Discover Financial Services(US:DFS)2025-04-23 20:16Financial Performance - Interest income for Q1 2025 was $4,801 million, a decrease of 3% compared to $4,948 million in Q1 2024[1] - Net interest income increased by 2% to $3,558 million from $3,487 million year-over-year[1] - Total non-interest income was $693 million, reflecting a 3% increase from $673 million in the same quarter last year[1] - Net income allocated to common stockholders rose by 31% to $1,069 million from $813 million year-over-year[1] - The effective tax rate for Q1 2025 was 23.5%, down from 24.0% in Q1 2024[1] - Digital Banking's Net Interest Income increased to $3,558 million in Q1 2025, up 2% from $3,487 million in Q1 2024[8] - Net Income before Income Taxes for Digital Banking increased to $1,353 million in Q1 2025, a 30% increase from $1,037 million in Q1 2024[8] Asset and Equity Changes - Total assets decreased by 3% to $147,914 million from $152,707 million in Q1 2024[2] - Total assets decreased by $3,731 million, or 2%, to $148,045 million compared to March 31, 2024[4] - Total equity increased by 29% to $18,963 million compared to $14,670 million in the same quarter last year[2] - Tangible Common Equity per Share rose to $70.14 in Q1 2025, up from $53.31 in Q1 2024[13] Loan and Credit Metrics - Average credit card loans remained stable at $100,088 million, with a slight decrease of $222 million, or 0%[6] - Total loan receivables decreased by $9,152 million, or 7%, to $117,403 million compared to March 31, 2024[6] - The allowance for credit losses decreased by $1,150 million, or 12%, to $8,108 million compared to March 31, 2024[6] - The gross principal charge-off rate increased to 6.31%, up 57 basis points from the previous quarter[6] - Total Private Student Loans decreased to $0 in Q1 2025 from $10,480 million in Q1 2024, representing a 100% decline[7] Interest and Yield Metrics - The net interest margin improved to 12.18%, an increase of 115 basis points compared to the previous quarter[4] - The interest yield on total loans was 15.35%, an increase of 64 basis points compared to March 31, 2024[6] - Interest Yield for Personal Loans improved to 13.95% in Q1 2025, an increase of 55 basis points from 13.40% in Q1 2024[8] Deposit and Transaction Metrics - Non-interest-bearing direct to consumer deposits increased by $124 million, or 12%, to $1,161 million compared to March 31, 2024[4] - Discover Network transactions processed totaled 3,255 million in Q1 2025, a 2% increase from 3,195 million in Q1 2024[8] Delinquency and Reserve Rates - The delinquency rate (30 or more days) improved to 3.31%, a decrease of 7 basis points compared to the previous quarter[6] - The Delinquency Rate for Personal Loans was 1.68% in Q1 2025, a slight increase of 22 basis points from 1.46% in Q1 2024[8] - The Reserve Rate for Personal Loans was 7.66% in Q1 2025, an increase of 18 basis points from 7.48% in Q1 2024[8] Stock Performance - The common stock price at the end of the period was $170.70, a 30% increase from $131.09 in Q1 2024[1] - The Tier 1 risk-based capital ratio improved to 15.6% from 11.7% in Q1 2024[3] Revenue Changes - Total Payment Services revenue decreased to $96,384 million in Q1 2025, down 4% from $100,324 million in Q1 2024[8]