8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

Current Report

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): June 10, 2015

DISCOVER FINANCIAL SERVICES

(Exact name of registrant as specified in its charter)

Commission File Number: 001-33378

Delaware	36-2517428
(State or other jurisdiction of incorporation)	(IRS Employer Identification No.)

2500 Lake Cook Road, Riverwoods, Illinois 60015

(Address of principal executive offices, including zip code)

(224) 405-0900

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 7.01 Regulation FD Disclosure.

Discover Financial Services (“Discover”) previously announced that David Nelms, chairman and chief executive officer of Discover, will present at the William Blair Growth Stock Conference in Chicago on Wednesday, June 10, 2015, at 9:20 a.m. Central time.

A listen-only audio webcast will be posted on the day of the conference to Discover’s corporate website at http://investorrelations.discoverfinancial.com/. A replay will be available for 90 days after the conference at the same website address. The presentation is included as Exhibit 99.1 hereto and incorporated by reference into this Item 7.01.

The information contained in this Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1, is furnished pursuant to Item 7.01 of Form 8-K and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except as shall be expressly stated by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.	Description
99.1	Discover Financial Services William Blair Growth Stock Conference Presentation dated June 10, 2015

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	DISCOVER FINANCIAL SERVICES
Dated: June 10, 2015	By:	/s/ D. Christopher Greene
		Name: D. Christopher Greene
		Title: Vice President, Deputy General Counsel and Assistant Secretary

EXHIBIT INDEX

Exhibit No.	Description
99.1	Discover Financial Services William Blair Growth Stock Conference Presentation dated June 10, 2015

EX-99.1

William Blair Growth Stock Conference

David Nelms

Chairman & Chief Executive Officer

June 10, 2015

1

Exhibit 99.1

Notice

The following slides are part of a presentation by Discover Financial Services (the "Company") and are intended to be viewed as part of that

presentation. No representation is made that the information in these slides is complete.

Throughout these materials, we refer to direct-to-consumer deposits, or DTC deposits.  DTC deposits include deposit products that we offer to

customers through direct marketing, internet origination and affinity relationships.  DTC deposits include certificates of deposits, money market

accounts, online savings and checking accounts, and IRA certificates of deposit.

The information provided herein includes certain non-GAAP financial measures. The reconciliations of such measures to the comparable GAAP

figures

are

included

at

the

end

of

this

presentation,

which

is

available

on

the

Company’s

website

at

www.discover.com

and

the

SEC’s

website.

The presentation contains forward-looking statements. You are cautioned not to place undue reliance on forward-looking statements, which

speak only as of the date on which they are made, which reflect management’s estimates, projections, expectations or beliefs at that time, and

which are subject to risks and uncertainties that may cause actual results to differ materially. For a discussion of certain risks and uncertainties

that may affect the future results of the Company, please see "Special Note Regarding Forward-Looking Statements," "Risk Factors," "Business

–

Competition," "Business –

Supervision and Regulation" 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 December 31, 2014 and "Management’s Discussion and Analysis

of Financial Condition and Results of Operations" in the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015 which

is filed with the SEC and available at the SEC's website (www.sec.gov). The Company does not undertake to update or revise forward-looking

statements as more information becomes available. 

We own or have rights to use the trademarks, trade names and service marks that we use in conjunction with the operation of our business,

including,

but

not

limited

to:

Discover®,

PULSE®,

Cashback

Bonus®,

Discover

Cashback

Checking®,

Discover

it®,

Freeze

It

SM

,

Discover®

Network

and

Diners

Club

International®.

All

other

trademarks,

trade

names

and

service

marks

included

in

this

presentation

are

the

property

of

their respective owners.

2

Positioned as the leading direct bank & payments partner

Note(s)

Balances as of March 31, 2015; pre-tax profit and volume based on the trailing four quarters ending 1Q15; direct-to-consumer deposits includes affinity deposits

Direct Banking

(98% of DFS Pre-Tax Profit)

Payment Services

(2% of DFS Pre-Tax Profit)

Card Issuing

•

$53Bn in card receivables

•

$116Bn card sales volume

•

Leading cash rewards

program

•

1 in 4 U.S. households

Lending and Deposits

•

$14Bn personal loans and

private student loans

•

$29Bn direct-to-consumer

deposits

•

Cashback checking

•

Home loan originations

•

Home equity installment

loans

•

$10Bn volume

•

10+ network alliances

•

$165Bn volume

•

3,700+ issuers

•

$27Bn volume

•

80+ licensees

•

185+ countries / territories

Network Partners

3

Executive Summary

Attractive business model with a solid record of success

•

Delivering strong card growth

Driven by more new accounts, wallet share gain, industry low attrition

rate and great credit results

(1)

Aided by proprietary network impact on brand, acceptance and rewards

•

Utilizing consumer unsecured lending and marketing capabilities to grow

non-card assets

•

Leveraging a payments partnership strategy to position the business for

growth

•

Creating shareholder value through effective capital management

Note(s)

1.

Argus Information and Advisory Services, LLC used for attrition rate data

4

–

–

Direct Banking –

Faster loan growth, better efficiencies and higher returns

2009-2014 Average

Efficiency Ratio

(1)

2009-2014 Average

Return on Equity

2009-2014 CAGR

Total Loan Growth (%)

(2)

Note(s)

1.

Non-interest expense divided by total revenue (net interest income and noninterest income)

2.

Bank holding companies participating in the 2015 Comprehensive Capital Analysis and Review (CCAR); excludes Synchrony Financial, Santander Holdings USA, Goldman

Sachs, BMO Financial, HSBC USA and Deutsche Bank from some metrics due to limited information; excludes Discover

3.

2009 adjusted to exclude $1.4 billion ($0.9 billion after taxes) Visa and MasterCard settlement

(3)

(2)

Source

SNL, regulatory reports; Discover

(2)

(3)

5

Card -

Outperforming peers in loan growth and credit performance

Card Loan Growth (%YOY)

Note(s)

1.

Includes weighted average card loan growth for American Express (U.S. Card), Bank of America (U.S. Card), Capital One (U.S. Card adjusted for portfolio acquisitions and

divestitures and excludes installment loans), Citi (Citi-branded Cards N.A.), JPMorgan Chase (Card Services) and Wells Fargo (Consumer Credit Card 1Q12-1Q15)

2.

Weighted

average

rate;

includes

U.S.

card

net

charge-off

rates

for

American

Express

(U.S.

Card),

Bank

of

America

(U.S.

Card),

Capital

One

(U.S.

Card),

Citi

(Citi-branded

Cards

N.A.),

JPMorgan

Chase

(Card

Services)

and

Wells

Fargo

(1Q11-1Q15)

(1)

Card Net Charge-off Rate (%)

(2)

Source

Public company data

6

Proprietary network drives brand recognition and increasing

acceptance

Domestic Acceptance

2014 Average Unaided

Card Brand Awareness

Source

2014 Millward Brown Brand Tracking Study

Source

The Nilson Report, February 2005 and February 2015 issues

2004  2014

2004  2014

2004  2014

+111%

+86%

+67%

Discover

American

Express

Visa /

MasterCard

7

Growing non-card loan balances and funding channels

Non-Card

Loans ($Bn)

(1)

Direct-to-Consumer

Deposits ($Bn)

(2)

Note(s)

1.

Excludes federal student loans, majority of which were sold in 2010 with a subsequent sale of the remaining portfolio in 2012

2.

Includes affinity deposits

3.

Indeterminates

include savings, money market and checking balances

42% of funding at

12/31/14

20% of total loans at

12/31/14

8

(3)

Personal Loans

Private Student Loans

Strong capital level allows for significant capital returns

Note(s)

1.

Common Equity Tier 1 Capital Ratio (Basel III fully phased-in) is calculated using Basel III fully phased-in common equity tier 1 capital, a non-GAAP measure.  The Company

believes that the common equity tier 1 capital ratio based on fully phased-in Basel III rules is an important complement to the existing capital ratios and for comparability to

other financial institutions.  For the corresponding reconciliation of common equity tier 1 capital and risk weighted assets calculated under fully phased-in Basel III rules to

common equity tier 1 capital and risk weighted assets calculated under Basel III transition rules, see appendix

2.

CCAR

announced

capital

actions

(buybacks

and

dividends)

pro-rated

for

four

quarters

ending

1Q16

divided

by

market

capitalization

as

of

5/29/15

DFS Common Equity

Tier 1 Ratio

(1)

Estimated Dividend and

Buyback Yield

(2)

11%

Target

$2.5Bn+/-

14.7%

9

Source

Public Company Disclosures

Appendix

Reconciliation of GAAP to non-GAAP data

11

Note(s)

1.

Adjustments related to capital components for fully phased-in Basel III include the phase-in of the intangible asset exclusion

2.

Key differences under fully phased-in Basel III rules in the calculation of risk-weighted assets include higher risk weighting for past due loans and unfunded

commitments

3.

As of January 1, 2015 regulatory capital ratios are calculated under Basel III rules subject to transition provisions.  We reported under Basel I at December 31,

2014, September 30, 2014, June 30, 2014 and March 31, 2014

4.

Common equity tier 1 capital ratio (Basel III fully phased-in) is calculated using common equity tier 1 capital (Basel III fully phased-in), a non-GAAP measure,

divided by risk weighted assets (Basel III fully phased-in)

Quarter Ended

(unaudited, $ in millions)

3/31/15

Common equity Tier 1 capital (Basel III transition)

$10,497

Adjustments related to capital componentes during transition

(1)

(87)

Common equity Tier 1 capital (Basel III fully phased-in)

$10,410

Risk weighted assets (Basel III transition)

$70,864

Risk weighted assets (Basel III fully phased-in)

(2)

$70,757

Common equity Tier 1 capital (Basel III transition)

(3)

14.8%

Common equity Tier 1 capital (Basel III fully phased-in)

(3,4)

14.7%