Chief Executive Officer at Capital One Financial
Thanks, Andrew, and good evening, everyone. I'll begin on Slide 10 with third quarter results in our Credit Card business. Year-over-Year growth in purchase volume and loans, coupled with strong revenue margin, drove an increase in revenue compared to the third quarter of 2021. Credit Card segment results are largely a function of our Domestic Card results and trends, which are shown on Slide 11.
In the third quarter, strong year-over-year growth in every top line metric continued in our Domestic Card business. Purchase volume for the third quarter was up 16% year-over-year and up 47% compared to the third quarter of 2019. Ending loan balances increased $22 billion or about 22% year-over-year. Ending loans grew 5% from the sequential quarter, and revenue was up 21% year-over-year driven by the growth in purchase volume and loans, as well as strong revenue margin.
Strong credit results continued in the quarter. Both the charge-off rate and the delinquency rate are well below pre pandemic levels and continue to normalize. The Domestic Card charge-off rate for the quarter was 2.2% up 84 basis points year-over-year. The 30 plus delinquency rate at quarter-end was 2.97%, 104 basis points above the prior year. On a linked-quarter basis the charge-off rate was down 6 basis points, the delinquency rate was up 62 basis points from the linked-quarter. Noninterest expense was up 28% from the third quarter of 2021, including an increase in marketing.
Total company marketing expense was $978 million in the quarter. Our choices in Domestic Card marketing are the biggest driver of total company marketing trends. In our Domestic Card business we continue to lean into marketing to drive resilient growth. We are keeping a close eye on competitor actions and potential marketplace risks. We're seeing the success of our marketing and strong growth in purchase volumes, new accounts and loans across our Domestic Card business. And strong momentum in our decade-long focus on heavy spenders continued in the third quarter.
Heavy spender marketing includes early spend bonuses driven by continued strong account growth and spending as well as investments in franchise enhancements like our travel portal and airport lounges. In the third quarter our marketing continued to drive strong growth in heavy spender accounts and strong engagement and spend behaviors with both new and existing customers. Our decade-long quest to build our heavy spender franchise has brought with it significantly increased levels of marketing but the sustained revenue, credit resilience and capital benefits of this enduring franchise are compelling and, they're growing.
Slide 12 shows third quarter results for our Consumer Banking business. In the third quarter we continued to pull back on growth in auto in response to competitive pricing dynamics. Many auto lenders appear to have reflected rising interest rates in their marginal pricing decisions, but others have not and they have gained market share and pressured industry margins. We chose to pull back on auto originations, which declined 28% year-over-year and 20% from the linked-quarter. Driven by the decline in originations, Consumer Banking loan growth is slower than previous quarters. Third quarter ending loans grew 5% to the year-ago quarter, on a linked-quarter basis ending loans were essentially flat. Third quarter ending deposits in the Consumer Bank were up 2% year-over-year. Consumer Banking deposits were flat compared to the sequential-quarter. Consumer Banking revenue was up 7% year-over-year, as growth in auto loans was partially offset by the year-over-year decline in auto margins and the effects of our decision to completely eliminate overdraft fees. Noninterest expense was up 13% compared to the third quarter of 2021 driven by continuing investments in the digital capabilities of our auto and retail banking businesses and the increased marketing for our digital national bank. The auto charge-off rate and delinquency rate continued to normalize in the third quarter. The charge-off rate for the third quarter was 1.05%, up 87 basis points year-over-year. The 30 plus delinquency rate was 4.85%, up 120 basis points year-over-year. On a linked-quarter basis, the charge-off rate was up 44 basis points and the 30 plus delinquency rate was up 38 basis points.
Slide 13 shows third quarter results for our Commercial Banking business. Third quarter ending loan balances were up 2% from the sequential-quarter, driven by growth in selected industry specialties. Average loans were up 7% in the quarter. Ending deposits were up 6% from the second quarter, average deposits were down 2% in the quarter. Third quarter revenue was up 12% from the linked-quarter, noninterest expense was also up 12%. Commercial Banking credit remained strong in the third quarter. The Commercial Banking annualized charge-off rate was 5 basis points. The criticized performing loan rate was 5.97% and the criticized nonperforming loan rate was 0.57%. In closing, we continued to drive strong growth in card revenue, purchase volume and loans in the third quarter.
Loan growth in our Consumer Banking business was slower compared to previous quarters as we pulled back on auto originations and our Commercial Banking business posted another growth--another quarter of strong revenue growth. Credit results remain strong across our businesses, charge-off rates and delinquency rates are below pre pandemic levels and credit continues to normalize. We typically see an increase in operating expense over the second-half of the year--of any year. This year the timing of some of our investment opportunities drove a larger than usual third quarter increase in operating expense, which was up 11% from the second-quarter. We expect that this year's linked-quarter increase in fourth quarter operating expense will be smaller than the approximately 7% linked-quarter increase we've seen on average over the last five years.
Turning to operating efficiency ratio. Relative to full-year 2021, we expect annual operating efficiency ratio to be roughly flat in 2022 and modestly down in 2023. As usual, our operating expense and efficiency expectations exclude any potential adjusting items. Pulling way up we're in a strong position to deliver compelling long-term shareholder value as modern digital technology continues to transform banking. We continue to see opportunities to lean into marketing and resilient asset growth that can deliver sustained revenue annuities. Our growth opportunities are enhanced by our digital transformation. We continue to closely monitor and assess competitive dynamics and economic uncertainty. Powered by our modern digital technology we are continuously improving our proprietary underwriting, marketing and product capabilities and we're managing capital prudently to put ourselves in a position to thrive in a broad range of possible economic scenarios.
And now, we'll be happy to answer your questions. Jeff?