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 2024 Discover Financial Services earnings conference call. All lines have been placed on mute to prevent any background noise. Please note there will be no question and answer period after this morning's prepared remarks. After the call ends, questions should be directed to the Discover Investor Relations team. Lastly, if you need operator assistance, please press star zero. Thank you. I will now turn the call over to Mr. Eric Wasserstrom, Senior Vice President of Corporate Strategy and Investor Relations. Please go ahead.

Thank you, and welcome to this morning's call. I'll begin by referencing slides two and three 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 the second quarter 2024 earnings press release and presentation, as well as the risk factors detailed in our annual report and other filings with the SEC. Our call today will include remarks from our interim CEO, Michael Shepard, and John Green, our chief financial officer. There will be no question and answer session following today's remarks. However, the Investor Relations team will be available for any inquiries. It is now my pleasure to turn the call over to Michael.

Thank you, Eric. Good morning and welcome to our guests who have joined today's call. Discover's second quarter operating performance was very good, and we advanced several strategic priorities. Let me highlight a few of these accomplishments. On July 17, we entered into an agreement to sell our private student loan portfolio to affiliates and limited partners of Carlisle and KKR. Firstmark, a division of Nelnet, will assume responsibility for servicing the portfolio upon sale. This agreement represents an important milestone in our journey to simplify our operations and business mix. The completion of the sale also has financial implications, which John Green will detail in a few moments. As we continue to resolve past issues and strengthen our risk management and compliance posture, we have entered into a settlement agreement to resolve the merchant class actions associated with the card misclassification litigation subject to court approval. The decision to settle was based upon our internal reviews extensive dialogue with key constituencies, including merchants and regulators, and our pending merger with Capital One. The settlement agreement would resolve claims by parties affected by the card misclassification, including merchants, acquirers, and intermediaries. Our current remediation reserve is sufficient to cover the expenses under the terms of the settlement agreement. Our results also benefited from a litigation settlement in our payment services segment. where Discover was the plaintiff. We are happy to have this matter resolved and are satisfied with the favorable financial outcome. Finally, turning to our pending merger with Capital One, Capital One continues to lead the integration planning process, and the teams are working well together on integration planning and regulatory applications. Upcoming merger-related milestones include a virtual public hearing hosted by the Federal Reserve and the OCC, the completion of the written comment period, an in-person public hearing with the Delaware State Bank Commissioner, and the filing of the definitive merger proxy. We expect shareholder votes to occur this fall. We are encouraged by how the merger planning and application processes are progressing and continue to believe that the strategic rationale, operating scale, and economics of the combined company are compelling. With that, I'll now ask John Green to review our second quarter 2024 financial results.