Credit losses rose substantially at Discover Financial Services during the third quarter, but the Riverwoods, Ill.-based card issuer still managed to report bigger profits.

Discover on Tuesday reported net income of $639 million, up 4.4% from the same period a year earlier. Earnings per share were $1.56, up from $1.38 during the third quarter of 2015. The firm's results were boosted by a one-time, $28 million tax benefit.

Several measures of credit quality at Discover worsened between July and September.

In the firm's flagship card business, the percentage of loans that were at least 30 days past due rose from 1.65% to 1.87%. And the net principal chargeoff rate on credit card loans rose from 2.03% to 2.17%.

The credit card delinquency rate also rose during the second quarter. The company said in July that it had loosened its underwriting standards in the card business, though only marginally.

In Discover's personal loans business, where originations grew by 16% during the third quarter, the 30-day delinquency rate rose from 0.80% a year earlier to 0.98%. And the net principal chargeoff rate increased from 1.99% to 2.63%.

Throughout Discover's entire business, net principal chargeoffs rose from $324 million during the third quarter of last year to $370 million a year later. Its provision for loan losses in the quarter was $445 million, up 34% from a year earlier.

Loan growth in Discover's credit-card business was 4%, the same as during the second quarter. The company reported total loan growth of 5%, to $73.6 billion.

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