Market Outlook · June 16, 2020

Retail's Comeback, "Zombie" Companies and the Fed Just Keeps Buying

1 Retail sales in May explode!

U.S. retail sales made the biggest jump on record in May and double what was forecast, regaining more ground than expected after unprecedented drops in the prior two months as states allowed more merchants to reopen.

2 Perpetually low interest rates are giving rise to “zombie” companies

One consequence of aggressive Fed support to credit markets and long periods of low interest rates is that these actions interfere with the process of creative destruction and keeps companies alive that would otherwise have gone out of business.

3 US Census survey – how has this pandemic affected American workers?

Half of US households have experienced loss of income because of COVID-19. But the extent to which US households have lost income varies greatly from state to state.

4 Is the Fed buying corporate bonds a good thing?

After the Fed announced their intentions to support liquidity in corporate bond markets, we’ve seen nearly $42 billion flow into corporate bond ETFs.

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Bonus Offer

Offer is valid on new accounts only. Company must spend $3,000 within the first three months of account opening to receive the bonus. 10,000 bonus points will be credited within 60 days of qualification under the description: Commercial Spend Bonus.

Earning Points

Accelerated Rewards Tier: Earns one and a half (1.5) points for each dollar you spend for net retail purchases (gross retail purchases less any returns or credits).

There is no monthly point cap and points do not expire as long as you remain in the Accelerated Rewards Tier.

Rewards Redemption

Businesses in the Accelerated Rewards Tier may redeem points for (i) cash back to a First Citizens checking or savings account or credit card statement credits, (ii) credit towards a First Citizens personal loan or mortgage principal, (iii) Pay Me Back statement credits, (iv) travel rewards, including airline tickets, hotel, car rentals, cruises and tours, (v) retail gift cards and certificates and (vi) merchandise and (vii) donations. Businesses in the Accelerated Rewards Tier have access to additional experiential rewards and a fixed point value airline travel reward.

These Terms are only a summary. Other restrictions and requirements apply. The full First Citizens Rewards® Program Rules will be provided upon enrollment and are accessible via the program website at FirstCitizensRewards.com at log in.

Program Rules are subject to change or cancellation without notice.

Bonus Offer

Offer is valid on new accounts only. To qualify, company must spend $3,000 within the first three months of account opening to receive the bonus. $100 rewards dollars will be credited within 60 days of qualification under the description: Commercial Spend Bonus.

Earning Cash Back

Cash Back Rewards: Earns (i) one (1) reward dollar for each one hundred (100) dollars you spend for net retail purchases (gross retail purchases less any returns or credits), (ii) five (5) reward dollars for each one hundred (100) dollars you spend for net retail purchases in the following rewards categories: utilities and wireless phone (4 additional reward dollars on top of the 1 reward dollar for each one hundred dollars earned on net retail purchases) for the first twelve (12) months from account opening; three (3) reward dollars for each one hundred (100) dollars you spend for net retail purchases thereafter (2 additional reward dollars on top of the 1 reward dollar for each one hundred dollars earned on net retail purchases), (iii) two (2) reward dollars for each one hundred (100) dollars you spend for net retail purchases in the follow rewards categories: gas and office supplies (1 additional rewards dollars on top of the 1 reward dollar for each one hundred dollars earned on net retail purchases).

Rewards Categories: Merchants who accept Visa credit cards are assigned a merchant code, which is determined by the merchant or its processor in accordance with Visa procedures based on the kinds of products and services they primarily sell. We group similar merchant codes into categories for purposes of making reward offers to you. We make every effort to include all relevant merchant codes in our rewards categories. However, even though a merchant or some of the items that it sells may appear to fit within a rewards category, the merchant may not have a merchant code in that category. When this occurs, purchases with that merchant won't qualify for rewards offers on purchases in that category.

There is no monthly point cap. Reward dollars earned are available for redemption for a 3-year term. Reward dollars expiring during the year will be cleared from the Program Account on the last day of the month in which they expire.

Rewards Redemption

Businesses may redeem reward dollars for (i) cash back to a First Citizens checking or savings account or credit card statement credits and (ii) Pay Me Back statement credits.

Program Rules are subject to change or cancellation without notice.

Bonus Offer

Offer is valid on new accounts only. To qualify, company must spend $3,000 within the first three months of account opening to receive the bonus. 10,000 bonus points will be credited within 60 days of qualification under the description: Commercial Spend Bonus.

Earning Points

Base Rewards Tier: Earns (i) one (1) point for each dollar you spend for net retail purchases (gross retail purchases less any returns or credits), (ii) three (3) points for each dollar you spend for net retail purchases in the follow rewards category: gas stations (2 additional points on top of the 1 point per dollar earned on net retail purchases), (iii) two (2) points for each dollar you spend for net retail purchases in the following rewards categories: restaurants and travel (airlines, auto rental, and lodging) (1 additional point on top of the 1 point per dollar earned on net retail purchases).

Businesses may earn up to 10,000 points per calendar month, excluding bonus points. Points earned are available for redemption for a 3 year term. Points expiring during the year will be cleared from the Program Account on the last day of the month in which they expire.

Rewards Redemption

Businesses in the Base Rewards Tier may redeem points for (i) cash back to a First Citizens checking or savings account or credit card statement credits, (ii) credit towards a First Citizens personal loan or mortgage principal, (iii) Pay Me Back statement credits, (iv) travel rewards, including airline tickets, hotel, car rentals, cruises and tours, (v) retail gift cards and certificates and (vi) merchandise and (vii) donations.

Program Rules are subject to change or cancellation without notice.

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2,500 New Enrollment Bonus

The new enrollment bonus offer is available at account opening to new cardholders in the Accelerated Rewards Tier of the First Citizens Rewards® credit card or existing cardholders who upgrade to the Accelerated Rewards Tier. Not valid with any other promotional offers.

Earning Points

At the Accelerated Rewards Tier, you will earn 1.5 points for each $1 you spend for all net retail purchases (gross retail purchases less any returns or credits). Earned points are calculated on actual dollars spent rounded up or down to the nearest point. Points will be deducted from the available rewards account balance for all returned purchases. There is no monthly point cap and points do not expire as long as you remain in the Accelerated Rewards Tier.

Redeeming Points

Each point is worth $0.01, which means that 100 points equals $1 in redemption value. Redemptions start as low as 10,000 points. Some limitations may apply.

You may redeem points back into other First Citizens banking products:

Cash Back to an existing First Citizens Bank checking account, savings account or credit card account
Account credits towards a First Citizens personal loan or mortgage

Cash back and account credit redemptions must be completed through the Program website, however a statement credit back to your First Citizens Card can also be redeemed through the First Citizens Rewards Call Center. The redemptions will post within 2-8 business days. No First Citizens card or mortgage account credit will be applied, in whole or in part, against any monthly minimum payment due, however, account credits to your First Citizens consumer loan will be applied first to your outstanding interest and any remaining amount will be applied to your principal.

Cardholders in the Accelerated Rewards Tier may redeem 50,000 points for one continental flight when the flight is booked at least 21 days in advance and includes a Saturday night stay. This reward is only available for redemption on coach tickets priced below $1,000.00. Tickets priced above $1,000.00 are not eligible for this reward.

Redemptions are also available for travel, including airline tickets, hotel, car rentals, cruises and tours, retail gift cards and certificates, donations and merchandise.

You may use points for a Pay Me Back® redemption, meaning a statement credit for the corresponding dollar amount will be applied to your First Citizens Rewards card that was used for the purchases over $100. Some exclusions apply to certain categories of transactions. No statement credit will be applied, in whole or in part, against any monthly minimum payment due.

These terms are only a summary. Other restrictions and requirements apply. The full First Citizens Rewards® Program Rules will be provided upon enrollment and are accessible through the program website at FirstCitizensRewards.com at log in.

Program rules are subject to change or cancellation without notice.

Earning Reward Dollars

With Cash Back Rewards, you will earn 1 reward dollar for each $100 net dollars you spend for net retail purchases (gross retail purchases less any returns or credits). Earned reward dollars are calculated on actual dollars spent rounded up or down to the nearest point. Reward dollars will be deducted from the available rewards account balance for all returned purchases.

There is no monthly earnings cap. Reward dollars earned are available for redemption for 3 years. Reward dollars expiring during the year will be cleared from your Program Account on the last day of the month in which they expire.

Redeeming Reward Dollars

Each reward dollar is worth $1, which means that $100 reward dollars equals $100 in redemption value. Redemptions start as low as $25 rewards dollars.

You may redeem reward dollars back into other First Citizens banking products:

Cash Back to an existing First Citizens Bank checking account, savings account or credit card account
Account credits towards a First Citizens personal loan or mortgage

Cash back and account credit redemptions must be completed through the program website, however a statement credit back to your First Citizens Card can also be redeemed through the First Citizens Rewards Call Center. The redemptions will post within 2 to 8 business days. No First Citizens card or mortgage account credit will be applied, in whole or in part, against any monthly minimum payment due, however, account credits to your First Citizens consumer loan will be applied first to your outstanding interest and any remaining amount will be applied to your principal.

You may redeem rewards dollars for account credits to be deposited to your First Citizens checking or savings account or applied to your First Citizens credit card, consumer loan or mortgage.

You may use reward dollars for a Pay Me Back® redemption, meaning a statement credit for the corresponding dollar amount will be applied to your First Citizens Rewards card that was used for the purchases over $100. Some exclusions apply to certain categories of transactions. No statement credit will be applied, in whole or in part, against any monthly minimum payment due.

Program rules are subject to change or cancellation without notice.

Earning Points

At the Base Rewards Tier, you will earn 1 point for each $1 you spend for all net retail purchases (gross retail purchases less any returns or credits). Earned points are calculated on actual dollars spent rounded up or down to the nearest point. Points will be deducted from the available rewards account balance for all returned purchases.

At the Base Rewards Tier, cardholders may earn up to 10,000 points per calendar month. Points earned are available for redemption for a 3-year term. After the 3-year term, points expire and can no longer be redeemed. Points expiring during the year will be cleared from your Program Account on the last day of the month in which they expire.

Redeeming Points

Each point is worth $0.01, which means that 100 points equals $1 in redemption value. Redemptions start as low as 10,000 points. All rewards redemptions can be made through the First Citizens Rewards Center by telephone or through the program website. Some limitations apply.

You may redeem points back into other First Citizens banking products:

Cash Back to an existing First Citizens Bank checking account, savings account or credit card account
Account credits towards a First Citizens personal loan or mortgage

Redemptions are also available for retail gift cards and certificates, donations and merchandise.

These Terms are only a summary. Other restrictions and requirements apply. The full First Citizens Rewards® Program Rules will be provided upon enrollment and are accessible through the program website at FirstCitizensRewards.com at log in.

Program Rules are subject to change or cancellation without notice.

What are you looking for most in a credit card?

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Do you plan to use this card for everyday purchases?

Yes

In addition to cash back, are you also interested in earning points redeemable for gift card, merchandise and more?

Yes

Are you also interested in earning rewards?

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[Music]

Retail's Comeback, "Zombie" Companies and the Fed Just Keeps Buying

Brent Ciliano

1 Retail sales in May explode!

2 Perpetually low interest rates are giving rise to “zombie” companies

3 US Census survey – how has this pandemic affected American workers?

4 Is the Fed buying corporate bonds a good thing?

Bonus Offer

Earning Points

Rewards Redemption

Bonus Offer

Earning Cash Back

Rewards Redemption

Bonus Offer

Earning Points

Rewards Redemption

Thank you. We'll be in touch.

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Accelerated Earnings Card

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