People to ramp into 2021. Briefly concerning [indiscernible] eventually this slide will lose its prominence and be permanently relocated to the supplemental part of the slide deck.
Our reserve without PPP loans increased only two basis points to 1.43%.
We also increased our off balance sheet reserves slightly.
As the slide notes our unemployment forecast improved slightly this quarter.
So that plus flattish loan growth contributed to the modest reserve bill. The PPP program is back in the news not going to go through the entire slide but we've split out the smaller loan balances in the top right table. We're unsure as to how the [indiscernible] will manage the simplified approval process or the timing for reimbursement but suffice to say they've carved out the smaller loans to make it easier to get repaid. We won't characterize the rigor of the forgiveness process as similar to the initial funding process but we are not optimistic that the larger loans are likely will likely be a choppier process at least that's what we think for now.
So we're expecting some [indiscernible] income left in the fourth quarter due to PPP forgiveness but expect first quarter of 2021 we'll see the greater list. This is a new slide.
As I've discussed on the expense live regarding incentives this serves as a foundation for what we're trying to do as we ramp into 2021 with increased momentum. It was a great quarter for us as PPNR per share increased above $2 for the quarter to $2.08 per share.
Our goal is to try to ramp into 2021 with a mid to high single digit PPNR per share growth which we believe will compare very favorably to peers. Aiding our PPNR growth this year is reduced incentives so increasing our expense load for 2021 with target payout will be a big headwind for 2021.
So for 2021 we are discussing how best to manage that as we close in on our targets for next year. A lot to do with that is where we see the pandemic evolving over the next few months. Not going to go through this slide in depth obviously we have some idea about credit costs for the fourth quarter but we continue to withhold but suffice it to say we are optimistic about our shorter term prospects and once COVID is over we love our longer term prospects.
Now briefly about tangible equity. These are high quality assets that will there are high quality assets that will eventually exit our balance sheet. We believe we will manage back into the high [indiscernible] by year end and in the first quarter of next year. Quickly some comments on capital.
We are hearing some banks are getting back into or initiating buyback programs. That's obviously on our agenda as well. Likely not a focus for us for the next couple of quarters we intend to seek re-authorization of our buyback program soon and then evaluate whether we should restart the program.
We are a firm that works on many things, we are focused on growing earnings per share in an outsized weight but we are also intentional about growing tangible book value per share. We've accomplished a lot of things since year end 2016, our balance sheet was $11.2 billion in assets at 2016 year-end. One thing we are proud of is that since that time we have increased our tangible book value per share by 72%.
We are second to only one other firm in our peer group during that same time period. The 75th percentile of the peer group's at 37% roughly half of our growth rate. To say I'm pleased with how this quarter ended up is an understatement.
As the execution of various tactics I think it was one of the best quarters we've had. It's difficult to relay the significant effort that my colleagues are putting forth every day working with clients and solving their problems through this pandemic. It truly is remarkable. We all know it's a difficult operating environment. Loan growth is sluggish at best and the yield curve is no friend of any bank plus it's a yield curve that we believe will have to live through for an extended period of time. Politics are also very distracting and tend to rob us of our optimism.
However, the bright spots for Pinnacle can't be overemphasized at this time. Depositors continue to trust us and borrowers are figuring out how to manage their businesses through this cycle. Discipline has never been more important. We don't know how the pandemic will play out over the next few quarters but we do like our franchise and where we do business and with whom we do business. We believe migration patterns are favoring more people and commercial businesses moving into Tennessee, the Carolinas and Georgia. We like our competitive prospects.
We are as Terry will discuss shortly we're a force in Tennessee as well as in several markets in the Carolinas. The pilot share data would indicate that we are getting there in Charlotte, Raleigh, Charleston and believe me we will score in Atlanta.
Now to BHG. We've shown a similar slide before and it's intended to give you a snapshot of BHG's business flows over time and more importantly how they're holding up during the pandemic. The blue bars on the chart are originations and have ramped up with more loans being funded.
So business flows remain strong. The green bar represents loans on which gain on sale has been recorded as these longer sold to downstream banks. This is the traditional BHG model with gain on sale revenues being generated.
As you can see both bars are at record levels in the third quarter. Coupons have fluctuated over the last three years but there is no discernible trend up or down, seems like a mid 14% is the tick.
As the bank buy rates they failed to below 5% in the third quarter lowest I can recall since we became involved with banker's healthcare group. One thing we have not emphasized enough is a small chart at the bottom right over a thousand banks are now in BHG's network and almost 600 acquired BHG's loans this year. That seems to be one of the strongest funding platforms for a gain on sale model on the planet. There are firms out there trying to replicate this but they've got to get real busy, real fast to find a funding platform like BHGs. It's taken 20 years but it belongs to BHG. They own it. They developed it and they capitalize on it.
So from 30,000 feet business flows remain incredibly healthy. Loan originations remain strong. Loan sales are at record levels and the funding platform is ready to take BHG's inventory. The top left chart we've shown on several occasions the quality of BHG's borrowers has improved steadily over the last few years but particularly in 2020. They continue to refine their scorecards and increase the quality of the borrowing banks. The right chart again is the most powerful chart I think I can offer related to BHG's improving credit quality.
Looking at losses by [indiscernible] losses continue to level out earlier months since origination thus pointing toward a lower loss percentage over the life of the underlying loans. Pandemic related events will likely cause these lines to move upward but the quality of the borrowing base in our opinion is very impressive.
As Terry mentioned concerning the deferrals.
As of June 30, last quarter total deferrals represented about 15% of the total book. Dennis led the group with a 35% deferral rate. BHG communicated with these borrowers frequently and worked to decrease the numbers meaningfully in the third quarter as deferrals are essentially non-existent at the end of the third quarter. 95% of the deferred loans are current and paying of the 5% that aren't current about 25% of those are on a payment plan and paying as a degree. The remaining 75% or 3% to 4% of the deferral base is in early stage delinquency.
So losses from these could materialize in the next two to three months but that said this has been crazy good. We've updated charge-offs and reserve bills. These are for loans that BHG has sold to their network of community banks. The green bar shows that currently they've got more than 3.4 billion in credit with banks who've acquired their loans. The orange line shows the annual loss rate while the blue line on the chart details the recourse accrual as a percentage of outstanding loans with these other banks.
For the nine months of 2020 losses are running at 4.2% basically consistent with the last few years.
Lastly we said it last quarter and we'll see it again it's been a big year for BHG and we anticipate big things for the fourth quarter.
During the third quarter the credit markets improved allowed BHG the opportunity to execute on their first securitization. Appreciate that securitization went out at investment grade ratings. This allows BHG to continue to diversify its revenue string away from gain on sale with more interest income as well as provide another very competitive price funding source.
So wrapping up loan pricing is holding. Deposit growth is remarkable. The private deposit pricing is headed down. BHG is making it another great year and credit is very much manageable.
So with that I'll turn it over Tim to talk about credit.