Discover Financial Services : Q4 ()

Exhibit 99.3

2020 and 4Q20 Financial Results

January 20, 2021

©2021 DISCOVER FINANCIAL SERVICES

Notice

The following slides are part of a presentation by Discover Financial Services (the "Company") in connection with reporting quarterly financial results and are intended to be viewed as part of that presentation. No representation is made that the information in these slides is complete. For additional financial, statistical, and business related information, as well as information regarding business and segment trends, see the earnings release and financial supplement included as exhibits to the Company's Current Report on Form 8-K filed today and available on the Company's website (www.discover.com) and the SEC's website (www.sec.gov).

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, 2019, "Risk Factors" and "Management's Discussion & Analysis of Financial Condition and Results of Operations" in the company's Quarterly Report on Form 10-Q for the quarters ended March 31, 2020, June 30, 2020, and September 30 2020 which is filed with the SEC and available at the SEC's website (www.sec.gov) and subsequent reports on Forms 8-K and 10-Q, including the Company's Current Report on Form 8-K filed today with the SEC. The Company does not undertake to update or revise forward-looking statements as more information becomes available.

2

Full Year 2020 Highlights

• The challenges of 2020 highlighted the strength of our digital banking business model; our effective execution on several initiatives protected employees, supported customers and strengthened the Discover franchise
• Strong credit performance aided by history of conservative credit management and actions taken early in the pandemic
• • Tightened underwriting criteria on new accounts
  • Pulled back on promotional rate offers
  • Proactive credit line management
• Delivered $400MM in planned expense reductions
• • Committed to disciplined expense management
  • Continuing to invest in core capabilities to drive long-term growth and efficiency gains
• Well-positionedfor growth as U.S. economy moves into recovery
• Remain committed to returning capital to shareholders; recent Board approval for new $1.1 billion share repurchase program
• 2020 Net Income of $1.1Bn; diluted EPS of $3.60; 4Q20 Net Income of $799MM; diluted EPS of $2.59

3

4Q20 Summary Financial Results

Year-Over-Year Net Income & EPS ($MM, except EPS)

	4Q20			$	2,377	$	447	$	531	$	1,278	$	216
	4Q19			$	2,424	$	520	$	836	$	1,184	$	216
B/(W)			$	(47)	$	(73)	$	305	$	(94)	$	-
	EPS	$	2.25	$	(0.12)	$	(0.18)	$	0.75	$	(0.23)	$	0.12	$	2.59

Key Points

• Revenue net of interest expense was $2.8Bn, down 4%, driven by lower net interest income and lower net discount and interchange revenue
• Net interest margin was 10.63%, up 34 bps as lower funding costs were partially offset by lower loan yields driven by prime rate decreases
• Provision for credit losses decreased by $305MM driven by lower net charge-offs; there was no change in reserves in 4Q20
• Expenses were up 8% reflecting one-time items; excluding these items, expenses were down 4% as reductions in marketing and professional fees were partially offset by higher compensation (1)

Note(s)

1. Operating expense adjusted for one-time items is a non-GAAP measure. Management believes providing expenses excluding one-time items helps investors understand the impact of activities that are not expected to continue and provides investors with a useful metric to evaluate the company's operating performance; see appendix for a reconciliation

4

			4Q20 Loan Growth ($Bn)
		Total					Card			Key Points
				YOY					YOY
$95.9									(7)%	• Card receivables down 7%
$93.0				$77.2
	$88.9	$88.7	$90.4					YOY driven by increased
			$73.8				payment rates and lower BT/
						$71.5
							$70.2	$69.7	promo activity; up 3% QOQ
										driven by seasonal activity
4Q19	1Q20	2Q20	3Q20	4Q20	4Q19	1Q20	2Q20	3Q20	4Q20	• Organic student loans up 7%
YOY reflecting market share
										gain through 2020 peak season
	Organic Student			Personal
				YOY					YOY	• Personal loans decreased 7%
				+7%					(7)%	YOY reflecting increased
	$8.8		$9.0	$9.0	$7.7	$7.7				payments and actions taken to
	$8.6								mitigate credit risk
$8.4						$7.3
						$7.2	$7.2
4Q19	1Q20	2Q20	3Q20	4Q20	4Q19	1Q20	2Q20	3Q20	4Q20
							5

4Q20 Net Interest Margin

			NIM on Loans
10.46%	10.47%	10.43%					10.63%
10.29%	10.21%		10.19%
					9.81%
1Q19	2Q19	3Q19	4Q19	1Q20	2Q20	3Q20	4Q20

									Change
(%)	4Q20		3Q20		4Q19				QOQ		YOY
Total Interest Yield on Loans	11.96 % 11.78 %	12.52 %				18bps		-56bps
NIM on Loans	10.63 % 10.19 %	10.29 %				44bps		34bps
NIM on Interest-Earning Assets	7.93 % 7.70 %	8.66 %				23bps		-73bps
	4Q20		3Q20		4Q19
Interest-Earning Assets ($Bn)	Avg		Yield		Avg		Yield		Avg		Yield
Bal			Bal			Bal
Total Loans	$89.0		11.96 %		$88.4		11.78 %		$93.4		12.52 %
Other Interest-Earning Assets	30.3	1.13 %	28.6	0.88 %	17.7	2.05 %
Total Interest-Earning Assets	$119.3		9.20 %		$117.0		9.11 %		$111.1		10.86 %
	4Q20		3Q20		4Q19
Interest-Bearing Liabilities	Avg		Rate		Avg		Rate		Avg		Rate
($Bn)	Bal			Bal			Bal
Direct to Consumer Deposits (1)	$62.5		0.94 %		$61.6		1.25 %		$53.0		2.03 %
Brokered Deposits and Other	13.7	2.38 %	15.3	2.47 %	17.9	2.72 %
Interest Bearing-Deposits	76.2		1.20 %		76.8		1.49 %		70.9		2.20 %
Borrowings	25.1	2.42 %	22.9	2.23 %	25.1	3.50 %
Total Interest-Bearing Liabilities	$101.3		1.50 %		$99.7		1.66 %		$96.0		2.54 %

Note(s)

1. Includes Affinity relationships

Key Points

• NIM on loans was 10.63%, up 44bps QOQ driven by favorable deposit pricing
• Total loan yield of 11.96% down 56bps YOY reflecting the impact of prime rate decreases partially offset by favorable portfolio mix and lower interest charge-offs; up 18bps QOQ driven by favorable portfolio mix and lower interest charge-offs
• Average consumer deposits of $62.5Bn grew 18% YOY and were up 1.0Bn QOQ; consumer deposits composed 62% of total funding
• Rate on average interest-bearing liabilities of 1.50%, down 104bps YOY and 16bps QOQ, driven by lower deposit pricing

6

Funding Mix

Funding Mix (%), Average Balance			Maturities

Maturity profile provides opportunity to continue optimizing funding costs

								Maturities
								($Bn)		FY20		FY21		FY22
								Brokered & Other	$	19.0	$	17.9	$	4.5
								Deposits
								Securitized
								Borrowing	$	3.0	$	3.4	$	4.4
								Unsecured	$	1.8	$	0.8	$	0.8
								Borrowings
								Total	$	23.8	$	22.0	$	9.7
								Average
								Maturity Rate		FY20		FY21		FY22
								(%) (1)
								Brokered & Other		2.34 %		1.81 %		2.21 %
								Deposits
								Securitized		0.63 %		0.47 %		0.70 %
								Borrowing
								Unsecured		4.21 % 1.93 % 4.35 %
								Borrowings
								Total		2.26 %		1.61 %		1.72 %

Note(s)

1. Effective cost net of hedge impact

7

4Q20 Operating Expense

Year-Over-Year Expense ($MM)

$57	$85	$49	$1,278

$1,184 $(22)

$(75)

4Q19	Employee	Marketing	Info	Prof	All		4Q20
Expense	Comp		Process	Fees	Other	Expense
($MM)				4Q20		4Q19			$		%
Employee Compensation and Benefits		$504		$447			$57	13%
Marketing and Business Development		159		234			(75)	(32%)
Information Processing & Communications	198		113			85	75%
Professional Fees			192		214			(22)	(10%)
Premises and Equipment			30		27			3	11%
Other Expense			195		149			46		31%
Total Operating Expense			$1,278		$1,184			$94		8%
Total Operating Expense ex one-time items(1)
$1,141		$1,184			($43)		(4%)
Operating Efficiency(2)			45.2 %		40.2 %					500 bps

Key Points

One-time items in the quarter included:

($MM)
Information Processing	$77	Software write-offs
Compensation &	$26	Voluntary early
Benefits	retirement program
Other Expense	$27	Penalties and restitution
Premise & Equipment	$7	Accelerated lease
depreciation

Excluding one-time items, expenses were down 4% and included:

• Increased employee compensation reflecting higher average salaries and increased headcount
• Lower marketing expense as we aligned costs with the economic environment; reductions primarily in brand and acquisition marketing
• Decreased professional fees primarily driven by lower collection fees

Note(s)

1. Operating expense adjusted for one-time items is a non-GAAP measure. Management believes providing expenses excluding one-time items helps investors understand the impact of activities that are not expected to continue and provides investors with a useful metric to evaluate the company's operating performance; see appendix for a reconciliation
2. Defined as reported total operating expense divided by revenue net of interest expense

8

4Q20 Key Credit Metrics

				Change
	4Q19	3Q20	4Q20	QOQ	YOY
Credit Card Loans
Ending Loan Balance ($MM)	$77,181	$69,656	$71,472	2.6%	(7.4)%
Net Principal Charge-off Rate	3.41%	3.45%	2.63%	(82) bps	(78) bps
30-Day Delinquency Rate	2.62%	1.91%	2.07%	16 bps	(55) bps
Private Student Loans
Ending Loan Balance ($MM)	$9,653	$10,016	$9,954	(0.6)%	3.1%
Net Principal Charge-off Rate	1.02%	0.58%	0.71%	13 bps	(31) bps
30-Day Delinquency Rate (1)	1.72%	1.41%	1.32%	(9) bps	(40) bps
Personal Loans
Ending Loan Balance ($MM)	$7,687	$7,211	$7,177	(0.5)%	(6.6)%
Net Principal Charge-off Rate	4.26%	2.69%	2.79%	10 bps	(147) bps
30-Day Delinquency Rate	1.37%	1.10%	1.08%	(2) bps	(29) bps
Total Loans
Ending Loan Balance ($MM)	$95,894	$88,660	$90,449	2.0%	(5.7)%
Net Principal Charge-off Rate	3.19%	3.00%	2.38%	(62) bps	(81) bps
30-Day Delinquency Rate (1)	2.40%	1.76%	1.88%	12 bps	(52) bps

Note(s)

1. 30-Day Delinquency Rate excludes purchased loans

Key Points

• Credit card net charge-off rate decreased 78 bps YOY while 30-Day delinquency decreased 55bps YOY reflecting strong credit performance
• Student loan credit performance remains stable
• Personal loan net charge-offs improved 147bps YOY reflecting underwriting enhancements and consumer liquidity

9

Allowance for Credit Losses

($MM)	Credit Card		Student		Personal		Other		Total Loans
	Loans		Loans
Balance at January 1, 2020	4,550	653	613	28	5,844
Reserve rate	5.90 %		6.76 %		7.97 %		N/A		6.09 %
Balance at March 31, 2020	5,306	765	807	35	6,913
Reserve rate	7.19 %		7.68 %		10.55 %		N/A		7.44 %
Balance at June 30, 2020	6,491	799	857	37	8,184
Reserve rate	9.25 %		8.21 %		11.71 %		N/A		9.2 %
Balance at September 30, 2020	$6,491		$840		$857		$38		$8,226
Reserve rate	9.32 %		8.38 %		11.89 %		N/A		9.28 %
Provision for credit losses	463	18	50		-	531
Net Charge-offs	(463)		(18)		(50)		-		(531)
Balance at December 31, 2020	$6,491		$840		$857		$38		$8,226
Reserve rate	9.08 %	8.43 %	11.94 %		N/A	9.09 %

10

Capital Trends

13.1

12.2

11.5	11.4	11.4			11.7
11.2	11.3	165
11.1

										123
93						99
88
	82	79
			77						76
4Q18		1Q19	2Q19	3Q19	4Q19	1Q20	2Q20	3Q20	4Q20
		Common Equity Tier 1					Payout Ratio(2) (%)
		(CET1) Capital Ratio(1) (%)

Note(s)

1. Based on the final rule published September 30, 2020. Capital ratios reflect delay in the recognition of the impact of CECL reserves on regulatory capital for two years in accordance with the final rule
2. Payout Ratio is displayed on a trailing twelve month basis. This represents the trailing twelve months' Capital Return to Common Stockholders divided by the trailing twelve months' Net Income Allocated to Common Stockholders

11

2021 Perspective

Loan Growth

Net Interest Margin

Operating Expense

Net Charge-offs

Capital Management

• Modestly positive, subject to payment rate trends and economic conditions
• Decline in funding costs provides tailwind
• Focus on disciplined expense management
• Investments in marketing, technology capabilities, and automation
• Losses expected to increase in 2H21
• Likely to remain elevated into 2022
• Priorities for capital return remain unchanged
• Approved up to $1.1Bn in share repurchases

12

Appendix

4Q20 Revenue

					Inc /		(Dec)
($MM)	4Q20		4Q19		$		%
Net Interest Income	2,377		2,424		(47)		(2%)
Net Discount/Interchange Revenue	242	281		(39)	(14%)
Protection Products Revenue	45	48		(3)	(6%)
Loan Fee Income	110	123		(13)	(11%)
Transaction Processing Revenue	52	51		1	2%
Other Income	(2)		17		(19)	(112%)
Total Non-Interest Income	447	520		(73)	(14%)
Revenue Net of Interest Expense
$2,824	$2,944		$(120)	(4%)
					Change
	4Q20		4Q19		QOQ		YOY
Discover Card Sales Volume ($MM)	$40,957	$39,188		10 %	5 %
Rewards Rate (1)	1.38 %	1.32 %		-bps		6bps
NIM on Loans	10.63 %	10.29 %		44bps		34bps

Key Points

• Net interest income decreased 2% primarily due to lower average receivables
• Net discount and interchange revenue down 14% driven by higher rewards cost
• Rewards rate was 6bps higher YOY primarily driven by increased sales in 5% categories, particularly due to growth in online spending

Note(s)

1. Rewards cost divided by Discover card sales volume

14

			4Q20 Payments Volume ($Bn)
	Discover Network				PULSE		Key Points
				YOY					YOY
				+5%
								+10%	• Discover Network volume was
				$42.5
$40.6									up 5% reflecting the increase in
		$38.7					$55.0	$55.1
							Discover card sales volume
	$35.2						$52.9
	$32.3
				$50.0
					$49.2				• PULSE volume up 10% YOY
										driven by higher average spend
										per transaction, increased
4Q19	1Q20	2Q20	3Q20	4Q20	4Q19	1Q20	2Q20	3Q20	4Q20	spend at grocery and home
improvement and higher ATM
										volume
		Diners (1)				Network Partners
				YOY					YOY	• Diners Club volume down 28%
				(28)%					+23%
								from the prior year reflecting the
$8.8								$8.9
							$8.7	impact of the global pandemic
	$7.7
									on T&E spending
				$6.3
			$5.8	$7.1		$7.3
				$7.0
		$4.3
									• Network Partners higher 23%
										driven by higher AribaPay
4Q19	1Q20	2Q20	3Q20	4Q20	4Q19	1Q20	2Q20	3Q20	4Q20	volume

Total Network Volume up 6% YOY

Note(s)

1. Volume is derived from data provided by licensees for Diners Club branded cards issued outside of North America and is subject to subsequent revision or amendment

15

Sales Volume

Weekly Sales Volume Trend (%)			Key Points

100%
									• 4Q20 sales volume up 5% YOY
50%									with trends improving across all
									categories
0%
-50%									• Sales mix shifted to a higher
								concentration from retail and
									grocery which are now over half
-100%									of total sales
Mar	Apr	May	Jun	Jul	Aug	Oct	Nov	Dec	Jan
				Week Ending

		Gas			Groceries			Retail			• Significant YOY increase in
		Restaurants			Services			Travel			online sales volume
		Total Sales Volume
		Year-Over-Year Sales Volume Trend (%)
										• Travel, restaurants, and gas
			FY19	FY20	1Q20	2Q20	3Q20	4Q20
			Sales Mix	Sales Mix	have improved significantly;
Gas	6%	4%	-%	(48)%	(23)%	(20)%
Grocery	9%	11%	14%	14%	13%	14%	headwinds remain due to the
Retail	35%	40%	6%	7%	18%	20%	pandemic
Restaurants	8%	7%	(2)%	(43)%	(18)%	(10)%
Services	19%	18%	(1)%	(25)%	(4)%	1%
Travel	8%	4%	(20)%	(85)%	(59)%	(53)%
All Other	16%	16%	6%	(6)%	4%	4%
Total Sales Volume	100%	100%	3%	(16)%	(1)%	5%

Category Definitions

• Services includes entertainment, auto, education, medical, and other service providers
• All Other includes discount stores, drug stores, wholesale clubs, telecommunication, utilities, insurance, financial services and government

16

Credit Performance Trends

				Total Company Loans												Credit Card Loans
		3.08	3.25	3.22	3.05	3.19	3.27	3.44												3.50	3.49							3.65	3.90	3.45
2.97		3.00								3.23	3.32		3.41
											3.14
										2.38
																																		2.63
2.22	2.31	2.28	2.18	2.32	2.40	2.38								2.32	2.43	2.45	2.34	2.50		2.62	2.62
		1.98	1.76	1.88			2.17				2.07
																									1.91
3Q18	4Q18	1Q19	2Q19	3Q19	4Q19	1Q20	2Q20	3Q20	4Q20		3Q18	4Q18	1Q19	2Q19	3Q19	4Q19	1Q20	2Q20	3Q20	4Q20
			NCO rate (%)				30+ day DQ rate ex-purchased loans (%)											NCO rate (%)				30+ day DQ rate (%)
				Private Student Loans												Personal Loans
																		.09	4.49		4.53		4.33				4.26
																								3.99
																														3.59
2.13																																3.43
2.00
1.76			1.78																														2.79
		1.67	1.72	1.64																									2.69
				1.49	1.41	1.32
0.96	0.86	0.66	0.61	0.59	1.02	0.68	0.62	0.58	0.71			.57	1.60		1.51		1.49	1.49			1.37		1.31
												1.07	1.10		1.08
3Q18	4Q18	1Q19	2Q19	3Q19	4Q19	1Q20	2Q20	3Q20	4Q20			3Q18	4Q18	1Q19	2Q19	3Q19	4Q19	1Q20	2Q20	3Q20	4Q20
			NCO rate (%)				30+ day DQ rate ex-purchased loans (%)										NCO rate (%)			30+ day DQ rate (%)

17

Non-GAAP Reconciliation

($MM)		4Q20
Total operating expense	$	1,278
One-time expenses related to software write-offs, penalties and restitution, voluntary	$	(137)
early retirement program, accelerated lease depreciation
Operating expense ex one-time items	$	1,141

18