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q_an001
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What does Discover’s Provision Coverage Ratio for 2023 indicate about its approach to managing bad debts?
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The PCR for Discover for 2023 of approximately 401.21% indicates that Discover has set aside provisions that are more than four times the amount of its NPAs. A higher PCR suggests strong risk management as it shows that the company is well-prepared to cover potential losses from its bad loans. This level of coverage provides confidence that the company can absorb credit losses, reflecting financial stability and conservative provisioning practices.
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Analysis
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65, 67
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0001393612-24-000010
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 65: The following tables provide changes in our allowance for credit losses (dollars in millions):
| | | | | | | | | | | | | | | |
|---:|:-------------------------------------------------|:-------------------------------------|:------|:---------------------|:------|:---------------|:----|:------------|:------------|:----|:--------|:---|:---|:------|
| 1 | | For the Year Ended December 31, 2023 | | | | | | | | | | | | |
| 2 | | Credit Card Loans | | Private StudentLoans | | Personal Loans | | Other Loans | Total Loans | | | | | |
| 3 | Balance at December 31, 2022 | $ | 5,883 | | | $ | 839 | | $ | 595 | $ | 57 | $ | 7,374 |
| 4 | Cumulative effect of ASU No. 2022-02 adoption(1) | (66) | | | - | | | (2) | | - | (68) | | | |
| 5 | Balance at January 1, 2023 | 5,817 | | | 839 | | | 593 | | 57 | 7,306 | | | |
| 6 | Additions | | | | | | | | | | | | | |
| 7 | Provision for credit losses(2) | 5,476 | | | 152 | | | 363 | | 28 | 6,019 | | | |
| 8 | Deductions | | | | | | | | | | | | | |
| 9 | Charge-offs | (4,481) | | | (155) | | | (290) | | (1) | (4,927) | | | |
| 10 | Recoveries | 807 | | | 22 | | | 56 | | - | 885 | | | |
| 11 | Net charge-offs | (3,674) | | | (133) | | | (234) | | (1) | (4,042) | | | |
| 13 | Balance at December 31, 2023 | $ | 7,619 | | | $ | 858 | | $ | 722 | $ | 84 | $ | 9,283 |
| 15 | | For the Year Ended December 31, 2022 | | | | | | | | | | | | |
| 16 | | Credit Card Loans | | Private StudentLoans | | Personal Loans | | Other Loans | Total Loans | | | | | |
| 17 | Balance at December 31, 2021 | $ | 5,273 | | | $ | 843 | | $ | 662 | $ | 44 | $ | 6,822 |
| 18 | Additions | | | | | | | | | | | | | |
| 19 | Provision for credit losses(2) | 2,233 | | | 99 | | | 24 | | 13 | 2,369 | | | |
| 20 | Deductions | | | | | | | | | | | | | |
| 21 | Charge-offs | (2,417) | | | (126) | | | (159) | | - | (2,702) | | | |
| 22 | Recoveries | 794 | | | 23 | | | 68 | | - | 885 | | | |
| 23 | Net charge-offs | (1,623) | | | (103) | | | (91) | | - | (1,817) | | | |
| 25 | Balance at December 31, 2022 | $ | 5,883 | | | $ | 839 | | $ | 595 | $ | 57 | $ | 7,374 |
| 27 | | For the Year Ended December 31, 2021 | | | | | | | | | | | | |
| 28 | | Credit Card Loans | | Private StudentLoans | | Personal Loans | | Other Loans | Total Loans | | | | | |
| 29 | Balance at December 31, 2020 | $ | 6,491 | | | $ | 840 | | $ | 857 | $ | 38 | $ | 8,226 |
| 32 | Additions | | | | | | | | | | | | | |
| 33 | Provision for credit losses(2) | 229 | | | 67 | | | (75) | | 6 | 227 | | | |
| 34 | Deductions | | | | | | | | | | | | | |
| 35 | Charge-offs | (2,255) | | | (89) | | | (190) | | - | (2,534) | | | |
| 36 | Recoveries | 808 | | | 25 | | | 70 | | - | 903 | | | |
| 37 | Net charge-offs | (1,447) | | | (64) | | | (120) | | - | (1,631) | | | |
| 39 | Balance at December 31, 2021 | $ | 5,273 | | | $ | 843 | | $ | 662 | $ | 44 | $ | 6,822 |
(1)Represents the adjustment to the allowance for credit losses as a result of the adoption of Accounting Standards Update ("ASU") No. 2022-02 on January 1, 2023.
(2)Excludes a $1 million, $10 million and $9 million adjustment to the liability for expected credit losses on unfunded commitments for the years ended December 31, 2023, 2022 and 2021, respectively, as the liability is recorded in accrued expenses and other liabilities in our consolidated statements of financial condition.
-65-
, Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 67:
Delinquencies
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 following table presents the amounts and delinquency rates of key loan products that are 30 and 90 days or more delinquent, and loan receivables that are not accruing interest regardless of delinquency (dollars in millions):| | | | | | | | | | | | |
|---:|:---------------------------------|:-------------|:------|:-----|:-----|:---|:---|:---|:------|:-----|:---|
| 1 | | December 31, | | | | | | | | | |
| 2 | | 2023 | | 2022 | | | | | | | |
| 3 | | $ | | % | $ | | % | | | | |
| 4 | Loans 30 or more days delinquent | | | | | | | | | | |
| 5 | Credit card loans | $ | 3,955 | | 3.87 | % | | $ | 2,278 | 2.53 | % |
| 6 | Private student loans | $ | 271 | | 2.62 | % | | $ | 212 | 2.05 | % |
| 7 | Personal loans | $ | 143 | | 1.45 | % | | $ | 63 | 0.80 | % |
| 9 | Total loan receivables | $ | 4,427 | | 3.45 | % | | $ | 2,578 | 2.30 | % |
| 11 | Loans 90 or more days delinquent | | | | | | | | | | |
| 12 | Credit card loans | $ | 1,917 | | 1.87 | % | | $ | 1,028 | 1.14 | % |
| 13 | Private student loans | $ | 70 | | 0.67 | % | | $ | 45 | 0.43 | % |
| 14 | Personal loans | $ | 39 | | 0.40 | % | | $ | 16 | 0.21 | % |
| 16 | Total loan receivables | $ | 2,045 | | 1.59 | % | | $ | 1,101 | 0.98 | % |
| 18 | Loans not accruing interest | $ | 269 | | 0.21 | % | | $ | 214 | 0.19 | % |
The 30-day and 90-day delinquency rates for credit card loans, private student loans, and personal loans at December 31, 2023, increased compared to December 31, 2022, primarily driven by portfolio seasoning.
Modified and Restructured Loans
For information regarding modified and restructured loans, see Note 4: Loan Receivables to our condensed consolidated financial statements.
Maturities and Sensitivities of Loan Receivables to Changes in Interest Rates
Our loan portfolio had the following maturity distribution(1) (dollars in millions):
| | | | | | | | | | | | | | | |
|---:|:----------------------|:-------------------|:-------|:-----------------------------------|:------|:------------------------------------------|:-------|:------------------------|:------|:-------|:-------|:------|:---|:--------|
| 1 | At December 31, 2023 | Due OneYear orLess | | Due AfterOne YearThroughFive Years | | Due AfterFive Years Through Fifteen Years | | Due After Fifteen Years | Total | | | | | |
| 2 | Credit card loans | $ | 32,250 | | | $ | 54,628 | | $ | 15,032 | $ | 349 | $ | 102,259 |
| 3 | Private student loans | 364 | | | 2,083 | | | 6,296 | | 1,609 | 10,352 | | | |
| 4 | Personal loans | 2,653 | | | 6,653 | | | 546 | | - | 9,852 | | | |
| 5 | Other loans | 161 | | | 724 | | | 2,102 | | 2,959 | 5,946 | | | |
| 6 | Total loan portfolio | $ | 35,428 | | | $ | 64,088 | | $ | 23,976 | $ | 4,917 | $ | 128,409 |
(1) Because of the uncertainty regarding loan repayment patterns, the above amounts have been calculated using contractually required minimum payments. Historically, actual loan repayments have been higher than such minimum payments and, therefore, the above amounts may not necessarily be indicative of our actual loan repayments.
At December 31, 2023, approximately $55.9 billion of our loan portfolio due after one year had interest rates tied to an index and approximately $37.0 billion were fixed-rate loans.
-67-
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The following tables provide changes in our allowance for credit losses (dollars in millions):
| | | | | | | | | | | | | | | |
|---:|:-------------------------------------------------|:-------------------------------------|:------|:---------------------|:------|:---------------|:----|:------------|:------------|:----|:--------|:---|:---|:------|
| 1 | | For the Year Ended December 31, 2023 | | | | | | | | | | | | |
| 2 | | Credit Card Loans | | Private StudentLoans | | Personal Loans | | Other Loans | Total Loans | | | | | |
| 3 | Balance at December 31, 2022 | $ | 5,883 | | | $ | 839 | | $ | 595 | $ | 57 | $ | 7,374 |
| 4 | Cumulative effect of ASU No. 2022-02 adoption(1) | (66) | | | - | | | (2) | | - | (68) | | | |
| 5 | Balance at January 1, 2023 | 5,817 | | | 839 | | | 593 | | 57 | 7,306 | | | |
| 6 | Additions | | | | | | | | | | | | | |
| 7 | Provision for credit losses(2) | 5,476 | | | 152 | | | 363 | | 28 | 6,019 | | | |
| 8 | Deductions | | | | | | | | | | | | | |
| 9 | Charge-offs | (4,481) | | | (155) | | | (290) | | (1) | (4,927) | | | |
| 10 | Recoveries | 807 | | | 22 | | | 56 | | - | 885 | | | |
| 11 | Net charge-offs | (3,674) | | | (133) | | | (234) | | (1) | (4,042) | | | |
| 13 | Balance at December 31, 2023 | $ | 7,619 | | | $ | 858 | | $ | 722 | $ | 84 | $ | 9,283 |
| 15 | | For the Year Ended December 31, 2022 | | | | | | | | | | | | |
| 16 | | Credit Card Loans | | Private StudentLoans | | Personal Loans | | Other Loans | Total Loans | | | | | |
| 17 | Balance at December 31, 2021 | $ | 5,273 | | | $ | 843 | | $ | 662 | $ | 44 | $ | 6,822 |
| 18 | Additions | | | | | | | | | | | | | |
| 19 | Provision for credit losses(2) | 2,233 | | | 99 | | | 24 | | 13 | 2,369 | | | |
| 20 | Deductions | | | | | | | | | | | | | |
| 21 | Charge-offs | (2,417) | | | (126) | | | (159) | | - | (2,702) | | | |
| 22 | Recoveries | 794 | | | 23 | | | 68 | | - | 885 | | | |
| 23 | Net charge-offs | (1,623) | | | (103) | | | (91) | | - | (1,817) | | | |
| 25 | Balance at December 31, 2022 | $ | 5,883 | | | $ | 839 | | $ | 595 | $ | 57 | $ | 7,374 |
| 27 | | For the Year Ended December 31, 2021 | | | | | | | | | | | | |
| 28 | | Credit Card Loans | | Private StudentLoans | | Personal Loans | | Other Loans | Total Loans | | | | | |
| 29 | Balance at December 31, 2020 | $ | 6,491 | | | $ | 840 | | $ | 857 | $ | 38 | $ | 8,226 |
| 32 | Additions | | | | | | | | | | | | | |
| 33 | Provision for credit losses(2) | 229 | | | 67 | | | (75) | | 6 | 227 | | | |
| 34 | Deductions | | | | | | | | | | | | | |
| 35 | Charge-offs | (2,255) | | | (89) | | | (190) | | - | (2,534) | | | |
| 36 | Recoveries | 808 | | | 25 | | | 70 | | - | 903 | | | |
| 37 | Net charge-offs | (1,447) | | | (64) | | | (120) | | - | (1,631) | | | |
| 39 | Balance at December 31, 2021 | $ | 5,273 | | | $ | 843 | | $ | 662 | $ | 44 | $ | 6,822 |
(1)Represents the adjustment to the allowance for credit losses as a result of the adoption of Accounting Standards Update ("ASU") No. 2022-02 on January 1, 2023.
(2)Excludes a $1 million, $10 million and $9 million adjustment to the liability for expected credit losses on unfunded commitments for the years ended December 31, 2023, 2022 and 2021, respectively, as the liability is recorded in accrued expenses and other liabilities in our consolidated statements of financial condition.
-65-
,
Delinquencies
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 following table presents the amounts and delinquency rates of key loan products that are 30 and 90 days or more delinquent, and loan receivables that are not accruing interest regardless of delinquency (dollars in millions):| | | | | | | | | | | | |
|---:|:---------------------------------|:-------------|:------|:-----|:-----|:---|:---|:---|:------|:-----|:---|
| 1 | | December 31, | | | | | | | | | |
| 2 | | 2023 | | 2022 | | | | | | | |
| 3 | | $ | | % | $ | | % | | | | |
| 4 | Loans 30 or more days delinquent | | | | | | | | | | |
| 5 | Credit card loans | $ | 3,955 | | 3.87 | % | | $ | 2,278 | 2.53 | % |
| 6 | Private student loans | $ | 271 | | 2.62 | % | | $ | 212 | 2.05 | % |
| 7 | Personal loans | $ | 143 | | 1.45 | % | | $ | 63 | 0.80 | % |
| 9 | Total loan receivables | $ | 4,427 | | 3.45 | % | | $ | 2,578 | 2.30 | % |
| 11 | Loans 90 or more days delinquent | | | | | | | | | | |
| 12 | Credit card loans | $ | 1,917 | | 1.87 | % | | $ | 1,028 | 1.14 | % |
| 13 | Private student loans | $ | 70 | | 0.67 | % | | $ | 45 | 0.43 | % |
| 14 | Personal loans | $ | 39 | | 0.40 | % | | $ | 16 | 0.21 | % |
| 16 | Total loan receivables | $ | 2,045 | | 1.59 | % | | $ | 1,101 | 0.98 | % |
| 18 | Loans not accruing interest | $ | 269 | | 0.21 | % | | $ | 214 | 0.19 | % |
The 30-day and 90-day delinquency rates for credit card loans, private student loans, and personal loans at December 31, 2023, increased compared to December 31, 2022, primarily driven by portfolio seasoning.
Modified and Restructured Loans
For information regarding modified and restructured loans, see Note 4: Loan Receivables to our condensed consolidated financial statements.
Maturities and Sensitivities of Loan Receivables to Changes in Interest Rates
Our loan portfolio had the following maturity distribution(1) (dollars in millions):
| | | | | | | | | | | | | | | |
|---:|:----------------------|:-------------------|:-------|:-----------------------------------|:------|:------------------------------------------|:-------|:------------------------|:------|:-------|:-------|:------|:---|:--------|
| 1 | At December 31, 2023 | Due OneYear orLess | | Due AfterOne YearThroughFive Years | | Due AfterFive Years Through Fifteen Years | | Due After Fifteen Years | Total | | | | | |
| 2 | Credit card loans | $ | 32,250 | | | $ | 54,628 | | $ | 15,032 | $ | 349 | $ | 102,259 |
| 3 | Private student loans | 364 | | | 2,083 | | | 6,296 | | 1,609 | 10,352 | | | |
| 4 | Personal loans | 2,653 | | | 6,653 | | | 546 | | - | 9,852 | | | |
| 5 | Other loans | 161 | | | 724 | | | 2,102 | | 2,959 | 5,946 | | | |
| 6 | Total loan portfolio | $ | 35,428 | | | $ | 64,088 | | $ | 23,976 | $ | 4,917 | $ | 128,409 |
(1) Because of the uncertainty regarding loan repayment patterns, the above amounts have been calculated using contractually required minimum payments. Historically, actual loan repayments have been higher than such minimum payments and, therefore, the above amounts may not necessarily be indicative of our actual loan repayments.
At December 31, 2023, approximately $55.9 billion of our loan portfolio due after one year had interest rates tied to an index and approximately $37.0 billion were fixed-rate loans.
-67-
|
Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 65: The following tables provide changes in our allowance for credit losses (dollars in millions):
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="27">For the Year Ended December 31, 2023</td></tr><tr><td colspan="3"> </td><td colspan="3">Credit Card Loans</td><td colspan="3"></td><td colspan="3">Private StudentLoans</td><td colspan="3"></td><td colspan="3">Personal Loans</td><td colspan="3"></td><td colspan="3">Other Loans</td><td colspan="3"></td><td colspan="3">Total Loans</td></tr><tr><td colspan="3">Balance at December 31, 2022</td><td>$</td><td>5,883 </td><td></td><td colspan="3"></td><td>$</td><td>839 </td><td></td><td colspan="3"></td><td>$</td><td>595 </td><td></td><td colspan="3"></td><td>$</td><td>57 </td><td></td><td colspan="3"></td><td>$</td><td>7,374 </td><td></td></tr><tr><td colspan="3">Cumulative effect of ASU No. 2022-02 adoption(1)</td><td colspan="2">(66)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(2)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(68)</td><td></td></tr><tr><td colspan="3">Balance at January 1, 2023</td><td colspan="2">5,817 </td><td></td><td colspan="3"></td><td colspan="2">839 </td><td></td><td colspan="3"></td><td colspan="2">593 </td><td></td><td colspan="3"></td><td colspan="2">57 </td><td></td><td colspan="3"></td><td colspan="2">7,306 </td><td></td></tr><tr><td colspan="3">Additions</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Provision for credit losses(2)</td><td colspan="2">5,476 </td><td></td><td colspan="3"></td><td colspan="2">152 </td><td></td><td colspan="3"></td><td colspan="2">363 </td><td></td><td colspan="3"></td><td colspan="2">28 </td><td></td><td colspan="3"></td><td colspan="2">6,019 </td><td></td></tr><tr><td colspan="3">Deductions</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Charge-offs</td><td colspan="2">(4,481)</td><td></td><td colspan="3"></td><td colspan="2">(155)</td><td></td><td colspan="3"></td><td colspan="2">(290)</td><td></td><td colspan="3"></td><td colspan="2">(1)</td><td></td><td colspan="3"></td><td colspan="2">(4,927)</td><td></td></tr><tr><td colspan="3">Recoveries</td><td colspan="2">807 </td><td></td><td colspan="3"></td><td colspan="2">22 </td><td></td><td colspan="3"></td><td colspan="2">56 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">885 </td><td></td></tr><tr><td colspan="3">Net charge-offs</td><td colspan="2">(3,674)</td><td></td><td colspan="3"></td><td colspan="2">(133)</td><td></td><td colspan="3"></td><td colspan="2">(234)</td><td></td><td colspan="3"></td><td colspan="2">(1)</td><td></td><td colspan="3"></td><td colspan="2">(4,042)</td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Balance at December 31, 2023</td><td>$</td><td>7,619 </td><td></td><td colspan="3"></td><td>$</td><td>858 </td><td></td><td colspan="3"></td><td>$</td><td>722 </td><td></td><td colspan="3"></td><td>$</td><td>84 </td><td></td><td colspan="3"></td><td>$</td><td>9,283 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="27">For the Year Ended December 31, 2022</td></tr><tr><td colspan="3"> </td><td colspan="3">Credit Card Loans</td><td colspan="3"></td><td colspan="3">Private StudentLoans</td><td colspan="3"></td><td colspan="3">Personal Loans</td><td colspan="3"></td><td colspan="3">Other Loans</td><td colspan="3"></td><td colspan="3">Total Loans</td></tr><tr><td colspan="3">Balance at December 31, 2021</td><td>$</td><td>5,273 </td><td></td><td colspan="3"></td><td>$</td><td>843 </td><td></td><td colspan="3"></td><td>$</td><td>662 </td><td></td><td colspan="3"></td><td>$</td><td>44 </td><td></td><td colspan="3"></td><td>$</td><td>6,822 </td><td></td></tr><tr><td colspan="3">Additions</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Provision for credit losses(2)</td><td colspan="2">2,233 </td><td></td><td colspan="3"></td><td colspan="2">99 </td><td></td><td colspan="3"></td><td colspan="2">24 </td><td></td><td colspan="3"></td><td colspan="2">13 </td><td></td><td colspan="3"></td><td colspan="2">2,369 </td><td></td></tr><tr><td colspan="3">Deductions</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Charge-offs</td><td colspan="2">(2,417)</td><td></td><td colspan="3"></td><td colspan="2">(126)</td><td></td><td colspan="3"></td><td colspan="2">(159)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(2,702)</td><td></td></tr><tr><td colspan="3">Recoveries</td><td colspan="2">794 </td><td></td><td colspan="3"></td><td colspan="2">23 </td><td></td><td colspan="3"></td><td colspan="2">68 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">885 </td><td></td></tr><tr><td colspan="3">Net charge-offs</td><td colspan="2">(1,623)</td><td></td><td colspan="3"></td><td colspan="2">(103)</td><td></td><td colspan="3"></td><td colspan="2">(91)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1,817)</td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Balance at December 31, 2022</td><td>$</td><td>5,883 </td><td></td><td colspan="3"></td><td>$</td><td>839 </td><td></td><td colspan="3"></td><td>$</td><td>595 </td><td></td><td colspan="3"></td><td>$</td><td>57 </td><td></td><td colspan="3"></td><td>$</td><td>7,374 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="27">For the Year Ended December 31, 2021</td></tr><tr><td colspan="3"> </td><td colspan="3">Credit Card Loans</td><td colspan="3"></td><td colspan="3">Private StudentLoans</td><td colspan="3"></td><td colspan="3">Personal Loans</td><td colspan="3"></td><td colspan="3">Other Loans</td><td colspan="3"></td><td colspan="3">Total Loans</td></tr><tr><td colspan="3">Balance at December 31, 2020</td><td>$</td><td>6,491 </td><td></td><td colspan="3"></td><td>$</td><td>840 </td><td></td><td colspan="3"></td><td>$</td><td>857 </td><td></td><td colspan="3"></td><td>$</td><td>38 </td><td></td><td colspan="3"></td><td>$</td><td>8,226 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Additions</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Provision for credit losses(2)</td><td colspan="2">229 </td><td></td><td colspan="3"></td><td colspan="2">67 </td><td></td><td colspan="3"></td><td colspan="2">(75)</td><td></td><td colspan="3"></td><td colspan="2">6 </td><td></td><td colspan="3"></td><td colspan="2">227 </td><td></td></tr><tr><td colspan="3">Deductions</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Charge-offs</td><td colspan="2">(2,255)</td><td></td><td colspan="3"></td><td colspan="2">(89)</td><td></td><td colspan="3"></td><td colspan="2">(190)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(2,534)</td><td></td></tr><tr><td colspan="3">Recoveries</td><td colspan="2">808 </td><td></td><td colspan="3"></td><td colspan="2">25 </td><td></td><td colspan="3"></td><td colspan="2">70 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">903 </td><td></td></tr><tr><td colspan="3">Net charge-offs</td><td colspan="2">(1,447)</td><td></td><td colspan="3"></td><td colspan="2">(64)</td><td></td><td colspan="3"></td><td colspan="2">(120)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1,631)</td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Balance at December 31, 2021</td><td>$</td><td>5,273 </td><td></td><td colspan="3"></td><td>$</td><td>843 </td><td></td><td colspan="3"></td><td>$</td><td>662 </td><td></td><td colspan="3"></td><td>$</td><td>44 </td><td></td><td colspan="3"></td><td>$</td><td>6,822 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
(1)Represents the adjustment to the allowance for credit losses as a result of the adoption of Accounting Standards Update ("ASU") No. 2022-02 on January 1, 2023.
(2)Excludes a $1 million, $10 million and $9 million adjustment to the liability for expected credit losses on unfunded commitments for the years ended December 31, 2023, 2022 and 2021, respectively, as the liability is recorded in accrued expenses and other liabilities in our consolidated statements of financial condition.
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, Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 67:
Delinquencies
Delinquencies are an indicator of credit quality at a point in time. A loan balance is considered delinquent when contractual payments on the loan become 30 days past due.
The following table presents the amounts and delinquency rates of key loan products that are 30 and 90 days or more delinquent, and loan receivables that are not accruing interest regardless of delinquency (dollars in millions):<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="21">December 31,</td></tr><tr><td colspan="3"> </td><td colspan="9">2023</td><td colspan="3"></td><td colspan="9">2022</td></tr><tr><td colspan="3"> </td><td colspan="3">$</td><td colspan="3"></td><td colspan="3">%</td><td colspan="3"></td><td colspan="3">$</td><td colspan="3"></td><td colspan="3">%</td></tr><tr><td colspan="3">Loans 30 or more days delinquent</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Credit card loans</td><td>$</td><td>3,955 </td><td></td><td colspan="3"></td><td colspan="2">3.87 </td><td>%</td><td colspan="3"></td><td>$</td><td>2,278 </td><td></td><td colspan="3"></td><td colspan="2">2.53 </td><td>%</td></tr><tr><td colspan="3">Private student loans</td><td>$</td><td>271 </td><td></td><td colspan="3"></td><td colspan="2">2.62 </td><td>%</td><td colspan="3"></td><td>$</td><td>212 </td><td></td><td colspan="3"></td><td colspan="2">2.05 </td><td>%</td></tr><tr><td colspan="3">Personal loans</td><td>$</td><td>143 </td><td></td><td colspan="3"></td><td colspan="2">1.45 </td><td>%</td><td colspan="3"></td><td>$</td><td>63 </td><td></td><td colspan="3"></td><td colspan="2">0.80 </td><td>%</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total loan receivables</td><td>$</td><td>4,427 </td><td></td><td colspan="3"></td><td colspan="2">3.45 </td><td>%</td><td colspan="3"></td><td>$</td><td>2,578 </td><td></td><td colspan="3"></td><td colspan="2">2.30 </td><td>%</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Loans 90 or more days delinquent</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Credit card loans</td><td>$</td><td>1,917 </td><td></td><td colspan="3"></td><td colspan="2">1.87 </td><td>%</td><td colspan="3"></td><td>$</td><td>1,028 </td><td></td><td colspan="3"></td><td colspan="2">1.14 </td><td>%</td></tr><tr><td colspan="3">Private student loans</td><td>$</td><td>70 </td><td></td><td colspan="3"></td><td colspan="2">0.67 </td><td>%</td><td colspan="3"></td><td>$</td><td>45 </td><td></td><td colspan="3"></td><td colspan="2">0.43 </td><td>%</td></tr><tr><td colspan="3">Personal loans</td><td>$</td><td>39 </td><td></td><td colspan="3"></td><td colspan="2">0.40 </td><td>%</td><td colspan="3"></td><td>$</td><td>16 </td><td></td><td colspan="3"></td><td colspan="2">0.21 </td><td>%</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total loan receivables</td><td>$</td><td>2,045 </td><td></td><td colspan="3"></td><td colspan="2">1.59 </td><td>%</td><td colspan="3"></td><td>$</td><td>1,101 </td><td></td><td colspan="3"></td><td colspan="2">0.98 </td><td>%</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Loans not accruing interest</td><td>$</td><td>269 </td><td></td><td colspan="3"></td><td colspan="2">0.21 </td><td>%</td><td colspan="3"></td><td>$</td><td>214 </td><td></td><td colspan="3"></td><td colspan="2">0.19 </td><td>%</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>The 30-day and 90-day delinquency rates for credit card loans, private student loans, and personal loans at December 31, 2023, increased compared to December 31, 2022, primarily driven by portfolio seasoning.
Modified and Restructured Loans
For information regarding modified and restructured loans, see Note 4: Loan Receivables to our condensed consolidated financial statements.
Maturities and Sensitivities of Loan Receivables to Changes in Interest Rates
Our loan portfolio had the following maturity distribution(1) (dollars in millions):<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">At December 31, 2023</td><td colspan="3">Due OneYear orLess</td><td colspan="3"></td><td colspan="3">Due AfterOne YearThroughFive Years</td><td colspan="3"></td><td colspan="3">Due AfterFive Years Through Fifteen Years</td><td colspan="3"></td><td colspan="3">Due After Fifteen Years</td><td colspan="3"></td><td colspan="3">Total</td></tr><tr><td colspan="3">Credit card loans</td><td>$</td><td>32,250 </td><td></td><td colspan="3"></td><td>$</td><td>54,628 </td><td></td><td colspan="3"></td><td>$</td><td>15,032 </td><td></td><td colspan="3"></td><td>$</td><td>349 </td><td></td><td colspan="3"></td><td>$</td><td>102,259 </td><td></td></tr><tr><td colspan="3">Private student loans</td><td colspan="2">364 </td><td></td><td colspan="3"></td><td colspan="2">2,083 </td><td></td><td colspan="3"></td><td colspan="2">6,296 </td><td></td><td colspan="3"></td><td colspan="2">1,609 </td><td></td><td colspan="3"></td><td colspan="2">10,352 </td><td></td></tr><tr><td colspan="3">Personal loans</td><td colspan="2">2,653 </td><td></td><td colspan="3"></td><td colspan="2">6,653 </td><td></td><td colspan="3"></td><td colspan="2">546 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">9,852 </td><td></td></tr><tr><td colspan="3">Other loans</td><td colspan="2">161 </td><td></td><td colspan="3"></td><td colspan="2">724 </td><td></td><td colspan="3"></td><td colspan="2">2,102 </td><td></td><td colspan="3"></td><td colspan="2">2,959 </td><td></td><td colspan="3"></td><td colspan="2">5,946 </td><td></td></tr><tr><td colspan="3">Total loan portfolio</td><td>$</td><td>35,428 </td><td></td><td colspan="3"></td><td>$</td><td>64,088 </td><td></td><td colspan="3"></td><td>$</td><td>23,976 </td><td></td><td colspan="3"></td><td>$</td><td>4,917 </td><td></td><td colspan="3"></td><td>$</td><td>128,409 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>(1) Because of the uncertainty regarding loan repayment patterns, the above amounts have been calculated using contractually required minimum payments. Historically, actual loan repayments have been higher than such minimum payments and, therefore, the above amounts may not necessarily be indicative of our actual loan repayments.
At December 31, 2023, approximately $55.9 billion of our loan portfolio due after one year had interest rates tied to an index and approximately $37.0 billion were fixed-rate loans.
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The following tables provide changes in our allowance for credit losses (dollars in millions):
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="27">For the Year Ended December 31, 2023</td></tr><tr><td colspan="3"> </td><td colspan="3">Credit Card Loans</td><td colspan="3"></td><td colspan="3">Private StudentLoans</td><td colspan="3"></td><td colspan="3">Personal Loans</td><td colspan="3"></td><td colspan="3">Other Loans</td><td colspan="3"></td><td colspan="3">Total Loans</td></tr><tr><td colspan="3">Balance at December 31, 2022</td><td>$</td><td>5,883 </td><td></td><td colspan="3"></td><td>$</td><td>839 </td><td></td><td colspan="3"></td><td>$</td><td>595 </td><td></td><td colspan="3"></td><td>$</td><td>57 </td><td></td><td colspan="3"></td><td>$</td><td>7,374 </td><td></td></tr><tr><td colspan="3">Cumulative effect of ASU No. 2022-02 adoption(1)</td><td colspan="2">(66)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(2)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(68)</td><td></td></tr><tr><td colspan="3">Balance at January 1, 2023</td><td colspan="2">5,817 </td><td></td><td colspan="3"></td><td colspan="2">839 </td><td></td><td colspan="3"></td><td colspan="2">593 </td><td></td><td colspan="3"></td><td colspan="2">57 </td><td></td><td colspan="3"></td><td colspan="2">7,306 </td><td></td></tr><tr><td colspan="3">Additions</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Provision for credit losses(2)</td><td colspan="2">5,476 </td><td></td><td colspan="3"></td><td colspan="2">152 </td><td></td><td colspan="3"></td><td colspan="2">363 </td><td></td><td colspan="3"></td><td colspan="2">28 </td><td></td><td colspan="3"></td><td colspan="2">6,019 </td><td></td></tr><tr><td colspan="3">Deductions</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Charge-offs</td><td colspan="2">(4,481)</td><td></td><td colspan="3"></td><td colspan="2">(155)</td><td></td><td colspan="3"></td><td colspan="2">(290)</td><td></td><td colspan="3"></td><td colspan="2">(1)</td><td></td><td colspan="3"></td><td colspan="2">(4,927)</td><td></td></tr><tr><td colspan="3">Recoveries</td><td colspan="2">807 </td><td></td><td colspan="3"></td><td colspan="2">22 </td><td></td><td colspan="3"></td><td colspan="2">56 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">885 </td><td></td></tr><tr><td colspan="3">Net charge-offs</td><td colspan="2">(3,674)</td><td></td><td colspan="3"></td><td colspan="2">(133)</td><td></td><td colspan="3"></td><td colspan="2">(234)</td><td></td><td colspan="3"></td><td colspan="2">(1)</td><td></td><td colspan="3"></td><td colspan="2">(4,042)</td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Balance at December 31, 2023</td><td>$</td><td>7,619 </td><td></td><td colspan="3"></td><td>$</td><td>858 </td><td></td><td colspan="3"></td><td>$</td><td>722 </td><td></td><td colspan="3"></td><td>$</td><td>84 </td><td></td><td colspan="3"></td><td>$</td><td>9,283 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="27">For the Year Ended December 31, 2022</td></tr><tr><td colspan="3"> </td><td colspan="3">Credit Card Loans</td><td colspan="3"></td><td colspan="3">Private StudentLoans</td><td colspan="3"></td><td colspan="3">Personal Loans</td><td colspan="3"></td><td colspan="3">Other Loans</td><td colspan="3"></td><td colspan="3">Total Loans</td></tr><tr><td colspan="3">Balance at December 31, 2021</td><td>$</td><td>5,273 </td><td></td><td colspan="3"></td><td>$</td><td>843 </td><td></td><td colspan="3"></td><td>$</td><td>662 </td><td></td><td colspan="3"></td><td>$</td><td>44 </td><td></td><td colspan="3"></td><td>$</td><td>6,822 </td><td></td></tr><tr><td colspan="3">Additions</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Provision for credit losses(2)</td><td colspan="2">2,233 </td><td></td><td colspan="3"></td><td colspan="2">99 </td><td></td><td colspan="3"></td><td colspan="2">24 </td><td></td><td colspan="3"></td><td colspan="2">13 </td><td></td><td colspan="3"></td><td colspan="2">2,369 </td><td></td></tr><tr><td colspan="3">Deductions</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Charge-offs</td><td colspan="2">(2,417)</td><td></td><td colspan="3"></td><td colspan="2">(126)</td><td></td><td colspan="3"></td><td colspan="2">(159)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(2,702)</td><td></td></tr><tr><td colspan="3">Recoveries</td><td colspan="2">794 </td><td></td><td colspan="3"></td><td colspan="2">23 </td><td></td><td colspan="3"></td><td colspan="2">68 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">885 </td><td></td></tr><tr><td colspan="3">Net charge-offs</td><td colspan="2">(1,623)</td><td></td><td colspan="3"></td><td colspan="2">(103)</td><td></td><td colspan="3"></td><td colspan="2">(91)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1,817)</td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Balance at December 31, 2022</td><td>$</td><td>5,883 </td><td></td><td colspan="3"></td><td>$</td><td>839 </td><td></td><td colspan="3"></td><td>$</td><td>595 </td><td></td><td colspan="3"></td><td>$</td><td>57 </td><td></td><td colspan="3"></td><td>$</td><td>7,374 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="27">For the Year Ended December 31, 2021</td></tr><tr><td colspan="3"> </td><td colspan="3">Credit Card Loans</td><td colspan="3"></td><td colspan="3">Private StudentLoans</td><td colspan="3"></td><td colspan="3">Personal Loans</td><td colspan="3"></td><td colspan="3">Other Loans</td><td colspan="3"></td><td colspan="3">Total Loans</td></tr><tr><td colspan="3">Balance at December 31, 2020</td><td>$</td><td>6,491 </td><td></td><td colspan="3"></td><td>$</td><td>840 </td><td></td><td colspan="3"></td><td>$</td><td>857 </td><td></td><td colspan="3"></td><td>$</td><td>38 </td><td></td><td colspan="3"></td><td>$</td><td>8,226 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Additions</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Provision for credit losses(2)</td><td colspan="2">229 </td><td></td><td colspan="3"></td><td colspan="2">67 </td><td></td><td colspan="3"></td><td colspan="2">(75)</td><td></td><td colspan="3"></td><td colspan="2">6 </td><td></td><td colspan="3"></td><td colspan="2">227 </td><td></td></tr><tr><td colspan="3">Deductions</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Charge-offs</td><td colspan="2">(2,255)</td><td></td><td colspan="3"></td><td colspan="2">(89)</td><td></td><td colspan="3"></td><td colspan="2">(190)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(2,534)</td><td></td></tr><tr><td colspan="3">Recoveries</td><td colspan="2">808 </td><td></td><td colspan="3"></td><td colspan="2">25 </td><td></td><td colspan="3"></td><td colspan="2">70 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">903 </td><td></td></tr><tr><td colspan="3">Net charge-offs</td><td colspan="2">(1,447)</td><td></td><td colspan="3"></td><td colspan="2">(64)</td><td></td><td colspan="3"></td><td colspan="2">(120)</td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">(1,631)</td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Balance at December 31, 2021</td><td>$</td><td>5,273 </td><td></td><td colspan="3"></td><td>$</td><td>843 </td><td></td><td colspan="3"></td><td>$</td><td>662 </td><td></td><td colspan="3"></td><td>$</td><td>44 </td><td></td><td colspan="3"></td><td>$</td><td>6,822 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
(1)Represents the adjustment to the allowance for credit losses as a result of the adoption of Accounting Standards Update ("ASU") No. 2022-02 on January 1, 2023.
(2)Excludes a $1 million, $10 million and $9 million adjustment to the liability for expected credit losses on unfunded commitments for the years ended December 31, 2023, 2022 and 2021, respectively, as the liability is recorded in accrued expenses and other liabilities in our consolidated statements of financial condition.
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Delinquencies
Delinquencies are an indicator of credit quality at a point in time. A loan balance is considered delinquent when contractual payments on the loan become 30 days past due.
The following table presents the amounts and delinquency rates of key loan products that are 30 and 90 days or more delinquent, and loan receivables that are not accruing interest regardless of delinquency (dollars in millions):<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="21">December 31,</td></tr><tr><td colspan="3"> </td><td colspan="9">2023</td><td colspan="3"></td><td colspan="9">2022</td></tr><tr><td colspan="3"> </td><td colspan="3">$</td><td colspan="3"></td><td colspan="3">%</td><td colspan="3"></td><td colspan="3">$</td><td colspan="3"></td><td colspan="3">%</td></tr><tr><td colspan="3">Loans 30 or more days delinquent</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Credit card loans</td><td>$</td><td>3,955 </td><td></td><td colspan="3"></td><td colspan="2">3.87 </td><td>%</td><td colspan="3"></td><td>$</td><td>2,278 </td><td></td><td colspan="3"></td><td colspan="2">2.53 </td><td>%</td></tr><tr><td colspan="3">Private student loans</td><td>$</td><td>271 </td><td></td><td colspan="3"></td><td colspan="2">2.62 </td><td>%</td><td colspan="3"></td><td>$</td><td>212 </td><td></td><td colspan="3"></td><td colspan="2">2.05 </td><td>%</td></tr><tr><td colspan="3">Personal loans</td><td>$</td><td>143 </td><td></td><td colspan="3"></td><td colspan="2">1.45 </td><td>%</td><td colspan="3"></td><td>$</td><td>63 </td><td></td><td colspan="3"></td><td colspan="2">0.80 </td><td>%</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total loan receivables</td><td>$</td><td>4,427 </td><td></td><td colspan="3"></td><td colspan="2">3.45 </td><td>%</td><td colspan="3"></td><td>$</td><td>2,578 </td><td></td><td colspan="3"></td><td colspan="2">2.30 </td><td>%</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Loans 90 or more days delinquent</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Credit card loans</td><td>$</td><td>1,917 </td><td></td><td colspan="3"></td><td colspan="2">1.87 </td><td>%</td><td colspan="3"></td><td>$</td><td>1,028 </td><td></td><td colspan="3"></td><td colspan="2">1.14 </td><td>%</td></tr><tr><td colspan="3">Private student loans</td><td>$</td><td>70 </td><td></td><td colspan="3"></td><td colspan="2">0.67 </td><td>%</td><td colspan="3"></td><td>$</td><td>45 </td><td></td><td colspan="3"></td><td colspan="2">0.43 </td><td>%</td></tr><tr><td colspan="3">Personal loans</td><td>$</td><td>39 </td><td></td><td colspan="3"></td><td colspan="2">0.40 </td><td>%</td><td colspan="3"></td><td>$</td><td>16 </td><td></td><td colspan="3"></td><td colspan="2">0.21 </td><td>%</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Total loan receivables</td><td>$</td><td>2,045 </td><td></td><td colspan="3"></td><td colspan="2">1.59 </td><td>%</td><td colspan="3"></td><td>$</td><td>1,101 </td><td></td><td colspan="3"></td><td colspan="2">0.98 </td><td>%</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Loans not accruing interest</td><td>$</td><td>269 </td><td></td><td colspan="3"></td><td colspan="2">0.21 </td><td>%</td><td colspan="3"></td><td>$</td><td>214 </td><td></td><td colspan="3"></td><td colspan="2">0.19 </td><td>%</td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>The 30-day and 90-day delinquency rates for credit card loans, private student loans, and personal loans at December 31, 2023, increased compared to December 31, 2022, primarily driven by portfolio seasoning.
Modified and Restructured Loans
For information regarding modified and restructured loans, see Note 4: Loan Receivables to our condensed consolidated financial statements.
Maturities and Sensitivities of Loan Receivables to Changes in Interest Rates
Our loan portfolio had the following maturity distribution(1) (dollars in millions):<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3">At December 31, 2023</td><td colspan="3">Due OneYear orLess</td><td colspan="3"></td><td colspan="3">Due AfterOne YearThroughFive Years</td><td colspan="3"></td><td colspan="3">Due AfterFive Years Through Fifteen Years</td><td colspan="3"></td><td colspan="3">Due After Fifteen Years</td><td colspan="3"></td><td colspan="3">Total</td></tr><tr><td colspan="3">Credit card loans</td><td>$</td><td>32,250 </td><td></td><td colspan="3"></td><td>$</td><td>54,628 </td><td></td><td colspan="3"></td><td>$</td><td>15,032 </td><td></td><td colspan="3"></td><td>$</td><td>349 </td><td></td><td colspan="3"></td><td>$</td><td>102,259 </td><td></td></tr><tr><td colspan="3">Private student loans</td><td colspan="2">364 </td><td></td><td colspan="3"></td><td colspan="2">2,083 </td><td></td><td colspan="3"></td><td colspan="2">6,296 </td><td></td><td colspan="3"></td><td colspan="2">1,609 </td><td></td><td colspan="3"></td><td colspan="2">10,352 </td><td></td></tr><tr><td colspan="3">Personal loans</td><td colspan="2">2,653 </td><td></td><td colspan="3"></td><td colspan="2">6,653 </td><td></td><td colspan="3"></td><td colspan="2">546 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td><td colspan="3"></td><td colspan="2">9,852 </td><td></td></tr><tr><td colspan="3">Other loans</td><td colspan="2">161 </td><td></td><td colspan="3"></td><td colspan="2">724 </td><td></td><td colspan="3"></td><td colspan="2">2,102 </td><td></td><td colspan="3"></td><td colspan="2">2,959 </td><td></td><td colspan="3"></td><td colspan="2">5,946 </td><td></td></tr><tr><td colspan="3">Total loan portfolio</td><td>$</td><td>35,428 </td><td></td><td colspan="3"></td><td>$</td><td>64,088 </td><td></td><td colspan="3"></td><td>$</td><td>23,976 </td><td></td><td colspan="3"></td><td>$</td><td>4,917 </td><td></td><td colspan="3"></td><td>$</td><td>128,409 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>(1) Because of the uncertainty regarding loan repayment patterns, the above amounts have been calculated using contractually required minimum payments. Historically, actual loan repayments have been higher than such minimum payments and, therefore, the above amounts may not necessarily be indicative of our actual loan repayments.
At December 31, 2023, approximately $55.9 billion of our loan portfolio due after one year had interest rates tied to an index and approximately $37.0 billion were fixed-rate loans.
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q_an002
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How does DFS Debt-to-Equity Ratio for 2023 reflect on the company's financial stability?
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Increase in Leverage: The ratio increased from 8.2 in 2022 to 9.2 in 2023, indicating higher reliance on debt relative to equity.
Financial Risk: The higher ratio suggests greater financial risk due to increased debt obligations.
Impact on Stability: Greater leverage could affect financial stability, especially in adverse economic conditions or with rising interest rates.
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Analysis
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85
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0001393612-24-000010
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Item 8. Financial Statements and Supplementary Data
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Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 85:
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Financial Condition
(dollars in millions, except for share amounts)| | | | | | | | |
|---:|:---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:--------|:-----|:---------|:---|:--------|
| 1 | | December 31, | | | | | |
| 2 | | 2023 | | 2022 | | | |
| 3 | Assets | | | | | | |
| 4 | Cash and cash equivalents | $ | 11,685 | | | $ | 8,856 |
| 5 | Restricted cash | 43 | | | 41 | | |
| 7 | Investment securities (includes available-for-sale securities of $13,402 and $11,987 reported at fair value with associated amortized cost of $13,451 and $12,167 at December 31, 2023 and 2022, respectively) | 13,655 | | | 12,208 | | |
| 8 | Loan receivables | | | | | | |
| 9 | Loan receivables | 128,409 | | | 112,120 | | |
| 10 | Allowance for credit losses | (9,283) | | | (7,374) | | |
| 11 | Net loan receivables | 119,126 | | | 104,746 | | |
| 12 | Premises and equipment, net | 1,091 | | | 1,003 | | |
| 13 | Goodwill | 255 | | | 255 | | |
| 15 | Other assets | 5,667 | | | 4,597 | | |
| 16 | Total assets | $ | 151,522 | | | $ | 131,706 |
| 17 | Liabilities and Stockholders' Equity | | | | | | |
| 18 | Liabilities | | | | | | |
| 19 | Deposits | | | | | | |
| 20 | Interest-bearing deposit accounts | $ | 107,493 | | | $ | 90,151 |
| 21 | Non-interest-bearing deposit accounts | 1,438 | | | 1,485 | | |
| 22 | Total deposits | 108,931 | | | 91,636 | | |
| 23 | Short-term borrowings | 750 | | | - | | |
| 24 | Long-term borrowings | 20,581 | | | 20,108 | | |
| 25 | Accrued expenses and other liabilities | 6,432 | | | 5,618 | | |
| 26 | Total liabilities | 136,694 | | | 117,362 | | |
| 27 | Commitments, contingencies and guarantees (Notes 15, 18 and 19) | | | | | | |
| 28 | Stockholders' Equity | | | | | | |
| 29 | Common stock, par value $0.01 per share; 2,000,000,000 shares authorized; 570,837,720 and 569,689,007 shares issued at December 31, 2023 and 2022, respectively | 6 | | | 6 | | |
| 30 | Preferred stock, par value $0.01 per share; 200,000,000 shares authorized; 10,700 shares issued and outstanding at December 31, 2023 and 2022, respectively | 1,056 | | | 1,056 | | |
| 31 | Additional paid-in capital | 4,553 | | | 4,468 | | |
| 32 | Retained earnings | 30,448 | | | 28,207 | | |
| 33 | Accumulated other comprehensive loss | (225) | | | (339) | | |
| 34 | Treasury stock, at cost; 320,734,860 and 302,305,216 shares at December 31, 2023 and 2022, respectively | (21,010) | | | (19,054) | | |
| 35 | Total stockholders' equity | 14,828 | | | 14,344 | | |
| 36 | Total liabilities and stockholders' equity | $ | 151,522 | | | $ | 131,706 |
The table below presents the carrying amounts of certain assets and liabilities of Discover Financial Services' consolidated variable interest entities ("VIEs"), which are included in the consolidated statements of financial condition above. The assets in the table below include those assets that can only be used to settle obligations of the consolidated VIEs. The liabilities in the table below include third-party liabilities of consolidated VIEs only and exclude intercompany balances that eliminate in consolidation. The liabilities also exclude amounts for which creditors have recourse to the general credit of Discover Financial Services.
| | | | | | | |
|---:|:----------------------------------------------------------------------|:-------------|:--------|:-----|:---|:--------|
| 1 | | December 31, | | | | |
| 2 | | 2023 | | 2022 | | |
| 3 | Assets | | | | | |
| 4 | Restricted cash | $ | 43 | | $ | 41 |
| 5 | Loan receivables | $ | 30,590 | | $ | 25,937 |
| 6 | Allowance for credit losses allocated to securitized loan receivables | $ | (1,347) | | $ | (1,152) |
| 7 | Other assets | $ | 3 | | $ | 3 |
| 8 | Liabilities | | | | | |
| 9 | Short- and long-term borrowings | $ | 11,743 | | $ | 10,259 |
| 10 | Accrued expenses and other liabilities | $ | 19 | | $ | 14 |
See Notes to the Consolidated Financial Statements.
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DISCOVER FINANCIAL SERVICES
Consolidated Statements of Financial Condition
(dollars in millions, except for share amounts)| | | | | | | | |
|---:|:---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:--------|:-----|:---------|:---|:--------|
| 1 | | December 31, | | | | | |
| 2 | | 2023 | | 2022 | | | |
| 3 | Assets | | | | | | |
| 4 | Cash and cash equivalents | $ | 11,685 | | | $ | 8,856 |
| 5 | Restricted cash | 43 | | | 41 | | |
| 7 | Investment securities (includes available-for-sale securities of $13,402 and $11,987 reported at fair value with associated amortized cost of $13,451 and $12,167 at December 31, 2023 and 2022, respectively) | 13,655 | | | 12,208 | | |
| 8 | Loan receivables | | | | | | |
| 9 | Loan receivables | 128,409 | | | 112,120 | | |
| 10 | Allowance for credit losses | (9,283) | | | (7,374) | | |
| 11 | Net loan receivables | 119,126 | | | 104,746 | | |
| 12 | Premises and equipment, net | 1,091 | | | 1,003 | | |
| 13 | Goodwill | 255 | | | 255 | | |
| 15 | Other assets | 5,667 | | | 4,597 | | |
| 16 | Total assets | $ | 151,522 | | | $ | 131,706 |
| 17 | Liabilities and Stockholders' Equity | | | | | | |
| 18 | Liabilities | | | | | | |
| 19 | Deposits | | | | | | |
| 20 | Interest-bearing deposit accounts | $ | 107,493 | | | $ | 90,151 |
| 21 | Non-interest-bearing deposit accounts | 1,438 | | | 1,485 | | |
| 22 | Total deposits | 108,931 | | | 91,636 | | |
| 23 | Short-term borrowings | 750 | | | - | | |
| 24 | Long-term borrowings | 20,581 | | | 20,108 | | |
| 25 | Accrued expenses and other liabilities | 6,432 | | | 5,618 | | |
| 26 | Total liabilities | 136,694 | | | 117,362 | | |
| 27 | Commitments, contingencies and guarantees (Notes 15, 18 and 19) | | | | | | |
| 28 | Stockholders' Equity | | | | | | |
| 29 | Common stock, par value $0.01 per share; 2,000,000,000 shares authorized; 570,837,720 and 569,689,007 shares issued at December 31, 2023 and 2022, respectively | 6 | | | 6 | | |
| 30 | Preferred stock, par value $0.01 per share; 200,000,000 shares authorized; 10,700 shares issued and outstanding at December 31, 2023 and 2022, respectively | 1,056 | | | 1,056 | | |
| 31 | Additional paid-in capital | 4,553 | | | 4,468 | | |
| 32 | Retained earnings | 30,448 | | | 28,207 | | |
| 33 | Accumulated other comprehensive loss | (225) | | | (339) | | |
| 34 | Treasury stock, at cost; 320,734,860 and 302,305,216 shares at December 31, 2023 and 2022, respectively | (21,010) | | | (19,054) | | |
| 35 | Total stockholders' equity | 14,828 | | | 14,344 | | |
| 36 | Total liabilities and stockholders' equity | $ | 151,522 | | | $ | 131,706 |
The table below presents the carrying amounts of certain assets and liabilities of Discover Financial Services' consolidated variable interest entities ("VIEs"), which are included in the consolidated statements of financial condition above. The assets in the table below include those assets that can only be used to settle obligations of the consolidated VIEs. The liabilities in the table below include third-party liabilities of consolidated VIEs only and exclude intercompany balances that eliminate in consolidation. The liabilities also exclude amounts for which creditors have recourse to the general credit of Discover Financial Services.
| | | | | | | |
|---:|:----------------------------------------------------------------------|:-------------|:--------|:-----|:---|:--------|
| 1 | | December 31, | | | | |
| 2 | | 2023 | | 2022 | | |
| 3 | Assets | | | | | |
| 4 | Restricted cash | $ | 43 | | $ | 41 |
| 5 | Loan receivables | $ | 30,590 | | $ | 25,937 |
| 6 | Allowance for credit losses allocated to securitized loan receivables | $ | (1,347) | | $ | (1,152) |
| 7 | Other assets | $ | 3 | | $ | 3 |
| 8 | Liabilities | | | | | |
| 9 | Short- and long-term borrowings | $ | 11,743 | | $ | 10,259 |
| 10 | Accrued expenses and other liabilities | $ | 19 | | $ | 14 |
See Notes to the Consolidated Financial Statements.
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Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 85:
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Financial Condition
(dollars in millions, except for share amounts)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="9">December 31,</td></tr><tr><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td></tr><tr><td colspan="3">Assets</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>11,685 </td><td></td><td colspan="3"></td><td>$</td><td>8,856 </td><td></td></tr><tr><td colspan="3">Restricted cash</td><td colspan="2">43 </td><td></td><td colspan="3"></td><td colspan="2">41 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Investment securities (includes available-for-sale securities of $13,402 and $11,987 reported at fair value with associated amortized cost of $13,451 and $12,167 at December 31, 2023 and 2022, respectively)</td><td colspan="2">13,655 </td><td></td><td colspan="3"></td><td colspan="2">12,208 </td><td></td></tr><tr><td colspan="3">Loan receivables</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Loan receivables</td><td colspan="2">128,409 </td><td></td><td colspan="3"></td><td colspan="2">112,120 </td><td></td></tr><tr><td colspan="3">Allowance for credit losses</td><td colspan="2">(9,283)</td><td></td><td colspan="3"></td><td colspan="2">(7,374)</td><td></td></tr><tr><td colspan="3">Net loan receivables</td><td colspan="2">119,126 </td><td></td><td colspan="3"></td><td colspan="2">104,746 </td><td></td></tr><tr><td colspan="3">Premises and equipment, net</td><td colspan="2">1,091 </td><td></td><td colspan="3"></td><td colspan="2">1,003 </td><td></td></tr><tr><td colspan="3">Goodwill</td><td colspan="2">255 </td><td></td><td colspan="3"></td><td colspan="2">255 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Other assets</td><td colspan="2">5,667 </td><td></td><td colspan="3"></td><td colspan="2">4,597 </td><td></td></tr><tr><td colspan="3">Total assets</td><td>$</td><td>151,522 </td><td></td><td colspan="3"></td><td>$</td><td>131,706 </td><td></td></tr><tr><td colspan="3">Liabilities and Stockholders' Equity</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Liabilities</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Deposits</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest-bearing deposit accounts</td><td>$</td><td>107,493 </td><td></td><td colspan="3"></td><td>$</td><td>90,151 </td><td></td></tr><tr><td colspan="3">Non-interest-bearing deposit accounts</td><td colspan="2">1,438 </td><td></td><td colspan="3"></td><td colspan="2">1,485 </td><td></td></tr><tr><td colspan="3">Total deposits</td><td colspan="2">108,931 </td><td></td><td colspan="3"></td><td colspan="2">91,636 </td><td></td></tr><tr><td colspan="3">Short-term borrowings</td><td colspan="2">750 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Long-term borrowings</td><td colspan="2">20,581 </td><td></td><td colspan="3"></td><td colspan="2">20,108 </td><td></td></tr><tr><td colspan="3">Accrued expenses and other liabilities</td><td colspan="2">6,432 </td><td></td><td colspan="3"></td><td colspan="2">5,618 </td><td></td></tr><tr><td colspan="3">Total liabilities</td><td colspan="2">136,694 </td><td></td><td colspan="3"></td><td colspan="2">117,362 </td><td></td></tr><tr><td colspan="3">Commitments, contingencies and guarantees (Notes 15, 18 and 19)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Stockholders' Equity</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Common stock, par value $0.01 per share; 2,000,000,000 shares authorized; 570,837,720 and 569,689,007 shares issued at December 31, 2023 and 2022, respectively</td><td colspan="2">6 </td><td></td><td colspan="3"></td><td colspan="2">6 </td><td></td></tr><tr><td colspan="3">Preferred stock, par value $0.01 per share; 200,000,000 shares authorized; 10,700 shares issued and outstanding at December 31, 2023 and 2022, respectively</td><td colspan="2">1,056 </td><td></td><td colspan="3"></td><td colspan="2">1,056 </td><td></td></tr><tr><td colspan="3">Additional paid-in capital</td><td colspan="2">4,553 </td><td></td><td colspan="3"></td><td colspan="2">4,468 </td><td></td></tr><tr><td colspan="3">Retained earnings</td><td colspan="2">30,448 </td><td></td><td colspan="3"></td><td colspan="2">28,207 </td><td></td></tr><tr><td colspan="3">Accumulated other comprehensive loss</td><td colspan="2">(225)</td><td></td><td colspan="3"></td><td colspan="2">(339)</td><td></td></tr><tr><td colspan="3">Treasury stock, at cost; 320,734,860 and 302,305,216 shares at December 31, 2023 and 2022, respectively</td><td colspan="2">(21,010)</td><td></td><td colspan="3"></td><td colspan="2">(19,054)</td><td></td></tr><tr><td colspan="3">Total stockholders' equity</td><td colspan="2">14,828 </td><td></td><td colspan="3"></td><td colspan="2">14,344 </td><td></td></tr><tr><td colspan="3">Total liabilities and stockholders' equity</td><td>$</td><td>151,522 </td><td></td><td colspan="3"></td><td>$</td><td>131,706 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>The table below presents the carrying amounts of certain assets and liabilities of Discover Financial Services' consolidated variable interest entities ("VIEs"), which are included in the consolidated statements of financial condition above. The assets in the table below include those assets that can only be used to settle obligations of the consolidated VIEs. The liabilities in the table below include third-party liabilities of consolidated VIEs only and exclude intercompany balances that eliminate in consolidation. The liabilities also exclude amounts for which creditors have recourse to the general credit of Discover Financial Services.
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="9">December 31,</td></tr><tr><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td></tr><tr><td colspan="3">Assets</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Restricted cash</td><td>$</td><td>43 </td><td></td><td colspan="3"></td><td>$</td><td>41 </td><td></td></tr><tr><td colspan="3">Loan receivables</td><td>$</td><td>30,590 </td><td></td><td colspan="3"></td><td>$</td><td>25,937 </td><td></td></tr><tr><td colspan="3">Allowance for credit losses allocated to securitized loan receivables</td><td>$</td><td>(1,347)</td><td></td><td colspan="3"></td><td>$</td><td>(1,152)</td><td></td></tr><tr><td colspan="3">Other assets</td><td>$</td><td>3 </td><td></td><td colspan="3"></td><td>$</td><td>3 </td><td></td></tr><tr><td colspan="3">Liabilities</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Short- and long-term borrowings</td><td>$</td><td>11,743 </td><td></td><td colspan="3"></td><td>$</td><td>10,259 </td><td></td></tr><tr><td colspan="3">Accrued expenses and other liabilities</td><td>$</td><td>19 </td><td></td><td colspan="3"></td><td>$</td><td>14 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
See Notes to the Consolidated Financial Statements.
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DISCOVER FINANCIAL SERVICES
Consolidated Statements of Financial Condition
(dollars in millions, except for share amounts)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="9">December 31,</td></tr><tr><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td></tr><tr><td colspan="3">Assets</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>11,685 </td><td></td><td colspan="3"></td><td>$</td><td>8,856 </td><td></td></tr><tr><td colspan="3">Restricted cash</td><td colspan="2">43 </td><td></td><td colspan="3"></td><td colspan="2">41 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Investment securities (includes available-for-sale securities of $13,402 and $11,987 reported at fair value with associated amortized cost of $13,451 and $12,167 at December 31, 2023 and 2022, respectively)</td><td colspan="2">13,655 </td><td></td><td colspan="3"></td><td colspan="2">12,208 </td><td></td></tr><tr><td colspan="3">Loan receivables</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Loan receivables</td><td colspan="2">128,409 </td><td></td><td colspan="3"></td><td colspan="2">112,120 </td><td></td></tr><tr><td colspan="3">Allowance for credit losses</td><td colspan="2">(9,283)</td><td></td><td colspan="3"></td><td colspan="2">(7,374)</td><td></td></tr><tr><td colspan="3">Net loan receivables</td><td colspan="2">119,126 </td><td></td><td colspan="3"></td><td colspan="2">104,746 </td><td></td></tr><tr><td colspan="3">Premises and equipment, net</td><td colspan="2">1,091 </td><td></td><td colspan="3"></td><td colspan="2">1,003 </td><td></td></tr><tr><td colspan="3">Goodwill</td><td colspan="2">255 </td><td></td><td colspan="3"></td><td colspan="2">255 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Other assets</td><td colspan="2">5,667 </td><td></td><td colspan="3"></td><td colspan="2">4,597 </td><td></td></tr><tr><td colspan="3">Total assets</td><td>$</td><td>151,522 </td><td></td><td colspan="3"></td><td>$</td><td>131,706 </td><td></td></tr><tr><td colspan="3">Liabilities and Stockholders' Equity</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Liabilities</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Deposits</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest-bearing deposit accounts</td><td>$</td><td>107,493 </td><td></td><td colspan="3"></td><td>$</td><td>90,151 </td><td></td></tr><tr><td colspan="3">Non-interest-bearing deposit accounts</td><td colspan="2">1,438 </td><td></td><td colspan="3"></td><td colspan="2">1,485 </td><td></td></tr><tr><td colspan="3">Total deposits</td><td colspan="2">108,931 </td><td></td><td colspan="3"></td><td colspan="2">91,636 </td><td></td></tr><tr><td colspan="3">Short-term borrowings</td><td colspan="2">750 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Long-term borrowings</td><td colspan="2">20,581 </td><td></td><td colspan="3"></td><td colspan="2">20,108 </td><td></td></tr><tr><td colspan="3">Accrued expenses and other liabilities</td><td colspan="2">6,432 </td><td></td><td colspan="3"></td><td colspan="2">5,618 </td><td></td></tr><tr><td colspan="3">Total liabilities</td><td colspan="2">136,694 </td><td></td><td colspan="3"></td><td colspan="2">117,362 </td><td></td></tr><tr><td colspan="3">Commitments, contingencies and guarantees (Notes 15, 18 and 19)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Stockholders' Equity</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Common stock, par value $0.01 per share; 2,000,000,000 shares authorized; 570,837,720 and 569,689,007 shares issued at December 31, 2023 and 2022, respectively</td><td colspan="2">6 </td><td></td><td colspan="3"></td><td colspan="2">6 </td><td></td></tr><tr><td colspan="3">Preferred stock, par value $0.01 per share; 200,000,000 shares authorized; 10,700 shares issued and outstanding at December 31, 2023 and 2022, respectively</td><td colspan="2">1,056 </td><td></td><td colspan="3"></td><td colspan="2">1,056 </td><td></td></tr><tr><td colspan="3">Additional paid-in capital</td><td colspan="2">4,553 </td><td></td><td colspan="3"></td><td colspan="2">4,468 </td><td></td></tr><tr><td colspan="3">Retained earnings</td><td colspan="2">30,448 </td><td></td><td colspan="3"></td><td colspan="2">28,207 </td><td></td></tr><tr><td colspan="3">Accumulated other comprehensive loss</td><td colspan="2">(225)</td><td></td><td colspan="3"></td><td colspan="2">(339)</td><td></td></tr><tr><td colspan="3">Treasury stock, at cost; 320,734,860 and 302,305,216 shares at December 31, 2023 and 2022, respectively</td><td colspan="2">(21,010)</td><td></td><td colspan="3"></td><td colspan="2">(19,054)</td><td></td></tr><tr><td colspan="3">Total stockholders' equity</td><td colspan="2">14,828 </td><td></td><td colspan="3"></td><td colspan="2">14,344 </td><td></td></tr><tr><td colspan="3">Total liabilities and stockholders' equity</td><td>$</td><td>151,522 </td><td></td><td colspan="3"></td><td>$</td><td>131,706 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>The table below presents the carrying amounts of certain assets and liabilities of Discover Financial Services' consolidated variable interest entities ("VIEs"), which are included in the consolidated statements of financial condition above. The assets in the table below include those assets that can only be used to settle obligations of the consolidated VIEs. The liabilities in the table below include third-party liabilities of consolidated VIEs only and exclude intercompany balances that eliminate in consolidation. The liabilities also exclude amounts for which creditors have recourse to the general credit of Discover Financial Services.
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="9">December 31,</td></tr><tr><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td></tr><tr><td colspan="3">Assets</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Restricted cash</td><td>$</td><td>43 </td><td></td><td colspan="3"></td><td>$</td><td>41 </td><td></td></tr><tr><td colspan="3">Loan receivables</td><td>$</td><td>30,590 </td><td></td><td colspan="3"></td><td>$</td><td>25,937 </td><td></td></tr><tr><td colspan="3">Allowance for credit losses allocated to securitized loan receivables</td><td>$</td><td>(1,347)</td><td></td><td colspan="3"></td><td>$</td><td>(1,152)</td><td></td></tr><tr><td colspan="3">Other assets</td><td>$</td><td>3 </td><td></td><td colspan="3"></td><td>$</td><td>3 </td><td></td></tr><tr><td colspan="3">Liabilities</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Short- and long-term borrowings</td><td>$</td><td>11,743 </td><td></td><td colspan="3"></td><td>$</td><td>10,259 </td><td></td></tr><tr><td colspan="3">Accrued expenses and other liabilities</td><td>$</td><td>19 </td><td></td><td colspan="3"></td><td>$</td><td>14 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
See Notes to the Consolidated Financial Statements.
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q_an003
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What does the change in Discover’s ROE for 2023 compared to 2022 reflect about the company?
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ROE Calculation:
2023: ROE (2023)=$2,940 million/$14,586 million = 19.6%
2022: ROE (2022)=$4,374 million/$14,344 million = 29.9%
The decline from 29.9% in 2022 to 19.6% in 2023 reflects a reduction in profitability relative to shareholders' equity. This drop could be attributed to decreased net income despite a relatively stable equity base.
|
Analysis
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85, 86
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0001393612-24-000010
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Item 8. Financial Statements and Supplementary Data
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Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 85:
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Financial Condition
(dollars in millions, except for share amounts)| | | | | | | | |
|---:|:---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:--------|:-----|:---------|:---|:--------|
| 1 | | December 31, | | | | | |
| 2 | | 2023 | | 2022 | | | |
| 3 | Assets | | | | | | |
| 4 | Cash and cash equivalents | $ | 11,685 | | | $ | 8,856 |
| 5 | Restricted cash | 43 | | | 41 | | |
| 7 | Investment securities (includes available-for-sale securities of $13,402 and $11,987 reported at fair value with associated amortized cost of $13,451 and $12,167 at December 31, 2023 and 2022, respectively) | 13,655 | | | 12,208 | | |
| 8 | Loan receivables | | | | | | |
| 9 | Loan receivables | 128,409 | | | 112,120 | | |
| 10 | Allowance for credit losses | (9,283) | | | (7,374) | | |
| 11 | Net loan receivables | 119,126 | | | 104,746 | | |
| 12 | Premises and equipment, net | 1,091 | | | 1,003 | | |
| 13 | Goodwill | 255 | | | 255 | | |
| 15 | Other assets | 5,667 | | | 4,597 | | |
| 16 | Total assets | $ | 151,522 | | | $ | 131,706 |
| 17 | Liabilities and Stockholders' Equity | | | | | | |
| 18 | Liabilities | | | | | | |
| 19 | Deposits | | | | | | |
| 20 | Interest-bearing deposit accounts | $ | 107,493 | | | $ | 90,151 |
| 21 | Non-interest-bearing deposit accounts | 1,438 | | | 1,485 | | |
| 22 | Total deposits | 108,931 | | | 91,636 | | |
| 23 | Short-term borrowings | 750 | | | - | | |
| 24 | Long-term borrowings | 20,581 | | | 20,108 | | |
| 25 | Accrued expenses and other liabilities | 6,432 | | | 5,618 | | |
| 26 | Total liabilities | 136,694 | | | 117,362 | | |
| 27 | Commitments, contingencies and guarantees (Notes 15, 18 and 19) | | | | | | |
| 28 | Stockholders' Equity | | | | | | |
| 29 | Common stock, par value $0.01 per share; 2,000,000,000 shares authorized; 570,837,720 and 569,689,007 shares issued at December 31, 2023 and 2022, respectively | 6 | | | 6 | | |
| 30 | Preferred stock, par value $0.01 per share; 200,000,000 shares authorized; 10,700 shares issued and outstanding at December 31, 2023 and 2022, respectively | 1,056 | | | 1,056 | | |
| 31 | Additional paid-in capital | 4,553 | | | 4,468 | | |
| 32 | Retained earnings | 30,448 | | | 28,207 | | |
| 33 | Accumulated other comprehensive loss | (225) | | | (339) | | |
| 34 | Treasury stock, at cost; 320,734,860 and 302,305,216 shares at December 31, 2023 and 2022, respectively | (21,010) | | | (19,054) | | |
| 35 | Total stockholders' equity | 14,828 | | | 14,344 | | |
| 36 | Total liabilities and stockholders' equity | $ | 151,522 | | | $ | 131,706 |
The table below presents the carrying amounts of certain assets and liabilities of Discover Financial Services' consolidated variable interest entities ("VIEs"), which are included in the consolidated statements of financial condition above. The assets in the table below include those assets that can only be used to settle obligations of the consolidated VIEs. The liabilities in the table below include third-party liabilities of consolidated VIEs only and exclude intercompany balances that eliminate in consolidation. The liabilities also exclude amounts for which creditors have recourse to the general credit of Discover Financial Services.
| | | | | | | |
|---:|:----------------------------------------------------------------------|:-------------|:--------|:-----|:---|:--------|
| 1 | | December 31, | | | | |
| 2 | | 2023 | | 2022 | | |
| 3 | Assets | | | | | |
| 4 | Restricted cash | $ | 43 | | $ | 41 |
| 5 | Loan receivables | $ | 30,590 | | $ | 25,937 |
| 6 | Allowance for credit losses allocated to securitized loan receivables | $ | (1,347) | | $ | (1,152) |
| 7 | Other assets | $ | 3 | | $ | 3 |
| 8 | Liabilities | | | | | |
| 9 | Short- and long-term borrowings | $ | 11,743 | | $ | 10,259 |
| 10 | Accrued expenses and other liabilities | $ | 19 | | $ | 14 |
See Notes to the Consolidated Financial Statements.
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, Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 86:
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Income
(dollars in millions, except for share amounts)| | | | | | | | | | | |
|---:|:------------------------------------------------------|:---------------------------------|:-------|:-----|:-------|:-----|:-------|:-------|:---|:------|
| 1 | | For the Years Ended December 31, | | | | | | | | |
| 2 | | 2023 | | 2022 | | 2021 | | | | |
| 3 | Interest income | | | | | | | | | |
| 4 | Credit card loans | $ | 14,438 | | | $ | 10,632 | | $ | 8,717 |
| 5 | Other loans | 2,515 | | | 1,870 | | | 1,734 | | |
| 6 | Investment securities | 449 | | | 179 | | | 182 | | |
| 7 | Other interest income | 443 | | | 183 | | | 18 | | |
| 8 | Total interest income | 17,845 | | | 12,864 | | | 10,651 | | |
| 9 | Interest expense | | | | | | | | | |
| 10 | Deposits | 3,886 | | | 1,257 | | | 661 | | |
| 11 | Short-term borrowings | 5 | | | 2 | | | - | | |
| 12 | Long-term borrowings | 855 | | | 606 | | | 473 | | |
| 13 | Total interest expense | 4,746 | | | 1,865 | | | 1,134 | | |
| 14 | Net interest income | 13,099 | | | 10,999 | | | 9,517 | | |
| 15 | Provision for credit losses | 6,018 | | | 2,359 | | | 218 | | |
| 16 | Net interest income after provision for credit losses | 7,081 | | | 8,640 | | | 9,299 | | |
| 17 | Other income | | | | | | | | | |
| 18 | Discount and interchange revenue, net | 1,447 | | | 1,380 | | | 1,188 | | |
| 19 | Protection products revenue | 172 | | | 172 | | | 165 | | |
| 20 | Loan fee income | 763 | | | 632 | | | 464 | | |
| 21 | Transaction processing revenue | 303 | | | 249 | | | 227 | | |
| 22 | (Losses) gains on equity investments | (9) | | | (214) | | | 424 | | |
| 23 | Other income | 85 | | | 75 | | | 66 | | |
| 24 | Total other income | 2,761 | | | 2,294 | | | 2,534 | | |
| 25 | Other expense | | | | | | | | | |
| 26 | Employee compensation and benefits | 2,434 | | | 2,139 | | | 1,986 | | |
| 27 | Marketing and business development | 1,164 | | | 1,035 | | | 810 | | |
| 28 | Information processing and communications | 608 | | | 513 | | | 500 | | |
| 29 | Professional fees | 1,041 | | | 871 | | | 797 | | |
| 30 | Premises and equipment | 89 | | | 118 | | | 92 | | |
| 31 | Other expense | 680 | | | 540 | | | 620 | | |
| 32 | Total other expense | 6,016 | | | 5,216 | | | 4,805 | | |
| 33 | Income before income taxes | 3,826 | | | 5,718 | | | 7,028 | | |
| 34 | Income tax expense | 886 | | | 1,344 | | | 1,606 | | |
| 35 | Net income | $ | 2,940 | | | $ | 4,374 | | $ | 5,422 |
| 36 | Net income allocated to common stockholders | $ | 2,859 | | | $ | 4,286 | | $ | 5,323 |
| 37 | Basic earnings per common share | $ | 11.27 | | | $ | 15.45 | | $ | 17.75 |
| 38 | Diluted earnings per common share | $ | 11.26 | | | $ | 15.44 | | $ | 17.74 |
See Notes to the Consolidated Financial Statements.
-86-
|
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Financial Condition
(dollars in millions, except for share amounts)| | | | | | | | |
|---:|:---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|:-------------|:--------|:-----|:---------|:---|:--------|
| 1 | | December 31, | | | | | |
| 2 | | 2023 | | 2022 | | | |
| 3 | Assets | | | | | | |
| 4 | Cash and cash equivalents | $ | 11,685 | | | $ | 8,856 |
| 5 | Restricted cash | 43 | | | 41 | | |
| 7 | Investment securities (includes available-for-sale securities of $13,402 and $11,987 reported at fair value with associated amortized cost of $13,451 and $12,167 at December 31, 2023 and 2022, respectively) | 13,655 | | | 12,208 | | |
| 8 | Loan receivables | | | | | | |
| 9 | Loan receivables | 128,409 | | | 112,120 | | |
| 10 | Allowance for credit losses | (9,283) | | | (7,374) | | |
| 11 | Net loan receivables | 119,126 | | | 104,746 | | |
| 12 | Premises and equipment, net | 1,091 | | | 1,003 | | |
| 13 | Goodwill | 255 | | | 255 | | |
| 15 | Other assets | 5,667 | | | 4,597 | | |
| 16 | Total assets | $ | 151,522 | | | $ | 131,706 |
| 17 | Liabilities and Stockholders' Equity | | | | | | |
| 18 | Liabilities | | | | | | |
| 19 | Deposits | | | | | | |
| 20 | Interest-bearing deposit accounts | $ | 107,493 | | | $ | 90,151 |
| 21 | Non-interest-bearing deposit accounts | 1,438 | | | 1,485 | | |
| 22 | Total deposits | 108,931 | | | 91,636 | | |
| 23 | Short-term borrowings | 750 | | | - | | |
| 24 | Long-term borrowings | 20,581 | | | 20,108 | | |
| 25 | Accrued expenses and other liabilities | 6,432 | | | 5,618 | | |
| 26 | Total liabilities | 136,694 | | | 117,362 | | |
| 27 | Commitments, contingencies and guarantees (Notes 15, 18 and 19) | | | | | | |
| 28 | Stockholders' Equity | | | | | | |
| 29 | Common stock, par value $0.01 per share; 2,000,000,000 shares authorized; 570,837,720 and 569,689,007 shares issued at December 31, 2023 and 2022, respectively | 6 | | | 6 | | |
| 30 | Preferred stock, par value $0.01 per share; 200,000,000 shares authorized; 10,700 shares issued and outstanding at December 31, 2023 and 2022, respectively | 1,056 | | | 1,056 | | |
| 31 | Additional paid-in capital | 4,553 | | | 4,468 | | |
| 32 | Retained earnings | 30,448 | | | 28,207 | | |
| 33 | Accumulated other comprehensive loss | (225) | | | (339) | | |
| 34 | Treasury stock, at cost; 320,734,860 and 302,305,216 shares at December 31, 2023 and 2022, respectively | (21,010) | | | (19,054) | | |
| 35 | Total stockholders' equity | 14,828 | | | 14,344 | | |
| 36 | Total liabilities and stockholders' equity | $ | 151,522 | | | $ | 131,706 |
The table below presents the carrying amounts of certain assets and liabilities of Discover Financial Services' consolidated variable interest entities ("VIEs"), which are included in the consolidated statements of financial condition above. The assets in the table below include those assets that can only be used to settle obligations of the consolidated VIEs. The liabilities in the table below include third-party liabilities of consolidated VIEs only and exclude intercompany balances that eliminate in consolidation. The liabilities also exclude amounts for which creditors have recourse to the general credit of Discover Financial Services.
| | | | | | | |
|---:|:----------------------------------------------------------------------|:-------------|:--------|:-----|:---|:--------|
| 1 | | December 31, | | | | |
| 2 | | 2023 | | 2022 | | |
| 3 | Assets | | | | | |
| 4 | Restricted cash | $ | 43 | | $ | 41 |
| 5 | Loan receivables | $ | 30,590 | | $ | 25,937 |
| 6 | Allowance for credit losses allocated to securitized loan receivables | $ | (1,347) | | $ | (1,152) |
| 7 | Other assets | $ | 3 | | $ | 3 |
| 8 | Liabilities | | | | | |
| 9 | Short- and long-term borrowings | $ | 11,743 | | $ | 10,259 |
| 10 | Accrued expenses and other liabilities | $ | 19 | | $ | 14 |
See Notes to the Consolidated Financial Statements.
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,
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Income
(dollars in millions, except for share amounts)| | | | | | | | | | | |
|---:|:------------------------------------------------------|:---------------------------------|:-------|:-----|:-------|:-----|:-------|:-------|:---|:------|
| 1 | | For the Years Ended December 31, | | | | | | | | |
| 2 | | 2023 | | 2022 | | 2021 | | | | |
| 3 | Interest income | | | | | | | | | |
| 4 | Credit card loans | $ | 14,438 | | | $ | 10,632 | | $ | 8,717 |
| 5 | Other loans | 2,515 | | | 1,870 | | | 1,734 | | |
| 6 | Investment securities | 449 | | | 179 | | | 182 | | |
| 7 | Other interest income | 443 | | | 183 | | | 18 | | |
| 8 | Total interest income | 17,845 | | | 12,864 | | | 10,651 | | |
| 9 | Interest expense | | | | | | | | | |
| 10 | Deposits | 3,886 | | | 1,257 | | | 661 | | |
| 11 | Short-term borrowings | 5 | | | 2 | | | - | | |
| 12 | Long-term borrowings | 855 | | | 606 | | | 473 | | |
| 13 | Total interest expense | 4,746 | | | 1,865 | | | 1,134 | | |
| 14 | Net interest income | 13,099 | | | 10,999 | | | 9,517 | | |
| 15 | Provision for credit losses | 6,018 | | | 2,359 | | | 218 | | |
| 16 | Net interest income after provision for credit losses | 7,081 | | | 8,640 | | | 9,299 | | |
| 17 | Other income | | | | | | | | | |
| 18 | Discount and interchange revenue, net | 1,447 | | | 1,380 | | | 1,188 | | |
| 19 | Protection products revenue | 172 | | | 172 | | | 165 | | |
| 20 | Loan fee income | 763 | | | 632 | | | 464 | | |
| 21 | Transaction processing revenue | 303 | | | 249 | | | 227 | | |
| 22 | (Losses) gains on equity investments | (9) | | | (214) | | | 424 | | |
| 23 | Other income | 85 | | | 75 | | | 66 | | |
| 24 | Total other income | 2,761 | | | 2,294 | | | 2,534 | | |
| 25 | Other expense | | | | | | | | | |
| 26 | Employee compensation and benefits | 2,434 | | | 2,139 | | | 1,986 | | |
| 27 | Marketing and business development | 1,164 | | | 1,035 | | | 810 | | |
| 28 | Information processing and communications | 608 | | | 513 | | | 500 | | |
| 29 | Professional fees | 1,041 | | | 871 | | | 797 | | |
| 30 | Premises and equipment | 89 | | | 118 | | | 92 | | |
| 31 | Other expense | 680 | | | 540 | | | 620 | | |
| 32 | Total other expense | 6,016 | | | 5,216 | | | 4,805 | | |
| 33 | Income before income taxes | 3,826 | | | 5,718 | | | 7,028 | | |
| 34 | Income tax expense | 886 | | | 1,344 | | | 1,606 | | |
| 35 | Net income | $ | 2,940 | | | $ | 4,374 | | $ | 5,422 |
| 36 | Net income allocated to common stockholders | $ | 2,859 | | | $ | 4,286 | | $ | 5,323 |
| 37 | Basic earnings per common share | $ | 11.27 | | | $ | 15.45 | | $ | 17.75 |
| 38 | Diluted earnings per common share | $ | 11.26 | | | $ | 15.44 | | $ | 17.74 |
See Notes to the Consolidated Financial Statements.
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Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 85:
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Financial Condition
(dollars in millions, except for share amounts)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="9">December 31,</td></tr><tr><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td></tr><tr><td colspan="3">Assets</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>11,685 </td><td></td><td colspan="3"></td><td>$</td><td>8,856 </td><td></td></tr><tr><td colspan="3">Restricted cash</td><td colspan="2">43 </td><td></td><td colspan="3"></td><td colspan="2">41 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Investment securities (includes available-for-sale securities of $13,402 and $11,987 reported at fair value with associated amortized cost of $13,451 and $12,167 at December 31, 2023 and 2022, respectively)</td><td colspan="2">13,655 </td><td></td><td colspan="3"></td><td colspan="2">12,208 </td><td></td></tr><tr><td colspan="3">Loan receivables</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Loan receivables</td><td colspan="2">128,409 </td><td></td><td colspan="3"></td><td colspan="2">112,120 </td><td></td></tr><tr><td colspan="3">Allowance for credit losses</td><td colspan="2">(9,283)</td><td></td><td colspan="3"></td><td colspan="2">(7,374)</td><td></td></tr><tr><td colspan="3">Net loan receivables</td><td colspan="2">119,126 </td><td></td><td colspan="3"></td><td colspan="2">104,746 </td><td></td></tr><tr><td colspan="3">Premises and equipment, net</td><td colspan="2">1,091 </td><td></td><td colspan="3"></td><td colspan="2">1,003 </td><td></td></tr><tr><td colspan="3">Goodwill</td><td colspan="2">255 </td><td></td><td colspan="3"></td><td colspan="2">255 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Other assets</td><td colspan="2">5,667 </td><td></td><td colspan="3"></td><td colspan="2">4,597 </td><td></td></tr><tr><td colspan="3">Total assets</td><td>$</td><td>151,522 </td><td></td><td colspan="3"></td><td>$</td><td>131,706 </td><td></td></tr><tr><td colspan="3">Liabilities and Stockholders' Equity</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Liabilities</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Deposits</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest-bearing deposit accounts</td><td>$</td><td>107,493 </td><td></td><td colspan="3"></td><td>$</td><td>90,151 </td><td></td></tr><tr><td colspan="3">Non-interest-bearing deposit accounts</td><td colspan="2">1,438 </td><td></td><td colspan="3"></td><td colspan="2">1,485 </td><td></td></tr><tr><td colspan="3">Total deposits</td><td colspan="2">108,931 </td><td></td><td colspan="3"></td><td colspan="2">91,636 </td><td></td></tr><tr><td colspan="3">Short-term borrowings</td><td colspan="2">750 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Long-term borrowings</td><td colspan="2">20,581 </td><td></td><td colspan="3"></td><td colspan="2">20,108 </td><td></td></tr><tr><td colspan="3">Accrued expenses and other liabilities</td><td colspan="2">6,432 </td><td></td><td colspan="3"></td><td colspan="2">5,618 </td><td></td></tr><tr><td colspan="3">Total liabilities</td><td colspan="2">136,694 </td><td></td><td colspan="3"></td><td colspan="2">117,362 </td><td></td></tr><tr><td colspan="3">Commitments, contingencies and guarantees (Notes 15, 18 and 19)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Stockholders' Equity</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Common stock, par value $0.01 per share; 2,000,000,000 shares authorized; 570,837,720 and 569,689,007 shares issued at December 31, 2023 and 2022, respectively</td><td colspan="2">6 </td><td></td><td colspan="3"></td><td colspan="2">6 </td><td></td></tr><tr><td colspan="3">Preferred stock, par value $0.01 per share; 200,000,000 shares authorized; 10,700 shares issued and outstanding at December 31, 2023 and 2022, respectively</td><td colspan="2">1,056 </td><td></td><td colspan="3"></td><td colspan="2">1,056 </td><td></td></tr><tr><td colspan="3">Additional paid-in capital</td><td colspan="2">4,553 </td><td></td><td colspan="3"></td><td colspan="2">4,468 </td><td></td></tr><tr><td colspan="3">Retained earnings</td><td colspan="2">30,448 </td><td></td><td colspan="3"></td><td colspan="2">28,207 </td><td></td></tr><tr><td colspan="3">Accumulated other comprehensive loss</td><td colspan="2">(225)</td><td></td><td colspan="3"></td><td colspan="2">(339)</td><td></td></tr><tr><td colspan="3">Treasury stock, at cost; 320,734,860 and 302,305,216 shares at December 31, 2023 and 2022, respectively</td><td colspan="2">(21,010)</td><td></td><td colspan="3"></td><td colspan="2">(19,054)</td><td></td></tr><tr><td colspan="3">Total stockholders' equity</td><td colspan="2">14,828 </td><td></td><td colspan="3"></td><td colspan="2">14,344 </td><td></td></tr><tr><td colspan="3">Total liabilities and stockholders' equity</td><td>$</td><td>151,522 </td><td></td><td colspan="3"></td><td>$</td><td>131,706 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>The table below presents the carrying amounts of certain assets and liabilities of Discover Financial Services' consolidated variable interest entities ("VIEs"), which are included in the consolidated statements of financial condition above. The assets in the table below include those assets that can only be used to settle obligations of the consolidated VIEs. The liabilities in the table below include third-party liabilities of consolidated VIEs only and exclude intercompany balances that eliminate in consolidation. The liabilities also exclude amounts for which creditors have recourse to the general credit of Discover Financial Services.
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="9">December 31,</td></tr><tr><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td></tr><tr><td colspan="3">Assets</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Restricted cash</td><td>$</td><td>43 </td><td></td><td colspan="3"></td><td>$</td><td>41 </td><td></td></tr><tr><td colspan="3">Loan receivables</td><td>$</td><td>30,590 </td><td></td><td colspan="3"></td><td>$</td><td>25,937 </td><td></td></tr><tr><td colspan="3">Allowance for credit losses allocated to securitized loan receivables</td><td>$</td><td>(1,347)</td><td></td><td colspan="3"></td><td>$</td><td>(1,152)</td><td></td></tr><tr><td colspan="3">Other assets</td><td>$</td><td>3 </td><td></td><td colspan="3"></td><td>$</td><td>3 </td><td></td></tr><tr><td colspan="3">Liabilities</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Short- and long-term borrowings</td><td>$</td><td>11,743 </td><td></td><td colspan="3"></td><td>$</td><td>10,259 </td><td></td></tr><tr><td colspan="3">Accrued expenses and other liabilities</td><td>$</td><td>19 </td><td></td><td colspan="3"></td><td>$</td><td>14 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
See Notes to the Consolidated Financial Statements.
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, Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 86:
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Income
(dollars in millions, except for share amounts)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="15">For the Years Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Interest income</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Credit card loans</td><td>$</td><td>14,438 </td><td></td><td colspan="3"></td><td>$</td><td>10,632 </td><td></td><td colspan="3"></td><td>$</td><td>8,717 </td><td></td></tr><tr><td colspan="3">Other loans</td><td colspan="2">2,515 </td><td></td><td colspan="3"></td><td colspan="2">1,870 </td><td></td><td colspan="3"></td><td colspan="2">1,734 </td><td></td></tr><tr><td colspan="3">Investment securities</td><td colspan="2">449 </td><td></td><td colspan="3"></td><td colspan="2">179 </td><td></td><td colspan="3"></td><td colspan="2">182 </td><td></td></tr><tr><td colspan="3">Other interest income</td><td colspan="2">443 </td><td></td><td colspan="3"></td><td colspan="2">183 </td><td></td><td colspan="3"></td><td colspan="2">18 </td><td></td></tr><tr><td colspan="3">Total interest income</td><td colspan="2">17,845 </td><td></td><td colspan="3"></td><td colspan="2">12,864 </td><td></td><td colspan="3"></td><td colspan="2">10,651 </td><td></td></tr><tr><td colspan="3">Interest expense</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Deposits</td><td colspan="2">3,886 </td><td></td><td colspan="3"></td><td colspan="2">1,257 </td><td></td><td colspan="3"></td><td colspan="2">661 </td><td></td></tr><tr><td colspan="3">Short-term borrowings</td><td colspan="2">5 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Long-term borrowings</td><td colspan="2">855 </td><td></td><td colspan="3"></td><td colspan="2">606 </td><td></td><td colspan="3"></td><td colspan="2">473 </td><td></td></tr><tr><td colspan="3">Total interest expense</td><td colspan="2">4,746 </td><td></td><td colspan="3"></td><td colspan="2">1,865 </td><td></td><td colspan="3"></td><td colspan="2">1,134 </td><td></td></tr><tr><td colspan="3">Net interest income</td><td colspan="2">13,099 </td><td></td><td colspan="3"></td><td colspan="2">10,999 </td><td></td><td colspan="3"></td><td colspan="2">9,517 </td><td></td></tr><tr><td colspan="3">Provision for credit losses</td><td colspan="2">6,018 </td><td></td><td colspan="3"></td><td colspan="2">2,359 </td><td></td><td colspan="3"></td><td colspan="2">218 </td><td></td></tr><tr><td colspan="3">Net interest income after provision for credit losses</td><td colspan="2">7,081 </td><td></td><td colspan="3"></td><td colspan="2">8,640 </td><td></td><td colspan="3"></td><td colspan="2">9,299 </td><td></td></tr><tr><td colspan="3">Other income</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Discount and interchange revenue, net</td><td colspan="2">1,447 </td><td></td><td colspan="3"></td><td colspan="2">1,380 </td><td></td><td colspan="3"></td><td colspan="2">1,188 </td><td></td></tr><tr><td colspan="3">Protection products revenue</td><td colspan="2">172 </td><td></td><td colspan="3"></td><td colspan="2">172 </td><td></td><td colspan="3"></td><td colspan="2">165 </td><td></td></tr><tr><td colspan="3">Loan fee income</td><td colspan="2">763 </td><td></td><td colspan="3"></td><td colspan="2">632 </td><td></td><td colspan="3"></td><td colspan="2">464 </td><td></td></tr><tr><td colspan="3">Transaction processing revenue</td><td colspan="2">303 </td><td></td><td colspan="3"></td><td colspan="2">249 </td><td></td><td colspan="3"></td><td colspan="2">227 </td><td></td></tr><tr><td colspan="3">(Losses) gains on equity investments</td><td colspan="2">(9)</td><td></td><td colspan="3"></td><td colspan="2">(214)</td><td></td><td colspan="3"></td><td colspan="2">424 </td><td></td></tr><tr><td colspan="3">Other income</td><td colspan="2">85 </td><td></td><td colspan="3"></td><td colspan="2">75 </td><td></td><td colspan="3"></td><td colspan="2">66 </td><td></td></tr><tr><td colspan="3">Total other income</td><td colspan="2">2,761 </td><td></td><td colspan="3"></td><td colspan="2">2,294 </td><td></td><td colspan="3"></td><td colspan="2">2,534 </td><td></td></tr><tr><td colspan="3">Other expense</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Employee compensation and benefits</td><td colspan="2">2,434 </td><td></td><td colspan="3"></td><td colspan="2">2,139 </td><td></td><td colspan="3"></td><td colspan="2">1,986 </td><td></td></tr><tr><td colspan="3">Marketing and business development</td><td colspan="2">1,164 </td><td></td><td colspan="3"></td><td colspan="2">1,035 </td><td></td><td colspan="3"></td><td colspan="2">810 </td><td></td></tr><tr><td colspan="3">Information processing and communications</td><td colspan="2">608 </td><td></td><td colspan="3"></td><td colspan="2">513 </td><td></td><td colspan="3"></td><td colspan="2">500 </td><td></td></tr><tr><td colspan="3">Professional fees</td><td colspan="2">1,041 </td><td></td><td colspan="3"></td><td colspan="2">871 </td><td></td><td colspan="3"></td><td colspan="2">797 </td><td></td></tr><tr><td colspan="3">Premises and equipment</td><td colspan="2">89 </td><td></td><td colspan="3"></td><td colspan="2">118 </td><td></td><td colspan="3"></td><td colspan="2">92 </td><td></td></tr><tr><td colspan="3">Other expense</td><td colspan="2">680 </td><td></td><td colspan="3"></td><td colspan="2">540 </td><td></td><td colspan="3"></td><td colspan="2">620 </td><td></td></tr><tr><td colspan="3">Total other expense</td><td colspan="2">6,016 </td><td></td><td colspan="3"></td><td colspan="2">5,216 </td><td></td><td colspan="3"></td><td colspan="2">4,805 </td><td></td></tr><tr><td colspan="3">Income before income taxes</td><td colspan="2">3,826 </td><td></td><td colspan="3"></td><td colspan="2">5,718 </td><td></td><td colspan="3"></td><td colspan="2">7,028 </td><td></td></tr><tr><td colspan="3">Income tax expense</td><td colspan="2">886 </td><td></td><td colspan="3"></td><td colspan="2">1,344 </td><td></td><td colspan="3"></td><td colspan="2">1,606 </td><td></td></tr><tr><td colspan="3">Net income</td><td>$</td><td>2,940 </td><td></td><td colspan="3"></td><td>$</td><td>4,374 </td><td></td><td colspan="3"></td><td>$</td><td>5,422 </td><td></td></tr><tr><td colspan="3">Net income allocated to common stockholders</td><td>$</td><td>2,859 </td><td></td><td colspan="3"></td><td>$</td><td>4,286 </td><td></td><td colspan="3"></td><td>$</td><td>5,323 </td><td></td></tr><tr><td colspan="3">Basic earnings per common share</td><td>$</td><td>11.27 </td><td></td><td colspan="3"></td><td>$</td><td>15.45 </td><td></td><td colspan="3"></td><td>$</td><td>17.75 </td><td></td></tr><tr><td colspan="3">Diluted earnings per common share</td><td>$</td><td>11.26 </td><td></td><td colspan="3"></td><td>$</td><td>15.44 </td><td></td><td colspan="3"></td><td>$</td><td>17.74 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
See Notes to the Consolidated Financial Statements.
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|
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Financial Condition
(dollars in millions, except for share amounts)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="9">December 31,</td></tr><tr><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td></tr><tr><td colspan="3">Assets</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Cash and cash equivalents</td><td>$</td><td>11,685 </td><td></td><td colspan="3"></td><td>$</td><td>8,856 </td><td></td></tr><tr><td colspan="3">Restricted cash</td><td colspan="2">43 </td><td></td><td colspan="3"></td><td colspan="2">41 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Investment securities (includes available-for-sale securities of $13,402 and $11,987 reported at fair value with associated amortized cost of $13,451 and $12,167 at December 31, 2023 and 2022, respectively)</td><td colspan="2">13,655 </td><td></td><td colspan="3"></td><td colspan="2">12,208 </td><td></td></tr><tr><td colspan="3">Loan receivables</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Loan receivables</td><td colspan="2">128,409 </td><td></td><td colspan="3"></td><td colspan="2">112,120 </td><td></td></tr><tr><td colspan="3">Allowance for credit losses</td><td colspan="2">(9,283)</td><td></td><td colspan="3"></td><td colspan="2">(7,374)</td><td></td></tr><tr><td colspan="3">Net loan receivables</td><td colspan="2">119,126 </td><td></td><td colspan="3"></td><td colspan="2">104,746 </td><td></td></tr><tr><td colspan="3">Premises and equipment, net</td><td colspan="2">1,091 </td><td></td><td colspan="3"></td><td colspan="2">1,003 </td><td></td></tr><tr><td colspan="3">Goodwill</td><td colspan="2">255 </td><td></td><td colspan="3"></td><td colspan="2">255 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Other assets</td><td colspan="2">5,667 </td><td></td><td colspan="3"></td><td colspan="2">4,597 </td><td></td></tr><tr><td colspan="3">Total assets</td><td>$</td><td>151,522 </td><td></td><td colspan="3"></td><td>$</td><td>131,706 </td><td></td></tr><tr><td colspan="3">Liabilities and Stockholders' Equity</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Liabilities</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Deposits</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Interest-bearing deposit accounts</td><td>$</td><td>107,493 </td><td></td><td colspan="3"></td><td>$</td><td>90,151 </td><td></td></tr><tr><td colspan="3">Non-interest-bearing deposit accounts</td><td colspan="2">1,438 </td><td></td><td colspan="3"></td><td colspan="2">1,485 </td><td></td></tr><tr><td colspan="3">Total deposits</td><td colspan="2">108,931 </td><td></td><td colspan="3"></td><td colspan="2">91,636 </td><td></td></tr><tr><td colspan="3">Short-term borrowings</td><td colspan="2">750 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Long-term borrowings</td><td colspan="2">20,581 </td><td></td><td colspan="3"></td><td colspan="2">20,108 </td><td></td></tr><tr><td colspan="3">Accrued expenses and other liabilities</td><td colspan="2">6,432 </td><td></td><td colspan="3"></td><td colspan="2">5,618 </td><td></td></tr><tr><td colspan="3">Total liabilities</td><td colspan="2">136,694 </td><td></td><td colspan="3"></td><td colspan="2">117,362 </td><td></td></tr><tr><td colspan="3">Commitments, contingencies and guarantees (Notes 15, 18 and 19)</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Stockholders' Equity</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Common stock, par value $0.01 per share; 2,000,000,000 shares authorized; 570,837,720 and 569,689,007 shares issued at December 31, 2023 and 2022, respectively</td><td colspan="2">6 </td><td></td><td colspan="3"></td><td colspan="2">6 </td><td></td></tr><tr><td colspan="3">Preferred stock, par value $0.01 per share; 200,000,000 shares authorized; 10,700 shares issued and outstanding at December 31, 2023 and 2022, respectively</td><td colspan="2">1,056 </td><td></td><td colspan="3"></td><td colspan="2">1,056 </td><td></td></tr><tr><td colspan="3">Additional paid-in capital</td><td colspan="2">4,553 </td><td></td><td colspan="3"></td><td colspan="2">4,468 </td><td></td></tr><tr><td colspan="3">Retained earnings</td><td colspan="2">30,448 </td><td></td><td colspan="3"></td><td colspan="2">28,207 </td><td></td></tr><tr><td colspan="3">Accumulated other comprehensive loss</td><td colspan="2">(225)</td><td></td><td colspan="3"></td><td colspan="2">(339)</td><td></td></tr><tr><td colspan="3">Treasury stock, at cost; 320,734,860 and 302,305,216 shares at December 31, 2023 and 2022, respectively</td><td colspan="2">(21,010)</td><td></td><td colspan="3"></td><td colspan="2">(19,054)</td><td></td></tr><tr><td colspan="3">Total stockholders' equity</td><td colspan="2">14,828 </td><td></td><td colspan="3"></td><td colspan="2">14,344 </td><td></td></tr><tr><td colspan="3">Total liabilities and stockholders' equity</td><td>$</td><td>151,522 </td><td></td><td colspan="3"></td><td>$</td><td>131,706 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>The table below presents the carrying amounts of certain assets and liabilities of Discover Financial Services' consolidated variable interest entities ("VIEs"), which are included in the consolidated statements of financial condition above. The assets in the table below include those assets that can only be used to settle obligations of the consolidated VIEs. The liabilities in the table below include third-party liabilities of consolidated VIEs only and exclude intercompany balances that eliminate in consolidation. The liabilities also exclude amounts for which creditors have recourse to the general credit of Discover Financial Services.
<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"></td><td colspan="9">December 31,</td></tr><tr><td colspan="3"></td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td></tr><tr><td colspan="3">Assets</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Restricted cash</td><td>$</td><td>43 </td><td></td><td colspan="3"></td><td>$</td><td>41 </td><td></td></tr><tr><td colspan="3">Loan receivables</td><td>$</td><td>30,590 </td><td></td><td colspan="3"></td><td>$</td><td>25,937 </td><td></td></tr><tr><td colspan="3">Allowance for credit losses allocated to securitized loan receivables</td><td>$</td><td>(1,347)</td><td></td><td colspan="3"></td><td>$</td><td>(1,152)</td><td></td></tr><tr><td colspan="3">Other assets</td><td>$</td><td>3 </td><td></td><td colspan="3"></td><td>$</td><td>3 </td><td></td></tr><tr><td colspan="3">Liabilities</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Short- and long-term borrowings</td><td>$</td><td>11,743 </td><td></td><td colspan="3"></td><td>$</td><td>10,259 </td><td></td></tr><tr><td colspan="3">Accrued expenses and other liabilities</td><td>$</td><td>19 </td><td></td><td colspan="3"></td><td>$</td><td>14 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
See Notes to the Consolidated Financial Statements.
-85-
,
DISCOVER FINANCIAL SERVICES
Consolidated Statements of Income
(dollars in millions, except for share amounts)<table><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td colspan="3"> </td><td colspan="15">For the Years Ended December 31,</td></tr><tr><td colspan="3"> </td><td colspan="3">2023</td><td colspan="3"></td><td colspan="3">2022</td><td colspan="3"></td><td colspan="3">2021</td></tr><tr><td colspan="3">Interest income</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Credit card loans</td><td>$</td><td>14,438 </td><td></td><td colspan="3"></td><td>$</td><td>10,632 </td><td></td><td colspan="3"></td><td>$</td><td>8,717 </td><td></td></tr><tr><td colspan="3">Other loans</td><td colspan="2">2,515 </td><td></td><td colspan="3"></td><td colspan="2">1,870 </td><td></td><td colspan="3"></td><td colspan="2">1,734 </td><td></td></tr><tr><td colspan="3">Investment securities</td><td colspan="2">449 </td><td></td><td colspan="3"></td><td colspan="2">179 </td><td></td><td colspan="3"></td><td colspan="2">182 </td><td></td></tr><tr><td colspan="3">Other interest income</td><td colspan="2">443 </td><td></td><td colspan="3"></td><td colspan="2">183 </td><td></td><td colspan="3"></td><td colspan="2">18 </td><td></td></tr><tr><td colspan="3">Total interest income</td><td colspan="2">17,845 </td><td></td><td colspan="3"></td><td colspan="2">12,864 </td><td></td><td colspan="3"></td><td colspan="2">10,651 </td><td></td></tr><tr><td colspan="3">Interest expense</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Deposits</td><td colspan="2">3,886 </td><td></td><td colspan="3"></td><td colspan="2">1,257 </td><td></td><td colspan="3"></td><td colspan="2">661 </td><td></td></tr><tr><td colspan="3">Short-term borrowings</td><td colspan="2">5 </td><td></td><td colspan="3"></td><td colspan="2">2 </td><td></td><td colspan="3"></td><td colspan="2">- </td><td></td></tr><tr><td colspan="3">Long-term borrowings</td><td colspan="2">855 </td><td></td><td colspan="3"></td><td colspan="2">606 </td><td></td><td colspan="3"></td><td colspan="2">473 </td><td></td></tr><tr><td colspan="3">Total interest expense</td><td colspan="2">4,746 </td><td></td><td colspan="3"></td><td colspan="2">1,865 </td><td></td><td colspan="3"></td><td colspan="2">1,134 </td><td></td></tr><tr><td colspan="3">Net interest income</td><td colspan="2">13,099 </td><td></td><td colspan="3"></td><td colspan="2">10,999 </td><td></td><td colspan="3"></td><td colspan="2">9,517 </td><td></td></tr><tr><td colspan="3">Provision for credit losses</td><td colspan="2">6,018 </td><td></td><td colspan="3"></td><td colspan="2">2,359 </td><td></td><td colspan="3"></td><td colspan="2">218 </td><td></td></tr><tr><td colspan="3">Net interest income after provision for credit losses</td><td colspan="2">7,081 </td><td></td><td colspan="3"></td><td colspan="2">8,640 </td><td></td><td colspan="3"></td><td colspan="2">9,299 </td><td></td></tr><tr><td colspan="3">Other income</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Discount and interchange revenue, net</td><td colspan="2">1,447 </td><td></td><td colspan="3"></td><td colspan="2">1,380 </td><td></td><td colspan="3"></td><td colspan="2">1,188 </td><td></td></tr><tr><td colspan="3">Protection products revenue</td><td colspan="2">172 </td><td></td><td colspan="3"></td><td colspan="2">172 </td><td></td><td colspan="3"></td><td colspan="2">165 </td><td></td></tr><tr><td colspan="3">Loan fee income</td><td colspan="2">763 </td><td></td><td colspan="3"></td><td colspan="2">632 </td><td></td><td colspan="3"></td><td colspan="2">464 </td><td></td></tr><tr><td colspan="3">Transaction processing revenue</td><td colspan="2">303 </td><td></td><td colspan="3"></td><td colspan="2">249 </td><td></td><td colspan="3"></td><td colspan="2">227 </td><td></td></tr><tr><td colspan="3">(Losses) gains on equity investments</td><td colspan="2">(9)</td><td></td><td colspan="3"></td><td colspan="2">(214)</td><td></td><td colspan="3"></td><td colspan="2">424 </td><td></td></tr><tr><td colspan="3">Other income</td><td colspan="2">85 </td><td></td><td colspan="3"></td><td colspan="2">75 </td><td></td><td colspan="3"></td><td colspan="2">66 </td><td></td></tr><tr><td colspan="3">Total other income</td><td colspan="2">2,761 </td><td></td><td colspan="3"></td><td colspan="2">2,294 </td><td></td><td colspan="3"></td><td colspan="2">2,534 </td><td></td></tr><tr><td colspan="3">Other expense</td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr><tr><td colspan="3">Employee compensation and benefits</td><td colspan="2">2,434 </td><td></td><td colspan="3"></td><td colspan="2">2,139 </td><td></td><td colspan="3"></td><td colspan="2">1,986 </td><td></td></tr><tr><td colspan="3">Marketing and business development</td><td colspan="2">1,164 </td><td></td><td colspan="3"></td><td colspan="2">1,035 </td><td></td><td colspan="3"></td><td colspan="2">810 </td><td></td></tr><tr><td colspan="3">Information processing and communications</td><td colspan="2">608 </td><td></td><td colspan="3"></td><td colspan="2">513 </td><td></td><td colspan="3"></td><td colspan="2">500 </td><td></td></tr><tr><td colspan="3">Professional fees</td><td colspan="2">1,041 </td><td></td><td colspan="3"></td><td colspan="2">871 </td><td></td><td colspan="3"></td><td colspan="2">797 </td><td></td></tr><tr><td colspan="3">Premises and equipment</td><td colspan="2">89 </td><td></td><td colspan="3"></td><td colspan="2">118 </td><td></td><td colspan="3"></td><td colspan="2">92 </td><td></td></tr><tr><td colspan="3">Other expense</td><td colspan="2">680 </td><td></td><td colspan="3"></td><td colspan="2">540 </td><td></td><td colspan="3"></td><td colspan="2">620 </td><td></td></tr><tr><td colspan="3">Total other expense</td><td colspan="2">6,016 </td><td></td><td colspan="3"></td><td colspan="2">5,216 </td><td></td><td colspan="3"></td><td colspan="2">4,805 </td><td></td></tr><tr><td colspan="3">Income before income taxes</td><td colspan="2">3,826 </td><td></td><td colspan="3"></td><td colspan="2">5,718 </td><td></td><td colspan="3"></td><td colspan="2">7,028 </td><td></td></tr><tr><td colspan="3">Income tax expense</td><td colspan="2">886 </td><td></td><td colspan="3"></td><td colspan="2">1,344 </td><td></td><td colspan="3"></td><td colspan="2">1,606 </td><td></td></tr><tr><td colspan="3">Net income</td><td>$</td><td>2,940 </td><td></td><td colspan="3"></td><td>$</td><td>4,374 </td><td></td><td colspan="3"></td><td>$</td><td>5,422 </td><td></td></tr><tr><td colspan="3">Net income allocated to common stockholders</td><td>$</td><td>2,859 </td><td></td><td colspan="3"></td><td>$</td><td>4,286 </td><td></td><td colspan="3"></td><td>$</td><td>5,323 </td><td></td></tr><tr><td colspan="3">Basic earnings per common share</td><td>$</td><td>11.27 </td><td></td><td colspan="3"></td><td>$</td><td>15.45 </td><td></td><td colspan="3"></td><td>$</td><td>17.75 </td><td></td></tr><tr><td colspan="3">Diluted earnings per common share</td><td>$</td><td>11.26 </td><td></td><td colspan="3"></td><td>$</td><td>15.44 </td><td></td><td colspan="3"></td><td>$</td><td>17.74 </td><td></td></tr><tr><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td><td colspan="3"></td></tr></table>
See Notes to the Consolidated Financial Statements.
-86-
|
q_an004
| "How did the earnings per share (EPS) attributable to NEE, assuming dilution, change from 2021 to 20(...TRUNCATED) | "The earnings per share (EPS) attributable to NEE, assuming dilution, changed as follows from 2021 t(...TRUNCATED) |
Analysis
|
60
|
0000753308-24-000008
|
Item 8. Financial Statements and Supplementary Data
| "NEXTERA ENERGY INC 10-K form for the fiscal year ended 2023-12-31, page 60: \nTable of Contents\n\n(...TRUNCATED) | "\nTable of Contents\n\n\n\nNEXTERA ENERGY, INC.\n\n\nCONSOLIDATED STATEMENTS OF INCOME\n\n(millions(...TRUNCATED) | "NEXTERA ENERGY INC 10-K form for the fiscal year ended 2023-12-31, page 60: \nTable of Contents\n\n(...TRUNCATED) | "\nTable of Contents\n\n\n\nNEXTERA ENERGY, INC.\n\n\nCONSOLIDATED STATEMENTS OF INCOME\n\n(millions(...TRUNCATED) |
q_an005
|
What are the liquidity metrics for Apple Inc. for the year 2023, and what do they indicate?
| "The liquidity metrics for Apple Inc. for the year 2023 are as follows:\n- Current Assets: $143,566 (...TRUNCATED) |
Analysis
|
28, 30
|
0000320193-23-000106
|
Item 8. Financial Statements and Supplementary Data
| "Apple Inc. 10-K form for the fiscal year ended 2023-09-30, page 28: \nApple Inc.\n\n\nCONSOLIDATED (...TRUNCATED) | "\nApple Inc.\n\n\nCONSOLIDATED STATEMENTS OF OPERATIONS\n\n(In millions, except number of shares, w(...TRUNCATED) | "Apple Inc. 10-K form for the fiscal year ended 2023-09-30, page 28: \nApple Inc.\n\n\nCONSOLIDATED (...TRUNCATED) | "\nApple Inc.\n\n\nCONSOLIDATED STATEMENTS OF OPERATIONS\n\n(In millions, except number of shares, w(...TRUNCATED) |
q_an006
|
What does the Fixed Asset Turnover Ratio for Apple Inc. for the year 2023 indicate?
| " The Fixed Asset Turnover Ratio of Apple for 2023 is 8.93. This ratio indicates that Apple Inc. is (...TRUNCATED) |
Analysis
|
28, 30
|
0000320193-23-000106
|
Item 8. Financial Statements and Supplementary Data
| "Apple Inc. 10-K form for the fiscal year ended 2023-09-30, page 28: \nApple Inc.\n\n\nCONSOLIDATED (...TRUNCATED) | "\nApple Inc.\n\n\nCONSOLIDATED STATEMENTS OF OPERATIONS\n\n(In millions, except number of shares, w(...TRUNCATED) | "Apple Inc. 10-K form for the fiscal year ended 2023-09-30, page 28: \nApple Inc.\n\n\nCONSOLIDATED (...TRUNCATED) | "\nApple Inc.\n\n\nCONSOLIDATED STATEMENTS OF OPERATIONS\n\n(In millions, except number of shares, w(...TRUNCATED) |
q_an007
| "What does the change in dividend payout ratio between 2022 and 2023 indicate about Discover's divid(...TRUNCATED) | "The increase in dividend payout ratio from 14.9% in FY 2022 to 23.9% in FY 2023 indicates that Disc(...TRUNCATED) |
Analysis
|
77;86
|
0001393612-24-000010;0001393612-24-000010
| "Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations;(...TRUNCATED) | "Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 77: Our Board of D(...TRUNCATED) | "Our Board of Directors declared the following common stock dividends during 2023, 2022 and 2021:\n|(...TRUNCATED) | "Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 77: Our Board of D(...TRUNCATED) | "Our Board of Directors declared the following common stock dividends during 2023, 2022 and 2021:<ta(...TRUNCATED) |
q_an008
| "How Discover’s Return on Assets for 2023 reflect the company’s efficiency in utilizing its asse(...TRUNCATED) | "\nDiscover’s ROA for 2023 was approximately 2.08%, which indicates how efficiently the company us(...TRUNCATED) |
Analysis
|
85, 86
|
0001393612-24-000010
|
Item 8. Financial Statements and Supplementary Data
| "Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 85: \nDISCOVER FIN(...TRUNCATED) | "\nDISCOVER FINANCIAL SERVICES\n\n\nConsolidated Statements of Financial Condition\n\n(dollars in mi(...TRUNCATED) | "Discover Financial Services 10-K form for the fiscal year ended 2023-12-31, page 85: \nDISCOVER FIN(...TRUNCATED) | "\nDISCOVER FINANCIAL SERVICES\n\n\nConsolidated Statements of Financial Condition\n\n(dollars in mi(...TRUNCATED) |
q_an009
| "How does NVIDIA's improvement in its Quick Ratio from 2023 to 2024 reflect the company's enhanced l(...TRUNCATED) | "There are 2 ways to calculate Quick ratio:\n\nMethod 1: Calculating quick assets as Current assets (...TRUNCATED) |
Analysis
|
52
|
0001045810-24-000029
|
Item 15. Exhibit and Financial Statement Schedules
| "NVIDIA CORP 10-K form for the fiscal year ended 2024-01-28, page 52: \nNVIDIA Corporation and Subsi(...TRUNCATED) | "\nNVIDIA Corporation and Subsidiaries\n\n\nConsolidated Balance Sheets\n\n(In millions, except par (...TRUNCATED) | "NVIDIA CORP 10-K form for the fiscal year ended 2024-01-28, page 52: \nNVIDIA Corporation and Subsi(...TRUNCATED) | "\nNVIDIA Corporation and Subsidiaries\n\n\nConsolidated Balance Sheets\n\n(In millions, except par (...TRUNCATED) |
q_an010
| "How does the increase in NVIDIA's Cash Ratio from 2023 to 2024 highlight improvements in its abilit(...TRUNCATED) | "Cash Ratio is calculated using the formula: Cash Ratio = Cash & Cash Equivalents / Current Liabilit(...TRUNCATED) |
Analysis
|
52
|
0001045810-24-000029
|
Item 15. Exhibit and Financial Statement Schedules
| "NVIDIA CORP 10-K form for the fiscal year ended 2024-01-28, page 52: \nNVIDIA Corporation and Subsi(...TRUNCATED) | "\nNVIDIA Corporation and Subsidiaries\n\n\nConsolidated Balance Sheets\n\n(In millions, except par (...TRUNCATED) | "NVIDIA CORP 10-K form for the fiscal year ended 2024-01-28, page 52: \nNVIDIA Corporation and Subsi(...TRUNCATED) | "\nNVIDIA Corporation and Subsidiaries\n\n\nConsolidated Balance Sheets\n\n(In millions, except par (...TRUNCATED) |
End of preview. Expand
in Data Studio
SECQUE
SECQUE is a comprehensive benchmark for evaluating large language models (LLMs) in financial analysis tasks.
SECQUE comprises 565 expert-written questions covering SEC filings analysis across four key categories:
- comparison analysis
- ratio calculation
- risk assessment
- financial insight generation.
To assess model performance, we develop SECQUE-Judge, an evaluation mechanism leveraging multiple LLM-based judges, which demonstrates strong alignment with human evaluations. Additionally, we provide an extensive analysis of various models’ performance on our benchmark.
Results
| Model | Baseline | Financial | Baseline CoT | Financial CoT | Flipped | Avg Tokens by Model |
|---|---|---|---|---|---|---|
| GPT-4o | 0.69/0.79 | 0.62/0.71 | 0.67/0.76 | 0.63/0.73 | 0.68/0.78 | 319.84 |
| GPT-4o-mini | 0.64/0.73 | 0.38/0.47 | 0.60/0.72 | 0.56/0.65 | 0.62/0.73 | 289.76 |
| Llama-3.3-70B-Instruct | 0.65/0.75 | 0.60/0.71 | 0.63/0.74 | 0.60/0.72 | 0.62/0.74 | 341.63 |
| Qwen2.5-32B-Instruct | 0.61/0.72 | 0.49/0.58 | 0.60/0.71 | 0.55/0.67 | 0.65/0.75 | 331.34 |
| Phi-4 | 0.56/0.66 | 0.55/0.64 | 0.57/0.67 | 0.56/0.66 | 0.57/0.67 | 294.33 |
| Meta-Llama-3.1-8B-Instruct | 0.48/0.60 | 0.41/0.54 | 0.44/0.56 | 0.40/0.53 | 0.47/0.59 | 338.38 |
| Mistral-Nemo-Instruct-2407 | 0.46/0.55 | 0.32/0.42 | 0.45/0.56 | 0.44/0.55 | 0.44/0.54 | 231.52 |
| Avg Tokens by Prompt | 283.04 | 151.97 | 437.38 | 334.71 | 317.57 | 304.93 |
Citation
@inproceedings{
title = "SECQUE: A Benchmark for Evaluating Real-World Financial Analysis Capabilitiese",
author = "Ben Yoash, Noga and
Brief, Meni and
Ovadia, Oded and
Shenderovitz, Gil and
Mishaeli, Moshik and
Lemberg, Rachel and
Sheetrit, Eitam",
month = apr,
year = "2025",
url = "https://arxiv.org/pdf/2504.04596",
}
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