Discover Financial Services (DFS) 8-K Discover Financial Services Reports Fourth Quarter 2024 Net Income of $1.3 Billion

DISCOVER FINANCIAL SERVICES																		Exhibit 99.2
EARNINGS SUMMARY
(unaudited, in millions, except per share statistics)
	Quarter Ended													Twelve Months Ended
	Dec 31, 2024		Sep 30, 2024		Jun 30, 2024		Mar 31, 2024		Dec 31, 2023		Dec 31, 2024 vs. Dec 31, 2023			Dec 31, 2024		Dec 31, 2023		2024 vs. 2023
EARNINGS SUMMARY
Interest Income	$4,989		$5,112		$4,971		$4,948		$4,868		$121	2	%	$20,020		$17,845		$2,175	12	%
Interest Expense	1,359		1,457		1,447		1,461		1,400		(41)	(3	%)	5,724		4,746		978	21	%
Net Interest Income	3,630		3,655		3,524		3,487		3,468		162	5	%	14,296		13,099		1,197	9	%
Discount/Interchange Revenue	1,157		1,142		1,153		1,024		1,142		15	1	%	4,476		4,460		16	—	%
Rewards Cost	758		779		716		703		788		(30)	(4	%)	2,956		3,079		(123)	(4	%)
Discount and Interchange Revenue, net	399		363		437		321		354		45	13	%	1,520		1,381		139	10	%
Protection Products Revenue	43		42		42		42		43		—	—	%	169		172		(3)	(2	%)
Loan Fee Income	200		214		205		200		217		(17)	(8	%)	819		763		56	7	%
Transaction Processing Revenue	83		84		91		87		82		1	1	%	345		303		42	14	%
Other Income	404		95		239		23		16		388	NM		761		76		685	NM
Total Non-Interest Income	1,129		798		1,014		673		712		417	59	%	3,614		2,695		919	34	%
Revenue Net of Interest Expense	4,759		4,453		4,538		4,160		4,180		579	14	%	17,910		15,794		2,116	13	%
Provision for Credit Losses	1,202		1,473		739		1,497		1,909		(707)	(37	%)	4,911		6,018		(1,107)	(18	%)
Employee Compensation and Benefits	792		703		658		671		646		146	23	%	2,824		2,434		390	16	%
Marketing and Business Development	299		263		258		250		372		(73)	(20	%)	1,070		1,164		(94)	(8	%)
Information Processing & Communications	208		197		167		163		170		38	22	%	735		608		127	21	%
Professional Fees	363		323		296		292		312		51	16	%	1,274		1,041		233	22	%
Premises and Equipment	25		25		23		20		25		—	—	%	93		89		4	4	%
Other Expense	168		277		336		148		263		(95)	(36	%)	929		803		126	16	%
Total Operating Expense	1,855		1,788		1,738		1,544		1,788		67	4	%	6,925		6,139		786	13	%
Income/ (Loss) Before Income Taxes	1,702		1,192		2,061		1,119		483		1,219	252	%	6,074		3,637		2,437	67	%
Tax Expense	411		322		538		268		117		294	251	%	1,539		841		698	83	%
Net Income/ (Loss)	$1,291		$870		$1,523		$851		$366		$925	253	%	$4,535		$2,796		$1,739	62	%
Net Income/ (Loss) Allocated to Common Stockholders	$1,284		$834		$1,515		$813		$364		$920	253	%	$4,446		$2,715		$1,731	64	%
Effective Tax Rate	24.1	%	27.0	%	26.1	%	24.0	%	24.0	%				25.3	%	23.1	%
Net Interest Margin	11.96	%	11.38	%	11.17	%	11.03	%	10.98	%	98	bps		11.38	%	11.07	%	31	bps
Operating Efficiency	39.0	%	40.1	%	38.3	%	37.1	%	42.8	%	(380)	bps		38.7	%	38.9	%	(20)	bps
ROE	29	%	21	%	40	%	24	%	10	%				28	%	20	%
ROCE	31	%	23	%	43	%	8	%	11	%				30	%	22	%
Capital Returned to Common Stockholders	$160		$155		$178		$180		$144		$16	11	%	$674		$2,541		($1,867)	(73	%)
Payout Ratio	12	%	19	%	12	%	22	%	40	%				15	%	94	%
Ending Common Shares Outstanding	251		251		251		251		250		1	—	%	251		250		1	—	%
Weighted Average Common Shares Outstanding	251		251		251		250		250		1	—	%	251		254		(3)	(1	%)
Weighted Average Common Shares Outstanding (fully diluted)	251		251		251		250		250		1	—	%	251		254		(3)	(1	%)
PER SHARE STATISTICS
Basic EPS	$5.11		$3.32		$6.04		$3.25		$1.45		$3.66	252	%	$17.72		$10.71		$7.01	65	%
Diluted EPS	$5.11		$3.32		$6.03		$3.25		$1.45		$3.66	252	%	$17.72		$10.70		$7.02	66	%
Common Dividends Declared Per Share	$0.70		$0.70		$0.70		$0.70		$0.70		$—	—	%	$2.80		$2.70		$0.10	4	%
Common Stock Price (period end)	$173.23		$140.29		$130.81		$131.09		$112.40		$60.83	54	%	$173.23		$112.40		$60.83	54	%
Book Value per share	$71.32		$68.11		$63.76		$58.54		$56.92		$14.40	25	%	$71.32		$56.92		$14.40	25	%
Note: See Glossary of Financial Terms for definitions of financial terms

DISCOVER FINANCIAL SERVICES
BALANCE SHEET SUMMARY
(unaudited, in millions)
	Quarter Ended
	Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Dec 31, 2024 vs. Dec 31, 2023
BALANCE SHEET SUMMARY
Assets
Cash and Investment Securities	$28,552	$26,423	$24,405	$27,965	$25,383	$3,169	12	%
Loans Held-for-Sale	—	8,484	10,145	—	—	—	—	%
Loan Portfolio	121,118	118,509	117,504	126,555	128,409	(7,291)	(6	%)
Total Loan Receivables	121,118	126,993	127,649	126,555	128,409	(7,291)	(6	%)
Allowance for Credit Losses	(8,323)	(8,512)	(8,481)	(9,258)	(9,283)	960	10	%
Net Loan Receivables	112,795	118,481	119,168	117,297	119,126	(6,331)	(5	%)
Premises and Equipment, net	1,072	1,085	1,087	1,107	1,091	(19)	(2	%)
Goodwill and Intangible Assets, net	255	255	255	255	255	—	—	%
Other Assets	4,966	5,371	5,973	6,083	5,858	(892)	(15	%)
Total Assets	$147,640	$151,615	$150,888	$152,707	$151,713	($4,073)	(3	%)
Liabilities & Stockholders' Equity
Certificates of Deposits 1	29,296	30,296	25,881	25,921	24,151	5,145	21	%
Savings, Money Market, and Other Deposits 1, 2	61,316	60,013	61,414	61,412	59,882	1,434	2	%
Total Direct to Consumer Deposits 1, 2	90,612	90,309	87,295	87,333	84,033	6,579	8	%
Brokered Deposits and Other Deposits	16,397	19,543	21,055	23,097	24,898	(8,501)	(34	%)
Deposits	107,009	109,852	108,350	110,430	108,931	(1,922)	(2	%)
Securitized Borrowings 3	8,475	9,307	9,608	10,933	11,743	(3,268)	(28	%)
Other Borrowings 3	7,778	8,870	9,533	9,542	9,588	(1,810)	(19	%)
Borrowings	16,253	18,177	19,141	20,475	21,331	(5,078)	(24	%)
Accrued Expenses and Other Liabilities	6,452	6,477	7,387	7,132	7,216	(764)	(11	%)
Total Liabilities	129,714	134,506	134,878	138,037	137,478	(7,764)	(6	%)
Total Equity	17,926	17,109	16,010	14,670	14,235	3,691	26	%
Total Liabilities and Stockholders' Equity	$147,640	$151,615	$150,888	$152,707	$151,713	($4,073)	(3	%)
LIQUIDITY
Liquidity Portfolio	$27,325	$24,804	$22,371	$25,739	$23,254	$4,071	18	%
Private Asset-backed Securitization Capacity	3,500	2,750	3,500	3,500	2,750	750	27	%
Federal Home Loan Bank Borrowing Capacity	4,679	3,853	3,383	3,087	2,551	2,128	83	%
Federal Reserve Discount Window 4	46,489	46,118	39,569	41,710	41,199	5,290	13	%
Undrawn Credit Facilities 4	54,668	52,721	46,452	48,297	46,500	8,168	18	%
Total Liquidity	$81,993	$77,525	$68,823	$74,036	$69,754	$12,239	18	%
¹ Includes Affinity relationships
² Savings, Money Market, and Other Deposits and reflects both interest-bearing and non-interest bearing direct to consumer deposits
³ Includes short-term and long-term borrowings
⁴ Excludes investments pledged to the Federal Reserve, which is included within the liquidity portfolio
Note: See Glossary of Financial Terms for definitions of financial terms

DISCOVER FINANCIAL SERVICES
BALANCE SHEET STATISTICS
(unaudited, in millions)
	Quarter Ended
	Dec 31, 2024		Sep 30, 2024		Jun 30, 2024		Mar 31, 2024		Dec 31, 2023		Dec 31, 2024 vs. Dec 31, 2023
BALANCE SHEET STATISTICS
Total Common Equity	$16,870		$16,053		$14,954		$13,614		$13,179		$3,691	28	%
Total Common Equity/Total Assets	11.4	%	10.6	%	9.9	%	8.9	%	8.7	%
Total Common Equity/Net Loans	15.0	%	13.5	%	12.5	%	11.6	%	11.1	%
Tangible Assets	$147,385		$151,360		$150,633		$152,452		$151,458		($4,073)	(3	%)
Tangible Common Equity  1	$16,615		$15,798		$14,699		$13,359		$12,924		$3,691	29	%
Tangible Common Equity/Tangible Assets  1	11.3	%	10.4	%	9.8	%	8.8	%	8.5	%
Tangible Common Equity/Net Loans  1	14.7	%	13.3	%	12.3	%	11.4	%	10.8	%
Tangible Common Equity per share  1	$66.10		$62.89		$58.53		$53.31		$51.67		$14.43	28	%
	Basel III
	Quarter Ended
REGULATORY CAPITAL RATIOS 2	Dec 31, 2024		Sep 30, 2024		Jun 30, 2024		Mar 31, 2024		Dec 31, 2023
Total Risk Based Capital Ratio	16.5	%	14.9	%	14.2	%	13.3	%	13.2	%
Tier 1 Risk Based Capital Ratio	15.0	%	13.4	%	12.6	%	11.7	%	11.6	%
Tier 1 Leverage Ratio	12.3	%	11.4	%	11.1	%	10.1	%	10.3	%
Common Equity Tier 1 Capital Ratio	14.1	%	12.5	%	11.8	%	10.9	%	10.8	%
1 Tangible Common Equity ("TCE") is a non-GAAP measure. The Company believes TCE is a more meaningful measure to investors of the net asset value of the Company. For corresponding reconciliation of TCE to a GAAP financial measure see Reconciliation of GAAP to non-GAAP Data schedule
2 Based on the final rule published September 30, 2020. Capital ratios reflect the impact of CECL reserves on regulatory capital with transition impacts
Note: See Glossary of Financial Terms for definitions of financial terms

DISCOVER FINANCIAL SERVICES
AVERAGE BALANCE SHEET
(unaudited, in millions)
	Quarter Ended
	Dec 31, 2024		Sep 30, 2024		Jun 30, 2024		Mar 31, 2024		Dec 31, 2023		Dec 31, 2024 vs. Dec 31, 2023
AVERAGE BALANCES
Assets
Cash and Investment Securities	$29,724		$24,023		$24,193		$25,662		$22,448		$7,276	32	%
Restricted Cash	399		641		590		558		104		295	NM
Credit Card Loans	101,059		100,290		99,584		100,310		99,610		1,449	1	%
Private Student Loans 1	1,458		9,631		10,304		10,577		10,369		(8,911)	(86	%)
Personal Loans	10,421		10,428		10,266		10,004		9,754		667	7	%
Other Loans	7,826		7,358		6,829		6,235		5,654		2,172	38	%
Total Loans	120,764		127,707		126,983		127,126		125,387		(4,623)	(4	%)
Total Interest Earning Assets	150,887		152,371		151,766		153,346		147,939		2,948	2	%
Allowance for Credit Losses	(8,510)		(8,480)		(9,245)		(9,279)		(8,668)		158	2	%
Other Assets	7,401		7,756		7,953		7,709		7,462		(61)	(1	%)
Total Assets	$149,778		$151,647		$150,474		$151,776		$146,733		$3,045	2	%
Liabilities and Stockholders' Equity
Non-Interest-bearing Direct to Consumer Deposits 2	$1,103		$1,063		$1,071		$1,037		$987		$116	12	%
Certificates of Deposits 2	29,634		27,839		25,906		25,625		22,496		7,138	32	%
Savings, Money Market, and Other Deposits 2	59,571		59,258		59,973		59,212		58,766		805	1	%
Interest-bearing Direct to Consumer Deposits 2	89,205		87,097		85,879		84,837		81,262		7,943	10	%
Brokered Deposits and Other Deposits	17,515		20,189		21,631		23,792		23,271		(5,756)	(25	%)
Total Interest-bearing Deposits	106,720		107,286		107,510		108,629		104,533		2,187	2	%
Securitized Borrowings 3	8,852		9,971		10,432		11,340		11,045		(2,193)	(20	%)
Other Borrowings 3	8,098		9,416		9,521		9,572		9,228		(1,130)	(12	%)
Total Interest-bearing Liabilities	123,670		126,673		127,463		129,541		124,806		(1,136)	(1	%)
Other Liabilities & Stockholders' Equity	25,005		23,911		21,940		21,198		20,940		4,065	19	%
Total Liabilities and Stockholders' Equity	$149,778		$151,647		$150,474		$151,776		$146,733		$3,045	2	%
AVERAGE YIELD
Assets
Cash and Investment Securities	4.24	%	4.46	%	4.51	%	4.51	%	4.36	%	(12)	bps
Restricted Cash	5.69	%	5.73	%	8.33	%	7.03	%	16.71	%	(1,102)	bps
Credit Card Loans	16.22	%	16.23	%	15.99	%	15.79	%	15.63	%	59	bps
Private Student Loans 1	9.85	%	10.08	%	9.97	%	10.04	%	10.16	%	(31)	bps
Personal Loans	13.84	%	13.72	%	13.60	%	13.40	%	13.20	%	64	bps
Other Loans	7.50	%	7.45	%	7.45	%	7.39	%	7.14	%	36	bps
Total Loans	15.37	%	15.06	%	14.85	%	14.71	%	14.61	%	76	bps
Total Interest Earning Assets	13.15	%	13.35	%	13.18	%	12.98	%	13.05	%	10	bps
AVERAGE RATES
Liabilities and Stockholders' Equity
Certificates of Deposits 2	4.61	%	4.67	%	4.62	%	4.53	%	4.24	%	37	bps
Savings, Money Market, and Other Deposits 2	3.99	%	4.27	%	4.29	%	4.35	%	4.39	%	(40)	bps
Interest-bearing Direct to Consumer Deposits 2	4.19	%	4.40	%	4.39	%	4.41	%	4.35	%	(16)	bps
Brokered Deposits and Other Deposits	4.76	%	4.95	%	4.85	%	4.75	%	4.64	%	12	bps
Total Interest-bearing Deposits	4.29	%	4.50	%	4.48	%	4.48	%	4.41	%	(12)	bps
Securitized Borrowings 3	4.60	%	4.81	%	4.89	%	4.71	%	4.68	%	(8)	bps
Other Borrowings 3	5.24	%	5.23	%	5.12	%	4.94	%	4.55	%	69	bps
Total Interest-bearing Liabilities	4.37	%	4.58	%	4.56	%	4.54	%	4.45	%	(8)	bps
Net Interest Margin	11.96	%	11.38	%	11.17	%	11.03	%	10.98	%	98	bps
Net Yield on Interest-earning Assets	9.57	%	9.54	%	9.34	%	9.15	%	9.30	%	27	bps
1 Private student loans were classified as held-for-sale effective June 30, 2024, and subsequently completed the sale during the fourth quarter of 2024
2 Includes Affinity relationships
3 Includes short-term and long-term borrowings
Note: See Glossary of Financial Terms for definitions of financial terms

DISCOVER FINANCIAL SERVICES
LOAN STATISTICS
(unaudited, in millions)
	Quarter Ended													Twelve Months Ended
	Dec 31, 2024		Sep 30, 2024		Jun 30, 2024		Mar 31, 2024		Dec 31, 2023		Dec 31, 2024 vs. Dec 31, 2023			Dec 31, 2024		Dec 31, 2023		2024 vs. 2023
TOTAL LOAN RECEIVABLES
Ending Loans  1	$121,118		$126,993		$127,649		$126,555		$128,409		($7,291)	(6	%)	$121,118		$128,409		($7,291)	(6	%)
Average Loans  1	$120,764		$127,707		$126,983		$127,126		$125,387		($4,623)	(4	%)	$125,638		$118,311		$7,327	6	%
Interest Yield 1	15.37	%	15.06	%	14.85	%	14.71	%	14.61	%	76	bps		14.99	%	14.33	%	66	bps
Gross Principal Charge-off Rate 2	5.77	%	5.91	%	5.77	%	5.74	%	4.82	%	95	bps		5.80	%	4.17	%	163	bps
Net Principal Charge-off Rate 2	4.64	%	4.86	%	4.83	%	4.92	%	4.11	%	53	bps		4.81	%	3.42	%	139	bps
Delinquency Rate (30 or more days) 2	3.48	%	3.46	%	3.33	%	3.38	%	3.45	%	3	bps		3.48	%	3.45	%	3	bps
Delinquency Rate (90 or more days) 2	1.71	%	1.65	%	1.62	%	1.64	%	1.59	%	12	bps		1.71	%	1.59	%	12	bps
Gross Principal Charge-off Dollars 2	$1,730		$1,756		$1,820		$1,812		$1,521		$209	14	%	$7,118		$4,927		$2,191	44	%
Net Principal Charge-off Dollars 2	$1,391		$1,442		$1,522		$1,556		$1,298		$93	7	%	$5,911		$4,042		$1,869	46	%
Net Interest and Fee Charge-off Dollars 2	$334		$335		$344		$348		$279		$55	20	%	$1,361		$873		$488	56	%
Loans Delinquent 30 or more days 2	$4,216		$4,105		$3,917		$4,282		$4,427		($211)	(5	%)	$4,216		$4,427		($211)	(5	%)
Loans Delinquent 90 or more days 2	$2,071		$1,960		$1,903		$2,079		$2,045		$26	1	%	$2,071		$2,045		$26	1	%
Allowance for Credit Losses (period end)	$8,323		$8,512		$8,481		$9,258		$9,283		($960)	(10	%)	$8,323		$9,283		($960)	(10	%)
Reserve Change Build/ (Release) 3, 4	($189)		$31		($777)		($25)		$618		($807)			($960)		$1,977		($2,937)
Reserve Rate 2	6.87	%	7.18	%	7.22	%	7.32	%	7.23	%	(36)	bps		6.87	%	7.23	%	(36)	bps
CREDIT CARD LOANS
Ending Loans	$102,786		$100,489		$100,066		$99,475		$102,259		$527	1	%	$102,786		$102,259		$527	1	%
Average Loans	$101,059		$100,290		$99,584		$100,310		$99,610		$1,449	1	%	$100,313		$94,205		$6,108	6	%
Interest Yield	16.22	%	16.23	%	15.99	%	15.79	%	15.63	%	59	bps		16.06	%	15.33	%	73	bps
Gross Principal Charge-off Rate	6.28	%	6.46	%	6.66	%	6.61	%	5.50	%	78	bps		6.50	%	4.76	%	174	bps
Net Principal Charge-off Rate	5.03	%	5.28	%	5.55	%	5.66	%	4.68	%	35	bps		5.38	%	3.90	%	148	bps
Delinquency Rate (30 or more days)	3.84	%	3.84	%	3.69	%	3.83	%	3.87	%	(3)	bps		3.84	%	3.87	%	(3)	bps
Delinquency Rate (90 or more days)	1.93	%	1.87	%	1.83	%	1.95	%	1.87	%	6	bps		1.93	%	1.87	%	6	bps
Gross Principal Charge-off Dollars	$1,596		$1,629		$1,648		$1,649		$1,380		$216	16	%	$6,522		$4,481		$2,041	46	%
Net Principal Charge-off Dollars	$1,278		$1,332		$1,373		$1,411		$1,175		$103	9	%	$5,394		$3,674		$1,720	47	%
Loans Delinquent 30 or more days	$3,944		$3,857		$3,697		$3,810		$3,955		($11)	—	%	$3,944		$3,955		($11)	—	%
Loans Delinquent 90 or more days	$1,980		$1,883		$1,834		$1,941		$1,917		$63	3	%	$1,980		$1,917		$63	3	%
Allowance for Credit Losses (period end)	$7,403		$7,586		$7,591		$7,541		$7,619		($216)	(3	%)	$7,403		$7,619		($216)	(3	%)
Reserve Change Build/ (Release) 4	($183)		($5)		$50		($78)		$549		($732)			($216)		$1,802		($2,018)
Reserve Rate	7.20	%	7.55	%	7.59	%	7.58	%	7.45	%	(25)	bps		7.20	%	7.45	%	(25)	bps
Total Discover Card Volume	$58,306		$56,593		$56,441		$53,239		$60,917		($2,611)	(4	%)	$224,579		$232,785		($8,206)	(4	%)
Discover Card Sales Volume	$55,252		$53,380		$53,482		$50,137		$57,145		($1,893)	(3	%)	$212,251		$217,914		($5,663)	(3	%)
Rewards Rate	1.35	%	1.44	%	1.32	%	1.39	%	1.37	%	(2)	bps		1.38	%	1.40	%	(2)	bps
1 Total Loans includes private student loans, home equity and other loans
2 Excludes loans classified as held-for-sale as of June 30, 2024
3 Includes the adjustment to eliminate the allowance for credit losses upon classifying the private student loan portfolio as held-for-sale as of June 30, 2024
4 Excludes any build/release of the liability for expected credit losses on unfunded commitments as the offset is recorded in accrued expenses and other liabilities in the Company's condensed consolidated statements of financial condition
Note: See Glossary of Financial Terms for definitions of financial terms

DISCOVER FINANCIAL SERVICES
LOAN STATISTICS
(unaudited, in millions)
	Quarter Ended													Twelve Months Ended
	Dec 31, 2024		Sep 30, 2024		Jun 30, 2024		Mar 31, 2024		Dec 31, 2023		Dec 31, 2024 vs. Dec 31, 2023			Dec 31, 2024		Dec 31, 2023		2024 vs. 2023
PRIVATE STUDENT LOANS1
Organic Student Loans	$—		$8,101		$9,740		$10,050		$9,894		($9,894)	(100	%)	$—		$9,894		($9,894)	(100	%)
Purchased Student Loans	—		383		405		430		458		(458)	(100	%)	—		458		(458)	(100	%)
Total Private Student Loans	$—		$8,484		$10,145		$10,480		$10,352		($10,352)	(100	%)	$—		$10,352		($10,352)	(100	%)
Interest Yield	9.85	%	10.08	%	9.97	%	10.04	%	10.16	%	(31)	bps		10.02	%	9.95	%	7	bps
Net Principal Charge-off Rate 2	N/A		N/A		1.85	%	1.58	%	1.52	%	NM			1.72	%	1.29	%	43	bps
Delinquency Rate (30 or more days) 2	N/A		N/A		N/A		2.59	%	2.62	%	NM			N/A		2.62	%	NM
Reserve Rate 3	N/A		N/A		N/A		8.29	%	8.29	%	NM			N/A		8.29	%	NM
PERSONAL LOANS
Ending Loans	$10,314		$10,438		$10,321		$10,107		$9,852		$462	5	%	$10,314		$9,852		$462	5	%
Interest Yield	13.84	%	13.72	%	13.60	%	13.40	%	13.20	%	64	bps		13.64	%	12.83	%	81	bps
Net Principal Charge-off Rate	4.24	%	4.01	%	3.98	%	4.02	%	3.39	%	85	bps		4.06	%	2.60	%	146	bps
Delinquency Rate (30 or more days)	1.69	%	1.66	%	1.54	%	1.46	%	1.45	%	24	bps		1.69	%	1.45	%	24	bps
Reserve Rate	7.56	%	7.65	%	7.68	%	7.48	%	7.33	%	23	bps		7.56	%	7.33	%	23	bps
1 Private student loans were classified as held-for-sale effective June 30, 2024, and subsequently completed the sale during the fourth quarter of 2024
2 Excludes loans classified as held-for-sale as of June 30, 2024
3 The allowance for credit losses was reversed upon classifying the private student loan portfolio as held-for-sale
Note: See Glossary of Financial Terms for definitions of financial terms

DISCOVER FINANCIAL SERVICES
SEGMENT RESULTS AND VOLUME STATISTICS
(unaudited, in millions)
	Quarter Ended													Twelve Months Ended
	Dec 31, 2024		Sep 30, 2024		Jun 30, 2024		Mar 31, 2024		Dec 31, 2023		Dec 31, 2024 vs. Dec 31, 2023			Dec 31, 2024		Dec 31, 2023		2024 vs. 2023
DIGITAL BANKING
Interest Income	$4,989		$5,112		$4,971		$4,948		$4,868		$121	2	%	$20,020		$17,845		$2,175	12	%
Interest Expense	1,359		1,457		1,447		1,461		1,400		(41)	(3	%)	5,724		4,746		978	21	%
Net Interest Income	3,630		3,655		3,524		3,487		3,468		162	5	%	14,296		13,099		1,197	9	%
Non-Interest Income	1,001		669		691		541		595		406	68	%	2,902		2,245		657	29	%
Revenue Net of Interest Expense	4,631		4,324		4,215		4,028		4,063		568	14	%	17,198		15,344		1,854	12	%
Provision for Credit Losses	1,202		1,473		739		1,497		1,909		(707)	(37	%)	4,911		6,018		(1,107)	(18	%)
Total Operating Expense	1,801		1,743		1,692		1,494		1,725		76	4	%	6,730		5,945		785	13	%
Income/ (Loss) Before Income Taxes	$1,628		$1,108		$1,784		$1,037		$429		$1,199	279	%	$5,557		$3,381		$2,176	64	%
Net Interest Margin	11.96	%	11.38	%	11.17	%	11.03	%	10.98	%	98	bps		11.38	%	11.07	%	31	bps
Pretax Return on Loan Receivables	5.36	%	3.45	%	5.65	%	3.28	%	1.35	%	401	bps		4.42	%	2.86	%	156	bps
Allowance for Credit Losses (period end)	$8,323		$8,512		$8,481		$9,258		$9,283		($960)	(10	%)	$8,323		$9,283		($960)	(10	%)
Reserve Change Build/ (Release)	($189)		$31		($777)		($25)		$618		($807)			($960)		$1,977		($2,937)
PAYMENT SERVICES
Interest Income	$—		$—		$—		$—		$—		$—	—	%	$—		$—		$—	—	%
Interest Expense	—		—		—		—		—		—	—	%	—		—		—	—	%
Net Interest Income	—		—		—		—		—		—	—	%	—		—		—	—	%
Non-Interest Income (Loss)	128		129		323		132		117		11	9	%	712		450		262	58	%
Revenue Net of Interest Expense	128		129		323		132		117		11	9	%	712		450		262	58	%
Provision for Credit Losses	—		—		—		—		—		—	—	%	—		—		—	—	%
Total Operating Expense	54		45		46		50		63		(9)	(14	%)	195		194		1	1	%
Income/ (Loss) Before Income Taxes	$74		$84		$277		$82		$54		$20	37	%	$517		$256		$261	102	%
TRANSACTIONS PROCESSED ON NETWORKS
Discover Network	977		954		936		883		974		3	—	%	3,750		3,728		22	1	%
PULSE Network	2,463		2,421		2,413		2,312		2,308		155	7	%	9,609		7,705		1,904	25	%
Total	3,440		3,375		3,349		3,195		3,282		158	5	%	13,359		11,433		1,926	17	%
NETWORK VOLUME
PULSE Network	$84,900		$82,573		$81,749		$79,073		$79,194		$5,706	7	%	$328,295		$285,616		$42,679	15	%
Network Partners	6,081		7,512		8,111		11,070		8,736		(2,655)	(30	%)	32,774		39,671		(6,897)	(17	%)
Diners Club International 1	11,435		10,388		9,421		10,181		10,468		967	9	%	41,425		39,299		2,126	5	%
Total Payment Services	102,416		100,473		99,281		100,324		98,398		4,018	4	%	402,494		364,586		37,908	10	%
Discover Network - Proprietary	57,120		55,184		55,351		51,764		58,419		(1,299)	(2)	%	219,419		224,572		(5,153)	(2)	%
Total	$159,536		$155,657		$154,632		$152,088		$156,817		$2,719	2	%	$621,913		$589,158		$32,755	6	%
1 Volume is derived from data provided by licencees for Diners Club branded cards issued outside of North America and is subject to subsequent revision or amendment
Note: See Glossary of Financial Terms for definitions of financial terms

DISCOVER FINANCIAL SERVICES - GLOSSARY OF FINANCIAL TERMS
Balance Sheet & Regulatory Capital Terms
Liquidity Portfolio represents cash and cash equivalents (excluding cash-in-process) and other investments
Regulatory Capital Ratios are preliminary
•	Total Risk Based Capital Ratio represents total capital divided by risk-weighted assets
•	Tier 1 Capital Ratio represents tier 1 capital divided by risk-weighted assets
•	Tier 1 Leverage Ratio represents tier 1 capital divided by average total assets
•	Common Equity Tier 1 Capital Ratio represents common equity tier 1 capital divided by risk weighted assets
Tangible Assets represents total assets less goodwill and intangibles
Tangible Common Equity ("TCE"), a non-GAAP financial measure, represents total common equity less goodwill and intangibles. The Company believes TCE is a meaningful measure to investors of the net asset value of the Company. For corresponding reconciliation of TCE to a GAAP financial measure, see Reconciliation of GAAP to Non-GAAP Data
Tangible Common Equity/Net Loans, a non-GAAP measure, represents TCE divided by total loans less the allowance for credit losses (period end)
Tangible Common Equity per Share, a non-GAAP measure, represents TCE divided by ending common shares outstanding
Tangible Common Equity/Tangible Assets, a non-GAAP measure, represents TCE divided by total assets less goodwill and intangibles
Undrawn Credit Facilities represents asset-backed conduit funding facilities and Federal Reserve discount window (excluding investments pledged to the Federal Reserve, which are included within the liquidity investment portfolio)
Credit Related Terms
Delinquency Rate (30 or more days) represents loans delinquent thirty days or more divided by ending loans (total or respective product loans, as appropriate)
Delinquency Rate (90 or more days) represents loans delinquent ninety days or more divided by ending loans (total or respective product loans, as appropriate)
Gross Principal Charge-off Rate represents gross principal charge-off dollars (annualized) divided by average loans for the reporting period (total or respective product loans, as appropriate)
Net Principal Charge-off Rate represents net principal charge-off dollars (annualized) divided by average loans for the reporting period (total or respective product loans, as appropriate)
Reserve Rate represents the allowance for credit losses divided by total loans (total or respective product loans, as appropriate)
Earnings and Shareholder Return Terms
Book Value per share represents total equity divided by ending common shares outstanding
Capital Returned to Common Stockholders represents common stock dividends declared and treasury share repurchases, excluding common stock issued under employee benefit plans and stock based compensation
Earnings Per Share represents net income allocated to common stockholders divided by the weighted average common shares outstanding
Interest Yield represents interest income on loan receivables (annualized) divided by average loans for the reporting period (total or respective product loans, as appropriate)
Net Income Allocated to Common Stockholders represents net income less preferred stock dividends and income allocated to participating securities
Net Interest Margin represents net interest income (annualized) divided by average total loans for the period
Net Yield on Interest Earning Assets represents net interest income (annualized) divided by average total interest earning assets for the period
Operating Efficiency represents total operating expense divided by revenue net of interest expense
Pretax Return on Loan Receivables represents income before income taxes (annualized) divided by total average loans for the period
Payout Ratio represents capital returned to common stockholders divided by net income allocated to common stockholders
Return on Common Equity represents net income available for common stockholders (annualized) divided by average total common equity for the reporting period
Return on Equity represents net income (annualized) divided by average total equity for the reporting period
Rewards Rate represents Credit Card rewards cost divided by Discover Card sales volume
Volume Terms
Discover Card Sales Volume represents Discover card activity related to sales net of returns
Discover Card Volume represents Discover card activity related to sales net of returns, balance transfers, cash advances and other activity
Discover Network Proprietary Volume represents gross Discover Card sales volume on the Discover Network

DISCOVER FINANCIAL SERVICES
RECONCILIATION OF GAAP TO NON-GAAP DATA
(unaudited, in millions)
	Quarter Ended
	Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023
GAAP Total Common Equity	$16,870	$16,053	$14,954	$13,614	$13,179
Less: Goodwill	(255)	(255)	(255)	(255)	(255)
Less: Intangibles	—	—	—	—	—
Tangible Common Equity 1	$16,615	$15,798	$14,699	$13,359	$12,924
GAAP Book Value Per Share	$71.32	$68.11	$63.76	$58.54	$56.92
Less: Goodwill	(1.02)	(1.02)	(1.02)	(1.02)	(1.03)
Less: Intangibles	—	—	—	—	—
Less: Preferred Stock	(4.20)	(4.20)	(4.21)	(4.21)	(4.22)
Tangible Common Equity Per Share	$66.10	$62.89	$58.53	$53.31	$51.67
¹ Tangible Common Equity ("TCE"), a non-GAAP financial measure, represents common equity less goodwill and intangibles. A reconciliation of TCE to common equity, a GAAP financial measure, is shown above. Other financial services companies may also use TCE and definitions may vary, so users of this information are advised to exercise caution in comparing TCE of different companies. TCE is included because management believes that common equity excluding goodwill and intangibles is a more meaningful measure to investors of the true net asset value of the Company
Note: See Glossary of Financial Terms for definitions of financial terms