We have identified opportunities in our core businesses in mortgage to drive sustainable profitability and continue to invest in product development and risk and compliance infrastructure. Our relentless focus on eliminating inefficiencies and redundancies is a necessary part of our daily activities given the industry wide pressure on margins, lower consumer transaction fees and higher regulatory costs as Dodd-Frank becomes fully implemented.
We fully believe the strong risk management and compliance functions of our core competency is necessary for any successful company. Finally, we continue to implement lasting innovative ways to better serve our customers, all with the overriding goal of generating value for our shareholders.
Last night, we reported second quarter net income of $86 million or $0.15 per share. Through the first six months to 2012 we have earned $77.3 million or $0.13 per share. Our second quarter net income was one of the most profitable quarters in the history of our 25 years.
Our quarterly net income also contributed to an increase in our Tier 1 capital ratio to 9.07% and total risk based capital ratio in excess of 17%. On an annualized basis, second quarter return on average assets was 2.37% and return on average equity was in excess of 31%.Book vale also increased by nearly 11% to $1.65 per share as compared to $1.49 per share in the prior quarter. We continue to maintain a deferred tax asset allowance of approximately $348.7 million or $0.62 per share which consistent with GAAP is not included in our $1.65 book value per share.Our second quarter results reflect the strong earnings power of our mortgage banking business with second quarter gain on loan sale income of $212 million or 166 basis points. Second quarter residential first mortgage originations were $12.5 billion and residential first mortgage rate locks remains strong at $17.5 billion. Read the rest of this transcript for free on seekingalpha.com