使用警語：中文譯文來源為 Google 翻譯，僅供參考，實際內容請以英文原文為主
Erin Stieber - Senior Vice President of Financial Planning and Analysis and Investor Relations
Erin Stieber - Senior Vice President of Financial Planning and Analysis and Investor Relations
Thank you, and welcome to this morning's call. By way of introduction, I'm Erin Stieber, Senior Vice President of Financial Planning and Analysis and Investor Relations. Eric Wasserstrom has decided to pursue an opportunity outside the company. We appreciate his contributions to the Investor Relations and Corporate Strategy Programs over the past four years and wish him well. I'm excited for this new opportunity and look forward to getting to know all of you over the coming months.
謝謝您，歡迎參加今天早上的電話會議。首先介紹一下，我是艾琳·斯蒂伯 (Erin Stieber)，負責財務規劃和分析以及投資者關係的高級副總裁。埃里克·瓦瑟斯特羅姆 (Eric Wasserstrom) 決定在公司外部尋找機會。我們感謝他過去四年對投資者關係和企業策略計劃的貢獻，並祝他一切順利。我對這個新機會感到很興奮，並期待在接下來的幾個月中認識你們所有人。
I'll begin by referencing slides 2 and 3 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, 2024 earnings press release and presentation as well as the risk factors detailed in our annual report and other filings with the SEC.
我會先參考我們收益簡報的投影片 2 和 3，您可以在我們的投資人關係網站 Investorrelations.discover.com 的財務部分找到這些投影片。我們今天的討論包含某些前瞻性陳述，這些陳述存在風險和不確定性，可能導致實際結果出現重大差異。請參閱我們關於 2024 年第三季財報新聞稿和簡報中出現的前瞻性陳述的通知，以及我們向 SEC 提交的年度報告和其他文件中詳細說明的風險因素。
Our call today will include remarks from our interim CEO, Michael Shepherd and John Greene, 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.
我們今天的電話會議將包括我們的臨時執行長 Michael Shepherd 和財務長約翰·格林 (John Greene) 的演講。今天的講話之後不會有問答環節。不過，投資人關係團隊將隨時解答任何問題。現在我很高興將電話轉給麥可。
Michael Shepherd - Interim Chief Executive Officer, President, Director
Michael Shepherd - Interim Chief Executive Officer, President, Director
Thank you, Erin. Good morning, and welcome to today's call. Discover's financial performance remained strong in the third quarter and we continue to advance our critical strategic priorities of driving business results, strengthening risk management and compliance and planning for the merger with Capital One. We've made significant progress on the execution of the sale of the private student loan portfolio, successfully completing the first of four closings.
謝謝你，艾琳。早上好，歡迎參加今天的電話會議。 Discover 第三季的財務表現依然強勁，我們持續推進推動業務成果、加強風險管理和合規性以及規劃與第一資本合併的關鍵策略優先事項。我們在執行私人學生貸款組合的銷售方面取得了重大進展，成功完成了四次交割中的第一次。
Additionally, earlier this month, we completed the sale of the second tranche. As we near the end of our student loan disposition journey, we look forward to realizing the benefits of a more focused business model. John will review the details of the sale a bit later in the call.
此外，本月早些時候，我們完成了第二批的銷售。當我們的學生貸款處置之旅即將結束時，我們期待實現更專注的商業模式的好處。約翰將在稍後的電話會議中回顧銷售細節。
Our risk management and compliance capabilities continue to advance. We are seeing improved results from new programs which focus on reducing risk and preventing customer harm. Our organization is driven by our commitment to customers, communities and employees. And as part of our culture, we reinforce ethical decision making and customer service through strengthened governance and controls.
我們的風險管理和合規能力不斷進步。我們看到專注於降低風險和防止客戶傷害的新計劃取得了更好的成果。我們的組織是由我們對客戶、社區和員工的承諾所驅動的。作為我們文化的一部分，我們透過加強治理和控制來加強道德決策和客戶服務。
Discover ranked number two in customer satisfaction among US credit card issuers by JD Power for the fifth consecutive year. We are glad to report that this marks an 18 year run of being ranked either first or second. We recently reached two important milestones in our community based facility strategy. First, we celebrated the grand opening of our Whitehall, Ohio customer care and community center, marking a significant investment in the region.
Discover 連續第五年在 JD Power 的美國信用卡發行商客戶滿意度調查中排名第二。我們很高興地報告，這標誌著連續 18 年排名第一或第二。我們最近在社區為基礎的設施策略中達到了兩個重要的里程碑。首先，我們慶祝了俄亥俄州白廳客戶服務和社區中心的盛大開業，這標誌著對該地區的一項重大投資。
Second, we achieved 1,000 active jobs in the Chatham neighborhood of Chicago, fulfilling our three year commitment. We are proud to create valuable jobs and offer free access to state of the art facilities in the communities where we operate.
其次，我們在芝加哥查塔姆社區創造了 1,000 個活躍就業崗位，履行了我們的三年承諾。我們很自豪能夠在我們經營所在的社區創造有價值的就業機會並免費使用最先進的設施。
Our employees are a key reason for our success and our award winning customer service. We are very pleased that employee engagement remains high. Attrition is relatively low and we continue to be recognized as a great place to work.
我們的員工是我們成功和屢獲殊榮的客戶服務的關鍵原因。我們很高興員工敬業度仍然很高。人員流失率相對較低，我們繼續被認為是一個理想的工作場所。
Discover was ranked number 16 by Fortune for best large workplaces in financial services and insurance. And was also recognized as a 2024 best place to work for people with disabilities. Shifting attention to our pending merger, Capital One continues to lead merger related activities with applications currently under regulatory review. Integration planning is advancing well.
Discover 在《財富》雜誌金融服務和保險領域最佳大型工作場所排名中排名第 16 位。並被評為 2024 年殘疾人最佳工作場所。第一資本將注意力轉向我們即將進行的合併，繼續領導與目前正在接受監管審查的申請相關的合併活動。整合規劃進展順利。
With that, I'll now ask John Greene to review our third quarter 2024 financial results.
現在，我將請 John Greene 審查我們 2024 年第三季的財務表現。
John Greene - Executive Vice President and Chief Financial Officer
John Greene - Executive Vice President and Chief Financial Officer
Thank you, Michael, and good morning, everyone. I'll start with our summary financial results on slide 5. In the quarter, we reported net income of $965 million which was up 41% from the prior year. Financial performance was strong driven by revenue growth from modestly higher loan balances. Net interest margin expansion, we recognized a gain from the first closing of the private student loan portfolio sale and credit is performing in line with expectations with net charge off plateauing.
謝謝你，邁克爾，大家早安。我將從投影片 5 中的財務業績摘要開始。貸款餘額小幅上升推動營收成長，財務表現強勁。淨利差擴大，我們認識到私人學生貸款投資組合銷售首次結束帶來的收益，信貸表現符合預期，淨沖銷已脫離平穩狀態。
Let's review the details beginning on slide 6. Our net interest margin ended the quarter at 11.38% of 43 basis points from the prior year and up 21 basis points sequentially. On a quarter-over-quarter basis, margin expansion was primarily driven by a lower card promotional balance mix. Card receivables increased 3% year-over-year due to a lower payment rate partially offset by a decrease in sales volume. The payment rate declined around 100 basis points from last year was stable versus the prior quarter and approximately 70 basis points above pre pandemic levels.
讓我們回顧一下從投影片 6 開始的詳細資訊。從季度環比來看，利潤率擴張主要是由信用卡促銷餘額組合下降所推動的。卡片應收帳款年增 3%，原因是付款率下降，但被銷量下降部分抵銷。支付率比去年下降約 100 個基點，與上一季相比保持穩定，比大流行前的水平高出約 70 個基點。
Discover card sales were down 3% compared to the prior year. Sales were impacted by cautious consumer behavior and credit tightening actions which began in 2022. We expect these dynamics to persist for the remainder of the year.
Discover 卡銷量與前一年相比下降了 3%。銷售受到謹慎的消費者行為和 2022 年開始的信貸緊縮行動的影響。
Personal loans were up 9% from the prior year. We continue to see strong demand from consumers seeking debt consolidation. The average FICO for new personal loan accounts is above 750. Student loans were down 19% year-over-year as a result of the first student loan asset sale. We recognize a gain of $70 million in the quarter.
個人貸款比上年增長9%。我們繼續看到尋求債務合併的消費者的強勁需求。新個人貸款帳戶的平均FICO高於750。我們確認本季收益為 7000 萬美元。
As Michael mentioned, shortly after the quarter ended, we completed the sale of the second tranche. Approximately 55% of the portfolio has been sold to date. We expect to sell the remaining portions of the portfolio by mid-November. Average consumer deposits were up 11% year-over-year and 1% sequentially. We are managing deposit balances to meet our liquidity needs and we have benefited from the student loan sale. We anticipate a through the cycle beta of around 70%.
正如邁克爾所提到的，季度結束後不久，我們完成了第二批的銷售。迄今為止，大約 55% 的投資組合已售出。我們預計在 11 月中旬之前出售投資組合的剩餘部分。平均消費者存款年增 11%，較上季成長 1%。我們正在管理存款餘額以滿足我們的流動性需求，並且我們從學生貸款銷售中受益。我們預計整個週期的貝塔值約為 70%。
Looking at other revenue on slide 7. Non-interest income increased $76 million or 11%. Other income increased due to the gain from the loan sale. Loan fee revenue was up $20 million driven by higher instances.
檢視投影片 7 的其他收入。其他收入因貸款銷售收益而增加。由於實例增加，貸款費用收入增加了 2000 萬美元。
Our rewards rate was 144 basis points in the period, an increase of 2 basis points versus the prior year quarter and up 12 basis points sequentially. The increases were driven by changes in the promotional categories. During the third quarter of 2024, consumers enjoyed higher rewards with Grocery and Walmart spend earning 5%.
在此期間，我們的獎勵率為 144 個基點，比去年同期增加了 2 個基點，比上一季增加了 12 個基點。這一增長是由促銷類別的變化所推動的。 2024 年第三季度，消費者享受了更高的獎勵，雜貨店和沃爾瑪的支出增加了 5%。
Moving to expenses on slide 8. Total operating expenses were up $238 million or 16% year-over-year. Looking at our major expense categories, compensation costs increased $128 million or 22%, primarily due to higher wage rates and employee retention awards.
轉到幻燈片 8 上的費用。從我們的主要支出類別來看，薪酬成本增加了 1.28 億美元，即 22%，這主要是由於工資率和員工保留獎的提高。
Information processing increased as a result of technology investment and accelerated student loan software depreciation. And professional fees were up $42 million or 15% driven by higher recovery fees and merger and integration cost.
由於技術投資和學生貸款軟體折舊加速，資訊處理量增加。由於回收費用以及合併和整合成本增加，專業費用增加了 4,200 萬美元，即 15%。
We recognize $43 million of merger and integration planning costs in the quarter, $65 million year-to-date and anticipate about $125 million for the full year 2024 spread across multiple expense categories. We expect total risk management and compliance expense of approximately $550 million in 2024 excluding card misclassification cost.
我們確認本季的合併和整合規劃成本為 4,300 萬美元，年初至今為 6,500 萬美元，預計 2024 年全年約 1.25 億美元分佈在多個費用類別中。我們預計 2024 年風險管理和合規費用總額約為 5.5 億美元（不包括卡片錯誤分類成本）。
Moving to credit performance on slide 9. Total net charge offs were 4.86%, 134 basis points higher than the prior year and up 3 basis points from the prior quarter, adjusting for the impact of reclassifying private student loans to held for sale. The total net charge off rate would have declined 20 basis points. In card, net charge offs declined 27 basis points from the prior quarter outperforming seasonality, 30 plus day delinquency formation increased in line with seasonal trends. The 2023 card ventures continues to perform in line with the 2022 vintage and remains highly profitable.
轉向投影片 9 上的信貸表現。總淨沖銷率將下降 20 個基點。在信用卡方面，淨沖銷比上一季下降了 27 個基點，表現優於季節性，超過 30 天的拖欠形成增加與季節性趨勢一致。 2023 年卡企業的表現繼續與 2022 年保持一致，並保持高利潤。
An early look at the 2024 vintage suggest improvements compared to 2022 and 2023. Personal loan net charge offs and delinquencies ticked up modestly but are well within historical norms and vintages are meeting profitability targets. We continue to see a stable yet cautious consumer. The labor markets remain strong and wages are growing. However, households are contending with inflation and the impacts on everyday living expenses.
對 2024 年年份的初步觀察表明，與 2022 年和 2023 年相比有所改善。我們繼續看到穩定但謹慎的消費者。勞動市場依然強勁，薪資不斷成長。然而，家庭正在應對通貨膨脹及其對日常生活支出的影響。
Spend per card member is returning to a more normal level. Slower, stable spending indicates that households have adjusted spending patterns to manage their budgets which is beneficial from a credit standpoint.
每位持卡會員的支出正在恢復到更正常的水平。支出放緩、穩定表明家庭已經調整支出模式來管理預算，從信貸角度來看這是有利的。
Turning to the allowance for credit losses on slide 10. Our credit reserve balance increased $31 million from the prior quarter as a result of loan growth. The reserve rate was 7.18%, down 4 basis points from the prior quarter driven by our credit performance and modest improvements in the forecast for household net worth and debt service burden. Our economic outlook assumes year end 2024 unemployment of 4.4% with peak unemployment at 4.6% and GDP in the 1% to 3% range.
轉向幻燈片 10 上的信貸損失準備金。由於我們的信貸表現以及家庭淨資產和償債負擔預測的適度改善，準備金率為 7.18%，較上季下降 4 個基點。我們的經濟前景假設 2024 年底失業率為 4.4%，失業率高峰為 4.6%，GDP 成長在 1% 至 3% 範圍內。
Looking at slide 11. Our common equity Tier-1 ratio for the period was 12.7%, up 80 basis points supported by core earnings and the student loan sale. We declared a quarterly cash dividend of $0.70 per share of common stock.
看投影片 11。我們宣布季度現金股利為每股普通股 0.70 美元。
Before we discuss or revise you, 2024, I would like to provide a brief regulatory update. As part of its review of the joint proxy statement and prospectus, the staff of the SEC has indicated that they disagree with certain aspects of Discoverâs accounting approach for the card misclassification matter.
在我們討論或修改《2024 年》之前，我想提供一個簡短的監管更新。作為聯合委託書和招股說明書審查的一部分，SEC 工作人員表示，他們不同意 Discover 銀行卡錯誤分類問題的會計方法的某些方面。
We are working diligently to resolve their comments which largely focus on the allocation of previously incurred card misclassification charges between revenue and expense. We do not anticipate resolution of this matter to have an impact to cumulative historical earnings, capital or our counterparty restitution plan liability.
我們正在努力解決他們的意見，這些意見主要集中在先前發生的卡片錯誤分類費用在收入和費用之間的分配。我們預期該問題的解決不會對累積歷史收益、資本或我們的交易對手賠償計畫責任產生影響。
Including on slide 12, we have revised our 2024 outlook to reflect our latest view. We are updating our loan growth expectations to down low to mid-single digits. This change is driven by a higher than anticipated payment rate and slightly lower card sales. Excluding the student loan sale, loans are estimated to grow low single digits.
包括投影片 12 在內，我們修改了 2024 年展望，以反映我們的最新觀點。我們正在將貸款成長預期下調至低至中個位數。這一變化是由高於預期的支付率和略低的信用卡銷售所推動的。不包括學生貸款銷售，貸款預計將成長低個位數。
We are tightening our net interest margin range to 11.2% to 11.4%. Our operating expense guidance is unchanged. We are tightening our range of net charge off to 4.9% to 5% reflecting our improved credit performance. Our capital management expectations have not changed. In summary, we continue to deliver strong financial results, prudently manage our business and prepare for our merger with capital one.
我們將淨利差範圍收緊至 11.2% 至 11.4%。我們的營運費用指導不變。我們將淨費用範圍收緊至 4.9% 至 5%，以反映我們信用表現的改善。我們的資本管理預期沒有改變。總而言之，我們將繼續取得強勁的財務業績，審慎地管理我們的業務，並為與第一資本的合併做好準備。
This concludes our remarks. I'll turn the call back over to the operator.
我們的發言到此結束。我會將電話轉回給接線生。
Operator
Operator
Thank you. Today's call has ended. The Discover Investor Relations team will be available for your questions. Thank you for joining. You may now disconnect.
謝謝。今天的通話結束了。 Discover 投資人關係團隊將隨時為您解答問題。感謝您的加入。您現在可以斷開連線。