Discover Financial Services Inc., the sixth-biggest U.S. credit-card lender, posted a fiscal fourth-quarter profit that missed analysts’ estimates as increased expenses offset a decline in soured loans.

Net income for the three months ended Nov. 30 climbed 7.4 percent to $551 million, or $1.07 a share, from $513 million, or 95 cents, a year earlier, the Riverwoods, Ill.-based company said Dec. 20 in a statement. The average estimate of 24 analysts surveyed by Bloomberg News was $1.13 a share.

Discover is adding staff and increasing marketing costs as Chief Executive Officer David Nelms seeks to move Discover beyond its core credit-card operations. Under Nelms, the firm has become one of the biggest U.S. student lenders and also started offering mortgages in June.

“Our strategy and business model are working as we achieved organic growth in all of our lending products,” Nelms said in the statement.

Discover’s expenses tied to employee compensation and benefits rose 21% to $278 million. The firm raised its quarterly dividend 40 percent to 14 cents a share.

Write-offs of loans deemed uncollectible fell to 2.02% in November from 3.04% a year earlier. Loans at least 30 days overdue, a signal of future defaults, dropped to 1.84% from 2.43%. Only New York-based American Express Co. posted lower rates among the six biggest U.S. credit-card issuers.

Discover gained 66% this year through yesterday, the second-biggest advance after Bank of America among 81 companies in the Standard & Poor’s 500 Financials Index. It also has outperformed its bigger payment-processing competitors, Visa, MasterCard and American Express, which have climbed 47%, 31% and 20%, respectively.

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