Discover Financial Services is an American financial services company, which issues the Discover Card and operates the Discover and Pulse networks. Discover Card is the third largest credit card brand in the United States, when measured by cards in force, with nearly 50 million cardholders
The Discover Card was originally introduced by Sears in 1985, and was a unit of Dean Witter, which merged with Morgan Stanley in 1997. In 2007, the unit was spun off as an independent, publicly traded company. Today, Discover is headquartered in the Chicago suburb of Riverwoods, Illinois.

In April 2008, Discover Financial Services and Citigroup announced that Discover was purchasing the Diners Club network from Citi for $165 million. In May 2008, the Federal Trade Commission approved the transaction. The deal was completed on July 1, 2008.[2] Discover stated that the Diners Club network, which is a major network outside North America, will be merged with the Discover Network, a major network in North America, creating an international network for Discover Network cards and Diners Club cards. Diners Club cards will continue to be issued by Diners Club International licensees, including Citibank. Discover Bank has no plans on issuing Diners Club branded cards itself.

Discover Financial Services (DFS), incorporated in 1960, is a direct banking and payment services company. The Company operates as a bank holding and financial holding company. DFS operates two banking subsidiaries: Discover Bank and Bank of New Castle. It offers credit cards, student loans, personal loans and deposit products through Discover Bank. The Company manages its business activities in two segments: Direct Banking and Payment Services. The Direct Banking segment includes Discover card-branded credit cards issued to individuals and small businesses on the Discover Network, and other consumer products and services, including personal loans, student loans, pre-paid cards and other consumer lending and deposit products offered through the Company’s Discover Bank subsidiary. The Payment Services segment includes the PULSE network (PULSE), Diners Club International (Diners Club) and DFS’ third-party issuing business, which includes credit, debit and pre-paid cards issued on the Discover Network by third parties. On December 31, 2010, the Company acquired the Student Loan Corporation (SLC). SLC became a wholly owned subsidiary of Discover Bank.
Direct Banking
DFS offers credit cards to consumers and small businesses. Its credit card customers are permitted to revolve their balances and repay their obligations over a period of time and at an interest rate set forth in their card member agreements, which may be either fixed or variable. The interest that the Company earns on revolving credit card balances makes up 95% of its total interest income. DFS also charges customers other fees, including fees for late payments, balance transfer transactions, cash advance transactions and foreign currency transactions. DFS also offers various products and services in connection with its credit card business, such as Payment Protection, Identity Theft Protection, Wallet Protection, Credit ScoreTracker and other fee-based products. The Company’s credit card customers’ transactions are processed over the Discover Network. Customers can apply for a Discover Student Loan by mail, online or by phone. The Company's private student loans are marketed through colleges and universities, including schools where Discover or Citibank is named a preferred lender. Discover Student Loans and CitiAssist Loans are also marketed online and through direct mail. In addition, CitiAssist loans are marketed through marketing agreements with Citibank and its affiliates.
DFS' personal loans are unsecured loans with fixed interest rates, fixed terms and fixed payments. These loans are primarily intended to help customers consolidate existing debt, although they can be used for other reasons. In addition to the interest earned on the personal loans, DFS also earns fees from customers that enroll in its credit protection product. DFS generally markets its personal loan products to its existing credit card customers through direct mail, statement inserts and e-mail. However, DFS also market personal loans to non-Discover customers through direct mail. Customers can submit their applications through phone, online or through the mail, and can service their accounts online or by phone.
The Company markets several fee-based products to its customers, including Identity Theft Protection, Payment Protection, Wallet Protection, Credit ScoreTracker and Extended Warranties. Identity Theft Protection includes an initial credit report, credit bureau report monitoring and prompt alerts. Payment Protection service allows customers to suspend their payments for up to two years, depending on the product, in the event of certain covered events. Different products cover different events, such as unemployment, disability or other life events. Depending on the product and availability under state laws, outstanding balances up to certain amounts are cancelled in the event of death. Wallet Protection service offers one-call convenience if the customer’s wallet is lost or stolen, including requesting cancellation and replacement of the customer’s credit and debit cards, monitoring the customer’s credit bureau reports for 90 days. Credit ScoreTracker product offers customers resources that help them understand and monitor their credit score. Credit ScoreTracker is specifically designed for score monitoring by alerting customers when their score changes, allowing customers to set a target score and providing resources to help them understand the factors that may be influencing their score. Extended Warranties discover customers can purchase online service warranties from Square Trade, its extended warranty provider, to protect their purchases of new electronics and appliances from any retailer, as well as certain other purchases.
DFS obtains deposits from consumers directly or through affinity relationships (direct-to-consumer deposits) and through third-party securities brokerage firms who offer its deposits to their customers (brokered deposits). Its deposit products include certificates of deposit, money market accounts, online savings accounts and individual retirement account (IRA) certificates of deposit. Customers can apply for, fund and service their deposit accounts online or through phone.
Payment Services
The Company's PULSE network is an ATM/debit networks. PULSE links cardholders of more than 4,400 financial institutions with ATMs and point-of-sale (POS) terminals located throughout the United States. PULSE also provides cash access at over 750,000 ATMs in over 80 countries. PULSE’s primary source of revenue is transaction fees charged for switching and settling ATM, personal identification number (PIN) POS debit and signature debit transactions initiated through the use of debit cards issued by participating financial institutions. In addition, PULSE offers a variety of optional products and services that produce income for the network, including signature debit processing, pre-paid card processing, and connections to other regional and national electronic funds transfer networks.
DFS' Diners Club business maintains an acceptance network in over 185 countries and territories through its relationships with over 80 licensees, which are generally financial institutions. Diners Club itself does not directly issue credit cards to consumers, but grants its licensees the right to issue Diners Club branded credit cards and/or provide card acceptance services. The Company’s licensees pay it royalties for the right to use the Diners Club brand, which is its primary source of Diners Club revenues. Diners Club also earns revenue from providing various support services to its licensees, including processing and settlement of cross border transactions. Diners Club also offers licensees a centralized service center and Internet services.
The Company has agreements related to issuing credit, debit and prepaid cards with a number of other financial institutions for issuance of card products on the Discover Network. DFS refers to these financial institutions as third-party issuers. DFS earns merchant discount and acquirer interchange revenue, net of issuer interchange paid, plus assessments and fees for processing transactions for third-party issuers of signature cards on the Discover Network.
The Company competes with American Express, Bank of America, Capital One, JPMorgan Chase, Citigroup, Sallie Mae, Wells Fargo, Ally Financial, Capital One Direct, HSBC Direct, ING Direct, Visa, MasterCard and STAR.


OVERALL
Beta: 1.58
Market Cap (Mil.): $13,500.77
Shares Outstanding (Mil.): 545.49
Annual Dividend: 0.24
Yield (%): 0.97
FINANCIALS
DFS Industry Sector
P/E (TTM): 10.91 25.22 24.66
EPS (TTM): 19.90 -- --
ROI: -- 2.06 4.68
ROE: 19.60 16.02 9.23


SUMMARY
Name Age Since Current Position
Nelms, David 50 2009 Chairman of the Board, Chief Executive Officer
Hochschild, Roger 46 2004 President, Chief Operating Officer
Graf, R. Mark 46 2011 Chief Financial Officer, Executive Vice President, Chief Accounting Officer
Panzarino, James 58 2009 Executive Vice President, Chief Credit Risk Officer
Corley, Kathryn 50 2008 Executive Vice President, General Counsel, Secretary
Minetti, Carlos 48 2010 Executive Vice President, President – Consumer Banking and Operations
Offereins, Diane 53 2010 Executive Vice President, President – Payment Services
Talwar, Harit 50 2010 Executive Vice President, President – U.S. Cards
Schneider, Glenn 49 2009 Senior Vice President, Chief Information Officer
Weinbach, Lawrence 71 2009 Lead Independent Director
Aronin, Jeffrey 43 2007 Independent Director
Bush, Mary 62 2007 Independent Director
Devlin, Robert 70 2007 Independent Director
Moskow, Michael 73 2007 Independent Director
Case, Gregory 48 2007 Independent Director
Smith, E. Follin 51 2007 Independent Director
Maheras, Thomas 48 2008 Independent Director
Glassman, Cynthia 63 2009 Independent Director
Lenny, Richard 59 2009 Independent Director

COMPANY ADDRESS
Discover Financial Services
2500 Lake Cook Road
Riverwoods IL 60015
 
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