Discover Financial Services (NYSE:DFS) Q1 2024 Earnings Report Call Recording April 18, 2024
Discover Financial Services wasn't among the 30 most popular stocks among hedge funds at the end of the third quarter (see the details).
operator: good morning. My name is Todd. Today I will be the conference operator. We would like to welcome you to the 2024 First Quarter Discover Financial Services Earnings Conference Call. [Operator Instructions] Please note that there will be no Q&A session after the prepared remarks in the morning. After the call, please contact the Discover Investor Relations team with any questions. [Operator Instructions] I will now turn the call over to Eric Wasserstrom, Senior Vice President of Corporate Strategy and Investor Relations. Please move on.
Eric Wasserstrom: Thank you and welcome to this morning's call. First, refer to slides 2 and 3 of the earnings presentation. This presentation can be found in the financial section of our investor relations website, investorrelations.discover.com. Today's discussion contains certain forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially. See the forward-looking statements contained in the Company's 2024 First Quarter Financial Results press release and presentation, as well as the Company's communication regarding the risk factors detailed in the Company's Annual Report and other filings with the SEC. please. Today's conference call will also include remarks from Interim CEO Michael Hepard. and John Green, our Chief Financial Officer. There will be no question and answer session after today's remarks. However, our investor relations team is available to assist with any questions. I will transfer your call to Michael.
Michael Shepherd: Thank you, Eric, and good morning everyone. Thank you for joining today's conference call. I would like to start the call by introducing myself. I joined Discover's Board of Directors in August 2023 after a career in financial services spanning over 30 years in the public and private sectors. Among other roles, I served as Senior Deputy Controller of Currency early in my career. Most relevant to my current position, I was Chairman and CEO of BancWest Corporation and Bank of the West. As Chairman of Bank of the West, I helped oversee the 2023 acquisition and integration of Bank of the West into Bank of Montreal. I hope my experience will serve our shareholder customers and employees as an effective leader during this critical time.
John Green will discuss our first quarter results in detail, but I would like to highlight several aspects of our financial performance. Discover's operating results continued to be strong with increased revenue in the period driven by strong loan growth, primarily reflecting normalization of payment rates and strong net interest margins. . We continue to see growth in accounts receivable while maintaining prudent underwriting and disciplined customer acquisition. Credit continues to perform in line with our expectations and delinquencies remain stable in line with our expectations. Importantly, we continue to invest meaningful resources to strengthen our risk management and compliance programs. In the first quarter, after ongoing internal review and extensive discussions with multiple stakeholders, including merchants and regulators, Discover decided to significantly increase its responsibilities for card misclassification issues.
We believe that taking this action will help resolve these issues. There's been a lot of change at Discover over the past few months, so we thought it might be helpful to highlight our decision-making framework. Our goal is to execute on our risk management and compliance priorities, maintain our commitment to excellent customer service, and ensure that we remain well-positioned to drive long-term value creation. to maximize shareholder value. As Discover's interim CEO, I am fully committed to these goals. This will improve our company and enable us to best contribute to the combined Capital One. The Capital One team is leading the integrated planning process and looks forward to working with our colleagues to support our common goals.
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