Despite the challenging environment, we generated pre-provision net revenue of $1.9 billion and added $1 billion to our reserve for credit losses through the first nine months of this year.
Revenue in the third quarter was up 3% from the year-ago period.
Our consumer mortgage business generated funded volume of more than $2.3 billion this quarter, which was up more than 75% from the year-ago period and 5% from last quarter.
In the third quarter, Laurel Road originated over $400 million.
The current portfolio of approximately $4.6 billion will run off over time.
Net charge-offs for the quarter were 49 basis points.
As of September 30, loans subject to forbearance terms were less than 2% of total loans.
That's down from 4.3% at June 30.
This equates to less than 1% of clients in both our commercial and consumer businesses.
In the third quarter, our provision expense exceeded charge-offs by $32 million.
Our allowance for credit losses as a percentage of period-end loans now stands at 1.88% or 2.04%, excluding PPP loans.
In the third quarter, our common equity Tier 1 ratio increased to 9.5%, which is at the upper end of our targeted range of 9% to 9.5%.
In September, we paid a common stock dividend of $0.185 per share, the same amount we paid in the second quarter.
As Chris said, we reported third-quarter net income from continuing operations of $0.41 per common share.
Total average loans were $105 billion, up 14% from the third quarter of last year, driven by growth in both commercial and consumer loans.
Commercial loans reflect an increase of over $8 billion from PPP loans.
Laurel Road originated over $400 million of student consolidation loans this quarter, and we generated $2.3 billion of consumer mortgage loans.
Linked-quarter average loan balances were down 3%, reflecting pay downs from the heightened commercial line draws earlier this year.
Average deposits totaled $135 billion for the third quarter of 2020, up $25 billion or 22%, compared to the year-ago period and up 5% from the prior quarter.
Total interest-bearing deposit costs came down 20 basis points from the prior quarter, reflecting the impact of lower interest rates and the associated lag in pricing.
We would expect deposit costs to continue to decline about 6 to 9 basis points in the fourth quarter.
We continue to have a strong, stable core deposit base with consumer deposits accounting for over 60% of our total deposit mix.
Taxable equivalent net interest income was $1 billion for the third quarter of 2020, compared to $980 million a year ago and $1.025 billion for the prior quarter.
Our net interest margin was 2.62% for the third quarter of 2020, compared to 3% for the same period last year and 2.76% for the prior quarter.
Compared to the prior quarter, net interest income decreased $19 million driven by lower commercial loan balances.
Elevated liquidity levels negatively impacted the margin by 13 basis points, with all other drivers netting to an additional 1 basis point of pressure on the margin.
The lower-than-expected commercial loan balances contributed an additional 5 basis points of margin compression.
Noninterest income was $681 million for the third quarter of 2020, compared to $650 million for the year-ago period and $692 million in the second quarter.
Compared to the year-ago period, noninterest income increased $31 million.
The primary driver was an increase of $35 million in consumer mortgage business as we continue to grow the business and see record levels of originations.
Cards and payments income also increased $45 million related to the prepaid card activity from the state government support programs.
Compared to the second quarter of 2020, noninterest income decreased by $11 million.
The largest driver of the quarterly decrease was $22 million of lower operating lease income as we had gains on leveraged leases in the prior quarter, which impacted the quarter-over-quarter comparison.
Consumer mortgage income was down $11 million, following a record quarter for related fees in the second quarter.
Though down quarter over quarter, investment banking and debt placement fees had another solid quarter given the volatile environment, coming in at $146 million for the quarter.
Total noninterest expense for the quarter was $1.037 billion, compared to $939 million last year and $1.013 billion in the prior quarter.
The increase from the prior year is primarily related to $52 million of payments-related cost reported in other expense, as well as COVID-19-related expenses to ensure the health and safety of our teammates.
Compared to the prior quarter, noninterest expense increased $24 million.
The increase was largely due to higher payments-related costs, as well as personnel costs related to elevated employee benefits, primarily healthcare, which was up $15 million from last quarter.
For the quarter, net charge-offs were $128 million or 49 basis points of average loans.
Our provision for credit losses exceeded net charge-offs by $32 million or $0.03 per share.
Nonperforming loans were $834 million this quarter or 81 basis points of period-end loans, compared to $585 million or 63 basis points from the year-ago quarter.
Additionally, delinquencies actually improved quarter over quarter with a 6-basis-point decrease in our 30- to 89-day past dues in the 90-day plus category also declining quarter over quarter.
As of September 30, loans subject to forbearance were less than 1% based on the number of accounts for both commercial and consumer loans and less than 2% when using outstanding balances.
We ended the third quarter with our common equity Tier 1 ratio of 9.5%, up 40 basis points from 9.1% in the second quarter.
This places us at the upper end of our targeted range of 9% to 9.5%.
In the third quarter, we paid a common dividend of $0.185 per share, which was consistent with our second-quarter level.
Importantly, over the last four quarters, beginning with the fourth-quarter 2019, we have earned $1.14 per share, well above our current dividend run rate of $0.74 per share.
The benefit of repayment is estimated to be $20 million to $25 million.
Net charge-offs are expected to be in the 55- to 65-basis-point range next quarter.

Summary:
As Chris said, we reported third-quarter net income from continuing operations of $0.41 per common share.
For the quarter, net charge-offs were $128 million or 49 basis points of average loans.