Discover Financial Services

Stand by, your program is about to begin. Good morning. My name is Brittany, and I will be your conference operator today. At this time, I would like to welcome everyone to the fourth quarter and full year 2021 Discover Financial Services Earnings Conference Call. Our lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question at that time, please press the star and 1 on your telephone keypad. If you should need operator assistance, please press star zero. Thank you. I would now like to turn the call over to Mr. Eric Wasserstrom, head of investor relations. Please go ahead.

Thank you, Brittany, and good morning, everyone. Welcome to this morning's call. I'll begin on slide two of our earnings. You can find in the financial section of our investor relations website, investorrelations.discover.com. Our discussion today contains certain forward-looking statements that are subject to risks and uncertainties that may cause actual results to differ materially. Please refer to our notices regarding forward-looking statements that appear in our fourth quarter earnings press release and presentation. Our call today will include remarks from our CEO, Roger Hochschild, and John Green, our Chief Financial Officer. After we conclude our formal comments, there will be time for a question and answer session. During the Q&A session, you will be permitted to ask one question followed by one follow-up question. After your follow-up question, please return to the queue. Now it's my pleasure to turn the call over to Roger.

Thanks, Eric, and thanks to our listeners for joining today's call. I'll begin by reviewing the highlights and key metrics for the year. Then John will take you through the details of our fourth quarter results and our perspectives on 2022. 2021 was another year of unique challenges related to the pandemic, and I'm very pleased that once again, the Discover team was able to successfully execute against our business priorities in a fluid operating environment. This was evident in our fourth quarter results, which were the capstone to an outstanding year. For the fourth quarter, we earned $1.1 billion after tax, or $3.64 per share. and for the full year, $5.4 billion after tax, or $17.83 per share. These results underscore the strength of our differentiated model and were achieved as we continue to make meaningful enhancements to our capabilities and invest for future growth. Let me share a few examples from this past year. Throughout 2021, we continue to make advancements to our data and analytics platform, enhancing our capabilities in areas including targeting, collections, and fraud detection. We also made investments in machine learning to provide faster and better insights to improve customer personalization. And we continue to modernize our infrastructure and build out our hybrid cloud platform. We also opened a new customer care center in Chatham, a vibrant African-American community on Chicago's South Side. Once fully operational, the center will provide nearly 1,000 full-time jobs. Our Chatham Center challenges the traditional notions of corporate site selection, has helped us connect with a talented pool of diverse candidates and suppliers, is transforming how we approach diversity, equity, and inclusion, and it is already performing at an industry-leading level. We hope our commitment to Chatham will serve as a springboard for further economic development in other areas that have long been denied opportunity. Slide four of our presentation captures another important element of our results, which was our pivot into new account acquisition as the economic recovery took hold in late 2020 and early 2021. In the face of intensifying competition, our value proposition of cashback rewards, no annual fee, and industry-leading service remain very attractive to consumers. The strong level of card acquisition contributed to our return to loan growth over the second half of last year. In payments, we continue to expand our business, increase network volume, and establish new strategic partnerships. We expanded global acceptance and announced new network alliances in Portugal, Bahrain, Jordan, and Malaysia that will benefit us as cross-border travel recovers. We remain committed to building out our international acceptance and will continue to make investments to expand our reach. Our record earnings through the year generated significant capital, which we continue to put to good use. In addition to our investments in acquisition, brand, technology, and people, we also return significant capital to shareholders through dividends and buybacks by repurchasing $2.3 billion of common stock and increasing our quarterly dividend by 14%. As we look forward into 2022, I'm very optimistic about the trajectory of our business. While macroeconomic conditions created strong tailwinds this past year, we acted on opportunities to strengthen our business, actions that will drive long-term value this year and beyond. We start the new year in an excellent position, and I'm confident that our integrated digital banking and payments model will continue to create long-term value for our shareholders and customers. I'll now ask John to discuss key aspects of our quarterly financial results in more detail.