This quarter, we earned $1.6 billion after-tax or $5.04 per share.
This improved economic view, combined with lower loan balances and continued strong credit performance, were the primary drivers of $879 million reserve release in the quarter.
As discussed in previous quarters, the strong credit performance was accompanied by elevated payment rates that continue to put pressure on loan balances, which were down 7% year-over-year.
Payment rates were over 350 basis points higher than last year and at their highest level since the year 2000.
First, there has been a significant increase in sales volume, up 11% from a year ago and up 15% from the first quarter of 2019.
On the payment side, we had continued strong performance in our PULSE business, with volumes up 23%, driven by stimulus payments in the first quarter and higher average spend per transaction.
This quarter, we restarted our share repurchase program with $119 million in buybacks, in line with the regulatory restrictions still in place.
Revenue, net of interest expense, decreased 3% from the prior year, mainly from lower net interest income.
This was driven by a 7% decline in average receivables and lower market rates, partially offset by a reduction in funding costs as we continued to manage deposit pricing and optimize our funding mix.
Non-interest income was 5% lower, primarily due to a $35 million net gain from the sale of an equity investment in the prior year.
Consistent with our excellent credit quality, lower loan fee income reflects a decline in late fees, while net discount and interchange revenue was up 12% from the prior year, reflecting the increased sales volume.
The provision for credit losses was $2 billion lower than the prior year, mainly due to an $879 million reserve release in the current quarter, compared to a $1.1 billion reserve build in the prior year.
Additionally, net charge-offs decreased 30% or $232 million in the prior year.
Operating expenses decreased 7% year-over-year as we remain disciplined on expense management.
Other than compensation, all other expenses were down from the prior year, led by marketing, which decreased 33% year-over-year.
Total loans were down 7% from the prior year, driven by a 9% decrease in card receivables.
As a result, these balances were approximately 300 basis points lower than the prior year.
Organic student loans increased 5% from the prior year and originations returned to pre-pandemic levels.
Personal loans were down 9%, primarily due to the actions we took early in the pandemic to minimize credit loss.
The net interest margin was 10.75%, up 54 basis points from the prior year and 12 basis points sequentially.
Compared to the prior quarter, the improvement in net interest margin was driven by lower deposit pricing as we cut our online savings rates from 50 basis points to 40 basis points during the quarter.
Our funding from consumer deposits is now at 65%.
Average consumer deposits were up 14% year-over-year and flat to the prior quarter.
Consumer CDs were down 7% from the prior quarter, while savings and money market increased 4%.
Total non-interest income was $465 million, down $25 million, or 5% year-over-year, driven by the one-time gain in the prior year that I previously mentioned.
Excluding this, non-interest income was up 2%.
Net discount and interchange revenue increased 12% as revenue from higher sales volume was partially offset by higher rewards cost.
Total operating expenses are down $78 million, or 7% from the prior year.
Marketing and business development decreased $77 million, or 33% year-over-year.
Partially offsetting the favorability was a $39 million increase in employment compensation, that was driven by two factors: $22 million from a higher bonus accrual in the current year.
The total charge-offs were 2.5%, down 79 basis points year-over-year and up 10 basis points sequentially.
The card net charge-off rate was 2.8%, 85 basis points lower than the prior year with the net charge-offs dollars down $209 million, or 31%.
Sequentially, the card net charge-off rate increased 17 basis points and net charge-off dollars were up $11 million.
The card 30-plus delinquency rate was 1.85%, down 77 basis points from the prior year and 22 basis points lower sequentially.
Net charge-offs were down 15 basis points year-over-year and 18 basis points compared to the prior quarter.
The 30-plus delinquency rate improved 55 basis points from the prior year and 19 basis points sequentially.
In personal loans, net charge-offs were down 79 basis points year-over-year with a 30-plus delinquency rate down 47 basis points from the prior year and 24 basis points from the prior quarter.
This quarter, we released $879 million from the allowance.
Our assumptions on unemployment for a year-end 2021 rate of 6%, with a return to full employment in late 2023, we assume GDP growth of about 4.6%.
Our common equity Tier 1 ratio increased 180 basis points sequentially to 14.9%, well above our internal target of 10.5%.
We have continued to fund our quarterly dividend at $0.44 per share and repurchased $119 million of common stock during the quarter.
Our Board of Directors previously authorized up to $1.1 billion of repurchases.
As I mentioned earlier, we continue to optimize our funding mix and consumer deposits now make up 65% of total funding.
Our goal remains to have 70% to 80% of our funding from deposits, which we feel is achievable.
We released $879 million of reserves.

Summary:
This quarter, we earned $1.6 billion after-tax or $5.04 per share.
Revenue, net of interest expense, decreased 3% from the prior year, mainly from lower net interest income.
The provision for credit losses was $2 billion lower than the prior year, mainly due to an $879 million reserve release in the current quarter, compared to a $1.1 billion reserve build in the prior year.