Unused commitments to extend credit for loans

[Table of Contents](#i6f5a02f7aeae4b00b01c55901eb4a1a5_4)The following table shows the actual capital amounts and ratios of DFS and Discover Bank and comparisons of each to the regulatory minimum and "well-capitalized" requirements (dollars in millions):  


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|   | Actual |  | Minimum CapitalRequirements |  | Capital RequirementsTo Be Classified asWell-Capitalized |
|   | Amount |  | Ratio(1) |  | Amount |  | Ratio |  | Amount(2) |  | Ratio(2) |
| March 31, 2022 |  |  |  |  |  |  |  |  |  |  |  |
| Total capital (to risk-weighted assets) |  |  |  |  |  |  |  |  |  |  |  |
| Discover Financial Services | $ | 16,724  |  |  | 17.6  | % |  | $ | 7,585  |  |  | ≥8.0% |  | $ | 9,481  |  |  | ≥10.0% |
| Discover Bank | $ | 15,647  |  |  | 16.7  | % |  | $ | 7,475  |  |  | ≥8.0% |  | $ | 9,344  |  |  | ≥10.0% |
| Tier 1 capital (to risk-weighted assets) |  |  |  |  |  |  |  |  |  |  |  |
| Discover Financial Services | $ | 15,002  |  |  | 15.8  | % |  | $ | 5,689  |  |  | ≥6.0% |  | $ | 5,689  |  |  | ≥6.0% |
| Discover Bank | $ | 13,741  |  |  | 14.7  | % |  | $ | 5,607  |  |  | ≥6.0% |  | $ | 7,475  |  |  | ≥8.0% |
| Tier 1 capital (to average assets) |  |  |  |  |  |  |  |  |  |  |  |
| Discover Financial Services | $ | 15,002  |  |  | 13.7  | % |  | $ | 4,367  |  |  | ≥4.0% |  | N/A |  | N/A |
| Discover Bank | $ | 13,741  |  |  | 12.8  | % |  | $ | 4,309  |  |  | ≥4.0% |  | $ | 5,386  |  |  | ≥5.0% |
| Common Equity Tier 1 (to risk-weighted assets) |  |  |  |  |  |  |  |  |  |  |  |
| Discover Financial Services | $ | 13,946  |  |  | 14.7  | % |  | $ | 4,266  |  |  | ≥4.5% |  | N/A |  | N/A |
| Discover Bank | $ | 13,741  |  |  | 14.7  | % |  | $ | 4,205  |  |  | ≥4.5% |  | $ | 6,074  |  |  | ≥6.5% |
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| December 31, 2021 |  |  |  |  |  |  |  |  |  |  |  |
| Total capital (to risk-weighted assets) |  |  |  |  |  |  |  |  |  |  |  |
| Discover Financial Services | $ | 17,150  |  |  | 17.6  | % |  | $ | 7,775  |  |  | ≥8.0% |  | $ | 9,719  |  |  | ≥10.0% |
| Discover Bank | $ | 15,957  |  |  | 16.9  | % |  | $ | 7,573  |  |  | ≥8.0% |  | $ | 9,466  |  |  | ≥10.0% |
| Tier 1 capital (to risk-weighted assets) |  |  |  |  |  |  |  |  |  |  |  |
| Discover Financial Services | $ | 15,395  |  |  | 15.8  | % |  | $ | 5,831  |  |  | ≥6.0% |  | $ | 5,831  |  |  | ≥6.0% |
| Discover Bank | $ | 13,932  |  |  | 14.7  | % |  | $ | 5,680  |  |  | ≥6.0% |  | $ | 7,573  |  |  | ≥8.0% |
| Tier 1 capital (to average assets) |  |  |  |  |  |  |  |  |  |  |  |
| Discover Financial Services | $ | 15,395  |  |  | 13.9  | % |  | $ | 4,432  |  |  | ≥4.0% |  | N/A |  | N/A |
| Discover Bank | $ | 13,932  |  |  | 12.8  | % |  | $ | 4,365  |  |  | ≥4.0% |  | $ | 5,456  |  |  | ≥5.0% |
| Common Equity Tier 1 (to risk-weighted assets) |  |  |  |  |  |  |  |  |  |  |  |
| Discover Financial Services | $ | 14,339  |  |  | 14.8  | % |  | $ | 4,373  |  |  | ≥4.5% |  | N/A |  | N/A |
| Discover Bank | $ | 13,932  |  |  | 14.7  | % |  | $ | 4,260  |  |  | ≥4.5% |  | $ | 6,153  |  |  | ≥6.5% |
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    (1)Capital ratios are calculated based on the Basel III standardized approach rules, subject to applicable transition provisions, including CECL transition provisions.(2)The Basel III rules do not establish well-capitalized thresholds for these measures for bank holding companies. Existing well-capitalized thresholds established in the Federal Reserve's Regulation Y have been included where available.12.    Commitments, Contingencies and GuaranteesIn the normal course of business, the Company enters into a number of off-balance sheet commitments, transactions and obligations under guarantee arrangements that expose the Company to varying degrees of risk. The Company's commitments, contingencies and guarantee relationships are described below.CommitmentsUnused Credit ArrangementsAt March 31, 2022, the Company had unused credit arrangements for loans of approximately $222.3 billion. Such arrangements arise primarily from agreements with customers for unused lines of credit on certain credit cards and certain other loan products, provided there is no violation of conditions in the related agreements. These arrangements, substantially all of which the Company can terminate at any time and which do not necessarily represent future cash requirements, are periodically reviewed based on account usage, customer creditworthiness and loan qualification. As the Company’s credit card loans are unconditionally cancellable, no liability for expected credit losses is required for unused lines of credit. For all other loans, the Company records a liability for expected credit losses for unfunded commitments, which is presented as part of accrued expenses and other liabilities in the consolidated statements of financial condition.23
