Expenses were up $13 million, or 2%, from the prior year. The increase in expenses was due to higher employee compensation and marketing associated with the Home Loan Center acquisition, increased card marketing initiatives and higher headcount. The second quarter of 2012 included a $90 million addition to legal reserves.
Payment Services pretax loss for the quarter was $21 million as expenses increased $49 million from the prior year. Total pretax charges related to supporting Diners Club International franchises during the quarter were $55 million, which included a $15 million increase in loan loss provisions for prior franchise loans.
Payment Services dollar volume was $49.4 billion for the second quarter of 2013, down 2% from the prior year. PULSE transaction dollar volume declined by 3% year-over-year due to merchant routing and competitor actions.
During the second quarter of 2013, the company repurchased approximately 7 million shares of common stock for $340 million. Shares of common stock outstanding declined by 1% from the prior quarter.
Conference Call and Webcast Information
The company will host a conference call to discuss its second quarter results on Tuesday, July 23, 2013, at 4:00 p.m. Central time. Interested parties can listen to the conference call via a live audio webcast at
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 issues 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
A financial summary follows. Financial, statistical, and business related information, as well as information regarding business and segment trends, is included in the financial supplement filed as Exhibit 99.2 to the company's Current Report on Form 8-K filed today with the Securities and Exchange Commission (“SEC”). Both the earnings release and the financial supplement are available online at the SEC's website (
) and the company's website (
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements, which speak to our expected business and financial performance, among other matters, contain words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “aim,” “will,” “may,” “should,” “could,” “would,” “likely,” and similar expressions. Such statements are based upon the current beliefs and expectations of the company's management and are subject to significant risks and uncertainties. Actual results may differ materially from those set forth in the forward-looking statements. These 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.