Operator:
Ladies and gentlemen, thank you for standing by, and welcome to the First Citizens BancShares First Quarter 2026 Earnings Conference Call. [Operator Instructions] As a reminder, today's conference is being recorded. I would now like to introduce the host of this conference call, Ms. Deanna Hart, Head of Investor Relations. You may begin.

Deanna Hart:
Good morning, and thank you. Welcome to First Citizens First Quarter 2026 Earnings Call. Joining me on the call today are our Chairman and Chief Executive Officer, Frank Holding; and Chief Financial Officer, Craig Nix. They will provide first quarter business and financial updates referencing our earnings call presentation, which you can find on our website. Our comments will include forward-looking statements, which are subject to risks and uncertainties that may cause actual results to differ materially from expectations. We assume no obligation to update such statements. These risks are outlined on Page 3 of the presentation. We will also reference non-GAAP financial measures. Reconciliations of these measures against the most directly comparable GAAP measures can be found in Section 5 of the presentation. Finally, First Citizens is not responsible for and does not guarantee the accuracy of earnings transcripts provided by third parties. I will now turn it over to Frank.

Frank Holding:
Thank you, Deanna. Good morning, and welcome, everyone. Thank you for joining us. I'll start by highlighting our overall performance for the quarter before turning it over to Craig Nix to take you through our financial results and outlook for 2026 in more detail. Starting on Page 5. We were pleased with our first quarter results. This morning, we reported adjusted earnings per share of $44.86, representing an adjusted ROE and ROA of 10.39% and 0.97%, respectively. While lower rates were a headwind, we saw strong deposit growth. Credit quality remains strong and expenses came in below our expectations. Deposit growth accelerated this quarter, up by 5.7% sequentially, anchored by increased client activity in tech and health care and global fund banking. In addition, deposits grew in the General Bank segment and the direct bank. This growth was also supplemented by the strategic use of broker deposits to further bolster our liquidity position. We also achieved solid increases in off-balance sheet client funds driven by the tech and health care and global fund banking businesses. We continue to optimize our capital stack, returning another $900 million to shareholders through share repurchases. Due to our strong liquidity position, we were able to prepay another $2.5 billion to the FDIC -- on our FDIC promissory note, money note during the quarter. Turning to our announcement this morning. We are expanding our commercial solutions and optimizing our brand portfolio to better serve our clients and drive growth. In 2026, we are accelerating our strategic road map by expanding capabilities in payments, international banking and digital assets. As part of this growth, we will transition to a united brand structure in the fourth quarter, featuring innovation banking and fund banking sub-brands under the First Citizens umbrella. Now brand adjustments always generate questions, and we want to be perfectly clear that while names are changing, the client experience is not. Our relationship teams remain the cornerstone of our service, providing the same deep specializations that our clients rely on. This brand alignment simply opens the door to a larger platform of solutions and a more connected network of experts for the future. Despite a complex global backdrop, we continue to operate from a position of strength. Our capital, liquidity and risk discipline provide a solid foundation that allows us to focus on what matters most, serving our clients and customers and continuing to drive long-term shareholder value. We are confident in our strategy, disciplined in our execution and very optimistic about the path ahead. I'll conclude with that and pass it over to Craig Nix to take us through the financial results for the quarter and guidance for the remainder of the year. Craig?

Craig Nix:
Thank you, Frank, and good morning, everyone. I will anchor my comments to Page 8 of the presentation, Pages 9 through 27 provide details underlying our first quarter results. In the first quarter, we delivered adjusted earnings of $44.86 per share on net income of $560 million. The sequential decline of $6.41 per share largely reflects the impact of lower interest rates on our net interest margin. However, we were pleased that lower noninterest expense helped offset a portion of the net interest income decline. In line with our previous guidance, net interest income declined by $101 million, with NIM compressing 11 basis points to 3.09%. This decline was primarily driven by lower earning asset yield following the Fed's rate cut in late 2025, alongside a shorter day count this quarter. However, these headwinds were moderated through strong organic loan growth, lower funding costs and a reduction in average borrowings. Noninterest income was down $9 million from the linked quarter, but in line with our previous guidance. The majority of the decline centered in other noninterest income, which was down $15 million, largely attributable to a decrease in other investment income, a line item subject to fluctuation on a quarterly basis. Outside of the decline in other noninterest income, our core fee categories performed well. We saw solid growth in deposit fees and lending-related capital market fees though these increases were partially tempered by seasonal declines in factoring commissions. Additionally, while the Fed funds rate environment pressured client investment fees, we successfully mitigated that impact through a $3.9 billion increase in average off-balance sheet client funds. Adjusted noninterest expense was $38 million lower sequentially, outperforming our previous guidance. This reduction reflects a $16 million decline in professional fees as we successfully completed several technology and risk management projects at the end of 2025. Marketing costs also declined by $15 million as we pivoted our funding strategy this quarter to leverage lower cost broker deposits rather than higher cost deposits in the direct bank. While the direct bank remains a critical funding source, and we expect marketing expense to normalize in the future, we will remain agile, balancing deposit growth with cost efficiency to protect our margins. Finally, we saw a $16 million seasonal normalization and other expenses. These reductions were partially offset by seasonally higher benefits expense due to resets as well as continued deliberate investments in our technology platforms, which are essential to scaling our operations and enhancing our client experience. Turning to the balance sheet. Period-end loans grew $762 million or 0.5% sequentially, driven by global fund banking, which was up $1 billion on record production of over $6 billion, surpassing the record set just last quarter. With average line utilization also trending higher, we see evidence of higher client demand and a robust pipeline moving forward. In middle market banking, we added $327 million in growth and stable production was bolstered by lower prepayments. While we are pleased with this quarter's growth, we maintain a guarded outlook given the broader macro environment. General bank loans decreased $591 million, primarily reflecting a strategic decision to move $365 million in SBA loans to held for sale. Excluding this balance sheet optimization, the decline was driven by typical first quarter seasonality. On an average loan basis, loans increased $2.2 billion sequentially, led by our global fund banking business. Turning to the right-hand side of the balance sheet. Period-end deposits grew by $9.3 billion or 5.7% sequentially. This growth reflects strong organic growth in our core business segments as well as execution of our balance sheet optimization strategies. Within SVB Commercial, we saw significant momentum in global fund banking and tech and health care where deposits grew sequentially by $5.6 billion, driven by a visible pickup in VC investment and exit activity. Growth here underscores the strength of our franchise within the innovation economy. While these inflows were encouraging, we remain disciplined in our outlook as a portion of this growth stem from large short-term deposits. As we've noted before, these inflows can be lumpy and we have already observed some anticipated outflows in April. We are managing these balances with a strict focus on liquidity and funding cost optimization in mind. In the General Bank, deposits grew by $1.1 billion. This was largely driven by successful seasonal campaign within our [ CAB ] business and solid growth in our branch network, demonstrating our ability to consistently execute on core deposit gathering initiatives. To support the transition away from the purchase money note and limit impacts to net interest income, we also tactically utilized $1.8 billion in broker deposits. This was a flexible lever for us this quarter as the all-in cost was lower than leading rates in the direct bank as we continue to monitor pricing and tenor to ensure a resilient and cost-effective funding mix. On an average basis, deposits also performed well, growing by $2.7 billion or 1.7% sequentially, driven primarily by tech and health care banking and [ CAB. ] Finally, off-balance sheet momentum was equally strong. SVB commercial client funds rose $8.1 billion to nearly $78 billion, while average off-balance sheet funds grew by $3.9 billion. Turning to credit. Provision was $103 million for the quarter, up $46 million from the linked quarter. The increase was driven almost entirely by a larger reserve release last quarter rather than a negative shift in credit quality. In fact, the net charge-off ratio came in 9 basis points lower than the linked quarter at 30 basis points with net charge-offs totaling $111 million. This was favorable to our previous guidance, though I'd characterize the beat as a matter of timing on specific resolution efforts, particularly within our general office book rather than a significant change in our overall outlook. While nonaccrual loans moved slightly higher to 96 basis points, the change was isolated to a few specific credits. We do not view this as a signal of broader migration or systemic pressure across the portfolio. This is supported by our $8 million reserve release this quarter, which was underpinned by growth in high-quality segments like Global Fund Banking and changes to the macroeconomic outlook. Given the heightened market focus on private credit and NDFI exposures, we've included a new slide today to provide additional transparency. Our NDFI exposure stands at $38.8 billion, but it is critical to look at the structure, 83% of this book consists of capital call lines. These are backed by contractual LP commitments, not investment performance, and historically carry exceptionally low credit risk. The remainder of the book is diversified, well collateralized and supported by structural protections. Traditional private credit represents approximately 8% of the NDFI portfolio and includes lines provided to credit funds and warehouse lines, both of which are well secured. To summarize, our exposure to the private credit ecosystem is defined by conservative structures, significant sponsor equity and rigorous covenant protections. While we remain vigilant in a volatile macro environment, our credit culture is built for this backdrop. We are confident that our disciplined standards and resilient portfolio position us well to navigate the cycles ahead. Turning to our capital position. We continue to execute on our commitment to a disciplined capital return. As of April 21, 2026, we have made significant progress on our 2025 share repurchase plan having repurchased over 20% of total common shares outstanding for a total of $5.7 billion. This includes the successful completion of our 2024 plan, and roughly 52% of our current $4 billion authorization. Our first quarter CET1 ratio stood at 10.83%. While this represents a 32 basis point sequential decrease, it was a deliberate outcome as we balance loan growth and share repurchases against first quarter earnings. As part of our annual capital planning and informed by internal stress testing, we adjusted our CET1 target range down by 50 basis points to 10% to 10.5%. We believe this recalibrated level provides the ideal balance of ensuring we remain strong for severe stress events while maximizing our flexibility to support both client growth and shareholder returns. Regarding the pace of repurchases moving forward, we returned $900 million to shareholders this quarter. However, as we approach our new target capital range, we anticipate a slower pace for the remainder of the year. This shift reflects prudent management of the balance sheet, accounting for anticipated organic growth, the shifting economic backdrop and our commitment to a conservative capital buffer. Finally, we are encouraged by the revised Basel III proposal released in March. Our initial assessment indicates a potential 70 to 100 basis points benefit to our CET1 ratio, primarily driven by lower risk-weighted assets under the new standardized approach. While the proposal includes the phase-in of AFS and pension-related AOCI, we don't expect a material impact given our short duration investment strategy and limited AOCI risk. Overall, these regulatory developments represent a clear step forward providing us with enhanced capital flexibility to drive long-term value for our shareholders. Turning to Page 29, I'll conclude with our outlook for the remainder of 2026. The macroeconomic backdrop remains fluid, making it difficult to narrow the range of potential impacts on the broader economy and our business lines and clients. Accordingly, we have not made significant changes to our previous guidance, but do continue to monitor the environment and how it could impact our performance. Starting with the balance sheet. We expect loans to land between $149 billion and $152 billion at the end of the second quarter. In the Commercial Bank, we expect loan growth to be anchored in Global Fund Banking where we are managing a robust $12 billion pipeline. While we expect long-term expansion, we remind everyone that ending balances can ebb and flow based on the timing of client draws and we anticipate some quarter-to-quarter volatility here even as absolute levels grow. Outside of growth in Global Fund Banking, we are projecting growth in commercial finance industry verticals and middle market banking portfolios. In the General Bank, as seasonal headwinds abate, we expect growth to be supported in the branch networks business and commercial loan portfolios. For the full year, we are reiterating our loan guidance of $153 billion to $157 billion, inclusive of the $1 billion in the BMO acquisition. To optimize our balance sheet, we continue to evaluate strategic sales similar to this quarter's $365 million SBA securitization to efficiently fund the repayment of our purchased money note. Now to deposits and funding. We anticipate second quarter deposits between $171 billion and $174 billion. We expect growth in the General Bank segment and in the direct bank as we are seeing strong momentum in both where competitive pricing and marketing are helping us capture share. Growth in these channels will help mitigate expected outflows in Global Fund Banking and within tech and health care as those clients continue to utilize cash for operations or move to off-balance sheet investment products. For the full year, we reaffirm our range of $181 billion to $186 billion, including the $5.7 billion BMO infusion. This range continues to include significant growth in the direct bank as we look to continue to prepay the purchase money notes. We've made significant progress on the purchase money note with $5.5 billion in total prepayments through today, including $2.5 billion this quarter and another $500 million in April. Moving forward, we expect to pay down at least $500 million to $1 billion per month, utilizing excess liquidity, broker deposits or other funding levers as interest rates and market conditions dictate. Next, our net interest income and rate outlook covers a range of 0 to 2, 25 basis point rate cuts where the Fed funds rate may decline from a range of 3.50% to 3.75% today to a range of 3% to 3.25% by year-end. We expect second quarter headline net interest income to be in the $1.6 billion to $1.67 billion range. While we expect strong earning asset growth, we think it will be partially offset by modest increases in funding costs as deposit competition remains intense across all channels. For the full year, we are marginally tightening our range to $6.5 billion to $6.8 billion. This accounts for the persistent pressure on DDA balances in a higher for longer environment, continued deposit competition and a projected $100 million reduction in loan accretion. Moving to credit. We expect second quarter net charge-offs in the 35 to 45 basis point range. We are actively managing the commercial general office portfolio and the SCB commercial books where we expect losses to remain elevated in the medium term, while the equipment finance portfolio losses have largely stabilized, we are watching one larger deal that could result in elevated losses in the second quarter. Reflecting first quarter performance, we are lowering our full year net charge-off outlook to 30 to 40 basis points with the range reflective of the fact that a handful of large deals can cause lumpiness in the ratio. Moving to noninterest income. We expect it to be in the $520 million to $550 million range in the second quarter. Overall, we continue to see strength in many of our business lines, such as fees from wealth, rail and credit card and merchant services. For the full year, we are raising our adjusted noninterest income guidance to $2.12 billion to $2.22 billion, driven by our rail business, repricing momentum, deposit fees and service charges, growth in wealth and lending-related fees as we continue to benefit from loan growth and capital markets activity. On to expenses. We expect the second quarter to be in the $1.34 billion to $1.38 billion range, slightly up from the first quarter. We expect the growth to come primarily from higher direct bank marketing costs given our focus on client acquisition in that channel. As we continue to focus on bending the cost curve, we are reducing our full year range to $5.34 billion to $5.43 billion. The increase in full year expenses includes merit-based increases, marketing costs, tech scaling and the BMO acquisition impact, which will add less than 1% to our overall expense growth in 2026. As Frank mentioned earlier, we are excited to implement a united brand strategy to continue to align platforms and provide expanded solutions for our clients. While we are still assessing the impact of this announcement, we believe it will add an additional $20 million to $30 million to full year noninterest expense. We expect that our adjusted efficiency ratio will be in the lower 60% range in 2026 as the impact of prior year rate cuts have put downward pressure on net interest income. We believe that the investments we have made in our franchise while driving up costs in the short and medium term are foundational to delivering positive operating leverage over time. Meanwhile, exercising disciplined expense management is a top priority for us given headwinds to net interest income, and while we are not providing guidance beyond 2026, we are committed to returning to positive operating leverage as the interest rate environment normalizes, and we begin to recognize some of the efficiencies from the investments in our franchise. Longer term, our goal remains to operate an efficiency ratio in the mid-50s. And finally, for both the second quarter and full year 2026, we expect our tax rate to be in the range of 24.5% to 25.5%, which is exclusive of any discrete items. To conclude, our first quarter results are reflective of the strength and resilience of our diversified business model. Thanks to our long-term focus and continued investments in our business, we're well positioned to continue delivering value to our clients, customers and shareholders. This concludes our prepared remarks. I will now turn it over to the operator for instructions for the question-and-answer portion of the call.

Operator:
[Operator Instructions] Our first question comes from Chris McGratty with KBW.

Christopher McGratty:
Great. Craig or Frank, on the new CET1 target, I just want to make sure I got all the pieces, 10%, 10.5% is the new target. And then on top of that, there's a 70 to 100 benefit on the Basel III. How should we think about -- I hear you on the near term on the buybacks. But is there any bias within the range near term? Any changes in uses of capital near term?

Craig Nix:
Yes. If you go back to '25 and so far '26, our repurchases have ranged from $600 million to $900 million per quarter. And as we move closer to that range, the 10% to 10.5%, we would expect to moderate to the lower end of that range for the next 2 quarters.

Christopher McGratty:
Okay. And then on the NII guide, I appreciate the fluidity of the curve. But any -- last quarter, you gave some comments on troughing expectations and margin expectations. Any refresh of that, both on a core and a reported basis, Craig?

Craig Nix:
Sure. In terms of just the tightening of the guidance, we would still, for the full year, expect low single-digit percentage decline in the absolute dollar amount of net interest income. If we look at the trajectory, though, for 2Q '26, we would expect both headline and ex accretion, net interest income to be down low single digits percentage points. And NIM to be in the mid-3.0s, and ex accretion in the high 2.90s. As far as fourth quarter exit we expect both headline and ex accretion net interest income to be up mid-single-digit percentage points and expect headline NIM to be in the high 3.0s and ex accretion in the low 3.0s. And in terms of troughing, I think you asked about that. We would expect that headline net interest income and ex accretion net interest income to have already troughed in the first quarter, but the NIM will trough in the third quarter.

Operator:
Our next question comes from Casey Haire with Autonomous Research.

Casey Haire:
Great. I wanted to touch on the deposit growth outlook, very good start here in the first quarter, a lot of it coming from the SVB side of things. Craig, I think I heard you say that you expect direct bank to drive a lot of the growth going forward. But just wondering what the outlook is on the SVB side of things after a strong quarter.

Craig Nix:
Why don't you do the SVB, and Marc, you can weigh in on this as well.

Unknown Executive:
Yes. I'll start with the SVB. I mean we do expect continued growth through the end of the year. I think when you look at the balances, as Craig mentioned, we did have some very large inflows, client accounts that we do expect to either go back out and/or transition to off balance sheet. And so I think second quarter from a Silicon Valley perspective, we do think moderate, but we do see growth really through the end of the year.

Marc Cadieux:
And nothing to add.

Craig Nix:
What do you think, Marc? Nothing to add, Marc. Okay.

Marc Cadieux:
Nothing to add.

Casey Haire:
Okay. Great. And then on the credit quality front, on the NPL uptick, Craig, I heard it's nothing systemic. But I was just wondering if you could provide a little more color as to what drove that, those credits, what type of credits they were and resolution efforts to reduce the NPL ratio of around 1% going forward?

Craig Nix:
Andy, would like to take that one, please?

Andrew Giangrave:
Yes, sure. The increase was driven specifically by 3 main credits, 2 of which were our multifamily that have moved to nonaccrual. We really don't see a lot of loss content on those 2, reviewed them for specific reserves and are working through resolution on those. The third was an account in our innovation portfolio, been criticized for some time. It's currently up for sale, and we hope to have resolution on that credit at some point this year. In terms of efforts to bring down our NPLs. The majority of our NPLs really reside in our general office. And so as Craig noted at the beginning, charge-offs in our general office portfolio were down this quarter, and we anticipate -- and a lot of that was timing on resolution. So we would anticipate, as we work through this year, to see some of those resolutions come to fruition. And as a result, we would anticipate NPLs to come down.

Operator:
Our next question comes from Anthony Elian with JPMorgan.

Anthony Elian:
Craig or Frank, I appreciate the new slide you have on the NDFI book. Could you help us quantify your exposure to companies in the software industry for both loans and deposits? I don't think this has been disclosed since you acquired SVB a few years ago.

Craig Nix:
Yes. I will let Andy elaborate. But in terms of on-balance sheet, software is $8.1 billion and about $14.4 billion of exposure. But I'll let Andy talk about what that portfolio looks like.

Andrew Giangrave:
Sure. Thanks, Craig. So having back the innovation economy for quite a while, we obviously had some very deep experience managing tech credit portfolios through multiple economic cycles and changes in tech shifts there. We have seen improvement throughout the last several quarters on our criticized levels within the [indiscernible] portfolio. And if you think about our portfolio, couple of main buckets, if you will. The first would be emerging growth, VC-backed type companies. And they are focused on being kind of the disruptors themselves and are really AI native or investing heavily in AI. And so you can think about those really being the investor-dependent type transaction. So they're really focused on access to capital, and that's where the risk would be. The other large bucket would be the middle market software companies kind of PE controlled or the late-stage venture-backed companies. These are actively focused on AI adoption and the evolution to address any potential disruption. And that would be the second bucket. And then there's also within that $8 billion, there's probably 25-ish, 30% of which are either cash-secured or ABL transactions. So we feel good about that credit risk as well. We have done a deep dive into the portfolio to evaluate any attributes for vulnerability or strength within each of those borrowers, including looking at, are they a system of record? Do they have proprietary data? What is the level of switching costs, et cetera. So we've got a good sense for strengths or weaknesses with each of those borrowers. We're also leveraging our deep relationships with the VC firms themselves to get additional insight. And as we go through the second quarter, we will be doing additional focal reviews at a finer segmentation. That's kind of the overview, high level overview of our software exposure. I think you touched on NDFI as well. Within our private credit book, we did a deep dive there this quarter as well. The software exposure within that portfolio average is about 14% of software exposure for any given fund, so not too outsized. And as Craig said, those structures are very well collateralized and have a lot of structural protections. And then finally, as part of that deep dive, we did a stress scenario and assume some very conservative either default rates and recovery rates and found that any losses would be manageable coming out of that portfolio.

Anthony Elian:
Great, Andy. And then my follow-up from an earlier question. Craig, on the exit NII guide you gave earlier, you gave a range of up mid-single digits. Could you make clear what time period that was for? And what comparison period was the base?

Craig Nix:
The up mid-single digits was the first quarter to fourth quarter exit.

Anthony Elian:
Both for core and GAAP NII?

Craig Nix:
That's correct.

Operator:
Our next question comes from Bernard Von Gizycki with Deutsche Bank.

Bernard Von Gizycki:
So just a question on the competition that remains intense in deposits. Could you just maybe provide some commentary on just thoughts in your franchise or what you're seeing with terms and pricing from peers?

Craig Nix:
I think competition is intense, pricing betas haven't moved much given pricing pressures. So I would describe competition as intense. I will let Marc maybe talk about a little bit what he's seeing at SVB, and Elliot a little bit of what we're seeing in the branch network in the direct bank.

Marc Cadieux:
So I will start. It's Marc Cadieux on SVB. And as Craig mentioned, the competition is intense. We see it from all manner financial institutions, neobanks, fintechs, et cetera, competing for balances. And as I think the quarter indicates, we are holding our own, notwithstanding the competition, allowing as already mentioned that there is some volatility to the balances and all of which is reflected in our guide. I will pass it along.

Elliot Howard:
Yes. And I think as it relates to both the branch network and especially the direct bank, where we're really seeing the pressure is on a lot of the money market promos, CD rates do now with kind of the expectation of really net rate cuts. And so we're seeing competitors still out there with really kind of a 4% type rate. I think our hope would be that betas would have shifted down a little bit that we would assume something kind of more in the high 3s, but competition has really remained and those lead rates have really stayed elevated through the first quarter.

Bernard Von Gizycki:
Great. And just as a follow-up. The commentary about the broker deposits being all in lower cost versus the direct bank. Just any commentary you can provide on what the -- maybe the spread differences between the 2, just to give us a sense?

Tom Eklund:
Yes, sure. This is Tom. If you look at the broker deposits, I mean, during the first quarter, you were able to raise those what I would consider in the high 3s. Whereas to Elliot's point earlier, some of the competition we've seen in the direct bank and even some of the branch network, we've seen rates north of 4% there. Obviously, the brokered market is efficient. Marketing costs are sort of fixed at that 10 basis points. So you have an all-in cost below that 4% handle in that channel. So that's really what drove us to shift a little heavier into that space. And again, we'll continue to monitor market conditions as we move ahead.

Operator:
Our next question comes from David Chiaverini with Jefferies.

David Chiaverini:
So on the loan outlook, it sounds like the pipelines for Global Fund Banking are robust, but you sounded more guarded on the middle market side of the business. Can you talk about what's driving this? Is it macro uncertainty or geopolitical risk? Just any color there would be helpful.

Unknown Executive:
Yes. I think in the middle market and really, come to the industry vertical space, I think we still do expect growth. I think, certainly, with the geopolitical events occurring right now, a little bit of uncertainty. We did see prepayments pick up a little bit in the first quarter. But I think all is equal, we are expecting growth really kind of in the, call it, mid-single digits in industry verticals and really that middle market space. So still optimistic. But I think we do have a little bit of hesitation just with kind of the uncertainty that's out there right now.

David Chiaverini:
Great. And in terms of the loan pricing environment and the competitive environment there, can you provide some commentary there? It's clearly very intense on the deposit side, curious about the loan pricing side.

Unknown Executive:
Yes. We've -- generally, I think over the past few quarters seen spreads come in a little bit just due to the competition. What I'd say is I think we're reaching more of a stabilization on really those spreads. So I think competition is fierce right now, but I think we'd characterize it really throughout '25 and certainly in first quarter '26 as remaining intense.

Operator:
Our next question comes from Christopher Marinac with Brean Capital, LLC.

Christopher Marinac:
Is there a further goal on the FDIC purchase money note beyond what you've already done in April?

Craig Nix:
With further goal, we would anticipate at a minimum, based on the roll-off of the loans collateralizing our U.S. treasuries collateralizing the note to pay down an additional $500 million to $1 billion per month, so that sort of gives you an idea of the trajectory we're on.

Christopher Marinac:
Sure. And then back to the other conversation about broker deposits, you really are a long ways away from having any restraints on how many brokered funds you can do. Is that correct?

Tom Eklund:
Yes, that's correct. I mean these were really sort of the first deposits. We had another slug of broker deposits that matured. I believe it was back in October last year. So we're really coming off of a very low base here. And really, the way we look at that is we look at those deposits in conjunction with the direct bank and sort of look for, as I spoke about earlier, opportunities from a cost perspective where we can get the best execution.

Christopher Marinac:
Great. But in general, in the big picture, the direct bank is still going to grow. It might just be more of a timing difference in terms of where you are this year, next year, et cetera?

Tom Eklund:
Yes, that's right. We still expect the direct bank to continue to grow. It's just that we might moderate some of the expectations if we continue to put on broker deposits to augment that growth if that turns out to be cheaper.

Operator:
I'm not showing any further questions at this time. I'd like to turn the call back over to our host, Ms. Deanna Hart for any closing remarks.

Deanna Hart:
Thank you, and thanks, everyone, for joining our call today. We appreciate your ongoing interest in our company. And if you have further questions or need additional information, please feel free to reach out to the Investor Relations team. We hope you have a great rest of your day.

Operator:
Ladies and gentlemen, this concludes today's conference call. You may now disconnect. Have a wonderful day.