First Citizens BancShares, Inc. · NASDAQ:FCNCA

First Citizens BancShares — Investor Presentation (May 2024)

30 slides from First Citizens BancShares's investor presentation, May 23, 2024

  1. Slide 1: Making Sense

    Making Sense Brent Ciliano, SVP Phillip Neuhart, SVP Chief Investment Officer Director of Market and Economic Research May 23, 2024

  2. Slide 2: What are we going to cover?

    What are we going to cover? 1 Economic Update 2 Market Update 2

  3. Slide 3: Economic Update

    Economic Update

  4. Slide 4: The Outlook for the US Economy Has Improved Substantially

    The Outlook for the US Economy Has Improved Substantially 3.0 2024 GDP Growth (Year-Over-Year Percent Change) 2.5 Median Professional Forecast 2.0 1.5 1.0 0.5 0.0 Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May 2022 2022 2022 2022 2022 2023 2023 2023 2023 2023 2023 2024 2024 2024 4 Source: B

  5. Slide 5: Is Economic Activity Slowing?

    Is Economic Activity Slowing? ISM Indices (50+=Increasing) 70 ISM Manufacturing 65 ISM Services 60 55 50 45 40 5 17 18 19 20 21 22 23 24 Source: Strategas, Bloomberg

  6. Slide 6: Federal Reserve Has Hiked Aggressively

    Federal Reserve Has Hiked Aggressively Federal Reserve Historical Tightening Paths 600 Mar/83 2024 Fed Funds Futures Pricing*: 550 500 Apr/88 • First Cut: September (65%) 450 400 Jan/94 • Total 2024 25 bps Cuts: 1-2 Feb/99 350 • 2024 Year-End Rate: 4.90% Bps of Hikes 300 Jun/04 250 Dec/15 200 150 Ma

  7. Slide 7: Higher – and Flatter – For Longer?

    Higher – and Flatter – For Longer? 20 Months From Last Fed Rate Hike to First Rate Cut 18 16 14 Market pricing: 12 14 months 10 8 6 Current: 4 10 months 2 0 1980 1981 1984 1989 1995 1997- 2000- 2006- 2019 2024 1998 2001 2007 7 Source: Apollo, Bloomberg

  8. Slide 8: Financial Conditions Remain Very Loose

    Financial Conditions Remain Very Loose Bloomberg Financial Conditions Index Negative Value Indicates Tighter Financial Conditions 1.5 Conditions Loosening 1.0 0.5 First Fed Hike Conditions Have Loosened Materially 0.0 -0.5 -1.0 Conditions Tightening -1.5 Jan-21 Jul-21 Jan-22 Jul-22 Jan-23 Jul-23 Jan

  9. Slide 9: Inflation Is Slowing…Albeit Slowly

    Inflation Is Slowing…Albeit Slowly Consumer Price Index Year-Over-Year Percent Change 10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% -1% '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 '24 9 CPI YoY% Core CPI YoY% Source: Strategas, Bloomberg

  10. Slide 10: Normalizing: Labor Market Is Coming Closer Into Balance

    Normalizing: Labor Market Is Coming Closer Into Balance Wage Growth and Voluntary Quits Rate Wage Growth (year-over-year, left axis) 7 3.5 Quits Rate (right axis) 6 3.0 5 2.5 4 2018-19 averages 2.0 3 1.5 2 1.0 2018 2019 2020 2021 2022 2023 2024 10 Source: Labor Department, Federal Reserve Bank of At

  11. Slide 11: Consumer Expenditures Remain Strong

    Consumer Expenditures Remain Strong Personal Consumption Expenditures (SAAR, $) % Change - Year to Year 25% Goods PCE Y/Y Chg 20% Services PCE Y/Y Chg 15% Goods Spending +43% in Apr '21 10% 6.95% 5% 0% 3.63% -5% -10% 20-Year Average: -15% Goods: +4.25% Services: +4.69% -20% '18 '19 '20 '21 '22 '23 '

  12. Slide 12: Normalizing: Household Savings Have Come Back to Earth

    Normalizing: Household Savings Have Come Back to Earth Cumulative "Excess Savings" 2.5 Trillions of dollars 2.0 1.5 August 2021: 1.0 $2.1 trillion 0.5 0.0 -0.5 2019 2020 2021 2022 2023 2024 Note: "Excess savings" is the difference between actual savings and the pre-pandemic trend 12 Source: Federal

  13. Slide 13: The Misery Index Is Below Historical Averages

    The Misery Index Is Below Historical Averages Misery Index (CPI Inflation Rate + Unemployment Rate) Average, last 40 years 25 20 15 10 5 0 13 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 Source: Bloomberg

  14. Slide 14: Limited Supply Has Supported Housing Starts, Depressed Resales

    Limited Supply Has Supported Housing Starts, Depressed Resales US Housing Starts US Existing Home Sales Thousands, Seasonally Adjusted Annual Rate Millions, Seasonally Adjusted Annual Rate 2,000 7.0 1,800 6.5 1,600 6.0 1,400 5.5 1,200 5.0 1,000 4.5 800 4.0 600 3.5 400 3.0 07 08 09 10 11 12 13 14 15

  15. Slide 15: Market Update

    Market Update

  16. Slide 16: Global Markets Year-to-Date

    Global Markets Year-to-Date Total Return by Asset Class YTD US Equity Returns 12% As of 05/20/2024 10% Value Blend Growth YTD 2024 (05/20/2024) 8% Large 9.2% 12.7% 14.8% 6% 4% Mid 2% 7.5% 7.6% 7.7% 0% Small -2% 2.4% 4.2% 6.2% -4% U.S. Equities Intl. Developed Emerging Market Aggregate Fixed Municipa

  17. Slide 17: Stocks Have Rallied Sharply; Rally Broadening Recently

    Stocks Have Rallied Sharply; Rally Broadening Recently S&P 500: Year-to-Date S&P 500 Index Through 5/20/24 5,500 Index: Total Return 5,300 S&P 500 11.9% 5,100 4,900 S&P 500 Equal Weighted 6.9% 4,700 4,500 Difference 5.0% 4,300 +29% S&P 500: 2/2/24 4,100 Through 5/20/24 3,900 3,700 +48% Index: Total

  18. Slide 18: Largest Stocks Are Driving the Stock Market

    Largest Stocks Are Driving the Stock Market Contribution of Top 10 Largest Stocks to Total S&P 500 Performance* Top 10 Share of S&P 500 Performance (left axis) 90% S&P 500 Performance That Year (right axis) 40% 80% 35% 70% 30% 60% 25% 50% 20% 40% 15% 30% 20% 10% 10% 5% 0% 0% 2007 2024 2023 2020 1999

  19. Slide 19: Market Valuation Below Extremes but Above Average

    Market Valuation Below Extremes but Above Average S&P 500 Next Twelve Months Price-to-Earnings Ratio 28X 24X 20X +1 Standard Deviation 16X Average 12X -1 Standard Deviation 8X 85 88 91 94 97 00 03 06 09 12 15 18 21 24 19 Source: Strategas

  20. Slide 20: P/E Ratios Suggest There is Room For Broadening

    P/E Ratios Suggest There is Room For Broadening Cap. Weight Price-to-Forward Earnings 45x Through End-March 2024 40x Top 10 35x Top 11-500 30x 25x 20x 15x 10x 5x 2000 2004 2008 2012 2016 2020 2024 20 Source: Trivariate Research

  21. Slide 21: Partisan Strategies Require Staying Uninvested For Long Periods

    Partisan Strategies Require Staying Uninvested For Long Periods Growth of $10,000 Invested in the S&P 500 Since 1953 2,000,000 1,795,194 1,800,000 1,600,000 1,400,000 1,200,000 1,000,000 800,000 600,000 400,000 215,364 200,000 83,356 0 Invested Only During Invested Only During Invested All Years Rep

  22. Slide 22: Corporate Earnings

    Corporate Earnings ▪ 2024 estimated growth is 11.1% or $244 per share Estimated Next 12-Month S&P 500 Operating Margin 18.0% 17.0% ▪ 2025 estimated growth is 14.1% or $278 per share 16.0% 15.0% ▪ Average growth since 1950 is 7.6% 14.0% 13.0% '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 '24 22

  23. 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 5/20/24 Bear 4,000 -24.6% Base 5,500 3.6% Bull 6,000 13.0% 23 Source: Bloomberg, FactSet

  24. Slide 24: US Treasury Yield Curve Remains Inverted

    US Treasury Yield Curve Remains Inverted US Treasury Yield Curve 5.8% 5.6% As of 5.4% 5/20/2024 5.4% 5.4% 5.4% 12/29/2023 5.4% 5.2% 5.3% 5.2% 5.1% 5.0% 4.8% 4.8% 4.7% 4.8% 4.6% 4.6% 4.5% 4.6% 4.5% 4.4% 4.4% 4.2% 4.2% 4.2% 4.0% 4.0% 4.0% 3.9% 3.9% 3.8% 3.8% 1 3 6 1 2 3 5 7 10 20 30 MM M Yr Yr Yr Yr Y

  25. Slide 25: Bond Yields Remain Elevated Versus Recent History

    Bond Yields Remain Elevated Versus Recent History US Fixed Income Indices Yield-to-Worst Index 12/31/2021 5/20/2024 2-Year Treasury 0.73% 4.85% 10-Year Treasury 1.51% 4.44% Aggregate Bond 1.75% 5.06% Intermediate Government/Credit 1.30% 4.90% Municipal Bond 1.11% 3.69% Investment Grade Corporate Bon

  26. Slide 26: The US Fiscal Situation Has Deteriorated Materially

    The US Fiscal Situation Has Deteriorated Materially Net Interest Cost & Weighted Average US Federal Budget Deficit Cost of Marketable Debt % of GDP 19% 10% 20 9% 17% 8% 15 15% Net Interest Cost, 7% Pct of Tax Revenues 10 13% (Left Axis) 6% 11% 5% 5 4% 9% 3% 0 7% Weighted Average Cost of Marketable D

  27. Slide 27: Treasury Auction Sizes Have Been Growing

    Treasury Auction Sizes Have Been Growing Monthly Treasury Issuance by Security Term 500 (Billions of dollars) 450 2-year 3-year 5-year 7-year 10-year 20-year 30-year 400 350 300 250 200 150 100 50 0 2018 2019 2020 2021 2022 2023 2024 27 Source: Bloomberg

  28. Slide 28: Geopolitical Events: S&P 500 Returns

    Geopolitical Events: S&P 500 Returns Stock Market Performance around Geopolitical Events Time to Time to 12- bottom recover prior Size of 1-week 1-month 3-months 6-months months (trading level (trading selloff from from from from from Event Event date days) Days) (%) bottom bottom bottom bottom bott

  29. Slide 29: Stay Informed with Our Latest Releases

    Stay Informed with Our Latest Releases Making Sense In Brief – A look at the week ahead in under two minutes every Monday morning Q&A Videos – Monthly conversations covering 2-3 of the top questions we’re hearing from clients MarketWebinars updates –(Monthly) Monthly interactive discussions with in-

  30. Slide 30: Brent Ciliano, CFA | SVP, Chief Investment Officer

    Brent Ciliano, CFA | SVP, Chief Investment Officer Capital Management Group | First Citizens Bank 8510 Colonnade Center Drive| Raleigh, NC 27615 Brent.Ciliano@firstcitizens.com | 919.716.2650 Phillip Neuhart | SVP, Director of Market & Economic Research Capital Management Group | First Citizens Bank

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