In the second quarter, Capital One earned $3.5 billion or $7.62 per diluted common share.
Included in the results for the quarter was a $55 million legal reserve build.
Net of this adjusting item, earnings per share in the quarter was $7.71.
On a GAAP basis, pre-provision earnings increased slightly in the sequential quarter to $3.4 billion.
We recorded a provision benefit of $1.2 billion in the quarter as $541 million of charge-offs was offset by a $1.7 billion allowance release.
Revenue grew 4% in the linked quarter, largely driven by the impact of strong Domestic Card purchase volume on noninterest income and the absence of the mark on our Snowflake investment a quarter ago.
Period-end loans held for investment grew $6.5 billion or 3%, inclusive of the effect of moving $4.1 billion of loans to held-for-sale during the quarter.
The loans moved to held-for-sale consisted of $2.6 billion of an International Card partnership portfolio and $1.5 billion in commercial loans.
We released $1.7 billion of allowance, primarily driven by observed strong credit performance and an improved economic outlook.
Our Domestic Card coverage is now 8.9%, down from 10.5% last quarter.
Our branded card coverage is 10.1%.
Coverage in our consumer business declined about 60 basis points to 3%.
Coverage in our Commercial Banking business declined about 25 basis points to 1.7%, with the single largest driver being the improvement in our energy portfolio.
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You can see our preliminary average liquidity coverage ratio during the first -- during the quarter was 141%.
The LCR continues to be well above the 100% regulatory requirement.
Our liquidity reserves from cash, securities and Federal Home Loan Bank capacity ended the quarter at approximately $137 billion.
The $14 billion decline in total liquidity was driven by lower ending cash balances.
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You can see that our second quarter net interest margin was 5.89%, 10 basis points lower than the prior quarter.
Our common equity Tier 1 capital ratio was 14.5% at the end of the second quarter, down 10 basis points from the first quarter.
Our stress capital buffer requirement, which will be effective on October 1 of this year, is 2.5%, resulting in a total capital requirement by the Fed of 7%.
Based on our internal modeling, we continue to estimate that our CET1 capital need is around 11%.
We repurchased $1.7 billion of common stock in the second quarter, the full amount allowed under the Fed's capital preservation measures.
We have approximately $5.3 billion remaining of our current board authorization of $7.5 billion.
In the third quarter of 2020, we reduced our dividend to $0.10 due to the Fed's capital preservation measures.
The difference between our historical $0.40 dividend and the reduced level for those two quarters was $0.60 per common share.
Therefore, we expect to make up for the reduced level of dividends from the second half of 2020 by paying a $0.60 special dividend in the third quarter of 2021.
In addition to the special dividend, we expect to increase our quarterly common stock dividend from $0.40 per share to $0.60 per share in the third quarter.
Both the $0.60 special dividend and the increase of our quarterly common stock dividend to $0.60 will be subject to board approval.
Domestic Card purchase volume for the second quarter was up 48% from the second quarter of 2020.
Purchase volume was up 25% from the second quarter of 2019, which is an acceleration from the first quarter when we saw growth of 17% versus 2019.
In June, T&E purchase volume was up 3% compared to June of 2019.
At the end of the quarter, Domestic Card loan balances were down $4.1 billion or about 4% year over year.
Excluding the impact of a partnership portfolio moved to held-for-sale last year, second quarter ending loans declined about 2% year over year.
Compared to the sequential quarter, ending loans were up about 5%, ahead of typical seasonal growth of 2%.
The Domestic Card charge-off rate for the quarter was 2.28%, a 225-basis-point improvement year over year.
The 30-plus delinquency rate at quarter end was 1.68%, 106 basis points better than the prior year.
Provision for credit losses improved by about $3.5 billion year over year.
Purchase volume growth outpacing loan growth and strong credit were the key drivers of Domestic Card revenue margin, which was up 226 basis points year over year to 17.7%.
Revenue margin increased over 50 basis points quarter over quarter, higher than our typical seasonal pattern.
Total company marketing expense was $620 million in the quarter, up $347 million compared to the second quarter of 2020.
Driven by auto, second quarter ending loans increased 12% year over year in the Consumer Banking business.
Average loans also grew 12%.
Auto originations were up 56% year over year and up 47% from the linked quarter.
Second quarter ending deposits in the consumer bank were up $4.4 billion or 2% year over year.
Average deposits were up 9% year over year.
Consumer Banking revenue increased 27% from the prior-year quarter, driven by growth in auto loans and retail deposits.
Second-quarter provision for credit losses improved by $1.2 billion year over year, driven by an allowance release and lower charge-offs in our auto business.
Year over year, the second quarter charge-off rate improved 120 basis points to negative 0.12%, and the delinquency rate was essentially flat at 3.26%.
Second quarter ending loan balances were down 5% year over year.
Average loans were down 7%.
Commercial line utilization continues to be down year over year, and we moved $1.5 billion of commercial real estate loans to held-for-sale.
Quarterly average deposits increased 22% from the second quarter of 2020 and 5% from the linked quarter as middle market and government customers continue to hold elevated levels of liquidity.
Second-quarter revenue was up 3% from the prior-year quarter and down 6% from the linked quarter.
Excluding this effect, Commercial Banking revenue would have increased about 13% year over year and 4% from the linked quarter.
In the second quarter, the Commercial Banking annualized charge-off rate was negative 11 basis points.
The criticized performing loan rate was 7.6%, and the criticized nonperforming loan rate was 1%.

Summary:
In the second quarter, Capital One earned $3.5 billion or $7.62 per diluted common share.
Net of this adjusting item, earnings per share in the quarter was $7.71.
We recorded a provision benefit of $1.2 billion in the quarter as $541 million of charge-offs was offset by a $1.7 billion allowance release.
You can see that our second quarter net interest margin was 5.89%, 10 basis points lower than the prior quarter.
Our common equity Tier 1 capital ratio was 14.5% at the end of the second quarter, down 10 basis points from the first quarter.