Discover Financial Services

Good morning. My name is Todd and I will be your conference operator today. At this time, I would like to welcome everyone to the second quarter 2023 Discover Financial Services earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there'll be a question and answer session. If you would like to ask a question at that time, please press star one on your telephone keypad. If you should need operator assistance, please press star zero. Thank you. I will now turn the call over to Mr. Eric Wosterstrom, head of investor relations. Please go ahead.

Thanks, Todd, and good morning, everyone. Welcome to this morning'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 second quarter earnings release and presentation. On our call today, we'll 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 Q&A session. During the Q&A session, we ask that you pose 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.

Thank you, Eric, and thanks to our listeners for joining today's call. I'll begin by reviewing some of our highlights for the quarter and then discuss the regulatory matter that we've disclosed in our press release. John will then take you through the details of our second quarter results and our updated perspectives on 2023. Last night, we reported second quarter net income of $901 million, or $3.54 per share. The quarter was characterized by strong asset and deposit growth while credit is performing right in line with our expectations. Importantly, we advanced several operational priorities this quarter. One key milestone occurred in May when we relaunched our cashback debit product. We're excited by the positive early results we're seeing so far. In the first few weeks, we opened over 30,000 new accounts and plan to begin national marketing in support of this product in the fall. The relaunch advances our goal of becoming the leading direct bank and over time we expect cashback debit will be a significant entry point into the Discover franchise. We also continue to expand the Discover global network. This quarter we announced five new partnerships in the Asia Pacific region and added a new partnership with Guava Pay in the UK. These strategic partnerships underscore our commitment to building out our international acceptance. And lastly, we continue to invest in our human capital. We're honored to have been recognized as a 2023 best places to work for people with disabilities. This builds upon our recent recognitions as one of Fortune's 100 best companies to work for, best workplaces for parents, and best workplaces for women. As you may have read in our press release last night, Beginning around mid-2007, we incorrectly classified certain card accounts into our highest merchant and merchant acquirer pricing tier. We are taking actions to correct this card product misclassification going forward and are preparing a program to compensate affected merchants and acquirers. While the financial impacts of this misclassification are not material, it underscored deficiencies in our corporate governance and risk management. We're in discussions with our regulators regarding these matters. We have received a proposed consent order from the FDIC in connection with consumer compliance, which does not cover the misclassification topic. We believe additional supervisory actions could occur. I want to emphasize that we take our business practices and compliance very seriously. We've made significant progress and investment in this area, and look forward to working with our board and our regulators to achieve further advancement. Now, I'll hand it over to John to review our results and updated outlook in more detail.