Good morning, ladies and gentlemen. I am Jay Williams, Chairman of the Board of Associated Banc-Corp. On behalf of my fellow directors, let me welcome you to our 2026 Annual Shareholder Meeting. During the meeting, assistance for anyone having technical difficulties can be accessed by dialing 844-986-0822 for in the U.S., or 303-562-9302 for international. On the meeting website, there is a Meeting Materials section which contains the proxy statement and Form 10-K, as well as a copy of the 2025 annual meeting minutes. There is also a place for you to vote or update your previous vote and a place for you to ask a question.
At the conclusion of the business portion of the meeting, we will answer questions that have been submitted during the meeting. Participating in the webcast with me today are Andy Harmening, our President and Chief Executive Officer, and Randy Erickson, our General Counsel and Corporate Secretary. Also joining in the webcast are your directors and nominees who are standing for re-election today. Judy Greffin, Michael Haddad, Andy Harmening, Rodney Jones-Tyson, Eileen Kamerick, Wende Kotouc, Kristen Ludgate, Cory Nettles, Owen Sullivan, and Karen van Lith, and myself. I now call the meeting to order. We have a quorum present with over 87% of the shares represented by proxy as of 10:00 A.M. this morning. A final tally will be available at the close of the meeting after the tellers have made necessary adjustments. I now declare the polls open.
There are four items which are being submitted to a vote of the shareholders today. If you are a record shareholder who has not voted and would like to vote, you may do so by selecting the Vote Here button on the meeting website and follow the instructions. Polls will close at the end of our presentation. As I mentioned, the minutes of the 2025 annual meeting are available for inspection on the website under Meeting Materials section, as well as on the company's website in the Investor Relations section. I now turn the meeting over to Andy.
Thanks, Jay. I'd like to welcome our shareholders and other guests who have joined us for today's meeting. I would also like to extend a special welcome to Wende Kotouc, who joined our board of directors earlier this month, and to our new customers and colleagues in Nebraska, Iowa, and the Twin Cities, who officially joined Associated on April 1st through our acquisition of American National Corporation. We're thrilled about the future of our combined company and look forward to completing the conversion process later this year. Today marks my five-year anniversary as president and CEO at Associated. As I reflect on these past five years, it's clear that we've come a long way as a company.
Five years ago, we had a clean balance sheet, expense discipline, and a 106-year legacy of long-standing loyal relationships across the state of Wisconsin, providing us with a stable and granular foundation for growth. We also learned from customers, colleagues, community members, and shareholders that we had opportunities to grow and deepen our customer base sustainably, improve collaboration across lines of business, and enhance our profitability profile. We took that feedback to heart. Over these past five years, we've been executing a strategic plan designed to build our foundation and strengthen our franchise with sustainable organic growth momentum and improved profitability.
We've made investments to bolster key leadership, add talent across the organization, enhance our value proposition for consumers and small businesses, expand our commercial presence, and reposition our balance sheet to decrease our reliance on low-yielding non-customer Resi mortgage loans and higher-cost wholesale funding sources. Five years later, we're a much different bank. On the consumer side, we're positioned to attract and deepen relationships with a best-in-class value proposition that continues to improve. We've modernized our digital banking experience, launched a successful mass affluent program, upgraded our product set, added features like early pay and credit monitoring, and improved our marketing acquisition capabilities to showcase our value more effectively. As a result, we've taken a multiyear headwind of net customer attrition and turned it into a tailwind.
With net primary checking households growth of 1% in 2024, 1.5% in 2025, and 2% growth expected for 2026. We are also positioned to drive sustainable, relationship-focused growth in commercial, where we've added top talent and key leadership roles, expanded our capabilities with several new verticals, and increased RMs across the bank by 44% in key growth markets like Milwaukee, Chicago, the Twin Cities, and Kansas City, where we opened a new C&I office in March of last year. As a result of these efforts, we grew commercial and industrial loans by over $800 million in 2024 and over $1.2 billion in 2025. We expect to deliver another $1.2 billion in growth in 2026.
These investments are expected to deliver continued momentum for the foreseeable future, but they've already transformed our financial profile. Since 2020, we've grown C&I loans by over $4 billion, a more than 50% increase. As we continue to add relationship C&I loans to the books, they're replacing lower-yielding non-relationship Resi mortgage balances as they roll off. We've worked down our concentration of mortgage loans by 11 percentage points since 2020. This ongoing mix shift is contributing to enhanced profitability. In 2025, we posted three consecutive quarters of record NII and a net interest margin north of 3% for the year, 50 basis points higher than 2020. The mix shift is also helping us drive stronger capital generation with a CET1 ratio that has improved by over 100 basis points since Q4 2023.
We've invested to transform the growth profile of the bank, but managing our expense base is a disciplined way has remained a priority. As a result, our adjusted efficiency ratio decreased by over 700 basis points from 2020 to 2025, and our ROTCE increased to 13.6% in 2025. In Q4 2025, our ROTCE climbed above 15%. Importantly, we've also remained disciplined on the credit front. Our net charge-off rate has remained well below the 35 basis points target provided in 2023 and in 2025. Net charge-offs were just 12 basis points for the year. Taken together, our efforts have a transformative impact on our company. In fact, we posted the strongest net income in company history in 2025. Our results in early 2026 are further proof that we are on the right track.
Last week, we reported first quarter earnings of $117 million, an 18% increase from the same period a year ago. We saw over $500 million in C&I loan growth, 2.2% in annualized household growth, and just 7 basis points of annualized net charge-offs during the quarter. On April 1st, we announced the closing of our acquisition of American National Bank. As we work to complete integration, this partnership is expected to complement and accelerate our growth momentum in markets like Omaha and the Twin Cities. Colleagues from both organizations continue to work closely to facilitate a smooth and successful integration, and we expect to complete the conversion process late in the third quarter of this year. A key driver of our strategy has been our ability to establish sustainable growth in major metropolitan markets.
The investments we've made to bolster market leadership, add talented RMs, enhance our value proposition for consumers and small businesses, and amplify our brand presence have already delivered encouraging results in legacy markets like Milwaukee and Chicago. In 2026, we're doubling down to duplicate the success in several other attractive metropolitan areas with strong growth characteristics, including the Twin Cities, Omaha, Kansas City, and Dallas. In fact, we've already executed on several investments in early 2026 that are expected to drive additional organic growth momentum. First, we are leveraging our best-in-class value proposition and a proven market and acquisition engine to accelerate customer growth. In 2026, we're increasing acquisition-focused marketing spend by 25% across the broader footprint and by over 100% in the Twin Cities and Omaha.
Through these actions, we're confident we can drive continued household growth momentum in 2026 and 2027, and we're already off to a strong start with 2.2% annualized household growth in Q1. As we continue to attract and deepen relationships, we're building a stronger pipeline into our private wealth business, particularly in major metro markets where we're under-penetrated. To capitalize on these opportunities, we hired a new director of private banking for major metropolitan markets earlier this month. We've also taken several steps to drive incremental growth in commercial, adding another wave of RMs and expanding our capabilities. After launching a new C&I office in Kansas City last year and seeing promising results, we expanded the team with three additional colleagues in Q1. Based in part on the successful model we've deployed in Kansas City, we officially launched a new C&I office in Dallas.
The market leader has been hired, and we expect our RM hires to begin in May. Last week, we announced a new nationally focused franchise banking vertical. With these actions, we are on track to increase commercial RMs by an additional 10% over the course of the year, setting ourselves up to drive sustainable, high-quality commercial loan and deposit growth for the next several years. We're excited about our growth prospects at Associated, but as always, our intention is to grow in a disciplined way. We feel well-positioned to navigate the current environment thanks to our disciplined approach to risk management, our enhanced profitability profile, a solid capital position, and the resilience and stability of our Midwestern markets. As always, our ability to execute our strategy hinges on our colleagues, who have played a crucial role in advancing our plan over the past five years.
Their passion and commitment to serving our customers is the bedrock of what has become a best-in-class customer value proposition and award-winning experience for our customers. We also aim to offer a best-in-class experience for our colleagues by listening and acting. Each year, our colleagues provide valuable feedback through our annual engagement surveys and other channels that helps drive meaningful enhancements to the colleague experience. In our most recent engagement survey, we received thousands of comments with ideas to help foster collaboration, support career development, and set new colleagues up for success. It's feedback like this that helps us build the culture of our company. We continue to be recognized for our commitment to our colleagues, having just been named a Top Workplace by USA TODAY for the sixth straight year. We're gonna keep listening.
As part of the process to merge Associated Bank and American National Bank, we recently launched a culture assessment to deepen our understanding of each organization's culture, helping us to understand how colleagues view the workplace today, and how we should welcome new colleagues to the combined organization as we continue to grow. This culture survey revealed many similarities and shared values across both companies, one of the most prominent messages was a clear commitment to uplifting the communities in which we live and we work. From Green Bay to Omaha, we're proud to play an active role in helping communities across the Midwest to grow and prosper. At Associated, our 2024- 2026 community commitment plan details a $2 billion investment in support of affordable housing development, small business growth, and lending to nonprofits.
As part of our merger agreement with American National, we've committed to honor existing community contributions in Omaha as well. The commitment goes beyond financial support. Each year, our colleagues have a direct impact on their communities through nonprofit board service and volunteerism. Last year at Associated, we celebrated another strong year of volunteerism with colleagues reporting over 63,000 volunteer hours and adding over $2.2 million in community service value. In summary, I'm incredibly proud of the progress we've made as a company over the past five years. I'm also excited about what's next for Associated, thanks to the growth momentum we've generated with our strategic plan and our opportunity to accelerate that momentum across the footprint. I'm also grateful for the continued support and partnership we've received along the way from our stakeholders.
I wanna thank our 4,000 legacy Associated colleagues for the way you've embraced change over these past five years and have stepped up to build a stronger Associated. I wanna thank our new American National colleagues for the enthusiasm and professionalism you've exhibited as you navigate the integration process. I wanna thank our customers for growing and learning with us and continuing to trust Associated Bank with your business. I'd like to thank our board of directors for supporting our strategic plan and providing valuable insights and feedback along the way. Lastly, I wanna thank our shareholders for your ongoing support as we work to deliver stronger returns and sustainable growth. We look forward to sharing our growth and progress with you for many years to come.
Thank you, Andy. I now declare the polls closed, and we can proceed to the business portion of the meeting. The first item of business is the election of 11 individuals who've been nominated to serve as Directors. Mr. Secretary, could you please present the results of this item?
Mr. Chairman, each of the nominated directors identified in the proxy statement has received in excess of 93% of the votes cast.
Based upon the secretary's report, the 11 nominated directors are elected. The next item is the advisory approval of the compensation of the named executive officers. Mr. Secretary, could you present the results on this item?
Mr. Chairman, in excess of 96% of the votes cast voted to approve the executive officer compensation.
Based on the secretary's report, the advisory vote on the compensation of named executives was approved. The last item is the ratification of the appointment of KPMG to audit the company's 2026 financial statements. Mr. Secretary, could you present the results of this item?
Mr. Chairman, in excess of 97% of the votes cast voted to ratify the appointment of KPMG to audit the company's 2026 financial statements.
Based on the secretary's report, the appointment of KPMG has been ratified. That concludes our formal meeting. At this time, it is my pleasure to formally welcome our newest board member, Wende Kotouc, and look forward to her insight and contribution to the board. I also wanna take the time to recognize our directors who are retiring from the board today, R. Jay Gerken, Robert A. Jeffe, and Gale E. Klappa. We are forever grateful for your leadership and service to the company. In recognition of your service, Associated is pleased to make a $25,000 contribution to the charitable organization of your choice. This contribution reflects not only our gratitude, but also our shared commitment to giving back and making a positive impact up beyond the boardroom. That concludes our formal meeting. Andy Harmening and I will answer questions submitted to us by shareholders.
Our first question, Mr. Chairman, why not have an in-person option to attend the annual meeting in order to create a shareholder sense of community? At Associated, we have determined to hold a completely virtual meeting to leverage technology to provide expanded access, improved communication, and cost savings for our shareholders and for Associated. We think that is the solution for our annual meeting in the best interest of shareholders.
That concludes the questions from shareholders. We'd like to thank everyone for their participation in the meeting, and very much appreciate your support of Associated Banc-Corp. Thank you.