Good morning, and welcome to the Webster Financial Corporation's First Quarter 2018 Earnings Call.
I will now introduce Webster's Director of Investor Relations, Terry Mangan. Please go ahead, sir.
Terrence K. Mangan
Thank you, Donna. Welcome to Webster Financial Corporation's first quarter 2018 results conference call. This conference is being recorded. Also this presentation includes forward-looking statements within the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995 with respect to Webster's financial condition, results of operations and business and financial performance. Webster has based these forward-looking statements on current expectations and projections about future growth. Actual results may differ materially from those projected in the forward-looking statements.
Additional information concerning risks, uncertainties, assumptions and other factors that could cause actual results to materially differ from those in the forward-looking statements is contained in Webster Financial's public filings with the Securities and Exchange Commission, including our Form 8-K containing our earnings release for the first quarter of 2018.
I'll now introduce John Ciulla, President and CEO of Webster.
John R. Ciulla
Thanks, Terry, and good morning, everyone. Welcome to Webster's First Quarter 2018 Earnings Call. CFO, Glenn MacInnes; and I will review the quarter. And then HSA Bank President, Chad Wilkins, will join us to take questions.
I'll begin on Slide two. As evidenced by our first quarter reported results, we continue to make meaningful progress on execution of our strategic priorities: aggressively growing HSA Bank; expanding Commercial Banking; and optimizing and transforming Community Banking, all of which create value for customers and maximize Webster's economic profit over time.
Ongoing revenue momentum, disciplined expense management and stable credit quality are driving economic profit at Webster. In Q1, diluted earnings per share of $0.85 reflect record levels of net interest income and PPNR, along with the benefit of a lower federal tax rate. We've now earned in excess of our cost of capital for the fourth consecutive quarter and our tangible book value per share has increased 7.5% from a year ago. Continued loan growth and a 22-basis point year-over-year increase in the net interest margin led to our 34th consecutive quarter of year-over-year revenue growth. We continue to benefit from our asset-sensitive balance sheet as we are able to fund floating rate commercial loans with low cost long-duration deposits.
In Q1, total revenues increased over 10% from a year ago, while expenses increased less than 5% resulting in a fourth consecutive quarter of positive operating leverage. Our efficiency ratio was below 60% for the third consecutive quarter. Asset quality remains stable as nonperforming assets and charge-offs remain at cycle lows.
The positive aspects of Webster's balance sheet transformation are evident on Slide three. The overall portfolio yield on loans in Q1 is 40 basis points higher than a year ago. We've benefited from higher rates, particularly LIBOR, over the past year as more than 70% of our loans are floating rate were reset periodically. Deposits grew 5.6% year-over-year to $21 billion, funding loan growth and allowing us to further reduce borrowings. Our strong deposit