Moving on to slide three, you’ll see our improving earnings trend. The earnings profile of Associated has shown considerable progress over the prior year, with both net income and return on tier one common improving significantly in each period. Return on tier one common for the first quarter was 9.23%, up significantly from just under 4% a year ago as we continued to drive toward bringing long term value to our shareholders.
On slide four, you’ll see some detail on our loan portfolio. The portfolio grew to $14.3 billion at March 31. This was up $223 million from year end and represents a 2% quarter-over-quarter and 13% year over year growth rate. Although loan growth this quarter was seasonally weaker than we would have liked, we remain optimistic for the balance of the year.
First quarter loan growth was driven by net growth in the retail and residential mortgage portfolio of $155 million, and in commercial real estate lending of $82 million. Residential mortgage balances increased by $178 million, or 6%, during the quarter. Installment loan balances continued to decline by $20 million this quarter, and home equity balances were down $3 million.
Investor commercial real estate loans grew by $100 million during the quarter, while construction loan balances declined by $18 million. The commercial and business lending portfolio declined by a net $15 million during the quarter.General commercial loans, which include middle market activity, grew by a net $27 million. Oil and gas lending increased by about $5 million during the quarter. Declines in the mortgage warehouse book of $37 million, and declines in the power and utilities portfolio of $12 million offset the growth in the other commercial and business lending portfolios during the quarter. On slide five, we have information about our deposits and cost of funding. Total deposits of $15.7 billion were up $563 million, or 4%, from the end of the fourth quarter. Net deposit growth was primarily driven by a $1 billion, or 20%, increase in money market deposits, and was driven by our pricing strategies to shift client funds away from repo agreements and into more traditional deposit products. Read the rest of this transcript for free on seekingalpha.com