Discover Financial Services Reports Fourth Quarter Net Income of $387 Million

Discover Financial Services (NYSE: DFS) today reported net income of $387 million or $0.99 per diluted share for the fourth quarter of 2017, as compared to $563 million or $1.40 per diluted share for the fourth quarter of 2016. The company’s return on equity for the fourth quarter of 2017 was 14%. Net income included non-recurring charges of $189 million resulting from actions taken by the company in connection with the Tax Cuts and Jobs Act (“Tax Act”). These charges had the effect of reducing diluted earnings per share by $0.52.

Fourth Quarter Highlights
• Total loans grew $7.0 billion (9%) from the prior year to $84.2 billion.
• Credit card loans grew $5.8 billion (9%) to $67.3 billion, on Discover card sales volume of $35.3 billion.
• Total net charge-off rate excluding PCI loans increased 53 basis points from the prior year to 2.92% and the total 30+ day delinquency rate excluding PCI loans increased 23 basis points from the prior year to 2.20%.
• Consumer deposits grew $3.4 billion (9%) from the prior year to $39.4 billion.
• Payment Services transaction dollar volume was $54.0 billion, up 17% from the prior year.
• Income tax expense includes a one-time adjustment of $179 million to reflect the impact of the Tax Act.

“Our earnings in the fourth quarter and full year were driven by strong loan and revenue growth across our businesses, the result of continued execution of our strategy,” said David Nelms, chairman and CEO of Discover. “As we move forward in 2018, this strong momentum, enhanced by the favorable economic environment, should position us well for sustained growth, strong ROE and continued return of excess capital to shareholders. While the new tax law impacted the current quarter, I am excited about the opportunity it provides to further invest in growth, our people and our communities.”
details at:  https://investorrelations.discover.com/newsroom/press-releases/press-release-details/2018/Discover-Financial-Services-Reports-Fourth-Quarter-Net-Income-of-387-Million-or-099-Per-Diluted-Share/default.aspx

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