The Company stopped accepting new applications for private student loans February 1, 2024, and as of June 30, 2024, the Company's private student loan portfolio was classified as loans held-for-sale. The purchase price payable to Discover Bank in the transaction represents a premium to the balances of principal and interest to be capitalized of the private student loan portfolio.

On February 19, 2024, Discover and Capital One jointly announced that they entered into an agreement and plan of 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.

Following the consent of the Board of Directors of Discover Bank, the FDIC issued a consent order to Discover Bank. The 2023 Order addresses shortcomings in Discover Bank's compliance management system for consumer protection laws and related matters.

Discover Bank is working diligently to complete items required by the 2023 Order. This includes having retained third party consultants to conduct independent reviews and the submission of action plans to the FDIC by the required deadlines for review and feedback.

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.

In estimating expected credit losses, the Company considered the uncertainties associated with borrower behavior and payment trends, as well as recent and expected macroeconomic conditions including those relating to consumer price inflation and the fiscal and monetary policy responses to that inflation.

The Company is subject to examination by the Internal Revenue Service and tax authorities in various state, local and foreign tax jurisdictions. The Company's federal income tax filings are open to examinations for the tax years ended December 31, 2020 and forward.

Discover card sales volume was $53.4 billion and $157.0 billion, respectively, for the three and nine months ended September 30, 2024, which was a decrease of 2.9% and 2.3%, respectively, as compared to the same periods in 2023. This volume decrease was primarily driven by lower new account growth.

In accordance with the Merger Agreement with Capital One, share repurchases have been paused through the completion of the merger.

Environmental, social and governance ("ESG") issues, including climate change, human capital and governance practices, are a significant area of focus by U.S. federal, state and international lawmakers and regulatory agencies, as well as shareholders and other stakeholders.

Federal Reserve, OCC and FDIC issued a proposal to amend the risk-based capital framework, which includes replacing the current "advanced approach" with a new expanded risk-based approach.

The CFPB's priorities have continued to focus on, among other things, increased enforcement of existing consumer protection laws, with a particular focus on fees charged to consumers, UDAAP, fair lending, student lending and servicing, debt collection and credit reporting.