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Business Segments and Revenue from Contracts with Customers
 3 Months Ended
Mar. 31, 2025
Segment Reporting [Abstract]  
Business Segments and Revenue from Contracts with Customers
NOTE 13—BUSINESS SEGMENTS AND REVENUE FROM CONTRACTS WITH CUSTOMERS
Our principal operations are organized into three major business segments, which are defined primarily based on the products and services provided or the types of customers served: Credit Card, Consumer Banking and Commercial Banking. The operations of acquired businesses have been integrated into or managed as a part of our existing business segments. Certain activities that are not part of a business segment are included in the Other category, such as the management of our corporate investment portfolio and asset/liability positions performed by our centralized Corporate Treasury group and any residual tax expense or benefit beyond what is assessed to our business segments in order to arrive at the consolidated effective tax rate. The Other category also includes unallocated corporate expenses that do not directly support the operations of the business segments or for which the business segments are not considered financially accountable in evaluating their performance, such as certain restructuring charges and integration expenses related to the Transaction.
Basis of Presentation
We report the results of each of our business segments on a continuing operations basis. The results of our individual businesses reflect the manner in which management evaluates performance and makes decisions about funding our operations and allocating resources. The Chief Operating Decision Maker (“CODM”) for each of our segments is the Chief Executive Officer (“CEO”). The CODM uses the segments’ income (loss) from continuing operations after tax to assess segment performance and decide how to allocate resources.
Business Segment Reporting Methodology
The results of our business segments are intended to present each segment as if it were a stand-alone business. Our internal management and reporting process used to derive our segment results employs various allocation methodologies, including funds transfer pricing, to assign certain balance sheet assets, deposits and other liabilities and their related revenues and expenses directly or indirectly attributable to each business segment. Marketing expenses are included within non-interest expense and can be directly incurred by a business segment or indirectly incurred and allocated. Total marketing expense was $1.2 billion and $1.0 billion for the three months ended March 31, 2025 and 2024, respectively. Credit Card marketing expense was $1.0 billion and $884 million for the three months ended March 31, 2025 and 2024, respectively. Our funds transfer pricing process managed by our centralized Corporate Treasury group provides a funds credit for sources of funds, such as deposits generated by our Consumer Banking and Commercial Banking businesses, and a charge for the use of funds by each business segment. The allocation is unique to each business segment and acquired business and is based on the composition of assets and liabilities. The funds transfer pricing process considers the interest rate and liquidity risk characteristics of assets and liabilities and off-balance sheet products. Periodically the methodology and assumptions utilized in the funds transfer pricing process are adjusted to reflect economic conditions and other factors, which may impact the allocation of net interest income to the business segments. Due to the integrated nature of our business segments, estimates and judgments have been made in allocating certain revenue and expense items. Transactions between segments are based on specific criteria or approximate market rates. We regularly assess the assumptions, methodologies and reporting classifications used for segment reporting, which may result in the implementation of refinements or changes in future periods. We provide additional information on the allocation methodologies used to derive our business segment results in “Part II—Item 8. Financial Statements and Supplementary Data—Note 18—Business Segments and Revenue from Contracts with Customers” in our 2024 Form 10-K.
Segment Results and Reconciliation
We may periodically change our business segments or reclassify business segment results based on modifications to our management reporting methodologies or changes in organizational alignment. The following table presents our business segment results for the three months ended March 31, 2025 and 2024, selected balance sheet data as of March 31, 2025 and 2024, and a reconciliation of our total business segment results to our reported consolidated income from continuing operations, loans held for investment and deposits.
Table 13.1: Segment Results and Reconciliation
Three Months Ended March 31, 2025
(Dollars in millions)Credit CardConsumer Banking
Commercial Banking(1)
Other(1)
Consolidated Total
Net interest income (loss)$5,654 $1,943 $572 $(156)$8,013 
Non-interest income (loss)1,511 183 312 (19)1,987 
Total net revenue (loss)(2)
7,165 2,126 884 (175)10,000 
Provision (benefit) for credit losses1,926 301 142 0 2,369 
Non-interest expense3,638 1,581 486 197 5,902 
Income (loss) from continuing operations before income taxes1,601 244 256 (372)1,729 
Income tax provision (benefit)382 58 61 (176)325 
Income (loss) from continuing operations, net of tax$1,219 $186 $195 $(196)$1,404 
Loans held for investment$157,189 $78,896 $87,513 $0 $323,598 
Deposits0 324,920 29,984 12,560 367,464 
                                                                                                                                                                                                                                                                                                                                                                                                                                    
Three Months Ended March 31, 2024
(Dollars in millions)Credit CardConsumer Banking
Commercial Banking(1)
Other(1)
Consolidated Total
Net interest income (loss)$5,272 $2,011 $599 $(394)$7,488 
Non-interest income (loss)1,476 159 281 (2)1,914 
Total net revenue (loss)(2)
6,748 2,170 880 (396)9,402 
Provision (benefit) for credit losses2,259 426 (2)0 2,683 
Non-interest expense3,229 1,246 515 147 5,137 
Income (loss) from continuing operations before income taxes1,260 498 367 (543)1,582 
Income tax provision (benefit)299 117 87 (201)302 
Income (loss) from continuing operations, net of tax$961 $381 $280 $(342)$1,280 
Loans held for investment$150,594 $75,099 $89,461 $0 $315,154 
Deposits0 300,806 31,082 19,081 350,969 
_________
(1)Some of our commercial investments generate tax-exempt income, tax credits or other tax benefits. Accordingly, we present our Commercial Banking revenue and yields on a taxable-equivalent basis, calculated using the federal statutory tax rate of 21% and state taxes where applicable, with offsetting reductions to the Other category.
(2)Total net revenue was reduced by $705 million and $630 million in the first quarters of 2025 and 2024, respectively, for credit card finance charges and fees charged off as uncollectible.
Revenue from Contracts with Customers
The majority of our revenue from contracts with customers consists of interchange fees, service charges and other customer-related fees, and other contract revenue. Interchange fees are primarily from our Credit Card business and are recognized upon settlement with the interchange networks, net of rewards earned by customers. Service charges and other customer-related fees within our Consumer Banking business are primarily related to fees earned on consumer deposit accounts for account maintenance and various transaction-based services such as automated teller machine (“ATM”) usage. Service charges and other customer-related fees within our Commercial Banking business are mostly related to fees earned on treasury management and capital markets services. Other contract revenue in our Credit Card business consists primarily of revenue from our merchant relationships. Other contract revenue in our Consumer Banking business consists primarily of revenue earned from services provided to auto industry participants. Revenue from contracts with customers is included in non-interest income in our consolidated statements of income.
The following table presents revenue from contracts with customers and a reconciliation to non-interest income by business segment for the three months ended March 31, 2025 and 2024.
Table 13.2: Revenue from Contracts with Customers and Reconciliation to Segment Results
Three Months Ended March 31, 2025
(Dollars in millions)Credit CardConsumer Banking
Commercial Banking(1)
Other(1)
Consolidated Total
Contract revenue:
Interchange fees, net(2)
$1,085 $115 $23 $0 $1,223 
Service charges and other customer-related fees0 20 85 0 105 
Other111 49 1 0 161 
Total contract revenue
1,196 184 109 0 1,489 
Revenue (reduction) from other sources315 (1)203 (19)498 
Total non-interest income (loss)$1,511 $183 $312 $(19)$1,987 
Three Months Ended March 31, 2024
(Dollars in millions)Credit CardConsumer Banking
Commercial Banking(1)
Other(1)
Consolidated Total
Contract revenue:
Interchange fees, net(2)
$1,020 $98 $27 $0 $1,145 
Service charges and other customer-related fees0 4 74 0 78 
Other121 44 2 0 167 
Total contract revenue1,141 146 103 0 1,390 
Revenue (reduction) from other sources335 13 178 (2)524 
Total non-interest income (loss)$1,476 $159 $281 $(2)$1,914 
__________
(1)Some of our commercial investments generate tax-exempt income, tax credits or other tax benefits. Accordingly, we present our Commercial Banking revenue and yields on a taxable-equivalent basis, calculated using the federal statutory tax rate of 21% and state taxes where applicable, with offsetting reductions to the Other category.
(2)Interchange fees are presented net of customer reward expenses.