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Discover Financial Services (DFS) operates as a digital banking and payment services company, managing its business activities in two main segments: Digital Banking and Payment Services. The company offers Discover-branded credit cards, personal loans, home loans, and deposit products, generating substantial revenue from interest income on these loan products . Additionally, DFS provides payment transaction processing and settlement services through the PULSE network, Diners Club, and the Network Partners business on the Discover Global Network . The company's primary revenues consist of interest income earned on loan receivables and fees from customers, financial institutions, merchants, and issuers .
- Digital Banking - Offers Discover-branded credit cards, personal loans, home loans, and deposit products, generating revenue primarily from interest income on loan products and fees related to discount and interchange, protection products, and loan fee income.
- Credit Cards - Provides Discover-branded credit card products contributing significantly to revenue through interest income and fees.
- Personal Loans - Offers personal loan products with revenue generated from interest income.
- Home Loans - Provides home loan products, contributing to interest income.
- Deposit Products - Includes consumer deposit products that fund business activities.
- Payment Services - Encompasses the PULSE network, Diners Club, and the Network Partners business, providing payment transaction processing and settlement services on the Discover Global Network.
- PULSE Network - Generates transaction processing revenue.
- Diners Club - Provides royalty and licensee revenue.
- Network Partners - Offers additional payment services on the Discover Global Network.
| Name | Position | External Roles | Short Bio | |
|---|---|---|---|---|
Daniel P. Capozzi Executive | Executive Vice President, President – Consumer Banking | None | Joined DFS in 2007; previously President – US Cards; contributed to exceeding PBTR targets and advancing fraud detection capabilities. | |
Efie Vainikos Executive | Assistant Secretary | None | Currently serving as Assistant Secretary at DFS; no additional details provided in the documents. | |
Hope D. Mehlman Executive | Executive Vice President, Chief Legal Officer, General Counsel, and Corporate Secretary | None | Joined DFS in 2023; previously EVP and General Counsel at Bank of the West and BNP Paribas USA, Inc.; extensive legal and governance expertise. | |
J. Michael Shepherd Executive | Interim Chief Executive Officer and President | Director at Pacific Mutual Holdings Inc. | Former Chairman and CEO of BancWest Corporation and Bank of the West; extensive experience in risk management, consumer banking, and regulatory matters. | View Report → |
Jason J. Strle Executive | Executive Vice President, Chief Information Officer (CIO) | None | Joined DFS in 2023; previously EVP and Group CIO for Corporate Functions at Wells Fargo; expertise in technology transformations and digital banking. | |
Jason P. Hanson Executive | Executive Vice President, President – Payment Services | None | Joined DFS in 2019; previously led payments strategy and global acceptance at DFS; expertise in payments growth and strategy. | |
John T. Greene Executive | Executive Vice President, Chief Financial Officer (CFO) | None | Joined DFS in 2019; previously held CFO roles at Bioverativ, Willis Group Holdings, and HSBC Holdings. | |
Keith E. Toney Executive | Executive Vice President, President – Credit and Decision Management | None | Joined DFS in 2019; previously Chief Data Officer; extensive experience in data-driven decision-making and risk management. | |
Michael E. Roemer Executive | Executive Vice President, Chief Risk Officer (CRO) | None | Joined DFS in 2021; previously Chief Compliance Officer at Wells Fargo and Barclays; extensive experience in compliance and risk management. | |
Beverley A. Sibblies Board | Director, Member of Audit Committee | None | Joined DFS in 2023; former CFO of HSBC Finance Corporation; expertise in financial services, compliance, and risk management. | |
Candace H. Duncan Board | Director, Chair of Audit Committee | Director at Teleflex Inc. | Joined DFS in 2014; former Managing Partner at KPMG LLP; expertise in financial and accounting matters, corporate governance, and risk management. | |
Daniela O’Leary-Gill Board | Director, Interim Chair of Risk Oversight Committee | None | Joined DFS in 2023; former COO of BMO U.S.; expertise in governance, regulatory issues, and strategic leadership. | |
David L. Rawlinson II Board | Director | President and CEO of Qurate Retail, Inc. | Joined DFS in 2021; expertise in global e-commerce, consumer trends, and digital business operations; CEO of Qurate Retail, Inc. | |
Gregory C. Case Board | Director, Chair of Compensation and Leadership Development Committee | CEO of Aon plc | Joined DFS in 2007; CEO of Aon plc since 2005; expertise in corporate governance, strategy, and risk management. | |
Jennifer L. Wong Board | Director, Member of Audit Committee | COO of Reddit, Inc.; Board Member at IMAX Corporation | Joined DFS in 2019; expertise in digital transformation, cybersecurity, and business strategy; COO of Reddit and board member at IMAX Corporation. | |
Kathy L. Lonowski Board | Director, Member of Risk Oversight Committee | None | Joined DFS in 2023; former Regional Director at FDIC; expertise in compliance, risk management, and consumer protection. | |
Mark A. Thierer Board | Director | Board Member at P3 Health Partners, Inc.; Board Member at Senior Connect Acquisition Corp. | Joined DFS in 2013; former CEO of OptumRx and Catamaran Corporation; expertise in corporate governance, strategy, and technology. | |
Thomas G. Maheras Board | Independent Chairman of the Board | Managing Partner at Tegean Capital Management, LLC; Partner at Iron Park Capital Management, LLC | Long-standing DFS board member since 2008; expertise in financial services, risk management, and governance. |
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With the updated loan growth expectations now projected to decline low to mid-single digits, what specific strategies are you implementing to counteract the higher than anticipated payment rates and slightly lower card sales impacting growth?
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Given the SEC's disagreement with your accounting approach on the card misclassification matter, can you elaborate on the potential implications for future financial reporting and how you plan to address the SEC's concerns?
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Total operating expenses increased by 16% year-over-year, driven in part by professional fees up 15% due to higher recovery fees and merger and integration costs; how do you plan to manage these rising expenses, especially considering the pending merger with Capital One?
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Despite recognizing a gain from the sale of the private student loan portfolio, student loans were down 19% year-over-year; how will the continued sale of this portfolio impact your profitability and focus on a more streamlined business model moving forward?
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With net charge-offs in total loans at 4.86%, up 134 basis points from the prior year, and an increase in 30-plus day delinquency formation, what measures are you taking to mitigate credit risk, especially as consumer spending stabilizes and households face inflationary pressures?
Competitors mentioned in the company's latest 10K filing.
| Company | Description |
|---|---|
Competes in the credit card business on the basis of rewards programs, merchant acceptance, and international business travel segments. It is noted as a particularly strong competitor to Diners Club due to its upscale brand image and high transaction fees. Additionally, it competes in the personal loan product space. | |
Competes in the credit card business by offering a variety of financial products and services, which may position it better among customers who prefer a single financial institution for all their needs. | |
Competes in the credit card business by offering a wide variety of financial products and services, leveraging its financial resources and scale. | |
Competes in the credit card business and direct-to-consumer deposits business. It is noted for its breadth of banking products and competitive positioning. | |
Competes in the credit card business and personal loan product space. It is noted for its financial resources and ability to offer competitive rewards and pricing. | |
Competes in the personal loan product space as a non-traditional lender. | |
Lending Club | Competes in the personal loan product space as a non-traditional lender. |
Competes in the payment services business and enjoys greater merchant acceptance and broader global brand recognition. It has entered into long-term arrangements with financial institutions that may discourage them from issuing cards on the Discover Network or routing debit transactions to PULSE. | |
Competes in the payment services business and enjoys greater merchant acceptance and broader global brand recognition. It has entered into long-term arrangements with financial institutions that may discourage them from issuing cards on the Discover Network or routing debit transactions to PULSE. | |
First Data's STAR | Competes with the PULSE network in the payment services business. |
Competes in the direct-to-consumer deposits business, offering acquisition and servicing capabilities similar to other large banks. | |
Competes in the direct-to-consumer deposits business, offering acquisition and servicing capabilities similar to other large banks. | |
Competes in the direct-to-consumer deposits business, offering acquisition and servicing capabilities similar to other large banks. | |
Competes in the direct-to-consumer deposits business, offering acquisition and servicing capabilities similar to other large banks. | |
USAA | Competes in the direct-to-consumer deposits business, offering acquisition and servicing capabilities similar to other large banks. |
Recent developments and announcements about DFS.
Earnings
New Earnings (Q4 2024)
·Jan 24, 2025, 12:13 AMView full earnings summary →DFS Q4 net income soared to $1.3B vs $366M YOY, boosted by a $381M student loan sale gain and improving credit performance (net charge-off at 4.8%). However, a 3% drop in card sales and rising expenses underscore challenges to watch in 2024.
8-K Filings
8-K Filing
·Feb 19, 2025, 9:34 PMFinancial ExhibitsRegulation FD DisclosureView full 8-K filing →The latest 8-K provides updated credit card performance data. As of Feb 28, 2025, ending loans were $99.2B, average loans $100.1B, with a 6.03% net charge-off rate and a 3.78% delinquency rate.