2004 was an extraordinary year for E*TRADE FINANCIAL, delivering earnings of $0.99 per diluted share on $380.5 million in net income — compared to $0.55 per share and net income of $203.0 million in 2003. Total assets/deposits in customer accounts reached a record level of $100.4 billion at year-end — an increase of 21 percent over the previous year.
This robust growth was accomplished in large part by enhancements to our value proposition in three areas: price, functionality and service. Major pricing initiatives included the launch of a third pricing tier in our commission structure, Priority E*TRADE; a new commission breakpoint for valued customers based on activity or assets; lower options contract fees; No-Fee, No-Minimum IRAs; and proprietary stock index funds with the lowest expense ratios in the industry. In addition, we paid out nearly $2 million to customers through our 12b-1 rebate program on mutual funds — putting nearly half the mutual fund fees we received back in customers' pockets.
We improved functionality both through new technology and upgrades to existing features. We upgraded our website to allow customers to view all of their accounts at E*TRADE FINANCIAL on one, consolidated page. We launched major upgrades to our Main Street, Active Trader and Professional Trading front ends, as well as a new Exchange Traded Funds Center. We also enhanced our OptionsEdge trading center and introduced EquityExpress — an innovative feature making home equity loans and lines of credit available in one week.
Our most important progress in service was the successful migration of our core processing and clearing system to a single platform. This was the largest infrastructure project in our history and establishes the backbone for our integrated value proposition. We also expanded our relationship manager program and opened five additional E*TRADE FINANCIAL Centers in key cities around the country.
In addition to enhancing our value proposition, we also worked to strengthen the Company's financial position. We deployed capital to grow our businesses, bought back stock and de-leveraged the balance sheet by retiring debt and refinancing equity-linked debt with straight debt. Over the past three years, as our financial performance has improved, we have continued to reinvest in the Company and we will continue to do so in the future. Since our initial share buyback program began in Q3 of 2001, we have invested $487 million and repurchased 66 million shares at an average price of $7.34. During that same time, we also retired $390 million in corporate debt and lowered our debt-equity-ratio to 26 percent from over 52 percent prior to these balance sheet initiatives. We continue to see significant value in reinvesting in the Company through stock buybacks and debt retirement.