Revenue net of interest expense increased $115 million, up 6% from the prior year due to loan growth and net interest margin expansion.

Net interest income increased $141 million, or 10%, from the prior year, benefiting from loan growth, lower interest expense and higher loan yield. Net interest margin was 9.82%, up 42 basis points from the prior year. The increase in net interest margin from the prior year reflects decreased funding costs and higher loan yield. Credit card yield was 12.08%, an increase of 6 basis points from the prior year. The increase in credit card yield from the prior year reflects lower interest charge-offs and a modestly higher portion of customers revolving balances. Interest expense as a percent of total loans decreased 34 basis points from the prior year as the company continued to take advantage of available low rate funding.

Other income decreased $26 million, or 5%, from the prior year due to lower direct mortgage related income.

The delinquency rate for credit card loans over 30 days past due was 1.72%, an improvement of 7 basis points from the prior year, and an increase of 5 basis points from the prior quarter. Credit card net charge-off rate for the fourth quarter was 2.09%, down 22 basis points from the prior year and up 4 basis points from the prior quarter. The student loan net charge-off rate excluding PCI loans was 1.41%, up 41 basis points from the prior year and 8 basis points from the prior quarter due to a larger portion of the portfolio entering repayment. Strong growth in personal loans resulted in the net charge-off rate decreasing by 47 basis points from the prior year and 1 basis point from the prior quarter to 2.00%.

Provision for loan losses of $352 million decreased $18 million from the prior year, driven by lower charge-offs and lower reserve additions. The reserve addition for the fourth quarter of 2013 was $48 million. The accounting treatment for higher expected losses on a portion of the PCI student loans contributed $28 million to the reserve additions in the quarter.

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