AMERICAN EXPRESS CO 10-Q form for quarterly period ended 2024-06-30, page 38: 
ITEM 1. FINANCIAL STATEMENTS


AMERICAN EXPRESS COMPANY


CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)|    |                                                                           |        |       |      |        |    |       |
|---:|:--------------------------------------------------------------------------|:-------|:------|:-----|:-------|:---|:------|
|  1 | Three Months Ended June 30 (Millions, except per share amounts)           | 2024   |       | 2023 |        |    |       |
|  2 | Revenues                                                                  |        |       |      |        |    |       |
|  3 | Non-interest revenues                                                     |        |       |      |        |    |       |
|  4 | Discount revenue                                                          | $      | 8,855 |      |        | $  | 8,481 |
|  5 | Net card fees                                                             | 2,060  |       |      | 1,789  |    |       |
|  6 | Service fees and other revenue                                            | 1,280  |       |      | 1,232  |    |       |
|  7 | Processed revenue                                                         | 408    |       |      | 447    |    |       |
|  8 | Total non-interest revenues                                               | 12,603 |       |      | 11,949 |    |       |
|  9 | Interest income                                                           |        |       |      |        |    |       |
| 10 | Interest on loans                                                         | 5,092  |       |      | 4,213  |    |       |
| 11 | Interest and dividends on investment securities                           | 25     |       |      | 34     |    |       |
| 12 | Deposits with banks and other                                             | 677    |       |      | 528    |    |       |
| 13 | Total interest income                                                     | 5,794  |       |      | 4,775  |    |       |
| 14 | Interest expense                                                          |        |       |      |        |    |       |
| 15 | Deposits                                                                  | 1,425  |       |      | 1,196  |    |       |
| 16 | Long-term debt and other                                                  | 639    |       |      | 474    |    |       |
| 17 | Total interest expense                                                    | 2,064  |       |      | 1,670  |    |       |
| 18 | Net interest income                                                       | 3,730  |       |      | 3,105  |    |       |
| 19 | Total revenues net of interest expense                                    | 16,333 |       |      | 15,054 |    |       |
| 20 | Provisions for credit losses                                              |        |       |      |        |    |       |
| 21 | Card Member receivables                                                   | 226    |       |      | 230    |    |       |
| 22 | Card Member loans                                                         | 970    |       |      | 923    |    |       |
| 23 | Other                                                                     | 72     |       |      | 45     |    |       |
| 24 | Total provisions for credit losses                                        | 1,268  |       |      | 1,198  |    |       |
| 25 | Total revenues net of interest expense after provisions for credit losses | 15,065 |       |      | 13,856 |    |       |
| 26 | Expenses                                                                  |        |       |      |        |    |       |
| 27 | Card Member rewards                                                       | 4,227  |       |      | 3,956  |    |       |
| 28 | Business development                                                      | 1,427  |       |      | 1,388  |    |       |
| 29 | Card Member services                                                      | 1,154  |       |      | 949    |    |       |
| 30 | Marketing                                                                 | 1,480  |       |      | 1,408  |    |       |
| 31 | Salaries and employee benefits                                            | 1,949  |       |      | 1,875  |    |       |
| 32 | Other, net                                                                | 1,038  |       |      | 1,546  |    |       |
| 33 | Total expenses                                                            | 11,275 |       |      | 11,122 |    |       |
| 34 | Pretax income                                                             | 3,790  |       |      | 2,734  |    |       |
| 35 | Income tax provision                                                      | 775    |       |      | 560    |    |       |
| 36 | Net income                                                                | $      | 3,015 |      |        | $  | 2,174 |
| 37 | Earnings per Common Share (Note 14)(a)                                    |        |       |      |        |    |       |
| 38 | Basic                                                                     | $      | 4.16  |      |        | $  | 2.89  |
| 39 | Diluted                                                                   | $      | 4.15  |      |        | $  | 2.89  |
| 40 | Average common shares outstanding for earnings per common share:          |        |       |      |        |    |       |
| 41 | Basic                                                                     |        |       |      | 740    |    |       |
| 42 | Diluted                                                                   |        |       |      | 741    |    |       |
(a)Represents net income less (i) earnings allocated to participating share awards of $23 million and $17 million for the three months ended June 30, 2024 and 2023, respectively, and (ii) dividends on preferred shares of $15 million for both the three months ended June 30, 2024 and 2023.

See Notes to Consolidated Financial Statements.

38




, Discover Financial Services 10-Q form for quarterly period ended 2024-06-30, page 3: 
DISCOVER FINANCIAL SERVICES


Condensed Consolidated Statements of Income (unaudited)

(dollars in millions, except for share amounts)
|    |                                                       |                                     |       |                                   |       |      |       |       |    |       |    |       |
|---:|:------------------------------------------------------|:------------------------------------|:------|:----------------------------------|:------|:-----|:------|:------|:---|:------|:---|:------|
|  1 |                                                       | For the Three Months Ended June 30, |       | For the Six Months Ended June 30, |       |      |       |       |    |       |    |       |
|  2 |                                                       | 2024                                |       | 2023                              |       | 2024 |       | 2023  |    |       |    |       |
|  3 | Interest income                                       |                                     |       |                                   |       |      |       |       |    |       |    |       |
|  4 | Credit card loans                                     | $                                   | 3,959 |                                   |       | $    | 3,466 |       | $  | 7,897 | $  | 6,787 |
|  5 | Other loans, including loans held-for-sale            | 729                                 |       |                                   | 606   |      |       | 1,441 |    | 1,170 |    |       |
|  6 | Investment securities                                 | 125                                 |       |                                   | 106   |      |       | 249   |    | 207   |    |       |
|  7 | Other interest income                                 | 158                                 |       |                                   | 112   |      |       | 332   |    | 203   |    |       |
|  8 | Total interest income                                 | 4,971                               |       |                                   | 4,290 |      |       | 9,919 |    | 8,367 |    |       |
|  9 | Interest expense                                      |                                     |       |                                   |       |      |       |       |    |       |    |       |
| 10 | Deposits                                              | 1,199                               |       |                                   | 905   |      |       | 2,409 |    | 1,661 |    |       |
| 11 | Short-term borrowings                                 | -                                   |       |                                   | -     |      |       | 6     |    | -     |    |       |
| 12 | Long-term borrowings                                  | 248                                 |       |                                   | 208   |      |       | 493   |    | 397   |    |       |
| 13 | Total interest expense                                | 1,447                               |       |                                   | 1,113 |      |       | 2,908 |    | 2,058 |    |       |
| 14 | Net interest income                                   | 3,524                               |       |                                   | 3,177 |      |       | 7,011 |    | 6,309 |    |       |
| 15 | Provision for credit losses                           | 739                                 |       |                                   | 1,305 |      |       | 2,236 |    | 2,407 |    |       |
| 16 | Net interest income after provision for credit losses | 2,785                               |       |                                   | 1,872 |      |       | 4,775 |    | 3,902 |    |       |
| 17 | Other income                                          |                                     |       |                                   |       |      |       |       |    |       |    |       |
| 18 | Discount and interchange revenue, net                 | 437                                 |       |                                   | 370   |      |       | 808   |    | 700   |    |       |
| 19 | Protection products revenue                           | 42                                  |       |                                   | 44    |      |       | 84    |    | 87    |    |       |
| 20 | Loan fee income                                       | 205                                 |       |                                   | 186   |      |       | 405   |    | 352   |    |       |
| 21 | Transaction processing revenue                        | 91                                  |       |                                   | 72    |      |       | 178   |    | 139   |    |       |
| 22 | Gains (losses) on equity investments                  | -                                   |       |                                   | 1     |      |       | -     |    | (17)  |    |       |
| 23 | Other income                                          | 239                                 |       |                                   | 28    |      |       | 262   |    | 50    |    |       |
| 24 | Total other income                                    | 1,014                               |       |                                   | 701   |      |       | 1,737 |    | 1,311 |    |       |
| 25 | Other expense                                         |                                     |       |                                   |       |      |       |       |    |       |    |       |
| 26 | Employee compensation and benefits                    | 658                                 |       |                                   | 588   |      |       | 1,329 |    | 1,213 |    |       |
| 27 | Marketing and business development                    | 258                                 |       |                                   | 268   |      |       | 508   |    | 509   |    |       |
| 28 | Information processing and communications             | 167                                 |       |                                   | 150   |      |       | 330   |    | 289   |    |       |
| 29 | Professional fees                                     | 296                                 |       |                                   | 216   |      |       | 588   |    | 448   |    |       |
| 30 | Premises and equipment                                | 23                                  |       |                                   | 20    |      |       | 43    |    | 42    |    |       |
| 31 | Other expense                                         | 327                                 |       |                                   | 162   |      |       | 1,240 |    | 286   |    |       |
| 32 | Total other expense                                   | 1,729                               |       |                                   | 1,404 |      |       | 4,038 |    | 2,787 |    |       |
| 33 | Income before income taxes                            | 2,070                               |       |                                   | 1,169 |      |       | 2,474 |    | 2,426 |    |       |
| 34 | Income tax expense                                    | 540                                 |       |                                   | 268   |      |       | 636   |    | 557   |    |       |
| 35 | Net income                                            | $                                   | 1,530 |                                   |       | $    | 901   |       | $  | 1,838 | $  | 1,869 |
| 36 | Net income allocated to common stockholders           | $                                   | 1,521 |                                   |       | $    | 895   |       | $  | 1,795 | $  | 1,826 |
| 37 | Basic earnings per common share                       | $                                   | 6.06  |                                   |       | $    | 3.54  |       | $  | 7.17  | $  | 7.09  |
| 38 | Diluted earnings per common share                     | $                                   | 6.06  |                                   |       | $    | 3.54  |       | $  | 7.16  | $  | 7.09  |

See Notes to the Condensed Consolidated Financial Statements.

3






Question: What is the margin growth rate for American Express and Discover Financial Services for the three months ended June 30, 2024, compared to the same period in 2023?
Answer: Margin Growth Rate for American Express:
Net income margin for 2024 = Net Income / Total Revenues Net of Interest Expense
Net income for Q2 2024 = $3,015 million
Total revenues net of interest expense for Q2 2024 = $16,333 million
Net income margin for Q2 2024 = $3,015 / $16,333 ≈ 18.45%

Net income for Q2 2023 = $2,174 million
Total revenues net of interest expense for Q2 2023 = $15,054 million
Net income margin for Q2 2023 = $2,174 / $15,054 ≈ 14.45%

Margin Growth Rate = ((Net Income Margin for Q2 2024 - Net Income Margin for Q2 2023) / Net Income Margin for Q2 2023) * 100
= ((18.45% - 14.45%) / 14.45%) * 100
= (4% / 14.45%) * 100 ≈ 27.72%

Margin Growth Rate for American Express ≈ 27.72%

Margin Growth Rate for Discover Financial Services:
Net income margin for 2024 = Net Income / Total Revenues
Net income for Q2 2024 = $1,530 million
Total revenues for Q2 2024 = $4,971 million (interest income) + $1,014 million (other income) = $5,985 million
Net income margin for Q2 2024 = $1,530 / $5,985 ≈ 25.58%

Net income for Q2 2023 = $901 million
Total revenues for Q2 2023 = $4,290 million (interest income) + $701 million (other income) = $4,991 million
Net income margin for Q2 2023 = $901 / $4,991 ≈ 18.05%

Margin Growth Rate = ((Net Income Margin for Q2 2024 - Net Income Margin for Q2 2023) / Net Income Margin for Q2 2023) * 100
= ((25.58% - 18.05%) / 18.05%) * 100
= (7.53% / 18.05%) * 100 ≈ 41.72%

Margin Growth Rate for Discover Financial Services ≈ 41.72%