Before we get started, I would like to remind you that our third quarter earnings release and quarterly supplement are available on our website. I'd also like to caution you that we may make forward-looking statements during today's call that are subject to risks and uncertainties. Factors that may cause actual results to differ materially from expectations are detailed in our SEC filings, including the Form 8-K filed today containing our earnings release and quarterly supplement. Information about any non-GAAP financial measures referenced, including a reconciliation of those measures to GAAP measures, can also be found in our SEC filings, in the earnings release and in the quarterly supplement available on our website at wellsfargo.com. I will now turn the call over to our Chairman and CEO, John Stumpf.John G. Stumpf Thanks, Jim. Good morning, and thanks for joining us today. We produced record results in the third quarter despite a choppy economic environment as we continue to execute Wells Fargo's diversified business model which has guided us for decades. Our diversified businesses generated record net income of $4.1 billion in the third quarter, an increase of 21% from a year ago, and a record EPS of $0.72, an increase of 20% from a year ago. Our focus on meeting our customers' financial needs led to robust deposit growth and our strongest quarterly loan growth since our merger with Wachovia almost 3 years ago. We also benefited this quarter from lower expenses and continued improvement in credit quality. As the economic environment and recovery remains uneven, Wells Fargo has not wavered from our commitment to do all we can to help our customers and the overall economy. For example, we remain committed to helping homeowners stay in their homes. Since 2009, we have hosted 40 preservation workshops, opened 27 home preservation centers, initiated over 716,000 active trial or completed mortgage modifications.
Within our Pick-a-Pay portfolio alone, we have forgiven over $4 billion of principal since we acquired this portfolio from Wachovia and modified approximately 1/3 of our total Pick-a-Pay loans as we strive to give customers an affordable, sustainable payment.We are also lending, providing companies with funds to invest for growth and job creation. As the #1 small business lender for 9 consecutive years, we are committed to helping small businesses succeed by actively lending. During the first 3 quarters of this year, we made over $10 billion in new loan commitments to our small business customers, an 8% increase from a year ago. We are also the #1 lender to middle-sized companies, and we've grown loans to middle market commercial customers for 14 straight months. And we continue to lend throughout our businesses, both commercial and consumer, with our core loan portfolio growing by $13.5 billion in the third quarter alone. In addition to serving the financial needs of our business and individual customers every day, we also strengthen our communities in many other ways. Wells Fargo employs 1 in every 500 Americans. And last year, we contributed $219 million to 19,000 nonprofits across U.S., making us America's third most generous cash donor according to The Chronicle of Philanthropy. Our team members throughout the country are active volunteers in the communities where they live and work, volunteering a total of over 900,000 hours during the first 9 months of this year alone. We know that with each community's success comes our success. I also want to highlight a very important milestone that occurred this past weekend. We completed our last retail banking state conversion, North Carolina. With all our banking stores in the U.S. operating under the Wells Fargo brand, I believe we now have the best leadership team, the best products and services and the best distribution system we've ever had at Wells Fargo.
Our successful integration reflects an incredible effort made by our entire team. Since we first started working to integrate Wachovia almost 3 years ago, we've converted over 3,000 Wachovia retail banking stores and more than 38 million customer accounts, including mortgage, deposits, trust, brokerage and credit cards onto one common platform. While the effort required to convert Wachovia stores and millions of accounts was tremendous, the real measure of success will be our ability to retain and grow customer relationships in the East and throughout our franchise going forward as One Wells Fargo.A cornerstone of those relationships and one of the most valuable parts of our franchise is our ability to attract and retain core deposits. Since the merger with Wachovia, we have grown checking and savings accounts by -- deposits by $185 billion. That's just in 3 years. We achieved this growth through building relationships with customers, not pricing. In fact, our average deposit costs were only 25 basis points in the third quarter. So with the Wachovia integration nearing successful completion, we remain focused on Wells Fargo's time-tested formula for success, an unwavering focus on helping our customers succeed financially. By focusing on our opportunities to better serve our customers and grow our businesses, Wells Fargo has never been better positioned for future growth. Let me now turn this over to Tim for more detail on our financial results. Tim? Timothy J. Sloan Thanks, John, and good morning, everyone. My remarks, which will take approximately 20 minutes, will follow the presentation included in the first half of the quarterly supplement starting on Page 2. John and I will then take your questions. As John highlighted, we had record earnings of $4.1 billion in the third quarter, up 3% from the second quarter and 21% from a year ago. And we achieved record EPS of $0.72, also up 3% from last quarter and 20% from a year ago.
During a continued period of economic volatility, our diversified model has performed for our shareholders, with 4 consecutive quarters of earning asset growth and 7 consecutive quarters of EPS growth. It is important to note that while our total revenue was down $758 million compared with the second quarter, half of this decline was from items that are relatively neutral to the bottom line, lower deferred compensation plan investment results and seasonally lower insurance, which have offsets in expenses, and the rest of the decline is due to lower equity gains.Read the rest of this transcript for free on seekingalpha.com