Discover Financial Services Reports Second Quarter Net Income of $753 Million or $2.32 Per …

The company’s return on equity for the second quarter of 2019 was 26%. … Shares of common stock outstanding declined by 1.8% from the prior …

2019 Capital Plan

On June 27, 2019, the Company announced that its capital plan for the four quarters ending June 30, 2020 contemplates share repurchases of up to $1.63 billion and an increase in the company’s quarterly dividend from $0.40 to $0.44 per share of common stock.

The capital plan contemplates actions that maintain capital ratios to meet regulatory and legal requirements and support the company’s funding and other capital markets activities. The timing and exact amount of repurchases under the new repurchase program will be based on market conditions and other factors, including Accounting Standards Update 2016-13, Financial Instruments – Credit Losses, commonly known as CECL, which becomes effective on January 1, 2020, and will change how financial institutions, including the company, account for expected credit losses.

Conference Call and Webcast Information

The company will host a conference call to discuss its first quarter results on Tuesday, July 23, 2019, at 4:00 p.m. Central time. Interested parties can listen to the conference call via a live audio webcast at

About Discover

Discover Financial Services (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 issues the Discover card, America’s cash rewards pioneer, and offers private student loans, personal loans, home equity loans, checking and savings accounts and certificates of deposit through its direct banking business. It operates the Discover Global Network, comprised 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 around the world. For more information, visit

A financial summary follows. Financial, statistical, and business related information, as well as information regarding business and segment trends, is included in the financial supplement filed as Exhibit 99.2 to the company’s Current Report on Form 8-K filed today with the Securities and Exchange Commission (“SEC”). Both the earnings release and the financial supplement are available online at the SEC’s website ( and the company’s website (

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements, which speak to our expected business and financial performance, among other matters, contain words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “aim,” “will,” “may,” “should,” “could,” “would,” “likely,” and similar expressions. Such statements are based upon the current beliefs and expectations of the company’s management and are subject to significant risks and uncertainties. Actual results may differ materially from those set forth in the forward-looking statements. These 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.

The following factors, among others, could cause actual results to differ materially from those set forth in the forward-looking statements: changes in economic variables, such as the availability of consumer credit, the housing market, energy costs, the number and size of personal bankruptcy filings, the rate of unemployment, the levels of consumer confidence and consumer debt, and investor sentiment; the impact of current, pending and future legislation, regulation, supervisory guidance, and regulatory and legal actions, including, but not limited to, those related to tax reform, financial regulatory reform, consumer financial services practices, anti-corruption, and funding, capital and liquidity; the actions and initiatives of current and potential competitors; the company’s ability to manage its expenses; the company’s ability to successfully achieve card acceptance across its networks and maintain relationships with network participants; the company’s ability to sustain and grow its non-card products; difficulty obtaining regulatory approval for, financing, closing, transitioning, integrating or managing the expenses of acquisitions of or investments in new businesses, products or technologies; the company’s ability to manage its credit risk, market risk, liquidity risk, operational risk, compliance and legal risk, and strategic risk; the availability and cost of funding and capital; access to deposit, securitization, equity, debt and credit markets; the impact of rating agency actions; the level and volatility of equity prices, commodity prices and interest rates, currency values, investments, other market fluctuations and other market indices; losses in the company’s investment portfolio; limits on the company’s ability to pay dividends and repurchase its common stock; limits on the company’s ability to receive payments from its subsidiaries; fraudulent activities or material security breaches of key systems; the company’s ability to remain organizationally effective; the company’s ability to increase or sustain Discover card usage or attract new customers; the company’s ability to maintain relationships with merchants; the effect of political, economic and market conditions, geopolitical events and unforeseen or catastrophic events; the company’s ability to introduce new products or services; the company’s ability to manage its relationships with third-party vendors; the company’s ability to maintain current technology and integrate new and acquired systems; the company’s ability to collect amounts for disputed transactions from merchants and merchant acquirers; the company’s ability to attract and retain employees; the company’s ability to protect its reputation and its intellectual property; and new lawsuits, investigations or similar matters or unanticipated developments related to current matters. The company routinely evaluates and may pursue acquisitions of or investments in businesses, products, technologies, loan portfolios or deposits, which may involve payment in cash or the company’s debt or equity securities.

Additional factors that could cause the company’s results to differ materially from those described in the forward-looking statements can be found under “Risk Factors,” “Business – Competition,” “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 December 31, 2018, and “Management’s Discussion & Analysis of Financial Condition and Results of Operations” in the company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2019, which are filed with the SEC and available at the SEC’s internet site (

(unaudited, in millions, except per share statistics)
Quarter Ended
June 30, 2019 March 31, 2019 June 30, 2018
Interest Income




Interest Expense




Net Interest Income




Discount/Interchange Revenue




Rewards Cost




Discount and Interchange Revenue, net




Protection Products Revenue




Loan Fee Income




Transaction Processing Revenue




Other Income




Total Other Income




Revenue Net of Interest Expense




Provision for Loan Losses




Employee Compensation and Benefits




Marketing and Business Development




Information Processing & Communications




Professional Fees




Premises and Equipment




Other Expense




Total Other Expense




Income Before Income Taxes




Tax Expense




Net Income




Net Income Allocated to Common Stockholders




Basic EPS




Diluted EPS




Common Stock Price (period end)




Book Value per share




Direct Banking




Payment Services








Total Assets




Total Liabilities




Total Equity




Total Liabilities and Stockholders’ Equity




Ending Loans 1, 2




Average Loans 1, 2




Interest Yield




Gross Principal Charge-off Rate




Gross Principal Charge-off Rate excluding PCI Loans 3




Net Principal Charge-off Rate




Net Principal Charge-off Rate excluding PCI Loans 3




Delinquency Rate (30 or more days) excluding PCI Loans 3




Delinquency Rate (90 or more days) excluding PCI Loans 3




Gross Principal Charge-off Dollars




Net Principal Charge-off Dollars




Net Interest and Fee Charge-off Dollars




Loans Delinquent 30 or more days 3




Loans Delinquent 90 or more days 3




Allowance for Loan Loss (period end)




Reserve Change Build/(Release) 4




Reserve Rate




Reserve Rate excluding PCI Loans 3




Ending Loans




Average Loans




Interest Yield




Gross Principal Charge-off Rate




Net Principal Charge-off Rate




Delinquency Rate (30 or more days)




Delinquency Rate (90 or more days)




Gross Principal Charge-off Dollars




Net Principal Charge-off Dollars




Loans Delinquent 30 or more days




Loans Delinquent 90 or more days




Allowance for Loan Loss (period end)




Reserve Change Build/(Release)




Reserve Rate




Total Discover Card Volume




Discover Card Sales Volume




Rewards Rate




PULSE Network




Network Partners




Diners Club International 5




Total Payment Services




Discover Network – Proprietary








1 Total Loans includes Home Equity and other loans.
2 Purchased Credit Impaired (“PCI”) loans are loans that were acquired in which a deterioration in credit quality occurred between the origination date and the acquisition date. These loans were initially recorded at fair value and accrete interest income over the estimated lives of the loans as long as cash flows are reasonably estimable, even if the loans are contractually past due. PCI loans are private student loans and are included in total loan receivables.
3 Excludes PCI loans (described above) which are accounted for on a pooled basis. Since a pool is accounted for as a single asset with a single composite interest rate and aggregate expectation of cash flows, the past-due status of a pool, or that of the individual loans within a pool, is not meaningful. Because the Company is recognizing interest income on a pool of loans, it is all considered to be performing.
4 Allowance for loan loss includes the net change in reserves on PCI pools having no remaining non-accretable difference which does not impact the reserve change build/(release) in provision for loan losses.
5 Volume is derived from data provided by licensees for Diners Club branded cards issued outside of North America and is subject to subsequent revision or amendment.
Note: See Glossary for definitions of financial terms in the financial supplement which is available online at the SEC’s website ( and the Company’s website (

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MPOWER Financing rated Top international student lender by Nerdwallet and US News

The innovative fintech firm uses big data analytics and artificial intelligence to offer scholarships and no-cosigner loans for international students in the …

The innovative fintech firm uses big data analytics and artificial intelligence to offer scholarships and no-cosigner loans for international students in the U.S. and Canada

WASHINGTON, July 17, 2019 /PRNewswire/ — MPOWER Financing, a mission-driven fintech that provides financial access to higher education for high-promise international and DACA students, was recognized by both Nerdwallet and U.S. News & World Report as the top student loan provider for international students.

Nerdwallet, a comparison website for personal finance products, awarded MPOWER a 5-star rating for its student loans, indicating that its products are “among the very best for consumer-friendly features.” Nerdwallet also commended MPOWER for offering loans that are “ideal for international and DACA students without a co-signer or U.S. credit history.” MPOWER’s loans are available to students from around the world for both graduate and undergraduate degrees at more than 350 top universities in the U.S.and Canada.

U.S. News & World Report recognized MPOWER Financing as the “best lender for international students.” This determination was made on the basis of MPOWER’s product offerings, cost, customer servicing ratings, eligibility, and other features. U.S. News also detailed that MPOWER’s underwriting process considers a student’s academic success and career path – a process that is enabled by MPOWER’s use of big data analytics and artificial intelligence.

“I was having a tough time obtaining education loans from India without collateral,” wroteKaushik Krishnan, one of MPOWER’s early students. “MPOWER was truly life changing for me. I’ve since graduated from my Masters program, found a job, and paid off my loan.”

“MPOWER allowed me to achieve my dream,” saidSol Bee, a South Korean student. “I was admitted to Berkeley in Fall 2016, but I couldn’t afford it at the time. MPOWER empowered me to be who I wanted to be by allowing me to take control of my finances and my life.”

“We’re honored by the industry recognition we’ve received, and the hundreds of heartfelt stories we get from students whom we have the privilege to serve,” says Manu Smadja, Co-founder and CEO of MPOWER. “We’re working hard to further improve our customer experience and to remain the best international student lending product on the market.”

MPOWER Financing, headquartered in Washington, D.C., and with offices in Bengaluru, New York City, and Toronto, is a mission-driven fintech company and provider of global educational loans. It is the only student lender in the world that leverages both overseas and domestic credit data, as well as future earning potential, to serve high-promise international and DACA students. MPOWER Financing works with over 350 top universities and colleges across the U.S. and Canada to provide financing to students from over 200 countries. Since 2014, it has received over $1B in loan application volume on its platform. MPOWER Financing helps students build their credit histories and provides them with personal finance education and career support to help prepare for life after school. The team is backed by Zephyr Management, Goal Structured Solutions, Gray Matters Capital, Lloyd Crescendo Advisors, 1776, Village Capital, Potentia, Breega, VARIV, DreamIt, Fresco, Chilango, Common Sense Fund, K Street, and University Ventures.

Contact: Sasha Ramani, 202-417-3800,

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Married to debt: Couples are taking out loans to pay for their weddings

… when he happened upon an ad for wedding-related loans while he was checking his credit score on Credit Karma. “I thought, ‘Hey, I’m going to be …

Abha Bhattarai

Reporter covering the retail industry

June 19 at 4:11 PM

Skyler Ramirez has a loan for his house, his car — and now his fiancee’s engagement ring.

The 26-year-old had already picked out the diamond solitaire from Tiffany & Co., when he happened upon an ad for wedding-related loans while he was checking his credit score on Credit Karma.

“I thought, ‘Hey, I’m going to be making a pretty sizable purchase,’” said Ramirez, a general contractor in Fort Myers, Fla., who proposed on Valentine’s Day. “I didn’t want to be using cash or pulling money from savings or investments accounts.”

It took about 15 minutes to get approval for the five-figure loan. At an interest rate of about 8 percent, it will take more than three years — and $300 a month — to pay it off. And it might not be the last loan he takes out as he prepares to get married.

Demand among Americans, who are already holding record levels of debt, for help financing weddings are giving rise to an industry of personal loans marketed specifically to brides and grooms.

[The average millennial has a net worth of $8,000. That’s far less than previous generations.]

Online lenders say they are issuing up to four times as many “wedding loans” as they did a year ago, as they look to reach a fast-growing demographic: Couples who are picking up the tab for their own nuptials, either by choice or by necessity. Financial technology companies with snappy names like Prosper, Upstart and Earnest are promoting wedding-specific loans with interest rates as high as 30 percent to cash-strapped couples. The loans are often marketed as a way to fund extras like custom calligraphy, doughnut displays and “Instagram-worthy” venues, though some borrowers say they rely on the loans to fund their entire wedding.

“People are carrying more debt, they want to get married but don’t have the funds to do so,” said David Green, chief product officer at Earnest, a San Francisco-based online lender. “These loans are a way to thread the needle.”

Demand for wedding loans has quadrupled in the past year, he said, making it the company’s fastest-growing line of business. Couples borrow, on average, $16,000 and typically pay it off within three years. Interest rates range from about 7 percent to 18 percent, making it a cheaper option than many credit cards. (The company’s tagline: Inspired by Pinterest? Make it happen with low interest.)

The popularity of these loans, experts say, comes amid a shift in how families are paying for weddings. There is less expectation, they said, that the bride’s parents will pick up the tab. Instead, both sets of parents, as well as grandparents, are increasingly contributing. The bride and groom are chipping in, too.

“Couples are getting married later, so they are more willing to pay,” said David Wood, president of the Association of Bridal Consultants. “At the same time, their parents are older, they may be on a retirement income and not have the means to pay for the wedding either.”

The average cost of an American wedding is rising, according to financial advisers. At the same time, Americans have more student loan debt than ever before — nearly $1.5 trillion of it. They are saving less and spending more on basics such as housing, food and transportation.

“What’s driving this growth? Weddings are getting more expensive and people are waiting longer to get married,” said Todd Nelson, director of strategic partnerships for LightStream, a lending division of SunTrust bank. “It used to be, generally speaking, the father of the bride was on the hook for paying for the wedding. That’s not necessarily the expectation anymore.”

So far this year the company has funded three times as many wedding loans as it did a year ago, Nelson said. LightStream considers a combination of factors, including credit history, employment and income, when approving applicants for personal loans.

While borrowing itself is nothing new — credit cards and family members have funded weddings for years — financial advisers say these types of online loans take lending a step further, by directly targeting 20- and 30-somethings on their computers. Ads for wedding loans, they say, have become commonplace on social media, as well as financial planning sites like Lending Tree, NerdWallet and LendEdu. LightStream’s online ads promise wedding loans with interest rates “as low as 5.74 percent.” Upstart, meanwhile, has a partnership with the wedding site the Knot, which frequently promotes its loans.

“Financial companies have become very good at making you feel okay about borrowing money,” said Roger Ma, a financial planner in New York. “In the end, though, they just want you to spend money you don’t have, and that’s never a good idea.”

[One way to save on your wedding: Pick a destination people won’t travel to]

As for Ramirez, he proposed on Valentine’s Day during a trip to Key West. (She said yes.) The couple is now planning a November wedding for 200 guests, though they have yet to decide exactly who will pay for it, or how.

“We’re asking family members — moms, dad, grandparents — if they can help,” Ramirez said. “But depending on what happens, we might be back for another loan.”

When Mary Naklicki got married in 1977, her parents paid $10 per person for her reception. Naklicki may have to pay 11 times that for her daughter’s November wedding.

“There’s so much more to pay for now,” said Naklicki, 62, who lives in Millsboro, Del. “These kids have photo booths and videographers. There was none of that when I got married. I paid for my gown, flowers and the photographer and that was it.”

Naklicki and her husband recently took out a five-year, $10,000 loan from the online lender Upstart to pay for their daughter’s wedding at a local country club. They had just paid for a family trip to Disney World over Thanksgiving when they got word that their younger daughter’s boyfriend planned to propose.

“We said, oh gosh, that means she’s going to want to plan a wedding,” said Naklicki, who plans to retire from her job as a traffic coordinator for a manufacturing company in three years. “We’d just spent all this money and figured a loan was our best option.”

Financial planners say they’ve seen an uptick in clients who are tempted to take out loans to cover wedding costs. But, they say, they try to steer clients toward less expensive options, or to encourage them to put off the reception while they save.

“The problem is, you don’t want to rely on a personal loan for something that isn’t necessary — and there is nothing necessary about an expensive wedding,” said Stefanie O’Connell, a personal finance expert and author of “The Broke and Beautiful Life.” “Everything about weddings is discretionary, aside from what you pay the county clerk.”

O’Connell, who is getting married in August (and paying for the wedding in cash), said she also encourages couples to think about their long-term plans.

“You have to put it in context,” she said. “You could spend $30,000 on a one-day celebration, or you could use it to put a down payment on a house. These loans sound great when you’re planning your wedding, but afterward, I hear a lot of regret.”

[Student debt now affects a staggering number of elderly Americans]

Brad Pritchett and David Chadd had hoped to pay for their wedding with cash. But about a month before their February nuptials, they realized they were $13,000 over budget.

“Quite frankly, we both have a taste level where we weren’t willing to compromise,” said Pritchett, 38, vice president of marketing for the American Heart Association. “It was important for us to have a great party to celebrate our love.”

He and Chadd, 27, took out a loan to cover costs. The process itself was “shockingly easy,” he said.

“Neither of us talked to a person, ever,” said Pritchett, who also has student loans. “The money landed in our account, and we were like, ‘It feels like we just did something illegal.’ It was crazy.”

About 150 guests attended their wedding at an upscale hotel near Dallas. The grooms wore custom bow ties, and their dogs (also in bow ties) walked down the aisle with them. There were confetti cannons and a surprise flash mob dance performance.

“It was just perfect,” Pritchett said. “We had the best time.”

The couple has set up automatic monthly payments to their lender, Prosper, and are hoping to pay off the two-year loan early. Pritchett said he has no regrets.

“But,” he added, “there are times when we think: Maybe in another life, eloping doesn’t seem like a terrible idea.”

Read more:

‘Stuff is meaningless’: Why brides and grooms are asking for down payments, Domino’s Pizza and TSA Pre-check instead

Tinder has more matchmaking power than your BFF. But dating apps aren’t necessarily your friends.

Your maid of honor is not made of cash

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How Pillar Is Helping Solve The Student Loan Problem

Rainfall Ventures, Great Oaks VC, Financial Venture Studio, Kairos, Red Dog Capital, and Day One Ventures participated in this round. And individual …
  • Pillar, a company that is helping solve the student loan problem, announced it has raised $5.5 million in seed funding
  • This round of funding was led by Kleiner Perkins with participation from Rainfall Ventures, Great Oaks VC, Financial Venture Studio, Kairos, Red Dog Capital, and Day One Ventures.
  • Individual investors Adam Nash, Noah Weiss, Zach Weinberg,Misha Esipov, Patrick Kavanagh, and Nadia Asoyan also participated

Pillar is a company that helps people manage, pay off, and save money on their student loans. And early users of the service have already linked $50 million worth of student loans into the platform for automating and managing the loan repayment process. And Britta Mulderrig, the head of growth and marketing at Pillar, announced that the company has $5.5 million in seed funding led by Kleiner Perkins.

Rainfall Ventures, Great Oaks VC, Financial Venture Studio, Kairos, Red Dog Capital, and Day One Ventures participated in this round. And individual investors include Adam Nash (the former CEO of Wealthfront and Acorns board member), Noah Weiss (former SVP of Product at Foursquare), Flatiron Health co-founders Zach Weinberg and Nat Turner, Misha Esipov (CEO and co-founder of Nova Credit), Patrick Kavanagh (head of growth at Robinhood), and Nadia Asoyan (head of finance and strategy at Robinhood) also joined.


Student loan debt is considered the second largest type of consumer debt with 45 million borrowers in the US owing more than $1.5 trillion. And 7 out of 10 students take out loans for paying for college and the average person graduates school with $30,000 in debt and it takes an average of 20 years to pay it off. And it takes more than 30 years on average for people with $60,000 in debt to pay it off. Nearly 20% of borrowers owe more than $100,000 after graduation.

And student loans also have a negative impact on the economy and harms wealth creation opportunities in America. About 83% of people ages 22 to 35 with student debt blame their loans as the reason why they have not bought a house yet. And women — who own two-thirds of all student loan debt — are disproportionately impacted due to the gender pay gap. Since women borrow more and earn less, it results in two extra years for paying off their loans.

How does Pillar work? The platform aggregates all of a borrower’s student loans into one place. Then it analyzes their loans, income, and spending for determining the fastest way to pay down their debt. From there, Pillar automates the payment and management process — which makes it easy for people to take action and pay off debt faster.


“Last year my wife graduated from law school with over $300k of student loans. I was at Stanford Business School, where I planned to take on another $250,000 of debt. We spent weeks researching how we were going to pay our loans back, but struggled to find a way that was right for our unique financial situation and goals,” said Pillar co-founder and CEO Michael Bloch. “I experienced the same problem that millions of other borrowers face each day. I saw how the student loan debt crisis is one of the biggest challenges facing our country, so I dropped out of Stanford to help solve it.”

Essentially, it solves the pain points inherent to managing student loans, thus creating a positive impact on borrowers and helping them get out of debt faster. And the average borrower on Pillar will save $6,200 and four years on repayment.


“Managing student loans has become one of the biggest challenges for many Americans today, impeding their financial well-being,” added Kleiner Perkins investor Monica Desai. “Startups have revolutionized many aspects of personal finance. We believe Pillar is well poised to tackle this mounting crisis and make it radically easier for graduates to manage and get ahead of their student loans.”

One of the biggest issues for borrowers is that student loan lenders are financially incentivized to keep people in debt longer. Pillar is not a student loan provider or refinancer so it does not make money from charging interest on student loans. And it takes just two minutes to sign up with Pillar. Plus it is completely free to download and use. Later this year, Pillar is going to introduce premium features that people can access.

“According to my student loan providers, I will be paying off my loans until I am 40 — yikes. I’m excited about Pillar because it tells me how much money I save by paying a few extra dollars towards my loans every month, which lender apps don’t do and are hard to use. With Pillar, I can see all my loans in one place and can finally see how much money that extra $5 saves me!” exclaimed BNY Mellon project manager Jordan Trejo.

With Pillar, people can make in-app payments and they are regularly updated on new ways to save money so that they can pay off their loans more effectively. And Pillar shows people how much money they will save over time if they make specified payments now or in the near term and whether they can afford to increase or decrease their payments.

“There is no simple way to figure out if you’re on track with making your student loan payments, I’m always wondering if I’m doing the right thing and making the right payments. Pillar’s app makes it easy to know if you are on the right track and making progress,” explained filmmaker Nora Unkel.

Pillar was founded last year by Bloch and CTO Gilad Kahala. Kahala was previously a senior data engineer at Spring Inc., a senior software engineer at Fiverr, and a software engineer for ForNova, IBM, and Zoran. And prior to launching Pillar, Bloch was a manager at DoorDash, the head of growth at Camio.

“I’ve been looking for a way to easily see and repay my student loans all in one place,” explained Ashwin Aravind — who is a law school graduate and management consultant with more than $200,000 in debt. “It’s exciting to see Pillar come along because that’s exactly what it does. I can use it without getting confused or feeling like I’m being kept in debt longer so someone else can make money off of me.”

You can download and sign up for Pillar in two minutes via iOS or via Android, which will add users quickly to a growing waitlist. Early access to Pillar is based on a first-come, first served basis.

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