Discover Financial Services Reports Fourth Quarter EPS of $.64

Discover Financial Services DFS today reported net income for the fourth quarter of 2010 of $350 million, as compared to net income of $353 million for the fourth quarter of 2009.

• Discover card sales volume was $23 billion in the quarter, an increase of 6% from the prior year.
• Net interest margin of 9.28% improved 12 basis points as compared to the prior quarter, reflecting the sale of lower yielding federal student loans.
• Credit performance continued to improve, with net charge-offs down $103 million from the prior quarter and a net charge-off rate for the fourth quarter of 6.58%. The delinquency rate for loans over 30 days past due was 3.89%, with delinquent balances declining $181 million in the quarter.
• The outlook for continuing improvement in credit performance led to a $414 million release of loan loss reserves.
• Payment Services processed record transaction volume in the quarter of $40.4 billion with profit before tax up 32% from the prior year.
• Deposit balances originated through direct-to-consumer and affinity relationships grew $1.5 billion in the quarter to $20.6 billion.