Good day, ladies and gentlemen, and welcome to the Southside Bancshares, Inc., First Quarter 2018 Earnings Call. Currently at this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. (Operator Instructions) Also as a reminder, this conference call is being recorded.
I would now like to turn the call over to your host, Suni Davis, Senior Vice President and Chief Risk Officer. Please go ahead.
Thank you, Delim. Good morning, everyone, and thank you for joining Southside Bancshares First Quarter 2018 Earnings Call. The purpose of this call is to discuss the Company's results for the quarter as well as our outlook for upcoming quarters. A transcript of today's call will be posted on southside.com under Investor Relations. During today's call, and in other disclosures and presentations, I will remind you that any forward-looking statements made are subject to risks and uncertainties. Factors that could materially change our current forward-looking assumptions are described in our earnings release and in our Form 10-K.
Joining me today to review Southside Bancshares First Quarter 2018 Results are Lee Gibson, President and CEO; and Julie Shamburger, Senior EVP and CFO. Our agenda today is as follows: First, you'll hear Julie discuss an overview of financial results for the quarter, including loan activity, asset quality and update on our securities portfolio and non-interest expense items for the quarter. Then, Lee will share his comments on the quarter, including the core conversion completed over the weekend to integrate Diboll State Bancshares Inc. as a result of the November 30, 2017, merger.
I will now turn the call over to Julie.
Thank you, Suni. Good morning, everyone, and welcome to Southside Bancshares First Quarter 2018 Earnings Call. We reported first quarter net income of $16.3 million compared to first quarter 2017 net income of $15 million, an 8.4% increase. Our diluted earnings per share for the first quarter ended March 31, 2018, were $0.46 per share, a decrease of $0.05 or 9.8% compared to $0.51 per share for the same period last year.
During the first quarter, we experienced only a slight increase in total loans of $15.3 million on a linked-quarter basis due to higher-than-anticipated payoffs. When compared to March 31, 2017, total loans increased by $770.7 million or 30.4%. Approximately $621.3 million of the annual growth was a result of loans acquired in the acquisition of Diboll State Bancshares last quarter.
At March 31, 2017, our loans with oil and gas industry exposure remain minimal at 1.66% of our total loan portfolio. We recorded loan loss provision expense during the first quarter of $3.7 million, an increase of $2.5 million compared to provision expense recorded in the fourth quarter. As reported earlier today in our earnings release, the higher first quarter provision expense was a result of two commercial real estate loan relationships that were placed on non-accrual status. Non-performing assets increased to $42.4 million or 0.67% of total assets during the quarter