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. Yeah. A couple of questions. We also consider the current trends in unemployment and the increasing number of COVID cases. [Operator Instructions] Our first question comes from the line of Sanjay Sakhrani of KBW. 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. Now granted, it's very different environment, but the unemployment rate is relatively high and a little bit higher than what we had during the GFC. Moshe, thanks for the question. Thanks, Moshe. The Algorithm predicts "% Predicted Move After Earnings Announcement" (PMAEA) for DFS three weeks prior to earnings date. But management's intent is unchanged. Just to give us a sense of how much your deposit funding on average could compress? Moving to Slide 6, which shows our allowance for credit losses. I will now turn the call over to Mr. Craig Streem, Head of Investor Relations. Oct 21, 2020 4:55PM EDT (RTTNews) - Discover Financial Services (DFS) announced a profit for its third quarter that increased from last year. Now, as always, it's my pleasure to turn the call over to Roger. Since the onset of the pandemic, we have been a leader in reducing rates on our consumer deposit products. So [Multiple Speech]. I don't think any of us in business has seen this. And then, Roger, longer-term, coming out of the credit crisis, if I recall, you guys came out and took share and we're positioned pretty well. Given our current excess liquidity position, we expect to issue very little wholesale debt in the near term. 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. Thanks. He has been a wonderful team member and a terrific help with my transition into the Company. I guess, my question is on the reserve build. Card net charge off dollars actually came down $7 million, while the rate increased 13 basis points. These credit metrics benefit from disciplined underwriting and our strong customer service and collection efforts. Or are there like liquidity concerns of having assets unencumbered that you're managing to? Thank you. Thanks, Rick. We're on track to deliver the remaining 10% in the fourth quarter and continue to review the business for efficiency opportunities. The most significant driver of this was a $1.3 billion reserve build in recognition of further deterioration in the macroeconomic outlook subsequent to March 31. I'd like to turn the floor back over to Craig Streem for any additional or closing remarks. 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. We have continued to fund our quarterly dividend at $0.44 per share. And maybe if I can ask a follow-up question from a topic that was hit on before. Discover Financial Services (NYSE:DFS)Q2 2020 Earnings CallJul 23, 2020, 8:00 a.m. 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. Turning to slide eight. Sales have improved across all categories with particular strength in online retail, home improvement and everyday spend categories, partially offset by continued weakness in travel and entertainment spending. 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. I was just wondering what is happening there, is it just competitive factors, is that mix issue. 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. I appreciate all the color on reserves and provisions. Your next question comes from the line of Betsy Graseck with Morgan Stanley. 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. Thanks. And do you look at these types of opportunities as market share gain or is that too premature to be thinking about that? Asset yields are obviously going to be improving and it seems like the funding tailwinds are sizable over the next couple of quarters. If you experience any issues with this process, please contact us for further assistance. Analysts: Bob Napoli — William Blair — Analyst. I think -- I believe a majority of your customers have mortgages. So, in the first quarter, our NIM was 10.21% and then in the second quarter, it came down to 9.81%. Thanks so much. [Operator Instructions] Thank you. 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. We're using all the tools we have available. And so, a lot of what we're seeing are opportunities for either investments, partnership. So that -- that will be our focus. 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. Thank you, Maria. Since June 30th, we have decreased our online savings rate 41 basis points, down to 0.60%. We earned $2.45 per share, driven by solid credit performance of our portfolio and significantly lower operating expenses. But overall, as you look at where we are this quarter, I see some upside from that from my vantage point today. 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 there a specific number in terms of the amount of benefit from the forbearance impact? So we'll see how that plays out over the long term, but I couldn't be more excited about where we're positioned. We'll continue to look for opportunities to reduce deposit costs. As the economic environment evolve, we'll continue to monitor and take actions on expenses as conditions warrant. And we've talked a bit about temporary unemployment, as well as the impact on sort of entry-level retail, entry-level hospitality, entry-level restaurant. It is on Thu 28 Jan (In 36 Days). Compare credit cards to find which offer is right for you.. The pandemic continued to have a significant impact on sales volume, as well as loan growth through the quarter. That's consistent with what we've seen over the last decade plus from you guys. So, we continue to watch the differentiation on customers who elected to enter into one of the Skip-a-Pay programs to see if there is any potential issue. Our key macro assumptions were an unemployment rate of 11% at the end of 2020 and slowly recovering over the next several years. In terms of operating expenses, we remain on track to deliver $400 million of cost reductions this year, while continuing to invest in core capabilities, such as advanced analytics to increase efficiency and drive long-term value. “That way, when you make a purchase, the recipient doesn’t receive your personal financial information,” she says. The quarterly reserve calculation also included an overlay, which considers the impact of the Skip-a-Pay program, leveraging our previous experience with disaster relief. That's -- frankly, it's tough to call it right now because we're modeling out unprecedented scenarios here. [Operator Instructions] Thank you. Other loan products were generally flat from the prior quarter. Thanks. Our next question comes from the line of Bill Carcache of Wolfe Research. But we will invest according to the opportunities we see in the marketplace. Great, thanks. On the liability side, we've seen great appetite on our -- for our deposit products, which is positive. DM Martins Research Mon, Oct. 26 5 Comments. Thank you. And then just one quick one on the -- I was hoping that you guys operate more on the network business. Hey, Sanjay, it's Roger. And as I said earlier, we're going to be mindful in terms of those sorts of decisions. The -- in terms of the government programs, we did nothing in our modeling to reflect what's been kicked around right now in Washington in terms of the next round of stimulus. So, the consumer is stronger coming into this recession than coming into the Great Recession. And we also think that we'll come near the top on the payment prioritization through even a tough, tough downturn. Thanks, Bill. Thanks for taking my call. So, that means what we're likely to see is, charge-offs grow through the year slowly. Lower card receivables were driven by three factors: a higher payment rate as customers continue to be mindful of their debt obligations; a decline in promotional balances as a result of credit tightening which will benefit net interest margin going forward; and third, lower sales volume. We're not looking to substantially change any of the duration of any of the liabilities that we see on the balance sheet. Discover Financial Services (DFS) reports earnings on 1/20/2021. Good morning. And so, we're not just looking at the raw unemployment numbers as we do our modeling. Turning now to slide nine, showing credit metrics. And so, kind of maybe -- if some of this has been discussed already, but I'm sort of struck by that, it seems like you have an opportunity and where does -- where can you direct that attention and how much do you have in kind of available, whether it's spending on rewards or marketing, like, what are the -- what are the tools and how are you going to use them over the next few quarters, particularly, now as we're going into the holiday season. Our next question comes from the line of Kevin Barker of Piper Sandler. Consumers have also shifted to much more online spending, which makes our investments in Secure Remote Commerce and our partnership with the other major networks to implement Click-to-Pay even more significantly. Total card sales volume decreased 16% in the second quarter. Yeah. Our private student loan portfolio had another quarter of strong credit performance with net charge-offs down 1 basis points compared to the prior year. 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