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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2024
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                    to 
Commission File Number 001-33378
DISCOVER FINANCIAL SERVICES
(Exact name of registrant as specified in its charter) 
Delaware
(State or other jurisdiction of incorporation or organization)
36-2517428
(I.R.S. Employer Identification No.)
2500 Lake Cook Road, Riverwoods, Illinois 60015
(Address of principal executive offices, including zip code)
(224) 405-0900
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act
Title of each classTrading symbol(s)Name of each exchange on which registered
Common Stock, par value $0.01 per shareDFSNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).     Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer
Accelerated Filer
Non-accelerated Filer
Smaller Reporting Company
Emerging Growth Company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  
As of April 26, 2024, there were 250,599,037 shares of the registrant's Common Stock, par value $0.01 per share, outstanding.



DISCOVER FINANCIAL SERVICES
Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2024
Except as otherwise indicated or unless the context otherwise requires, "Discover Financial Services," "Discover," "DFS," "we," "us," "our," and "the Company" refer to Discover Financial Services and its subsidiaries. See Glossary of Acronyms, located after Part I — Item 4, for terms and abbreviations used throughout the quarterly report.
We own or have rights to use the trademarks, trade names and service marks that we use in conjunction with the operation of our business, including, but not limited to Discover®, PULSE®, Cashback Bonus®, Discover Cashback Checking®, Discover it®, Freeze it®, College Covered® and Diners Club International®. All other trademarks, trade names and service marks included in this quarterly report on Form 10-Q are the property of their respective owners.


Part I.    FINANCIAL INFORMATION
Item 1.    Financial Statements
DISCOVER FINANCIAL SERVICES
Condensed Consolidated Statements of Financial Condition (unaudited)
(dollars in millions, except for share amounts)
March 31,
2024
December 31,
2023
Assets
Cash and cash equivalents$14,004 $11,685 
Restricted cash439 43 
Investment securities (includes available-for-sale securities of $13,261 and $13,402 reported at fair value with associated amortized cost of $13,439 and $13,451 at March 31, 2024 and December 31, 2023, respectively)
13,522 13,655 
Loan receivables
Loan receivables126,555 128,409 
Allowance for credit losses(9,258)(9,283)
Net loan receivables117,297 119,126 
Premises and equipment, net1,107 1,091 
Goodwill255 255 
Other assets6,065 5,667 
Total assets$152,689 $151,522 
Liabilities and Stockholders' Equity
Liabilities
Deposits
Interest-bearing deposit accounts$108,930 $107,493 
Non-interest bearing deposit accounts1,500 1,438 
Total deposits110,430 108,931 
Short-term borrowings 750 
Long-term borrowings20,475 20,581 
Accrued expenses and other liabilities7,064 6,432 
Total liabilities137,969 136,694 
Commitments, contingencies and guarantees (Notes 9, 12 and 13)
Stockholders' Equity
Common stock, par value $0.01 per share; 2,000,000,000 shares authorized; 571,594,531 and 570,837,720 shares issued at March 31, 2024 and December 31, 2023, respectively
6 6 
Preferred stock, par value $0.01 per share; 200,000,000 shares authorized; 10,700 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively
1,056 1,056 
Additional paid-in capital4,578 4,553 
Retained earnings30,511 30,448 
Accumulated other comprehensive loss(393)(225)
Treasury stock, at cost; 320,996,125 and 320,734,860 shares at March 31, 2024 and December 31, 2023, respectively
(21,038)(21,010)
Total stockholders' equity14,720 14,828 
Total liabilities and stockholders' equity$152,689 $151,522 
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 condensed 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.
March 31,
2024
December 31,
2023
Assets
Restricted cash$439 $43 
Loan receivables$29,192 $30,590 
Allowance for credit losses allocated to securitized loan receivables$(1,323)$(1,347)
Other assets$4 $3 
Liabilities
Short- and long-term borrowings$10,933 $11,743 
Accrued expenses and other liabilities$17 $19 
See Notes to the Condensed Consolidated Financial Statements.
1

DISCOVER FINANCIAL SERVICES
Condensed Consolidated Statements of Income (unaudited)
(dollars in millions, except for share amounts)
 For the Three Months Ended March 31,
 20242023
Interest income
Credit card loans$3,938 $3,321 
Other loans712 564 
Investment securities124 101 
Other interest income174 91 
Total interest income4,948 4,077 
Interest expense
Deposits1,210 756 
Short-term borrowings6  
Long-term borrowings245 189 
Total interest expense1,461 945 
Net interest income3,487 3,132 
Provision for credit losses1,497 1,102 
Net interest income after provision for credit losses1,990 2,030 
Other income
Discount and interchange revenue, net371 330 
Protection products revenue42 43 
Loan fee income200 166 
Transaction processing revenue87 67 
Gains (losses) on equity investments (18)
Other income23 22 
Total other income723 610 
Other expense
Employee compensation and benefits671 625 
Marketing and business development250 241 
Information processing and communications163 139 
Professional fees292 232 
Premises and equipment20 22 
Other expense913 124 
Total other expense2,309 1,383 
Income before income taxes404 1,257 
Income tax expense96 289 
Net income$308 $968 
Net income allocated to common stockholders$274 $931 
Basic earnings per common share$1.10 $3.55 
Diluted earnings per common share$1.10 $3.55 
See Notes to the Condensed Consolidated Financial Statements.
2

DISCOVER FINANCIAL SERVICES
Condensed Consolidated Statements of Comprehensive Income (unaudited)
(dollars in millions)
 For the Three Months Ended March 31,
 20242023
Net income$308 $968 
Other comprehensive (loss) income, net of tax
Unrealized (losses) gains on available-for-sale investment securities, net of tax(97)92 
Unrealized (losses) gains on cash flow hedges, net of tax(71)12 
Other comprehensive (loss) income(168)104 
Comprehensive income$140 $1,072 

See Notes to the Condensed Consolidated Financial Statements.
3

DISCOVER FINANCIAL SERVICES
Condensed Consolidated Statements of Changes in Stockholders' Equity (unaudited)
(dollars in millions, shares in thousands)
 Additional
Paid-in
Capital
Retained
Earnings
Accumulated Other Comprehensive LossTreasury
Stock
Total
Stockholders'
Equity
Preferred StockCommon Stock
 SharesAmountSharesAmount
For the Three Months Ended March 31, 2023
Balance at December 31, 202211 $1,056 569,689 $6 $4,468 $28,207 $(339)$(19,054)$14,344 
Cumulative effect of ASU No. 2022-02 adoption— — — — — 52 — — 52 
Net income— — — — — 968 — — 968 
Other comprehensive income— — — — — — 104 — 104 
Purchases of treasury stock— — — — — — — (1,243)(1,243)
Common stock issued under employee benefit plans— — 29  3 — — — 3 
Common stock issued and stock-based compensation expense— — 742  22 — — — 22 
Dividends — common stock ($0.60 per share)
— — — — — (159)— — (159)
Dividends — Series C preferred stock ($2,750 per share)
— — — — — (16)— — (16)
Dividends — Series D preferred stock ($3,062.50 per share)
— — — — — (15)— — (15)
Balance at March 31, 202311 $1,056 570,460 $6 $4,493 $29,037 $(235)$(20,297)$14,060 
For the Three Months Ended March 31, 2024
Balance at December 31, 202311 $1,056 570,838 $6 $4,553 $30,448 $(225)$(21,010)$14,828 
Cumulative effect of ASU No. 2023-02 adoption— — — — — (37)— — (37)
Net income— — — — — 308 — — 308 
Other comprehensive loss — — — — — — (168)— (168)
Purchases of treasury stock— — — — — — — (28)(28)
Common stock issued under employee benefit plans— — 25  3 — — — 3 
Common stock issued and stock-based compensation expense— — 732  22 — — — 22 
Dividends — common stock ($0.70 per share)
— — — — — (177)— — (177)
Dividends — Series C preferred stock ($2,750 per share)
— — — — — (16)— — (16)
Dividends — Series D preferred stock (3,062.50 per share)
— — — — — (15)— — (15)
Balance at March 31, 202411 $1,056 571,595 $6 $4,578 $30,511 $(393)$(21,038)$14,720 
See Notes to the Condensed Consolidated Financial Statements.
4

DISCOVER FINANCIAL SERVICES
Condensed Consolidated Statements of Cash Flows (unaudited)
(dollars in millions)
 For the Three Months Ended March 31,
 20242023
Cash flows provided by operating activities
Net income$308 $968 
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses1,497 1,102 
Deferred income taxes(199)(115)
Depreciation and amortization96 129 
Amortization of deferred revenues(123)(105)
Net losses on investments and other assets16 30 
Other, net29 25 
Changes in assets and liabilities:
(Increase) decrease in other assets(246)133 
Increase (decrease) in accrued expenses and other liabilities465 (376)
Net cash provided by operating activities1,843 1,791 
Cash flows provided by (used for) investing activities
Maturities of available-for-sale investment securities522 402 
Purchases of available-for-sale investment securities(475)(285)
Maturities of held-to-maturity investment securities4 3 
Purchases of held-to-maturity investment securities(12)(13)
Net change in principal on loans originated for investment398 (1,245)
Proceeds from the sale of other investments1 1 
Purchases of other investments(9)(16)
Purchases of premises and equipment(71)(76)
Net cash provided by (used for) investing activities358 (1,229)
Cash flows provided by (used for) financing activities
Net change in short-term borrowings(750) 
Net change in deposits1,488 4,088 
Maturities and repayment of securitized debt(4)(1,180)
Maturities and repayments of other long-term borrowings(1)(800)
Proceeds from issuance of common stock3 3 
Purchases of treasury stock(28)(1,232)
Dividends paid on common and preferred stock(194)(175)
Net cash provided by financing activities514 704 
Net increase in cash, cash equivalents and restricted cash2,715 1,266 
Cash, cash equivalents and restricted cash, at the beginning of the period11,728 8,897 
Cash, cash equivalents and restricted cash, at the end of the period$14,443 $10,163 
Reconciliation of cash, cash equivalents and restricted cash
Cash and cash equivalents$14,004 $10,130 
Restricted cash439 33 
Cash, cash equivalents and restricted cash, at the end of the period$14,443 $10,163 
See Notes to the Condensed Consolidated Financial Statements.
5

Notes to the Condensed Consolidated Financial Statements
(unaudited)
1.    Background and Basis of Presentation
Description of Business
Discover Financial Services ("DFS" or the "Company") is a digital banking and payment services company. The Company is a bank holding company under the Bank Holding Company Act of 1956 and a financial holding company under the Gramm-Leach-Bliley Act. Therefore, the Company is subject to oversight, regulation and examination by the Board of Governors of the Federal Reserve System (the "Federal Reserve"). The Company provides digital banking products and services and payment services through its subsidiaries. The Company offers its customers credit card loans, personal loans, home loans and deposit products. The Company also operates the Discover Network, the PULSE network ("PULSE") and Diners Club International ("Diners Club"), collectively known as the Discover Global Network. The Discover Network processes transactions for Discover-branded credit and debit cards and provides payment transaction processing and settlement services. PULSE operates an electronic funds transfer network, providing financial institutions issuing debit cards on the PULSE network with access to automated teller machines ("ATMs") domestically and internationally, as well as merchant acceptance throughout the United States of America ("U.S.") for debit card transactions. Diners Club is a global payments network of licensees, which are generally financial institutions, that issue Diners Club branded credit and charge cards and/or provide card acceptance services.
The Company manages its business activities in two segments, Digital Banking and Payment Services, based on the products and services provided. See Note 16: Segment Disclosures for a detailed description of each segment's operations and the allocation conventions used in business segment reporting.
In November 2023, the Company announced its Board of Directors had authorized management to explore the sale of its private student loan portfolio. The Company stopped accepting new applications for private student loans February 1, 2024. See "Business — Operating Model — Digital Banking — Private Student Loans" in the Company's annual report on Form 10-K for the year ended December 31, 2023.
Pending Merger with Capital One Financial Corporation
On February 19, 2024, Discover and Capital One Financial Corporation ("Capital One") jointly announced that they entered into an agreement and plan of merger (the "Merger Agreement"), under which the companies will combine in an all-stock merger, which valued Discover at $35.3 billion based on the price of Capital One common stock on the last trading day before the public announcement of the merger. Under the terms of the Merger Agreement, holders of Discover common stock will receive 1.0192 shares of Capital One common stock for each share of Discover common stock they own. Capital One shareholders will own approximately 60% of the combined company and Discover shareholders will own approximately 40% of the combined company. The Merger Agreement contains customary representations and warranties, covenants and closing conditions. The Board of Directors of the combined company will have fifteen directors, consisting of twelve Capital One Board members and three Discover Board members to be named at a later date. For more information, see Discover’s Current Report on Form 8-K filed with the Securities and Exchange Commission (the "SEC") on February 22, 2024.
Completion of the proposed merger remains subject to approval by the Federal Reserve Board and the Office of the Comptroller of the Currency and other customary closing conditions, including the approval of both companies’ shareholders.
Basis of Presentation
The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. ("GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete consolidated financial statements. In the opinion of management, the financial statements reflect all adjustments necessary for the fair presentation of results for the interim period. All such adjustments are of a normal, recurring nature. The preparation of financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and related disclosures. These estimates are based on information available as of the date of the condensed consolidated financial statements. The Company believes that the estimates used in the preparation of the condensed consolidated financial statements are reasonable. Actual results could differ from these estimates. These interim condensed consolidated financial statements should be read in conjunction with the Company's 2023 audited consolidated financial statements filed with the Company's annual report on Form 10-K for
6

the year ended December 31, 2023. The condensed consolidated financial statements for the three months ended March 31, 2023 have been restated as disclosed in the Company's report on Form 10-Q for the second quarter 2023.
Recently Issued Accounting Pronouncements (Not Yet Adopted)
In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This ASU enhances the transparency of income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid. Entities are required to disaggregate the rate reconciliation (including percentages and reported amounts) by certain specified categories with additional disaggregation by nature and/or jurisdiction for items over a designated threshold. Income taxes paid (net of refunds received) must be disaggregated by federal, state and foreign taxes and separately by individual jurisdiction in which that amount for a particular jurisdiction is equal to or greater than five percent of total income taxes paid (net of refunds received). This annual disclosure guidance is effective for the Company for the year ending December 31, 2025 and can be adopted on either a prospective or retrospective basis. The Company expects to adopt this standard on a prospective basis. While the ASU implements further income tax disclosure requirements, it does not change how an entity determines its income tax obligation, and it will have no impact on the Company’s consolidated financial condition, results of operations or cash flows.
In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The ASU requires disclosure of additional segment level information, particularly regarding significant segment expenses. Entities must disclose significant expense categories and amounts that are regularly provided to the chief operating decision maker ("CODM") and included in the reported segment measure of profit or loss. Other segment items must also be reported, which are those items that make up the difference between segment revenues less significant segment expenses and reported segment profit or loss. Additionally, entities must disclose the identity of the CODM and how they use the reported measures of segment profit or loss for decision making and assessing segment performance. The guidance is effective for the Company for the year ending December 31, 2024, and interim periods thereafter and requires retrospective application. While the ASU implements further segment disclosure requirements, it does not change how an entity identifies its operating or reportable segments, and it will have no impact on the Company’s consolidated financial condition, results of operations or cash flows.
Recently Adopted Accounting Pronouncement
In March 2023, the FASB issued ASU No. 2023-02, Investments—Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method. The ASU expanded the use of the proportional amortization method of accounting for tax credit investments. Under the proportional amortization method, the cost of the investment is amortized in proportion to the income tax credits and other income tax benefits received, the net effect of which is recognized as a component of income tax expense on the consolidated statements of income. Previously, the method was limited to Low Income Housing Tax Credit investments, however the Company historically did not elect to use this method. Under the amended guidance, use of proportional amortization is available to any qualifying tax credit investments, which now also includes New Markets Tax Credit investments among others. The ASU was effective for the Company on January 1, 2024. All of the Company's tax credit investments as of January 1, 2024 qualified and are now being accounted for under the proportional amortization method. Upon adoption, the Company recorded a $37 million charge to the opening balance of retained earnings to reflect the cumulative effect of adopting the proportional amortization method on a modified-retrospective basis for the Company's existing tax credit investments. The offset to retained earnings was a decrease of $23 million to the book value of the investments and a $14 million decrease to the related deferred tax asset position. Recognition of proportional amortization as a component of income tax expense rather than pre-tax income will result in an increase in the Company's effective tax rate.
7

2.    Investments
The Company's investment securities consist of the following (dollars in millions):
March 31,
2024
December 31,
2023
U.S. Treasury(1) and U.S. GSE(2) securities
$12,822 $12,937 
Residential mortgage-backed securities - Agency(3)
700 718 
Total investment securities$13,522 $13,655 
(1)Includes $377 million and $320 million of U.S. Treasury securities pledged as swap collateral as of March 31, 2024 and December 31, 2023, respectively.
(2)Consists of securities issued by the Federal Home Loan Bank ("FHLB").
(3)Primarily consists of securities issued by Fannie Mae, Freddie Mac, or Ginnie Mae.
The amortized cost, gross unrealized gains and losses and fair value of available-for-sale and held-to-maturity investment securities are as follows (dollars in millions):
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair Value
At March 31, 2024
Available-for-Sale Investment Securities(1)
U.S. Treasury and U.S. GSE securities$12,981 $10 $(169)$12,822 
Residential mortgage-backed securities - Agency458  (19)439 
Total available-for-sale investment securities$13,439 $10 $(188)$13,261 
Held-to-Maturity Investment Securities(2)
Residential mortgage-backed securities - Agency(3)
$261 $ $(23)$238 
Total held-to-maturity investment securities$261 $ $(23)$238 
At December 31, 2023
Available-for-Sale Investment Securities(1)
U.S. Treasury and U.S. GSE securities$12,971 $52 $(86)$12,937 
Residential mortgage-backed securities - Agency480  (15)465 
Total available-for-sale investment securities$13,451 $52 $(101)$13,402 
Held-to-Maturity Investment Securities(2)
Residential mortgage-backed securities - Agency(3)
$253 $ $(19)$234 
Total held-to-maturity investment securities$253 $ $(19)$234 
(1)Available-for-sale investment securities are reported at fair value.
(2)Held-to-maturity investment securities are reported at amortized cost.
(3)Amounts represent residential mortgage-backed securities ("RMBS") that were classified as held-to-maturity as they were entered into as a part of the Company's community reinvestment initiatives.
The Company primarily invests in U.S. Treasury obligations and securities issued by a U.S. government agency ("Agency") or government-sponsored enterprise ("U.S. GSE"), which have long histories with no credit losses and are explicitly or implicitly guaranteed by the U.S. federal government. Therefore, management has concluded that there is no expectation of non-payment on its investment securities and does not record an allowance for credit losses on these investments. In addition, the Company does not have the intent to sell any available-for-sale securities in an unrealized loss position and does not believe it is more likely than not that it will be required to sell any such security before recovery of its amortized cost basis.
8

The following table provides information about available-for-sale investment securities with aggregate gross unrealized losses and the length of time that individual investment securities have been in a continuous unrealized loss position (dollars in millions):
 Number of Securities in a Loss PositionLess than 12 monthsMore than 12 months
Fair
Value
Unrealized
Losses
Fair
Value
Unrealized
Losses
At March 31, 2024
Available-for-Sale Investment Securities
U.S. Treasury and U.S. GSE securities186 $7,701 $(97)$3,532 $(72)
Residential mortgage-backed securities - Agency31 $ $ $439 $(19)
At December 31, 2023
Available-for-Sale Investment Securities
U.S. Treasury and U.S. GSE securities105 $3,513 $(13)$3,978 $(73)
Residential mortgage-backed securities - Agency31 $ $ $465 $(15)
There were no proceeds from sales or recognized gains or losses on available-for-sale securities during the three months ended March 31, 2024 and 2023. See Note 8: Accumulated Other Comprehensive Income for unrealized gains and losses on available-for-sale securities during the three months ended March 31, 2024 and 2023.
Maturities of available-for-sale debt securities and held-to-maturity debt securities are provided in the following table (dollars in millions):
At March 31, 2024One Year
or
Less
After One
Year
Through
Five Years
After Five
Years
Through
Ten Years
After Ten
Years
Total
Available-for-Sale Investment Securities — Amortized Cost
U.S. Treasury and U.S. GSE securities$2,005 $10,552 $424 $ $12,981 
Residential mortgage-backed securities - Agency(1)
 65 24 369 458 
Total available-for-sale investment securities$2,005 $10,617 $448 $369 $13,439 
Held-to-Maturity Investment Securities — Amortized Cost
Residential mortgage-backed securities - Agency(1)
$ $ $ $261 $261 
Total held-to-maturity investment securities$ $ $ $261 $261 
Available-for-Sale Investment Securities — Fair Values
U.S. Treasury and U.S. GSE securities$1,971 $10,428 $423 $ $12,822 
Residential mortgage-backed securities - Agency(1)
 63 23 353 439 
Total available-for-sale investment securities$1,971 $10,491 $446 $353 $13,261 
Held-to-Maturity Investment Securities — Fair Values
Residential mortgage-backed securities - Agency(1)
$ $ $ $238 $238 
Total held-to-maturity investment securities$ $ $ $238 $238 
(1)Maturities of RMBS are reflective of the contractual maturities of the investment.
Other Investments
As a part of the Company’s community reinvestment initiatives, the Company has made equity investments in certain limited partnerships and limited liability companies that finance the construction and rehabilitation of affordable rental housing and stimulate economic development in low- to moderate-income communities. These investments are recorded within other assets on the Company’s condensed consolidated statements of financial condition. The Company has elected to account for its qualifying investments in Low Income Housing Tax Credit and New Markets Tax Credit programs under the proportional amortization method beginning January 1, 2024 on a modified retrospective basis. As of March 31, 2024, all of the Company's tax credit investments qualified for this election. Prior to 2024, these investments were accounted for using the equity method. Under the proportional amortization method, the cost of the investment is amortized in proportion to the income tax credits and other income tax benefits received, the net effect of which is recognized as a component of income tax expense on the condensed consolidated statements of income and within cash flows provided by operating activities on the condensed consolidated statements of cash flows. The Company earns a return primarily through tax credits allocated to the
9

affordable housing projects and the community revitalization projects. The Company does not consolidate these investments as the Company does not have a controlling financial interest in the investee entities. The related commitments for future investments are recorded in accrued expenses and other liabilities within the consolidated statements of financial condition for delayed equity contributions that are unconditional and legally binding. Equity contributions that are contingent upon a future event are recognized when that contingent event becomes probable. As of March 31, 2024 and December 31, 2023, the Company had outstanding investments in these entities of $479 million and $514 million, respectively, and related liabilities for delayed equity contributions of $183 million and $187 million, respectively. During the three months ended March 31, 2024, the Company recognized $16 million of amortization and $18 million of income tax credits and other income tax benefits. Non-income tax benefits comprised only immaterial cash distributions from these investments during the three months ended March 31, 2024.
The Company holds non-controlling equity positions in several payment services entities and third-party venture capital funds which invest in such entities. Most of the direct investments in such entities are not subject to equity method accounting because the Company does not have significant influence over the investee. The Company's investments in third-party venture capital funds represent limited partnership interests and are accounted for under the equity method. The common or preferred equity securities that the Company holds typically do not have readily determinable fair values. As a result, these investments are carried at cost minus impairment, if any. As of March 31, 2024 and December 31, 2023, the carrying value of these investments, which are recorded within other assets on the Company's condensed consolidated statements of financial condition, was $35 million.
3.    Loan Receivables
The Company has two loan portfolio segments: credit card loans and other loans.
The Company's classes of receivables within the two portfolio segments are depicted in the following table (dollars in millions):
March 31,
2024
December 31,
2023
Credit card loans(1)(2)
$99,475 $102,259 
Other loans(3)
Private student loans(4)
10,480 10,352 
Personal loans10,107 9,852 
Other loans6,493 5,946 
Total other loans27,080 26,150 
Total loan receivables126,555 128,409 
Allowance for credit losses(9,258)(9,283)
Net loan receivables$117,297 $119,126 
(1)Amounts include carrying values of $13.9 billion and $14.8 billion underlying investors' interest in trust debt at March 31, 2024 and December 31, 2023, respectively, and $15.2 billion and $15.6 billion in seller's interest at March 31, 2024 and December 31, 2023, respectively. See Note 4: Credit Card and Private Student Loan Securitization Activities for additional information.
(2)Unbilled accrued interest receivable on credit card loans, which is presented as part of other assets in the Company's condensed consolidated statements of financial condition, was $746 million and $753 million at March 31, 2024 and December 31, 2023, respectively.
(3)Accrued interest receivable on private student, personal and other loans, which is presented as part of other assets in the Company's condensed consolidated statements of financial condition, was $555 million, $72 million and $23 million, respectively, at March 31, 2024 and $522 million, $69 million and $21 million, respectively, at December 31, 2023.
(4)At March 31, 2024 and December 31, 2023, the private student loan portfolio continued to be classified as held for investment and there were $6.3 billion of private student loans in repayment.
Credit Quality Indicators
As part of credit risk management activities, on an ongoing basis, the Company reviews information related to the performance of a customer's account with the Company and information from credit bureaus, such as FICO or other credit scores, relating to the customer's broader credit performance. The Company actively monitors key credit quality indicators, including FICO scores and delinquency status, for credit card, private student and personal loans. These indicators are important to understand the overall credit performance of the Company's customers and their ability to repay.
FICO scores are generally obtained at the origination of the account and are refreshed monthly or quarterly thereafter to assist in predicting customer behavior. Historically, the Company has noted that accounts with FICO scores below 660 have larger delinquencies and credit losses than those with higher credit scores.
10

The following table provides the distribution of the amortized cost basis (excluding accrued interest receivable presented in other assets) by the most recent FICO scores available for the Company's customers for credit card, private student and personal loan receivables (dollars in millions):
Credit Risk Profile by FICO Score
March 31, 2024December 31, 2023
 660 and AboveLess than 660
or No Score
660 and AboveLess than 660
or No Score
$%$%$%$%
Credit card loans$79,207 80 %$20,268 20 %$82,238 80 %$20,021 20 %
Private student loans by origination year(1)(2)
2024$129 98 %$3 2 %
20231,399 94 %91 6 %$1,010 94 %$69 6 %
20221,445 94 %88 6 %1,495 95 %85 5 %
20211,411 94 %92 6 %1,468 94 %91 6 %
20201,127 94 %76 6 %1,180 94 %75 6 %
Prior4,277 93 %342 7 %4,537 93 %342 7 %
Total private student loans$9,788 93 %$692 7 %$9,690 94 %$662 6 %
Personal loans by origination year
2024$1,425 100 %$5  %
20234,614 97 %146 3 %$5,149 98 %$100 2 %
20222,244 92 %191 8 %2,604 93 %187 7 %
2021869 91 %85 9 %1,049 92 %91 8 %
2020285 92 %25 8 %355 92 %29 8 %
Prior185 85 %33 15 %247 86 %41 14 %
Total personal loans$9,622 95 %$485 5 %$9,404 95 %$448 5 %
(1)FICO score represents the higher credit score of the cosigner or borrower.
11

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 amortized cost basis (excluding accrued interest receivable presented in other assets) of delinquent loans in the Company's loan portfolio is shown below for credit card, private student and personal loan receivables (dollars in millions):
March 31, 2024December 31, 2023
30-89 Days
Delinquent
90 or
More Days
Delinquent
Total Past
Due
30-89 Days
Delinquent
90 or
More Days
Delinquent
Total Past
Due
Credit card loans$1,869 $1,941 $3,810 $2,038 $1,917 $3,955 
Private student loans by origination year(1)
2024$ $ $ 
20232 1 3 $ $ $ 
202210 6 16 7 2 9 
202118 10 28 18 6 24 
202020 10 30 20 7 27 
Prior143 51 194 156 55 211 
Total private student loans$193 $78 $271 $201 $70 $271 
Personal loans by origination year
2024$ $ $ 
202338 12 50 $26 $8 $34 
202241 15 56 44 16 60 
202117 6 23 20 8 28 
20205 2 7 7 2 9 
Prior7 4 11 7 5 12 
Total personal loans$108 $39 $147 $104 $39 $143 
(1)Private student loans may include a deferment period, during which borrowers are not required to make payments while enrolled in school at least half time as determined by the school. During a deferment period, these loans do not advance into delinquency.
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Allowance for Credit Losses
The following tables provide changes in the Company's allowance for credit losses (dollars in millions):
For the Three Months Ended March 31, 2024
 Credit Card LoansPrivate Student LoansPersonal LoansOther LoansTotal Loans
Balance at December 31, 2023$7,619 $858 $722 $84 $9,283 
Additions
Provision for credit losses(1)
1,333 53 134 11 1,531 
Deductions
Charge-offs(1,649)(47)(113)(3)(1,812)
Recoveries238 5 13  256 
Net charge-offs(1,411)(42)(100)(3)