Discover Announces $2.4 Billion Share Repurchase Program and Plans to Increase Quarterly Dividend from $0.14 to $0.20 Per Share

  Discover Announces $2.4 Billion Share Repurchase Program and Plans to
  Increase Quarterly Dividend from $0.14 to $0.20 Per Share of Common Stock

   Company Receives Non-Objection from the Federal Reserve with Respect to
               Proposed Capital Actions Through March 31, 2014

Business Wire

RIVERWOODS, Ill. -- March 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).

Contact:

Discover Financial Services
Investors:
Bill Franklin, 224-405-1902
williamfranklin@discover.com
or
Media:
Jon Drummond, 224-405-1888
jondrummond@discover.com
 
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