In the third quarter, Capital One earned $3.1 billion or $6.78 per diluted common share.
Included in our results for the quarter was a $45 million legal reserve build.
Net of this adjusting item, earnings per share in the quarter were $6.86.
On a GAAP basis, pre-provision earnings were $3.6 billion, an increase of 7 percent relative to a quarter ago.
Period and loans held for investment grew $11.8 billion or 5 percent as we had strong loan growth across all of our businesses.
Recall that we moved $4.1 billion of loans to held-for-sale late in the second quarter, so average loans in the third quarter grew more modestly at 3 percent.
Revenue increased 6 percent in the linked quarter, largely driven by the loan growth I just described, coupled with margin expansion in our card business.
Operating expenses grew 3 percent in the quarter with total non-interest expense increasing 6 percent.
We released $770 million of allowance in the third quarter as the effects of continued actual strong credit performance and a reduction in qualitative factors drove a decline in allowance balance, which was partially offset by loan growth in the quarter.
Turning to Page 6, I'll now discuss liquidity.
You can see our preliminary average liquidity coverage ratio during the third quarter was 143 percent.
The LCR remains stable and continues to be well above the 100 percent regulatory requirement.
Our liquidity reserves from cash, securities, and Federal Home Loan Bank capacity ended the quarter at approximately $124 billion, down $13 billion from the prior quarter as we continue to run off excess liquidity built during the pandemic.
The nine percent decline in total liquidity was driven by a modest reduction in the size of our investment portfolio and $8 billion in lower-ending cash balances, which were used to fund loan growth and share repurchases.
The decline in cash balances had an impact on our NIM, which I will discuss in more detail on Page 7.
You can see that our third-quarter net interest margin was 6.35 percent, 46 basis points higher than Q2 and 67 basis points higher than the year-ago quarter.
Our common equity Tier 1 capital ratio was 13.8 percent at the end of the third quarter, down 70 basis points from the prior quarter.
We repurchased $2.7 billion of common stock in the third quarter and have approximately $2.6 billion remaining of our current board authorization of $7.5 billion.
However, based on our internal modeling, we continue to estimate that our CET1 capital need is around 11 percent.
As a result of the full quarter of recent issuances and a partial quarter of the planned redemptions, we expect fourth-quarter preferred dividends to remain elevated at around $74 million.
Looking ahead to Q1, we expect the run rate for preferred dividends to decline to approximately $57 million per quarter, barring additional activity.
As you can see on Slide 11, third-quarter domestic card revenue grew 14 percent year over year.
Purchase volume for the third quarter was up 28 percent year over year and up 27 percent compared to the third quarter of 2019.
And the rebound in loan growth continued with ending loan balances, up $3.7 billion or about four percent year over year.
The domestic card charge-off rate for the quarter was 1.36 percent, a 228-basis-point improvement year over year.
The 30-plus delinquency rate at quarter-end was 1.93 percent, a 28-basis-point improvement over the prior year.
Domestic card revenue margin was up 218 basis points year over year to 18.4 percent.
Total company marketing expense was $751 million in the quarter, including marketing in card, auto, and retail banking.
Driven by auto, third-quarter ending loans increased 12 percent year over year in the consumer banking business.
Average loans also grew 12 percent.
Auto originations were up 29 percent year over year.
On a linked quarter basis, auto originations were down 11 percent from the exceptionally high level in the second quarter.
Third-quarter ending deposits in the consumer bank were up $2.7 billion or one percent year over year.
Consumer banking revenue increased 14 percent from the prior-year quarter, driven by growth in auto loans.
Third-quarter provision for credit losses improved by $48 million year over year, driven by an allowance release in our auto business.
Year over year, the third-quarter charge-off rate improved five basis points to 0.18 percent and the delinquency rate improved 11 basis points to 3.65 percent.
Looking at sequential-quarter trends, the charge-off rate increased from the unprecedented negative charge-off rate in the second quarter and the 30-plus delinquency rate was up 39 basis points from the second quarter, consistent with historical seasonal patterns.
Ending deposits grew 18 percent from the third quarter of 2020 as middle market and government customers continued to hold elevated levels of liquidity.
Quarterly average deposits also increased 18 percent year over year.
Third-quarter revenue was up 17 percent from the prior-year quarter and 23 percent from the linked quarter.
Recall that revenue in the second quarter was unusually low due to the impact of moving $1.5 billion in commercial real estate loans to held-for-sale.
The criticized performing loan rate was 6.9 percent and the criticized non-performing loan rate was 0.8 percent.

Summary:
In the third quarter, Capital One earned $3.1 billion or $6.78 per diluted common share.
Net of this adjusting item, earnings per share in the quarter were $6.86.
Revenue increased 6 percent in the linked quarter, largely driven by the loan growth I just described, coupled with margin expansion in our card business.
Operating expenses grew 3 percent in the quarter with total non-interest expense increasing 6 percent.
You can see that our third-quarter net interest margin was 6.35 percent, 46 basis points higher than Q2 and 67 basis points higher than the year-ago quarter.
Our common equity Tier 1 capital ratio was 13.8 percent at the end of the third quarter, down 70 basis points from the prior quarter.