Company Receives Non-Objection from the Federal Reserve with Respect
to Proposed Capital Actions Through March 31, 2014
RIVERWOODS, Ill.--(BUSINESS WIRE)--Mar. 14, 2013--
Discover Financial Services (NYSE: DFS) today announced that its board
of directors has approved a new share repurchase program authorizing the
company to repurchase up to $2.4 billion of its common stock, and that
it plans to increase its quarterly common stock dividend. These actions
were part of the company’s capital plan, which was submitted to the
Federal Reserve as part of the 2013 Capital Plan Review. The Federal
Reserve notified Discover that it has no objections to the capital
actions through March 31, 2014, set forth in the company’s capital plan.
The new share repurchase program expires on March 31, 2015, and may be
terminated at any time. It replaces the prior $2 billion share
repurchase program, which had approximately $600 million of remaining
authorization as of March 14, 2013. Any share repurchases after March
31, 2014, would be subject to receiving Federal Reserve non-objection to
the company’s 2014 capital plan.
The company’s capital plan includes an increase in the quarterly
dividend from $0.14 to $0.20 per share of common stock in the second
quarter of 2013. The board of directors will consider this increase in
the company’s dividend at its April meeting.
“The share repurchase program and planned dividend increase reflect the
strength of our capital position and our commitment to effective capital
management,” said David Nelms, chairman and chief executive officer of
Discover.
The company expects to make share repurchases from time to time based on
market conditions and other factors, subject to legal or regulatory
restrictions and approvals.
About Discover
Discover Financial Services (NYSE: DFS) is a direct banking and payment
services company with one of the most recognized brands in U.S.
financial services. Since its inception in 1986, the company has become
one of the largest card issuers in the United States. The company
operates the Discover card, America's cash rewards pioneer, and offers
home loans, private student loans, personal loans, checking and savings
accounts, certificates of deposit and money market accounts through its
direct banking business. Its payment businesses consist of Discover
Network, with millions of merchant and cash access locations; PULSE, one
of the nation's leading ATM/debit networks; and Diners Club
International, a global payments network with acceptance in more than
185 countries and territories. For more information, visit www.discoverfinancial.com.
This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. Such
statements are based upon the current beliefs and expectations of the
company's management and are subject to significant risks and
uncertainties. The declaration and payment of future dividends, as well
as the amount thereof, are subject to the discretion of our board of
directors. The amount and size of any future dividends and share
repurchases will depend upon the company’s results of operations,
financial condition, capital levels, cash requirements, future prospects
and other factors. Holders of our shares of common stock are subject to
the prior dividend rights of holders of our preferred stock or the
depositary shares representing such preferred stock outstanding, and if
full dividends have not been declared and paid on all outstanding shares
of preferred stock in any dividend period, no dividend may be declared
or paid or set aside for payment on our common stock. In addition,
banking laws and regulations and the company’s banking regulators may
limit the company’s ability to pay dividends and make share repurchases.
For example, the company’s ability to make capital distributions,
including paying dividends or repurchasing shares, is subject to the
Federal Reserve’s annual review and non-objection of the company’s
capital plan. In certain circumstances, the company may not be able to
make a capital distribution, such as a dividend or share repurchase,
unless the Federal Reserve has approved such distribution. Further,
current or future regulatory initiatives may require the company to hold
more capital in the future. There can be no assurance that we will
declare and pay any dividends or repurchase any shares of our common
stock in the future. The forward-looking statements speak only as of the
date of this press release, and there is no undertaking to update or
revise them as more information becomes available. Additional factors
impacting dividends and share repurchases can be found in "Business -
Supervision and Regulation", “Risk Factors” and "Management's Discussion
and Analysis of Financial Condition and Results of Operations" in the
company's annual report on Form 10-K for the year ended November 30,
2012, which is available at the SEC's internet site (www.sec.gov).
Source: Discover Financial Services
Discover Financial Services
Investors:
Bill Franklin,
224-405-1902
williamfranklin@discover.com
or
Media:
Jon
Drummond, 224-405-1888
jondrummond@discover.com