Discover 2015 Annual Report Download - page 78

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Average Balance Sheet Analysis
(dollars in millions)
For the Years Ended December 31,
2015 2014 2013
Average
Balance Rate Interest Average Balance Rate Interest Average Balance Rate Interest
Assets
Interest-earning assets
Cash and cash equivalents ................................ $ 9,840 0.26% $ 26 $ 7,228 0.25% $ 18 $ 5,557 0.25% $ 14
Restricted cash ................................................. 631 0.14% 1 763 0.08% 1 704 0.10% 1
Investment securities ......................................... 2,876 1.71% 49 4,000 1.67% 67 5,190 1.42% 74
Loan receivables(1)
Credit card(2)(3) ........................................... 54,846 12.08% 6,626 52,600 12.09% 6,359 49,816 12.00% 5,978
Personal loans ............................................ 5,245 12.04% 631 4,592 12.36% 568 3,706 12.52% 464
Private student loans ................................... 5,272 7.16% 378 4,450 7.02% 312 3,561 7.07% 252
PCI student loans ........................................ 3,385 6.51% 220 3,916 6.64% 260 4,434 6.13% 272
Mortgage loans held for sale ....................... 93 3.63% 3 118 3.92% 5 216 3.47% 7
Other ........................................................ 220 4.90% 11 177 3.49% 6 87 3.00% 2
Total loan receivables ............................. 69,061 11.40% 7,869 65,853 11.40% 7,510 61,820 11.28% 6,975
Total interest-earning assets ................ 82,408 9.64% 7,945 77,844 9.76% 7,596 73,271 9.64% 7,064
Allowance for loan losses ................................ (1,782) (1,645) (1,639)
Other assets ................................................... 4,469 4,279 4,348
Total assets ....................................... $ 85,095 $ 80,478 $ 75,980
Liabilities and Stockholders’ Equity
Interest-bearing liabilities
Interest-bearing deposits
Time deposits(4) ........................................... $ 26,480 1.61% 427 $ 26,627 1.66% 443 $ 27,718 2.02% 559
Money market deposits(5) ............................. 7,280 0.98% 71 7,624 0.91% 70 5,719 0.87% 50
Other interest-bearing savings deposits ........ 12,538 1.00% 125 10,617 0.96% 101 9,428 0.95% 89
Total interest-bearing deposits(6) .............. 46,298 1.35% 623 44,868 1.37% 614 42,865 1.63% 698
Borrowings
Short-term borrowings ................................ 84 1.41% 1 111 1.59% 2 199 1.57% 3
Securitized borrowings(4)(5) ........................... 16,924 1.94% 329 16,686 1.78% 297 16,297 1.74% 284
Other long-term borrowings(4) ...................... 6,691 4.63% 310 4,192 5.28% 221 2,609 6.18% 161
Total borrowings .................................... 23,699 2.70% 640 20,989 2.48% 520 19,105 2.35% 448
Total interest-bearing liabilities............ 69,997 1.80% 1,263 65,857 1.72% 1,134 61,970 1.85% 1,146
Other liabilities and stockholders’ equity ............. 15,098 14,621 14,010
Total liabilities and stockholders’
equity ............................................. $ 85,095 $ 80,478 $ 75,980
Net interest income ............................ $ 6,682 $ 6,462 $ 5,918
Net interest margin(7) ........................................... 9.68% 9.81% 9.57%
Net yield on interest-bearing assets(8) .................... 8.11% 8.30% 8.08%
Interest rate spread(9) ........................................... 7.84% 8.04% 7.79%
(1) Average balances of loan receivables include non-accruing loans, which are included in the yield calculations. If the non-accruing loan balances were excluded,
there would not be a material impact on the amounts reported above.
(2) Interest income on credit card loans includes $192 million, $192 million and $171 million of amortization of balance transfer fees for the years ended December 31,
2015, 2014 and 2013, respectively.
(3) The year ended December 31, 2013 includes the impact of interest rate swap agreements used to change a portion of certain floating-rate credit card loan
receivables to fixed-rate.
(4) Includes the impact of interest rate swap agreements used to change a portion of fixed-rate funding to floating-rate funding.
(5) Includes the impact of interest rate swap agreements used to change a portion of floating-rate funding to fixed-rate funding.
(6) Includes the impact of FDIC insurance premiums.
(7) Net interest margin represents net interest income as a percentage of average total loan receivables.
(8) Net yield on interest-bearing assets represents net interest income as a percentage of average total interest-earning assets.
(9) Interest rate spread represents the difference between the rate on total interest-earning assets and the rate on total interest-bearing liabilities.