Discover 2015 Annual Report Download - page 149

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-133-
• 4.0% Tier 1 capital to average consolidated assets as reported on consolidated financial statements (known
as the “leverage ratio”); and
• 4.5% CET1 to risk-weighted assets.
As of December 31, 2015, the Company and Discover Bank met the requirements for well-capitalized status and
there have been no conditions or events that management believes have changed the Company’s or Discover Bank’s
category. To be categorized as “well-capitalized,” the Company and Discover Bank must maintain minimum total
capital risk-based, Tier 1 risk-based, Tier 1 leverage and CET1 ratios as set forth in the table below.
The following table shows the actual capital amounts and ratios of the Company and Discover Bank and
comparisons of each to the regulatory minimum and “well-capitalized” requirements (dollars in millions):
Actual Minimum Capital
Requirements
Capital Requirements
To Be Classified as
Well-Capitalized
Amount Ratio Amount Ratio Amount Ratio
At December 31, 2015(1)
Total capital (to risk-weighted assets)
Discover Financial Services .................... $ 12,500 16.5% $ 6,063 $7,579
Discover Bank ...................................... $ 11,909 15.9% $ 6,001 $ 7,501
Tier 1 capital (to risk-weighted assets)
Discover Financial Services .................... $ 11,126 14.7% $ 4,547 $ 6,063
Discover Bank ...................................... $ 9,941 13.3% $ 4,500 $ 6,001
Tier 1 capital (to average assets)
Discover Financial Services .................... $ 11,126 12.9% $ 3,452 $ 4,315
Discover Bank ...................................... $ 9,941 11.6% $ 3,416 $ 4,270
CET1 capital (to risk-weighted assets) (Basel
III transition)
Discover Financial Services .................... $ 10,566 13.9% $ 3,410 $ 4,926
Discover Bank ...................................... $ 9,941 13.3% $ 3,375 $ 4,875
At December 31, 2014(1)
Total capital (to risk-weighted assets)
Discover Financial Services .................... $ 12,418 17.0% $ 5,831 $7,289
Discover Bank ...................................... $ 11,040 15.3% $ 5,767 $ 7,209
Tier 1 capital (to risk-weighted assets)
Discover Financial Services .................... $ 10,839 14.9% $ 2,916 $ 4,373
Discover Bank ...................................... $ 9,470 13.1% $ 2,884 $ 4,326
Tier 1 capital (to average assets)
Discover Financial Services .................... $ 10,839 13.2% $ 3,288 $ 4,111
Discover Bank ...................................... $ 9,470 11.7% $ 3,252 $ 4,066
CET1 capital (to risk-weighted assets) (Basel
III transition)
Discover Financial Services .................... N/A N/A N/A N/A N/A N/A
Discover Bank ...................................... N/A N/A N/A N/A N/A N/A
(1) As of January 1, 2015, actual capital amounts and ratios are calculated under Basel III rules subject to transition provisions. The Company reported under Basel I at
December 31, 2014.
The amount of dividends that a bank may pay in any year is subject to certain regulatory restrictions. Under the
current banking regulations, a bank may not pay dividends if such a payment would leave the bank inadequately
capitalized. Discover Bank paid dividends of $1.8 billion each in the years ended December 31, 2015 and 2014, and
$1.6 billion in the year ended December 31, 2013 to the Company.