Diluted earnings per share was $0.56 per share compared to $0.57 last quarter and $0.83 a year ago.
Adjusted diluted earnings per share was $0.89 per share compared to $0.23 last quarter and $0.97 a year ago.
The primary difference between reported and adjusted figures for the quarter was a $0.30 per share impact from a goodwill impairment of our mortgage reporting unit that Jamie will detail shortly.
Period-end loan balances of $39.5 billion were down $364 million from the prior quarter, with commercial loan growth partially offsetting declines in the consumer portfolio.
1% of loans had a full principal and interest deferral at the end of the quarter, down from 15% in May.
Total deposits of $44.7 billion were up $471 million from the prior quarter.
Broad-based core transaction deposit growth of $1.6 billion allowed us to accelerate our deposit pricing and remixing strategy, which led to stable net interest income at $377 million.
The net interest margin declined three basis points to 3.10%, slightly better than we expected as headwinds from student loan sales and bond portfolio repositioning completed in the second quarter were partially offset by the favorable trends in deposit pricing and remixing.
Adjusted non-interest revenue of $116 million was strong, up $20 million from the prior quarter.
The improvement was led by quarter-over-quarter increases in net mortgage revenues of $8 million and core banking fees of $5 million.
Adjusted non-interest expense of $269 million was down $8 million from the prior quarter, led by an improvement of $5 million in employment expenses.
Provision for credit losses of $43 million were down $98 million from the prior quarter.
The ACL ratio increased six basis points to 1.80%, excluding P3 balances.
The CET1 ratio increased 40 basis points to 9.3%, following strong core performance in the settlement of transactions we executed in the second quarter.
The total risk-based capital ratio increased 46 basis points to 13.16%, the highest level since 2014.
As a result, there has been a goodwill impairment for our mortgage reporting unit of $45 million.
Total loans declined $364 million in the third quarter as commercial loan growth helped offset reductions from P3 loan payoffs of $77 million and strategic asset dispositions of single service loans.
Excluding the impact of asset dispositions and P3 payoffs, we had net loan growth of $245 million in the quarter.
Commercial loans, excluding P3 balances, increased $291 million.
Consumer loans declined $578 million, led by the disposition of roughly $185 million of non-relationship mortgages, along with continued declines in our lending partnership portfolios.
As shown on Slide 5, we had total deposit growth of $471 million.
Broad based core transaction deposit growth of $1.6 billion offset the strategic declines in time deposits of $1.2 billion and broker deposits of $381 million.
We estimate approximately $2.3 billion or 80% of deposit balances associated with P3 loans remained on the balance sheet at the end of the quarter.
The cost of deposits fell by 14 basis points from the previous quarter to 39 basis points due to a combination of rates paid and deposit remixing.
For context, this compares to a low of 26 basis points in the third quarter of 2014.
These activities in an environment of lower for longer interest rates, combined with strong growth in core customer deposits, should allow us to get our total deposit cost to the 26 basis point lows of the prior cycle.
Slide 6 shows net interest income of $377 million, stable from the previous quarter and included $12 million in fee accretion from our P3 loan portfolio.
There are $74 million of P3 processing fees remaining.
Earlier this month, the SBA announced a streamlined forgiveness process for certain P3 loans of $50,000 or less.
Approximately 7% of our P3 balances fall within this threshold.
There is approximately $10 million in fees associated with these loans, which will be accelerated when we receive the forgiveness proceeds.
Net interest margin was 3.10%, down three basis points from the previous quarter.
Core banking revenue improved by $5 million from the second quarter, primarily due to increased transaction activity as most components are gradually returning to pre-COVID levels.
Net mortgage revenue of $31 million remained elevated, primarily due to increase in secondary revenues driven by higher loan sales and gain on sale.
Secondary mortgage production was $654 million in the third quarter, which is an increase of $19 million or 3% from the second quarter's record production.
Assets under management of $17.5 billion grew 6% from the previous quarter.
Slide 8 includes non-interest expenses, which were $317 million or $269 million adjusted.
Adjustments include $3 million in restructuring charges, primarily related to branch optimization, as well as the $45 million goodwill impairment previously discussed.
Total employment expenses were $5 million less than the previous quarter, primarily due to lower commissions, lower headcount and reduced COVID-related staffing expenses.
The voluntary retirement offer is expected to result in a onetime fourth-quarter expense of approximately $14 million and have a two-year payback.
Provision for credit losses of $43 million includes net charge-offs of $28 million or 29 basis points.
Downgrades in the hotel portfolio, one of the hardest hit industries, accounted for $603 million of the increase in criticized and classified loans.
There were $125 million in hotel loans that had principal and interest deferrals at the end of the quarter, which represents about 8% of the total hotel portfolio.
Our latest economic outlook includes an unemployment rate of about 8% as of year-end before declining modestly in 2021.
This, along with credit migration and other portfolio activity resulted in an allowance for credit losses of $665 million, up $15 million from the previous quarter.
The allowance for credit loss ratio increased six basis points to 1.8%, excluding P3 loans.
CET1 increased 40 basis points to 9.3% this quarter, that's an increase of 35 basis points from the end of 2019 and was accomplished while increasing the reserve by $382 million.
The total risk-based capital ratio of 13.16%, up 46 basis points from the second quarter was the highest since 2014.
At the end of the third quarter, we had $337 million in loans on a full principal and interest deferral, which was less than 1% of total loans.
The aggregate amount in deferment was well below the 3 to 5% range we estimated last quarter and down significantly from the 15% we referenced in our first quarter 10-Q filing.
Of the $337 million in deferment at the end of the quarter, 50%, or $169 million were in the consumer book.
The $169 million in deferments represents approximately 2% of total consumer loans.
Commercial deferments as of 9/30 were $168 million, or 54 basis points of the total commercial portfolio.
Full P&I deferments were largely concentrated in the hotel and full-service restaurant segments, which comprise 85%, or $143 million of commercial deferments at the end of the quarter.
94% have made a payment, while another 5 to 6% have not had a payment due or were in a grace period at the end of the quarter.
Only approximately 20 basis points of loans that exited a deferral status were past due are moved to nonaccrual status at the end of the third quarter.
Inclusive of these modifications, we estimate that total loans with accommodations, as of the end of September, remained below 3%, which was at the low end of the range we projected last quarter for full P&I deferrals.
As we mentioned on the previous slide, the hotel and full-service restaurant segment had a total of $143 million with a full principal and interest deferment as of 9/30, well below the original estimates.
Synovus has $365 million of full-service restaurants, and using our portfolio cash inflow data, we estimate they are operating at an average of 85% of revenue compared to the prior year.
There were $18 million of full-service restaurant deferrals at the end of the third quarter.
During the third quarter, we saw the portfolio year-over-year inflows improve from being down 6% in June to being up 3% in July and then settling in essentially flat with the prior year in August.
Digital user enrollment is up 10% year to date, and we've experienced a 30% increase in the number of deposits being handled outside of our branch network.
Our original financial objective of an incremental $100 million of pre-tax income remains the baseline for execution.
On the expense front, we are executing on the $25 million third-party spend program with work streams continuing to be implemented through the early part of 2021.
Our plan for 13 branch closures in 2020 remains on track with additional back office real estate consolidation planned for 2021.
As Jamie mentioned, it is expected to have a onetime charge of approximately $14 million and have an earn-back period of less than two years.
We will continue to update and provide further details as we execute on the overall organizational efficiency program, and we remain confident in our ability to generate up to $65 million in savings overall.
While we've been more focused on the efficiency initiatives out of the gate, we are progressing with revenue opportunities that were identified during the diagnostic phase with continued confidence in the pre-tax income range of 35 to $55 million.
We made significant investments in education, including donating $1 million to the United Negro College Fund to provide scholarships for African American students, who want to attend historically black colleges and universities or other higher learning institutions across our five state footprint.

Summary:
Diluted earnings per share was $0.56 per share compared to $0.57 last quarter and $0.83 a year ago.
Adjusted diluted earnings per share was $0.89 per share compared to $0.23 last quarter and $0.97 a year ago.
The primary difference between reported and adjusted figures for the quarter was a $0.30 per share impact from a goodwill impairment of our mortgage reporting unit that Jamie will detail shortly.