Market Overview

Discover Financial Services Announces New $2 Billion Share Repurchase Authorization

RIVERWOODS, Ill.--(BUSINESS WIRE)--

Discover Financial Services (NYSE: DFS) today announced that its board of directors has approved a new share repurchase program, authorizing the company to purchase up to $2 billion of its common stock. The program expires on March 22, 2014, and may be terminated at any time. The share repurchase program replaces the prior $1 billion program that had $575 million of remaining authorization.

The company's board also declared a cash dividend of $0.10 per share of common stock, payable on April 19, 2012, to stockholders of record at the close of business on April 5, 2012.

“We are pleased to announce the increase in our authorized share repurchase program and the continuation of our dividend to common shareholders, which increased by 67 percent last quarter,” said David Nelms, chairman and chief executive officer of Discover. “These actions reflect the strength of our capital position and its resiliency across a range of potential economic scenarios, including the supervisory stress scenario prescribed by the Federal Reserve Board's 2012 Capital Plan Review. We believe our capital plan leaves us well positioned for continued growth and responsible returns of capital to shareholders while maintaining significant opportunistic flexibility.”

The company expects to make share repurchases from time to time based on market conditions and other factors, subject to legal or regulatory restrictions.

About Discover

Discover Financial Services (NYSE: DFS) is a direct banking and payment services company with one of the most recognized brands in U.S. financial services. Since its inception in 1986, the company has become one of the largest card issuers in the United States. The company operates the Discover card, America's cash rewards pioneer, and offers personal and student loans, online savings accounts, certificates of deposit and money market accounts through its Discover Bank subsidiary. Its payment businesses consist of Discover Network, with millions of merchant and cash access locations; PULSE, one of the nation's leading ATM/debit networks; and Diners Club International, a global payments network with acceptance in more than 185 countries and territories. For more information, visit http://www.discoverfinancial.com.

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are based upon the current beliefs and expectations of the company's management and are subject to significant risks and uncertainties. The declaration and payment of future dividends, as well as the amount thereof, are subject to the discretion of our board of directors. The amount and size of any future dividends and share repurchases will depend upon the company's results of operations, financial condition, capital levels, cash requirements, future prospects and other factors. In addition, banking laws and regulations and the company's banking regulators may limit the company's ability to pay dividends and make share repurchases. For example, the company's ability to make capital distributions, including paying dividends or repurchasing shares, is subject to the Federal Reserve's annual review and non-objection of the company's capital plan. In certain circumstances, the company may not be able to make a capital distribution, such as a dividend or share repurchase, unless the Federal Reserve has approved such distribution. Further, current or future regulatory initiatives may require the company to hold more capital in the future. There can be no assurance that we will declare and pay any dividends or repurchase any shares of our common stock in the future. The forward-looking statements speak only as of the date of this press release, and there is no undertaking to update or revise them as more information becomes available. Additional factors impacting dividends and share repurchases can be found in "Business - Supervision and Regulation" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the company's annual report on Form 10-K for the year ended November 30, 2011, which is available at the SEC's internet site (www.sec.gov).

Discover Financial Services
Investor Contact:
Craig Streem
Investor Relations
224-405-3575
craigstreem@discover.com
or
Media Contact:
Jon Drummond
Media Relations
224-405-1888
jondrummond@discover.com

 

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