There is a level of concern in terms of jobless claims and the impact on prime consumers. The provision for credit losses improved by nearly $50 million from the prior year as a result of the decline in net charge-offs and a lower reserve build. Great, thanks. So, we're looking at the impacts as very, very mild. Since we launched this program in mid-March, we have helped over 662,000 customers across all of our products, and in fact, about 60% of total loans enrolled have already exited the program. Roger C. Hochschild -- Director, Chief Executive Officer and President. Our next question comes from the line of Moshe Orenbuch of Credit Suisse. Great, thanks. Just thank you everybody for your interest. But the leverage that we're going to get in future quarters will come out of the funding base. I'll now ask John to discuss key aspects of our financial results in more detail. Thanks, Dominic. Roger Hochschild … Our common equity Tier 1 ratio increased 50 basis points sequentially, primarily due to the decline in loan balances. Thanks. Great. So, those are really some trends that have been there, but have accelerated in a very significant way as a result of the COVID pandemic. And you've got this really high savings rate going on right now. Yes, we did. Cumulative Growth of a $10,000 Investment in Stock Advisor, Discover Financial Services (DFS) Q2 2020 Earnings Call Transcript @themotleyfool #stocks $DFS, Why Discover Financial Services Stock Rose 12.5% in October, Discover Financial Services (DFS) Q3 2020 Earnings Call Transcript, 7 U.S. Banks That Will Need to Hold More Regulatory Capital. So you've been pleased with your account growth that you've generated over the past couple of quarters. I understand. And then third, which is a consideration of their business is certainly the customer relationships and ensuring that our long-term good quality customers aren't feeling like they're impacted in a way that's unfair. Stock Advisor launched in February of 2002. Consumer financial obligation load is significantly lower today than it was coming into the Great Recession and debt service load was also -- it's also lower today. And so, you can't map total unemployment to losses in a prime card base, the way that you saw that pattern in last downturn. On the liability side, we've seen great appetite on our -- for our deposit products, which is positive. Your next question comes from the line of Bob Napoli with William Blair. Market data powered by FactSet and Web Financial Group. We've continued to fund our quarterly dividend at $0.44 per share of common stock in line with requirements provided by our regulators and approved by our Board of Directors. Our call today will include remarks from our CEO, Roger Hochschild; and John Greene, our Chief Financial Officer. In these uniquely challenging times, I'm pleased with Discover's results and how well our business model has performed. Okay. Yeah, thanks for the question. Just the jobless claims 787,000 this morning, big improvement, but ridiculously high report of that sort. 23, 2020Corporate Participants: Craig Streem — Investor Relations. So I would characterize it this way, as the $400 million of cost savings from the previous guidance, I wouldn't necessarily call that a deferral. While overall credit performance remained strong through the third quarter, we expect the economic environment to lead to deterioration in consumer credit, with delinquencies slightly increasing in 2021. Roger C. Hochschild — Director, Chief Executive Officer and President. Yeah. The average estimate of three analysts surveyed by Zacks Investment Research was for earnings of 33 cents per share. Sales volume turned positive in September and net interest margin expanded nicely. Discover Financial Services Q3 2020 Earnings Call Oct 22, 2020, 8:00 a.m. Credit performance remains stable but some deterioration is expected in the coming quarters. To summarize the quarter, we're pleased with our results given the extremely challenging environment. So, in the first quarter, our NIM was 10.21% and then in the second quarter, it came down to 9.81%. I will now turn the call over to Mr. Craig Streem, Head of Investor Relations. Non-interest income was down 10% driven by lower fee income, reflecting fewer late fee incidences and the impact of lower overall spending and cash advance fees. Is that right? In terms of new accounts, while we don't disclose a number on that, what I would say is that, we think we probably sustain new account marketing more than a lot of competitors as I look at industry metrics. So first having been here for over 20 years, I have to maybe disagree with the phrase chronic under investment. Crystal, thank you very much, and welcome everybody to our call this morning. That all makes sense. Yeah. And so, as we think about how we use capital, the top priority is supporting organic growth, next comes a mix of dividends and buybacks. So we'll see, but we'll look at it through the quarter, the fourth quarter and make a call in terms of what's appropriate from a GAAP standpoint. Thank you. Now, the 11% does feel at this point like a, I'll call, a robust number, but what we -- what we're trying to get clarity on is, as the service workers who initially were impacted by the pandemic containment activity went to the unemployment ranks, some of those have returned. I was just wondering what is happening there, is it just competitive factors, is that mix issue. Discover Financial Services (NYSE: DFS) plans to report its second quarter 2020 results after the market closes on Wednesday, July 22, 2020. Martins Research • Mon, Oct. 26 • 5 Comments Q2 2020 (Jun 2020) EPS of -$1.20 missed by -$1.17 Revenue of $2.66B ( … If we can do that -- do some promos or balance transfers safely in a credit environment we will do that, because it would be high returning -- high returning customers. I think usually you guys are in the mid teens or somewhere in that range. I would say that in terms of overall volume it was up 16% year-over-year, at least for PULSE and certainly we are happy about that. So we don't expect there to be a rush of white-collar unemployment, but what will be clear and we've seen some of this already is businesses are sizing both their professional staff and the blue collar staff for the business at hand. One of the questions is around stimulus and if you don't get it, how much does that impact potential changes in the reserve and then the other pieces on the mortgage forbearance. So we look at the card yield. So if we had peaked out in the low 240s, could we actually potentially see the margin somewhere in excess of that over the next few quarters. But knowing you'll see message resonates surprisingly well. I certainly would caveat that and say that consumer behavior is really difficult to predict here in a time such as this. As we considered the level of allowances needed, we modeled several different scenarios. And I was just wondering how much -- how you think about the dividend going forward and how much of a priority is to maintain it, given some shareholders look at it as an important or just maybe how you think about it given the trajectory of your earnings? Net charge-offs improved 130 basis points and the 30-plus delinquency rate was down 39 basis points from the prior year. EPS of $2.45 beats by $0.91 Revenue of $2.71B (-6.41% Y/Y) beats by $53.62M The following slide deck was published by Discover Financial Services in conjunction with their 2020 Q3 … But again, it's caveated by all of those points that I just mentioned. We also considered unemployment reports in June and July, which showed higher permanent unemployment and the impact of recent increases in COVID-19 cases. Betsy Graseck -- Morgan Stanley -- Analyst. It's really the impact of those on the overall economy and keeping the trough from being too deep. Craig is going to continue to lead the IR team until a successor has been named and is in place. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. I mean, I think -- as you think about the importance of the government programs, it's less about the $1,200 check that a family gets, as you think about life of loan losses and what that will support. Yeah. Discover Financial Services (DFS) Q2 2020 Earnings Call Transcript DFS earnings call for the period ending June 30, 2020. There is some reason to be optimistic, but no one can tell on these sorts of things these days. But today, we don't see anything that -- that's out there that would suggest that reserves are, I'll say, weak or deep strengthening at this point. So, why don't I start with the NIM question. We are continuing to look at the mix and incentives to ensure we're driving appropriate level of profitability for the investments we're making there in the payments business. Discover Financial Services. At this time, I would like to welcome everyone to the Second Quarter 2020 Discover Financial Services Earnings Conference Call. I'm not going to get into the details. But overall, as you look at where we are this quarter, I see some upside from that from my vantage point today. The forbearance programs have acted exactly as we had hoped, they've helped some customers manage through the pandemic. DM Martins Research Mon, Oct. 26 5 Comments. Discover Financial Services posted a solid set of numbers in the third quarter, driven by a well-balanced mix of positive and negative factors. But what I can point you to is retail, in my prepared comments in terms of the growth we've seen there. I know typically it's a function of account growth and balances per account and obviously you've had some shrinkage recently because of the spend levels that we all know about. [Operator Instructions] We will take our first question from Sanjay Sakhrani with KBW. We do enjoy slightly better pricing if it's a direct relationship versus through a brokers. In particular, our strong partnerships with PayPal and Amazon, some of the programs we're already putting in market with Amazon will serve us well in the fourth quarter. Good morning and good quarter. Certainly, the asset side has been strong as we talked about in the prepared comments. Thanks for joining us. Yeah. Just first off, on the outlook for growth. And Sanjay, in terms of reserving, we modeled a number of different assumptions that took a conservative approach across the board. And we're very disciplined and, to a lesser extent, involved in M&A. We didn't actually quantify that, but as we were making determinations on economic scenarios, and frankly, the overall quantum of reserves and reserve coverage, it was one -- it was a point that helped us get to where we arrived. So, Sanjay, just to echo those comments, we feel very good about the overall reserve and the conservative approach we took, especially given when you look at the overall portfolio performance that we've seen to date and actions we've taken back as far as 2017 on the personal loans business. I mean, I think we would have expected a little bit more of a big bulge coming out of the deferral periods and the expiring of a lot of the stimulus. And so, when you think about your expectation for unemployment at 11% by year-end and where we are and the idea of a white collar rush of unemployment, that would be quite the rush of white-collar unemployment versus the amount of people that are unemployed now versus a steady state. Discover Financial Services plans to report its first quarter 2020 results after the market closes on Wednesday, April 22, 2020. Yeah. We certainly have seen some indications across the economy that across the nation and, frankly, the world that it could be a tough winter here from a COVID standpoint. Thanks so much. Hi, good morning. For our customers, we continue to provide an industry-leading service experience, leveraging our digital capabilities and with average answer times in our call centers remaining at pre-pandemic levels of under one minute. I'm curious, if you feel like with this reserve build that you're pretty much done provided, there is no significant change to the macro outlook. And then just separately on credit and the outlook for credit here. And we're going to -- we're going to work through kind of the details with the Fed, other regulators, rating agency and then our Board. But there had been some concern among investors when you guys gave guidance earlier this year, pre-COVID that Discover may have lost its expense discipline and that's the reason that you guys at the time guided to negative operating leverage was due to years of chronic under investment. Our common equity Tier 1 ratio increased 40 basis points sequentially, mainly due to decline in loan balances. Thank you. Kind of a short-term question. Yeah. Slide 8 highlights enrollment trends in our Skip-a-Pay program, which offers relief to customers experiencing financial stress due to the pandemic. We quickly implemented changes to credit policy at the onset of the pandemic, including tightening criteria for new accounts and line increases and additional income verification. I'm glad you guys are doing well and congratulations, Craig. Thank you. So good news on what it's doing on the deposit side of our business. But again, I think you can expect to see the continued expense discipline that I think has always been a hallmark here at Discover, our overall lower cost operating model. Since its inception in 1986, the company has become one of the largest card issuers in the United States. Yeah. Good morning. I'd like to turn the floor back over to Craig Streem for any additional or closing remarks. And thanks to our listeners for joining today's call. So I'm really excited about the progress the team is making there. Discover Financial Services Q1 2020 earnings call dated Apr. Betsy Graseck -- Morgan Stanley -- Analyst. So, to John's point, we really think about it just in terms of at a macro level as opposed to what those checks may do in one month for a given household. So, some of that will be based on the funding of our balance sheet and some of it will be based on the competitive environment that we're dealing with. Okay. And then regarding the liability side, the order of magnitude and the drop in liability costs over the last couple of quarters are obviously very strong, just given the rate environment. It has come down recently. Similar to last quarter, I won't review our standard slides on loan growth, payment volumes, or revenue and expense, but you can find our traditional disclosures on slides 11 to 16 in the appendix to this presentation. But the other expense lines, professional fees, information processing, other miscellaneous expense, we're going to keep a foot on those to ensure that we're disciplined about how we're spending the dollars. Of the 90% of the $400 that you've saved, how much of that was -- is just investments that have been deferred versus actual core efficiencies that you guys have identify and taken out. I know you already addressed one question on that earlier in the Q&A. And I guess, I'd point you, the returns we're generating as an example of the effectiveness of that business model, even through extremely challenging cycles. To date, we enrolled a total of $3.4 billion of card loans. I'm not going to give a bunch of detail here, but what I can say is, we look at the second quarter as likely the trough on NIM overall. Moving to slide six. And so it's a blend of those two. Or is there something else I'm not thinking about. During the Q&A session, please limit yourself to one question and if you have a follow-up please queue back in so we can accommodate as many participants as possible. Dominick Gabriele -- Oppenheimer -- Analyst. And so, things like permanent unemployment, there -- you need to adjust to that. Please go ahead. Is there a minimum level of broker that you want to maintain? Thanks. Now, to be honest, those segments inherently are likely to be a little bit more risky. Managing credit remains a top priority. In our other lending products, organic student loans increased 7% from the prior year and personal loans decreased 5%. Operating expenses of $1.1 billion were flat to the prior year and included a $59 million one-time impairment charge to our Diners business, relates to the impacts of the slowdown in global T&E spending. And finally, capital and liquidity both remained strong. While I am pleased with our execution in the second quarter, we remain in a very challenging environment with considerable uncertainty as our country continues to struggle to stop the spread of COVID-19 and the impact on our economy remains very significant. Certainly, the mix of revolvers and transactors will also have an impact and typically impacts the fourth quarter a bit but. In summary, solid results in the third quarter, the portfolio remains stable with improvements in overall delinquency levels, reserves were flat, except for those pertaining to student loans where the balance and commitment levels increased. And then a follow up. Marketing and business development expense was 42% lower year-over-year as we responded to the significant slowdown in the US economy. And so, we will have to adjust our strategies accordingly. And ladies and gentlemen, that was our final question. RIVERWOODS, Ill.-- (BUSINESS WIRE)-- Discover Financial Services (NYSE: DFS) plans to report its first quarter 2020 results after the market closes on Wednesday, April 22, 2020. And then just one quick one on the -- I was hoping that you guys operate more on the network business. Okay. And does that feed into your reserve analysis as well? But in terms of the environment, I think the jobless claims numbers and we'll see what this week has, but seven straight weeks over 800,000 and more and more of that permanent unemployment in white collar is a reason for ongoing concern. Great. Our key macro assumptions were an unemployment rate of 11% at the end of 2020 and slowly recovering over the next several years. The timing of the rise in delinquency and subsequent losses could be impacted if there is a second government stimulus program or economic trends shift materially. Relative to the second quarter, NIM increased primarily due to favorable consumer deposit pricing. At this time, I would like to welcome everyone to the Third Quarter 2020 Discover Financial Services Earnings Conference Call. Discover Financial Services Dips on Earnings Miss The company flips into the red on the bottom line due to the now-expected heavy provisioning. Got it. Your last question comes from the line of Kevin Barker with Piper Sandler. So, it's actually relatively small, the -- on the delinquency number, it's somewhere between 5 and 10 basis points. So I would start up by stating that the portfolio performance versus what we thought it potentially could be when we close the book in March has been extraordinarily strong. Right. Yeah. That said, we believe we have taken the appropriate credit actions and don't see the need to make significant changes at this time. Our next question comes from the line of Rick Shane of JP Morgan. [Operator Instructions] Thank you. And so, I would characterize it that way. [Operator Instructions] Your next question comes from the line of Meng Jiao with Deutsche Bank. ET. Thank you. So, we're feeling good about that. The trend continued through the first half of October with sales up 7%. The greatest weekly decline was in mid-April when total sales were down 33% for the week ending April 18. Yeah. But then also marketing investments that drive profitable growth and high returning accounts.
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