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Allowance for Credit Losses and Reserve for Unfunded Lending Commitments (Tables)

6 Months Ended

Jun. 30, 2025

Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract]

Allowance for Credit Losses on Financing Receivables

The table below summarizes changes in the allowance for credit losses and reserve for unfunded lending commitments by portfolio segment for the three and six months ended June 30, 2025 and 2024. Our allowance for credit losses increased by $7.6 billion to $23.9 billion as of June 30, 2025 from December 31, 2024.

Table 5.1: Allowance for Credit Losses and Reserve for Unfunded Lending Commitments Activity

						Three Months Ended June 30, 2025
(Dollars in millions)						Credit Card						Consumer Banking						Commercial Banking												Total
Allowance for credit losses:
Balance as of March 31, 2025						$	12,510					$	1,872					$	1,517											$	15,899
Charge-offs(1)						(3,590)						(612)						(81)												(4,283)
Recoveries(2)						862						352						9												1,223
Net charge-offs						(2,728)						(260)						(72)												(3,060)
Initial allowance for purchased credit deteriorated loans						2,870						0						0												2,870
Benefit from expected recoveries of charged off loans(3)						(3,305)						0						0												(3,305)
Provision for credit losses(4)						11,098						252						90												11,440
Allowance build (release) for credit losses						7,935						(8)						18												7,945
Other changes(5)						29						0						0												29
Balance as of June 30, 2025						20,474						1,864						1,535												23,873
Reserve for unfunded lending commitments:
Balance as of March 31, 2025						0						0						144												144
Provision (benefit) for losses on unfunded lending commitments						0						0						(9)												(9)
Balance as of June 30, 2025						0						0						135												135
Combined allowance and reserve as of June 30, 2025						$	20,474					$	1,864					$	1,670											$	24,008

						Six Months Ended June 30, 2025
(Dollars in millions)						Credit Card						Consumer Banking						Commercial Banking												Total
Allowance for credit losses:
Balance as of December 31, 2024						$	12,974					$	1,884					$	1,400											$	16,258
Charge-offs(1)						(6,568)						(1,288)						(119)												(7,975)
Recoveries(2)						1,441						715						23												2,179
Net charge-offs						(5,127)						(573)						(96)												(5,796)
Initial allowance for purchased credit deteriorated loans						2,870						0						0												2,870
Benefit from expected recoveries of charged off loans(3)						(3,305)						0						0												(3,305)
Provision for credit losses(4)						13,024						553						231												13,808
Allowance build (release) for credit losses						7,462						(20)						135												7,577
Other changes(5)						38						0						0												38
Balance as of June 30, 2025						20,474						1,864						1,535												23,873
Reserve for unfunded lending commitments:
Balance as of December 31, 2024						0						0						143												143
Provision (benefit) for losses on unfunded lending commitments						0						0						(8)												(8)
Balance as of June 30, 2025						0						0						135												135
Combined allowance and reserve as of June 30, 2025						$	20,474					$	1,864					$	1,670											$	24,008

						Three Months Ended June 30, 2024
(Dollars in millions)						Credit Card						Consumer Banking						Commercial Banking												Total
Allowance for credit losses:
Balance as of March 31, 2024						$	11,754					$	2,088					$	1,538											$	15,380
Charge-offs						(2,686)						(636)						(39)												(3,361)
Recoveries(2)						428						283						6												717
Net charge-offs						(2,258)						(353)						(33)												(2,644)
Provision for credit losses						3,545						330						39												3,914
Allowance build (release) for credit losses						1,287						(23)						6												1,270
Other changes(5)						(1)						0						0												(1)
Balance as of June 30, 2024						13,040						2,065						1,544												16,649
Reserve for unfunded lending commitments:
Balance as of March 31, 2024						0						0						134												134
Provision (benefit) for losses on unfunded lending commitments						0						0						(5)												(5)
Balance as of June 30, 2024						0						0						129												129
Combined allowance and reserve as of June 30, 2024						$	13,040					$	2,065					$	1,673											$	16,778

						Six Months Ended June 30, 2024
(Dollars in millions)						Credit Card						Consumer Banking						Commercial Banking												Total
Allowance for credit losses:
Balance as of December 31, 2023						$	11,709					$	2,042					$	1,545											$	15,296
Charge-offs						(5,260)						(1,296)						(78)												(6,634)
Recoveries(2)						795						563						16												1,374
Net charge-offs						(4,465)						(733)						(62)												(5,260)
Provision for credit losses						5,804						756						61												6,621
Allowance build (release) for credit losses						1,339						23						(1)												1,361
Other changes(5)						(8)						0						0												(8)
Balance as of June 30, 2024						13,040						2,065						1,544												16,649
Reserve for unfunded lending commitments:
Balance as of December 31, 2023						0						0						158												158
Provision (benefit) for losses on unfunded lending commitments						0						0						(29)												(29)
Balance as of June 30, 2024						0						0						129												129
Combined allowance and reserve as of June 30, 2024						$	13,040					$	2,065					$	1,673											$	16,778

__________

(1)Charge-offs exclude $19.4 billion of loans charged off by Discover, with expected recoveries of $3.3 billion included as a benefit to the allowance for credit losses.

(2)The amount and timing of recoveries are impacted by our collection strategies, which are based on customer behavior and risk profile and include direct customer communications, repossession of collateral, the periodic sale of charged off loans as well as additional strategies, such as litigation.

(3)Represents contractual rights to collect on recoveries of acquired Discover loans that are charged off.

(4)Amount includes the initial allowance for credit losses of $8.8 billion for non-PCD loans acquired in the Transaction.

(5)Primarily represents foreign currency translation adjustments.

Credit Quality Indicator

The tables below present our Credit Card segment by delinquency status as of June 30, 2025 and December 31, 2024.

Table 4.3: Domestic and International Credit Card Delinquency Status

												June 30, 2025																		December 31, 2024
(Dollars in millions)												Revolving Loans						Revolving Loans Converted to Term						Total						Revolving Loans						Revolving Loans Converted to Term						Total
Credit Card:
Domestic credit card:
Current												$	242,322					$	1,079					$	243,401					$	148,112					$	453					$	148,565
30-59 days												2,643						59						2,702						1,944						29						1,973
60-89 days												1,940						45						1,985						1,483						20						1,503
Greater than 90 days												4,300						93						4,393						3,549						28						3,577
Total domestic credit card												251,205						1,276						252,481						155,088						530						155,618
International card businesses:
Current												7,054						42						7,096						6,533						37						6,570
30-59 days												115						4						119						102						5						107
60-89 days												70						3						73						69						3						72
Greater than 90 days												147						5						152						135						6						141
Total international card businesses												$	7,386					$	54					$	7,440					$	6,839					$	51					$	6,890

Table 4.4: Personal Loans Delinquency Status

						June 30, 2025
						Term Loans by Vintage Year
(Dollars in millions)						2025						2024						2023						2022						2021						Prior						Total Term Loans						Revolving Loans						Revolving Loans Converted to Term						Total
Personal loans—Delinquency status:
Current						$	2,225					$	3,652					$	2,294					$	988					$	335					$	128					$	9,622					$	0					$	0					$	9,622
30-59 days						3						20						25						13						4						2						67						0						0						67
60-89 days						1						16						20						11						4						1						53						0						0						53
Greater than 90 days						1						13						17						10						3						2						46						0						0						46
Total personal loans						$	2,230					$	3,701					$	2,356					$	1,022					$	346					$	133					$	9,788					$	0					$	0					$	9,788

The table below presents loans held for investment in our Consumer Banking segment loans held for investment by credit quality indicator as of June 30, 2025 and December 31, 2024. We present our auto loan portfolio by Fair Isaac Corporation (“FICO”) scores at origination and our retail banking loan portfolio by delinquency status, which includes all past due loans, both performing and nonperforming.

Table 4.5: Consumer Banking Portfolio by Vintage Year

						June 30, 2025
						Term Loans by Vintage Year
(Dollars in millions)						2025						2024						2023						2022						2021						Prior						Total Term Loans						Revolving Loans						Revolving Loans Converted to Term						Total
Auto—At origination FICO scores:(1)
Greater than 660						$	9,274					$	14,173					$	6,668					$	6,285					$	4,022					$	1,040					$	41,462					$	0					$	0					$	41,462
621-660						3,466						4,790						2,846						2,253						1,436						517						15,308						0						0						15,308
620 or below						6,503						7,052						4,006						2,814						1,852						1,020						23,247						0						0						23,247
Total auto						19,243						26,015						13,520						11,352						7,310						2,577						80,017						0						0						80,017
Retail banking—Delinquency status:
Current						57						130						74						83						44						466						854						343						3						1,200
30-59 days						0						0						0						0						0						3						3						8						0						11
60-89 days						0						0						0						0						0						0						0						2						0						2
Greater than 90 days						0						0						0						0						0						1						1						2						0						3
Total retail banking						57						130						74						83						44						470						858						355						3						1,216
Total consumer banking						$	19,300					$	26,145					$	13,594					$	11,435					$	7,354					$	3,047					$	80,875					$	355					$	3					$	81,233

    

						December 31, 2024
						Term Loans by Vintage Year
(Dollars in millions)						2024						2023						2022						2021						2020						Prior						Total Term Loans						Revolving Loans						Revolving Loans Converted to Term						Total
Auto—At origination FICO scores:(1)
Greater than 660						$	17,057					$	8,333					$	8,194					$	5,621					$	1,482					$	394					$	41,081					$	0					$	0					$	41,081
621-660						5,584						3,492						2,906						1,986						667						235						14,870						0						0						14,870
620 or below						8,102						4,882						3,626						2,546						1,207						515						20,878						0						0						20,878
Total auto						30,743						16,707						14,726						10,153						3,356						1,144						76,829						0						0						76,829
Retail banking—Delinquency status:
Current						143						78						93						49						51						469						883						351						3						1,237
30-59 days						0						0						0						0						0						2						2						11						0						13
60-89 days						0						0						0						0						0						1						1						2						0						3
Greater than 90 days						0						0						0						0						1						7						8						1						1						10
Total retail banking						143						78						93						49						52						479						894						365						4						1,263
Total consumer banking						$	30,886					$	16,785					$	14,819					$	10,202					$	3,408					$	1,623					$	77,723					$	365					$	4					$	78,092

__________

(1)Amounts represent period-end loans held for investment in each credit score category. Auto loan credit scores generally represent average FICO scores obtained from three credit bureaus at the time of application and are not refreshed thereafter. Balances for which no credit score is available or the credit score is invalid are included in the 620 or below category.

The following table presents loans held for investment for our Commercial Banking segment by internal risk ratings as of June 30, 2025 and December 31, 2024. The internal risk rating status includes all past due loans, both performing and nonperforming.

Table 4.6: Commercial Banking Portfolio by Internal Risk Ratings

						June 30, 2025
						Term Loans by Vintage Year
(Dollars in millions)						2025						2024						2023						2022						2021						Prior						Total Term Loans						Revolving Loans						Revolving Loans Converted to Term						Total
Internal risk rating:(1)
Commercial and multifamily real estate
Noncriticized						$	1,100					$	1,694					$	2,259					$	3,500					$	1,823					$	5,208					$	15,584					$	14,715					$	49					$	30,348
Criticized performing						0						104						89						910						67						1,069						2,239						30						2						2,271
Criticized nonperforming						10						18						0						21						81						218						348						0						0						348
Total commercial and multifamily real estate						1,110						1,816						2,348						4,431						1,971						6,495						18,171						14,745						51						32,967
Commercial and industrial
Noncriticized						3,018						5,358						5,142						8,986						4,417						7,898						34,819						16,717						116						51,652
Criticized performing						5						168						340						362						623						510						2,008						921						4						2,933
Criticized nonperforming						0						15						13						255						150						233						666						137						0						803
Total commercial and industrial						3,023						5,541						5,495						9,603						5,190						8,641						37,493						17,775						120						55,388
Total commercial banking						$	4,133					$	7,357					$	7,843					$	14,034					$	7,161					$	15,136					$	55,664					$	32,520					$	171					$	88,355

						December 31, 2024
						Term Loans by Vintage Year
(Dollars in millions)						2024						2023						2022						2021						2020						Prior						Total Term Loans						Revolving Loans						Revolving Loans Converted to Term						Total
Internal risk rating:(1)
Commercial and multifamily real estate
Noncriticized						$	1,820					$	2,574					$	3,846					$	2,230					$	903					$	4,887					$	16,260					$	12,691					$	49					$	29,000
Criticized performing						71						89						1,072						35						110						922						2,299						93						2						2,394
Criticized nonperforming						23						0						46						103						86						249						507						2						0						509
Total commercial and multifamily real estate						1,914						2,663						4,964						2,368						1,099						6,058						19,066						12,786						51						31,903
Commercial and industrial
Noncriticized						5,694						6,092						9,952						5,009						2,730						6,239						35,716						15,449						266						51,431
Criticized performing						101						190						680						932						92						258						2,253						887						0						3,140
Criticized nonperforming						41						13						186						43						184						91						558						143						0						701
Total commercial and industrial						5,836						6,295						10,818						5,984						3,006						6,588						38,527						16,479						266						55,272
Total commercial banking						$	7,750					$	8,958					$	15,782					$	8,352					$	4,105					$	12,646					$	57,593					$	29,265					$	317					$	87,175

__________

(1)Criticized exposures correspond to the “Special Mention,” “Substandard” and “Doubtful” asset categories defined by bank regulatory authorities.

The table below presents gross charge-offs for loans held for investment by vintage year during the six months ended June 30, 2025.

Table 5.2: Gross Charge-Offs by Vintage Year

						Six Months Ended June 30, 2025
						Term Loans by Vintage Year
(Dollars in millions)						2025						2024						2023						2022						2021												Prior						Total Term Loans						Revolving Loans						Revolving Loans Converted to Term						Total
Credit Card
Domestic credit card						N/A						N/A						N/A						N/A						N/A												N/A						N/A						$	6,159					$	89					$	6,248
Personal loans						$	1					$	18					$	21					$	11					$	3											$	2					$	56					N/A						N/A						56
International card business						N/A						N/A						N/A						N/A						N/A												N/A						N/A						257						7						264
Total credit card						1						18						21						11						3												2						56						6,416						96						6,568
Consumer Banking
Auto						24						327						315						298						189												96						1,249						0						0						1,249
Retail banking						0						0						0						0						0												1						1						38						0						39
Total consumer banking						24						327						315						298						189												97						1,250						38						0						1,288
Commercial Banking
Commercial and multifamily real estate						0						0						0						2						0												19						21						0						0						21
Commercial and industrial						0						0						0						22						10												33						65						33						0						98
Total commercial banking						0						0						0						24						10												52						86						33						0						119
Total						$	25					$	345					$	336					$	333					$	202											$	151					$	1,392					$	6,487					$	96					$	7,975

Schedule of Loss Sharing Arrangement Impact

The table below summarizes the changes in the estimated reimbursements from these partners for the three and six months ended June 30, 2025 and 2024.

Table 5.3: Summary of Credit Card Partnership Loss Sharing Arrangements Impacts

						Three Months Ended June 30,
(Dollars in millions)						2025						2024
Estimated reimbursements from partners, beginning of period						$	1,090					$	2,075
Amounts due from partners for charged off loans						(166)						(253)
Change in estimated partner reimbursements that (increased) decreased provision for credit losses						267						(612)
Estimated reimbursements from partners, end of period						$	1,191					$	1,210

						Six Months Ended June 30,
(Dollars in millions)						2025						2024
Estimated reimbursements from partners, beginning of period						$	1,010					$	2,014
Amounts due from partners for charged off loans						(337)						(577)
Change in estimated partner reimbursements that (increased) decreased provision for credit losses						518						(227)
Estimated reimbursements from partners, end of period						$	1,191					$	1,210

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Schedule of loss sharing arrangement impact

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- Definition

Tabular disclosure of allowance for credit loss on financing receivable.

+ References

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 326
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479319/326-20-50-13

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- Definition

Tabular disclosure of financing receivables by credit quality indicator. The credit quality indicator is a statistic about the credit quality of financing receivables. Examples include, but not limited to, consumer credit risk scores, credit-rating-agency ratings, an entity's internal credit risk grades, loan-to-value ratios, collateral, collection experience and other internal metrics.

+ References

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 326
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 5
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479319/326-20-50-5

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