First Citizens Bancshares, Inc. · NASDAQ:FCNCA
First Citizens Bancshares — Investor Presentation (January 2025)
30 slides from First Citizens Bancshares's investor presentation, Jan 30, 2025
Slide 1: Monthly Market Update
Brent Ciliano, SVP Chief Investment Officer Monthly Market Update Phillip Neuhart, SVP Director of Market and Economic Research Recorded January 30, 2025
Slide 2: What are we going to cover?
What are we going to cover? 1. Economic Update: Growth Outlook | Labor Market | Inflation & Interest Rates 2. Market Update: Equity Markets | Fixed Income | Policy Uncertainty
Slide 3: Economic Update
Economic Update Growth Outlook | Labor Market | Inflation & Interest Rates
Slide 4: The Growth Outlook Is Off to a Strong Start in 2025
The Growth Outlook Is Off to a Strong Start in 2025 GDP Growth Expectations 3.0% 2.7 2.6 2.5% 2.3 2.2 2.0% 1.8 1.7 1.7 1.5 1.5% 1.0% 0.5% 0.0% Today 3 months 6 months 12 months Today 3 months 6 months 12 months ago ago ago ago ago ago 2025 2024 4 Source: Bloomberg. Data as of 01/29/2025
Slide 5: US Economic Growth Towers Over the Other Large Advanced Economies
US Economic Growth Towers Over the Other Large Advanced Economies GDP Growth Forecasts 3.0% Median Professional Consensus, Year/Year Percent Change 2025 2024 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% -0.5% United States Germany Japan United France Italy Canada Kingdom 5 Source: Bloomberg, International Monetary
Slide 6: Forecasters See US Recession Risk at Its Lowest in Years
Forecasters See US Recession Risk at Its Lowest in Years Probability of Recession, Next Twelve Months Median Professional Forecast 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2019 2020 2021 2022 2023 2024 2025 6 Source: Bloomberg. Data as of 1/29/2025.
Slide 7: New Payroll Job Growth Is Running at Close to Trend Pace
New Payroll Job Growth Is Running at Close to Trend Pace 800 Payroll Job Growth Thousands, three-month moving average 700 600 500 400 Estimated 300 breakeven rate 200 100 0 Feb '21 Aug '21 Feb '22 Aug '22 Feb '23 Aug '23 Feb '24 Aug '24 7 Source: Department of Labor, Bloomberg, Federal Reserve Bank
Slide 8: The Unemployment Rate Has Moved Up…Can It Hold Steady Near 4%?
The Unemployment Rate Has Moved Up…Can It Hold Steady Near 4%? US Unemployment Rate Apr. 2020: 11% Percent 14.8% 10% 9% 8% Average since 1960: 5.9% 7% 6% 5% Dec. 2024: 4.1% 4% 3% 1960 1970 1980 1990 2000 2010 2020 8 Source: Department of Labor, Bloomberg. Data through December 2024.
Slide 9: Labor Demand Has Improved on the Margin
Labor Demand Has Improved on the Margin Number of Job Openings Available per Unemployed Worker 2.5 2.0 1.5 2018-2019 average 1.0 0.5 0.0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 9 Source: Department of Labor, Bloomberg. Data through November 2024.
Slide 10: Consumer Expenditures Are Holding Up, Still Led by Services Spending
Consumer Expenditures Are Holding Up, Still Led by Services Spending Personal Consumption Expenditures 50% Percent change, year over year 40% Services 20-year average: Goods Services: 4.9% 30% Goods: 4.2% 20% 10% +6.6% 0% +3.0% -10% -20% 2018 2019 2020 2021 2022 2023 2024 10 Source: Department of Co
Slide 11: Household Net Worth Is Up by Nearly Half – Over $50 Trillion – Since 2020
Household Net Worth Is Up by Nearly Half – Over $50 Trillion – Since 2020 Household Net Worth Household Net Worth 180 Trillions of Dollars 2024 Q3: 70% Percent change from 5 years ago $160 trillion 160 60% 140 2024 Q3: +49% 50% 120 40% 100 30% 80 20% 60 40 10% 20 0% 0 -10% 1995 2000 2005 2010 2015 2
Slide 12: Inflation Is Still Too High, and Price Growth Has Exceeded Wage Growth
Inflation Is Still Too High, and Price Growth Has Exceeded Wage Growth Changes in Inflation, Wages, and Prices Since 2021 25 CPI Inflation Prices are up Consumer Price Index about 21% Wages 20 15 Wages are up about 18% 10 Inflation is down to about 3% 5 Federal Reserve's 2% Target 0 2021 2022 2023 2
Slide 13: Markets See Future Inflation Running Moderately Above the 2% Target
Markets See Future Inflation Running Moderately Above the 2% Target Breakeven Inflation Rates 4.0 Next 5 years (e.g. 2025-2029) Average Since 2021 3.5 Federal Reserve's 2% Target Average, 2016-2019 3.0 Avg: +2.5% 2.5 2.0 1.5 Avg: +1.7% 1.0 0.5 0.0 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 13
Slide 14: Markets See the Fed as on Hold and the Funds Rate Declining to Just 3.9%
Markets See the Fed as on Hold and the Funds Rate Declining to Just 3.9% Federal Funds Rate and Market-Implied Path Today 6% October 1, 2024 End-2025: 3.9% 5% 4 quarter-point cuts from Oct 1, 2024 4% 3% End-2025: 2.9% 2% 8 quarter-point cuts from Oct 1, 2024 1% 0% 2020 2021 2022 2023 2024 2025 2026
Slide 15: Market Update
Market Update Equity Markets | Fixed Income | Policy Uncertainty
Slide 16: Global Markets Last Year
Global Markets Last Year Total Return by Asset Class 30% 1H 2024 2H 2024 CY 2024 2025 YTD 25% 20% 15% 10% 5% 0% -5% U.S. Equities Intl. Developed Emerging Market Aggregate Fixed Municipal Bonds Equities Equities Income 16 Source: Bloomberg. Data through 1/28/2025.
Slide 17: The S&P 500 Is Crossing New All-Time Highs
The S&P 500 Is Crossing New All-Time Highs S&P 500 Index 6500 6000 5500 5000 4500 4000 Total return since 2023: +63% 3500 Dec '22 Mar '23 Jun '23 Sep '23 Dec '23 Mar '24 Jun '24 Sep '24 Dec '24 17 Source: Bloomberg. Data through 1/28/2025.
Slide 18: Global Markets Year-to-Date
Global Markets Year-to-Date 2024 US Equity Returns 2025 YTD US Equity Returns As of 12/31/2024 As of 01/28/2025 Value Blend Growth Value Blend Growth Large Large 15.1% 27.4% 35.2% 5.0% 3.3% 2.3% Mid Mid 13.1% 15.3% 22.1% 3.5% 4.3% 6.5% Small Small 8.0% 11.5% 15.1% 2.2% 2.7% 3.1% 18 Source: Bloomberg
Slide 19: S&P 500 Breadth Worsened in Q4 but Has Improved Modestly This Year
S&P 500 Breadth Worsened in Q4 but Has Improved Modestly This Year S&P 500 Index Index level, left axis 6500 Percent of members above 200-day moving average, right axis 100 % 90% 6000 80% 5500 70% 60% 5000 50% 4500 40% 4000 30% 20% 3500 10% 3000 0% Jan '23 Apr '23 Jul '23 Oct '23 Jan '24 Apr '24 Jul
Slide 20: Stocks Outside the Top 10 Are Less Expensive
Stocks Outside the Top 10 Are Less Expensive Cap. Weight Price-to-Forward Earnings Top 10 45x Top 11-500 40x 35x 30x 25x 20x 15x 10x 5x 2000 2004 2008 2012 2016 2020 2024 20 Source: Trivariate Research. Data through 12/31/2024.
Slide 21: Gross Margin Has Expanded For Many US Companies Since 2020
Gross Margin Has Expanded For Many US Companies Since 2020 27% Percent of Top 3000 US Equities with Gross Margin >60% Ex-Financials and Real Estate Through End 2024 25% 23% 21% 19% 17% 15% 1999 2004 2009 2014 2019 2024 21 Source: Trivariate Research. Data as of 12/31/2024.
Slide 22: Corporate Earnings
Corporate Earnings Estimated Next 12-Month S&P 500 Operating Margin ▪ 2024 estimated growth is 9.5% 18% 17.4% ▪ Q4 2024: 12.7% 17% 16% ▪ 2025 estimated growth is 14.8% 15% 14% ▪ Average growth since 1950 is 7.6% 13% 2012 2014 2016 2018 2020 2022 2024 22 Source: FactSet, Bloomberg, Strategas. Data as
Slide 23: S&P 500 Price Target
S&P 500 Price Target Next Twelve-Month S&P 500 Price Target Percent Change from NTM Price Level 1/28/25 Bear 4,600 -24.2% Base 6,400 5.5% Bull 6,900 13.7% 23 Source: Bloomberg, FactSet, First Citizens Wealth.
Slide 24: The US Treasury Curve Un-Inverted and Steepened
The US Treasury Curve Un-Inverted and Steepened US Treasury Yield Curve 5.6% 5.4% As of Latest date - Jan 28, '25 5.4% 2024 low - Sept. 16, '24 5.4% 5.2% 5.4% 2024 high - Apr. 25, '24 5.2% 5.0% 4.9% 4.9% 5.0% 4.9% 4.7% 4.7% 4.7% 4.8% 4.8% 4.9% 4.6% 4.8% 4.6% 4.5% 4.3 4.8% % 4.3% 4.4% 4.3% 4.2% 4.4%
Slide 25: Yields Have Risen After Previous Mid-Cycle Policy Adjustments
Yields Have Risen After Previous Mid-Cycle Policy Adjustments Change in US 10-Year Treasury Yield Change in US 10-Year Treasury Yield No Recession +2.0 +2.0 Recessions +1.5 +1.5 2024 +1.0 +1.0 +0.5 +0.5 0.0 0.0 -0.5 -0.5 -1.0 1989 1995 (Pandemic) -1.0 1990 2001 1998 2019 2008 2020 -1.5 -1.5 0 1 2 3
Slide 26: The New Administration Has Floated the Steepest Tariffs in 100 Years
The New Administration Has Floated the Steepest Tariffs in 100 Years US Weighted Average Effective Tariff Rate 70% 60% 50% 40% 30% Range of possibilities 20% 10% 0% Source: Yale Budget Lab, Historical Statistics of the United States, Bureau of Economic Analysis. 26
Slide 27: Household Debt Has Improved, But Government Debt Is at Historic Highs
Household Debt Has Improved, But Government Debt Is at Historic Highs 120% United States Debt by Sector Percent of GDP Households and Nonprofits 100% Nonfinancial Business Federal Government 80% 60% 40% 20% 0% 1960 1970 1980 1990 2000 2010 2020 27 Source: Federal Reserve. Data through Q3 2024.
Slide 28: Greater Interest Expense Is Projected to Crowd Out Government Spending
Greater Interest Expense Is Projected to Crowd Out Government Spending 35 US Federal Government Spending Percent of GDP, Projections from Congressional Budget Office 30 Non-discretionary Net Interest Mandatory (e.g. Soc. Sec., Medicare) Discretionary Defense Projections 25 Non-defense Discretionary
Slide 29: Stay Informed with Our Latest Releases
Stay Informed with Our Latest Releases In Brief | Weekly economic updates Q&A Videos | Monthly topical discussions Market updates | Monthly interactive discussions with in-depth market & economic analysis Articles | Often coinciding with market or economic events Or visit firstcitizens.com/market-ou
Slide 30: Important Disclosures
Important Disclosures This material is for informational purposes only and is not intended to be an offer, specific Authors investment strategy, recommendation, or solicitation to purchase or sell any security or insurance product, and should not be construed as legal, tax or accounting advice. Plea
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