Discover Financial Services

Good morning. My name is Katie, and I will be your conference operator today. At this time, I would like to welcome everyone to the third quarter 2022 Discover Financial Services earnings conference call. All 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 star 1 on your telephone keypad. If you should need operator assistance, please press star 0. Thank you. I will now turn the call over to Mr. Eric Wasserstrom, head of investor relations. Please go ahead.

Thank you, Katie, and good morning, everyone. Welcome to today's call. I'll begin on slide two of our earnings presentation, which 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 third quarter's earnings release, 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, it will be time for 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'm very pleased with our results this quarter. Against a fluid macroeconomic backdrop, we generate strong financial performance while continuing to advance our strategic priorities. Let's start with a summary on slide three. For the third quarter, we reported net income of $1 billion after tax, or $3.54 per share. Over the past three months, as Fed policy has become more restrictive, It has made fears of a recession more acute. Against this backdrop, the key narratives of the third quarter results are the strength of our balance sheet and the quality of our earnings. Our increase in revenues this year has been largely driven by our strong receivables growth, with loans up 17% year over year. This growth was driven largely by elevated sales volume and the increased number of new accounts we've added since mid-2021. We continue to use a through-the-cycle approach to underwriting, which considers all stages of a credit cycle, including downturns. As part of our conservative credit management, we marginally tightened our new account underwriting criteria this quarter. Given these factors, we consider our growth to be consistent with current macroeconomic conditions. Naturally, discussion of recession elicits concerns about credit quality. But the credit performance of our loan portfolio at this stage does not suggest anything other than gradual normalization. Nonetheless, a late cycle environment requires a particular awareness of changing conditions and underscores the importance of our strong financial condition. We also continue to advance our strategic priorities. As a few examples, in August, we expanded our global presence with the signing of Worry Card, one of the largest issuers in South Korea. The extension of this relationship, as well as the number of new network partnerships we've announced this year, highlight our focus on expanding our international presence. And we continue to demonstrate the value of our network and our growing relationships with FinTech partners. As an example, we announced in October that we will facilitate payments for TIDI's new healthcare vendor management system, which will digitize and streamline payments in an industry where legacy purchasing is still primarily manual. Finally, this summer we announced the opening of our new advanced analytics resource Center at our downtown Chicago location. The first cohort of 75 individuals which we selected from over 1000 applicants has already started, and we intend to grow the program with an additional cohort in 2023. This follows the grand opening of our customer care Center in the south side neighborhood of chatham earlier this year. and underscores our commitment to bring additional jobs to Chicago while supporting great customer experiences. I'll now turn the call over to John to review our results in more detail.