While the overall portfolio performance has been stable through the second quarter, we do expect to see some deterioration in consumer credit in coming quarters. 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. Thank you. What we saw was actually, as Roger said, excellent underlying portfolio performance. Card charge-offs increased 41 basis points from the prior year, mainly due to seasoning of loan growth. It's really the impact of those on the overall economy and keeping the trough from being too deep. [Operator Instructions] Thank you. Since its inception in 1986, the company has become one of the largest card issuers in the United States. A lion's share of that has been as a result of online retailers and you know the major players there, which is driving, I'll say, further demise of the brick and mortar retailers and accelerating the digital channel for a card, things that Discover offers in terms of the network and our Secure Remote Commerce that we're working on, all will position us well for that growing trend. In the early stages of the pandemic, there was a substantial difference and the market took care of that and narrowed the gap. And what you can see there is, based on the maturity profile and the cost we're seeing versus online deposits that there will be an opportunity to expand net interest margin. Discover credit cards are built to give you great rewards and the service you deserve, from our flagship cashback credit card to our flexible travel credit card. John T. Greene -- Executive Vice President, Chief Financial Officer. So, overall, we feel very comfortable with our reserve today, and as the economic conditions unfold, that will have an impact, either plus or minus on the overall reserve. 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. Credit performance in this product continues to benefit from tight underwriting and a high percentage of cosigned loans. Likewise, Betsy. Okay. 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. So you will have plenty of opportunity to wish him well, as we all do. 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. Thank you. The bulk of the reduction was in brand marketing and card acquisition. Credit performance in our personal loan portfolio continue to be very strong this quarter, reflecting our disciplined underwriting and the benefit of credit actions implemented over the past several years. Discover Financial Services plans to report its second quarter 2020 results after the market closes on Wednesday, July 22, 2020. And right now we are in a situation where we have excess liquidity; and then the second -- the second piece of the equation is, the competitive landscape. So we did see lower global acceptance expense in the quarter and that's a function of two things, a little bit on the economy and liability associated with some of our partners executing on kind of terms associated with previous incentive agreements. And finally, capital and liquidity both remained strong. Our leadership position in cash rewards and flexible redemption options, including a point-of-sale with Amazon and PayPal are serving us well as consumers are increasingly shopping online and concerns over the safety of travel are limiting the appeal of airline miles. 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. Thank you, Maria. Thank you. Of those, out of the program, approximately 80% have returned to making payments. A quick follow-up on credit. Roger C. Hochschild — Director, Chief Executive Officer and President. It'd be premature on that. In our other lending products, organic student loans increased 7% from the prior year and personal loans decreased 5%. John, on net interest margin, you saw some really nice expansion, you talked about the benefits that you are seeing from lower promo activity. These were partially offset by lower funding costs. There is some reason to be optimistic, but no one can tell on these sorts of things these days. Moving to Slide 6, which shows our allowance for credit losses. But again, it's caveated by all of those points that I just mentioned. Our next question comes from the line of Kevin Barker of Piper Sandler. Fraud is one of the areas where we're deploying advanced analytics and next generation modeling and leveraging additional information sources. 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. Yeah. Yes. As we move toward our targeted 70% to 80% of funding from consumer deposits, we expect to see continued benefits to net interest margin. Looking at slide seven. And so we feel good about that. That's -- frankly, it's tough to call it right now because we're modeling out unprecedented scenarios here. Stock Advisor launched in February of 2002. So, in the reserve, we, I think, took a conservative approach and used an economic outlook that was considerably worse than the end of Q1. Copyright, Trademark and Patent Information. One of the capabilities we've been working on is just the ability to react more quickly and that helped us react very quickly to the pandemic, in terms of tightening credit across all our products, but that should also help when job losses abate and it becomes time to widen the credit box as well. We will begin this morning on slide two of our earnings presentation which you can find in the financials section of our Investor Relations website investorrelations.discover.com. So, since the pandemic, just to give you some details, we decreased our online savings by about 60 basis points. Yeah. Thanks, Dominic. The question I have is just around the reserving level. Turning now to slide nine, showing credit metrics. So, that's what we like to do. To date, we've realized approximately 90% of the targeted $400 million of expense reductions we discussed over the past few quarters. Your next question comes from the line of Moshe Orenbuch with Credit Suisse. Look, we're entering what's historically the most important part of the year in terms of spending in consumer behavior. Great. 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. A conference call … Outside of a one-time item, operating expenses were down as we started to benefit from our expense reduction programs. The traditional links between unemployment and delinquency and charge-offs, we're trying to model that. And ladies and gentlemen, that was our final question. Loan growth continues to be affected by the pandemic, with total loans down 4% year-over-year, including card loans down 6% and personal loans down 5%. That concludes our formal remarks, so I'll turn the turn the call back to our operator to open the phone lines for Q&A. So, we've seen a lot of controversy around the dividend on with several competitors or even some other banks. Nevertheless, we've continued to see strong demand with average consumer deposits increasing 22% year-over-year and now making up 60% of total funding. So, we've been pleased with how -- actually how the balance sheet has come together. And does that feed into your reserve analysis as well? John Thomas Greene -- Executive Vice President and Chief Financial Officer. 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. The Registered Agent on file for this company is C T Corporation System and … Clearly, the year changed dramatically. The average estimate of three analysts surveyed by Zacks Investment Research was for earnings of 33 cents per share. Credit performance remains stable but some deterioration is expected in the coming quarters. Yeah. Since the end of 2019, we have seen a 70% increase in contactless spending. So let me start by talking a bit about the unemployment rate, and then I'll pass it to John to talk on the reserves. So in terms of positioning ourselves as the leading digital bank. In the quarter, we added $42 million to the allowance, driven by a $354 million increase in organic student loans. I think we are leveraging that position of strength. And progressively, it will start to impact the prime revolver base. So I would necessarily characterize it as more intense than ever. It's encouraging to see positive operating leverage in this environment. Discover Financial Services plans to report its first quarter 2020 results after the market closes on Wednesday, April 22, 2020. Great, thanks. The 30-plus delinquency rate improved 59 basis points from last year and 26 basis points from the prior quarter as credit performance of our card portfolio continued to be stable. 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. Certainly, the asset side has been strong as we talked about in the prepared comments. We will begin on Slide 2 of our earnings presentation, which you can find in the Financials section of our Investor Relations website, investorrelations.discover.com. Hey, Sanjay, it's Roger. Thanks, Moshe. 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 … I would say, until the environment improves, it's quite safe to expect continued heavy regulatory focus on return of capital. As we said pricing, given how hard it is to reprice cards after the Card Act, we're not reacting to specific competitors in a given quarter, we're taking -- working closely with financing, a very disciplined through the cycle book. Right. Discover Financial Services (NYSE: DFS): Fourth Quarter Results 2019 2018 YOY Change Total loans, end of period (in billions) $95.9 $90.5 6% Total revenue net of interest expense (in millions) $2,944 $2,807 5% Total net charge-off rate 3.19% 3.08% 11 bps Net income (in millions) $708 $687 3% Diluted EPS $2.25 $2.03 11% Discover Financial Services (NYSE: DFS) today reported … So, why don't I start with the NIM question. Yeah. We're effectively a -- added interest rate, basically balanced interest rate risk position. Asset yields are obviously going to be improving and it seems like the funding tailwinds are sizable over the next couple of quarters. Just first off, on the outlook for growth. I would say that, if the economic environment continues to improve, it's natural that we're going to spend more money on customer acquisition in order to drive profitable growth into the future. Thank you. Just hoping to get a little more color there. So fortunately we hedge those and have a nice benefit coming through over the next couple of years. [Operator Instructions] Your next question comes from the line of Meng Jiao with Deutsche Bank. Moshe Orenbuch -- Credit Suisse -- Analyst. As a direct banking and payment services company in the United States, Discover Financial Services (DFS Quick Quote DFS - Free Report) ... On its last earnings … Our next question comes from the line of Moshe Orenbuch of Credit Suisse. So, no specific information on that other than to say that underlying roll rates are far more positive than we thought they would be at this time. Thanks, Crystal. Roger, understanding that there will always be one-off investments that need to be made. Thanks for taking my call. So -- yeah. Our next question comes from the line of Dominick Gabriele of Oppenheimer. The 30-plus delinquency rate was 42 basis points lower than the prior year and down 24 basis points from the prior quarter. But I think a good way to think about it is charge-offs elevating in '21, perhaps peaking in the later part of '21 depending on the economic scenario that we're dealing with and then starting to tail off in '22. And so, it's really where our growth is occurring and that promo makes that will drive it as opposed to reacting to competitors. We do these programs to improve -- to improve the cash flows of the company and ensure that when there is a temporary issue with a customer that they -- they can manage through it and return to paying their bills. Our products are well positioned as consumers increasingly look for value in these challenging times. Moshe, thanks for the question. Thanks. 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. Of course, the safety of our employees continues to be a top priority, all areas of the Firm, including our 100% US-based customer service team are operating effectively in a remote environment and we have informed employees they will not be required to return to our physical locations until after January 1, 2021, at the earliest. Just thank you everybody for your interest. Under CECL, as you know, right, that is reserves for the life of loan for the loans we have on our balance sheet. So good news on what it's doing on the deposit side of our business. I'm curious -- two things, you're seeing an uptick in spending, which is a good sign. We earned $2.45 per share, driven by solid credit performance of our portfolio and significantly lower operating expenses. Professional fees decreased $38 million or 20%, mainly driven by lower third-party recovery fees related to core closure, as well as favorable vendor pricing adjustments. And how that's influencing your outlook for the 11% unemployment rate? That's an immediate benefit to net interest margin in the Company. In these uniquely challenging times, I'm pleased with Discover's results and how well our business model has performed. And we're very disciplined and, to a lesser extent, involved in M&A. So, we're seeing that the portfolio continues to be really, really stable as I said. Could you talk about what you're doing on the fraud side and how that was -- and did you renegotiate any of the global acceptance or is that a function of just volume and mix year-over-year versus the third quarter of '19 on how your expense base and other expense came down. The credit performance in our portfolio has been stable and we believe that the actions we've taken over the past few years, including reducing our contingent liability and the additional credit actions we implemented in March, position us well. So very, very mild impact to delinquency reporting as well. Craig is going to continue to lead the IR team until a successor has been named and is in place. Okay. The trend continued through the first half of October with sales up 7%.

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