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Business Segments and Revenue from Contracts with Customers
 9 Months Ended
Sep. 30, 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, integration expenses, and certain liabilities incurred by Discover ahead of the Transaction and not attributable to ongoing operations.
The assets and liabilities related to the acquired Home Loan business are presented separately within assets of discontinued operations and liabilities of discontinued operations on the consolidated balance sheets, and the operating results have been reflected as discontinued operations for all periods presented. As such, the related results have been excluded from continuing operations and business segment results.
•Credit Card: Consists of our domestic consumer card lending, personal loans, domestic small business card lending and international card businesses in the U.K. and Canada.
•Consumer Banking: Consists of our deposit gathering and lending activities for consumers and small businesses, national auto lending and services offered by the Global Payment Network.
•Commercial Banking: Consists of our lending, deposit gathering, capital markets and treasury management services to commercial real estate and commercial and industrial customers. Our customers typically include companies with annual revenues between $20 million and $2 billion.
•Other category: Includes the residual impact of the allocation of our centralized Corporate Treasury group activities, such as management of our corporate investment portfolio, asset/liability management and oversight of our funds transfer pricing process, to our business segments. Accordingly, net gains and losses on our investment securities portfolio and certain trading activities are included in the Other category. 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. 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 $1.4 billion and $4.0 billion for the three and nine months ended September 30, 2025, respectively, and $1.1 billion and $3.2 billion for the three and nine months ended September 30, 2024, respectively. Credit Card marketing expense was $1.2 billion and $3.4 billion for the three and nine months ended September 30, 2025, respectively, and $964 million and $2.8 billion for the three and nine months ended September 30, 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. The allocation is unique to each 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 businesses. 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 and nine months ended September 30, 2025 and 2024, selected balance sheet data as of September 30, 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 September 30, 2025
(Dollars in millions)Credit CardConsumer Banking
Commercial Banking(1)
Other(1)
Consolidated Total
Net interest income$9,396 $2,357 $586 $65 $12,404 
Non-interest income (loss)2,211 475 318 (49)2,955 
Total net revenue(2)
11,607 2,832 904 16 15,359 
Provision for credit losses
2,364 340 9 1 2,714 
Non-interest expense5,409 1,941 520 393 8,263 
Income (loss) from continuing operations before income taxes3,834 551 375 (378)4,382 
Income tax provision
914 131 89 55 1,189 
Income (loss) from continuing operations, net of tax$2,920 $420 $286 $(433)$3,193 
Loans held for investment$271,037 $83,230 $88,892 $0 $443,159 
Deposits0 416,765 29,920 22,100 468,785 
Nine Months Ended September 30, 2025
(Dollars in millions)Credit CardConsumer Banking
Commercial Banking(1)
Other(1)
Consolidated Total
Net interest income (loss)$22,343 $6,462 $1,760 $(153)$30,412 
Non-interest income (loss)5,524 1,052 965 (102)7,439 
Total net revenue (loss)(2)
27,867 7,514 2,725 (255)37,851 
Provision for credit losses
15,388 893 232 0 16,513 
Non-interest expense13,494 5,235 1,495 932 21,156 
Income (loss) from continuing operations before income taxes(1,015)1,386 998 (1,187)182 
Income tax provision (benefit)(237)330 237 (482)(152)
Income (loss) from continuing operations, net of tax$(778)$1,056 $761 $(705)$334 
Loans held for investment$271,037 $83,230 $88,892 $0 $443,159 
Deposits0 416,765 29,920 22,100 468,785 
Three Months Ended September 30, 2024
(Dollars in millions)Credit CardConsumer Banking
Commercial Banking(1)
Other(1)
Consolidated Total
Net interest income (loss)$5,743 $2,028 $596 $(291)$8,076 
Non-interest income (loss)
1,509 182 292 (45)1,938 
Total net revenue (loss)(2)
7,252 2,210 888 (336)10,014 
Provision (benefit) for credit losses2,084 351 48 (1)2,482 
Non-interest expense3,367 1,331 495 121 5,314 
Income (loss) from continuing operations before income taxes1,801 528 345 (456)2,218 
Income tax provision (benefit)427 125 82 (193)441 
Income (loss) from continuing operations, net of tax$1,374 $403 $263 $(263)$1,777 
Loans held for investment$156,651 $76,758 $86,834 $0 $320,243 
Deposits0 309,569 30,598 13,464 353,631 
                                                                                                                                                                                                                                                                                                                                                                                                                                
Nine Months Ended September 30, 2024
(Dollars in millions)Credit CardConsumer Banking
Commercial Banking(1)
Other(1)
Consolidated Total
Net interest income (loss)$16,309 $6,064 $1,804 $(1,067)$23,110 
Non-interest income (loss)
4,491 513 844 (36)5,812 
Total net revenue (loss)(2)
20,800 6,577 2,648 (1,103)28,922 
Provision (benefit) for credit losses
7,888 1,107 80 (1)9,074 
Non-interest expense9,730 3,827 1,493 347 15,397 
Income (loss) from continuing operations before income taxes3,182 1,643 1,075 (1,449)4,451 
Income tax provision (benefit)756 388 254 (601)797 
Income (loss) from continuing operations, net of tax$2,426 $1,255 $821 $(848)$3,654 
Loans held for investment$156,651 $76,758 $86,834 $0 $320,243 
Deposits0 309,569 30,598 13,464 353,631 
_________
(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 $869 million and $2.4 billion in the three and nine months ended September 30, 2025, respectively, and $624 million and $1.9 billion in the three and nine months ended September 30, 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 discount and interchange fees, service charges and other customer-related fees, and other contract revenue. Discount and 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 ATM usage, transaction processing services on the PULSE Network, as well as various participation and membership fees. 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 and nine months ended September 30, 2025 and 2024.
Table 13.2: Revenue from Contracts with Customers and Reconciliation to Segment Results
Three Months Ended September 30, 2025
(Dollars in millions)Credit CardConsumer Banking
Commercial Banking(1)
Other(1)
Consolidated Total
Contract revenue:
Discount and interchange fees, net(2)
$1,521 $268 $23 $0 $1,812 
Service charges and other customer-related fees37 144 111 0 292 
Other126 52 1 0 179 
Total contract revenue
1,684 464 135 0 2,283 
Revenue (reduction) from other sources527 11 183 (49)672 
Total non-interest income (loss)$2,211 $475 $318 $(49)$2,955 
Nine Months Ended September 30, 2025
(Dollars in millions)Credit CardConsumer Banking
Commercial Banking(1)
Other(1)
Consolidated Total
Contract revenue:
Discount and interchange fees, net(2)
$3,813 $631 $69 $0 $4,513 
Service charges and other customer-related fees57 242 278 1 578 
Other362 154 9 0 525 
Total contract revenue
4,232 1,027 356 1 5,616 
Revenue (reduction) from other sources1,292 25 609 (103)1,823 
Total non-interest income (loss)$5,524 $1,052 $965 $(102)$7,439 
Three Months Ended September 30, 2024
(Dollars in millions)Credit CardConsumer Banking
Commercial Banking(1)
Other(1)
Consolidated Total
Contract revenue:
Discount and interchange fees, net(2)
$1,086 $113 $28 $1 $1,228 
Service charges and other customer-related fees0 23 92 0 115 
Other67 36 1 0 104 
Total contract revenue1,153 172 121 1 1,447 
Revenue (reduction) from other sources356 10 171 (46)491 
Total non-interest income (loss)$1,509 $182 $292 $(45)$1,938 
Nine Months Ended September 30, 2024
(Dollars in millions)Credit CardConsumer Banking
Commercial Banking(1)
Other(1)
Consolidated Total
Contract revenue:
Discount and interchange fees, net(2)
$3,222 $318 $81 $1 $3,622 
Service charges and other customer-related fees0 66 239 0 305 
Other271 101 6 0 378 
Total contract revenue3,493 485 326 1 4,305 
Revenue (reduction) from other sources998 28 518 (37)1,507 
Total non-interest income (loss)$4,491 $513 $844 $(36)$5,812 
__________
(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)Discount and interchange fees are presented net of customer reward expenses.