First Citizens BancShares, Inc. · NASDAQ:FCNCA

First Citizens BancShares — Investor Presentation (March 2024)

29 slides from First Citizens BancShares's investor presentation, Mar 27, 2024

  1. Slide 1: Brent Ciliano and Phillip Neuhart, March 27, 2024

    Brent Ciliano, SVP Phillip Neuhart, SVP Chief Investment Officer Director of Market and Economic Research March 27, 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: Global Growth Outlook

    Global Growth Outlook World Economic Outlook Consensus Real Economic Growth Estimates 2022 2023 Estimate as of: 2024 Actual Growth Dec-22 Mar-24 Est. Growth World 3.5% 2.1% 3.1% 2.8% United States 1.9% 0.4% 2.5% 2.2% Euro Area 3.4% -0.1% 0.4% 0.5% United Kingdom 4.5% -0.9% 0.1% 0.3% Japan 1.0% 1.3%

  5. Slide 5: Is the Pace of Economic Activity Improving?

    Is the Pace of Economic Activity Improving? 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/83 550 2024 Fed Funds Futures Pricing*: 500 Apr/88 450 • First Cut: June (70%) Jan/94 400 • Total 2024 25 bps Cuts: 3-4 350 Feb/99 Bps of Hikes 300 • 2024 Year-End Rate: 4.54% Jun/04 250 Dec/15 200 150 Mar/22

  7. Slide 7: The FOMC's Rate Expectations

    The FOMC’s Rate Expectations Federal Funds Rate 6% Fed Funds Upper Bound 5% FOMC Dots Median - Dec. '23 FOMC Dots Median - March '24 4% 3% 2% 1% 0% 7 '15 '16 '17 '18 '19 '20 '21 '22 '23 '24 '25 '26 Source: Bloomberg

  8. Slide 8: Inflation Is Moderating at a Slower Pace

    Inflation Is Moderating at a Slower Pace 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 8 CPI YoY% Core CPI YoY% Source: Strategas, Bloomberg

  9. Slide 9: Inflation Still Important but Less of a Talking Point

    Inflation Still Important but Less of a Talking Point S&P 500 Transcript Analyzer: "Inflation" Rolling 3-Month Sum 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 9 Jan '16 Jan '17 Jan '18 Jan '19 Jan '20 Jan '21 Jan '22 Jan '23 Jan '24 Source: Strategas

  10. Slide 10: Path of Inflation

    Path of Inflation Consumer Price Index Year-over-Year Percent Change 9% 8.7% 8.3% 8.0% 8% 7.1% Actual 7% 5.8% 6% Consensus Estimates 5% 4.0% 4% 3.5% 3.2% 3.0% 2.9% 3% 2.6% 2.5% 2.4% 2.3% 2% 1% 0% Q1 '22 Q2 '22 Q3 '22 Q4 '22 Q1 '23 Q2 '23 Q3 '23 Q4 '23 Q1 '24 Q2 '24 Q3 '24 Q4 '24 Q1 '25 Q2 '25 10 Sou

  11. Slide 11: The Labor Market Is Resilient

    The Labor Market Is Resilient US Employees on Nonfarm Payrolls Total MoM Net Change SA Thou 3000 2500 Jun 2020: +4,615 2000 Last 6M Avg: 1500 +231 1000 500 0 -500 -1000 Apr 2020: -1500 -20,477 -2000 11 Jan-20 Aug-20 Mar-21 Oct-21 May-22 Dec-22 Jul-23 Feb-24 Source: BLS, Strategas

  12. Slide 12: Wage Growth Has Moderated but Remains Robust

    Wage Growth Has Moderated but Remains Robust US Average Hourly Earnings Year-over-Year Percent Change 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 4.3% 3.0% 15-Year Average: +3.0% 2.0% 1.0% 0.0% 12 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Source: Bloomberg

  13. Slide 13: Consumer Expenditures

    Consumer Expenditures 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 4/21 10% 6.33% 5% 0.98% 0% -5% -10% 20-Year Average: -15% Goods: +4.29% Services: +4.68% -20% '18 '19 '20 '21 '22 '23 '24 13 Source: Str

  14. Slide 14: Market Update

    Market Update

  15. Slide 15: Global Markets Year-to-Date

    Global Markets Year-to-Date Total Return by Asset Class 10% YTD US Equity Returns As of 03/22/2024 8% Value Blend Growth YTD 2024 (03/22/2024) Large 6% 7.6% 10.7% 12.6% 4% Mid 2% 6.1% 6.8% 8.6% 0% Small -0.1% 2.5% 5.2% -2% U.S. Equities Intl. Developed Emerging Market Aggregate Fixed Municipal Bonds

  16. Slide 16: Stocks Have Rallied Sharply; Rally Broadening Recently

    Stocks Have Rallied Sharply; Rally Broadening Recently S&P 500: Year-to-Date Through 3/22/24 S&P 500 Index Index: Total Return 5,500 5,300 S&P 500 10.1% 5,100 S&P 500 Equal Weighted 6.1% 4,900 4,700 Difference 4.0% +27% 4,500 4,300 S&P 500: 2/2/24 4,100 Through 3/22/24 3,900 +46% Index: Total Return

  17. Slide 17: Presidential Cycle: S&P 500 Returns

    Presidential Cycle: S&P 500 Returns S&P 500 Total Return In Election Years With Incumbent President Running For Re-Election 40% 33.9% 35% 32.4% Avg Return Since 1944 30% = +15.8% 23.8% 23.1% 25% 19.8% 19.0% 20% 18.4% 16.5% 16.0% 15% 10.9% 10% 6.6% 7.7% 5.5% 6.3% 5% 0% -5% -10% -8.2% -9.8% -15% '32 '

  18. Slide 18: Corporate Earnings

    Corporate Earnings ▪ 2024 estimated growth is 10.9% or Estimated Next 12-Month S&P 500 Operating Margin $244 per share 18.0% 17.0% ▪ 2025 estimated growth is 13.3% or 16.0% $276 per share 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 18

  19. Slide 19: Magnificent 7 Valuation Is Well Below Prior Peaks

    Magnificent 7 Valuation Is Well Below Prior Peaks Magnificent 7 Forward 12-Month Price-to-Earnings Ratio 45 40 35 30 Average 25 20 15 16 17 18 19 20 21 22 23 24 19 Source: Bloomberg

  20. Slide 20: 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 20 85 88 91 94 97 00 03 06 09 12 15 18 21 24 Source: Strategas

  21. Slide 21: Market Valuation and Forward Market Return

    Market Valuation and Forward Market Return Average Forward 12 Month Return by ERP Tranche (1950 - Current, Quarterly) 16.0% 14.9% 14.0% 13.4% 12.4% 12.0% 10.5% 10.0% 7.7% 8.0% 6.4% 6.0% 3.9% 4.0% 2.0% 0.0% < 10 10 - 12 12 - 14 14 - 16 16 - 18 18 - 20 > 20 21 Source: Strategas

  22. Slide 22: S&P 500 Price Target

    S&P 500 Price Target Next Twelve-Month S&P 500 Price Target Percent Change from NTM Price Level 3/26/24 Bear 4,000 -23.1% Base 5,500 5.7% Bull 6,000 15.3% 22 Source: Bloomberg, FactSet

  23. Slide 23: US Treasury Yield Curve Remains Inverted

    US Treasury Yield Curve Remains Inverted US Treasury Yield Curve 5.8% 5.6% As of 5.4% 3/22/2024 5.4% 5.4% 12/29/2023 5.4% 5.3% 5.2% 5.3% 5.2% 5.0% 5.0% 4.8% 4.8% 4.6% 4.6% 4.5% 4.4% 4.2% 4.4% 4.4% 4.2% 4.2% 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 23 MM M Yr Yr Yr Y

  24. Slide 24: 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 3/22/2024 2-Year Treasury 0.73% 4.59% 10-Year Treasury 1.51% 4.20% Aggregate Bond 1.75% 4.84% Intermediate Government/Credit 1.30% 4.67% Municipal Bond 1.11% 3.44% Investment Grade Corporate Bon

  25. Slide 25: Corporate Bond Spreads Remain Tight

    Corporate Bond Spreads Remain Tight US Fixed Income Option Adjusted Spreads in Basis Points 1,200 High Yield Spread 1,000 Investment Grade Spread 800 600 400 200 0 25 13 14 15 16 17 18 19 20 21 22 23 24 Source: Bloomberg

  26. Slide 26: Bonds' Future Total Returns Tend to Capture Current YTW

    Bonds’ Future Total Returns Tend to Capture Current YTW Aggregate Bond Index Return Percent Capture of Yield-to-Worst 200% 180% 160% 140% 120% %-CAPTURE 100% 80% 60% 40% 20% 0% 26 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 Source: Bloomberg

  27. Slide 27: Treasury Returns and the Fed

    Treasury Returns and the Fed Treasury Returns Around Fed Rate Cuts 12.0% Since 1984 10-Year Treasury, 12-Month Total Return 9.9% 10.0% 8.4% 8.2% 8.0% 7.6% 7.1% 6.0% 4.0% 2.0% 0.0% -3 -1 0 1 3 Months Before/After First Cut in Fed Cycle 27 Source: Goldman Sachs Asset Management

  28. Slide 28: 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 MarketWebinars updates –(Monthly) Monthly interactive discussions with in-depth analysi

  29. Slide 29: Contact details and disclosures

    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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