subject to consent orders with the Consumer Financial Protection Bureau ("CFPB") and FDIC, as described below. Pursuant to powers granted under federal banking laws, regulatory agencies have broad and sweeping discretion and may assess civil money penalties, require changes to certain business practices or require customer restitution at any time. In accordance with applicable accounting guidance, the Company establishes an accrued liability for legal and regulatory matters when those matters present loss contingencies that are both probable and estimable. Litigation and regulatory settlement-related expenses were immaterial for the three and nine months ended September 30, 2023 and 2022. There may be an exposure to loss in excess of any amounts accrued. The Company believes the estimate of the aggregate range of reasonably possible losses (meaning the likelihood of losses is more than remote but less than likely), in excess of the amounts that the Company has accrued for legal and regulatory proceedings, is up to $230 million as of September 30, 2023. This estimated range of reasonably possible losses is based on currently available information for those proceedings in which the Company is involved and considers the Company's best estimate of such losses for those matters for which an estimate can be made. It does not represent the Company's maximum potential loss exposure. Various aspects of the legal proceedings underlying the estimated range will change from time to time and actual results may vary significantly from the estimate. The Company's estimated range noted above involves significant judgment, given the varying stages of the proceedings, the existence of numerous yet to be resolved issues, the breadth of the claims (often spanning multiple years and, in some cases, a wide range of business activities), unspecified damages and/or the novelty of the legal issues presented. The outcome of pending matters could adversely affect the Company's reputation and be material to the Company's condensed consolidated financial condition, operating results and cash flows for a particular future period, depending on, among other things, the level of the Company's income for such period. In July 2015, the Company announced that its subsidiaries, Discover Bank, The Student Loan Corporation and Discover Products Inc. (the "Discover Subsidiaries"), agreed to a consent order with the CFPB with respect to certain private student loan servicing practices (the “2015 Order”). The 2015 Order expired in July 2020. In December 2020, the Discover Subsidiaries agreed to a consent order (the “2020 Order”) with the CFPB resolving the agency’s investigation into Discover Bank’s compliance with the 2015 Order. In connection with the 2020 Order, Discover is required to implement a redress and compliance plan and must pay at least $10 million in consumer redress to consumers who may have been harmed and has paid a $25 million civil money penalty to the CFPB. On September 25, 2023, following the consent of the Board of Directors of Discover Bank, the FDIC issued a consent order (“consent order”) to Discover Bank. The consent order addresses shortcomings in Discover Bank’s compliance management system for consumer protection laws and related matters. As part of the consent order, Discover Bank has agreed to improve its consumer compliance management system and enhance related corporate governance and enterprise risk management practices, and increase the level of Board oversight over such matters. Discover Bank has been taking significant steps to strengthen the organization’s compliance management system and address the other issues identified in the consent order. Management and the Board are committed to ensuring that all of the requirements of the consent order are met. The consent order does not contain any monetary penalties or fines. On March 8, 2016, a class-action lawsuit was filed against the Company, other credit card networks, other issuing banks and EMVCo in the U.S. District Court for the Northern District of California (B&R Supermarket, Inc., d/b/a Milam's Market, et al. v. Visa, Inc. et al.) alleging a conspiracy by defendants to shift fraud liability to merchants with the migration to the EMV security standard and chip technology. The plaintiffs assert joint and several liability among the defendants and seek unspecified damages, including treble damages, attorneys' fees, costs and injunctive relief. The Company filed its motion to compel arbitration, motion for summary judgment, and Daubert challenges on November 30, 2022, and awaits rulings. The Company is not in a position at this time to assess the likely outcome or its exposure, if any, with respect to this matter. However, the Company will seek to defend itself vigorously against all claims asserted by the plaintiffs. Card Product Misclassification As reported in the second quarter of 2023, beginning in 2007, the Company incorrectly classified certain credit card accounts into its highest merchant and merchant acquirer pricing tier. The misclassification affected pricing for certain merchants and merchant acquirers, but not for cardholders. In the second quarter of 2023, the Company recorded a liability of $365 million within accrued expenses and other liabilities to provide refunds to merchants and merchant acquirers as a result of the card product misclassification. As of September 30, 2023, the balance of the liability was $376 million, reflecting an additional $11 million for the estimated effect of the current price tiering on discount and interchange assessments for the third quarter. As of September 30, 2023, no disbursements had been made against this liability as the Company continues to develop its plan to provide refunds to merchants and merchant acquirers and engage in ongoing discussions about such plans with its regulators. Management is taking actions to correct the card product misclassification going forward and to prepare a program to compensate affected merchants and merchant acquirers. It is not possible to know with certainty the final amount of potential refunds at this time given differences in individual merchant agreements, changes in network terms and availability of historical data. Regulators may require refunds or other remediation that may result in other charges or an amount different than the Company’s current estimate. The Company remains in discussions with its regulators regarding this matter. The Company expects these discussions will likely result in enforcement actions, which may include, among other remedies, monetary penalties, the amount of which cannot be estimated at this time. In addition, the Company and its subsidiaries have been named as defendants in various lawsuits, including putative class actions on behalf of affected merchants, a putative class action on behalf of shareholders and shareholder derivative actions. The Company also is cooperating with an SEC investigation into the card product misclassification matter. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Accounting Standards Codification ("ASC") Topic 820, Fair Value Measurement , provides a three-level hierarchy for classifying the inputs to valuation techniques used to measure fair value of financial instruments based on whether the inputs are observable or unobservable. It also requires certain disclosures about those measurements. The three-level valuation hierarchy is as follows: • Level 1 : Fair values determined by Level 1 inputs are defined as those that utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. • Level 2 : Fair values determined by Level 2 inputs are those that utilize inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active or inactive markets, quoted prices for the identical assets in an inactive market and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals. The Company evaluates factors such as the frequency of transactions, the size of the bid-ask spread and the significance of adjustments made when considering transactions involving similar assets or liabilities to assess the relevance of those observed prices. If relevant and observable prices are available, the fair values of the related assets or liabilities would be classified as Level 2. • Level 3 : Fair values determined by Level 3 inputs are those based on unobservable inputs and include situations where there is little, if any, market activity for the asset or liability being valued. In instances where the inputs used to measure fair value may fall into different levels of the fair value hierarchy, the level in the fair value hierarchy in which the measurements are classified is based on the lowest level input that is significant to the fair value measurement in its entirety. Accordingly, the Company may utilize both observable and unobservable inputs in determining the fair values of financial instruments classified within the Level 3 category. The Company evaluates the classification of each fair value measurement within the hierarchy at least quarterly. The Company's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and involves consideration of factors specific to the asset or liability. Furthermore, certain techniques used to measure fair value involve some degree of judgment and, as a result, are not necessarily indicative of the amounts the Company would realize in a current market exchange. Assets and Liabilities Measured at Fair Value on a Recurring Basis Assets and liabilities measured at fair value on a recurring basis are as follows (dollars in millions): Quoted Price Significant Significant Total Balance at September 30, 2023 Assets Fair value - OCI U.S. Treasury and U.S. GSE securities $ 12,598 $ 8 $ — $ 12,606 Residential mortgage-backed securities - Agency — 473 — 473 Available-for-sale investment securities $ 12,598 $ 481 $ — $ 13,079 Derivative financial instruments - cash flow hedges (1) $ — $ 9 $ — $ 9 Fair value - Net income Marketable equity securities $ 39 $ — $ — $ 39 Derivative financial instruments - fair value hedges (1) $ — $ 5 $ — $ 5 Liabilities Fair value - OCI Derivative financial instruments - cash flow hedges (1) $ — $ 1 $ — $ 1 Balance at December 31, 2022 Assets Fair value - OCI U.S. Treasury and U.S. GSE securities $ 11,416 $ 7 $ — $ 11,423 Residential mortgage-backed securities - Agency — 564 — 564 Available-for-sale investment securities $ 11,416 $ 571 $ — $ 11,987 Derivative financial instruments - cash flow hedges (1) $ — $ 1 $ — $ 1 Fair value - Net income Marketable equity securities $ 41 $ — $ — $ 41 Liabilities Fair value - OCI Derivative financial instruments - cash flow hedges (1) $ — $ 3 $ — $ 3 Fair value - Net income Derivative financial instruments - fair value hedges (1) $ — $ 2 $ — $ 2 . (1) Derivative instrument carrying values in an asset or liability position are presented as part of other assets or accrued expenses and other liabilities, respectively, in the Company's condensed consolidated statements of financial condition. Available-for-Sale Investment Securities Investment securities classified as available-for-sale consist of U.S. Treasury and U.S. GSE securities and RMBS. The fair value estimates of investment securities classified as Level 1, consisting of U.S. Treasury securities, are determined based on quoted market prices for the same securities. The fair value estimates of U.S. GSE securities and RMBS are classified as Level 2 and are valued by maximizing the use of relevant observable inputs, including quoted prices for similar securities, benchmark yield curves and market-corroborated inputs. The Company validates the fair value estimates provided by pricing services primarily by comparing to valuations obtained through other pricing sources. The Company evaluates pricing variances among different pricing sources to ensure that the valuations utilized are reasonable. The Company also corroborates the reasonableness of the fair value estimates with analysis of trends of significant inputs, such as market interest rate curves. The Company further performs due diligence in understanding the procedures and techniques performed by the pricing services to derive fair value estimates. At September 30, 2023, amounts reported in RMBS reflect U.S. government agency and U.S. GSE obligations issued by Ginnie Mae, Fannie Mae and Freddie Mac with an aggregate par value of $505 million, a weighted-average coupon of 4.08% and a weighted-average remaining maturity of four years. Marketable Equity Securities The Company holds non-controlling equity positions in payment service entities that have actively traded stock and therefore have readily determinable fair values. The Company classifies these equity securities as Level 1, the fair value estimates of which are determined based on quoted share prices for the same securities. Derivative Financial Instruments The Company's derivative financial instruments consist of interest rate swaps and foreign exchange forward contracts. These instruments are classified as Level 2 as their fair values are estimated using proprietary pricing models, containing certain assumptions based on readily observable market-based inputs, including interest rate curves, option volatility and foreign currency forward and spot rates. In determining fair values, the pricing models use widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity and the observable market-based inputs. The fair values of the interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The variable cash payments are based on an expectation of future interest rates derived from the observable market interest rate curves. The Company considers collateral and master netting agreements that mitigate credit exposure to counterparties in determining the counterparty credit risk valuation adjustment. The fair values of the currency instruments are valued by comparing the contracted forward exchange rate pertaining to the specific contract maturities to the current market exchange rate. The Company validates the fair value estimates of interest rate swaps primarily through comparison to the fair value estimates computed by the counterparties to each of the derivative transactions. The Company evaluates pricing variances among different pricing sources to ensure that the valuations utilized are reasonable. The Company also corroborates the reasonableness of the fair value estimates with analysis of trends of significant inputs, such as market interest rate curves. The Company performs due diligence in understanding the impact of any changes to the valuation techniques performed by proprietary pricing models before implementation, working closely with the third-party valuation service and reviewing the service's control objectives at least annually. The Company corroborates the fair value of foreign exchange forward contracts through independent calculation of the fair value estimates. Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis The Company also has assets that, under certain conditions, are subject to measurement at fair value on a non-recurring basis. These assets include those associated with acquired businesses, including goodwill. For these assets, measurement at fair value in periods subsequent to the initial recognition of the assets may be applicable whenever one is tested for impairment. No impairments were recognized related to these assets during the three and nine months ended September 30, 2023 and 2022. Financial Instruments Measured at Other Than Fair Value The following tables disclose the estimated fair value of the Company's financial assets and financial liabilities that are not required to be carried at fair value (dollars in millions): Balance at September 30, 2023 Quoted Prices in Active Markets Significant Significant Total Carrying Assets Amortized cost Residential mortgage-backed securities - Agency $ — $ 226 $ — $ 226 $ 257 Held-to-maturity investment securities $ — $ 226 $ — $ 226 $ 257 Net loan receivables $ — $ — $ 121,102 $ 121,102 $ 114,011 Carrying value approximates fair value (1) Cash and cash equivalents $ 9,194 $ — $ — $ 9,194 $ 9,194 Restricted cash $ 39 $ — $ — $ 39 $ 39 Accrued interest receivables (2) $ — $ 1,396 $ — $ 1,396 $ 1,396 Liabilities Amortized cost Time deposits (3) $ — $ 40,490 $ — $ 40,490 $ 40,748 Long-term borrowings - owed to securitization investors $ — $ 10,607 $ 69 $ 10,676 $ 10,889 Other long-term borrowings — 8,010 — 8,010 8,578 Long-term borrowings $ — $ 18,617 $ 69 $ 18,686 $ 19,467 Carrying value approximates fair value (1) Accrued interest payables (2) $ — $ 357 $ — $ 357 $ 357 Balance at December 31, 2022 Assets Amortized cost Residential mortgage-backed securities - Agency $ — $ 199 $ — $ 199 $ 221 Held-to-maturity investment securities $ — $ 199 $ — $ 199 $ 221 Net loan receivables $ — $ — $ 110,796 $ 110,796 $ 104,746 Carrying value approximates fair value (1) Cash and cash equivalents $ 8,856 $ — $ — $ 8,856 $ 8,856 Restricted cash $ 41 $ — $ — $ 41 $ 41 Accrued interest receivables (2) $ — $ 1,211 $ — $ 1,211 $ 1,211 Liabilities Amortized cost Time deposits (3) $ — $ 32,710 $ — $ 32,710 $ 33,070 Long-term borrowings - owed to securitization investors $ — $ 9,862 $ 84 $ 9,946 $ 10,259 Other long-term borrowings — 9,468 — 9,468 9,849 Long-term borrowings $ — $ 19,330 $ 84 $ 19,414 $ 20,108 Carrying value approximates fair value (1) Accrued interest payables (2) $ — $ 308 $ — $ 308 $ 308 (1) The carrying values of these assets and liabilities approximate fair value due to their short-term nature. (2) Accrued interest receivable and payable carrying values are presented as part of other assets and accrued expenses and other liabilities, respectively, in the Company's condensed consolidated statements of financial condition. (3) Excludes deposits without contractually defined maturities for all periods presented. |
Derivatives and Hedging Activit
Derivatives and Hedging Activities | 9 Months Ended |
Sep. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and Hedging Activities | Derivatives and Hedging Activities The Company uses derivatives to manage its exposure to various financial risks. The Company does not enter into derivatives for trading or speculative purposes. Certain derivatives used to manage the Company's exposure to foreign currency are not designated as hedges and do not qualify for hedge accounting. Derivatives may give rise to counterparty credit risk, which generally is mitigated through collateral arrangements as described under the sub-heading "— Collateral Requirements and Credit-Risk Related Contingency Features." The Company enters into derivative transactions with established dealers that meet minimum credit criteria established by the Company. All counterparties must be pre-approved before engaging in any transaction with the Company. The Company regularly monitors counterparties to ensure compliance with the Company's risk policies and limits. In determining the counterparty credit risk valuation adjustment for the fair values of derivatives, if any, the Company considers collateral and legally enforceable master netting agreements that mitigate credit exposure to related counterparties. All derivatives are recorded in other assets at their gross positive fair values and in accrued expenses and other liabilities at their gross negative fair values. See Note 14: Fair Value Measurements for a description of the valuation methodologies used for derivatives. Cash collateral amounts associated with derivative positions that are cleared through an exchange are legally characterized as settlement of the derivative positions. Such collateral amounts are reflected as offsets to the associated derivatives balances recorded in other assets or in accrued expenses and other liabilities. Other cash collateral posted and held balances are recorded in other assets and deposits, respectively, in the condensed consolidated statements of financial condition. Collateral amounts recorded in the condensed consolidated statements of financial condition are based on the net collateral posted or held position for each applicable legal entity's master netting arrangement with each counterparty. Derivatives Designated as Hedges Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows arising from changes in interest rates, or other types of forecasted transactions, are considered cash flow hedges. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Cash Flow Hedges The Company uses interest rate swaps to manage its exposure to variability in cash flows related to changes in interest rates on interest-earning assets and funding instruments. These interest rate swaps qualify for hedge accounting in accordance with ASC Topic 815, Derivatives and Hedging ("ASC 815"). At September 30, 2023 and December 31, 2022, the Company's outstanding cash flow hedges primarily relate to interest receipts from credit card receivables and had an initial maximum period of four years and three years, respectively. The change in the fair value of derivatives designated as cash flow hedges is recorded in OCI and is subsequently reclassified into earnings in the period that the hedged forecasted cash flows affect earnings. Amounts reported in AOCI related to derivatives at September 30, 2023, will be reclassified to interest income and interest expense as interest receipts and payments are accrued on the Company's then outstanding credit card receivables and certain floating-rate debt, respectively. During the next 12 months, the Company estimates it will reclassify $113 million into pretax earnings related to its cash flow hedges. Fair Value Hedges The Company is exposed to changes in the fair value of its fixed-rate debt obligations due to changes in interest rates. The Company uses interest rate swaps to manage its exposure to changes in the fair value of certain fixed-rate long-term borrowings, including securitized debt and bank notes, attributable to changes in the respective benchmark rates. These interest rate swaps qualify as fair value hedges in accordance with ASC 815. Changes in the fair values of both (i) the derivatives and (ii) the hedged long-term borrowings attributable to the interest-rate risk being hedged are recorded in interest expense. The changes generally provide substantial offset to one another, with any difference recognized in interest expense. Derivatives Not Designated as Hedges Foreign Exchange Forward Contracts The Company has foreign exchange forward contracts that are economic hedges and are not designated as accounting hedges. The Company enters into foreign exchange forward contracts to manage foreign currency risk. Changes in the fair value of these contracts are recorded in other income on the condensed consolidated statements of income. Derivatives Cleared Through an Exchange Cash variation margin payments on derivatives cleared through an exchange are legally considered settlement payments and are accounted for with corresponding derivative positions as one unit of account and not presented separately as collateral. With settlement payments on derivative positions cleared through this exchange reflected as offsets to the associated derivative asset and liability balances, the fair values of derivative instruments and collateral balances shown are generally reduced. Derivatives Activity The following table summarizes the fair value (including accrued interest) and outstanding notional amounts of derivative instruments and related collateral balances (dollars in millions): September 30, 2023 December 31, 2022 Notional Number of Outstanding Derivative Contracts Derivative Assets Derivative Liabilities Notional Derivative Assets Derivative Liabilities Derivatives designated as hedges Interest rate swaps—cash flow hedge $ 8,900 15 $ 9 $ 1 $ 5,000 $ 1 $ 3 Interest rate swaps—fair value hedge $ 6,750 8 5 — $ 4,425 — 2 Derivatives not designated as hedges Foreign exchange forward contracts (1) $ 25 7 — — $ 25 — — Total gross derivative assets/liabilities (2) 14 1 1 5 Less: collateral held/posted (3) — (1) — (5) Total net derivative assets/liabilities $ 14 $ — $ 1 $ — (1) The foreign exchange forward contracts have notional amounts of EUR 6 million, GBP 6 million, SGD 1 million, INR 788 million and AUD 2 million as of September 30, 2023 and December 31, 2022. (2) In addition to the derivatives disclosed in the table, the Company enters into forward contracts to purchase when-issued mortgage-backed securities as part of its community reinvestment initiatives. At September 30, 2023, the Company had no outstanding contracts. At December 31, 2022, the Company had one outstanding contract with a total notional amount of $48 million and an immaterial fair value. (3) Collateral amounts, which consist of cash and investment securities, are limited to the related derivative asset/liability balance and do not include excess collateral received/pledged. The following amounts were recorded on the statements of financial condition related to cumulative basis adjustments for fair value hedges (dollars in millions): September 30, 2023 December 31, 2022 Carrying Amount of Hedged Liabilities Cumulative Amount of Fair Value Hedging Adjustment (Decreasing) the Carrying Amount of Hedged Liabilities (1) Carrying Amount of Hedged Liabilities Cumulative Amount of Fair Value Hedging Adjustment (Decreasing) the Carrying Amount of Hedged Liabilities (1) Long-term borrowings $ 6,595 $ (127) $ 4,386 $ (3) (1) The balance includes $14 million and $28 million of cumulative hedging adjustments related to discontinued hedging relationships as of September 30, 2023 and December 31, 2022, respectively. The following table summarizes the impact of the derivative instruments on income and indicates where within the condensed consolidated financial statements such impact is reported (dollars in millions): Location and Amount of (Losses) Gains Recognized on the Condensed Consolidated Statements of Income Interest Expense Long-Term Borrowings Interest Income (Credit Card) Other Income For the Three Months Ended September 30, 2023 Total amounts of income and expense line items presented in the condensed consolidated statements of income, where the effects of fair value or cash flow hedges are recorded $ (225) $ 3,726 $ 21 The effects of cash flow and fair value hedging Gains (losses) on fair value hedging relationships Amounts reclassified from OCI into earnings $ 2 $ (31) $ — Gains (losses) on fair value hedging relationships Gains on hedged items $ 24 $ — $ — Losses on interest rate swaps (53) — — Total losses on fair value hedging relationships $ (29) $ — $ — For the Three Months Ended September 30, 2022 Total amounts of income and expense line items presented in the condensed consolidated statements of income, where the effects of fair value or cash flow hedges are recorded $ (168) $ 2,783 $ 19 The effects of cash flow and fair value hedging Losses on cash flow hedging relationships Amounts reclassified from OCI into earnings $ (1) $ (1) $ — Gains (losses) on fair value hedging relationships Gains on hedged items $ 3 $ — $ — Losses on interest rate swaps (11) — — Total losses on fair value hedging relationships $ (8) $ — $ — The effects of derivatives not designated in hedging relationships Gains on derivatives not designated as hedges $ — $ — $ 1 Location and Amount of (Losses) Gains Recognized on the Condensed Consolidated Statements of Income Interest Expense Interest Income (Credit Card) Long-Term Borrowings Other Income For the Nine Months Ended September 30, 2023 Total amounts of income and expense line items presented in the condensed consolidated statements of income, where the effects of fair value or cash flow hedges are recorded $ (622) $ 10,513 $ 71 The effects of cash flow and fair value hedging Gains (losses) on cash flow hedging relationships Amounts reclassified from OCI into earnings $ 6 $ (56) $ — Gains (losses) on fair value hedging relationships Gains on hedged items $ 111 $ — $ — Losses on interest rate swaps (181) — — Total losses on fair value hedging relationships $ (70) $ — $ — For the Nine Months Ended September 30, 2022 Total amounts of income and expense line items presented in the condensed consolidated statements of income, where the effects of fair value or cash flow hedges are recorded $ (416) $ 7,475 $ 64 The effects of cash flow and fair value hedging Losses on cash flow hedging relationships Amounts reclassified from OCI into earnings $ (3) $ (1) $ — Gains (losses) on fair value hedging relationships Gains on hedged items $ 72 $ — $ — Losses on interest rate swaps (61) — — Total gains on fair value hedging relationships $ 11 $ — $ — The effects of derivatives not designated in hedging relationships Gains on derivatives not designated as hedges $ — $ — $ 2 For the impact of the derivative instruments on OCI, see Note 8: Accumulated Other Comprehensive Income. Collateral Requirements and Credit-Risk Related Contingency Features The Company has master netting arrangements and minimum collateral posting thresholds with its counterparties for its fair value and cash flow hedge interest rate swaps and foreign exchange forward contracts. The Company has not sought a legal opinion in relation to the enforceability of its master netting arrangements and, as such, does not report any of these positions on a net basis. Collateral is required by either the Company or its subsidiaries or the counterparty depending on the net fair value position of the derivatives held with that counterparty. These collateral receivable or payable amounts are generally not offset against the fair value of these derivatives but are recorded separately in other assets or deposits. Most of the Company's cash collateral amounts relate to positions cleared through an exchange and are reflected as offsets to the associated derivatives balances recorded in other assets and accrued expenses and other liabilities. The Company also has agreements with certain of its derivative counterparties that contain a provision under which the Company could be declared in default on any of its derivative obligations if the Company defaults on any of its indebtedness, including default where the lender has not accelerated repayment of the indebtedness. |
Segment Disclosures
Segment Disclosures | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Segment Disclosures | Segment Disclosures The Company manages its business activities in two segments: Digital Banking and Payment Services. • Digital Banking: The Digital Banking segment includes Discover-branded credit cards issued to individuals on the Discover Network and other consumer products and services, including private student loans, personal loans, home loans and other consumer lending and deposit products. The majority of Digital Banking revenues relate to interest income earned on the segment's loan products. Additionally, the Company's credit card products generate substantially all revenues related to discount and interchange, protection products and loan fee income. • Payment Services: The Payment Services segment includes PULSE, an automated teller machine, debit and electronic funds transfer network; Diners Club, a global payments network; and the Company's Network Partners business, which provides payment transaction processing and settlement services on the Discover Network. The majority of Payment Services revenues relate to transaction processing revenue from PULSE and royalty and licensee revenue from Diners Club. The business segment reporting provided to and used by the Company's chief operating decision-maker is prepared using the following principles and allocation conventions: • The Company aggregates operating segments when determining reportable segments. • Corporate overhead is not allocated between segments; all corporate overhead is included in the Digital Banking segment. • Through its operation of the Discover Network, the Digital Banking segment incurs fixed marketing, servicing and infrastructure costs that are not specifically allocated among the segments, except for an allocation of direct and incremental costs driven by the Company's Payment Services segment. • The Company's assets are not allocated among the operating segments in the information reviewed by the Company's chief operating decision-maker. • The revenues of each segment are derived from external sources. The segments do not earn revenue from intercompany sources. • Income taxes are not specifically allocated between the operating segments in the information reviewed by the Company's chief operating decision maker. The following table presents segment data (dollars in millions): Digital Payment Total For the Three Months Ended September 30, 2023 Interest income Credit card loans $ 3,726 $ — $ 3,726 Private student loans 261 — 261 Personal loans 305 — 305 Other loans 87 — 87 Other interest income 231 — 231 Total interest income 4,610 — 4,610 Interest expense 1,288 — 1,288 Net interest income 3,322 — 3,322 Provision for credit losses 1,702 — 1,702 Other income 592 130 722 Other expense 1,409 45 1,454 Income before income taxes $ 803 $ 85 $ 888 For the Three Months Ended September 30, 2022 Interest income Credit card loans $ 2,783 $ — $ 2,783 Private student loans 211 — 211 Personal loans 221 — 221 Other loans 44 — 44 Other interest income 98 — 98 Total interest income 3,357 — 3,357 Interest expense 514 — 514 Net interest income 2,843 — 2,843 Provision for credit losses 773 — 773 Other income 530 95 625 Other expense 1,326 42 1,368 Income before income taxes $ 1,274 $ 53 $ 1,327 Digital Payment Total For the Nine Months Ended September 30, 2023 Interest income Credit card loans $ 10,513 $ — $ 10,513 Private student loans 768 — 768 Personal loans 831 — 831 Other loans 224 — 224 Other interest income 641 — 641 Total interest income 12,977 — 12,977 Interest expense 3,346 — 3,346 Net interest income 9,631 — 9,631 Provision for credit losses 4,109 — 4,109 Other income 1,700 333 2,033 Other expense 4,110 131 4,241 Income before income taxes $ 3,112 $ 202 $ 3,314 For the Nine Months Ended September 30, 2022 Interest income Credit card loans $ 7,475 $ — $ 7,475 Private student loans 597 — 597 Personal loans 633 — 633 Other loans 113 — 113 Other interest income 190 — 190 Total interest income 9,008 — 9,008 Interest expense 1,076 — 1,076 Net interest income 7,932 — 7,932 Provision for credit losses 1,476 — 1,476 Other income 1,551 89 1,640 Other expense 3,604 117 3,721 Income (loss) before income taxes $ 4,403 $ (28) $ 4,375 |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | Revenue from Contracts with Customers ASC Topic 606, Revenue from Contracts with Customers ("ASC 606"), generally applies to the sales of any good or service for which no other specific accounting guidance is provided. ASC 606 defines a principles-based model under which revenue from a contract is allocated to the distinct performance obligations within the contract and recognized in income as each performance obligation is satisfied. The Company's revenue that is subject to this model includes discount and interchange, protection products fees, transaction processing revenue and certain amounts classified as other income. The following table presents revenue from contracts with customers disaggregated by business segment and reconciles revenue from contracts with customers to total other income (dollars in millions): Digital Banking Payment Services Total For the Three Months Ended September 30, 2023 Other income subject to ASC 606 Discount and interchange revenue, net (1) $ 354 $ 23 $ 377 Protection products revenue 42 — 42 Transaction processing revenue — 82 82 Other income 2 19 21 Total other income subject to ASC 606 (2) 398 124 522 Other income not subject to ASC 606 Loan fee income 194 — 194 Gains on equity investments — 6 6 Total other income not subject to ASC 606 194 6 200 Total other income by operating segment $ 592 $ 130 $ 722 For the Three Months Ended September 30, 2022 Other income subject to ASC 606 Discount and interchange revenue, net (1) $ 316 $ 19 $ 335 Protection products revenue 42 — 42 Transaction processing revenue — 65 65 Other income 3 16 19 Total other income subject to ASC 606 (2) 361 100 461 Other income not subject to ASC 606 Loan fee income 168 — 168 Gains (losses) on equity investments 1 (5) (4) Total other income (loss) not subject to ASC 606 169 (5) 164 Total other income by operating segment $ 530 $ 95 $ 625 Digital Banking Payment Services Total For the Nine Months Ended September 30, 2023 Other income subject to ASC 606 Discount and interchange revenue, net (1) $ 1,013 $ 64 $ 1,077 Protection products revenue 129 — 129 Transaction processing revenue — 221 221 Other income 12 59 71 Total other income subject to ASC 606 (2) 1,154 344 1,498 Other income not subject to ASC 606 Loan fee income 546 — 546 Gains (losses) on equity investments — (11) (11) Total other income (loss) not subject to ASC 606 546 (11) 535 Total other income by operating segment $ 1,700 $ 333 $ 2,033 For the Nine Months Ended September 30, 2022 Other income subject to ASC 606 Discount and interchange revenue, net (1) $ 962 $ 61 $ 1,023 Protection products revenue 128 — 128 Transaction processing revenue — 183 183 Other income 9 55 64 Total other income subject to ASC 606 (2) 1,099 299 1,398 Other income not subject to ASC 606 Loan fee income 450 — 450 Gains (losses) on equity investments 2 (210) (208) Total other income (loss) not subject to ASC 606 452 (210) 242 Total other income (loss) by operating segment $ 1,551 $ 89 $ 1,640 (1) Net of rewards, including Cashback Bonus rewards, of $787 million and $811 million for the three months ended September 30, 2023 and 2022, respectively, and $2.3 billion and $2.2 billion for the nine months ended September 30, 2023 and 2022. respectively. (2) Excludes $3 million and $13 million of deposit product fees that are reported within net interest income for the three and nine months ended September 30, 2023, respectively. Deposit product fees were immaterial for the three and nine months ended September 30, 2022. For a detailed description of the Company's significant revenue recognition accounting policies, see Note 2: Summary of Significant Accounting Policies to the consolidated financial statements in the Company's annual report on Form 10-K for the year ended December 31, 2022. |
Immaterial Restatement of Prior
Immaterial Restatement of Prior Period Financial Statements | 9 Months Ended |
Sep. 30, 2023 | |
Prior Period Adjustment [Abstract] | |
Error Correction | Immaterial Restatement of Prior Period Financial Statements As reported in the second quarter of 2023, beginning in 2007, the Company incorrectly classified certain credit card accounts into its highest merchant and merchant acquirer pricing tier. The card product classification impacts the pricing and charging of discount and interchange revenue, which is recorded within discount and interchange revenue, net, on the consolidated statements of income. The Company determined the revenue impact of the incorrect card product classification was immaterial to the consolidated financial statements for all impacted prior periods. For comparative purposes, the Company has made these immaterial corrections to the recognition of discount and interchange revenue, as well as the related impacts to assets, liabilities and retained earnings in the prior periods presented in this Form 10-Q. Assets were impacted by adjustments to deferred tax assets, and liabilities were impacted by an adjustment to the liability for estimated refunds to merchants and merchant acquirers. The prior period impacts to the Company's consolidated statement of financial condition were as shown below (dollars in millions): December 31, 2022 As Previously Reported Restatement Impacts As Restated Assets Other assets $ 4,519 $ 78 $ 4,597 Total assets $ 131,628 $ 78 $ 131,706 Liabilities and Stockholders' Equity Liabilities Accrued expenses and other liabilities $ 5,294 $ 324 $ 5,618 Total liabilities $ 117,038 $ 324 $ 117,362 Stockholders' Equity Retained earnings $ 28,453 $ (246) $ 28,207 Total stockholders' equity $ 14,590 $ (246) $ 14,344 Total liabilities and stockholders' equity $ 131,628 $ 78 $ 131,706 The prior period impacts to the Company's consolidated statements of income and the related impacts to the consolidated statements of comprehensive income were as shown below (dollars in millions): For the Three Months Ended September 30, 2022 For the Nine Months Ended September 30, 2022 As Previously Reported Restatement Impacts As Restated As Previously Reported Restatement Impacts As Restated Other income Discount and interchange revenue, net $ 346 $ (11) $ 335 $ 1,056 $ (33) $ 1,023 Total other income $ 636 $ (11) $ 625 $ 1,673 $ (33) $ 1,640 Other expense Other expense $ 174 $ (20) $ 154 $ 406 $ (20) $ 386 Total other expense $ 1,388 $ (20) $ 1,368 $ 3,741 $ (20) $ 3,721 Income before income taxes $ 1,318 $ 9 $ 1,327 $ 4,388 $ (13) $ 4,375 Income tax expense $ 312 $ 2 $ 314 $ 1,029 $ (3) $ 1,026 Net income $ 1,006 $ 7 $ 1,013 $ 3,359 $ (10) $ 3,349 Net income allocated to common stockholders $ 967 $ 8 $ 975 $ 3,277 $ (10) $ 3,267 Basic earnings per common share $ 3.54 $ 0.03 $ 3.57 $ 11.74 $ (0.04) $ 11.70 Diluted earnings per common share $ 3.54 $ 0.02 $ 3.56 $ 11.73 $ (0.04) $ 11.69 The prior period impacts to the Company's consolidated statements of changes in stockholders' equity were as shown below (dollars in millions): Retained Earnings Total Stockholders' Equity As Previously Reported For the Three Months Ended September 30, 2022 Balance at June 30, 2022 $ 26,776 $ 13,764 Net income $ 1,006 $ 1,006 Balance at September 30, 2022 $ 27,585 $ 14,286 Restatement Impacts For the Three Months Ended September 30, 2022 Balance at June 30, 2022 $ (245) $ (245) Net income $ 7 $ 7 Balance at September 30, 2022 $ (238) $ (238) As Restated For the Three Months Ended September 30, 2022 Balance at June 30, 2022 $ 26,531 $ 13,519 Net income $ 1,013 $ 1,013 Balance at September 30, 2022 $ 27,347 $ 14,048 Retained Earnings Total Stockholders' Equity As Previously Reported For the Nine Months Ended September 30, 2022 Balance at December 31, 2021 $ 24,766 $ 13,408 Net income $ 3,359 $ 3,359 Balance at September 30, 2022 $ 27,585 $ 14,286 Restatement Impacts For the Nine Months Ended September 30, 2022 Balance at December 31, 2021 $ (228) $ (228) Net income $ (10) $ (10) Balance at September 30, 2022 $ (238) $ (238) As Restated For the Nine Months Ended September 30, 2022 Balance at December 31, 2021 $ 24,538 $ 13,180 Net income $ 3,349 $ 3,349 Balance at September 30, 2022 $ 27,347 $ 14,048 The prior period impacts to the Company's consolidated statements of cash flows were as follows (dollars in millions): For the Nine Months Ended September 30, 2022 As Previously Reported Restatement Impacts As Restated Cash flows provided by operating activities Net income $ 3,359 $ (10) $ 3,349 Adjustments to reconcile net income to net cash provided by operating activities: Deferred income taxes $ (314) $ (3) $ (317) Changes in assets and liabilities: Increase in accrued expenses and liabilities $ 312 $ 13 $ 325 Net cash provided by operating activities $ 4,965 $ — $ 4,965 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsThe Company has evaluated events and transactions that have occurred subsequent to September 30, 2023, and determined that there were no subsequent events that would require recognition or disclosure in the condensed consolidated financial statements. |
Background and Basis of Prese_2
Background and Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of presentation | The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. ("GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete consolidated financial statements. In the opinion of management, the financial statements reflect all adjustments necessary for the fair presentation of results for the interim period. All such adjustments are of a normal, recurring nature. |
Use of estimates | The preparation of financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and related disclosures. These estimates are based on information available as of the date of the condensed consolidated financial statements. The Company believes that the estimates used in the preparation of the condensed consolidated financial statements are reasonable. Actual results could differ from these estimates. |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Investment Securities | The Company's investment securities consist of the following (dollars in millions): September 30, December 31, U.S. Treasury (1) and U.S. GSE (2) securities $ 12,606 $ 11,423 Residential mortgage-backed securities - Agency (3) 730 785 Total investment securities $ 13,336 $ 12,208 (1) Includes $285 million and $97 million of U.S. Treasury securities pledged as swap collateral as of September 30, 2023 and December 31, 2022, respectively. (2) Consists of a security issued by the Federal Home Loan Bank. (3) Consists of securities issued by Fannie Mae, Freddie Mac, or Ginnie Mae. |
Schedule of Amortized Cost, Gross Unrealized Gains, Gross Unrealized Losses and Fair Value | The amortized cost, gross unrealized gains and losses and fair value of available-for-sale and held-to-maturity investment securities are as follows (dollars in millions): Amortized Gross Gross Fair Value At September 30, 2023 Available-for-Sale Investment Securities (1) U.S. Treasury and U.S. GSE securities $ 12,942 $ — $ (336) $ 12,606 Residential mortgage-backed securities - Agency 505 — (32) 473 Total available-for-sale investment securities $ 13,447 $ — $ (368) $ 13,079 Held-to-Maturity Investment Securities (2) Residential mortgage-backed securities - Agency (3) $ 257 $ — $ (31) $ 226 Total held-to-maturity investment securities $ 257 $ — $ (31) $ 226 At December 31, 2022 Available-for-Sale Investment Securities (1) U.S. Treasury and U.S. GSE securities $ 11,580 $ 21 $ (178) $ 11,423 Residential mortgage-backed securities - Agency 587 — (23) 564 Total available-for-sale investment securities $ 12,167 $ 21 $ (201) $ 11,987 Held-to-Maturity Investment Securities (2) Residential mortgage-backed securities - Agency (3) $ 221 $ — $ (22) $ 199 Total held-to-maturity investment securities $ 221 $ — $ (22) $ 199 (1) Available-for-sale investment securities are reported at fair value. (2) Held-to-maturity investment securities are reported at amortized cost. (3) Amounts represent residential mortgage-backed securities ("RMBS") that were classified as held-to-maturity as they were entered into as a part of the Company's community reinvestment initiatives. |
Schedule of Fair Value of Securities in a Continuous Unrealized Loss Position for Less Than 12 Months and More Than 12 Months | The following table provides information about available-for-sale investment securities with aggregate gross unrealized losses and the length of time that individual investment securities have been in a continuous unrealized loss position (dollars in millions): Number of Securities in a Loss Position Less than 12 months More than 12 months Fair Unrealized Fair Unrealized At September 30, 2023 Available-for-Sale Investment Securities U.S. Treasury and U.S. GSE securities 203 $ 8,314 $ (205) $ 4,292 $ (131) Residential mortgage-backed securities - Agency 31 $ — $ — $ 473 $ (32) At December 31, 2022 Available-for-Sale Investment Securities U.S. Treasury and U.S. GSE securities 123 $ 9,060 $ (175) $ 106 $ (3) Residential mortgage-backed securities - Agency 34 $ 559 $ (22) $ 5 $ (1) |
Schedule of Maturities of Available-for-Sale Debt Securities and Held-to-Maturity Debt Securities | Maturities of available-for-sale debt securities and held-to-maturity debt securities are provided in the following table (dollars in millions): At September 30, 2023 One Year After One After Five After Ten Total Available-for-Sale Investment Securities — Amortized Cost U.S. Treasury and U.S. GSE securities $ 1,874 $ 10,747 $ 321 $ — $ 12,942 Residential mortgage-backed securities - Agency (1) 1 76 33 395 505 Total available-for-sale investment securities $ 1,875 $ 10,823 $ 354 $ 395 $ 13,447 Held-to-Maturity Investment Securities — Amortized Cost Residential mortgage-backed securities - Agency (1) $ — $ — $ — $ 257 $ 257 Total held-to-maturity investment securities $ — $ — $ — $ 257 $ 257 Available-for-Sale Investment Securities — Fair Values U.S. Treasury and U.S. GSE securities $ 1,842 $ 10,449 $ 315 $ — $ 12,606 Residential mortgage-backed securities - Agency (1) 1 72 31 369 473 Total available-for-sale investment securities $ 1,843 $ 10,521 $ 346 $ 369 $ 13,079 Held-to-Maturity Investment Securities — Fair Values Residential mortgage-backed securities - Agency (1) $ — $ — $ — $ 226 $ 226 Total held-to-maturity investment securities $ — $ — $ — $ 226 $ 226 (1) Maturities of RMBS are reflective of the contractual maturities of the investment. |
Loan Receivables (Tables)
Loan Receivables (Tables) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2023 | Sep. 30, 2023 | |
Receivables [Abstract] | ||
Schedule of Loan Receivables | The Company's classes of receivables within the two portfolio segments are depicted in the following table (dollars in millions): September 30, December 31, Credit card loans (1)(2) $ 97,389 $ 90,113 Other loans (3) Private student loans (4) 10,448 10,308 Personal loans 9,559 7,998 Other loans 5,280 3,701 Total other loans 25,287 22,007 Total loan receivables 122,676 112,120 Allowance for credit losses (8,665) (7,374) Net loan receivables $ 114,011 $ 104,746 (1) Amounts include carrying values of $13.9 billion and $13.5 billion underlying investors' interest in trust debt at September 30, 2023 and December 31, 2022, respectively, and $10.9 billion and $12.2 billion in seller's interest at September 30, 2023 and December 31, 2022, respectively. See Note 4: Credit Card and Private Student Loan Securitization Activities for additional information. (2) Unbilled accrued interest receivable on credit card loans, which is presented as part of other assets in the Company's condensed consolidated statements of financial condition, was $663 million and $611 million at September 30, 2023 and December 31, 2022, respectively. (3) Accrued interest receivable on private student, personal and other loans, which is presented as part of other assets in the Company's condensed consolidated statements of financial condition, was $573 million, $62 million and $18 million, respectively, at September 30, 2023 and $468 million, $49 million and $11 million, respectively, at December 31, 2022. (4) Private student loans in repayment were $5.8 billion and $6.0 billion at September 30, 2023 and December 31, 2022, respectively. | |
Schedule of Credit Risk Profile by FICO Score and Origination Year | The following table provides the distribution of the amortized cost basis (excluding accrued interest receivable presented in other assets) by the most recent FICO scores available for the Company's customers for credit card, private student and personal loan receivables (dollars in millions): Credit Risk Profile by FICO Score September 30, 2023 December 31, 2022 660 and Above Less than 660 660 and Above Less than 660 $ % $ % $ % $ % Credit card loans $ 78,585 81 % $ 18,804 19 % $ 73,827 82 % $ 16,286 18 % Private student loans by origination year (1)(2) 2023 $ 833 93 % $ 58 7 % 2022 1,528 95 % 78 5 % $ 1,172 94 % $ 77 6 % 2021 1,511 95 % 82 5 % 1,668 95 % 81 5 % 2020 1,213 95 % 69 5 % 1,365 95 % 65 5 % 2019 1,069 94 % 71 6 % 1,221 95 % 67 5 % Prior 3,674 93 % 262 7 % 4,306 94 % 286 6 % Total private student loans $ 9,828 94 % $ 620 6 % $ 9,732 94 % $ 576 6 % Personal loans by origination year 2023 $ 4,172 99 % $ 50 1 % 2022 2,988 95 % 172 5 % $ 4,270 98 % $ 77 2 % 2021 1,242 93 % 95 7 % 1,958 96 % 91 4 % 2020 437 93 % 32 7 % 790 95 % 40 5 % 2019 219 90 % 25 10 % 444 92 % 38 8 % Prior 104 82 % 23 18 % 249 86 % 41 14 % Total personal loans $ 9,162 96 % $ 397 4 % $ 7,711 96 % $ 287 4 % (1) A majority of private student loan originations occur in the third quarter and disbursements can span multiple calendar years. (2) FICO score represents the higher credit score of the cosigner or borrower. | |
Schedule of Delinquent Loans by Origination Year | The amortized cost basis (excluding accrued interest receivable presented in other assets) of delinquent loans in the Company's loan portfolio is shown below for credit card, private student and personal loan receivables (dollars in millions): September 30, 2023 December 31, 2022 30-89 Days 90 or Total Past 30-89 Days 90 or Total Past Credit card loans $ 1,797 $ 1,527 $ 3,324 $ 1,250 $ 1,028 $ 2,278 Private student loans by origination year (1) 2023 $ — $ — $ — 2022 8 1 9 $ — $ — $ — 2021 20 5 25 6 1 7 2020 23 6 29 14 3 17 2019 28 8 36 19 5 24 Prior 129 45 174 128 36 164 Total private student loans $ 208 $ 65 $ 273 $ 167 $ 45 $ 212 Personal loans by origination year 2023 $ 13 $ 3 $ 16 2022 40 14 54 $ 12 $ 3 $ 15 2021 20 7 27 15 6 21 2020 7 2 9 8 2 10 2019 5 2 7 6 2 8 Prior 4 2 6 6 3 9 Total personal loans $ 89 $ 30 $ 119 $ 47 $ 16 $ 63 (1) Private student loans may include a deferment period, during which borrowers are not required to make payments while enrolled in school at least half time as determined by the school. During a deferment period, these loans do not advance into delinquency. | |
Schedule of Changes in the Allowance for Credit Losses | The following tables provide changes in the Company's allowance for credit losses (dollars in millions): For the Three Months Ended September 30, 2023 Credit Card Loans Private Student Loans Personal Loans Other Loans Total Loans Balance at June 30, 2023 $ 6,525 $ 849 $ 622 $ 68 $ 8,064 Additions Provision for credit losses (1) 1,518 52 93 8 1,671 Deductions Charge-offs (1,171) (40) (76) — (1,287) Recoveries 198 5 14 — 217 Net charge-offs (973) (35) (62) — (1,070) Balance at September 30, 2023 $ 7,070 $ 866 $ 653 $ 76 $ 8,665 For the Three Months Ended September 30, 2022 Credit Card Loans Private Student Loans Personal Loans Other Loans Total Loans Balance at June 30, 2022 $ 5,307 $ 832 $ 572 $ 46 $ 6,757 Additions Provision for credit losses (1) 649 20 69 5 743 Deductions Charge-offs (592) (29) (38) — (659) Recoveries 197 6 17 — 220 Net charge-offs (395) (23) (21) — (439) Balance at September 30, 2022 $ 5,561 $ 829 $ 620 $ 51 $ 7,061 For the Nine Months Ended September 30, 2023 Credit Card Loans Private Student Loans Personal Loans Other Loans Total Loans Balance at December 31, 2022 $ 5,883 $ 839 $ 595 $ 57 $ 7,374 Cumulative effect of ASU No. 2022-02 adoption (2) (66) — (2) — (68) Balance at January 1, 2023 5,817 839 593 57 7,306 Additions Provision for credit losses (1) 3,752 121 211 19 4,103 Deductions Charge-offs (3,101) (111) (194) — (3,406) Recoveries 602 17 43 — 662 Net charge-offs (2,499) (94) (151) — (2,744) Balance at September 30, 2023 $ 7,070 $ 866 $ 653 $ 76 $ 8,665 For the Nine Months Ended September 30, 2022 Credit Card Loans Private Student Loans Personal Loans Other Loans Total Loans Balance at December 31, 2021 $ 5,273 $ 843 $ 662 $ 44 $ 6,822 Additions Provision for credit losses (1) 1,395 54 19 7 1,475 Deductions Charge-offs (1,720) (86) (115) — (1,921) Recoveries 613 18 54 — 685 Net charge-offs (1,107) (68) (61) — (1,236) Balance at September 30, 2022 $ 5,561 $ 829 $ 620 $ 51 $ 7,061 (1) Excludes a $31 million and $30 million adjustment of the liability for expected credit losses on unfunded commitments for the three months ended September 30, 2023 and 2022, respectively, and $6 million and $1 million for the nine months ended September 30, 2023 and 2022, respectively, as the liability is recorded in accrued expenses and other liabilities in the Company's condensed consolidated statements of financial condition. (2) Represents the adjustment to the allowance for credit losses as a result of the adoption of ASU No. 2022-02 on January 1, 2023, which eliminated the requirement to apply discounted cash flow measurements for certain troubled debt restructurings. | |
Schedule of Net Charge-offs of Interest and Fee Revenues on Loan Receivables | Net charge-offs of principal are recorded against the allowance for credit losses, as shown in the preceding table. Information regarding net charge-offs of interest and fee revenues on credit card and other loans is as follows (dollars in millions): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Interest and fees accrued subsequently charged-off, net of recoveries (recorded as a reduction of interest income) $ 176 $ 74 $ 460 $ 209 Fees accrued subsequently charged-off, net of recoveries (recorded as a reduction to other income) $ 47 $ 24 $ 134 $ 68 | |
Schedule of Gross Charge Offs from Loan Receivables | Gross principal charge-offs of the Company's loan portfolio are presented in the table below, on a year-to-date basis, for credit card, private student and personal loan receivables (dollars in millions): For the Nine Months Ended September 30, 2023 Credit card loans $ 3,101 Private student loans by origination year 2023 $ — 2022 2 2021 11 2020 15 2019 17 Prior 66 Total private student loans $ 111 Personal loans by origination year 2023 $ 5 2022 74 2021 58 2020 26 2019 19 Prior 12 Total personal loans $ 194 | |
Schedule of Delinquent and Non-Accruing Loans | The amortized cost basis (excluding accrued interest receivable presented in other assets) of delinquent and non-accruing loans in the Company's loan portfolio is shown below for each class of loan receivables (dollars in millions): (1) 30-89 Days 90 or Total Past 90 or Total Non-accruing (2) At September 30, 2023 Credit card loans $ 1,797 $ 1,527 $ 3,324 $ 1,460 $ 226 Other loans Private student loans 208 65 273 66 8 Personal loans 89 30 119 29 7 Other loans 25 15 40 4 27 Total other loans 322 110 432 99 42 Total loan receivables $ 2,119 $ 1,637 $ 3,756 $ 1,559 $ 268 At December 31, 2022 Credit card loans $ 1,250 $ 1,028 $ 2,278 $ 1,003 $ 176 Other loans Private student loans 167 45 212 45 8 Personal loans 47 16 63 16 7 Other loans 13 12 25 1 23 Total other loans 227 73 300 62 38 Total loan receivables $ 1,477 $ 1,101 $ 2,578 $ 1,065 $ 214 (1) The payment status of both modified and unmodified loans is included in this table. (2) The Company estimates that the gross interest income that would have been recorded under the original terms of non-accruing credit card loans was $11 million and $6 million for the three months ended September 30, 2023 and 2022, respectively, and $29 million and $17 million for the nine months ended September 30, 2023 and 2022, respectively. The Company does not separately track the amount of gross interest income that would have been recorded under the original terms of loans. Instead, the Company estimated this amount based on customers' current balances and most recent interest rates. | |
Schedule of Financing Receivables in Modification , Amortized Cost Basis | The following table provides the period-end amortized cost basis, by modification category, of loans to borrowers experiencing financial difficulty that entered a modification program during the period (dollars in millions). Some of the loans presented in the table below may no longer be enrolled in a program at period-end: For the Three Months Ended September 30, For the Nine Months Ended September 30, (1) 2023 2023 Credit card loans (2)(3) Interest rate reduction $ 685 $ 1,712 Total credit card loans (4) $ 685 $ 1,712 % of total class of financing receivables 0.70 % 1.76 % Private student loans (2) Payment delay (5) $ 12 $ 32 Interest rate reduction and payment delay (5) 28 74 Total private student loans (4) $ 40 $ 106 % of total class of financing receivables 0.38 % 1.01 % Personal loans (2) Payment delay (5) $ 4 $ 8 Term extension (6) 9 24 Interest rate reduction and payment delay (5) 21 48 Interest rate reduction and term extension (6) 9 22 Total personal loans (4) $ 43 $ 102 % of total class of financing receivables 0.45 % 1.07 % (1) The current quarter-to-date enrollment figures, when aggregated with previously disclosed quarter-to-date amounts, will not equal the year-to-date amounts in this table because all year-to-date enrollments are presented using the current period-end amortized cost basis. (2) Accrued interest receivable (including unbilled accrued interest receivable for credit card loans) on modified loans to borrowers experiencing financial difficulty, which is presented as part of other assets in the Company's condensed consolidated statements of financial condition, was immaterial at September 30, 2023. (3) Accounts that entered a credit card loan modification program include $120 million and $302 million that were converted from revolving line-of-credit arrangements to term loans during the three and nine months ended September 30, 2023, respectively. (4) For settlements, the amortized cost basis is zero at period-end and therefore there is no amount reported for principal forgiveness in the table above. See financial effects table below for principal forgiveness to borrowers experiencing financial difficulty. (5) The Company defines a payment delay as a temporary reduction in payments below the original contractually required payment amounts (e.g., interest only payments). The Company's credit card loan modification programs do not result in an other than insignificant delay in payment. | |
Schedule of Loan Modification Effects | The following table provides information on the financial effects of loan modifications to borrowers experiencing financial difficulty, by modification type, made during the period (dollars in millions): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2023 Credit card loans Weighted-average interest rate reduction 13.84 % 13.68 % Principal forgiven $ 35 $ 81 Interest and fees forgiven (1) $ 30 $ 77 Private student loans Weighted-average interest rate reduction 8.94 % 8.77 % Payment delay duration (in months) (2) 6 to 12 6 to 12 Principal forgiven $ — $ — Personal loans Weighted-average interest rate reduction 12.30 % 12.01 % Weighted-average term extension (in months) 38 38 Payment delay duration (in months) (2) 6 to 12 6 to 12 Principal forgiven $ — $ — (1) Represents the amount of interest and fees forgiven resulting from accounts entering into a credit card loan modification program and pre-charge off settlements. Interest and fees forgiven are reversed against the respective line items in the consolidated statements of income. (2) For private student loan payment delays, the Company offers up to six consecutive months of delay and most commonly limits assistance to a life of loan maximum of 12 months. For personal loan payment delays, the Company limits this assistance to a life of loan maximum of 12 months. | |
Schedule of Financing Receivable, Past Due, Modified | The following table presents the payment status and period-end amortized cost basis, by class of loan receivable, of loans that were modified on or after January 1, 2023 to borrowers experiencing financial difficulty (dollars in millions): (1) Current 30-89 Days 90 or At September 30, 2023 Credit card loans $ 1,399 $ 190 $ 123 Private student loans 92 11 2 Personal loans 81 13 8 Total $ 1,572 $ 214 $ 133 (1) This table includes any loan that entered a modification program during the period without regard to whether it remained in a modification program as of the reporting date. | |
Schedule of Financing Receivable, Modified, Subsequent Default | The following table presents the defaulted amount and period-end amortized cost basis, by modification category, of loans that defaulted during the period and were modified on or after January 1, 2023 through the end of the reporting period to borrowers experiencing financial difficulty (dollars in millions): For the Three Months Ended September 30, 2023 For the Nine Months Ended September 30, 2023 Defaulted Amount (1) Period-end Amortized Cost Basis Defaulted Amount (1) Period-end Amortized Cost Basis Credit card loans Interest rate reduction $ 120 $ 96 $ 203 $ 124 Total credit card loans $ 120 $ 96 $ 203 $ 124 (1) For purposes of this disclosure, a loan is considered to be defaulted when it is 60 days or more delinquent at month end and has advanced two stages of delinquency subsequent to modification. Loans that entered a modification program in any stage of delinquency but did not experience a further payment default are included in the payment status table above but are not counted as defaulted for purposes of this disclosure. | |
Schedule of Loans That Entered a Modification Program During the Period | The following table provides information on loans that entered a TDR program during the period (dollars in millions): For the Three Months Ended September 30, 2022 For the Nine Months Ended September 30, 2022 Number of Accounts Balances Number of Accounts Balances Accounts that entered a TDR program during the period Credit card loans (1) 63,803 $ 414 167,655 $ 1,071 Private student loans 1,863 $ 36 5,141 $ 96 Personal loans 1,799 $ 25 4,561 $ 62 (1) Accounts that entered a credit card TDR program include $80 million and $225 million that were converted from revolving line-of-credit arrangements to term loans during the three and nine months ended September 30, 2022, respectively. | |
Schedule of Troubled Debt Restructurings That Subsequently Defaulted | The following table presents the carrying value of loans that experienced a default during the period that had been modified in a TDR during the 15 months preceding the end of each period (dollars in millions): For the Three Months Ended September 30, 2022 For the Nine Months Ended September 30, 2022 Number of Accounts Aggregated Outstanding Balances Upon Default Number of Accounts Aggregated Outstanding Balances Upon Default TDRs that subsequently defaulted Credit card loans (1)(2) 7,784 $ 38 18,022 $ 89 Private student loans (3) 391 $ 7 658 $ 12 Personal loans (2) 606 $ 9 1,142 $ 16 (1) For credit card loans that default from a temporary loan modification program, accounts revert back to the pre-modification terms and charging privileges remain suspended in most cases. (2) For credit card loans and personal loans, a customer defaults from a loan modification program after either two consecutive missed payments or at charge-off, depending on the program. The outstanding balance upon default is generally the loan balance at the end of the month prior to default. |
Credit Card and Private Stude_2
Credit Card and Private Student Loan Securitization Activities (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Variable Interest Entities Disclosure [Abstract] | |
Schedule of Restricted Credit Card Securitized Assets | The carrying values of these restricted assets, which are presented on the Company's condensed consolidated statements of financial condition as relating to securitization activities, are shown in the following table (dollars in millions): September 30, December 31, Restricted cash $ 31 $ 33 Investors' interests held by third-party investors 10,975 10,200 Investors' interests held by wholly-owned subsidiaries of Discover Bank 2,918 3,341 Seller's interest 10,898 12,220 Loan receivables (1) 24,791 25,761 Allowance for credit losses allocated to securitized loan receivables (1) (1,129) (1,152) Net loan receivables 23,662 24,609 Other assets 3 2 Carrying value of assets of consolidated variable interest entities $ 23,696 $ 24,644 (1) The Company maintains its allowance for credit losses at an amount equal to lifetime expected credit losses associated with all loan receivables, which includes all loan receivables in the trusts. Therefore, the credit risk associated with the transferred receivables is fully reflected on the Company's statements of financial condition in accordance with GAAP. |
Deposits (Tables)
Deposits (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Deposits [Abstract] | |
Schedule of Certificates of Deposit Maturities | The following table summarizes certificates of deposits maturing over the remainder of this year, over each of the next four years and thereafter (dollars in millions): At September 30, 2023 2023 $ 5,274 2024 17,743 2025 7,070 2026 3,626 2027 4,258 Thereafter 2,777 Total $ 40,748 |
Long-Term Borrowings (Tables)
Long-Term Borrowings (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Borrowings and Weighted Average Interest Rates | Long-term borrowings consist of borrowings having original maturities of one year or more. The following table provides a summary of the Company's long-term borrowings and weighted-average interest rates on outstanding balances (dollars in millions): September 30, 2023 December 31, 2022 Maturity Interest Weighted-Average Interest Rate Outstanding Amount Outstanding Amount Securitized Debt Fixed-rate asset-backed securities (1) 2024-2026 0.58% - 5.03% 3.17% $ 9,895 $ 8,401 Floating-rate asset-backed securities (2) 2024 6.05% 6.05% 925 1,774 Total Discover Card Master Trust I and Discover Card Execution Note Trust 10,820 10,175 Floating-rate asset-backed security (3)(4) 2031 9.50% 9.50% 69 84 Total private student loan securitization trust 69 84 Total long-term borrowings - owed to securitization investors 10,889 10,259 Discover Financial Services (Parent Company) Fixed-rate senior notes 2024-2032 3.75% - 6.70% 4.68% 3,335 3,333 Fixed-rate retail notes 2023-2031 3.00% - 4.40% 3.80% 147 154 Discover Bank Fixed-rate senior bank notes (1) 2024-2030 2.45% - 4.65% 3.53% 3,548 5,348 Fixed-rate subordinated bank notes 2028 5.97% 5.97% 500 489 Fixed-rate Federal Home Loan Bank advances 2030 4.77% - 4.82% 4.82% 523 — Floating-rate Federal Home Loan Bank advance (5) 2023 5.54% 5.54% 525 525 Total long-term borrowings $ 19,467 $ 20,108 (1) The Company uses interest rate swaps to hedge portions of these long-term borrowings against changes in fair value attributable to changes in the applicable benchmark interest rates. The use of these interest rate swaps impacts the carrying value of the debt. See Note 15: Derivatives and Hedging Activities. (2) DCENT floating-rate asset-backed securities include issuances with the following interest rate terms: 1-month Term SOFR + 0.11448% Tenor Spread Adjustment + 60 basis points as of September 30, 2023. (3) The private student loan securitization trust floating-rate asset-backed security includes an issuance with the following interest rate term: Prime rate + 100 basis points as of September 30, 2023. (4) Repayment of this debt is dependent upon the timing of principal and interest payments on the underlying private student loans. The date shown represents the final maturity date. (5) The floating-rate Federal Home Loan Bank (“FHLB”) advance includes the following interest rate term: SOFR + 23 basis points as of September 30, 2023. |
Schedule of Long-Term Borrowings Maturities | The following table summarizes long-term borrowings maturing over the remainder of this year, over each of the next four years and thereafter (dollars in millions): September 30, 2023 2023 $ 532 2024 3,727 2025 6,086 2026 4,854 2027 1,000 Thereafter 3,268 Total $ 19,467 |
Preferred Stock (Tables)
Preferred Stock (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Schedule of Stock by Class | The table below presents a summary of the Company's non-cumulative perpetual preferred stock that is outstanding at September 30, 2023 (dollars in millions, except per depositary share amounts): Series Description Initial Issuance Date Liquidation Preference and Redemption Price per Depositary Share (1) Per Annum Dividend Rate in effect at September 30, 2023 Total Depositary Shares Authorized, Issued and Outstanding Carrying Value September 30, 2023 December 31, 2022 September 30, 2023 December 31, 2022 C (2)(3)(4) Fixed-to-Floating Rate 10/31/2017 $ 1,000 5.500 % 570,000 570,000 $ 563 $ 563 D (2)(5)(6) Fixed-Rate Reset 6/22/2020 $ 1,000 6.125 % 500,000 500,000 493 493 Total Preferred Stock 1,070,000 1,070,000 $ 1,056 $ 1,056 (1) Redeemable at the redemption price plus declared and unpaid dividends. (2) Issued as depositary shares, each representing 1/100 th interest in a share of the corresponding series of preferred stock. Each preferred share has a par value of $0.01. (3) Redeemable at the Company’s option, subject to regulatory approval, either (i) in whole or in part on any dividend payment date on or after October 30, 2027, or (ii) in whole but not in part, at any time within 90 days following a regulatory capital treatment event (as defined in the certificate of designations for the Series C preferred stock). (4) Any dividends declared are payable semi-annually in arrears at a rate of 5.500% per annum until October 30, 2027. Thereafter, dividends declared will be payable quarterly in arrears at a floating rate equal to 3-month Term SOFR plus a spread of 3.338% per annum. (5) Redeemable at the Company’s option, subject to regulatory approval, either (i) in whole or in part during the three-month period prior to, and including, each reset date (as defined in the certificate of designations for the Series D preferred stock) or (ii) in whole but not in part, at any time within 90 days following a regulatory capital treatment event (as defined in the certificate of designations for the Series D Preferred Stock). (6) Any dividends declared are payable semi-annually in arrears at a rate of 6.125% per annum until September 23, 2025, after which the dividend rate will reset every 5 years to a fixed annual rate equal to the 5-year Treasury plus a spread of 5.783%. |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of Changes in Accumulated Other Comprehensive Income (Loss) | Changes in each component of accumulated other comprehensive income ("AOCI") were as follows (dollars in millions): Unrealized (Losses) Gains on Available-for-Sale Investment Securities, Net of Tax Losses on Cash Flow Hedges, Net of Tax Losses on Pension Plan, Net of Tax AOCI For the Three Months Ended September 30, 2023 Balance at June 30, 2023 $ (195) $ (86) $ (189) $ (470) Net change (83) (20) — (103) Balance at September 30, 2023 $ (278) $ (106) $ (189) $ (573) For the Three Months Ended September 30, 2022 Balance at June 30, 2022 $ (48) $ (4) $ (199) $ (251) Net change (100) (2) — (102) Balance at September 30, 2022 $ (148) $ (6) $ (199) $ (353) For the Nine Months Ended September 30, 2023 Balance at December 31, 2022 $ (136) $ (14) $ (189) $ (339) Net change (142) (92) — (234) Balance at September 30, 2023 $ (278) $ (106) $ (189) $ (573) For the Nine Months Ended September 30, 2022 Balance at December 31, 2021 $ 114 $ (9) $ (199) $ (94) Net change (262) 3 — (259) Balance at September 30, 2022 $ (148) $ (6) $ (199) $ (353) |
Schedule of Other Comprehensive Income Before Reclassifications and Amounts Reclassified from AOCI | The following table presents each component of other comprehensive income ("OCI") before reclassifications and amounts reclassified from AOCI for each component of OCI before- and after-tax (dollars in millions): Before Tax Tax Benefit (Expense) Net of Tax For the Three Months Ended September 30, 2023 Available-for-Sale Investment Securities Net unrealized holding losses arising during the period $ (111) $ 28 $ (83) Net change $ (111) $ 28 $ (83) Cash Flow Hedges Net unrealized losses arising during the period $ (55) $ 13 $ (42) Amounts reclassified from AOCI 29 (7) 22 Net change $ (26) $ 6 $ (20) For the Three Months Ended September 30, 2022 Available-for-Sale Investment Securities Net unrealized holding losses arising during the period $ (133) $ 33 $ (100) Net change $ (133) $ 33 $ (100) Cash Flow Hedges Net unrealized losses arising during the period $ (4) $ 1 $ (3) Amounts reclassified from AOCI 2 (1) 1 Net change $ (2) $ — $ (2) For the Nine Months Ended September 30, 2023 Available-for-Sale Investment Securities Net unrealized holding losses arising during the period $ (188) $ 46 $ (142) Net change $ (188) $ 46 $ (142) Cash Flow Hedges Net unrealized losses arising during the period $ (172) $ 42 $ (130) Amounts reclassified from AOCI 50 (12) 38 Net change $ (122) $ 30 $ (92) For the Nine Months Ended September 30, 2022 Available-for-Sale Investment Securities Net unrealized holding losses arising during the period $ (346) $ 84 $ (262) Net change $ (346) $ 84 $ (262) Cash Flow Hedges Net unrealized losses arising during the period $ (2) $ — $ (2) Amounts reclassified from AOCI 4 1 5 Net change $ 2 $ 1 $ 3 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Effective Income Tax Rate Calculation | The following table presents the calculation of the Company's effective income tax rate (dollars in millions): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Income before income taxes $ 888 $ 1,327 $ 3,314 $ 4,375 Income tax expense $ 205 $ 314 $ 762 $ 1,026 Effective income tax rate 23.1 % 23.7 % 23.0 % 23.5 % |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted EPS | The following table presents the calculation of basic and diluted earnings per share ("EPS") (dollars and shares in millions, except per share amounts): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Numerator Net income $ 683 $ 1,013 $ 2,552 $ 3,349 Preferred stock dividends (31) (31) (62) (62) Net income available to common stockholders 652 982 2,490 3,287 Income allocated to participating securities (5) (7) (17) (20) Net income allocated to common stockholders $ 647 $ 975 $ 2,473 $ 3,267 Denominator Weighted-average shares of common stock outstanding 250 273 255 279 Effect of dilutive common stock equivalents — 1 — — Weighted-average shares of common stock outstanding and common stock equivalents 250 274 255 279 Basic earnings per common share $ 2.59 $ 3.57 $ 9.70 $ 11.70 Diluted earnings per common share $ 2.59 $ 3.56 $ 9.69 $ 11.69 |
Capital Adequacy (Tables)
Capital Adequacy (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Broker-Dealer, Net Capital Requirement, SEC Regulation [Abstract] | |
Schedule of Minimum and Well-Capitalized Requirements | The following table shows the actual capital amounts and ratios of DFS and Discover Bank and comparisons of each to the regulatory minimum and "well-capitalized" requirements (dollars in millions): Actual Minimum Capital Capital Requirements Amount Ratio (1) Amount Ratio Amount (2) Ratio (2) September 30, 2023 Total capital (to risk-weighted assets) Discover Financial Services $ 17,667 14.1 % $ 10,040 ≥8.0% $ 12,550 ≥10.0% Discover Bank $ 16,691 13.5 % $ 9,912 ≥8.0% $ 12,390 ≥10.0% Tier 1 capital (to risk-weighted assets) Discover Financial Services $ 15,627 12.5 % $ 7,530 ≥6.0% $ 7,530 ≥6.0% Discover Bank $ 13,821 11.2 % $ 7,434 ≥6.0% $ 9,912 ≥8.0% Tier 1 capital (to average assets) Discover Financial Services $ 15,627 11.0 % $ 5,678 ≥4.0% N/A N/A Discover Bank $ 13,821 9.9 % $ 5,596 ≥4.0% $ 6,995 ≥5.0% Common Equity Tier 1 (to risk-weighted assets) Discover Financial Services $ 14,572 11.6 % $ 5,647 ≥4.5% N/A N/A Discover Bank $ 13,821 11.2 % $ 5,575 ≥4.5% $ 8,053 ≥6.5% December 31, 2022 Total capital (to risk-weighted assets) Discover Financial Services (3) $ 18,004 15.8 % $ 9,139 ≥8.0% $ 11,424 ≥10.0% Discover Bank $ 16,579 14.7 % $ 9,015 ≥8.0% $ 11,268 ≥10.0% Tier 1 capital (to risk-weighted assets) Discover Financial Services (3) $ 16,039 14.0 % $ 6,854 ≥6.0% $ 6,854 ≥6.0% Discover Bank $ 13,683 12.1 % $ 6,761 ≥6.0% $ 9,015 ≥8.0% Tier 1 capital (to average assets) Discover Financial Services (3) $ 16,039 12.5 % $ 5,147 ≥4.0% N/A N/A Discover Bank $ 13,683 10.8 % $ 5,086 ≥4.0% $ 6,357 ≥5.0% Common Equity Tier 1 (to risk-weighted assets) Discover Financial Services (3) $ 14,983 13.1 % $ 5,141 ≥4.5% N/A N/A Discover Bank $ 13,683 12.1 % $ 5,071 ≥4.5% $ 7,324 ≥6.5% (1) Capital ratios are calculated based on the Basel III standardized approach rules, subject to applicable transition provisions, including CECL transition provisions. (2) The Basel III rules do not establish well-capitalized thresholds for these measures for bank holding companies. Existing well-capitalized thresholds established in the Federal Reserve's Regulation Y have been included where available. (3) Capital amounts and ratios have been updated to reflect the impact of the restatement described in Note 18: Immaterial Restatement of Prior Period Financial Statements . |
Commitments, Contingencies an_2
Commitments, Contingencies and Guarantees (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Guarantor Obligations [Line Items] | |
Schedule of Maximum Potential Counterparty Exposures Related to Settlement Guarantees and Merchant Chargeback Guarantee | The following table summarizes certain information regarding merchant chargeback guarantees (dollars in millions): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Aggregate sales transaction volume (1) $ 65,490 $ 66,766 $ 192,173 $ 189,505 (1) Represents transactions processed on the Discover Network for which a potential liability exists that, in aggregate, can differ from credit card sales volume. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis | Assets and liabilities measured at fair value on a recurring basis are as follows (dollars in millions): Quoted Price Significant Significant Total Balance at September 30, 2023 Assets Fair value - OCI U.S. Treasury and U.S. GSE securities $ 12,598 $ 8 $ — $ 12,606 Residential mortgage-backed securities - Agency — 473 — 473 Available-for-sale investment securities $ 12,598 $ 481 $ — $ 13,079 Derivative financial instruments - cash flow hedges (1) $ — $ 9 $ — $ 9 Fair value - Net income Marketable equity securities $ 39 $ — $ — $ 39 Derivative financial instruments - fair value hedges (1) $ — $ 5 $ — $ 5 Liabilities Fair value - OCI Derivative financial instruments - cash flow hedges (1) $ — $ 1 $ — $ 1 Balance at December 31, 2022 Assets Fair value - OCI U.S. Treasury and U.S. GSE securities $ 11,416 $ 7 $ — $ 11,423 Residential mortgage-backed securities - Agency — 564 — 564 Available-for-sale investment securities $ 11,416 $ 571 $ — $ 11,987 Derivative financial instruments - cash flow hedges (1) $ — $ 1 $ — $ 1 Fair value - Net income Marketable equity securities $ 41 $ — $ — $ 41 Liabilities Fair value - OCI Derivative financial instruments - cash flow hedges (1) $ — $ 3 $ — $ 3 Fair value - Net income Derivative financial instruments - fair value hedges (1) $ — $ 2 $ — $ 2 . (1) Derivative instrument carrying values in an asset or liability position are presented as part of other assets or accrued expenses and other liabilities, respectively, in the Company's condensed consolidated statements of financial condition. |
Schedule of Financial Instruments Measured at Other Than Fair Value | The following tables disclose the estimated fair value of the Company's financial assets and financial liabilities that are not required to be carried at fair value (dollars in millions): Balance at September 30, 2023 Quoted Prices in Active Markets Significant Significant Total Carrying Assets Amortized cost Residential mortgage-backed securities - Agency $ — $ 226 $ — $ 226 $ 257 Held-to-maturity investment securities $ — $ 226 $ — $ 226 $ 257 Net loan receivables $ — $ — $ 121,102 $ 121,102 $ 114,011 Carrying value approximates fair value (1) Cash and cash equivalents $ 9,194 $ — $ — $ 9,194 $ 9,194 Restricted cash $ 39 $ — $ — $ 39 $ 39 Accrued interest receivables (2) $ — $ 1,396 $ — $ 1,396 $ 1,396 Liabilities Amortized cost Time deposits (3) $ — $ 40,490 $ — $ 40,490 $ 40,748 Long-term borrowings - owed to securitization investors $ — $ 10,607 $ 69 $ 10,676 $ 10,889 Other long-term borrowings — 8,010 — 8,010 8,578 Long-term borrowings $ — $ 18,617 $ 69 $ 18,686 $ 19,467 Carrying value approximates fair value (1) Accrued interest payables (2) $ — $ 357 $ — $ 357 $ 357 Balance at December 31, 2022 Assets Amortized cost Residential mortgage-backed securities - Agency $ — $ 199 $ — $ 199 $ 221 Held-to-maturity investment securities $ — $ 199 $ — $ 199 $ 221 Net loan receivables $ — $ — $ 110,796 $ 110,796 $ 104,746 Carrying value approximates fair value (1) Cash and cash equivalents $ 8,856 $ — $ — $ 8,856 $ 8,856 Restricted cash $ 41 $ — $ — $ 41 $ 41 Accrued interest receivables (2) $ — $ 1,211 $ — $ 1,211 $ 1,211 Liabilities Amortized cost Time deposits (3) $ — $ 32,710 $ — $ 32,710 $ 33,070 Long-term borrowings - owed to securitization investors $ — $ 9,862 $ 84 $ 9,946 $ 10,259 Other long-term borrowings — 9,468 — 9,468 9,849 Long-term borrowings $ — $ 19,330 $ 84 $ 19,414 $ 20,108 Carrying value approximates fair value (1) Accrued interest payables (2) $ — $ 308 $ — $ 308 $ 308 (1) The carrying values of these assets and liabilities approximate fair value due to their short-term nature. (2) Accrued interest receivable and payable carrying values are presented as part of other assets and accrued expenses and other liabilities, respectively, in the Company's condensed consolidated statements of financial condition. (3) Excludes deposits without contractually defined maturities for all periods presented. |
Derivatives and Hedging Activ_2
Derivatives and Hedging Activities (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Fair Value and Outstanding Notional Amounts of Derivative Instruments and Related Collateral Balances | The following table summarizes the fair value (including accrued interest) and outstanding notional amounts of derivative instruments and related collateral balances (dollars in millions): September 30, 2023 December 31, 2022 Notional Number of Outstanding Derivative Contracts Derivative Assets Derivative Liabilities Notional Derivative Assets Derivative Liabilities Derivatives designated as hedges Interest rate swaps—cash flow hedge $ 8,900 15 $ 9 $ 1 $ 5,000 $ 1 $ 3 Interest rate swaps—fair value hedge $ 6,750 8 5 — $ 4,425 — 2 Derivatives not designated as hedges Foreign exchange forward contracts (1) $ 25 7 — — $ 25 — — Total gross derivative assets/liabilities (2) 14 1 1 5 Less: collateral held/posted (3) — (1) — (5) Total net derivative assets/liabilities $ 14 $ — $ 1 $ — (1) The foreign exchange forward contracts have notional amounts of EUR 6 million, GBP 6 million, SGD 1 million, INR 788 million and AUD 2 million as of September 30, 2023 and December 31, 2022. (2) In addition to the derivatives disclosed in the table, the Company enters into forward contracts to purchase when-issued mortgage-backed securities as part of its community reinvestment initiatives. At September 30, 2023, the Company had no outstanding contracts. At December 31, 2022, the Company had one outstanding contract with a total notional amount of $48 million and an immaterial fair value. (3) Collateral amounts, which consist of cash and investment securities, are limited to the related derivative asset/liability balance and do not include excess collateral received/pledged. |
Schedule of Hedged Items in Fair Value Hedging Relationship | The following amounts were recorded on the statements of financial condition related to cumulative basis adjustments for fair value hedges (dollars in millions): September 30, 2023 December 31, 2022 Carrying Amount of Hedged Liabilities Cumulative Amount of Fair Value Hedging Adjustment (Decreasing) the Carrying Amount of Hedged Liabilities (1) Carrying Amount of Hedged Liabilities Cumulative Amount of Fair Value Hedging Adjustment (Decreasing) the Carrying Amount of Hedged Liabilities (1) Long-term borrowings $ 6,595 $ (127) $ 4,386 $ (3) (1) The balance includes $14 million and $28 million of cumulative hedging adjustments related to discontinued hedging relationships as of September 30, 2023 and December 31, 2022, respectively. |
Schedule of Impact of the Derivative Instruments on Income | The following table summarizes the impact of the derivative instruments on income and indicates where within the condensed consolidated financial statements such impact is reported (dollars in millions): Location and Amount of (Losses) Gains Recognized on the Condensed Consolidated Statements of Income Interest Expense Long-Term Borrowings Interest Income (Credit Card) Other Income For the Three Months Ended September 30, 2023 Total amounts of income and expense line items presented in the condensed consolidated statements of income, where the effects of fair value or cash flow hedges are recorded $ (225) $ 3,726 $ 21 The effects of cash flow and fair value hedging Gains (losses) on fair value hedging relationships Amounts reclassified from OCI into earnings $ 2 $ (31) $ — Gains (losses) on fair value hedging relationships Gains on hedged items $ 24 $ — $ — Losses on interest rate swaps (53) — — Total losses on fair value hedging relationships $ (29) $ — $ — For the Three Months Ended September 30, 2022 Total amounts of income and expense line items presented in the condensed consolidated statements of income, where the effects of fair value or cash flow hedges are recorded $ (168) $ 2,783 $ 19 The effects of cash flow and fair value hedging Losses on cash flow hedging relationships Amounts reclassified from OCI into earnings $ (1) $ (1) $ — Gains (losses) on fair value hedging relationships Gains on hedged items $ 3 $ — $ — Losses on interest rate swaps (11) — — Total losses on fair value hedging relationships $ (8) $ — $ — The effects of derivatives not designated in hedging relationships Gains on derivatives not designated as hedges $ — $ — $ 1 Location and Amount of (Losses) Gains Recognized on the Condensed Consolidated Statements of Income Interest Expense Interest Income (Credit Card) Long-Term Borrowings Other Income For the Nine Months Ended September 30, 2023 Total amounts of income and expense line items presented in the condensed consolidated statements of income, where the effects of fair value or cash flow hedges are recorded $ (622) $ 10,513 $ 71 The effects of cash flow and fair value hedging Gains (losses) on cash flow hedging relationships Amounts reclassified from OCI into earnings $ 6 $ (56) $ — Gains (losses) on fair value hedging relationships Gains on hedged items $ 111 $ — $ — Losses on interest rate swaps (181) — — Total losses on fair value hedging relationships $ (70) $ — $ — For the Nine Months Ended September 30, 2022 Total amounts of income and expense line items presented in the condensed consolidated statements of income, where the effects of fair value or cash flow hedges are recorded $ (416) $ 7,475 $ 64 The effects of cash flow and fair value hedging Losses on cash flow hedging relationships Amounts reclassified from OCI into earnings $ (3) $ (1) $ — Gains (losses) on fair value hedging relationships Gains on hedged items $ 72 $ — $ — Losses on interest rate swaps (61) — — Total gains on fair value hedging relationships $ 11 $ — $ — The effects of derivatives not designated in hedging relationships Gains on derivatives not designated as hedges $ — $ — $ 2 |
Segment Disclosures (Tables)
Segment Disclosures (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Segment Disclosures | The following table presents segment data (dollars in millions): Digital Payment Total For the Three Months Ended September 30, 2023 Interest income Credit card loans $ 3,726 $ — $ 3,726 Private student loans 261 — 261 Personal loans 305 — 305 Other loans 87 — 87 Other interest income 231 — 231 Total interest income 4,610 — 4,610 Interest expense 1,288 — 1,288 Net interest income 3,322 — 3,322 Provision for credit losses 1,702 — 1,702 Other income 592 130 722 Other expense 1,409 45 1,454 Income before income taxes $ 803 $ 85 $ 888 For the Three Months Ended September 30, 2022 Interest income Credit card loans $ 2,783 $ — $ 2,783 Private student loans 211 — 211 Personal loans 221 — 221 Other loans 44 — 44 Other interest income 98 — 98 Total interest income 3,357 — 3,357 Interest expense 514 — 514 Net interest income 2,843 — 2,843 Provision for credit losses 773 — 773 Other income 530 95 625 Other expense 1,326 42 1,368 Income before income taxes $ 1,274 $ 53 $ 1,327 Digital Payment Total For the Nine Months Ended September 30, 2023 Interest income Credit card loans $ 10,513 $ — $ 10,513 Private student loans 768 — 768 Personal loans 831 — 831 Other loans 224 — 224 Other interest income 641 — 641 Total interest income 12,977 — 12,977 Interest expense 3,346 — 3,346 Net interest income 9,631 — 9,631 Provision for credit losses 4,109 — 4,109 Other income 1,700 333 2,033 Other expense 4,110 131 4,241 Income before income taxes $ 3,112 $ 202 $ 3,314 For the Nine Months Ended September 30, 2022 Interest income Credit card loans $ 7,475 $ — $ 7,475 Private student loans 597 — 597 Personal loans 633 — 633 Other loans 113 — 113 Other interest income 190 — 190 Total interest income 9,008 — 9,008 Interest expense 1,076 — 1,076 Net interest income 7,932 — 7,932 Provision for credit losses 1,476 — 1,476 Other income 1,551 89 1,640 Other expense 3,604 117 3,721 Income (loss) before income taxes $ 4,403 $ (28) $ 4,375 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenue from Contracts with Customers Disaggregated by Business Segment | The following table presents revenue from contracts with customers disaggregated by business segment and reconciles revenue from contracts with customers to total other income (dollars in millions): Digital Banking Payment Services Total For the Three Months Ended September 30, 2023 Other income subject to ASC 606 Discount and interchange revenue, net (1) $ 354 $ 23 $ 377 Protection products revenue 42 — 42 Transaction processing revenue — 82 82 Other income 2 19 21 Total other income subject to ASC 606 (2) 398 124 522 Other income not subject to ASC 606 Loan fee income 194 — 194 Gains on equity investments — 6 6 Total other income not subject to ASC 606 194 6 200 Total other income by operating segment $ 592 $ 130 $ 722 For the Three Months Ended September 30, 2022 Other income subject to ASC 606 Discount and interchange revenue, net (1) $ 316 $ 19 $ 335 Protection products revenue 42 — 42 Transaction processing revenue — 65 65 Other income 3 16 19 Total other income subject to ASC 606 (2) 361 100 461 Other income not subject to ASC 606 Loan fee income 168 — 168 Gains (losses) on equity investments 1 (5) (4) Total other income (loss) not subject to ASC 606 169 (5) 164 Total other income by operating segment $ 530 $ 95 $ 625 Digital Banking Payment Services Total For the Nine Months Ended September 30, 2023 Other income subject to ASC 606 Discount and interchange revenue, net (1) $ 1,013 $ 64 $ 1,077 Protection products revenue 129 — 129 Transaction processing revenue — 221 221 Other income 12 59 71 Total other income subject to ASC 606 (2) 1,154 344 1,498 Other income not subject to ASC 606 Loan fee income 546 — 546 Gains (losses) on equity investments — (11) (11) Total other income (loss) not subject to ASC 606 546 (11) 535 Total other income by operating segment $ 1,700 $ 333 $ 2,033 For the Nine Months Ended September 30, 2022 Other income subject to ASC 606 Discount and interchange revenue, net (1) $ 962 $ 61 $ 1,023 Protection products revenue 128 — 128 Transaction processing revenue — 183 183 Other income 9 55 64 Total other income subject to ASC 606 (2) 1,099 299 1,398 Other income not subject to ASC 606 Loan fee income 450 — 450 Gains (losses) on equity investments 2 (210) (208) Total other income (loss) not subject to ASC 606 452 (210) 242 Total other income (loss) by operating segment $ 1,551 $ 89 $ 1,640 (1) Net of rewards, including Cashback Bonus rewards, of $787 million and $811 million for the three months ended September 30, 2023 and 2022, respectively, and $2.3 billion and $2.2 billion for the nine months ended September 30, 2023 and 2022. respectively. (2) Excludes $3 million and $13 million of deposit product fees that are reported within net interest income for the three and nine months ended September 30, 2023, respectively. Deposit product fees were immaterial for the three and nine months ended September 30, 2022. |
Immaterial Restatement of Pri_2
Immaterial Restatement of Prior Period Financial Statements (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Prior Period Adjustment [Abstract] | |
Schedule of Error Corrections and Prior Period Adjustments | The prior period impacts to the Company's consolidated statement of financial condition were as shown below (dollars in millions): December 31, 2022 As Previously Reported Restatement Impacts As Restated Assets Other assets $ 4,519 $ 78 $ 4,597 Total assets $ 131,628 $ 78 $ 131,706 Liabilities and Stockholders' Equity Liabilities Accrued expenses and other liabilities $ 5,294 $ 324 $ 5,618 Total liabilities $ 117,038 $ 324 $ 117,362 Stockholders' Equity Retained earnings $ 28,453 $ (246) $ 28,207 Total stockholders' equity $ 14,590 $ (246) $ 14,344 Total liabilities and stockholders' equity $ 131,628 $ 78 $ 131,706 The prior period impacts to the Company's consolidated statements of income and the related impacts to the consolidated statements of comprehensive income were as shown below (dollars in millions): For the Three Months Ended September 30, 2022 For the Nine Months Ended September 30, 2022 As Previously Reported Restatement Impacts As Restated As Previously Reported Restatement Impacts As Restated Other income Discount and interchange revenue, net $ 346 $ (11) $ 335 $ 1,056 $ (33) $ 1,023 Total other income $ 636 $ (11) $ 625 $ 1,673 $ (33) $ 1,640 Other expense Other expense $ 174 $ (20) $ 154 $ 406 $ (20) $ 386 Total other expense $ 1,388 $ (20) $ 1,368 $ 3,741 $ (20) $ 3,721 Income before income taxes $ 1,318 $ 9 $ 1,327 $ 4,388 $ (13) $ 4,375 Income tax expense $ 312 $ 2 $ 314 $ 1,029 $ (3) $ 1,026 Net income $ 1,006 $ 7 $ 1,013 $ 3,359 $ (10) $ 3,349 Net income allocated to common stockholders $ 967 $ 8 $ 975 $ 3,277 $ (10) $ 3,267 Basic earnings per common share $ 3.54 $ 0.03 $ 3.57 $ 11.74 $ (0.04) $ 11.70 Diluted earnings per common share $ 3.54 $ 0.02 $ 3.56 $ 11.73 $ (0.04) $ 11.69 The prior period impacts to the Company's consolidated statements of changes in stockholders' equity were as shown below (dollars in millions): Retained Earnings Total Stockholders' Equity As Previously Reported For the Three Months Ended September 30, 2022 Balance at June 30, 2022 $ 26,776 $ 13,764 Net income $ 1,006 $ 1,006 Balance at September 30, 2022 $ 27,585 $ 14,286 Restatement Impacts For the Three Months Ended September 30, 2022 Balance at June 30, 2022 $ (245) $ (245) Net income $ 7 $ 7 Balance at September 30, 2022 $ (238) $ (238) As Restated For the Three Months Ended September 30, 2022 Balance at June 30, 2022 $ 26,531 $ 13,519 Net income $ 1,013 $ 1,013 Balance at September 30, 2022 $ 27,347 $ 14,048 Retained Earnings Total Stockholders' Equity As Previously Reported For the Nine Months Ended September 30, 2022 Balance at December 31, 2021 $ 24,766 $ 13,408 Net income $ 3,359 $ 3,359 Balance at September 30, 2022 $ 27,585 $ 14,286 Restatement Impacts For the Nine Months Ended September 30, 2022 Balance at December 31, 2021 $ (228) $ (228) Net income $ (10) $ (10) Balance at September 30, 2022 $ (238) $ (238) As Restated For the Nine Months Ended September 30, 2022 Balance at December 31, 2021 $ 24,538 $ 13,180 Net income $ 3,349 $ 3,349 Balance at September 30, 2022 $ 27,347 $ 14,048 The prior period impacts to the Company's consolidated statements of cash flows were as follows (dollars in millions): For the Nine Months Ended September 30, 2022 As Previously Reported Restatement Impacts As Restated Cash flows provided by operating activities Net income $ 3,359 $ (10) $ 3,349 Adjustments to reconcile net income to net cash provided by operating activities: Deferred income taxes $ (314) $ (3) $ (317) Changes in assets and liabilities: Increase in accrued expenses and liabilities $ 312 $ 13 $ 325 Net cash provided by operating activities $ 4,965 $ — $ 4,965 |
Background and Basis of Prese_3
Background and Basis of Presentation (Narrative) (Details) | 9 Months Ended |
Sep. 30, 2023 segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments (in number of segments) | 2 |
Investments (Narrative) (Detail
Investments (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Summary of Investment Holdings [Line Items] | |||||
Proceeds from the sale of available-for-sale securities | $ 0 | $ 0 | $ 0 | $ 0 | |
Debt Securities, Available-for-Sale, Gain (Loss) | 0 | 0 | 0 | 0 | |
Contingent liabilities related to equity method investments | 0 | 0 | $ 0 | ||
Losses on equity investments | (6) | 4 | 11 | 208 | |
Other Investments in Payment Service Entities with Actively Traded Stocks | |||||
Summary of Investment Holdings [Line Items] | |||||
Losses on equity investments | (6) | $ 5 | 11 | $ 212 | |
Other Assets [Member] | Payment Services [Member] | |||||
Summary of Investment Holdings [Line Items] | |||||
Equity securities without readily determinable fair value | 34 | 34 | 39 | ||
Fair value of payment services equity investments with readily determinable fair values | 39 | 39 | 41 | ||
Other Assets [Member] | Community Reinvestment Act [Member] | |||||
Summary of Investment Holdings [Line Items] | |||||
Equity method investments | 426 | 426 | 416 | ||
Affordable housing project equity method investments | 395 | 395 | 375 | ||
Other Liabilities [Member] | Community Reinvestment Act [Member] | |||||
Summary of Investment Holdings [Line Items] | |||||
Contingent liabilities related to equity method investments | 126 | 126 | 111 | ||
Contingent liabilities related to affordable housing project equity method investments | $ 120 | $ 120 | $ 100 |
Investments (Schedule of Invest
Investments (Schedule of Investment Securities) (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 | |
Summary of Investment Holdings [Line Items] | |||
Investment securities | $ 13,336 | $ 12,208 | |
US Treasury and Government | |||
Summary of Investment Holdings [Line Items] | |||
Investment securities | [1],[2] | 12,606 | 11,423 |
Residential Mortgage-Backed Securities - Agency [Member] | |||
Summary of Investment Holdings [Line Items] | |||
Investment securities | [1] | 730 | 785 |
U.S. Treasury Securities [Member] | |||
Summary of Investment Holdings [Line Items] | |||
Derivative collateral | $ 285 | $ 97 | |
[1]Consists of securities issued by Fannie Mae, Freddie Mac, or Ginnie Mae.[2]Includes $285 million and $97 million of U.S. Treasury securities pledged as swap collateral as of September 30, 2023 and December 31, 2022, respectively. (2) Consists of a security issued by the Federal Home Loan Bank. |
Investments (Schedule of Amorti
Investments (Schedule of Amortized Cost, Gross Unrealized Gains, Gross Unrealized Losses and Fair Value) (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 | ||
Summary of Investment Holdings [Line Items] | ||||
Available-for-sale investment securities, amortized cost | [1] | $ 13,447 | $ 12,167 | |
Available-for-sale investment securities, gross unrealized gains | [1] | 0 | 21 | |
Available-for-sale investment securities, gross unrealized losses | [1] | (368) | (201) | |
Available-for-sale investment securities, fair value | [1] | 13,079 | 11,987 | |
Held-to-maturity investment securities, amortized cost | [2] | 257 | 221 | |
Held-to-maturity investment securities, gross unrealized gains | [2] | 0 | 0 | |
Held-to-maturity investment securities, gross unrealized losses | [2] | (31) | (22) | |
Held-to-maturity investment securities, fair value | [2] | 226 | 199 | |
US Treasury and Government | ||||
Summary of Investment Holdings [Line Items] | ||||
Available-for-sale investment securities, amortized cost | [1] | 12,942 | 11,580 | |
Available-for-sale investment securities, gross unrealized gains | [1] | 0 | 21 | |
Available-for-sale investment securities, gross unrealized losses | [1] | (336) | (178) | |
Available-for-sale investment securities, fair value | [1] | 12,606 | 11,423 | |
Residential Mortgage-Backed Securities - Agency [Member] | ||||
Summary of Investment Holdings [Line Items] | ||||
Available-for-sale investment securities, amortized cost | [1] | 505 | [3] | 587 |
Available-for-sale investment securities, gross unrealized gains | [1] | 0 | 0 | |
Available-for-sale investment securities, gross unrealized losses | [1] | (32) | (23) | |
Available-for-sale investment securities, fair value | [1] | 473 | [3] | 564 |
Held-to-maturity investment securities, amortized cost | [2],[4] | 257 | [3] | 221 |
Held-to-maturity investment securities, gross unrealized gains | [2],[4] | 0 | 0 | |
Held-to-maturity investment securities, gross unrealized losses | [2],[4] | (31) | (22) | |
Held-to-maturity investment securities, fair value | [2],[4] | $ 226 | [3] | $ 199 |
[1]Available-for-sale investment securities are reported at fair value.[2]Held-to-maturity investment securities are reported at amortized cost.[3]Maturities of RMBS are reflective of the contractual maturities of the investment.[4]Amounts represent residential mortgage-backed securities ("RMBS") that were classified as held-to-maturity as they were entered into as a part of the Company's community reinvestment initiatives. |
Investments (Schedule of Fair V
Investments (Schedule of Fair Value of Securities in a Continuous Unrealized Loss Position for Less Than 12 Months and More Than 12 Months) (Details) $ in Millions | Sep. 30, 2023 USD ($) securities | Dec. 31, 2022 USD ($) securities |
US Treasury and Government | ||
Summary of Investment Holdings [Line Items] | ||
Available-for-sale investment securities, continuous unrealized loss position, number of securities | securities | 203 | 123 |
Available-for-sale investment securities, continuous unrealized loss position, less than 12 months, fair value | $ 8,314 | $ 9,060 |
Available-for-sale securities, continuous unrealized loss position, less than 12 months, accumulated loss | (205) | (175) |
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer, fair value | 4,292 | 106 |
Available-for-sale investment securities, continuous unrealized loss position, more than 12 months, unrealized losses | $ (131) | $ (3) |
Residential Mortgage-Backed Securities - Agency [Member] | ||
Summary of Investment Holdings [Line Items] | ||
Available-for-sale investment securities, continuous unrealized loss position, number of securities | securities | 31 | 34 |
Available-for-sale investment securities, continuous unrealized loss position, less than 12 months, fair value | $ 0 | $ 559 |
Available-for-sale securities, continuous unrealized loss position, less than 12 months, accumulated loss | 0 | (22) |
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer, fair value | 473 | 5 |
Available-for-sale investment securities, continuous unrealized loss position, more than 12 months, unrealized losses | $ (32) | $ (1) |
Investments (Schedule of Maturi
Investments (Schedule of Maturities of Available-for-Sale Debt Securities and Held-to-Maturity Debt Securities) (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 | ||
Summary of Investment Holdings [Line Items] | ||||
Available-for-sale investment securities, debt maturities, one year or less, amortized cost | $ 1,875 | |||
Available-for-sale investment securities, debt maturities, after one year through five years, amortized cost | 10,823 | |||
Available-for-sale investment securities, debt maturities, after five years through ten years, amortized cost | 354 | |||
Available-for-sale investment securities, debt maturities, after ten years, amortized cost | 395 | |||
Available-for-sale investment securities, amortized cost | [1] | 13,447 | $ 12,167 | |
Held-to-maturity investment securities, debt maturities, one year or less, amortized cost | 0 | |||
Held-to-maturity investment securities, debt maturities, after one year through five years, amortized cost | 0 | |||
Held-to-maturity investment securities, debt maturities, after five years through ten years, amortized cost | 0 | |||
Held-to-maturity investment securities, debt maturities, after ten years, amortized cost | 257 | |||
Held-to-maturity investment securities, amortized cost | [2] | 257 | 221 | |
Available-for-sale investment securities, debt maturities, one year or less, fair value | 1,843 | |||
Available-for-sale investment securities, debt maturities, after one year through five years, fair value | 10,521 | |||
Available-for-sale investment securities, debt maturities, after five years through ten years, fair value | 346 | |||
Available-for-sale investment securities, debt maturities, after ten years, fair value | 369 | |||
Available-for-sale investment securities, fair value | [1] | 13,079 | 11,987 | |
Held-to-maturity investment securities, debt maturities, one year or less, fair value | 0 | |||
Held-to-maturity investment securities, debt maturities, after one year through five years, fair value | 0 | |||
Held-to-maturity investment securities, debt maturities, after five years through ten years, fair value | 0 | |||
Held-to-maturity investment securities, debt maturities, after ten years, fair value | 226 | |||
Held-to-maturity investment securities, fair value | [2] | 226 | 199 | |
US Treasury and Government | ||||
Summary of Investment Holdings [Line Items] | ||||
Available-for-sale investment securities, debt maturities, one year or less, amortized cost | 1,874 | |||
Available-for-sale investment securities, debt maturities, after one year through five years, amortized cost | 10,747 | |||
Available-for-sale investment securities, debt maturities, after five years through ten years, amortized cost | 321 | |||
Available-for-sale investment securities, debt maturities, after ten years, amortized cost | 0 | |||
Available-for-sale investment securities, amortized cost | [1] | 12,942 | 11,580 | |
Available-for-sale investment securities, debt maturities, one year or less, fair value | 1,842 | |||
Available-for-sale investment securities, debt maturities, after one year through five years, fair value | 10,449 | |||
Available-for-sale investment securities, debt maturities, after five years through ten years, fair value | 315 | |||
Available-for-sale investment securities, debt maturities, after ten years, fair value | 0 | |||
Available-for-sale investment securities, fair value | [1] | 12,606 | 11,423 | |
Residential Mortgage-Backed Securities - Agency [Member] | ||||
Summary of Investment Holdings [Line Items] | ||||
Available-for-sale investment securities, debt maturities, one year or less, amortized cost | [3] | 1 | ||
Available-for-sale investment securities, debt maturities, after one year through five years, amortized cost | [3] | 76 | ||
Available-for-sale investment securities, debt maturities, after five years through ten years, amortized cost | [3] | 33 | ||
Available-for-sale investment securities, debt maturities, after ten years, amortized cost | [3] | 395 | ||
Available-for-sale investment securities, amortized cost | [1] | 505 | [3] | 587 |
Held-to-maturity investment securities, debt maturities, one year or less, amortized cost | [3] | 0 | ||
Held-to-maturity investment securities, debt maturities, after one year through five years, amortized cost | [3] | 0 | ||
Held-to-maturity investment securities, debt maturities, after five years through ten years, amortized cost | [3] | 0 | ||
Held-to-maturity investment securities, debt maturities, after ten years, amortized cost | [3] | 257 | ||
Held-to-maturity investment securities, amortized cost | [2],[4] | 257 | [3] | 221 |
Available-for-sale investment securities, debt maturities, one year or less, fair value | [3] | 1 | ||
Available-for-sale investment securities, debt maturities, after one year through five years, fair value | [3] | 72 | ||
Available-for-sale investment securities, debt maturities, after five years through ten years, fair value | [3] | 31 | ||
Available-for-sale investment securities, debt maturities, after ten years, fair value | [3] | 369 | ||
Available-for-sale investment securities, fair value | [1] | 473 | [3] | 564 |
Held-to-maturity investment securities, debt maturities, one year or less, fair value | [3] | 0 | ||
Held-to-maturity investment securities, debt maturities, after one year through five years, fair value | [3] | 0 | ||
Held-to-maturity investment securities, debt maturities, after five years through ten years, fair value | [3] | 0 | ||
Held-to-maturity investment securities, debt maturities, after ten years, fair value | [3] | 226 | ||
Held-to-maturity investment securities, fair value | [2],[4] | $ 226 | [3] | $ 199 |
[1]Available-for-sale investment securities are reported at fair value.[2]Held-to-maturity investment securities are reported at amortized cost.[3]Maturities of RMBS are reflective of the contractual maturities of the investment.[4]Amounts represent residential mortgage-backed securities ("RMBS") that were classified as held-to-maturity as they were entered into as a part of the Company's community reinvestment initiatives. |
Loan Receivables (Narrative) (D
Loan Receivables (Narrative) (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2023 USD ($) | Jun. 30, 2023 USD ($) | Mar. 31, 2023 | Dec. 31, 2022 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) segment | Sep. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Number of loan portfolio segments (in segments) | segment | 2 | ||||||||
Allowance for credit losses | $ 8,665 | $ 8,064 | $ 7,374 | $ 7,061 | $ 8,665 | $ 7,061 | $ 6,757 | $ 6,822 | |
Allowance for credit losses, period increase (decrease) | $ 601 | $ 1,300 | |||||||
Expected EOY Unemployment Rate | 3.80% | 3.80% | |||||||
Expected Future Peak Unemployment Rate | 4.20% | 4.20% | |||||||
Expected EY Annualized Increase in GDP | 2.02% | 2.02% | |||||||
Reasonable and supportable forecast period | 18 months | 18 months | 18 months | 18 months | 18 months | 18 months | |||
Reversion period | 12 months | 12 months | |||||||
Percentage of defaulted loans that were charged off at the end of the month in which they defaulted (in percent) | 60% | 62% | |||||||
Minimum [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Delinquent Loan Qualification Period | 30 days | ||||||||
Personal Loans [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Temporary Reduced Payment Program, Maximum Period of Payment Reduction | 12 months | ||||||||
Maximum repayment term for permanent modification programs (in years) | 9 years | ||||||||
Credit Card Loans [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Allowance for credit losses | $ 7,070 | $ 6,525 | $ 5,883 | $ 5,561 | $ 7,070 | $ 5,561 | 5,307 | 5,273 | |
Temporary Reduced Payment Program, Maximum Period of Payment Reduction | 12 months | ||||||||
Permanent workout program maturity (in months) | 72 months | ||||||||
Interest and fees forgiven due to loan modification program | 30 | 7 | $ 77 | 20 | |||||
Total Other Loans [Member] | Private Student Loans [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Allowance for credit losses | 866 | 849 | 839 | 829 | 866 | 829 | 832 | 843 | |
Total Other Loans [Member] | Personal Loans [Member] | |||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||
Allowance for credit losses | $ 653 | $ 622 | $ 595 | $ 620 | $ 653 | $ 620 | $ 572 | $ 662 |
Loan Receivables (Schedule of L
Loan Receivables (Schedule of Loan Receivables) (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Jun. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Loan receivables | $ 122,676 | $ 112,120 | |||||
Allowance for credit losses | (8,665) | $ (8,064) | (7,374) | $ (7,061) | $ (6,757) | $ (6,822) | |
Net loan receivables | 114,011 | 104,746 | |||||
Variable Interest Entity, Primary Beneficiary [Member] | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Loan receivables | 24,946 | 25,937 | |||||
Allowance for credit losses | (1,129) | (1,152) | |||||
Credit Card Securitization Trusts [Member] | Variable Interest Entity, Primary Beneficiary [Member] | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Loan receivables | [1] | 24,791 | 25,761 | ||||
Allowance for credit losses | [1] | (1,129) | (1,152) | ||||
Net loan receivables | 23,662 | 24,609 | |||||
Seller's interest | 10,898 | 12,220 | |||||
Credit Card Loans [Member] | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Loan receivables | [2],[3] | 97,389 | 90,113 | ||||
Allowance for credit losses | (7,070) | (6,525) | (5,883) | (5,561) | (5,307) | (5,273) | |
Accrued interest receivable | 663 | 611 | |||||
Credit Card Loans [Member] | Credit Card Securitization Trusts [Member] | Variable Interest Entity, Primary Beneficiary [Member] | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Investors' interest | 13,900 | 13,500 | |||||
Seller's interest | 10,900 | 12,200 | |||||
Total Other Loans [Member] | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Loan receivables | [4] | 25,287 | 22,007 | ||||
Total Other Loans [Member] | Private Student Loans [Member] | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Loan receivables | [4],[5] | 10,448 | 10,308 | ||||
Allowance for credit losses | (866) | (849) | (839) | (829) | (832) | (843) | |
Accrued interest receivable | 573 | 468 | |||||
Private student loans in repayment | 5,800 | 6,000 | |||||
Total Other Loans [Member] | Personal Loans [Member] | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Loan receivables | [4] | 9,559 | 7,998 | ||||
Allowance for credit losses | (653) | (622) | (595) | (620) | (572) | (662) | |
Accrued interest receivable | 62 | 49 | |||||
Total Other Loans [Member] | Other Loans [Member] | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Loan receivables | [4] | 5,280 | 3,701 | ||||
Allowance for credit losses | (76) | $ (68) | (57) | $ (51) | $ (46) | $ (44) | |
Accrued interest receivable | $ 18 | $ 11 | |||||
[1]The Company maintains its allowance for credit losses at an amount equal to lifetime expected credit losses associated with all loan receivables, which includes all loan receivables in the trusts. Therefore, the credit risk associated with the transferred receivables is fully reflected on the Company's statements of financial condition in accordance with GAAP.[2]Amounts include carrying values of $13.9 billion and $13.5 billion underlying investors' interest in trust debt at September 30, 2023 and December 31, 2022, respectively, and $10.9 billion and $12.2 billion in seller's interest at September 30, 2023 and December 31, 2022, respectively. See Note 4: Credit Card and Private Student Loan Securitization Activities for additional information.[3]Unbilled accrued interest receivable on credit card loans, which is presented as part of other assets in the Company's condensed consolidated statements of financial condition, was $663 million and $611 million at September 30, 2023 and December 31, 2022, respectively.[4]Accrued interest receivable on private student, personal and other loans, which is presented as part of other assets in the Company's condensed consolidated statements of financial condition, was $573 million, $62 million and $18 million, respectively, at September 30, 2023 and $468 million, $49 million and $11 million, respectively, at December 31, 2022.[5]. |
Loan Receivables (Schedule of C
Loan Receivables (Schedule of Credit Risk Profile by FICO Score and Origination Year) (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 | |
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loan receivables | $ 122,676 | $ 112,120 | |
Credit Card Loans [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loan receivables | [1],[2] | 97,389 | 90,113 |
Credit Card Loans [Member] | FICO Score, 660 and Above [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loan receivables, credit card | $ 78,585 | $ 73,827 | |
FICO distribution %, credit card | 81% | 82% | |
Credit Card Loans [Member] | FICO Score, Less Than 660 Or No Score [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loan receivables, credit card | $ 18,804 | $ 16,286 | |
FICO distribution %, credit card | 19% | 18% | |
Total Other Loans [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loan receivables | [3] | $ 25,287 | $ 22,007 |
Total Other Loans [Member] | Private Student Loans [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loan receivables | [3],[4] | 10,448 | 10,308 |
Total Other Loans [Member] | Private Student Loans [Member] | FICO Score, 660 and Above [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loan receivables, originated in 2023 | [5],[6] | $ 833 | |
FICO distribution %, originated in 2023 | [5],[6] | 93% | |
Loan receivables, originated in 2022 | [5],[6] | $ 1,528 | $ 1,172 |
FICO distribution %, originated in 2022 | [5],[6] | 95% | 94% |
Loan receivables, originated in 2021 | [5],[6] | $ 1,511 | $ 1,668 |
FICO distribution %, originated in 2021 | [5],[6] | 95% | 95% |
Loan receivables, originated in 2020 | [5],[6] | $ 1,213 | $ 1,365 |
FICO distribution %, originated in 2020 | [5],[6] | 95% | 95% |
Loan receivables, originated in 2019 | [5],[6] | $ 1,069 | $ 1,221 |
FICO distribution %, originated in 2019 | [5],[6] | 94% | 95% |
Loan receivables, originated prior to 2019 | [5],[6] | $ 3,674 | $ 4,306 |
FICO distribution %, originated prior to 2019 | [5],[6] | 93% | 94% |
Loan receivables | [5],[6] | $ 9,828 | $ 9,732 |
FICO distribution %, loan receivables | [5],[6] | 94% | 94% |
Total Other Loans [Member] | Private Student Loans [Member] | FICO Score, Less Than 660 Or No Score [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loan receivables, originated in 2023 | [5],[6] | $ 58 | |
FICO distribution %, originated in 2023 | [5],[6] | 7% | |
Loan receivables, originated in 2022 | [5],[6] | $ 78 | $ 77 |
FICO distribution %, originated in 2022 | [5],[6] | 5% | 6% |
Loan receivables, originated in 2021 | [5],[6] | $ 82 | $ 81 |
FICO distribution %, originated in 2021 | [5],[6] | 5% | 5% |
Loan receivables, originated in 2020 | [5],[6] | $ 69 | $ 65 |
FICO distribution %, originated in 2020 | [5],[6] | 5% | 5% |
Loan receivables, originated in 2019 | [5],[6] | $ 71 | $ 67 |
FICO distribution %, originated in 2019 | [5],[6] | 6% | 5% |
Loan receivables, originated prior to 2019 | [5],[6] | $ 262 | $ 286 |
FICO distribution %, originated prior to 2019 | [5],[6] | 7% | 6% |
Loan receivables | [5],[6] | $ 620 | $ 576 |
FICO distribution %, loan receivables | [5],[6] | 6% | 6% |
Total Other Loans [Member] | Personal Loans [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loan receivables | [3] | $ 9,559 | $ 7,998 |
Total Other Loans [Member] | Personal Loans [Member] | FICO Score, 660 and Above [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loan receivables, originated in 2023 | $ 4,172 | ||
FICO distribution %, originated in 2023 | 99% | ||
Loan receivables, originated in 2022 | $ 2,988 | $ 4,270 | |
FICO distribution %, originated in 2022 | 95% | 98% | |
Loan receivables, originated in 2021 | $ 1,242 | $ 1,958 | |
FICO distribution %, originated in 2021 | 93% | 96% | |
Loan receivables, originated in 2020 | $ 437 | $ 790 | |
FICO distribution %, originated in 2020 | 93% | 95% | |
Loan receivables, originated in 2019 | $ 219 | $ 444 | |
FICO distribution %, originated in 2019 | 90% | 92% | |
Loan receivables, originated prior to 2019 | $ 104 | $ 249 | |
FICO distribution %, originated prior to 2019 | 82% | 86% | |
Loan receivables | $ 9,162 | $ 7,711 | |
FICO distribution %, loan receivables | 96% | 96% | |
Total Other Loans [Member] | Personal Loans [Member] | FICO Score, Less Than 660 Or No Score [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loan receivables, originated in 2023 | $ 50 | ||
FICO distribution %, originated in 2023 | 1% | ||
Loan receivables, originated in 2022 | $ 172 | $ 77 | |
FICO distribution %, originated in 2022 | 5% | 2% | |
Loan receivables, originated in 2021 | $ 95 | $ 91 | |
FICO distribution %, originated in 2021 | 7% | 4% | |
Loan receivables, originated in 2020 | $ 32 | $ 40 | |
FICO distribution %, originated in 2020 | 7% | 5% | |
Loan receivables, originated in 2019 | $ 25 | $ 38 | |
FICO distribution %, originated in 2019 | 10% | 8% | |
Loan receivables, originated prior to 2019 | $ 23 | $ 41 | |
FICO distribution %, originated prior to 2019 | 18% | 14% | |
Loan receivables | $ 397 | $ 287 | |
FICO distribution %, loan receivables | 4% | 4% | |
[1]Amounts include carrying values of $13.9 billion and $13.5 billion underlying investors' interest in trust debt at September 30, 2023 and December 31, 2022, respectively, and $10.9 billion and $12.2 billion in seller's interest at September 30, 2023 and December 31, 2022, respectively. See Note 4: Credit Card and Private Student Loan Securitization Activities for additional information.[2]Unbilled accrued interest receivable on credit card loans, which is presented as part of other assets in the Company's condensed consolidated statements of financial condition, was $663 million and $611 million at September 30, 2023 and December 31, 2022, respectively.[3]Accrued interest receivable on private student, personal and other loans, which is presented as part of other assets in the Company's condensed consolidated statements of financial condition, was $573 million, $62 million and $18 million, respectively, at September 30, 2023 and $468 million, $49 million and $11 million, respectively, at December 31, 2022.[4].[5]A majority of private student loan originations occur in the third quarter and disbursements can span multiple calendar years.[6]FICO score represents the higher credit score of the cosigner or borrower. |
Loan Receivables (Schedule of D
Loan Receivables (Schedule of Delinquent Loans by Origination Year) (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 | |
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loan receivables | $ 122,676 | $ 112,120 | |
Credit Card Loans [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loan receivables | [1],[2] | 97,389 | 90,113 |
Total Other Loans [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loan receivables | [3] | 25,287 | 22,007 |
Total Other Loans [Member] | Private Student Loans [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loan receivables | [3],[4] | 10,448 | 10,308 |
Total Other Loans [Member] | Personal Loans [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loan receivables | [3] | 9,559 | 7,998 |
30-89 Days Delinquent [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loan receivables | 2,119 | 1,477 | |
30-89 Days Delinquent [Member] | Credit Card Loans [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loan receivables, credit card | 1,797 | 1,250 | |
30-89 Days Delinquent [Member] | Total Other Loans [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loan receivables | 322 | 227 | |
30-89 Days Delinquent [Member] | Total Other Loans [Member] | Private Student Loans [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loan receivables, originated in 2023 | [5] | 0 | |
Loan receivables, originated in 2022 | [5] | 8 | 0 |
Loan receivables, originated in 2021 | [5] | 20 | 6 |
Loan receivables, originated in 2020 | [5] | 23 | 14 |
Loan receivables, originated in 2019 | [5] | 28 | 19 |
Loan receivables, originated prior to 2019 | [5] | 129 | 128 |
Loan receivables | [5] | 208 | 167 |
30-89 Days Delinquent [Member] | Total Other Loans [Member] | Personal Loans [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loan receivables, originated in 2023 | 13 | ||
Loan receivables, originated in 2022 | 40 | 12 | |
Loan receivables, originated in 2021 | 20 | 15 | |
Loan receivables, originated in 2020 | 7 | 8 | |
Loan receivables, originated in 2019 | 5 | 6 | |
Loan receivables, originated prior to 2019 | 4 | 6 | |
Loan receivables | 89 | 47 | |
90 or More Days Delinquent [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loan receivables | 1,637 | 1,101 | |
90 or More Days Delinquent [Member] | Credit Card Loans [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loan receivables, credit card | 1,527 | 1,028 | |
90 or More Days Delinquent [Member] | Total Other Loans [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loan receivables | 110 | 73 | |
90 or More Days Delinquent [Member] | Total Other Loans [Member] | Private Student Loans [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loan receivables, originated in 2023 | [5] | 0 | |
Loan receivables, originated in 2022 | [5] | 1 | 0 |
Loan receivables, originated in 2021 | [5] | 5 | 1 |
Loan receivables, originated in 2020 | [5] | 6 | 3 |
Loan receivables, originated in 2019 | [5] | 8 | 5 |
Loan receivables, originated prior to 2019 | [5] | 45 | 36 |
Loan receivables | [5] | 65 | 45 |
90 or More Days Delinquent [Member] | Total Other Loans [Member] | Personal Loans [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loan receivables, originated in 2023 | 3 | ||
Loan receivables, originated in 2022 | 14 | 3 | |
Loan receivables, originated in 2021 | 7 | 6 | |
Loan receivables, originated in 2020 | 2 | 2 | |
Loan receivables, originated in 2019 | 2 | 2 | |
Loan receivables, originated prior to 2019 | 2 | 3 | |
Loan receivables | 30 | 16 | |
Total Past Due [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loan receivables | 3,756 | 2,578 | |
Total Past Due [Member] | Credit Card Loans [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loan receivables, credit card | 3,324 | 2,278 | |
Total Past Due [Member] | Total Other Loans [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loan receivables | 432 | 300 | |
Total Past Due [Member] | Total Other Loans [Member] | Private Student Loans [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loan receivables, originated in 2023 | [5] | 0 | |
Loan receivables, originated in 2022 | [5] | 9 | 0 |
Loan receivables, originated in 2021 | [5] | 25 | 7 |
Loan receivables, originated in 2020 | [5] | 29 | 17 |
Loan receivables, originated in 2019 | [5] | 36 | 24 |
Loan receivables, originated prior to 2019 | [5] | 174 | 164 |
Loan receivables | [5] | 273 | 212 |
Total Past Due [Member] | Total Other Loans [Member] | Personal Loans [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loan receivables, originated in 2023 | 16 | ||
Loan receivables, originated in 2022 | 54 | 15 | |
Loan receivables, originated in 2021 | 27 | 21 | |
Loan receivables, originated in 2020 | 9 | 10 | |
Loan receivables, originated in 2019 | 7 | 8 | |
Loan receivables, originated prior to 2019 | 6 | 9 | |
Loan receivables | $ 119 | $ 63 | |
[1]Amounts include carrying values of $13.9 billion and $13.5 billion underlying investors' interest in trust debt at September 30, 2023 and December 31, 2022, respectively, and $10.9 billion and $12.2 billion in seller's interest at September 30, 2023 and December 31, 2022, respectively. See Note 4: Credit Card and Private Student Loan Securitization Activities for additional information.[2]Unbilled accrued interest receivable on credit card loans, which is presented as part of other assets in the Company's condensed consolidated statements of financial condition, was $663 million and $611 million at September 30, 2023 and December 31, 2022, respectively.[3]Accrued interest receivable on private student, personal and other loans, which is presented as part of other assets in the Company's condensed consolidated statements of financial condition, was $573 million, $62 million and $18 million, respectively, at September 30, 2023 and $468 million, $49 million and $11 million, respectively, at December 31, 2022.[4].[5]Private student loans may include a deferment period, during which borrowers are not required to make payments while enrolled in school at least half time as determined by the school. During a deferment period, these loans do not advance into delinquency. |
Loan Receivables (Schedule of_2
Loan Receivables (Schedule of Changes in the Allowance for Credit Losses) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Allowance for credit losses, balance at beginning of period | $ 8,064 | $ 6,757 | $ 7,374 | $ 6,822 |
Provision for credit losses(1) | (1,671) | (743) | (4,103) | (1,475) |
Charge-offs | (1,287) | (659) | (3,406) | (1,921) |
Recoveries | 217 | 220 | 662 | 685 |
Net charge-offs | (1,070) | (439) | (2,744) | (1,236) |
Allowance for credit losses, balance at end of period | 8,665 | 7,061 | 8,665 | 7,061 |
Off-Balance-Sheet, Credit Loss, Liability, Credit Loss Expense (Reversal) | (31) | (30) | (6) | (1) |
Cumulative Effect, Period of Adoption, Adjustment | Accounting Standards Update 2022-02 | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Allowance for credit losses, balance at beginning of period | (68) | |||
Allowance for credit losses, balance at end of period | 0 | 0 | ||
Cumulative Effect, Period of Adoption, Adjusted Balance | Accounting Standards Update 2022-02 | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Allowance for credit losses, balance at beginning of period | 7,306 | |||
Credit Card Loans [Member] | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Allowance for credit losses, balance at beginning of period | 6,525 | 5,307 | 5,883 | 5,273 |
Provision for credit losses(1) | (1,518) | (649) | (3,752) | (1,395) |
Charge-offs | (1,171) | (592) | (3,101) | (1,720) |
Recoveries | 198 | 197 | 602 | 613 |
Net charge-offs | (973) | (395) | (2,499) | (1,107) |
Allowance for credit losses, balance at end of period | 7,070 | 5,561 | 7,070 | 5,561 |
Credit Card Loans [Member] | Cumulative Effect, Period of Adoption, Adjustment | Accounting Standards Update 2022-02 | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Allowance for credit losses, balance at beginning of period | (66) | |||
Credit Card Loans [Member] | Cumulative Effect, Period of Adoption, Adjusted Balance | Accounting Standards Update 2022-02 | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Allowance for credit losses, balance at beginning of period | 5,817 | |||
Total Other Loans [Member] | Private Student Loans [Member] | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Allowance for credit losses, balance at beginning of period | 849 | 832 | 839 | 843 |
Provision for credit losses(1) | (52) | (20) | (121) | (54) |
Charge-offs | (40) | (29) | (111) | (86) |
Recoveries | 5 | 6 | 17 | 18 |
Net charge-offs | (35) | (23) | (94) | (68) |
Allowance for credit losses, balance at end of period | 866 | 829 | 866 | 829 |
Total Other Loans [Member] | Private Student Loans [Member] | Cumulative Effect, Period of Adoption, Adjustment | Accounting Standards Update 2022-02 | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Allowance for credit losses, balance at beginning of period | 0 | |||
Total Other Loans [Member] | Private Student Loans [Member] | Cumulative Effect, Period of Adoption, Adjusted Balance | Accounting Standards Update 2022-02 | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Allowance for credit losses, balance at beginning of period | 839 | |||
Total Other Loans [Member] | Personal Loans [Member] | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Allowance for credit losses, balance at beginning of period | 622 | 572 | 595 | 662 |
Provision for credit losses(1) | (93) | (69) | (211) | (19) |
Charge-offs | (76) | (38) | (194) | (115) |
Recoveries | 14 | 17 | 43 | 54 |
Net charge-offs | (62) | (21) | (151) | (61) |
Allowance for credit losses, balance at end of period | 653 | 620 | 653 | 620 |
Total Other Loans [Member] | Personal Loans [Member] | Cumulative Effect, Period of Adoption, Adjustment | Accounting Standards Update 2022-02 | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Allowance for credit losses, balance at beginning of period | (2) | |||
Total Other Loans [Member] | Personal Loans [Member] | Cumulative Effect, Period of Adoption, Adjusted Balance | Accounting Standards Update 2022-02 | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Allowance for credit losses, balance at beginning of period | 593 | |||
Total Other Loans [Member] | Other Loans [Member] | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Allowance for credit losses, balance at beginning of period | 68 | 46 | 57 | 44 |
Provision for credit losses(1) | (8) | (5) | (19) | (7) |
Charge-offs | 0 | 0 | 0 | 0 |
Recoveries | 0 | 0 | 0 | 0 |
Net charge-offs | 0 | 0 | 0 | 0 |
Allowance for credit losses, balance at end of period | $ 76 | $ 51 | 76 | $ 51 |
Total Other Loans [Member] | Other Loans [Member] | Cumulative Effect, Period of Adoption, Adjustment | Accounting Standards Update 2022-02 | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Allowance for credit losses, balance at beginning of period | 0 | |||
Total Other Loans [Member] | Other Loans [Member] | Cumulative Effect, Period of Adoption, Adjusted Balance | Accounting Standards Update 2022-02 | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Allowance for credit losses, balance at beginning of period | $ 57 |
Loan Receivables (Schedule of N
Loan Receivables (Schedule of Net Charge-offs of Interest and Fee Revenues on Loan Receivables) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Receivables [Abstract] | ||||
Interest and fees accrued subsequently charged-off, net of recoveries (recorded as a reduction of interest income) | $ 176 | $ 74 | $ 460 | $ 209 |
Fees accrued subsequently charged-off, net of recoveries (recorded as a reduction to other income) | $ 47 | $ 24 | $ 134 | $ 68 |
Loan Receivables (Schedule of G
Loan Receivables (Schedule of Gross Principal Charge-offs (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Financing Receivable, Loan Modifications [Line Items] | ||||
Financing Receivable, Allowance for Credit Loss, Writeoff | $ 1,287 | $ 659 | $ 3,406 | $ 1,921 |
Credit Card Loans [Member] | ||||
Financing Receivable, Loan Modifications [Line Items] | ||||
Financing Receivable Revolving Writeoff | 3,101 | |||
Financing Receivable, Allowance for Credit Loss, Writeoff | 1,171 | 592 | 3,101 | 1,720 |
Total Other Loans [Member] | Private Student Loans [Member] | ||||
Financing Receivable, Loan Modifications [Line Items] | ||||
Gross Principal Charge-off, Year One, Originated, Current Fiscal Year | 0 | |||
Gross Principal Charge-off, Year Two, Originated, Year Before Current Fiscal Year | 2 | |||
Gross Principal Charge-off, Year Three, Originated, Two Years Before Current Fiscal Year | 11 | |||
Gross Principal Charge-off, Year Four, Originated, Three Years Before Current Fiscal Year | 15 | |||
Gross Principal Charge-off, Year Five, Originated, Four Years Before Current Fiscal Year | 17 | |||
Gross Principal Charge-off Originated More Than Five Years Before Current Fiscal Year | 66 | |||
Financing Receivable, Allowance for Credit Loss, Writeoff | 40 | 29 | 111 | 86 |
Total Other Loans [Member] | Personal Loans [Member] | ||||
Financing Receivable, Loan Modifications [Line Items] | ||||
Gross Principal Charge-off, Year One, Originated, Current Fiscal Year | 5 | |||
Gross Principal Charge-off, Year Two, Originated, Year Before Current Fiscal Year | 74 | |||
Gross Principal Charge-off, Year Three, Originated, Two Years Before Current Fiscal Year | 58 | |||
Gross Principal Charge-off, Year Four, Originated, Three Years Before Current Fiscal Year | 26 | |||
Gross Principal Charge-off, Year Five, Originated, Four Years Before Current Fiscal Year | 19 | |||
Gross Principal Charge-off Originated More Than Five Years Before Current Fiscal Year | 12 | |||
Financing Receivable, Allowance for Credit Loss, Writeoff | $ 76 | $ 38 | $ 194 | $ 115 |
Loan Receivables (Schedule of_3
Loan Receivables (Schedule of Delinquent and Non-Accruing Loans) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | ||
Financing Receivable, Past Due [Line Items] | ||||||
Loan receivables | $ 122,676 | $ 122,676 | $ 112,120 | |||
Loan receivables, 90 or more days delinquent and accruing | 1,559 | 1,559 | 1,065 | |||
Loan receivables, total non-accruing | [1] | 268 | 268 | 214 | ||
30-89 Days Delinquent [Member] | ||||||
Financing Receivable, Past Due [Line Items] | ||||||
Loan receivables | 2,119 | 2,119 | 1,477 | |||
90 or More Days Delinquent [Member] | ||||||
Financing Receivable, Past Due [Line Items] | ||||||
Loan receivables | 1,637 | 1,637 | 1,101 | |||
Total Past Due [Member] | ||||||
Financing Receivable, Past Due [Line Items] | ||||||
Loan receivables | 3,756 | 3,756 | 2,578 | |||
Credit Card Loans [Member] | ||||||
Financing Receivable, Past Due [Line Items] | ||||||
Loan receivables | [2],[3] | 97,389 | 97,389 | 90,113 | ||
Loan receivables, 90 or more days delinquent and accruing | 1,460 | 1,460 | 1,003 | |||
Loan receivables, total non-accruing | [1] | 226 | 226 | 176 | ||
Estimated gross interest income that would have been recorded based on original terms | 11 | $ 6 | 29 | $ 17 | ||
Credit Card Loans [Member] | 30-89 Days Delinquent [Member] | ||||||
Financing Receivable, Past Due [Line Items] | ||||||
Loan receivables, credit card | 1,797 | 1,797 | 1,250 | |||
Credit Card Loans [Member] | 90 or More Days Delinquent [Member] | ||||||
Financing Receivable, Past Due [Line Items] | ||||||
Loan receivables, credit card | 1,527 | 1,527 | 1,028 | |||
Credit Card Loans [Member] | Total Past Due [Member] | ||||||
Financing Receivable, Past Due [Line Items] | ||||||
Loan receivables, credit card | 3,324 | 3,324 | 2,278 | |||
Total Other Loans [Member] | ||||||
Financing Receivable, Past Due [Line Items] | ||||||
Loan receivables | [4] | 25,287 | 25,287 | 22,007 | ||
Loan receivables, 90 or more days delinquent and accruing | 99 | 99 | 62 | |||
Loan receivables, total non-accruing | [1] | 42 | 42 | 38 | ||
Total Other Loans [Member] | 30-89 Days Delinquent [Member] | ||||||
Financing Receivable, Past Due [Line Items] | ||||||
Loan receivables | 322 | 322 | 227 | |||
Total Other Loans [Member] | 90 or More Days Delinquent [Member] | ||||||
Financing Receivable, Past Due [Line Items] | ||||||
Loan receivables | 110 | 110 | 73 | |||
Total Other Loans [Member] | Total Past Due [Member] | ||||||
Financing Receivable, Past Due [Line Items] | ||||||
Loan receivables | 432 | 432 | 300 | |||
Total Other Loans [Member] | Private Student Loans [Member] | ||||||
Financing Receivable, Past Due [Line Items] | ||||||
Loan receivables | [4],[5] | 10,448 | 10,448 | 10,308 | ||
Loan receivables, 90 or more days delinquent and accruing | 66 | 66 | 45 | |||
Loan receivables, total non-accruing | [1] | 8 | 8 | 8 | ||
Total Other Loans [Member] | Private Student Loans [Member] | 30-89 Days Delinquent [Member] | ||||||
Financing Receivable, Past Due [Line Items] | ||||||
Loan receivables | [6] | 208 | 208 | 167 | ||
Total Other Loans [Member] | Private Student Loans [Member] | 90 or More Days Delinquent [Member] | ||||||
Financing Receivable, Past Due [Line Items] | ||||||
Loan receivables | [6] | 65 | 65 | 45 | ||
Total Other Loans [Member] | Private Student Loans [Member] | Total Past Due [Member] | ||||||
Financing Receivable, Past Due [Line Items] | ||||||
Loan receivables | [6] | 273 | 273 | 212 | ||
Total Other Loans [Member] | Personal Loans [Member] | ||||||
Financing Receivable, Past Due [Line Items] | ||||||
Loan receivables | [4] | 9,559 | 9,559 | 7,998 | ||
Loan receivables, 90 or more days delinquent and accruing | 29 | 29 | 16 | |||
Loan receivables, total non-accruing | [1] | 7 | 7 | 7 | ||
Total Other Loans [Member] | Personal Loans [Member] | 30-89 Days Delinquent [Member] | ||||||
Financing Receivable, Past Due [Line Items] | ||||||
Loan receivables | 89 | 89 | 47 | |||
Total Other Loans [Member] | Personal Loans [Member] | 90 or More Days Delinquent [Member] | ||||||
Financing Receivable, Past Due [Line Items] | ||||||
Loan receivables | 30 | 30 | 16 | |||
Total Other Loans [Member] | Personal Loans [Member] | Total Past Due [Member] | ||||||
Financing Receivable, Past Due [Line Items] | ||||||
Loan receivables | 119 | 119 | 63 | |||
Total Other Loans [Member] | Other Loans [Member] | ||||||
Financing Receivable, Past Due [Line Items] | ||||||
Loan receivables | [4] | 5,280 | 5,280 | 3,701 | ||
Loan receivables, 90 or more days delinquent and accruing | 4 | 4 | 1 | |||
Loan receivables, total non-accruing | [1] | 27 | 27 | 23 | ||
Total Other Loans [Member] | Other Loans [Member] | 30-89 Days Delinquent [Member] | ||||||
Financing Receivable, Past Due [Line Items] | ||||||
Loan receivables | 25 | 25 | 13 | |||
Total Other Loans [Member] | Other Loans [Member] | 90 or More Days Delinquent [Member] | ||||||
Financing Receivable, Past Due [Line Items] | ||||||
Loan receivables | 15 | 15 | 12 | |||
Total Other Loans [Member] | Other Loans [Member] | Total Past Due [Member] | ||||||
Financing Receivable, Past Due [Line Items] | ||||||
Loan receivables | $ 40 | $ 40 | $ 25 | |||
[1]The Company estimates that the gross interest income that would have been recorded under the original terms of non-accruing credit card loans was $11 million and $6 million for the three months ended September 30, 2023 and 2022, respectively, and $29 million and $17 million for the nine months ended September 30, 2023 and 2022, respectively. The Company does not separately track the amount of gross interest income that would have been recorded under the original terms of loans. Instead, the Company estimated this amount based on customers' current balances and most recent interest rates.[2]Amounts include carrying values of $13.9 billion and $13.5 billion underlying investors' interest in trust debt at September 30, 2023 and December 31, 2022, respectively, and $10.9 billion and $12.2 billion in seller's interest at September 30, 2023 and December 31, 2022, respectively. See Note 4: Credit Card and Private Student Loan Securitization Activities for additional information.[3]Unbilled accrued interest receivable on credit card loans, which is presented as part of other assets in the Company's condensed consolidated statements of financial condition, was $663 million and $611 million at September 30, 2023 and December 31, 2022, respectively.[4]Accrued interest receivable on private student, personal and other loans, which is presented as part of other assets in the Company's condensed consolidated statements of financial condition, was $573 million, $62 million and $18 million, respectively, at September 30, 2023 and $468 million, $49 million and $11 million, respectively, at December 31, 2022.[5].[6]Private student loans may include a deferment period, during which borrowers are not required to make payments while enrolled in school at least half time as determined by the school. During a deferment period, these loans do not advance into delinquency. |
Loan Receivables (Schedule of_4
Loan Receivables (Schedule of Loans That Entered a Modification Program During the Period) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | ||
Credit Card Loans [Member] | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Financing Receivable, Troubled Debt Restructuring, Postmodification | $ 685 | $ 1,712 | [1] | ||
Financing Receivable, Modified in Period, to Total Financing Receivables, Percentage | 0.70% | 1.76% | [1] | ||
Financing Receivable, Revolving, Converted to Term Loan During Period | $ 120 | $ 80 | $ 302 | $ 225 | |
Credit Card Loans [Member] | Contractual Interest Rate Reduction | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Financing Receivable, Troubled Debt Restructuring, Postmodification | 685 | 1,712 | [1] | ||
Total Other Loans [Member] | Private Student Loans [Member] | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Financing Receivable, Troubled Debt Restructuring, Postmodification | $ 40 | $ 106 | |||
Financing Receivable, Modified in Period, to Total Financing Receivables, Percentage | 0.38% | 1.01% | |||
Total Other Loans [Member] | Private Student Loans [Member] | Payment Deferral | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Financing Receivable, Troubled Debt Restructuring, Postmodification | $ 12 | $ 32 | |||
Total Other Loans [Member] | Private Student Loans [Member] | InterestRateReductionandPaymentDeferral | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Financing Receivable, Troubled Debt Restructuring, Postmodification | 28 | 74 | |||
Total Other Loans [Member] | Personal Loans [Member] | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Financing Receivable, Troubled Debt Restructuring, Postmodification | $ 43 | $ 102 | |||
Financing Receivable, Modified in Period, to Total Financing Receivables, Percentage | 0.45% | 1.07% | |||
Total Other Loans [Member] | Personal Loans [Member] | Payment Deferral | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Financing Receivable, Troubled Debt Restructuring, Postmodification | $ 4 | $ 8 | |||
Total Other Loans [Member] | Personal Loans [Member] | InterestRateReductionandPaymentDeferral | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Financing Receivable, Troubled Debt Restructuring, Postmodification | 21 | 48 | |||
Total Other Loans [Member] | Personal Loans [Member] | Extended Maturity | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Financing Receivable, Troubled Debt Restructuring, Postmodification | 9 | 24 | |||
Total Other Loans [Member] | Personal Loans [Member] | Extended Maturity and Interest Rate Reduction | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Financing Receivable, Troubled Debt Restructuring, Postmodification | $ 9 | $ 22 | |||
[1]Accounts that entered a credit card loan modification program include $120 million and $302 million that were converted from revolving line-of-credit arrangements to term loans during the three and nine months ended September 30, 2023, respectively. |
Loan Receivables (Schedule of_5
Loan Receivables (Schedule of Loan Modification Effects) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Credit Card Loans [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Financing Receivable, Modified, Weighted Average Interest Rate Decrease from Modification | 13.84% | 13.68% | ||
Interest and fees forgiven due to loan modification program | $ 30 | $ 7 | $ 77 | $ 20 |
Credit Card Loans [Member] | Principal Forgiveness | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
FinancingReceivableExcludingAccruedInterestModifiedPeriod | $ 35 | $ 81 | ||
Total Other Loans [Member] | Private Student Loans [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Financing Receivable, Modified, Weighted Average Interest Rate Decrease from Modification | 8.94% | 8.77% | ||
Total Other Loans [Member] | Private Student Loans [Member] | Principal Forgiveness | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
FinancingReceivableExcludingAccruedInterestModifiedPeriod | $ 0 | $ 0 | ||
Total Other Loans [Member] | Private Student Loans [Member] | Minimum [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Payment delay duration (in months) | 6 months | 6 months | ||
Total Other Loans [Member] | Private Student Loans [Member] | Maximum [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Payment delay duration (in months) | 12 months | 12 months | ||
Total Other Loans [Member] | Personal Loans [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Financing Receivable, Modified, Weighted Average Interest Rate Decrease from Modification | 12.30% | 12.01% | ||
Financing Receivable, Modified, Weighted Average Term Increase from Modification | 38 months | 38 months | ||
Total Other Loans [Member] | Personal Loans [Member] | Principal Forgiveness | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
FinancingReceivableExcludingAccruedInterestModifiedPeriod | $ 0 | $ 0 | ||
Total Other Loans [Member] | Personal Loans [Member] | Minimum [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Payment delay duration (in months) | 6 months | 6 months | ||
Total Other Loans [Member] | Personal Loans [Member] | Maximum [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Payment delay duration (in months) | 12 months | 12 months |
Loan Receivables (Schedule of_6
Loan Receivables (Schedule of Delinquent Loans Receivables Aging) (Details) $ in Millions | Sep. 30, 2023 USD ($) |
Financial Asset, 1 to 29 Days Past Due | |
Financing Receivable, Past Due [Line Items] | |
Financing Receivable, Troubled Debt Restructuring | $ 1,572 |
30-89 Days Delinquent [Member] | |
Financing Receivable, Past Due [Line Items] | |
Financing Receivable, Troubled Debt Restructuring | 214 |
90 or More Days Delinquent [Member] | |
Financing Receivable, Past Due [Line Items] | |
Financing Receivable, Troubled Debt Restructuring | 133 |
Credit Card Loans [Member] | Financial Asset, 1 to 29 Days Past Due | |
Financing Receivable, Past Due [Line Items] | |
Financing Receivable, Troubled Debt Restructuring | 1,399 |
Credit Card Loans [Member] | 30-89 Days Delinquent [Member] | |
Financing Receivable, Past Due [Line Items] | |
Financing Receivable, Troubled Debt Restructuring | 190 |
Credit Card Loans [Member] | 90 or More Days Delinquent [Member] | |
Financing Receivable, Past Due [Line Items] | |
Financing Receivable, Troubled Debt Restructuring | 123 |
Total Other Loans [Member] | Private Student Loans [Member] | Financial Asset, 1 to 29 Days Past Due | |
Financing Receivable, Past Due [Line Items] | |
Financing Receivable, Troubled Debt Restructuring | 92 |
Total Other Loans [Member] | Private Student Loans [Member] | 30-89 Days Delinquent [Member] | |
Financing Receivable, Past Due [Line Items] | |
Financing Receivable, Troubled Debt Restructuring | 11 |
Total Other Loans [Member] | Private Student Loans [Member] | 90 or More Days Delinquent [Member] | |
Financing Receivable, Past Due [Line Items] | |
Financing Receivable, Troubled Debt Restructuring | 2 |
Total Other Loans [Member] | Personal Loans [Member] | Financial Asset, 1 to 29 Days Past Due | |
Financing Receivable, Past Due [Line Items] | |
Financing Receivable, Troubled Debt Restructuring | 81 |
Total Other Loans [Member] | Personal Loans [Member] | 30-89 Days Delinquent [Member] | |
Financing Receivable, Past Due [Line Items] | |
Financing Receivable, Troubled Debt Restructuring | 13 |
Total Other Loans [Member] | Personal Loans [Member] | 90 or More Days Delinquent [Member] | |
Financing Receivable, Past Due [Line Items] | |
Financing Receivable, Troubled Debt Restructuring | $ 8 |
Loan Receivables (Schedule of F
Loan Receivables (Schedule of Financing Receivable, Modified, Subsequent Default) (Details) - Credit Card Loans [Member] - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2023 | Sep. 30, 2023 | |
Carrying Value [Member] | ||
Financing Receivable, Modified, Subsequent Default [Line Items] | ||
Defaulted Amount | $ 120 | $ 203 |
Defaulted Amount | 96 | 124 |
Contractual Interest Rate Reduction | Carrying Value [Member] | ||
Financing Receivable, Modified, Subsequent Default [Line Items] | ||
Defaulted Amount | 120 | 203 |
Contractual Interest Rate Reduction | ||
Financing Receivable, Modified, Subsequent Default [Line Items] | ||
Defaulted Amount | $ 96 | $ 124 |
Loan Receivables (Schedule of A
Loan Receivables (Schedule of Accounts that Entered a Troubled Debt Restructuring Program) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Credit Card Loans [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Accounts that entered a TDR program during the period, number of accounts (in accounts) | $ 63,803 | $ 167,655 | ||
Accounts that entered a TDR program during the period, balances | 414,000,000 | 1,071,000,000 | ||
Financing Receivable, Revolving, Converted to Term Loan During Period | $ 120,000,000 | 80,000,000 | $ 302,000,000 | 225,000,000 |
Total Other Loans [Member] | Private Student Loans [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Accounts that entered a TDR program during the period, number of accounts (in accounts) | 1,863 | 5,141 | ||
Accounts that entered a TDR program during the period, balances | 36,000,000 | 96,000,000 | ||
Total Other Loans [Member] | Personal Loans [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Accounts that entered a TDR program during the period, number of accounts (in accounts) | 1,799 | 4,561 | ||
Accounts that entered a TDR program during the period, balances | $ 25,000,000 | $ 62,000,000 |
Loan Receivables (Schedule of T
Loan Receivables (Schedule of Troubled Debt Restructurings That Subsequently Defaulted) (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 USD ($) accounts | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) accounts | ||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
Financing Receivable Modifications Subsequent Default Number of Missed Payments | 2 | |||
Delinquency days to default (in days) | 60 days | |||
Credit Card Loans [Member] | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
TDRs that subsequently defaulted, number of accounts (in accounts) | accounts | 7,784 | [1],[2] | 18,022 | |
Modified loans that subsequently defaulted, aggregated outstanding balances upon default | $ 38,000,000 | [1],[2] | $ 89,000,000 | |
Total Other Loans [Member] | Private Student Loans [Member] | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
TDRs that subsequently defaulted, number of accounts (in accounts) | accounts | 391 | [3] | 658 | |
Modified loans that subsequently defaulted, aggregated outstanding balances upon default | $ 7,000,000 | [3] | $ 12,000,000 | |
Total Other Loans [Member] | Personal Loans [Member] | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
TDRs that subsequently defaulted, number of accounts (in accounts) | accounts | 606 | [1] | 1,142 | |
Modified loans that subsequently defaulted, aggregated outstanding balances upon default | $ 9,000,000 | [1] | $ 16,000,000 | |
[1]For credit card loans and personal loans, a customer defaults from a loan modification program after either two consecutive missed payments or at charge-off, depending on the program. The outstanding balance upon default is generally the loan balance at the end of the month prior to default.[2]For credit card loans that default from a temporary loan modification program, accounts revert back to the pre-modification terms and charging privileges remain suspended in most cases.[3]For student loans, a customer defaults from a loan modification after they are 60 or more days delinquent. The outstanding balance upon default is generally the loan balance at the end of the month prior to default. |
Credit Card and Private Stude_3
Credit Card and Private Student Loan Securitization Activities (Narrative) (Details) | 9 Months Ended |
Sep. 30, 2023 classes | |
Variable Interest Entity, Primary Beneficiary [Member] | Discover Card Execution Note Trust [Member] | Credit Card Securitization Trusts [Member] | |
Variable Interest Entity [Line Items] | |
Number of classes of securities in debt structure (in classes) | 4 |
Credit Card and Private Stude_4
Credit Card and Private Student Loan Securitization Activities (Schedule of Restricted Credit Card Securitized Assets) (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Jun. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | |
Variable Interest Entity [Line Items] | |||||||
Restricted cash | $ 39 | $ 41 | $ 1,866 | ||||
Loan receivables | 122,676 | 112,120 | |||||
Allowance for credit losses allocated to securitized loan receivables | (8,665) | $ (8,064) | (7,374) | $ (7,061) | $ (6,757) | $ (6,822) | |
Net loan receivables | 114,011 | 104,746 | |||||
Other assets | 5,513 | 4,597 | |||||
Assets | 143,432 | 131,706 | |||||
Variable Interest Entity, Primary Beneficiary [Member] | |||||||
Variable Interest Entity [Line Items] | |||||||
Restricted cash | 39 | 41 | |||||
Loan receivables | 24,946 | 25,937 | |||||
Allowance for credit losses allocated to securitized loan receivables | (1,129) | (1,152) | |||||
Other assets | 4 | 3 | |||||
Variable Interest Entity, Primary Beneficiary [Member] | Credit Card Securitization Trusts [Member] | |||||||
Variable Interest Entity [Line Items] | |||||||
Restricted cash | 31 | 33 | |||||
Investors' interests held by third-party investors | 10,975 | 10,200 | |||||
Investors' interests held by wholly-owned subsidiaries of Discover Bank | 2,918 | 3,341 | |||||
Seller's interest | 10,898 | 12,220 | |||||
Loan receivables | [1] | 24,791 | 25,761 | ||||
Allowance for credit losses allocated to securitized loan receivables | [1] | (1,129) | (1,152) | ||||
Net loan receivables | 23,662 | 24,609 | |||||
Other assets | 3 | 2 | |||||
Assets | $ 23,696 | $ 24,644 | |||||
[1]The Company maintains its allowance for credit losses at an amount equal to lifetime expected credit losses associated with all loan receivables, which includes all loan receivables in the trusts. Therefore, the credit risk associated with the transferred receivables is fully reflected on the Company's statements of financial condition in accordance with GAAP. |
Deposits (Narrative) (Details)
Deposits (Narrative) (Details) - USD ($) $ in Billions | Sep. 30, 2023 | Dec. 31, 2022 |
Deposits [Abstract] | ||
Deposit Liability, Uninsured | $ 5.9 | $ 8.9 |
Deposits (Schedule of Certifica
Deposits (Schedule of Certificates of Deposit Maturities) (Details) $ in Millions | Sep. 30, 2023 USD ($) |
Deposits [Abstract] | |
2023 | $ 5,274 |
2024 | 17,743 |
2025 | 7,070 |
2026 | 3,626 |
2027 | 4,258 |
Thereafter | 2,777 |
Total | $ 40,748 |
Long-Term Borrowings (Narrative
Long-Term Borrowings (Narrative) (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Federal Home Loan Bank, advances, general debt obligations, maximum amount available | $ 3,300 | $ 2,200 |
Federal Home Loan Bank advances | 1,000 | 525 |
Discover Card Master Trust I and Discover Card Execution Note Trust [Member] | Securitized Debt [Member] | ||
Debt Instrument [Line Items] | ||
Total commitment of secured credit facilities | 3,500 | 3,500 |
Total used commitment of secured credit facilities | $ 0 | $ 0 |
Long-Term Borrowings (Schedule
Long-Term Borrowings (Schedule of Long-Term Borrowings and Weighted Average Interest Rates) (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2023 | Dec. 31, 2022 | ||
Debt Instrument [Line Items] | |||
Long-term borrowings (in dollars) | $ 19,467 | $ 20,108 | |
Variable Interest Entity, Primary Beneficiary [Member] | |||
Debt Instrument [Line Items] | |||
Long-term borrowings (in dollars) | 10,889 | 10,259 | |
Securitized Debt [Member] | Discover Card Master Trust I and Discover Card Execution Note Trust [Member] | |||
Debt Instrument [Line Items] | |||
Long-term borrowings (in dollars) | $ 10,820 | 10,175 | |
Securitized Debt [Member] | Discover Card Master Trust I and Discover Card Execution Note Trust [Member] | Fixed-Rate Asset-Backed Securities [Member] | |||
Debt Instrument [Line Items] | |||
Weighted-average interest rate | [1] | 3.17% | |
Long-term borrowings (in dollars) | [1] | $ 9,895 | 8,401 |
Securitized Debt [Member] | Discover Card Master Trust I and Discover Card Execution Note Trust [Member] | Fixed-Rate Asset-Backed Securities [Member] | Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate | [1] | 0.58% | |
Securitized Debt [Member] | Discover Card Master Trust I and Discover Card Execution Note Trust [Member] | Fixed-Rate Asset-Backed Securities [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate | [1] | 5.03% | |
Securitized Debt [Member] | Discover Card Master Trust I and Discover Card Execution Note Trust [Member] | Floating-Rate Asset-Backed Securities [Member] | |||
Debt Instrument [Line Items] | |||
Weighted-average interest rate | [2] | 6.05% | |
Long-term borrowings (in dollars) | [2] | $ 925 | 1,774 |
Securitized Debt [Member] | Discover Card Master Trust I and Discover Card Execution Note Trust [Member] | Floating-Rate Asset-Backed Securities [Member] | Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate | [2] | 6.05% | |
Securitized Debt [Member] | Discover Card Master Trust I and Discover Card Execution Note Trust [Member] | Floating-Rate Asset-Backed Securities [Member] | 1-Month SOFR [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate terms | 1-month Term SOFR + 0.11448% Tenor Spread Adjustment + 60 basis points | ||
Securitized Debt [Member] | Discover Card Master Trust I and Discover Card Execution Note Trust [Member] | Floating-Rate Asset-Backed Securities [Member] | 1-Month SOFR [Member] | Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 0.60% | ||
Securitized Debt [Member] | Student Loan Trust [Member] | |||
Debt Instrument [Line Items] | |||
Long-term borrowings (in dollars) | $ 69 | 84 | |
Securitized Debt [Member] | Student Loan Trust [Member] | Floating-Rate Asset-Backed Securities [Member] | |||
Debt Instrument [Line Items] | |||
Weighted-average interest rate | [3],[4] | 9.50% | |
Long-term borrowings (in dollars) | [3],[4] | $ 69 | 84 |
Securitized Debt [Member] | Student Loan Trust [Member] | Floating-Rate Asset-Backed Securities [Member] | Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate | 9.50% | ||
Securitized Debt [Member] | Student Loan Trust [Member] | Floating-Rate Asset-Backed Securities [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate | [3],[4] | 9.50% | |
Securitized Debt [Member] | Student Loan Trust [Member] | Floating-Rate Asset-Backed Securities [Member] | Prime Rate [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate terms | Prime rate + 100 basis points | ||
Basis spread on variable rate | 1% | ||
Securitized Debt [Member] | Variable Interest Entity, Primary Beneficiary [Member] | |||
Debt Instrument [Line Items] | |||
Long-term borrowings (in dollars) | $ 10,889 | 10,259 | |
Securitized Debt [Member] | Discover Bank [Member] | Floating-Rate Asset-Backed Securities [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate terms | SOFR + 23 basis points | ||
Corporate Debt Securities [Member] | Parent Company [Member] | Fixed-Rate Senior Notes [Member] | |||
Debt Instrument [Line Items] | |||
Weighted-average interest rate | 4.68% | ||
Long-term borrowings (in dollars) | $ 3,335 | 3,333 | |
Corporate Debt Securities [Member] | Parent Company [Member] | Fixed-Rate Senior Notes [Member] | Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate | 3.75% | ||
Corporate Debt Securities [Member] | Parent Company [Member] | Fixed-Rate Senior Notes [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate | 6.70% | ||
Corporate Debt Securities [Member] | Parent Company [Member] | Fixed-Rate Retail Notes [Member] | |||
Debt Instrument [Line Items] | |||
Weighted-average interest rate | 3.80% | ||
Long-term borrowings (in dollars) | $ 147 | 154 | |
Corporate Debt Securities [Member] | Parent Company [Member] | Fixed-Rate Retail Notes [Member] | Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate | 3% | ||
Corporate Debt Securities [Member] | Parent Company [Member] | Fixed-Rate Retail Notes [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate | 4.40% | ||
Senior Notes [Member] | Discover Bank [Member] | Fixed-Rate Senior Bank Notes [Member] | |||
Debt Instrument [Line Items] | |||
Weighted-average interest rate | [1] | 3.53% | |
Long-term borrowings (in dollars) | [1] | $ 3,548 | 5,348 |
Senior Notes [Member] | Discover Bank [Member] | Fixed-Rate Senior Bank Notes [Member] | Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate | [1] | 2.45% | |
Senior Notes [Member] | Discover Bank [Member] | Fixed-Rate Senior Bank Notes [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate | [1] | 4.65% | |
Subordinated Debt [Member] | Discover Bank [Member] | Fixed-RateSubordinatedBankNotes | |||
Debt Instrument [Line Items] | |||
Weighted-average interest rate | [1] | 5.97% | |
Long-term borrowings (in dollars) | [1] | $ 500 | 489 |
Subordinated Debt [Member] | Discover Bank [Member] | Fixed-RateSubordinatedBankNotes | Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate | 5.97% | ||
Subordinated Debt [Member] | Discover Bank [Member] | Fixed-RateSubordinatedBankNotes | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate | [1] | 5.97% | |
Federal Home Loan Bank Advances | Discover Bank [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 0.23% | ||
Federal Home Loan Bank Advances | Discover Bank [Member] | FixedRateFHLBAdvance | |||
Debt Instrument [Line Items] | |||
Weighted-average interest rate | 4.82% | ||
Long-term borrowings (in dollars) | $ 523 | 0 | |
Federal Home Loan Bank Advances | Discover Bank [Member] | FixedRateFHLBAdvance | Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate | 4.77% | ||
Federal Home Loan Bank Advances | Discover Bank [Member] | FixedRateFHLBAdvance | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate | 4.82% | ||
Federal Home Loan Bank Advances | Discover Bank [Member] | Federal Home Loan Bank Certificates and Obligations (FHLB) | |||
Debt Instrument [Line Items] | |||
Weighted-average interest rate | 5.54% | ||
Long-term borrowings (in dollars) | $ 525 | $ 525 | |
Federal Home Loan Bank Advances | Discover Bank [Member] | Federal Home Loan Bank Certificates and Obligations (FHLB) | Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate | 5.54% | ||
Federal Home Loan Bank Advances | Discover Bank [Member] | Federal Home Loan Bank Certificates and Obligations (FHLB) | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate | 5.54% | ||
[1]The Company uses interest rate swaps to hedge portions of these long-term borrowings against changes in fair value attributable to changes in the applicable benchmark interest rates. The use of these interest rate swaps impacts the carrying value of the debt. See Note 15: Derivatives and Hedging Activities.[2]DCENT floating-rate asset-backed securities include issuances with the following interest rate terms: 1-month Term SOFR + 0.11448% Tenor Spread Adjustment + 60 basis points as of September 30, 2023.[3]Repayment of this debt is dependent upon the timing of principal and interest payments on the underlying private student loans. The date shown represents the final maturity date. (5) The floating-rate Federal Home Loan Bank (“FHLB”) advance includes the following interest rate term: SOFR + 23 basis points as of September 30, 2023. |
Long-Term Borrowings (Schedul_2
Long-Term Borrowings (Schedule of Long-Term Borrowings Maturities) (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Debt Disclosure [Abstract] | ||
2023 | $ 532 | |
2024 | 3,727 | |
2025 | 6,086 | |
2026 | 4,854 | |
2027 | 1,000 | |
Thereafter | 3,268 | |
Total | $ 19,467 | $ 20,108 |
Preferred Stock (Schedule of St
Preferred Stock (Schedule of Stock by Class) (Details) - USD ($) $ / shares in Units, $ in Millions | 9 Months Ended | ||||
Jun. 22, 2020 | Oct. 31, 2017 | Sep. 30, 2023 | Dec. 31, 2022 | ||
Class of Stock [Line Items] | |||||
Preferred stock, par value $0.01 per share; 200,000,000 shares authorized; 10,700 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively | $ 1,056 | $ 1,056 | |||
Preferred stock, par or stated value per share | $ 0.01 | $ 0.01 | |||
Series C Preferred Stock [Member] | |||||
Class of Stock [Line Items] | |||||
Preferred stock, initial issue date | [1] | Oct. 31, 2017 | |||
Preferred stock, earliest redemption date | Oct. 30, 2027 | ||||
Series D Preferred Stock | |||||
Class of Stock [Line Items] | |||||
Preferred stock, initial issue date | [1] | Jun. 22, 2020 | |||
Dividend rate reset | 5 years | ||||
Preferred Stock [Member] | |||||
Class of Stock [Line Items] | |||||
Preferred stock, depositary shares issued (in number of depositary shares) | 1,070,000 | 1,070,000 | |||
Proceeds from issuance of preferred stock, net | $ 1,056 | $ 1,056 | |||
Preferred Stock [Member] | Series C Preferred Stock [Member] | |||||
Class of Stock [Line Items] | |||||
Preferred stock, liquidation preference per share | [1],[2],[3] | $ 1,000 | |||
Preferred stock, redemption price per share | [1],[2],[3] | $ 1,000 | |||
Preferred Stock, Dividend Rate, Percentage | [1],[4] | 5.50% | |||
Preferred stock, depositary shares issued (in number of depositary shares) | [1] | 570,000 | 570,000 | ||
Preferred stock, par value $0.01 per share; 200,000,000 shares authorized; 10,700 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively | [1] | $ 563 | $ 563 | ||
Depositary shares represented by one preferred share | 100 | ||||
Preferred stock, par or stated value per share | $ 0.01 | ||||
Redemption period of preferred stock following regulatory capital treatment event | 90 days | ||||
Preferred stock dividend payment rate variable, rate to be used in future periods | 3% | ||||
Preferred Stock [Member] | Series C Preferred Stock [Member] | Three-Month Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | |||||
Class of Stock [Line Items] | |||||
Preferred stock dividend payment rate variable, rate to be used in future periods | 0.03338 | ||||
Preferred Stock [Member] | Series D Preferred Stock | |||||
Class of Stock [Line Items] | |||||
Preferred stock, liquidation preference per share | [1],[3],[5] | $ 1,000 | |||
Preferred stock, redemption price per share | [1],[3],[5] | $ 1,000 | |||
Preferred Stock, Dividend Rate, Percentage | [1],[6] | 6.125% | |||
Preferred stock, depositary shares issued (in number of depositary shares) | [1] | 500,000 | 500,000 | ||
Preferred stock, par value $0.01 per share; 200,000,000 shares authorized; 10,700 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively | [1] | $ 493 | $ 493 | ||
Depositary shares represented by one preferred share | 100 | ||||
Preferred stock, par or stated value per share | $ 0.01 | ||||
Redemption period of preferred stock following regulatory capital treatment event | 90 days | ||||
Preferred stock dividend payment rate variable, rate to be used in future periods | 5% | ||||
Preferred Stock [Member] | Series D Preferred Stock | Five-Year Treasury Rate | |||||
Class of Stock [Line Items] | |||||
Preferred stock dividend payment rate variable, rate to be used in future periods | 0.05783 | ||||
[1] Issued as depositary shares, each representing 1/100 th interest in a share of the corresponding series of preferred stock. Each preferred share has a par value of $0.01. |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Schedule of Changes in Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Accumulated other comprehensive income (loss), net of tax, balance at beginning of period | $ (339) | |||
Net change in accumulated other comprehensive income (loss), net of tax | $ (103) | $ (102) | (234) | $ (259) |
Accumulated other comprehensive income (loss), net of tax, balance at end of period | (573) | (573) | ||
Accumulated Other Comprehensive (Loss) Income [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Accumulated other comprehensive income (loss), net of tax, balance at beginning of period | (470) | (251) | (339) | (94) |
Net change in accumulated other comprehensive income (loss), net of tax | (103) | (102) | (234) | (259) |
Accumulated other comprehensive income (loss), net of tax, balance at end of period | (573) | (353) | (573) | (353) |
Unrealized Gains (Losses) on Available-for-Sale Investment Securities, Net of Tax [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Accumulated other comprehensive income (loss), net of tax, balance at beginning of period | (195) | (48) | (136) | 114 |
Net change in accumulated other comprehensive income (loss), net of tax | (83) | (100) | (142) | (262) |
Accumulated other comprehensive income (loss), net of tax, balance at end of period | (278) | (148) | (278) | (148) |
Gains (Losses) on Cash Flow Hedges, Net of Tax [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Accumulated other comprehensive income (loss), net of tax, balance at beginning of period | (86) | (4) | (14) | (9) |
Net change in accumulated other comprehensive income (loss), net of tax | (20) | (2) | (92) | 3 |
Accumulated other comprehensive income (loss), net of tax, balance at end of period | (106) | (6) | (106) | (6) |
Gains (Losses) on Pension Plan, Net of Tax [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Accumulated other comprehensive income (loss), net of tax, balance at beginning of period | (189) | (199) | (189) | (199) |
Net change in accumulated other comprehensive income (loss), net of tax | 0 | 0 | 0 | 0 |
Accumulated other comprehensive income (loss), net of tax, balance at end of period | $ (189) | $ (199) | $ (189) | $ (199) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income (Schedule of Other Comprehensive Income Before Reclassifications and Amounts Reclassified from AOCI) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||
Available-for-sale investment securities, net unrealized holding gains (losses) arising during the period, before tax | $ (111) | $ (133) | $ (188) | $ (346) |
Available-for-sale investment securities, net unrealized holding gains (losses) arising during the period, tax benefit (expense) | 28 | 33 | 46 | 84 |
Available-for-sale investment securities, net unrealized holding gains (losses) arising during the period, net of tax | (83) | (100) | (142) | (262) |
Available-for-sale investment securities, net change, before tax | (111) | (133) | (188) | (346) |
Available-for-sale investment securities, net change, tax benefit (expense) | 28 | 33 | 46 | 84 |
Available-for-sale investment securities, net change, net of tax | (83) | (100) | (142) | (262) |
Cash flow hedges, net unrealized gains (losses) arising during the period, before tax | (55) | (4) | (172) | (2) |
Cash flow hedges, net unrealized gains (losses) arising during the period, tax benefit (expense) | 13 | 1 | 42 | 0 |
Cash flow hedges, net unrealized gains (losses) arising during the period, net of tax | (42) | (3) | (130) | (2) |
Cash flow hedges, amounts reclassified from AOCI, before tax | 29 | 2 | 50 | 4 |
Cash flow hedges, amounts reclassified from AOCI, tax benefit (expense) | (7) | (1) | (12) | 1 |
Cash flow hedges, amounts reclassified from AOCI, net of tax | 22 | 1 | 38 | 5 |
Cash flow hedges, net change, before tax | (26) | (2) | (122) | 2 |
Cash flow hedges, net change, tax benefit (expense) | 6 | 0 | 30 | 1 |
Cash flow hedges, net change, net of tax | $ (20) | $ (2) | $ (92) | $ 3 |
Income Taxes (Schedule of Effec
Income Taxes (Schedule of Effective Income Tax Rate Calculation) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Jun. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |||||
Income before income taxes | $ 888 | $ 1,257 | $ 1,327 | $ 3,314 | $ 4,375 |
Income tax expense | $ 205 | $ 289 | $ 314 | $ 762 | $ 1,026 |
Effective income tax rate (in percent) | 23.10% | 23.70% | 23% | 23.50% |
Earnings Per Share (Schedule of
Earnings Per Share (Schedule of Basic and Diluted EPS ) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Jun. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Numerator: | |||||
Net income | $ 683 | $ 1,013 | $ 2,552 | $ 3,349 | |
Preferred stock dividends, income statement impact | (31) | (31) | (62) | (62) | |
Net income available to common stockholders | 652 | 982 | 2,490 | 3,287 | |
Undistributed Earnings (Loss) Allocated to Participating Securities, Basic | (5) | (7) | (17) | (20) | |
Net income allocated to common stockholders | 647 | $ 931 | 975 | 2,473 | 3,267 |
Net income (loss) available to common stockholders, diluted | $ 647 | $ 975 | $ 2,473 | $ 3,267 | |
Denominator: | |||||
Weighted-average shares of common stock outstanding | 250 | 273 | 255 | 279 | |
Effect of dilutive common stock equivalents | 0 | 1 | 0 | 0 | |
Weighted-average shares of common stock outstanding and common stock equivalents | 250 | 274 | 255 | 279 | |
Basic earnings per common share (in dollars per share) | $ 2.59 | $ 3.55 | $ 3.57 | $ 9.70 | $ 11.70 |
Diluted earnings per common share (in dollars per share) | $ 2.59 | $ 3.55 | $ 3.56 | $ 9.69 | $ 11.69 |
Capital Adequacy (Schedule of M
Capital Adequacy (Schedule of Minimum and Well-Capitalized Requirements) (Details) $ in Millions | Sep. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Parent Company [Member] | |||
Compliance with Regulatory Capital Requirements [Line Items] | |||
Total capital to risk-weighted assets, actual amount | $ 17,667 | $ 18,004 | |
Total capital to risk-weighted assets, actual ratio (in percent) | [1] | 0.141 | 0.158 |
Total capital to risk-weighted assets, minimum capital requirements, amount | $ 10,040 | $ 9,139 | |
Total capital to risk-weighted assets, minimum capital requirements, ratio (in percent) | 0.080 | 0.080 | |
Total capital to risk-weighted assets, capital requirements to be classified as well-capitalized, amount | [2] | $ 12,550 | $ 11,424 |
Total capital to risk-weighted assets, capital requirements to be classified as well-capitalized, ratio (in percent) | [2] | 0.100 | 0.100 |
Tier I capital to risk-weighted assets, actual amount | $ 15,627 | $ 16,039 | |
Tier I capital to risk-weighted assets, actual ratio (in percent) | [1] | 0.125 | 0.140 |
Tier I capital to risk-weighted assets, minimum capital requirements, amount | $ 7,530 | $ 6,854 | |
Tier I capital to risk-weighted assets, minimum capital requirements, ratio (in percent) | 0.060 | 0.060 | |
Tier I capital to risk-weighted assets, capital requirements to be classified as well-capitalized, amount | [2] | $ 7,530 | $ 6,854 |
Tier I capital to risk-weighted assets, capital requirements to be classified as well-capitalized, ratio (in percent) | [2] | 0.060 | 0.060 |
Tier I capital to average assets, actual amount | $ 15,627 | $ 16,039 | |
Tier I capital to average assets, actual ratio (in percent) | [1] | 0.110 | 0.125 |
Tier I capital to average assets, minimum capital requirements, amount | $ 5,678 | $ 5,147 | |
Tier I capital to average assets, minimum capital requirements, ratio (in percent) | 0.040 | 0.040 | |
CET1 capital to risk-weighted assets, actual amount | $ 14,572 | $ 14,983 | |
CET1 capital to risk-weighted assets, actual ratio (in percent) | [1] | 0.116 | 0.131 |
CET1 capital to risk-weighted assets, minimum capital requirements, amount | $ 5,647 | $ 5,141 | |
CET1 capital to risk-weighted assets, minimum capital requirements, ratio (in percent) | 4.50% | 4.50% | |
Discover Bank [Member] | |||
Compliance with Regulatory Capital Requirements [Line Items] | |||
Total capital to risk-weighted assets, actual amount | $ 16,691 | $ 16,579 | |
Total capital to risk-weighted assets, actual ratio (in percent) | [1] | 0.135 | 0.147 |
Total capital to risk-weighted assets, minimum capital requirements, amount | $ 9,912 | $ 9,015 | |
Total capital to risk-weighted assets, minimum capital requirements, ratio (in percent) | 0.080 | 0.080 | |
Total capital to risk-weighted assets, capital requirements to be classified as well-capitalized, amount | [2] | $ 12,390 | $ 11,268 |
Total capital to risk-weighted assets, capital requirements to be classified as well-capitalized, ratio (in percent) | [2] | 0.100 | 0.100 |
Tier I capital to risk-weighted assets, actual amount | $ 13,821 | $ 13,683 | |
Tier I capital to risk-weighted assets, actual ratio (in percent) | [1] | 0.112 | 0.121 |
Tier I capital to risk-weighted assets, minimum capital requirements, amount | $ 7,434 | $ 6,761 | |
Tier I capital to risk-weighted assets, minimum capital requirements, ratio (in percent) | 0.060 | 0.060 | |
Tier I capital to risk-weighted assets, capital requirements to be classified as well-capitalized, amount | [2] | $ 9,912 | $ 9,015 |
Tier I capital to risk-weighted assets, capital requirements to be classified as well-capitalized, ratio (in percent) | [2] | 0.080 | 0.080 |
Tier I capital to average assets, actual amount | $ 13,821 | $ 13,683 | |
Tier I capital to average assets, actual ratio (in percent) | [1] | 0.099 | 0.108 |
Tier I capital to average assets, minimum capital requirements, amount | $ 5,596 | $ 5,086 | |
Tier I capital to average assets, minimum capital requirements, ratio (in percent) | 0.040 | 0.040 | |
Tier I capital to average assets, capital requirements to be classified as well-capitalized, amount | [2] | $ 6,995 | $ 6,357 |
Tier I capital to average assets, capital requirements to be classified as well-capitalized, ratio (in percent) | [2] | 0.050 | 0.050 |
CET1 capital to risk-weighted assets, actual amount | $ 13,821 | $ 13,683 | |
CET1 capital to risk-weighted assets, actual ratio (in percent) | [1] | 0.112 | 0.121 |
CET1 capital to risk-weighted assets, minimum capital requirements, amount | $ 5,575 | $ 5,071 | |
CET1 capital to risk-weighted assets, minimum capital requirements, ratio (in percent) | 4.50% | 4.50% | |
CET1 capital to risk-weighted assets, capital requirements to be classified as well-capitalized, amount | [2] | $ 8,053 | $ 7,324 |
CET1 capital to risk-weighted assets, capital requirements to be classified as well-capitalized, ratio (in percent) | [2] | 6.50% | 6.50% |
[1]Capital ratios are calculated based on the Basel III standardized approach rules, subject to applicable transition provisions, including CECL transition provisions.[2]The Basel III rules do not establish well-capitalized thresholds for these measures for bank holding companies. Existing well-capitalized thresholds established in the Federal Reserve's Regulation Y have been included where available. |
Commitments, Contingencies an_3
Commitments, Contingencies and Guarantees (Narrative) (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Commitments, Contingencies and Guarantees [Line Items] | ||
Off-Balance-Sheet, Credit Loss, Liability | $ 0 | |
Guarantor obligations, maximum exposure, undiscounted | 90 | |
Contingent liabilities related to equity method investments | 0 | $ 0 |
Escrow deposits and settlement withholdings | 10 | $ 11 |
Commitments to Extend Credit [Member] | ||
Commitments, Contingencies and Guarantees [Line Items] | ||
Unused commitments to extend credit for loans | $ 231,800 |
Commitments, Contingencies an_4
Commitments, Contingencies and Guarantees (Schedule of Maximum Potential Counterparty Exposures Related to Settlement Guarantees and Merchant Chargeback Guarantee) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | ||
Merchant Chargeback Guarantees [Member] | |||||
Loss Contingencies [Line Items] | |||||
Aggregate sales transaction volume | [1] | $ 65,490 | $ 66,766 | $ 192,173 | $ 189,505 |
[1]Represents transactions processed on the Discover Network for which a potential liability exists that, in aggregate, can differ from credit card sales volume. |
Litigation and Regulatory Mat_2
Litigation and Regulatory Matters (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Dec. 22, 2020 | Sep. 30, 2023 | Jun. 30, 2023 | |
Revision of Prior Period, Adjustment | |||
Loss Contingencies [Line Items] | |||
Accrued Liabilities and Other Liabilities | $ 376 | $ 365 | |
Increase (Decrease) in Accrued Liabilities and Other Operating Liabilities | 11 | ||
Unfavorable Regulatory Action [Member] | Consumer Financial Protection Bureau Consent Order [Member] | |||
Loss Contingencies [Line Items] | |||
Amount of civil money penalty for consent order | $ 25 | ||
Maximum [Member] | Pending and Threatened Litigation [Member] | |||
Loss Contingencies [Line Items] | |||
Loss contingency, range of possible loss, portion not accrued | $ 230 | ||
Minimum [Member] | Unfavorable Regulatory Action [Member] | Consumer Financial Protection Bureau Consent Order [Member] | |||
Loss Contingencies [Line Items] | |||
Loss contingency, estimate of possible loss | $ 10 |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Fair Value, Nonrecurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Goodwill and Intangible Asset Impairment | $ 0 | $ 0 |
Residential Mortgage-Backed Securities - Agency [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities, par value | $ 505 | |
Available for sale securities, weighted average coupon rate (in percent) | 4.08% | |
Available for sale securities, weighted average remaining maturity (in years) | 4 years |
Fair Value Measurements (Schedu
Fair Value Measurements (Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis) (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Available-for-sale investment securities, fair value | [1] | $ 13,079 | $ 11,987 | |
US Treasury and Government | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Available-for-sale investment securities, fair value | [1] | 12,606 | 11,423 | |
Residential Mortgage-Backed Securities - Agency [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Available-for-sale investment securities, fair value | [1] | 473 | [2] | 564 |
Fair Value, Recurring [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Available-for-sale investment securities, fair value | 13,079 | 11,987 | ||
Fair value of payment services equity investments with readily determinable fair values | 39 | 41 | ||
Fair Value, Recurring [Member] | Interest Rate Swaps [Member] | Cash Flow Hedging [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative asset | 9 | [3] | 1 | |
Derivative financial instruments, liabilities, fair value | 1 | [3] | 3 | |
Fair Value, Recurring [Member] | Interest Rate Swaps [Member] | Fair Value Hedging [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative asset | [3] | 5 | ||
Derivative financial instruments, liabilities, fair value | 2 | |||
Fair Value, Recurring [Member] | US Treasury and Government | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Available-for-sale investment securities, fair value | 12,606 | 11,423 | ||
Fair Value, Recurring [Member] | Residential Mortgage-Backed Securities - Agency [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Available-for-sale investment securities, fair value | 473 | 564 | ||
Fair Value, Recurring [Member] | Level 1 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Available-for-sale investment securities, fair value | 12,598 | 11,416 | ||
Fair value of payment services equity investments with readily determinable fair values | 39 | 41 | ||
Fair Value, Recurring [Member] | Level 1 [Member] | Interest Rate Swaps [Member] | Cash Flow Hedging [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative asset | 0 | [3] | 0 | |
Derivative financial instruments, liabilities, fair value | 0 | [3] | 0 | |
Fair Value, Recurring [Member] | Level 1 [Member] | Interest Rate Swaps [Member] | Fair Value Hedging [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative asset | [3] | 0 | ||
Derivative financial instruments, liabilities, fair value | 0 | |||
Fair Value, Recurring [Member] | Level 1 [Member] | US Treasury and Government | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Available-for-sale investment securities, fair value | 12,598 | 11,416 | ||
Fair Value, Recurring [Member] | Level 1 [Member] | Residential Mortgage-Backed Securities - Agency [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Available-for-sale investment securities, fair value | 0 | 0 | ||
Fair Value, Recurring [Member] | Level 2 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Available-for-sale investment securities, fair value | 481 | 571 | ||
Fair value of payment services equity investments with readily determinable fair values | 0 | 0 | ||
Fair Value, Recurring [Member] | Level 2 [Member] | Interest Rate Swaps [Member] | Cash Flow Hedging [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative asset | 9 | [3] | 1 | |
Derivative financial instruments, liabilities, fair value | 1 | [3] | 3 | |
Fair Value, Recurring [Member] | Level 2 [Member] | Interest Rate Swaps [Member] | Fair Value Hedging [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative asset | [3] | 5 | ||
Derivative financial instruments, liabilities, fair value | 2 | |||
Fair Value, Recurring [Member] | Level 2 [Member] | US Treasury and Government | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Available-for-sale investment securities, fair value | 8 | 7 | ||
Fair Value, Recurring [Member] | Level 2 [Member] | Residential Mortgage-Backed Securities - Agency [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Available-for-sale investment securities, fair value | 473 | 564 | ||
Fair Value, Recurring [Member] | Level 3 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Available-for-sale investment securities, fair value | 0 | 0 | ||
Fair value of payment services equity investments with readily determinable fair values | 0 | 0 | ||
Fair Value, Recurring [Member] | Level 3 [Member] | Interest Rate Swaps [Member] | Cash Flow Hedging [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative asset | 0 | [3] | 0 | |
Derivative financial instruments, liabilities, fair value | 0 | [3] | 0 | |
Fair Value, Recurring [Member] | Level 3 [Member] | Interest Rate Swaps [Member] | Fair Value Hedging [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative asset | [3] | 0 | ||
Derivative financial instruments, liabilities, fair value | 0 | |||
Fair Value, Recurring [Member] | Level 3 [Member] | US Treasury and Government | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Available-for-sale investment securities, fair value | 0 | 0 | ||
Fair Value, Recurring [Member] | Level 3 [Member] | Residential Mortgage-Backed Securities - Agency [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Available-for-sale investment securities, fair value | $ 0 | $ 0 | ||
[1]Available-for-sale investment securities are reported at fair value.[2]Maturities of RMBS are reflective of the contractual maturities of the investment.[3]Derivative instrument carrying values in an asset or liability position are presented as part of other assets or accrued expenses and other liabilities, respectively, in the Company's condensed consolidated statements of financial condition. |
Fair Value Measurements (Sche_2
Fair Value Measurements (Schedule of Financial Instruments Measured at Other Than Fair Value) (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 | ||
Estimated Fair Value [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Held-to-maturity investment securities | $ 226 | $ 199 | ||
Net loan receivables | 121,102 | 110,796 | ||
Cash and cash equivalents | [1] | 9,194 | 8,856 | |
Restricted cash | [1] | 39 | 41 | |
Accrued interest receivables | [1],[2] | 1,396 | 1,211 | |
Time deposits | [3] | 40,490 | 32,710 | |
Long-term borrowings | 18,686 | 19,414 | ||
Accrued interest payables | [1],[2] | 357 | 308 | |
Estimated Fair Value [Member] | Variable Interest Entity, Primary Beneficiary [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Long-term borrowings | 10,676 | 9,946 | ||
Estimated Fair Value [Member] | Consolidated Entity Excluding Variable Interest Entities (VIE) [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Long-term borrowings | 8,010 | 9,468 | ||
Estimated Fair Value [Member] | Residential Mortgage-Backed Securities - Agency [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Held-to-maturity investment securities | 226 | 199 | ||
Estimated Fair Value [Member] | Level 1 [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Held-to-maturity investment securities | 0 | 0 | ||
Net loan receivables | 0 | 0 | ||
Cash and cash equivalents | [1] | 9,194 | 8,856 | |
Restricted cash | [1] | 39 | 41 | |
Accrued interest receivables | [1],[2] | 0 | 0 | |
Time deposits | [3] | 0 | 0 | |
Long-term borrowings | 0 | 0 | ||
Accrued interest payables | [1],[2] | 0 | 0 | |
Estimated Fair Value [Member] | Level 1 [Member] | Variable Interest Entity, Primary Beneficiary [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Long-term borrowings | 0 | 0 | ||
Estimated Fair Value [Member] | Level 1 [Member] | Consolidated Entity Excluding Variable Interest Entities (VIE) [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Long-term borrowings | 0 | 0 | ||
Estimated Fair Value [Member] | Level 1 [Member] | Residential Mortgage-Backed Securities - Agency [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Held-to-maturity investment securities | 0 | 0 | ||
Estimated Fair Value [Member] | Level 2 [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Held-to-maturity investment securities | 226 | 199 | ||
Net loan receivables | 0 | 0 | ||
Cash and cash equivalents | [1] | 0 | 0 | |
Restricted cash | [1] | 0 | 0 | |
Accrued interest receivables | [1],[2] | 1,396 | 1,211 | |
Time deposits | [3] | 40,490 | 32,710 | |
Long-term borrowings | 18,617 | 19,330 | ||
Accrued interest payables | [1],[2] | 357 | 308 | |
Estimated Fair Value [Member] | Level 2 [Member] | Variable Interest Entity, Primary Beneficiary [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Long-term borrowings | 10,607 | 9,862 | ||
Estimated Fair Value [Member] | Level 2 [Member] | Consolidated Entity Excluding Variable Interest Entities (VIE) [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Long-term borrowings | 8,010 | 9,468 | ||
Estimated Fair Value [Member] | Level 2 [Member] | Residential Mortgage-Backed Securities - Agency [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Held-to-maturity investment securities | 226 | 199 | ||
Estimated Fair Value [Member] | Level 3 [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Held-to-maturity investment securities | 0 | 0 | ||
Net loan receivables | 121,102 | 110,796 | ||
Cash and cash equivalents | [1] | 0 | 0 | |
Restricted cash | [1] | 0 | 0 | |
Accrued interest receivables | [1],[2] | 0 | 0 | |
Time deposits | [3] | 0 | 0 | |
Long-term borrowings | 69 | 84 | ||
Accrued interest payables | [1],[2] | 0 | 0 | |
Estimated Fair Value [Member] | Level 3 [Member] | Variable Interest Entity, Primary Beneficiary [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Long-term borrowings | 69 | 84 | ||
Estimated Fair Value [Member] | Level 3 [Member] | Consolidated Entity Excluding Variable Interest Entities (VIE) [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Long-term borrowings | 0 | 0 | ||
Estimated Fair Value [Member] | Level 3 [Member] | Residential Mortgage-Backed Securities - Agency [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Held-to-maturity investment securities | 0 | 0 | ||
Carrying Value [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Held-to-maturity investment securities | 257 | 221 | ||
Net loan receivables | 114,011 | 104,746 | ||
Cash and cash equivalents | [1] | 9,194 | 8,856 | |
Restricted cash | [1] | 39 | 41 | |
Accrued interest receivables | [1],[2] | 1,396 | 1,211 | |
Time deposits | [3] | 40,748 | 33,070 | |
Long-term borrowings | 19,467 | 20,108 | ||
Accrued interest payables | [1],[2] | 357 | 308 | |
Carrying Value [Member] | Variable Interest Entity, Primary Beneficiary [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Long-term borrowings | 10,889 | 10,259 | ||
Carrying Value [Member] | Consolidated Entity Excluding Variable Interest Entities (VIE) [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Long-term borrowings | 8,578 | 9,849 | ||
Carrying Value [Member] | Residential Mortgage-Backed Securities - Agency [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Held-to-maturity investment securities | 257 | 221 | ||
Held-to-maturity investment securities | [4] | 226 | 199 | |
Residential Mortgage-Backed Securities - Agency [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Held-to-maturity investment securities | [4],[5] | $ 226 | [6] | $ 199 |
[1]The carrying values of these assets and liabilities approximate fair value due to their short-term nature.[2]Accrued interest receivable and payable carrying values are presented as part of other assets and accrued expenses and other liabilities, respectively, in the Company's condensed consolidated statements of financial condition.[3]Excludes deposits without contractually defined maturities for all periods presented.[4]Held-to-maturity investment securities are reported at amortized cost.[5]Amounts represent residential mortgage-backed securities ("RMBS") that were classified as held-to-maturity as they were entered into as a part of the Company's community reinvestment initiatives.[6]Maturities of RMBS are reflective of the contractual maturities of the investment. |
Derivatives and Hedging Activ_3
Derivatives and Hedging Activities (Narrative) (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Interest Income | ||
Derivative [Line Items] | ||
Cash flow hedge gain (loss) to be reclassified within twelve months | $ 113 | |
Financing Receivable [Member] | ||
Derivative [Line Items] | ||
Initial maximum period for cash flow hedges (in years) | 4 years | 3 years |
Derivatives and Hedging Activ_4
Derivatives and Hedging Activities (Schedule of Fair Value and Outstanding Notional Amounts of Derivative Instruments and Related Collateral Balances) (Details) € in Millions, ₨ in Millions, £ in Millions, $ in Millions, $ in Millions, $ in Millions | Sep. 30, 2023 USD ($) transactions | Sep. 30, 2023 EUR (€) transactions | Sep. 30, 2023 GBP (£) transactions | Sep. 30, 2023 SGD ($) transactions | Sep. 30, 2023 INR (₨) transactions | Sep. 30, 2023 AUD ($) transactions | Dec. 31, 2022 USD ($) transactions | Dec. 31, 2022 EUR (€) transactions | Dec. 31, 2022 GBP (£) transactions | Dec. 31, 2022 SGD ($) transactions | Dec. 31, 2022 INR (₨) transactions | Dec. 31, 2022 AUD ($) transactions | ||
Derivatives, Fair Value [Line Items] | ||||||||||||||
Derivative assets | [1] | $ 14 | $ 1 | [2] | ||||||||||
Derivative liabilities | [1] | 1 | 5 | [2] | ||||||||||
Collateral held, derivative assets | [3] | 0 | 0 | [2] | ||||||||||
Collateral posted, derivative liabilities | [3] | (1) | (5) | [2] | ||||||||||
Total net derivative assets | 14 | 1 | [2] | |||||||||||
Derivative Liability, Fair Value, Amount Offset Against Collateral, Total | 0 | 0 | [2] | |||||||||||
Designated as Hedges [Member] | Cash Flow Hedging [Member] | Interest Rate Swaps [Member] | ||||||||||||||
Derivatives, Fair Value [Line Items] | ||||||||||||||
Derivative, notional amount | $ 8,900 | 5,000 | ||||||||||||
Derivative, number of outstanding derivative contracts (in transactions) | transactions | 15 | 15 | 15 | 15 | 15 | 15 | ||||||||
Derivative assets | $ 9 | 1 | [2] | |||||||||||
Derivative liabilities | 1 | 3 | [2] | |||||||||||
Designated as Hedges [Member] | Fair Value Hedging [Member] | Interest Rate Swaps [Member] | ||||||||||||||
Derivatives, Fair Value [Line Items] | ||||||||||||||
Derivative, notional amount | $ 6,750 | 4,425 | ||||||||||||
Derivative, number of outstanding derivative contracts (in transactions) | transactions | 8 | 8 | 8 | 8 | 8 | 8 | ||||||||
Derivative assets | $ 5 | 0 | [2] | |||||||||||
Derivative liabilities | 0 | 2 | [2] | |||||||||||
Not Designated as Hedges [Member] | Foreign Exchange Forward [Member] | ||||||||||||||
Derivatives, Fair Value [Line Items] | ||||||||||||||
Derivative, notional amount | [4] | $ 25 | 25 | |||||||||||
Derivative, number of outstanding derivative contracts (in transactions) | transactions | 7 | 7 | 7 | 7 | 7 | 7 | ||||||||
Derivative assets | $ 0 | 0 | [2] | |||||||||||
Derivative liabilities | $ 0 | 0 | [2] | |||||||||||
Not Designated as Hedges [Member] | Foreign Exchange Forward [Member] | Euro Member Countries, Euro | ||||||||||||||
Derivatives, Fair Value [Line Items] | ||||||||||||||
Derivative, notional amount | € | € 6 | € 6 | ||||||||||||
Not Designated as Hedges [Member] | Foreign Exchange Forward [Member] | United Kingdom, Pounds | ||||||||||||||
Derivatives, Fair Value [Line Items] | ||||||||||||||
Derivative, notional amount | £ | £ 6 | £ 6 | ||||||||||||
Not Designated as Hedges [Member] | Foreign Exchange Forward [Member] | Singapore, Dollars | ||||||||||||||
Derivatives, Fair Value [Line Items] | ||||||||||||||
Derivative, notional amount | $ 1 | $ 1 | ||||||||||||
Not Designated as Hedges [Member] | Foreign Exchange Forward [Member] | India, Rupees | ||||||||||||||
Derivatives, Fair Value [Line Items] | ||||||||||||||
Derivative, notional amount | ₨ | ₨ 788 | ₨ 788 | ||||||||||||
Not Designated as Hedges [Member] | Foreign Exchange Forward [Member] | Australia, Dollars | ||||||||||||||
Derivatives, Fair Value [Line Items] | ||||||||||||||
Derivative, notional amount | $ 2 | $ 2 | ||||||||||||
Not Designated as Hedges [Member] | When-Issued Forward Contracts [Member] | ||||||||||||||
Derivatives, Fair Value [Line Items] | ||||||||||||||
Derivative, notional amount | $ 48 | |||||||||||||
Derivative, number of outstanding derivative contracts (in transactions) | transactions | 0 | 0 | 0 | 0 | 0 | 0 | 1 | 1 | 1 | 1 | 1 | 1 | ||
[1]In addition to the derivatives disclosed in the table, the Company enters into forward contracts to purchase when-issued mortgage-backed securities as part of its community reinvestment initiatives. At September 30, 2023, the Company had no outstanding contracts. At December 31, 2022, the Company had one outstanding contract with a total notional amount of $48 million and an immaterial fair value.[2]T[3]Collateral amounts, which consist of cash and investment securities, are limited to the related derivative asset/liability balance and do not include excess collateral received/pledged.[4]he foreign exchange forward contracts have notional amounts of EUR 6 million, GBP 6 million, SGD 1 million, INR 788 million and AUD 2 million as of September 30, 2023 and December 31, 2022. |
Derivatives and Hedging Activ_5
Derivatives and Hedging Activities Derivatives and Hedging Activities (Schedule of Hedged Items in a Fair Value Hedging Relationship) (Details) - Long-term Debt [Member] - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 | |
Schedule of Hedged Items in Fair Value Hedging Relationship [Line Items] | |||
Carrying amount of hedged assets/liabilities | $ 6,595 | $ 4,386 | |
Hedged Liability, Fair Value Hedge, Cumulative Increase (Decrease) | [1] | (127) | (3) |
Hedged Liability, Discontinued Fair Value Hedge, Cumulative Increase (Decrease) | $ 14 | $ 28 | |
[1]The balance includes $14 million and $28 million of cumulative hedging adjustments related to discontinued hedging relationships as of September 30, 2023 and December 31, 2022, respectively. |
Derivatives and Hedging Activ_6
Derivatives and Hedging Activities (Schedule of Impact of the Derivative Instruments on Income) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amounts reclassified from OCI into earnings, cash flow hedges | $ (29) | $ (2) | $ (50) | $ (4) |
Interest Expense [Member] | Long-term Debt [Member] | Designated as Hedges [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Total amounts of income and expense line items presented in the condensed consolidated statements of income, where the effects of fair value or cash flow hedges are recorded | (225) | (168) | (622) | (416) |
Interest Expense [Member] | Long-term Debt [Member] | Designated as Hedges [Member] | Interest Rate Swaps [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amounts reclassified from OCI into earnings, cash flow hedges | 2 | (1) | 6 | (3) |
Gains on hedged items, fair value hedges | 24 | 3 | 111 | 72 |
Losses on interest rate swaps, fair value hedges | (53) | (11) | (181) | (61) |
Total gains on fair value hedges | (29) | (8) | (70) | 11 |
Interest Expense [Member] | Long-term Debt [Member] | Not Designated as Hedges [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | 0 | 0 | ||
Interest Income | Credit Card Loans [Member] | Designated as Hedges [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Total amounts of income and expense line items presented in the condensed consolidated statements of income, where the effects of fair value or cash flow hedges are recorded | 3,726 | 10,513 | 7,475 | |
Interest Income | Credit Card Loans [Member] | Designated as Hedges [Member] | Interest Rate Swaps [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amounts reclassified from OCI into earnings, cash flow hedges | (31) | (1) | (56) | (1) |
Gains on hedged items, fair value hedges | 0 | 0 | 0 | 0 |
Losses on interest rate swaps, fair value hedges | 0 | 0 | 0 | 0 |
Total gains on fair value hedges | 0 | 0 | 0 | 0 |
Interest Income | Credit Card Loans [Member] | Not Designated as Hedges [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | 0 | 0 | ||
Other Income [Member] | Designated as Hedges [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Total amounts of income and expense line items presented in the condensed consolidated statements of income, where the effects of fair value or cash flow hedges are recorded | 21 | 19 | 71 | 64 |
Other Income [Member] | Designated as Hedges [Member] | Interest Rate Swaps [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amounts reclassified from OCI into earnings, cash flow hedges | 0 | 0 | 0 | 0 |
Gains on hedged items, fair value hedges | 0 | 0 | 0 | 0 |
Losses on interest rate swaps, fair value hedges | 0 | 0 | 0 | 0 |
Total gains on fair value hedges | $ 0 | 0 | $ 0 | 0 |
Other Income [Member] | Not Designated as Hedges [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | $ 1 | $ 2 |
Segment Disclosures (Narrative)
Segment Disclosures (Narrative) (Details) | 9 Months Ended |
Sep. 30, 2023 segment | |
Segment Reporting [Abstract] | |
Number of reportable segments (in number of segments) | 2 |
Segment Disclosures (Schedule o
Segment Disclosures (Schedule of Segment Disclosures) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Jun. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Segment Reporting Information [Line Items] | |||||
Interest income | $ 4,610 | $ 3,357 | $ 12,977 | $ 9,008 | |
Interest expense | 1,288 | 514 | 3,346 | 1,076 | |
Net interest income | 3,322 | 2,843 | 9,631 | 7,932 | |
Provision for credit losses | 1,702 | 773 | 4,109 | 1,476 | |
Other income | 722 | $ 610 | 625 | 2,033 | 1,640 |
Other expense | 1,454 | 1,368 | 4,241 | 3,721 | |
Income before income taxes | 888 | $ 1,257 | 1,327 | 3,314 | 4,375 |
Credit Card Loans [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Interest income | 3,726 | 2,783 | 10,513 | 7,475 | |
Total Other Loans [Member] | Private Student Loans [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Interest income | 261 | 211 | 768 | 597 | |
Total Other Loans [Member] | Personal Loans [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Interest income | 305 | 221 | 831 | 633 | |
Total Other Loans [Member] | Other Loans [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Interest income | 87 | 44 | 224 | 113 | |
Unallocated Financing Receivables | Other [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Interest income | 231 | 98 | 641 | 190 | |
Operating Segments [Member] | Digital Banking [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Interest income | 4,610 | 3,357 | 12,977 | 9,008 | |
Interest expense | 1,288 | 514 | 3,346 | 1,076 | |
Net interest income | 3,322 | 2,843 | 9,631 | 7,932 | |
Provision for credit losses | 1,702 | 773 | 4,109 | 1,476 | |
Other income | 592 | 530 | 1,700 | 1,551 | |
Other expense | 1,409 | 1,326 | 4,110 | 3,604 | |
Income before income taxes | 803 | 1,274 | 3,112 | 4,403 | |
Operating Segments [Member] | Digital Banking [Member] | Credit Card Loans [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Interest income | 3,726 | 2,783 | 10,513 | 7,475 | |
Operating Segments [Member] | Digital Banking [Member] | Total Other Loans [Member] | Private Student Loans [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Interest income | 261 | 211 | 768 | 597 | |
Operating Segments [Member] | Digital Banking [Member] | Total Other Loans [Member] | Personal Loans [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Interest income | 305 | 221 | 831 | 633 | |
Operating Segments [Member] | Digital Banking [Member] | Total Other Loans [Member] | Other Loans [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Interest income | 87 | 44 | 224 | 113 | |
Operating Segments [Member] | Digital Banking [Member] | Unallocated Financing Receivables | Other [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Interest income | 231 | 98 | 641 | 190 | |
Operating Segments [Member] | Payment Services [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Interest income | 0 | 0 | 0 | 0 | |
Interest expense | 0 | 0 | 0 | 0 | |
Net interest income | 0 | 0 | 0 | 0 | |
Provision for credit losses | 0 | 0 | 0 | 0 | |
Other income | 130 | 95 | 333 | 89 | |
Other expense | 45 | 42 | 131 | 117 | |
Income before income taxes | 85 | 53 | 202 | (28) | |
Operating Segments [Member] | Payment Services [Member] | Credit Card Loans [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Interest income | 0 | 0 | 0 | 0 | |
Operating Segments [Member] | Payment Services [Member] | Total Other Loans [Member] | Private Student Loans [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Interest income | 0 | 0 | 0 | 0 | |
Operating Segments [Member] | Payment Services [Member] | Total Other Loans [Member] | Personal Loans [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Interest income | 0 | 0 | 0 | 0 | |
Operating Segments [Member] | Payment Services [Member] | Total Other Loans [Member] | Other Loans [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Interest income | 0 | 0 | 0 | 0 | |
Operating Segments [Member] | Payment Services [Member] | Unallocated Financing Receivables | Other [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Interest income | $ 0 | $ 0 | $ 0 | $ 0 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers (Schedule of Revenue from Contracts with Customers Disaggregated by Business Segment) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2023 | Jun. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | ||
Disaggregation of Revenue [Line Items] | ||||||
Discount and interchange revenue, net | $ 377 | $ 330 | $ 335 | $ 1,077 | $ 1,023 | |
Protection products revenue | 42 | 42 | 129 | 128 | ||
Transaction processing revenue | 82 | 65 | 221 | 183 | ||
Other income | 21 | 19 | 71 | 64 | ||
Loan fee income | 194 | 168 | 546 | 450 | ||
Gains (losses) on equity investments | 6 | (4) | (11) | (208) | ||
Total other income not subject to ASC 606 | 200 | 164 | 535 | 242 | ||
Total other income | 722 | $ 610 | 625 | 2,033 | 1,640 | |
Customer rewards included in discount and interchange revenue | 787 | 811 | 2,300 | 2,200 | ||
Deposit product fees reported in net interest income and excluded from other income subject to ASC 606 | 3 | 13 | ||||
Accounting Standards Update 2014-09 [Member] | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Discount and interchange revenue, net | [1] | 377 | 335 | 1,077 | 1,023 | |
Protection products revenue | 42 | 42 | 129 | 128 | ||
Transaction processing revenue | 82 | 65 | 221 | 183 | ||
Other income | 21 | 19 | 71 | 64 | ||
Total other income subject to ASC 606 | [2] | 522 | 461 | 1,498 | 1,398 | |
Operating Segments [Member] | Digital Banking [Member] | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Loan fee income | 194 | 168 | 546 | 450 | ||
Gains (losses) on equity investments | 1 | 0 | 2 | |||
Total other income not subject to ASC 606 | 194 | 169 | 546 | 452 | ||
Total other income | 592 | 530 | 1,700 | 1,551 | ||
Operating Segments [Member] | Digital Banking [Member] | Accounting Standards Update 2014-09 [Member] | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Discount and interchange revenue, net | [1] | 354 | 316 | 1,013 | 962 | |
Protection products revenue | 42 | 42 | 129 | 128 | ||
Transaction processing revenue | 0 | 0 | 0 | 0 | ||
Other income | 2 | 3 | 12 | 9 | ||
Total other income subject to ASC 606 | [2] | 398 | 361 | 1,154 | 1,099 | |
Operating Segments [Member] | Payment Services [Member] | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Loan fee income | 0 | 0 | 0 | 0 | ||
Gains (losses) on equity investments | 6 | (5) | (11) | (210) | ||
Total other income not subject to ASC 606 | 6 | (5) | (11) | (210) | ||
Total other income | 130 | 95 | 333 | 89 | ||
Operating Segments [Member] | Payment Services [Member] | Accounting Standards Update 2014-09 [Member] | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Discount and interchange revenue, net | [1] | 23 | 19 | 64 | 61 | |
Protection products revenue | 0 | 0 | 0 | 0 | ||
Transaction processing revenue | 82 | 65 | 221 | 183 | ||
Other income | 19 | 16 | 59 | 55 | ||
Total other income subject to ASC 606 | [2] | $ 124 | $ 100 | $ 344 | $ 299 | |
[1]Net of rewards, including Cashback Bonus rewards, of $787 million and $811 million for the three months ended September 30, 2023 and 2022, respectively, and $2.3 billion and $2.2 billion for the nine months ended September 30, 2023 and 2022. respectively.[2]Excludes $3 million and $13 million of deposit product fees that are reported within net interest income for the three and nine months ended September 30, 2023, respectively. Deposit product fees were immaterial for the three and nine months ended September 30, 2022. |
Immaterial Restatement of Pri_3
Immaterial Restatement of Prior Period Financial Statements (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2023 | Jun. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||
Other assets | $ 5,513 | $ 5,513 | $ 4,597 | |||||
Assets | 143,432 | 143,432 | 131,706 | |||||
Accrued expenses and other liabilities | 5,710 | 5,710 | 5,618 | |||||
Total liabilities | 129,196 | 129,196 | 117,362 | |||||
Retained Earnings (Accumulated Deficit) | 30,236 | 30,236 | 28,207 | |||||
Stockholders' Equity Attributable to Parent | 14,236 | $ 13,856 | $ 14,048 | 14,236 | $ 14,048 | 14,344 | $ 13,519 | $ 13,180 |
Liabilities and Equity | 143,432 | 143,432 | 131,706 | |||||
Discount and interchange revenue, net | 377 | 330 | 335 | 1,077 | 1,023 | |||
Other income | 722 | 610 | 625 | 2,033 | 1,640 | |||
Other expense | 144 | 154 | 430 | 386 | ||||
Other expense | 1,454 | 1,368 | 4,241 | 3,721 | ||||
Income before income taxes | 888 | 1,257 | 1,327 | 3,314 | 4,375 | |||
Income tax expense | 205 | 289 | 314 | 762 | 1,026 | |||
Net income | 683 | 1,013 | 2,552 | 3,349 | ||||
Net income allocated to common stockholders | $ 647 | $ 931 | $ 975 | $ 2,473 | $ 3,267 | |||
Basic earnings per common share (in dollars per share) | $ 2.59 | $ 3.55 | $ 3.57 | $ 9.70 | $ 11.70 | |||
Diluted earnings per common share (in dollars per share) | $ 2.59 | $ 3.55 | $ 3.56 | $ 9.69 | $ 11.69 | |||
Deferred income taxes | $ (470) | $ (317) | ||||||
Increase (Decrease) in Other Operating Assets | (436) | (350) | ||||||
(Decrease) increase in accrued expenses and other liabilities | (190) | 325 | ||||||
Net Cash Provided by (Used in) Operating Activities | 5,687 | 4,965 | ||||||
Retained Earnings [Member] | ||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||
Stockholders' Equity Attributable to Parent | $ 30,236 | $ 29,761 | $ 27,347 | 30,236 | 27,347 | 28,207 | 26,531 | 24,538 |
Net income | $ 683 | 1,013 | $ 2,552 | 3,349 | ||||
Previously Reported | ||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||
Other assets | 4,519 | |||||||
Assets | 131,628 | |||||||
Accrued expenses and other liabilities | 5,294 | |||||||
Total liabilities | 117,038 | |||||||
Retained Earnings (Accumulated Deficit) | 28,453 | |||||||
Stockholders' Equity Attributable to Parent | 14,286 | 14,286 | 14,590 | 13,764 | 13,408 | |||
Liabilities and Equity | 131,628 | |||||||
Discount and interchange revenue, net | 341 | 346 | 1,056 | |||||
Other income | 621 | 636 | 1,673 | |||||
Other expense | 174 | 406 | ||||||
Other expense | 1,388 | 3,741 | ||||||
Income before income taxes | 1,268 | 1,318 | 4,388 | |||||
Income tax expense | 292 | 312 | 1,029 | |||||
Net income | 1,006 | 3,359 | ||||||
Net income allocated to common stockholders | $ 939 | $ 967 | $ 3,277 | |||||
Basic earnings per common share (in dollars per share) | $ 3.58 | $ 3.54 | $ 11.74 | |||||
Diluted earnings per common share (in dollars per share) | $ 3.58 | $ 3.54 | $ 11.73 | |||||
Deferred income taxes | $ (314) | |||||||
(Decrease) increase in accrued expenses and other liabilities | 312 | |||||||
Net Cash Provided by (Used in) Operating Activities | 4,965 | |||||||
Previously Reported | Retained Earnings [Member] | ||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||
Stockholders' Equity Attributable to Parent | $ 27,585 | 27,585 | 26,776 | 24,766 | ||||
Net income | 1,006 | 3,359 | ||||||
Revision of Prior Period, Adjustment | ||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||
Other assets | 78 | |||||||
Assets | 78 | |||||||
Accrued expenses and other liabilities | 324 | |||||||
Total liabilities | 324 | |||||||
Retained Earnings (Accumulated Deficit) | (246) | |||||||
Stockholders' Equity Attributable to Parent | (238) | (238) | (246) | (245) | (228) | |||
Liabilities and Equity | $ 78 | |||||||
Discount and interchange revenue, net | $ (11) | (11) | (33) | |||||
Other income | (11) | (11) | (33) | |||||
Other expense | (20) | (20) | ||||||
Other expense | (20) | (20) | ||||||
Income before income taxes | (11) | 9 | (13) | |||||
Income tax expense | $ (3) | 2 | (3) | |||||
Net income | 7 | (10) | ||||||
Net income allocated to common stockholders | $ 8 | $ (10) | ||||||
Basic earnings per common share (in dollars per share) | $ (0.03) | $ 0.03 | $ (0.04) | |||||
Diluted earnings per common share (in dollars per share) | $ (0.03) | $ 0.02 | $ (0.04) | |||||
Deferred income taxes | $ (3) | |||||||
(Decrease) increase in accrued expenses and other liabilities | 13 | |||||||
Net Cash Provided by (Used in) Operating Activities | 0 | |||||||
Revision of Prior Period, Adjustment | Retained Earnings [Member] | ||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||
Stockholders' Equity Attributable to Parent | $ (238) | (238) | $ (245) | $ (228) | ||||
Net income | $ 7 | $ (10) |