Our focus remains on our initiatives to increase our retail separate account offerings, expand the availability of ETFs in key channels, and grow the wealth management business. ETF assets reached $4.7 billion, up 79% over the prior year, with a strong organic growth rate over the period. In the third quarter, ETF sales and flows reached their highest quarterly level at $0.9 billion each, benefiting from strong investment performance and demand for some of our strategies. On the inorganic side, I would reiterate my comments from our last call that the environment remains very favorable with attractive opportunities to add compelling new capabilities or increase scale.
As always, however, we take a highly disciplined approach to inorganic growth and will act only when an opportunity is both financially and strategically compelling. Turning now to our financial results, the sequential improvement reflected growth in average assets under management and stable operating expenses. The operating margin was up 170 basis points to 33%, or 33.4% without squeezed items, with an incremental margin that continues to be above 50%. Earnings per share, as suggested, of $6.69 increased from $6.25 in the second quarter.
Relative to the prior year period, earnings per share, as suggested, decreased 3% on lower average assets. We also raised our quarterly dividend, representing the eighth consecutive annual increase. As a reminder, we bought back $50 million of our shares in the first half of the year, which was higher than our full year of repurchases in each of the prior two years. Buybacks remain an important component of our capital management strategy, and given our strong liquidity position, we intend to continue to balance return of capital shareholders with investments in the business, including inorganic opportunities.