Operator: Welcome to U.S. Bancorp's Second Quarter 2013 Earnings Conference Call. Following a review of the results by Richard Davis, Chairman, President, and Chief Executive Officer and Andy Cecere, U.S. Bancorp's Vice Chairman and Chief Financial Officer, there will be a formal question-and-answer session.
This call will be recorded and available for replay beginning today at approximately noon Eastern Daylight Time through Wednesday, July 24 at 12 Midnight Eastern Daylight Time.
I will now turn the conference call over to Judy Murphy, Director of Investor Relations for U.S. Bancorp.
Judith T. Murphy - EVP, Corporate Investor and Public Relations: Thank you, Lawry, and good morning to everyone who has joined our call. Richard Davis, Andy Cecere, and Bill Parker are here with me today to review U.S. Bancorp's second quarter 2013 results and to answer your questions.
Richard and Andy will be referencing a slide presentation during their prepared remarks. A copy of the slide presentation as well as our earnings release and supplemental analyst schedules are available on our website at usbank.com.
I would like to remind you that any forward-looking statements made during today's call are subject to risk and uncertainty. Factors that could materially change our current forward-looking assumptions are described on Page 2 of today's presentation, in our press release, and in our Form 10-K and subsequent reports on file with the SEC.
I will now turn the call over to Richard.
Richard K. Davis - Chairman, President and CEO: Thank you, Judy, and good morning, everyone. Thank you for joining us today to review U.S. Bank's second quarter results.
I'll begin with a few of our quarterly highlights on Page 3 of the presentation. U.S. Bancorp reported record net income of $1.5 billion for the second quarter of 2013 or $0.76 per diluted common share.
Total average loans grew year-over-year by 5.2% and 1.2% or 5% annualized on a linked quarter basis. We experienced stronger loan growth in total average deposits of 7% over the prior year and 1% or 4% annualized linked quarter.
Credit quality remained strong. Total net charge-off decreased by 9.5% from the prior quarter while non-performing assets declined linked quarter by 5.4%.
We generated significant capital this quarter. Our estimated Tier 1 common ratio under Basel III rules issued in early July was 8.6% at June 30, while our Basel I Tier 1 common equity ratio was 9.2% and our Tier 1 capital ratio was 11.1%. We repurchased 18 million shares of common stock during the second quarter. These buybacks along with our dividend which was increased by 18% in June resulted in 73% return of earnings to our shareholders in the second quarter.
On Slide 4, you can see that our performance metrics continue to be among the best in the industry. Return on average assets in the second quarter was 1.7%. Return on average common equity was 16.1%.
Our net interest margin and efficiency ratio are shown in the graph on the right hand side of Slide 4. This quarter's net interest margin of 3.43% was as expected 5 basis points lower than the prior quarter's rate of 3.48% and Andy will discuss the margin in more detail in just a few minutes. Our efficiency ratio for the second quarter was 51.7%. We anticipate that this ratio will remain in the low 50s going forward, as we continue to manage expenses in relation to revenue trends, while continue to invest in and grow our businesses.