We had another period of strong financial results in the third quarter, with earnings of $1.1 billion after-tax or $3.54 per share.
Total sales were up 27% over 2019 levels with strong momentum across all categories, even travel sales increased, and while they dropped a bit in August due to concerns related to the Delta variant, travel has steadily improved since then.
While the competitive environment has intensified, new accounts are now up 17% over 2019, reflecting the strength of our value proposition.
While some of our peers had to reinvigorate their rewards offerings and substantial cost, our rewards costs were up only 6 basis points year-over-year and nearly all of this increase was driven by higher consumer spending as evidenced in our strong discount revenue.
PULSE saw a meaningful increase in debit volume with 9% growth year-over-year and a 26% increase over the third quarter of 2019, demonstrating both the impact of the recovery and an increase in debit used through the pandemic.
Our Diners business has also started to see some improvement from the global recovery with volume up 12% from the prior year as the global economy recovers, we will continue to look for opportunities to expand our international reach.
Looking at our financial summary results on Page 4, there are three key things I want to call out.
First, our total revenue, net of interest expense is up 8% from the prior year, excluding $167 million unrealized loss due to market adjustments on our equity investments.
Including this, revenue is up 2% for the quarter.
Net charge-offs were down $343 million from the prior year, which supported a $165 million reserve release this quarter.
We saw the return to growth this quarter with ending loans up 1% over the prior year and up 2% sequentially.
Card loans were the primary driver and we're also up 1% year-over-year and 2% over the prior quarter.
Sales growth continued to accelerate and was up 27% over the third quarter of 2019.
Year-to-date, new accounts were up 27% from the prior year and up 17% over 2019 levels.
The payment rate was approximately 500 basis points over pre-pandemic levels.
Organic student loans increased 4% from the prior year with originations up 7% as most schools have returned to the normal in-person learning model.
Personal loans decreased 4% driven by high payment rates.
Moving to Slide 6, net interest margin was 10.8%, up 61 basis points from the prior year and 12 basis points from the prior quarter.
Card loan yield was up 1 basis point sequentially as lower interest charge-offs were offset by the increased promotional balance mix.
Yield on personal loans declined 15 basis points sequentially due to lower pricing.
Average consumer deposits were flat year-over-year and declined 1% from the prior quarter.
Late in September, we executed our first ABS issuance since October 2019 consisting of a $1.2 billion security with a three-year fixed rate coupon of 58 basis points and a five-year $600 million security with a fixed coupon of 103 basis points.
Total non-interest income increased $90 million or 20% over the prior year excluding the unrealized loss on equity investments.
Net discount and interchange revenue was up $61 million or 26% driven by strong sales volume.
This was partially offset by increased rewards costs due to high sales in the 5% category, which was restaurants and PayPal, both this year and last.
We continue to benefit from strong sales through our partnership with PayPal, while restaurant sales were up 62% year-over-year as dining activity recovered.
Loan fee income was up $21 million or 21%, primarily driven by lower late fee charge-offs and higher non-sufficient funds and cash advance fees.
Total operating expenses were up $185 million or 18% from the prior year.
Employee compensation increased $12 million driven by a higher bonus accrual in the current year.
Excluding bonuses, employee compensation was down 3% from their prior year from lower headcount.
Marketing expense increased $70 million supporting another quarter of strong new account growth.
Other expense included a $50 million legal accrual.
Professional fees were up $47 million, primarily due to higher recovery fees.
Year-to-date, recoveries were up 20% compared to the prior year.
Total net charge-offs were a record low at 1.46%, down 154 basis points year-over-year and 66 basis points sequentially.
Total net charge dollars decreased $343 million from their prior year and were down $131 million quarter-over-quarter.
This quarter, we released $165 million from reserves and our reserve rate dropped 35 basis points to 7.7%.
The impact of these was partially offset by a 2% increase in loans from the prior quarter.
Our economic assumptions include an unemployment rate of approximately 5.5% by year-end and GDP growth of just over 6%.
Our common equity Tier 1 for the period was 15.5%, well above our 10.5% target.
We repurchased $815 million of common stock and as we had previously announced, increased our dividend payable by 14% to $0.50 per share.
On funding, we continue to make progress toward our goals of having deposits be 70% to 80% of our funding mix.
Deposits now make up 68% of total funding, up from 62% in the prior year.

Summary:
We had another period of strong financial results in the third quarter, with earnings of $1.1 billion after-tax or $3.54 per share.
Including this, revenue is up 2% for the quarter.