Discover Financial Services (NYSE:DFS) Q1 2023 Earnings Call Transcript

And then there’s certainly a level of management judgment that we use to ensure that we have an appropriate reserve under financial accounting standards. So that’s essentially a quick sketch of the process that we use.Dominick Gabriele Excellent. Thanks so much for taking my questions. Have a good day.John Greene Thank you.Operator Thank you. Our next question will come from Mihir Bhatia with Bank of America. Your line is open.Unidentified Analyst Hi. This is Nate Rich [ph] on for Mihir Bhatia. Quick question for me. Are you seeing any changes to the credit quality for new applicants? I understand that you’re tightening credit and underwriting. But just curious to see how those consumers are asking for loans now versus a year or two ago?Roger Hochschild Yes.

I mean it’s a tricky question to answer, because it varies by channel. Obviously, we did quite a lot of pre-approved marketing. So we kind of set the criteria who applies and even within our non-pre-approved channels, we tend to be targeted. So I haven’t seen, I would guess, a huge difference in terms of applicant profile, but our new account profile has tended to improve as we’ve tightened credit.Unidentified Analyst Okay. And then as a quick follow-up, can you just talk about the performance? Like how are card loan business from like 2020 or 2022 performing versus the loans pre-pandemic?Roger Hochschild Yes. I think in general, John mentioned, all of the vintages are performing as expected. And so total losses are still normalizing in line with what we forecast.

So I would say continued strong performance across the board. And we haven’t seen huge differences in behavior by vintage.Unidentified Analyst Okay. Thank you.Operator Thank you. Our next question will come from Mark DeVries with Barclays. Your line is open.Mark DeVries [indiscernible] Roger Hochschild Hey, Mark, I think your line is open. Hey, Chelsea, we’ll come back to Mark offline.Operator Okay. Yes, sir. And as at this moment, there are no further questions in the queue. So I would like to turn it back over to management for any additional or closing remarks.Eric Wasserstrom Great. Well, if there are any additional questions, please reach out to us here at the IR team. And thanks very much. Have a great day.Operator Thank you, ladies and gentlemen.

This does conclude today’s conference, and we appreciate your participation. You may disconnect at any time.