Slide 3 includes some notable achievements from 2020, starting with the Paycheck Protection Program, through which we extended approximately 19,000 loans totaling $2.9 billion to customers across the Southeast.
We're also off to a very strong start with the newest round of P3 with approximately 5,000 loan applications submitted totaling $700 million in new requests.
And we made significant progress throughout the year, executing on our Phase 1 revenue and efficiency efforts.
As previously stated, we expect to achieve $100 million in pre-tax run rate benefits by the end of this year.
And Kevin will provide more detail later on plans for an additional $75 million in benefits by the end of 2022.
Our CET1 ratio increased over 70 basis points, ending the year at 9.7%.
In addition, our ACL ratio increased 75 basis points from day one CECL implementation.
And our total risk-based capital ended the year at 13.4%, the highest level since 2014.
We ended the year strong with diluted earnings per share of $0.96 per share compared to $0.56 last quarter and $0.97 a year ago.
Adjusted diluted earnings per share was up $1.08 per share compared to $0.89 last quarter and $0.94 a year ago.
Total adjusted revenues of $499 million were up $5 million from last quarter, led by broad-based increases in fee revenue, continued reductions in deposit costs and accelerated P3 loan forgiveness income.
Adjusted noninterest expense of $275 million was up $6 million from last quarter, which was impacted by a $5 million increase in Synovus Forward, P3 and COVID-related expenses.
Total loans declined $1.3 billion in the fourth quarter, including accelerated P3 loan forgiveness that resulted in balance declines of $516 million.
Total lending partnership loans held for investment declined $81 million, while loans held for sale from this category increased $81 million.
Excluding reductions in P3 and lending partnership balances, total loans declined $700 million or 2% from the third quarter.
Total C&I loans declined $640 million in the fourth quarter, including the $516 million coming from accelerated P3 forgiveness.
Line utilization continued to decline in the quarter, down an additional $57 million.
C&I line utilization of 40% was 6% lower than it was the same quarter last year and remain near historic lows.
Total CRE loans declined $395 million as payoff and paydown activity increased significantly in the fourth quarter as transactions that were delayed during the height of the pandemic were completed.
Total consumer loans declined $282 million.
As shown on Slide 6, we had total deposit growth of $2 billion.
Fourth-quarter increases were led by core transaction deposit growth of $1.8 billion and $1 billion in seasonal public funds.
The cost of deposits fell by 11 basis points from the previous quarter to 28 basis points due to a combination of rates paid and deposit remixing.
In the fourth quarter, we were able to reduce the cost of time deposits by 28 basis points and the cost of money market deposits by 9 basis points.
Slide 7 shows net interest income of $386 million in the fourth quarter, an increase of $9 million from the third quarter that was primarily due to the impact of increased P3 forgiveness.
Exclusive of P3 fee accretion, NII in the fourth quarter was $361 million as compared to $365 million the prior quarter.
The net interest margin was 3.12%, up 2 basis points from the previous quarter.
The additional P3 fee accretion of $13 million to a total of $25 million was a meaningful contributor to that increase.
Conversely, considerable deposit inflows, coupled with the timing of our subordinated debt transaction, led to an elevated level of one balance sheet liquidity within the fourth quarter with average excess cash balances increasing $1.4 billion.
This dynamic can have a notable impact on the margin with every $1 billion of extra cash on balance sheet diluting the margin by approximately 6 basis points.
As of year-end, there were $49 million of Phase 1 P3 processing fees remaining with approximately $20 million associated with loans that had initiated the forgiveness process.
Slide 8 shows noninterest revenue, which was $115 million, flat to the prior quarter.
After adjusting for security gains, adjusted noninterest revenue was $112 million, down $3 million from the prior quarter.
Core banking revenue improved by $3 million to $37 million primarily due to increased activity as we continue the gradual return to pre-COVID levels.
Service charges on deposits, SBA gains and card fees each increased about $1 million from the previous quarter.
$2 million in revenue growth from fiduciary and asset management, brokerage and insurance helped offset the $1 million decline in capital markets revenue resulting from lower loan activity.
Net mortgage revenue of $24 million, down $7 million from the prior quarter, remained elevated.
Secondary mortgage production increased 4%, which directly impacted commissions.
Total noninterest expenses were $302 million, down $14 million.
On an adjusted basis, NIE was $275 million, up $6 million from the prior quarter.
Adjustments include $14 million related to the voluntary early retirement program we announced in October, $8 million in loss on early extinguishment of debt and $4 million in branch optimization real estate writedowns.
Payback on all of these strategic initiatives are 2.5 years or less.
The quarter-over-quarter increase in adjusted NIE includes $5 million related to Synovus Forward, P3 and COVID.
Most of the $3 million increase in P3 and COVID-related expenses are upfront consulting and technology fees to streamline the forgiveness process.
During the quarter, we realized an additional $2.5 million in savings from Synovus Forward that offset investments in digital and technology.
In the fourth quarter, headcount declined by 100, most of which occurred in December as part of the voluntary early retirement plan.
Before providing some comments related to key credit metrics on Slide 10, I'd like to provide a brief update on our COVID-related deferral program, which provided for up to 180 days of deferred payments of principal and interest.
Loans in this program with a full P&I deferral declined to 34 basis points at the end of the fourth quarter.
Performance for borrowers that completed a deferral period has been strong, with approximately 99% paying as agreed.
Provision for credit losses of $11 million include net charge-offs of $22 million or 23 basis points.
The allowance for credit losses ended the fourth quarter at $654 million.
And the ACL ratio increased 1 basis point to 1.81%, excluding P3 loans.
Preliminary capital ratios on Slide 11 show continued improvement as CET1 increased 37 basis points to 9.7% this quarter.
We ended the year above the higher end of our operating range of 9 to 9.5%, which positions us well as we move into the new year.
The total risk-based capital ratio of 13.4% was up 25 basis points.
Our 2021 capital plan maintains the current common shareholder dividend of $0.33 per quarter and includes authorization for share repurchases of up to $200 million.
Based on the current outlook, we will continue to target a CET1 ratio at the higher end of the 9 to 9.5% range with more opportunity to deploy capital as we gain greater clarity around effectiveness of the vaccine, as well as confidence in the broader economic recovery.
The third-party spend program will fully deliver $25 million run rate savings in 2021.
We also consolidated 13 branch locations this past year, which will result in approximately $5 million in run rate savings on a go-forward basis.
And as we close out 2020, we completed two components of organizational efficiency work stream with a voluntary early retirement program and a back-office staffing optimization, which will produce $13 million in run rate benefit in 2021.
Starting with our pricing for value program, we have begun the market-based repricing of our treasury and payment solutions offerings and are pleased with the progress to date with an anticipated run rate benefit of approximately $9 million in the first half of 2021.
As a result of our progress and the plans for additional Phase 1 initiatives, we remain committed to deliver the $100 million run rate pre-tax benefits by the end of 2021.
We have also increased our objective by an additional $75 million run rate benefit to be achieved by the year-end 2022.
For example, treasury and payment solutions' new revenue in 2020 was up 160% over 2019 and 450% over two years ago.
We expect an additional 65 to 70% of the P3 loans funded in 2020 to be forgiven by mid-2021, leaving around $500 million on the books for an extended period.
Based upon our results to date, as well as our preliminary analysis of eligibility, we believe the number of applicants will range from 5,000 to 7,500, which compares to just over 19,000 last year.
We expect the average loan size to be less than the round one average of approximately $150,000, which would result in a higher percentage of fee revenue.
Excluding all P3 balance changes, we expect loan growth of approximately 2 to 4% in 2021.
A return to a more normalized C&I line utilization would increase funded loan balances by $650 million as compared to year-end balances.
Despite a challenging year, the Family Office grew assets under management by 23% and new business revenue booked for the year increased 66%.
In aggregate, we expect total adjusted revenues to decline 1 to 4% in 2021.
Some opportunities to perform at the higher end of the range include more favorable deposit pricing, further steepening in the yield curve, higher-than-expected economic activity, increased participation in Phase 2 of the P3 program and acceleration of the benefits from enhanced analytics and other revenue-centric Synovus Forward initiatives.
Despite our overall actions to reduce expenses, it is not inhibiting our ability to continue to invest in areas of focus with approximately $20 million in strategic investments in technology and digital planned for 2021.
In aggregate, we expect adjusted expenses to decline between 2 and 5% for the year.
Our CET1 ratio of 9.7% is above our stated operating range of 9 to 9.5%.
The CET1 target of 9.5% in the 2021 outlook is at the higher end of our 9 to 9.5% operating range, which we believe is prudent while greater levels of uncertainty exist.
Lastly, assuming no significant change in the current tax environment, we expect an effective tax rate of 23 to 25%.
For sensitivity purposes, a federal tax rate change from 21 to 28% would result in an increase of our long-term effective tax rate of 6.5%.
Kessel has led this company with such a steady hand over the last 10 years and has returned the company to a position of strength.

Summary:
We ended the year strong with diluted earnings per share of $0.96 per share compared to $0.56 last quarter and $0.97 a year ago.
Adjusted diluted earnings per share was up $1.08 per share compared to $0.89 last quarter and $0.94 a year ago.
As shown on Slide 6, we had total deposit growth of $2 billion.