First Citizens Bancshares, Inc. · NASDAQ:FCNCA
First Citizens Bancshares — Investor Presentation (March 2025)
30 slides from First Citizens Bancshares's investor presentation, Mar 26, 2025
Slide 1: Monthly Market Update
Brent Ciliano, SVP Chief Investment Officer Monthly Market Update Phillip Neuhart, SVP Director of Market and Recorded on March 26, 2025 Economic Research
Slide 2: What are we going to cover?
What are we going to cover? 1. Pulse Check: Recent Equity Market Selloff | Drawdowns in Context 2. Economic Update: Growth Outlook | Inflation & Interest Rates | Labor Market & Consumer Spending 3. Market Update: Equity Markets | Valuations | Fixed Income
Slide 3: Pulse Check: Global Markets Year to Date
Pulse Check: Global Markets Year to Date Total Market Returns Views From Our 2025 Outlook As of 3/24/2025 • We expect heightened market volatility in Since YTD CY 2025 Feb. 19 2025 2024 • Policy uncertainty • Large-cap stocks priced to US Equities -6.2% -1.8% +23.8% perfection Intl. Developed +1.8%
Slide 4: The S&P 500 Sold Off Over 10% From Recent All-Time Highs
The S&P 500 Sold Off Over 10% From Recent All-Time Highs S&P 500 Index 6500 -10% 6000 -8% 5500 -5% 5000 -25% -10% 4500 4000 Total return since 10/12/2022: +67% 3500 Source: Bloomberg. 4
Slide 5: Intra-Year Drawdowns Are Common
Intra-Year Drawdowns Are Common Average Max. Positive Calendar- 78% of Drawdown Since 1990: -15% Year Returns: times S&P 500 Calendar Year Return vs. Largest Intra-Year Decline 40% 38% 33% 32% 30% 31% 29% 29% 29% 30% 26% 25% 23% 22% 22% 21% 20% 16% 16% 18% 15% 14% 11% 12% 10% 10% 8% 5% 5% 2% 1% 1% 0
Slide 6: The S&P 500 Has Recovered Fairly Quickly After Most 10% Drawdowns
The S&P 500 Has Recovered Fairly Quickly After Most 10% Drawdowns Major S&P 500 Declines - 1950 to Present Major S&P 500 Declines - 1950 to Present Months 1-year Months Peak- Months 1-year Months Peak- % 1-year % Recovery % 1-year % Recovery Start Date End Date Peak-to- Post to-Full Start Date End D
Slide 7: Economic Update
Economic Update Growth Outlook | Inflation & Interest Rates | Labor Market & Consumer Spending
Slide 8: Global Growth Expectations Have Turned a Bit More Modest
Global Growth Expectations Have Turned a Bit More Modest World Economic Outlook Consensus Real Economic Growth Estimates 2024 2025 Estimate as of: Actual Growth Dec. 2024 Today World 3.2% 3.0% -0.1% 2.9% United States 2.8% 2.1% -0.4% 1.7% Euro Area 0.9% 1.0% -0.1% 0.9% Canada 1.5% 1.8% -0.2% 1.6% Me
Slide 9: Inflation Is Already Well Above the Fed's 2% Target
Inflation Is Already Well Above the Fed’s 2% Target Inflation: Consumer Price Index 12 Year-over-year 3-month annualized rate 10 8 6 4 2 2% target 0 -2 -4 -6 2018 2019 2020 2021 2022 2023 2024 2025 Source: Labor Department, Bloomberg 9
Slide 10: Household Inflation Expectations Have Surged, but Market Views Are Tamer
Household Inflation Expectations Have Surged, but Market Views Are Tamer Inflation Expectations, Next Five Years Household expectations 6 Market breakeven 5 4 3 2 1 0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Source: Bloomberg, University of Michigan 10
Slide 11: 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% Floated to date 10% 0% Source: Yale Budget Lab, Historical Statistics of the United States, Bureau of Economic Analysis, Bloomberg 11
Slide 12: The Federal Budget Deficit Is Driven Largely by Mandatory Spending
The Federal Budget Deficit Is Driven Largely by Mandatory Spending $8 trn Federal Budget, FY 2025 $7 trn Discretionary Non-Defense $6 trn Spending Budget Deficit Tariff revenue with Defense potential increase $5 trn Other Mandatory Other revenues Corporate Income Taxes $4 trn Medicaid Payroll Taxes
Slide 13: Job Cuts Have Hit the Government Sector but Not the Broader Economy
Job Cuts Have Hit the Government Sector but Not the Broader Economy Number of Employees Receiving Jobless Benefits Relative to Jan 1, 2025 180% Total US Federal Government 160% Washington, DC 140% 120% 100% 80% 60% 40% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar '24 '24 '24 '24 '24 '
Slide 14: The Unemployment Rate Is Still Very Low Today
The Unemployment Rate Is Still Very Low Today US Unemployment Rate Apr. 2020: 11% Percent 14.8% 10% 9% 8% Average since 1960: 5.9% 7% 6% 5% Feb. 2025: 4.1% 4% 3% 1960 1970 1980 1990 2000 2010 2020 Source: Department of Labor, Bloomberg. 14
Slide 15: Markets See the Fed Cutting Rates by About 0.50 - 0.75% This Year
Markets See the Fed Cutting Rates by About 0.50 - 0.75% This Year Federal Funds Rate and Market-Implied Path Observed 6% Latest market pricing 5% Today: 4.4% 4% End-2025: 3% 3.6% 2% 1% 0% 2020 2021 2022 2023 2024 2025 2026 Source: Bloomberg, First Citizens Wealth. 15
Slide 16: 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: 4.1% 20% 10% +5.7% 0% +3.4% -10% -20% 2018 2019 2020 2021 2022 2023 2024 2025 Source: Department of
Slide 17: Low-Income Household Spending Has Not Grown for Over Three Years
Low-Income Household Spending Has Not Grown for Over Three Years Inflation-Adjusted Growth in Retail Spending by Household Income July 2021 = 0 15% 10% 5% 0% -5% -10% Low Income Middle Income High Income -15% 2018 2019 2020 2021 2022 2023 2024 Note: Data are adjusted for inflation and seasonality. L
Slide 18: Soaring Equity Prices Are a Substantial Driver of Household Net Worth
Soaring Equity Prices Are a Substantial Driver of Household Net Worth Composition of Real Estate, Deposits & Treasuries, and Equities & Mutual Funds in Household Net Worth Household real estate Deposits and Treasury securities Corporate equities and mutual fund shares 35% 30% 25% 20% 15% 10% 5% % 19
Slide 19: Household Finances Are Becoming More Strained
Household Finances Are Becoming More Strained Delinquency Rates Likelihood of Being Able to Come Up with Percent of Total Loans Outstanding in Accounts 90+ Days Delinquent $2,000 for an Unexpected Expense Credit Card Loans (left axis) 15% Auto Loans (right axis) 5.5% 74% 14% 5.0% 72% 13% 4.5% 70% 12
Slide 20: Market Update
Market Update Equity Markets | Valuations | Fixed Income
Slide 21: Global Markets Have Seen Rotation in 2025
Global Markets Have Seen Rotation in 2025 2024 US Equity Returns 2025 YTD US Equity Returns Full Year 2024 As of 03/24/2025 Value Blend Growth Value Blend Growth Large Large 15.1% 27.4% 35.2% 4.9% -1.9% -6.0% Mid Mid 13.1% 15.3% 22.1% -0.4% -0.7% -1.6% Small Small 8.0% 11.5% 15.2% -4.4% -5.2% -5.9%
Slide 22: S&P 500 Valuations Have Contracted Modestly
S&P 500 Valuations Have Contracted Modestly 28X S&P 500 Next Twelve Months Price-to-Earnings Ratio 24X 20X +1 Standard Deviation Average 16X 12X -1 Standard Deviation 8X 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019 2022 2025 Source: Strategas 22
Slide 23: Multiples for the Top 10 Largest Equities Have Moved Down
Multiples for the Top 10 Largest Equities Have Moved Down Cap. Weighted 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 Source: Trivariate Research. 23
Slide 24: Corporate Earnings
Corporate Earnings ▪ 2025 estimated growth is 11.4% S&P 500 Earnings Per Share for 2025 Bottom-Up Analyst Forecasts $280 ▪ Q1 2025 estimated growth is 7.1% $279 $278 $277 ▪ 2026 estimated growth is 14.2% $276 $275 $274 $273 ▪ Average growth since 1950 is 7.6% $272 $271 $270 Jan Feb Mar Apr May Jun J
Slide 25: Corporations Have Quickly Shifted Their Attention to Tariffs
Corporations Have Quickly Shifted Their Attention to Tariffs Mentions of "Tariff" in S&P 500 Corporate Earnings Calls 500 450 400 350 300 250 200 150 100 50 0 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 202
Slide 26: S&P 500 Price Target
S&P 500 Price Target Next Twelve-Month S&P 500 Price Target Percent Next Twelve Months Change from Price Level 3/24/25 Bear 4,600 -20.2% Base 6,300 9.2% Bull 6,900 19.6% Source: Bloomberg, FactSet, First Citizens Wealth. 26
Slide 27: Treasury Yields Are Near Their Lows for This Year
Treasury Yields Are Near Their Lows for This Year US Treasury Yield Curve 5.2% 5.1% 5.0% 5.0% 4.8% 4.7% 4.8% 4.7% 4.7% 4.6% 4.6% 4.5% 4.3% 4.4% 4.3% 4.4% 4.3% 4.4% 4.2% 4.5% 4.2% 4.3% 4.1% 4.0% 4.0% 4.2% 4.3% 4.0% 4.0% 3.9% 3.9% 4.1% 3.8% 4.0% 3.6% As of Latest date - Mar 24, '25 3.4% Recent low - M
Slide 28: Fixed Income Is Still Offering Attractive Yield
Fixed Income Is Still Offering Attractive Yield US Fixed Income Indices Yield-to-Worst Index As of 3/24/2025 2-Year Treasury 4.0% 10-Year Treasury 4.3% Aggregate Bond 4.7% Intermediate Government/Credit 4.4% Municipal Bond 3.8% Investment Grade Corporate Bond 5.2% High Yield Corporate Bond 7.5% Sour
Slide 29: Stay Informed with Our Latest Releases
Stay Informed with Our Latest Releases 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 Market updates | Monthly interactive discussions with in- depth analysis of markets and
Slide 30: Authors and Important Disclosures
Authors Important Disclosures This material is for informational purposes only and is not intended to be an offer, specific investment strategy, Brent Ciliano, CFA | SVP, Chief Investment Officer recommendation, or solicitation to purchase or sell any security or insurance product, and should not be
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