Market Overview

Discover Financial Services Issues 10Q for Q2

Discover Financial Services (NYSE: DFS) released its 10Q for Q2.

Quarter Highlights: Net income for the second quarter of 2012 was $537 million, compared to $600 million for the second quarter of 2011. Credit card loans grew $1.6 billion to $46.6 billion and Discover card sales volume increased 5% from the prior year. Credit card loan delinquencies and net charge-offs reached historic lows with a delinquency rate for loans over 30 days past due of 1.91% and a net charge-off rate of 2.79%. Payment services pretax income was up 10% from the prior year to $47 million. Transaction volume for the segment was $51.4 billion in the quarter, an increase of 12% from the prior year. We repurchased 13.5 million shares of our common stock for $447 million, reducing our number of shares outstanding by 2.4%. We issued $1.0 billion of credit card asset-backed securities in a registered public offering through a securitization trust at an annual interest rate of one-month LIBOR plus 0.15% with a maturity of two years.

Recent Developments: On June 6, 2012, through our Discover Home Loans, Inc. subsidiary, we acquired substantially all of the operating and related assets of Home Loan Center, Inc., a subsidiary of Tree.com, Inc., adding a residential mortgage lending component to our direct banking business. On June 13, 2012, we issued $1.5 billion of credit card asset-backed securities in a registered public offering through a securitization trust, comprised of a $800 million issuance at an interest rate of 0.86% with a maturity of three years, and a $650 million issuance at an interest rate of one-month LIBOR plus 0.37% with a maturity of five years. On June 14, 2012, we announced a cash dividend of $0.10 per share of common stock, payable on July 19, 2012, to stockholders of record at the close of business on July 5, 2012.

Posted-In: Earnings News Guidance After-Hours Center

 

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