Discover Financial Service (NYSE: DFS) announced Thursday that it returned to profitability in second quarter as volumes increased with customers using their card more often. A continued decline in delinquent accounts also helped drive results.
The credit card company said it had net income of $184.6 million, or 33 cents per share. That compares with a net loss of $148.9 million, or 31 cents per share in the same period a year ago.
“Our very strong results this quarter were driven by a significant improvement in the credit performance of our loyal customer base along with continued solid growth in cardmember spending,” said David Nelms, chairman and chief executive officer of Discover.
Discover card sales volume was $23 billion, a record for a second quarter and an increase of 6% from the quarter a year ago.
Discover said net charge-offs continued to decline, hitting $81 million in the second quarter, a 7.97 percent charge-off rate, less than the 8 to 8.5 percent expected.
The company also said during the quarter it redeemed $1.2 billion of preferred stock issued to the U.S. Treasury under the TARP Capital Purchase Program.
