First Citizens BancShares, Inc. · NASDAQ:FCNCA

First Citizens BancShares — Investor Presentation (February 2024)

32 slides from First Citizens BancShares's investor presentation, Feb 29, 2024

  1. Slide 1: Market Update, February 29, 2024

    Brent Ciliano, SVP Phillip Neuhart, SVP Chief Investment Officer Director of Market and Economic Research February 29, 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 Feb-24 Est. Growth World 3.5% 2.1% 3.1% 2.8% United States 1.9% 0.4% 2.5% 2.0% Euro Area 3.4% -0.1% 0.5% 0.5% United Kingdom 4.5% -0.9% 0.3% 0.4% Japan 1.0% 1.3%

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

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

  6. Slide 6: CEO Confidence Positive for First Time in Two Years

    CEO Confidence Positive for First Time in Two Years CEO Confidence 90 80 70 60 50 40 30 Mar-21 Sep-21 Mar-22 Sep-22 Mar-23 Sep-23 Mar-24 6 Source: Bloomberg

  7. Slide 7: 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 (60%) Jan/94 400 • Total 2024 25 bps Cuts: 3-4 350 Feb/99 Bps of Hikes 300 • 2024 Year-End Rate: 4.53% Jun/04 250 Dec/15 200 150 Mar/22

  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 CPI YoY% Core CPI YoY% 8 Source: Strategas

  9. Slide 9: Path of Inflation

    Path of Inflation CPI: Owners' Equivalent Rent & Zillow Rent Index Year-Over-Year Percent Change 8.6% 18% 8.2% CPI Owners' Equivalent Rent 7.8% 16% 7.4% Zillow Rent Index (9-Month Lead, Right Axis) 14% 7.0% 6.6% 12% 6.2% 5.8% 10% 5.4% 8% 5.0% 4.6% 6% 4.2% 3.8% 4% 3.4% 2% 3.0% 2.6% 0% 2.2% 1.8% -2% 9

  10. Slide 10: Path of Inflation

    Path of Inflation Consumer Price Index Year-over-Year Percent Change 8.7% 9% 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% 2.3% 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: Labor Market Resilient

    Labor Market Resilient US Employees on Nonfarm Payrolls Total MoM Net Change SA Thou 3000 2500 Jun 2020: 2000 +4,565 Last 6M Avg: 1500 +248k 1000 500 0 -500 -1000 Apr 2020: -1500 -20,514 -2000 11 Jan-20 Jul-20 Jan-21 Jul-21 Jan-22 Jul-22 Jan-23 Jul-23 Jan-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% 4.5% 4.0% 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% 5.04% 0% -5% -10% 20-Year Average: -15% Goods: +4.31% Services: +4.68% -20% '18 '19 '20 '21 '22 '23 '24 13 Source: Str

  14. Slide 14: Commercial Real Estate

    Commercial Real Estate Small Bank Percentage of Total Commercial Real Estate Loans 70% Small Banks = Outside Top 25 65% 60% 55% 50% 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 14 Source: Bloomberg

  15. Slide 15: Commercial Real Estate

    Commercial Real Estate U.S. Major Metro Areas Offce Vacancy Rate Commercial Bank CRE Loan Delinquencies 20 % (Year-Over-Year Growth, NSA, EOP) 180% 19.6% 18 % 125% 79% 16 % 70% 14 % 15% 12 % -40% '05 '07 '09 '11 '13 '15 '17 '19 '21 '23 '00 '02 '05 '07 '10 '12 '15 '17 '20 '22 15 Source: Strategas

  16. Slide 16: Market Update

    Market Update

  17. Slide 17: Global Markets Year-to-Date

    Global Markets Year-to-Date Total Return by Asset Class 7% YTD US Equity Returns As of 02/23/2024 6% Value Blend Growth 5% YTD 2024 (02/23/2024) Large 4% 4.5% 7.7% 9.8% 3% 2% 1% Mid 1.9% 3.0% 5.7% 0% -1% Small -2% -2.8% -0.4% 2.2% -3% U.S. Equities Intl. Developed Emerging Market Aggregate Fixed Mun

  18. Slide 18: Stocks Have Rallied Sharply; Narrow Rally

    Stocks Have Rallied Sharply; Narrow Rally S&P 500 Index 5,300 S&P 500: Year-to-Date 5,100 Through 2/23/24 4,900 Index: Total Return 4,700 S&P 500 6.9% 4,500 +24% 4,300 S&P 500 Equal Weighted 2.7% 4,100 Difference 4.2% 3,900 +42% 3,700 3,500 Jan-22 May-22 Sep-22 Jan-23 May-23 Sep-23 Jan-24 18 Source:

  19. Slide 19: Growth Increasing Portion of the US Stock Market

    Growth Increasing Portion of the US Stock Market Distribution of Market Cap. of Top 500 by Style 90% Growth 80% Value 70% 60% 50% 40% 30% 20% 10% 0% 19 1999 2002 2005 2008 2011 2014 2017 2020 2023 Source: Trivariate Research

  20. Slide 20: The S&P 500's Narrow Rally

    The S&P 500’s Narrow Rally S&P 500 Contribution of 10 Largest Weights During Positive Performance Years 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 1991 1992 1993 1995 1996 1997 1998 1999 2003 2004 2005 2006 2007 2009 2010 2012 2013 2014 2016 2017 2019 2020 2021 2023 2024 YTD 20 Source: Trivariate Resear

  21. Slide 21: Corporate Earnings

    Corporate Earnings ▪ 2023 estimated growth is 0.9% or Percent of Stocks with Forecasted Gross Margin Expansion Top 500 (Ex-Financials & Real Estate) $220 per share 82% 77% ▪ 2024 estimated growth is 10.9% or 72% $243 per share 67% 62% ▪ Average growth since 1950 is 7.6% 57% 52% 47% 2011 2013 2015 20

  22. Slide 22: 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 22 85 88 91 94 97 00 03 06 09 12 15 18 21 24 Source: Strategas

  23. Slide 23: 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 23 Source: Strategas

  24. Slide 24: S&P 500 Price Target

    S&P 500 Price Target Next Twelve-Month S&P 500 Price Target Percent Change from NTM Price Level 2/27/24 Bear 3,700 -27.1% Base 4,850 -4.5% Bull 5,500 8.3% 24 Source: Bloomberg, FactSet

  25. Slide 25: Presidential Cycle: S&P 500 Returns

    Presidential Cycle: S&P 500 Returns Presidential Cycle Avg S&P 500 Returns: ReElected Vs. New President (CY 1937-2022) 23% 20.1% ReElected 18% New 13% 12.1% 11.8% 9.5% 8% 7.0% 4.3% 3% -2% -0.7% -0.1% Year 1 Year 2 Year 3 Year 4 25 Source: Strategas, *1965-1968 (Johnson) treated as cycle of first-tim

  26. Slide 26: US Treasury Yield Curve Remains Inverted

    US Treasury Yield Curve Remains Inverted US Treasury Yield Curve 5.8% 5.6% As of 5.4% 2/23/2024 5.4% 5.4% 5.4% 12/29/2023 5.3% 5.2% 5.3% 5.2% 5.0% 5.0% 4.8% 4.8% 4.7% 4.6% 4.5% 4.5% 4.4% 4.2% 4.3% 4.3% 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 26 MM M Yr Yr Yr Y

  27. Slide 27: 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 2/23/2024 2-Year Treasury 0.73% 4.69% 10-Year Treasury 1.51% 4.25% Aggregate Bond 1.75% 4.92% Intermediate Government/Credit 1.30% 4.75% Municipal Bond 1.11% 3.42% Investment Grade Corporate Bon

  28. Slide 28: 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 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20 Jan-21 Jan-22 Jan-23 Jan-24 Jul-13 Jul-14 Jul-15 Jul-16 Jul-17 Jul-18 Jul-19 Jul

  29. Slide 29: US Government Finances

    US Government Finances Net Interest Cost & Weighted Average US Federal Debt % of GDP Cost of Marketable Debt 120% 19% 10.0% 110% Federal Debt Held by Public as a Percentage of GDP (%) 9.0% 100% 17% Projections 8.0% 90% 15% Net Interest Cost, 7.0% 80% Pct of Tax Revenues 13% (Left Axis) 6.0% 70% 60%

  30. Slide 30: 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 1-week 1-month 3-months 6-months months (trading level (trading Size of from from from from from Event Event date days) Days) selloff (%) bottom bottom bottom bottom bott

  31. Slide 31: 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

  32. Slide 32: Contact and disclosures

    Brent Ciliano, CFA | SVP, Chief Investment Officer Capital Management Group | First Citizens Bank 8510 Colonnade Center Drive| Raleigh, NC 27615 [email protected] | 919.716.2650 Phillip Neuhart | SVP, Director of Market & Economic Research Capital Management Group | First Citizens Bank

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