Earnings were $1 billion or $a 1.73 per diluted share, an increase of a $1.28 over the last year.
Importantly, purchase volume increased a strong 8% over last year with a substantial increase in purchase volume per account of 18%.
While we're seeing strong trends on purchase volume, loan receivables were down 7% to $76.9 billion given elevated payment rates with the infusion of additional stimulus this quarter.
Though, average balances per account have rebounded, increasing 1% over the first quarter of last year, as our new accounts which were up 3%.
Net interest margin was down 117 basis points to 13.98% as further stimulus continue to elevate payment rates, which lowered our receivable mix and yield.
The efficiency ratio was 36.1% for the quarter.
We are on track with our strategic plans to reduce our expense base by moving $210 million of expenses by the end of the year.
The net charge-offs were 3.62% this quarter compared to 5.36% last year.
Deposits were down $1.9 billion or 3% versus last year.
Total deposits comprised 81% of our funding as our direct deposit platform remains an important funding source.
During the quarter we returned $328 million capital through share repurchases of $200 million and $128 million in common stock dividends.
We expect that exiting this partnership and redeploying the capital will be earnings per share neutral relative to current program economics and accretive to proposed renewal terms.
Approximately 60% of our applications were done digitally during the first quarter and we grew 14% in mobile channel applications.
In retail part 50% of our sales occurred online and approximately 65% of payments were made digitally.
During the quarter, we renewed 10 programs including American Eagle, Ashley HomeStore, CITCO, and Phillips 66.
We also added 10 new programs including Prime Healthcare, Mercyhealth and Emory Healthcare, which furthers our penetration of health systems.
We have unparalleled scale and depth in this space with $9.3 billion in receivables and acceptance of approximately 250,000 enrolled provider health and wellness retail locations.
The card is used by more than 8 million cardholders.
We earn more than 80% of dental offices nationwide and over 40 healthcare specialties, 13 of which we entered into since 2018.
We see big opportunity in health systems and hospitals and have rapidly expanded our reach by launching eight new programs in 2020, bringing our total to 13.
With the growth in our pet vertical, we are now in over 85% of that practices and have grown pets and force by 174% since our acquisition of the Pets Best insurance business two years ago.
Our cardholders give us high marks as we have increased our customer satisfaction score to 92% from 78% back in 2009.
Our net promoter score is nearly double the credit card industry average, and is proof the value our cardholders placed on the card we've been able to increase our repeat sales to nearly 60%.
Our receivables have increased 44% in seven years.
We have also increased the breadth of our business with an increase in provider locations of 41% in that time frame, and active accounts currently stand at 5.7 million, another double-digit increase in seven years.
This translates to a significant opportunity of more than $405 billion in out-of-pocket health expenditures in the U.S., but flexible and extended financing is only a small component of overall healthcare payments.
CareCredit is already accepted at more than 17,000 pharmacies nationwide and we recently announced that we will become the issuer of the Walgreens co-branded credit card program in the U.S., the first such credit program in the retail health sector and expect to launch the new program in the second half of 2021.
Americans spend more than $100 billion on expenditures.
Purchase volume an increased 8% versus last year and exceeded our expectations for the quarter.
This is evident in the increase in purchase volume per account which is up 18% over the last year.
Average active accounts were down 8%, which marks a slowing in the rate of decline that remains impacted by the macroeconomic effects of the pandemic in 2020 and uneven recovery in the first quarter.
We did originate over 5 million new accounts, an increase of 3% versus the first quarter 2020 which is a positive sign and reflective of improved consumer sentiment.
Loan receivables declined 7% which was worse than our expectations.
Interest and fees on loans were down 14% from last year, driven by the elevated payment rate in addition to lower delinquencies.
Dual and co-branded cards accounted for 38% of the purchase volume in the first quarter and increased 6% in the prior year.
On loan receivable basis, they accounted for 23% of the portfolio and declined 10% from the prior year.
RSAs increased $63 million or 7% from last year.
RSAs as a percentage of average receivables was 5.1% for the quarter.
This coupled with lower net charge-offs resulted in a significant decrease in the provision for credit losses of $1.3 billion or 80% from last year.
Other income increased $34 million, due to investment income.
Other expenses decreased $70 million or 7% from last year due to lower operational losses and lower marketing costs, partially offset by an increase in employee costs.
In Retail Card, loan receivables declined 9%, that show momentum with purchase volume increasing 11% versus last year.
Average active accounts were down 7% and interest in fees were down 16% due to the impact from the pandemic.
During the quarter, loan receivables declined 1% and average active accounts were down 9%.
Interest and fees were down 11%, which was driven primarily by lower late fees, finance charges, and merchant discount, all resulted reduction in loan receivables.
We did see positive momentum in purchase volume, which was up 3% over last year.
We continue to drive organic growth through our partnerships and networks and added 3,900 new merchants during the quarter.
We also continue to drive higher card reuse, which now stands at approximately 34% purchase volume excluding oil and gas.
Loan receivables were down 8% this quarter and drove a decrease in interest and fees on loans of 7% as we reported lower late fees and merchant discounts.
The expansion of our network and acceptance strategy has helped us drive the reuse rate to 59% of purchase volume in the first quarter.
During the quarter, recently enacted stimulus contributed to an elevation of payment rates, which were up about 2 percentage points on average compared to the average payment rates we experienced pre-pandemic.
The difference was as high as 3.5 percentage points in March when the most recent stimulus plan was enacted.
Net interest income decreased 12% from last year, driven by lower finance charges and late fees.
The net interest margin was 13.98% compared to last year's margin of 15.15%, largely driven by the impact of the pandemic on loan receivables and increase in liquidity and lower benchmark rates.
Specifically, the loan receivables yield of 19.32% was down 135 basis points versus last year and was the primary driver of 117 basis point reduction in our net interest margin.
The mix of loan receivables as a percent of total earning assets declined over 3 percentage points from 81.7% to 78.6%, driven by the higher liquidity held during the quarter.
This accounted for 61 basis points of the net interest margin decline.
The liquidity yield declined as a result of lower benchmark rates and accounted for 23 basis points reduction in our net interest margin.
These impacts were partially offset by a 93 basis point decrease in the total interest-bearing liabilities costs to 1.57%, primarily due to lower benchmark rates.
This provides a 78 basis point increase in our net interest margin.
Our 30-plus delinquency rate was 2.83% compared to 4.24% last year.
Our 90-plus delinquency rate was 1.52% compared to 2.10% last year.
Focusing on net charge-off trends, our net charge-off rate was 3.62% compared to 5.36% last year.
Our loss for credit losses as a percent of loan receivables was 12.88%.
Overall expenses were down $70 million or 7% from last year to $932 million as we continue to execute on our strategic plan to reduce costs.
The efficiency ratio for the first quarter was 36.1% compared to 32.7% last year.
Our deposits declined by $1.9 billion from last year.
Our securitized and unsecured funding sources declined by $2.1 billion.
This resulted in deposits being 81% of our funding compared to 79% last year.
The securitized funding comprising 9% and unsecured funding comprising 10% of our funding sources at quarter end.
Total liquidity including undrawn credit facilities was $28 billion, which equated to 29.2% of our total assets, up from 25.3% last year.
With this framework, we ended the quarter at 17.4% CET1 under the CECL transition rules, 310 basis points above last year's level of 14.3%.
The Tier 1 capital ratio was 18.3% under the CECL transition rules compared to 15.2% last year.
The total capital ratio increased 320 basis points to 19.7%.
And the Tier 1 capital plus reserve ratio on a fully phased in basis increased to 28.7% compared to 24.1% last year, reflecting the increase in the reserves as a result of implementing CECL.
During the quarter, we returned $328 million to shareholders, which included $200 million of share repurchases and paid a common stock dividend of $0.22 per share.
So, we now believe the peak will occur later than we anticipated, likely in early 2022.
As we outlined previously, we've implemented cost reductions across the organization and I'm pleased to report that we are in a pace which expense savings target of $210 million for the full year.
Consumer sentiment has improved, the unemployment rate has dropped, the U.S. retail posted the largest gain in 10 months.
Our business is showing its resilience as growth has accelerated with purchase volume up 8% and 5 million new accounts opened in this quarter.

Summary:
Earnings were $1 billion or $a 1.73 per diluted share, an increase of a $1.28 over the last year.
Though, average balances per account have rebounded, increasing 1% over the first quarter of last year, as our new accounts which were up 3%.
We expect that exiting this partnership and redeploying the capital will be earnings per share neutral relative to current program economics and accretive to proposed renewal terms.
During the quarter, loan receivables declined 1% and average active accounts were down 9%.
Net interest income decreased 12% from last year, driven by lower finance charges and late fees.
The Tier 1 capital ratio was 18.3% under the CECL transition rules compared to 15.2% last year.
And the Tier 1 capital plus reserve ratio on a fully phased in basis increased to 28.7% compared to 24.1% last year, reflecting the increase in the reserves as a result of implementing CECL.
So, we now believe the peak will occur later than we anticipated, likely in early 2022.