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FIN City Quarterly Investment Report
____________________________________________________________________________________ FOR CITY CLERK ONLY Council Meeting: 08/06/2018 Disposition: Accepted Report Agenda Item No: 4.c Meeting Date: August 6, 2018 SAN RAFAEL CITY COUNCIL AGENDA REPORT Department: Finance Department Prepared by: Nadine Hade Interim Finance Director City Manager Approval: ______________ TOPIC: QUARTERLY INVESTMENT REPORT SUBJECT: ACCCEPTANCE OF CITY OF SAN RAFAEL QUARTERLY INVESTMENT REPORT FOR THE QUARTER ENDING JUNE 30, 2018 RECOMMENDATION: Accept investment report for the quarter ending June 30, 2018, as presented. BACKGROUND: Pursuant to the State of California Government Code Section 53601, and the City’s investment policy, last approved by the City Council on June 18, 2018, staff provides the governing body a quarterly report on the City's investment activities and liquidity. Included in the report are the cost of each investment, the interest rates (yield), maturity dates, and market value. Separate reports are prepared for the City and the Successor Agency to San Rafael Redevelopment Agency. The City invests a portion of its pooled funds in the Local Agency Investment Fund (LAIF), a State-run investment pool. Beginning in March 2014, the City incorporated an investment strategy that added purchases of securities outside of LAIF with the assistance of its investment advisor, Insight Investment. In addition to operational funds the City manages, the City is also directing the investment of funds held by a Trustee for the Essential Public Safety Facilities. As of June 30, 2018, the balance was $50,124,035 and the portfolio had a yield of 2.06%. ANALYSIS: As of June 30, 2018, the primary LAIF account had a balance of $19,345,352. The other LAIF account holding housing funds for future administrative expenses contained $146,778. Portfolio returns on LAIF deposits were 1.85% for the quarter. The remaining investment assets included the $1,455,700 balance of Pt. San Pedro Assessment District bonds, and $24,610,027 in government agency securities and corporate bonds (including T-Note, US Bancorp, Berkshire Hathaway Inc., Toyota Motor Credit Corp., and FNMA). The overall portfolio returns for the quarter ended June 30, 2018 was 1.74%. The City’s Westamerica account had a balance of $11,591,230 at quarter end. SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 2 Exhibit A is composed of three parts: (1) Quarterly Investment Portfolio Report; (2) Historical Activity By Quarter summarizing the City’s investments; and (3) the three monthly investment reports from Insight Investment for the quarter. FISCAL IMPACT: No financial impact occurs by adopting the report. The City continues to meet the priority principles of investing - safety, liquidity and yield in respective order. The portfolio remains conservatively invested. Sufficient liquidity exists to meet daily operating and capital project requirements for the next six months. Operating funds, as defined for this report, exclude cash held with fiscal agents for the payment of bond principal and interest. RECOMMENDATION: Accept investment report for the quarter ending June 30, 2018, as presented. ATTACHMENTS: 1. Quarterly Investment Portfolio Report 2. Historical Activity by Quarter Report 3. Insight Investment Statements, April through June 2018 SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 3 I CERTIFY THAT ALL INVESTMENTS MADE ARE IN CONFORMANCE WITH THE CITY’S APPROVED INVESTMENT POLICY AND STATE INVESTMENT REGULATIONS. THE CITY HAS SUFFICIENT LIQUIDITY TO MEET ALL OF THE OBLIGATIONS REQUIRED DURING THE NEXT SIX -MONTH PERIOD. NADINE HADE INTERIM FINANCE DIRECTOR %Return LAIF 19,345,352$ 99.2% 1.85% LAIF ‐ RDA 146,778$ 0.8% 1.85% Total Internally Managed 19,492,130$ 44.2% Weighted Average Yield 1.85% Days Effective Average Duration ‐ Internal 1 Weighted Average Maturity ‐ Internal 1 %Return Cash 170,357$ 0.7% 0.00% Treasury Securities 4,434,357$ 18.0% 1.61% Instrumentality Securities 15,515,087$ 63.0% 1.41% Corporate Notes 3,034,526$ 12.3% 1.35% Municipal 1,455,700$ 5.9% 5.25% Total Externally Managed 24,610,027$ 55.8% Weighted Average Yield 1.66% Years Effective Average Duration ‐ External 1.68 Weighted Average Maturity ‐ External 1.96 Total Portfolio Assets %Return LAIF 19,492,130$ 44.2% 1.85% Cash 170,357$ 0.4% 0.00% Treasury Securities 4,434,357$ 10.1% 1.61% Instrumentality Securities 15,515,087$ 35.2% 1.41% Corporate Notes 3,034,526$ 6.9% 1.35% Municipal 1,455,700$ 3.3% 5.25% Total Portfolio Assets 44,102,157$ Weighted Average Yield 1.74% Years Effective Average Duration ‐ Total 0.94 Weighted Average Maturity ‐ Total 1.09 Based on Market Values June 30, 2018 City of Rafael Quarterly Investment Portfolio Report Externally Managed Assets Internally Managed Assets LAIF, 99.2% LAIF ‐RDA, 0.8% Cash , 0.7%Treasury Securities, 18.0% Instrumentality Securities, 63.0% Corporate Notes, 12.3% LAIF 44% Cash 1% Treasury Securities 10% Instrumentality Securities 35% Corporate Notes 7%Municipal 3% Exhibit A Internally Managed Assets %Return %Return %Return %Return %Return LAIF 19,345,352$ 99.2% 1.85% 19,257,368$ 99.2% 1.43% 24,197,411$ 99.4% 1.18% 26,120,827$ 99.4% 1.08% 34,063,133$ 99.6% 0.91% LAIF - Housing 146,778$ 0.8% 1.85% 146,234$ 0.8% 1.43% 145,792$ 0.6% 1.18% 145,398$ 0.6% 1.08% 145,064$ 0.4% 0.91% Total Internally Managed 19,492,130$ 44.2%19,403,602$ 44.1%24,343,203$ 49.8%26,266,225$ 51.7%34,208,197$ 58.2% Weighted Average Yield 1.85% 1.43% 1.18% 1.08% 0.91% Days Externally Managed Assets %Return %Return %Return %Return %Return Cash 170,357$ 11.7%0.00%115,317$ 0.5%0.00%95,875$ 0.4%0.00%132,133$ 0.5%0.00%34,392$ 0.1%0.00% Commercial Paper -$ 0.0% 0.00% -$ 0.0% 0.00% -$ 0.0% 0.00% -$ 0.0% 0.00% -$ 0.0% 0.00% Treasury Securities 4,434,357$ 18.0% 1.61% 4,439,353$ 18.1% 1.61% 4,465,904$ 18.2% 1.33% 4,390,921$ 17.9% 1.21% 4,146,098$ 16.9% 1.08% Instrumentality Securities 15,515,087$ 63.0% 1.41% 15,006,092$ 61.1% 1.38% 14,476,033$ 59.0% 1.28% 14,554,167$ 59.2% 1.17% 14,829,261$ 60.3% 1.02% Corporate Notes 3,034,526$ 12.3% 1.35% 3,529,912$ 14.4% 1.32% 4,040,998$ 16.5% 1.34% 4,053,171$ 16.5% 1.34% 4,058,635$ 16.5% 1.27% Municipal/Assessment District 1,455,700$ 5.9% 5.25% 1,455,700$ 5.9% 5.25% 1,455,700$ 5.9% 5.25% 1,455,700$ 5.9% 5.25% 1,520,800$ 6.2% 5.25% Total Externally Managed 24,610,027$ 55.8%24,546,375$ 55.9%24,534,510$ 50.2%24,586,091$ 48.3%24,589,185$ 41.8% Weighted Average Yield 1.66% 1.64% 1.53% 1.44% 1.33% Years Years Years Years Years Effective Average Duration - External 1.68 1.91 2.00 1.98 1.68 Weighted Average Maturity - External 1.96 2.20 2.31 2.37 2.03 Total Portfolio Assets %Return %Return %Return %Return %Return LAIF 19,492,130$ 44.2% 1.85% 19,403,602$ 44.1% 1.43% 24,343,203$ 49.8% 1.18% 26,266,225$ 51.7% 1.08% 34,208,197$ 58.2% 0.91% Cash 170,357$ 0.4% 0.00% 115,317$ 0.3% 0.00% 95,875$ 0.2% 0.00% 132,133$ 0.3% 0.00% 34,392$ 0.1% 0.00% Treasury Securities 4,434,357$ 10.1% 0.00% 4,439,353$ 10.1% 1.61% 4,465,904$ 9.1% 1.33% 4,390,921$ 8.6% 1.21% 4,146,098$ 7.1% 1.08% Instrumentality Securities 15,515,087$ 35.2% 1.61% 15,006,092$ 34.1% 1.38% 14,476,033$ 29.6% 1.28% 14,554,167$ 28.6% 1.17% 14,829,261$ 25.2% 1.02% Corporate Notes 3,034,526$ 6.9% 1.41% 3,529,912$ 8.0% 1.32% 4,040,998$ 8.3% 1.34% 4,053,171$ 8.0% 1.34% 4,058,635$ 6.9% 1.27% Municipal/Assessment District 1,455,700$ 3.3% 1.35% 1,455,700$ 3.3% 5.25% 1,455,700$ 3.0% 5.25% 1,455,700$ 2.9% 5.25% 1,520,800$ 2.6% 5.25% 44,102,157$ 43,949,978$ 48,877,713$ 50,852,316$ 58,797,383$ Total Portfolio Assets Weighted Average Yield 1.74% 1.55% 1.36% 1.25% 1.09% Years Years Years Years Years Effective Average Duration - Total 0.94 1.07 1.01 0.96 0.70 Weighted Average Maturity - Total 1.09 1.23 1.16 1.15 0.85 Performance Recap -The weighted average quarterly portfolio yield increased from 1.55% to 1.74% during the past quarter. The yield has increased over the past year, from 1.09% in the quarter ended June 30, 2017 to 1.74% in the most recent quarter. -This trend is reflective of the general increase in interest rates that occurred througout the year. -The effective average duration has decreased, from 1.07 to .94 years since last quarter as the City is still shortening it's investments in preparation of higher interest rates. -The total portfolio assets held steady during the quarter. June 30, 2018 City of San Rafael Historical Activity-By Quarter March 31, 2018 December 31, 2017 September 30, 2017 June 30, 2017 W:\Accounting and Budgeting\Finance\Bank Reconciliations\Statements\17-18\June 2018\Quarterly Report combined 6-30-18 SAN RAFAELApril 2018FOR PROFESSIONAL CLIENTS ONLYNOT TO BE DISTRIBUTED TO RETAIL CLIENTSTHIS DOCUMENT SHOULD NOT BE REPRODUCED INANY FORM WITHOUT PRIOR WRITTEN APPROVAL ContentsFixed income market review 3Activity and performance summary 4Recap of securities held6Maturity distribution of securities held 7Securities held8GASB 40 - Deposit and investment risk disclosure 12Transaction report15Additional information16 FIXED INCOME MARKET REVIEWAs of April 30, 2018SAN RAFAELChart 1: 2-year Treasury note yield: 04/30/2008—04/30/2018Source: BloombergFinanceLP, April 30, 2018.Chart 2: Treasury yield curve: 04/30/2017 and 04/30/2018Source: Bloomberg Finance LP, April 30, 2018.Economic Indicators and Monetary PolicyContinuing strength in the US economy was illustrated by many economic releasesduring April. That data, along with expectations for further rate increases by theFederal Reserve and growing concerns about potentially higher future Treasuryissuance, contributed to rising interest rates across the yield curve during the month.The 10-year Treasury note closed in April with a yield over 3%for the first time sinceDecember 2013 before retreating to 2.95% at month-end. The yield on the 2-yearTreasury note increased 22bp during April to end the month atnearly 2.5%, a level notseen since 2008. (See Chart1).The March payroll report was released on April 6. Average hourly earnings increased0.3% in March to a year-over-year rate of 2.7%, in line with expectations and 0.1%higher than February’s annual level. The unemployment rateheld steady at 4.1% whilethe underemployment rate decreased 0.2% to 8.0% in March. Although jobs addeddisappointed somewhat at 103,000 versus expectations for 185,000, February jobgrowthwas revisedup to326,000 from313,000.The Institute for Supply Management (ISM) Manufacturing Index was released on April2 at 59.3 and the Non-Manufacturing Index was released on April 4 at 58.8 for March.Both indices reflect an expanding economic environment andcomments frombusiness leaders showed concerns over tariffs, somewhat longer delivery times andearly indications of certain supply bottlenecks.The headline and the core Producer Price Index (PPI) levels released on April 10 eachrose 0.3% in March. The year-over-year increase was 3.0% at the headline level andexcluding food and energy the PPI increased 2.7%. The Consumer Price Index (CPI)data was released the next day and showed a 2.4% increase on a year-over-year basisin March including food and energy. The core CPI was 2.1% in March on a year-over-yearbasis, a13-monthhigh.Interest Rate SummaryAt the end of April the 3-month US Treasury bill yielded 1.80%, the 6-month USTreasury bill yielded 2.01%, the 2-year US Treasury note yielded 2.49%, the 5-year USTreasury note yielded 2.80% and the 10-year US Treasury noteyielded 2.95%. (SeeChart2).0.00%0.50%1.00%1.50%2.00%2.50%3.00%3.50%Apr-08 Apr-09 Apr-10 Apr-11 Apr-12 Apr-13 Apr-14 Apr-15 Apr-16 Apr-17 Apr-18Percentage0.00%0.50%1.00%1.50%2.00%2.50%3.00%3 m 6 m 1 yr 2 yr 3 yr 4 yr 5 yr 6 yr 7 yr 8 yr 9 yr 10 yrPercentage4/30/20184/30/20173 ACTIVITY AND PERFORMANCE SUMMARYFor the period April 1, 2018 - April 30, 2018SAN RAFAELAmortized Cost Basis Activity Summary24,815,645.42Opening balance21,554.57Income received21,554.57Total receipts(144.32)Expenses paid(144.32)Total disbursements0.00Interportfolio transfers0.00Total Interportfolio transfers0.00Realized gain (loss)(2,640.63)Total amortization expense2,392.50Total OID/MKT accretion income0.00Return of capitalClosing balance24,836,807.54Ending fair value24,532,089.50(304,718.04)Unrealized gain (loss)Comparative Rates of Return (%)* Twelvemonth trailing* Sixmonth trailing* One monthFed Funds1.25 0.70 0.14Overnight Repo1.23 0.70 0.14Merrill Lynch 3m US Treas Bill 1.22 0.72 0.14Merrill Lynch 6m US Treas Bill 1.35 0.80 0.15ML 1 Year US Treasury Note 1.55 0.92 0.18ML 2 Year US Treasury Note 1.75 1.05 0.19ML 5 Year US Treasury Note 2.13 1.19 0.22* rates reflected are cumulativeSummary of Amortized Cost Basis Return for the PeriodTotal portfolioInterest earned33,259.36Accretion (amortization)(248.13)Realized gain (loss) on sales0.00Total income on portfolio33,011.23Average daily amortized cost24,822,728.31Period return (%)Weighted average final maturity in days770YTD return (%)Detail of Amortized Cost Basis ReturnInterestearnedRealizedgain (loss)Accretion(amortization)Totalincome0.00Cash and Cash Equivalents 92.07 0.00 92.070.00Corporate Bonds 4,631.95 (859.31) 3,772.640.00Government Agencies 16,871.32 131.21 17,002.530.00Government Bonds 5,507.62 479.97 5,987.590.00Municipal/Provincial Bonds 6,156.40 0.00 6,156.40Total 33,259.36 (248.13) 0.00 33,011.230.130.554 ACTIVITY AND PERFORMANCE SUMMARYFor the period April 1, 2018 - April 30, 2018SAN RAFAELFair Value Basis Activity Summary24,546,375.25Opening balance21,554.57Income received21,554.57Total receipts(144.32)Expenses paid(144.32)Total disbursements0.00Interportfolio transfers0.00Total Interportfolio transfers0.00Unrealized gain (loss) on security movements0.00Return of capitalChange in fair value for the period(35,696.00)Ending fair value24,532,089.50Comparative Rates of Return (%)* Twelvemonth trailing* Sixmonth trailing* One monthFed Funds1.25 0.70 0.14Overnight Repo1.23 0.70 0.14ICE ML 3m US Treas Bill 1.17 0.68 0.13ICE ML 6m US Treas Bill 1.21 0.65 0.15ICE ML 1 Year US Treasury Note 0.64 0.29 0.06ICE ML US Treasury 1-3 (0.26) (0.47) (0.16)ICE ML US Treasury 1-5 (0.75) (1.01) (0.35)* rates reflected are cumulativeDetail of Fair Value Basis ReturnInterestearnedChange infair valueTotalincomeCash and Cash Equivalents 92.07 0.00 92.07Corporate Bonds 4,631.95 2,803.35 7,435.30Government Agencies 16,871.32 (28,114.90) (11,243.58)Government Bonds 5,507.62 (10,384.45) (4,876.83)Municipal/Provincial Bonds 6,156.40 0.00 6,156.40Total33,259.36 (35,696.00) (2,436.64)Summary of Fair Value Basis Return for the PeriodTotal portfolioInterest earned33,259.36Total income on portfolio(2,436.64)Average daily total value *24,624,421.24Period return (%)(0.01)Weighted average final maturity in days770Change in fair value(35,696.00)YTD return (%)0.09* Total value equals market value and accrued interest5 RECAP OF SECURITIES HELDAs of April 30, 2018SAN RAFAELWeightedaveragefinalmaturity (days)Weightedaverageeffectiveduration (years)PercentofportfolioAmortizedcostHistoricalcostFair value Unrealizedgain (loss)Cash and Cash Equivalents 136,727.60 136,727.60 136,727.60 0.00 0.55 0.001Corporate Bonds 3,571,541.50 3,558,069.42 3,532,715.80(25,353.62) 251 14.36 0.67Government Agencies 15,212,785.14 15,193,295.88 14,977,977.20 (215,318.68) 519 61.17 1.39Government Bonds 4,491,687.51 4,493,014.64 4,428,968.90 (64,045.74) 608 18.06 1.62Municipal/Provincial Bonds 1,455,700.00 1,455,700.00 1,455,700.00 0.00 5,239 5.85 9.94Total24,868,441.75 24,836,807.54 24,532,089.50 (304,718.04)770 100.00 1.82Cash and Cash Equivalents 0.55Corporate Bonds 14.36Government Agencies 61.17Government Bonds 18.06Municipal/Provincial Bonds 5.85Portfolio diversification (%)6 MATURITY DISTRIBUTION OF SECURITIES HELDAs of April 30, 2018SAN RAFAELMaturityHistoric cost PercentUnder 90 days634,817.60 2.5590 to 179 days1,556,203.50 6.26180 days to 1 year4,288,818.03 17.251 to 2 years12,331,135.74 49.592 to 3 years4,601,766.88 18.503 to 4 years0.00 0.004 to 5 years0.00 0.00Over 5 years1,455,700.00 5.8524,868,441.75 100.00Maturity distribution7 SECURITIES HELDAs of April 30, 2018SAN RAFAELAmortized cost/Accretion(amortization)Fair value/Change in fairvalueInterestreceivedInterestearnedUnrealizedgain(loss)Coupon Maturity/Call dateHistorical cost/Accrued interestpurchasedCusip/DescriptionTotalaccruedinterest%PortcostPar value orsharesCash and Cash Equivalents0.000136,727.60 136,727.600.000.00 0.00 0.00 0.000.00 0.00Cash and Cash Equivalents0.55136,727.60136,727.60Total Cash and Cash Equivalents136,727.60 136,727.60 136,727.60 0.00 0.00 0.000.00 0.000.550.000.00136,727.60Corporate Bonds037833AJ9 1.000 05/03/2018 498,090.00 499,992.89475.00(17.89) 0.00 402.77 2,458.330.00 71.09APPLE INC 1% 03MAY20182.00499,975.00500,000.00084670BX5 1.150 08/15/2018 500,355.00 500,051.41711.50(1,766.41) 0.00 463.20 1,197.920.00 (14.69)BERKSHIRE HATHAWAY INC1.15% 15AUG20182.01498,285.00500,000.0025468PDD5 1.500 09/17/2018 555,351.50 551,012.651,296.35(2,026.85) 0.00 664.59 985.420.00 (221.74)WALT DISNEY COMPANY/THE1.5% 17SEP20182.23548,985.80550,000.0091159HHE3 1.950 11/15/2018 509,425.00 502,246.79543.00(3,208.79) 0.00 785.42 4,468.7510/15/20180.00 (345.66)US BANCORP 1.95%15NOV2018 (CALLABLE15OCT18)2.05499,038.00500,000.00713448CK2 2.250 01/07/2019 505,530.00 502,085.36208.00(2,329.36) 0.00 906.25 3,531.2512/07/20180.00 (253.28)PEPSICO INC 2.25% 07JAN2019(CALLABLE 07DEC18)2.03499,756.00500,000.0014912L6R7 1.350 05/18/2019 498,245.00 499,290.49147.50(6,072.99) 0.00 543.75 3,037.500.00 56.31CATERPILLAR FINL SERVICE1.35% 18MAY20192.00493,217.50500,000.0089236TCF0 2.150 03/12/2020 504,545.00 503,389.83(578.00)(9,931.33) 0.00 865.97 1,433.330.00 (151.34)TOYOTA MOTOR CREDIT CORP2.15% 12MAR20202.03493,458.50500,000.00Total Corporate Bonds3,571,541.50 3,558,069.42 3,532,715.80 (25,353.62) 0.004,631.950.00 (859.31)14.3617,112.502,803.353,550,000.008 SECURITIES HELDAs of April 30, 2018SAN RAFAELAmortized cost/Accretion(amortization)Fair value/Change in fairvalueInterestreceivedInterestearnedUnrealizedgain(loss)Coupon Maturity/Call dateHistorical cost/Accrued interestpurchasedCusip/DescriptionTotalaccruedinterest%PortcostPar value orsharesGovernment Agencies3133EGFQ3 0.875 09/14/2018 500,497.00 500,082.42280.00(2,092.42) 0.00 352.43 559.030.00 (18.46)FEDERAL FARM CREDIT BANK0.875% 14SEP20182.01497,990.00500,000.003133EGM69 1.100 12/05/2018 1,247,248.75 1,249,179.59(312.50)(7,542.09) 0.00 1,107.63 5,538.190.00 114.48FEDERAL FARM CREDIT BANK1.1% 05DEC20185.021,241,637.501,250,000.003135G0H63 1.375 01/28/2019 1,012,490.00 1,003,756.81(490.00)(9,944.81) 0.00 1,107.64 3,513.890.00 (420.54)FANNIE MAE 1.375%28JAN20194.07993,812.001,000,000.003133782M2 1.500 03/08/2019 1,014,124.28 1,004,672.69(468.00)(11,102.69) 0.00 1,208.34 2,166.670.00 (455.14)FEDERAL HOME LOAN BANK1.5% 08MAR20194.08993,570.001,000,000.00313379EE5 1.625 06/14/2019 993,180.00 993,970.94(1,739.00)(2,294.94) 0.00 1,309.03 6,138.890.00 447.70FEDERAL HOME LOAN BANK1.625% 14JUN20193.99991,676.001,000,000.003135G0L76 1.075 07/11/2019 599,100.00 599,615.56(696.00)(8,801.56) 0.00 519.59 1,952.9207/11/20180.00 26.76FANNIE MAE 1.075%11JUL2019 (CALLABLE11JUL18)2.41590,814.00600,000.003133EGSC0 1.000 08/26/2019 1,000,610.00 1,000,267.86(2,780.00)(18,697.86) 0.00 805.56 1,777.780.00 (16.88)FEDERAL FARM CREDIT BANK1% 26AUG20194.02981,570.001,000,000.00313380FB8 1.375 09/13/2019 1,011,510.00 1,005,323.11(1,950.00)(19,563.11) 0.00 1,107.64 1,795.140.00 (323.92)FEDERAL HOME LOAN BANK1.375% 13SEP20194.07985,760.001,000,000.003134G3M49 1.500 09/26/2019 1,001,001.00 1,000,637.92(1,510.00)(15,277.92) 0.00 1,208.34 1,416.670.00 (37.82)FREDDIE MAC 1.5% 26SEP2019CALLABLE4.03985,360.001,000,000.003137EADM8 1.250 10/02/2019 993,010.00 994,887.31(1,575.00)(11,456.31) 6,250.00 1,006.94 972.220.00 299.57FREDDIE MAC 1.25%02OCT20193.99983,431.001,000,000.009 SECURITIES HELDAs of April 30, 2018SAN RAFAELAmortized cost/Accretion(amortization)Fair value/Change in fairvalueInterestreceivedInterestearnedUnrealizedgain(loss)Coupon Maturity/Call dateHistorical cost/Accrued interestpurchasedCusip/DescriptionTotalaccruedinterest%PortcostPar value orsharesGovernment Agencies3135G0R39 1.000 10/24/2019 589,095.11 590,844.01(863.40)(3,547.81) 3,000.00 483.33 100.000.00 514.38FANNIE MAE 1% 24OCT20192.37587,296.20600,000.003130ABCH7 1.500 11/04/2019 750,030.00 750,019.11(1,395.00)(10,841.61) 0.00 906.25 5,500.000.00 (1.05)FEDERAL HOME LOAN BANK1.5% 04NOV20193.02739,177.50750,000.003133ECEY6 1.450 02/11/2020 1,003,130.00 1,001,717.75(3,120.00)(20,747.75) 0.00 1,168.05 3,181.940.00 (80.39)FEDERAL FARM CREDIT BANK1.45% 11FEB20204.03980,970.001,000,000.003134G3K58 1.500 03/19/2020 498,289.00 498,870.97(1,415.00)(8,500.97) 0.00 604.17 854.170.00 49.88FREDDIE MAC 1.5%19MAR2020 CALLABLE2.00490,370.00500,000.00313383HU8 1.750 06/12/2020 996,870.00 997,396.22(2,411.00)(14,183.22) 0.00 1,409.72 6,708.330.00 102.51FEDERAL HOME LOAN BANK1.75% 12JUN20204.01983,213.001,000,000.003133EHVX8 1.500 08/24/2020 999,190.00 999,364.50(3,350.00)(24,524.50) 0.00 1,208.33 2,750.000.00 22.86FEDERAL FARM CREDIT BANK1.5% 24AUG20204.02974,840.001,000,000.003135G0RM7 1.630 10/30/2020 1,003,410.00 1,002,689.11(4,320.00)(26,199.11) 8,150.00 1,358.33 0.000.00 (92.73)FANNIE MAE 1.63%30OCT2020 CALLABLE4.03976,490.001,000,000.00Total Government Agencies15,212,785.14 15,193,295.88 14,977,977.20 (215,318.68)17,400.00 16,871.320.00 131.2161.1744,925.84(28,114.90)15,200,000.00Government Bonds912828WL0 1.500 05/31/2019 501,230.47 500,597.14(410.50)(4,913.64) 0.00 618.13 3,111.260.00 (45.24)USA TREASURY 1.5%31MAY20192.02495,683.50500,000.00912828WS5 1.625 06/30/2019 993,281.25 994,146.86(1,328.00)(2,310.86) 0.00 1,346.68 5,386.740.00 412.20USA TREASURY 1.625%30JUN20193.99991,836.001,000,000.0010 SECURITIES HELDAs of April 30, 2018SAN RAFAELAmortized cost/Accretion(amortization)Fair value/Change in fairvalueInterestreceivedInterestearnedUnrealizedgain(loss)Coupon Maturity/Call dateHistorical cost/Accrued interestpurchasedCusip/DescriptionTotalaccruedinterest%PortcostPar value orsharesGovernment Bonds912828TV2 1.250 10/31/2019 649,009.77 649,411.65(1,142.05)(10,532.50) 4,062.50 673.34 0.000.00 32.15USA TREASURY 1.25%31OCT20192.61638,879.15650,000.00912828H52 1.250 01/31/2020 745,869.14 747,224.44(1,699.50)(12,693.19) 0.00 776.93 2,304.900.00 129.90USA TREASURY 1.25%31JAN20203.00734,531.25750,000.00912828X96 1.500 05/15/2020 596,554.69 597,197.16(1,898.40)(9,197.16) 0.00 745.85 4,127.070.00 112.71USA TREASURY 1.5%15MAY20202.40588,000.00600,000.00912828XM7 1.625 07/31/2020 1,005,742.19 1,004,437.39(3,906.00)(24,398.39) 0.00 1,346.69 3,995.170.00 (161.75)USA TREASURY 1.625%31JUL20204.04980,039.001,000,000.00Total Government Bonds4,491,687.51 4,493,014.64 4,428,968.90 (64,045.74) 4,062.50 5,507.620.00 479.9718.0618,925.14(10,384.45)4,500,000.00Municipal/Provincial Bonds888599LS4 5.250 09/02/2032 1,455,700.00 1,455,700.000.000.00 0.00 6,156.40 12,312.800.00 0.00PT. SAN ASSESS DISTRICT5.25% 144A 02SEP2032SANRAF$015.851,455,700.001,455,700.00Total Municipal/Provincial Bonds1,455,700.00 1,455,700.00 1,455,700.00 0.00 0.00 6,156.400.00 0.005.8512,312.800.001,455,700.00Grand total24,868,441.75 24,836,807.54(35,696.00)(304,718.04) 21,462.50 33,167.2924,842,427.600.00 (248.13)100.0093,276.2824,532,089.5011 GASB 40 - DEPOSIT AND INVESTMENT RISK DISCLOSUREAs of April 30, 2018SAN RAFAELCusipS&PratingMoodyratingHistoricalcost% Portfoliohist costMarketvalue% Portfoliomkt valueEffectivedur (yrs)Description Coupon MaturitydateCall date Par value orsharesFederal Home Loan Banks3133782M2FEDERAL HOME LOAN 1.500 03/08/2019 AA+ Aaa 1,014,124.28 4.08 993,570.00 4.05 0.841,000,000.00313379EE5FEDERAL HOME LOAN 1.625 06/14/2019 AA+ Aaa 993,180.00 3.99 991,676.00 4.04 1.101,000,000.00313380FB8FEDERAL HOME LOAN 1.375 09/13/2019 AA+ Aaa 1,011,510.00 4.07 985,760.00 4.02 1.351,000,000.003130ABCH7FEDERAL HOME LOAN 1.500 11/04/2019 AA+ Aaa 750,030.00 3.02 739,177.50 3.01 1.48750,000.00313383HU8FEDERAL HOME LOAN 1.750 06/12/2020 AA+ Aaa 996,870.00 4.01 983,213.00 4.01 2.051,000,000.00Issuer total4,750,000.00 4,765,714.28 19.16 4,693,396.50 19.13 1.36Federal Farm Credit Banks3133EGFQ3FEDERAL FARM CREDIT 0.875 09/14/2018 AA+ Aaa 500,497.00 2.01 497,990.00 2.03 0.37500,000.003133EGM69FEDERAL FARM CREDIT 1.100 12/05/2018 AA+ Aaa 1,247,248.75 5.02 1,241,637.50 5.06 0.591,250,000.003133EGSC0FEDERAL FARM CREDIT 1.000 08/26/2019 AA+ Aaa 1,000,610.00 4.02 981,570.00 4.00 1.301,000,000.003133ECEY6FEDERAL FARM CREDIT 1.450 02/11/2020 AA+ Aaa 1,003,130.00 4.03 980,970.00 4.00 1.741,000,000.003133EHVX8FEDERAL FARM CREDIT 1.500 08/24/2020 AA+ Aaa 999,190.00 4.02 974,840.00 3.97 2.261,000,000.00Issuer total4,750,000.00 4,750,675.75 19.10 4,677,007.50 19.06 1.31United States Treasury Note/Bond912828WL0USA TREASURY 1.5% 1.500 05/31/2019 AA+ Aaa 501,230.47 2.02 495,683.50 2.02 1.06500,000.00912828WS5USA TREASURY 1.625% 1.625 06/30/2019 AA+ Aaa 993,281.25 3.99 991,836.00 4.04 1.141,000,000.00912828TV2USA TREASURY 1.25% 1.250 10/31/2019 AA+ Aaa 649,009.77 2.61 638,879.15 2.60 1.48650,000.00912828H52USA TREASURY 1.25% 1.250 01/31/2020 AA+ Aaa 745,869.14 3.00 734,531.25 2.99 1.72750,000.00912828X96USA TREASURY 1.5% 1.500 05/15/2020 AA+ Aaa 596,554.69 2.40 588,000.00 2.40 1.98600,000.00912828XM7USA TREASURY 1.625% 1.625 07/31/2020 AA+ Aaa 1,005,742.19 4.04 980,039.00 3.99 2.191,000,000.00Issuer total4,500,000.00 4,491,687.51 18.06 4,428,968.90 18.05 1.62Federal National Mortgage Association3135G0H63FANNIE MAE 1.375% 1.375 01/28/2019 AA+ Aaa 1,012,490.00 4.07 993,812.00 4.05 0.741,000,000.0012 GASB 40 - DEPOSIT AND INVESTMENT RISK DISCLOSUREAs of April 30, 2018SAN RAFAELCusipS&PratingMoodyratingHistoricalcost% Portfoliohist costMarketvalue% Portfoliomkt valueEffectivedur (yrs)Description Coupon MaturitydateCall datePar value orsharesFederal National Mortgage Association3135G0L76FANNIE MAE 1.075% 1.075 07/11/2019 07/11/2018 AA+ Aaa599,100.00 2.41 590,814.00 2.41 1.18600,000.003135G0R39FANNIE MAE 1%1.000 10/24/2019AA+ Aaa589,095.11 2.37 587,296.20 2.39 1.46600,000.003135G0RM7FANNIE MAE 1.63%1.630 10/30/2020AA+ Aaa1,003,410.00 4.03 976,490.00 3.98 2.441,000,000.00Issuer total3,200,000.00 3,204,095.11 12.88 3,148,412.20 12.83 1.49Federal Home Loan Mortgage Corp3134G3M49FREDDIE MAC 1.5%1.500 09/26/2019AA+ Aaa1,001,001.00 4.03 985,360.00 4.02 1.381,000,000.003137EADM8FREDDIE MAC 1.25% 1.250 10/02/2019AA+ Aaa993,010.00 3.99 983,431.00 4.01 1.401,000,000.003134G3K58FREDDIE MAC 1.5%1.500 03/19/2020AA+ Aaa498,289.00 2.00 490,370.00 2.00 1.84500,000.00Issuer total2,500,000.00 2,492,300.00 10.02 2,459,161.00 10.02 1.48Pt. San Assess District888599LS4 PT. SAN ASSESS5.250 09/02/2032NR NR1,455,700.00 5.85 1,455,700.00 5.93 9.941,455,700.00Issuer total1,455,700.00 1,455,700.00 5.85 1,455,700.00 5.93 9.94Walt Disney Co/The25468PDD5WALT DISNEY1.500 09/17/2018A+ A2555,351.50 2.23 548,985.80 2.24 0.38550,000.00Issuer total550,000.00 555,351.50 2.23 548,985.80 2.24 0.38Apple Inc037833AJ9APPLE INC 1%1.000 05/03/2018AA+ Aa1498,090.00 2.00 499,975.00 2.04 0.01500,000.00Issuer total500,000.00 498,090.00 2.00 499,975.00 2.04 0.01PepsiCo Inc713448CK2PEPSICO INC 2.25%2.250 01/07/2019 12/07/2018 A+ A1505,530.00 2.03 499,756.00 2.04 0.67500,000.00Issuer total500,000.00 505,530.00 2.03 499,756.00 2.04 0.6713 GASB 40 - DEPOSIT AND INVESTMENT RISK DISCLOSUREAs of April 30, 2018SAN RAFAELCusipS&PratingMoodyratingHistoricalcost% Portfoliohist costMarketvalue% Portfoliomkt valueEffectivedur (yrs)Description Coupon MaturitydateCall date Par value orsharesUS Bancorp91159HHE3US BANCORP 1.95% 1.950 11/15/2018 10/15/2018 A+ A1 509,425.00 2.05 499,038.00 2.03 0.53500,000.00Issuer total500,000.00 509,425.00 2.05 499,038.00 2.03 0.53Berkshire Hathaway Inc084670BX5BERKSHIRE HATHAWAY 1.150 08/15/2018 AA Aa2 500,355.00 2.01 498,285.00 2.03 0.29500,000.00Issuer total500,000.00 500,355.00 2.01 498,285.00 2.03 0.29Toyota Motor Credit Corp89236TCF0TOYOTA MOTOR CREDIT 2.150 03/12/2020 AA- Aa3 504,545.00 2.03 493,458.50 2.01 1.81500,000.00Issuer total500,000.00 504,545.00 2.03 493,458.50 2.01 1.81Caterpillar Financial Services Corp14912L6R7CATERPILLAR FINL 1.350 05/18/2019 A A3 498,245.00 2.00 493,217.50 2.01 1.03500,000.00Issuer total500,000.00 498,245.00 2.00 493,217.50 2.01 1.03Cash and Cash EquivalentsINVESTED CASH 0.000136,727.60 0.55 136,727.60 0.56 0.00136,727.60Issuer total136,727.60 136,727.60 0.55 136,727.60 0.56 0.00Grand total24,842,427.60 24,868,441.75 100.00 24,532,089.50 100.001.8214 TRANSACTION REPORTFor the period April 1, 2018 - April 30, 2018SAN RAFAELMaturity Par value orsharesInterest Transaction totalPrincipalTransactionCusip Sec type DescriptionTrade dateSettle dateRealizedgain(loss)6,250.0004/02/201804/02/2018Income3137EADM8 Government Agencies FREDDIE MAC 1.25% 10/02/2019 1,000,000.00 0.00 6,250.000.003,000.0004/24/201804/24/2018Income3135G0R39 Government Agencies FANNIE MAE 1% 24OCT201910/24/2019 600,000.00 0.00 3,000.000.008,150.0004/30/201804/30/2018Income3135G0RM7 Government Agencies FANNIE MAE 1.63% 30OCT2020 10/30/2020 1,000,000.00 0.00 8,150.000.004,062.5004/30/201804/30/2018Income912828TV2 Government Bonds USA TREASURY 1.25% 10/31/2019 650,000.00 0.00 4,062.500.0092.07Income Cash and Cash Equivalents Cash92.070.00 0.000.0004/30/201815 ADDITIONAL INFORMATIONAs of April 30, 2018SAN RAFAELPast performance is not a guide to future performance. The value of investments and any income from them will fluctuate and is not guaranteed (this may partly be due to exchange rate changes) and investors may not getback the amount invested. Transactions in foreign securities may be executed and settled in local markets. Performance comparisons will be affected by changes in interest rates. Investment returns fluctuate due to changesin market conditions. Investment involves risk, including the possible loss of principal. No assurance can be given that the performance objectives of a given strategy will be achieved. The information contained herein is foryour reference only and is being provided in response to your specific request and has been obtained from sources believed to be reliable; however, no representation is made regarding its accuracy or completeness. Thisdocument must not be used for the purpose of an offer or solicitation in any jurisdiction or in any circumstances in which such offer or solicitation is unlawful or otherwise not permitted. This document should not beduplicated, amended, or forwarded to a third party without consent from Insight. This is a marketing document intended for professional clients only and should not be made available to or relied upon by retail clientsInvestment advisory services in North America are provided through four different SEC-registered investment advisers using the brand Insight Investment: Cutwater Asset Management Corp. (CAMC), Cutwater InvestorServices Corp. (CISC), Insight North America LLC (INA) and Insight Investment International Limited (IIIL). The North American investment advisers are associated with a broader group of global investment managers that also(individually and collectively) use the corporate brand Insight Investment and may be referred to as Insight, Insight Group or Insight Investment.Both CISC and CAMC are investment advisers registered with the Securities and Exchange Commission (SEC), under the Investment Advisers Act of 1940, as amended. Registration with the SEC does not imply a certain level ofskill or training. You may request, without charge, additional information about Insight. Moreover, specific information relating to Insights strategies, including investment advisory fees, may be obtained from CAMCs andCISCs Forms ADV Part 2A, which are available without charge upon request.Where indicated, performance numbers used in the analysis are gross returns. The performance reflects the reinvestment of all dividends and income. CAMC and CISC charge management fees on all portfolios managed andthese fees will reduce the returns on the portfolios. For example, assume that $30 million is invested in an account with either CAMC or CISC, and this account achieves a 5.0% annual return compounded monthly, gross of fees,for a period of five years. At the end of five years that account would have grown to $38,500,760 before the deduction of management fees. Assuming management fees of 0.25% per year are deducted monthly from theaccount, the value at the end of the five year period would be $38,022,447. Actual fees for new accounts are dependent on size and subject to negotiation. CAMCS and CISC's investment advisory fees are discussed in Part 2Aof the Firms Form ADV.Unless otherwise stated, the source of information is Insight. Any forecasts or opinions are Insights own at the date of this document (or as otherwise specified) and may change. Material in this publication is for generalinformation only and is not advice, investment advice, or the recommendation of any purchase or sale of any security. Insight makes no implied or expressed recommendations concerning the manner in which an accountshould or would be handled, as appropriate investment strategies depend upon specific investment guidelines and objectives and should not be construed to be an assurance that any particular security in a strategy willremain in any fund, account, or strategy, or that a previously held security will not be repurchased. It should not be assumed that any of the security transactions or holdings referenced herein have been or will prove to beprofitable or that future investment decisions will be profitable or will equal or exceed the past investment performance of the securities listed.For trading activity the Clearing broker will be reflected. In certain cases the Clearing broker will differ from the Executing broker.In calculating ratings distributions and weighted average portfolio quality, Insight assigns U.S Treasury and U.S agency securities a quality rating based on the methodology used within the respective benchmark index. WhenMoodys, S&P and Fitch rate a security, Bank of America and Merrill Lynch indexes assign a simple weighted average statistic while Barclays indexes assign the median statistic. Insight assigns all other securities the lower ofMoodys and S&P ratings.Information about the indices shown here is provided to allow for comparison of the performance of the strategy to that of certain well-known and widely recognized indices. There is no representation that such index is anappropriate benchmark for such comparison. You cannot invest directly in an index and the indices represented do not take into account trading commissions and/or other brokerage or custodial costs. The volatility of theindices may be materially different from that of the strategy. In addition, the strategys holdings may differ substantially from the securities that comprise the indices shown.The BofA Merrill Lynch 3 Mo US T-Bill index is an unmanaged market index of U.S. Treasury securities maturing in 90 days that assumes reinvestment of all income.The BofA Merrill Lynch 6 Mo US T-Bill index measures the performance of Treasury bills with time to maturity of less than 6 months.The BofA Merrill Lynch Current 1-Year US Treasury Index is a one-security index comprised of the most recently issued 1-year US Treasury note. The index is rebalanced monthly. In order to qualify for inclusion, a 1-year notemust be auctioned on or before the third business day before the last business day of the month.The BofA Merrill Lynch Current 3-Year US Treasury Index is a one-security index comprised of the most recently issued 3-year US Treasury note. The index is rebalanced monthly. In order to qualify for inclusion, a 3-year notemust be auctioned on or before the third business day before the last business day of the month.The BofA Merrill Lynch Current 5-Year US Treasury Index is a one-security index comprised of the most recently issued 5-year US Treasury note. The index is rebalanced monthly. In order to qualify for inclusion, a 5-year notemust be auctioned on or before the third business day before the last business day of the month.The BofA Merrill Lynch 1-3 US Year Treasury Index is an unmanaged index that tracks the performance of the direct sovereign debt of the U.S. Government having a maturity of at least one year and less than three years.The BofA Merrill Lynch 1-5 US Year Treasury Index is an unmanaged index that tracks the performance of the direct sovereign debt of the U.S. Government having a maturity of at least one year and less than five years.Insight does not provide tax or legal advice to its clients and all investors are strongly urged to consult their tax and legal advisors regarding any potential strategy or investment.16 ADDITIONAL INFORMATIONAs of April 30, 2018SAN RAFAELInsight is a group of wholly owned subsidiaries of The Bank of New York Mellon Corporation. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation and may also be used as a generic term to referencethe Corporation as a whole or its various subsidiaries generally. Products and services may be provided under various brand names and in various countries by subsidiaries, affiliates and joint ventures of The Bank of New YorkMellon Corporation where authorized and regulated as required within each jurisdiction. Unless you are notified to the contrary, the products and services mentioned are not insured by the FDIC (or by any governmental entity)and are not guaranteed by or obligations of The Bank of New York Mellon Corporation or any of its affiliates. The Bank of New York Corporation assumes no responsibility for the accuracy or completeness of the above data anddisclaims all expressed or implied warranties in connection therewith.© 2018 Insight Investment. All rights reserved.17 SAN RAFAELMay 2018FOR PROFESSIONAL CLIENTS ONLYNOT TO BE DISTRIBUTED TO RETAIL CLIENTSTHIS DOCUMENT SHOULD NOT BE REPRODUCED INANY FORM WITHOUT PRIOR WRITTEN APPROVAL ContentsFixed income market review 3Activity and performance summary 4Recap of securities held6Maturity distribution of securities held 7Securities held8GASB 40 - Deposit and investment risk disclosure 12Securities purchased15Securities sold and matured 16Transaction report17Additional information18 FIXED INCOME MARKET REVIEWAs of May 31, 2018SAN RAFAELChart 1: 2: Unemployment and underemployment: 4/30/2008—4/30/2018Source: BloombergFinance LP, May 31, 2018.Chart 2: Treasury yield curve: 5/31/2017 and 5/31/2018Source: Bloomberg Finance LP, May 31, 2018.Economic Indicators and Monetary PolicyInterest rates increased through the first half of May. The 2-year US Treasury notereached a high in yield of 2.59% on May 16 and the 10-year US Treasury note closed at3.11% on May 17. However, rates fell as the month wore on as investors sought a safehaven in response to geopolitical concerns in Italy, the implications of continuing tariffissues and equity volatility. On May 29 the 2-year Treasury closed at 2.32% and the 10-year closed at 2.78% before partially retracingyields prior to month-end.On May 2, the Federal Open Market Committee (FOMC) met and unanimously agreedto maintain the federal funds target range of 1.5% to 1.75%. The FOMC described thecurrent policy as accommodative and recognized the strong labor market conditions,and expectations for inflation to return to a 2% symmetricaltarget. The next meetingof the FOMCis on June 13.The employment report released on May 4 showed average hourly earningsincreased 0.1% in April to 2.6% annual growth, short of expectations for 2.7% growth.Prior monthly earnings were revised lower to 0.2% from 0.3%.Payrolls increased lessthan forecast in April at 164,000 jobs added versus expectations for 193,000, butMarch gains were revised upward by 52,000 jobs. The unemployment rate fell to 3.9%in April from4.1% and the underemployment ratefell 0.2% to 7.8%. (See Chart 1).The Consumer Price Index (CPI) was released on May 10 showinga 2.5% increase on ayear-over-year basis in April including food and energy, inline with expectations. Thecore CPI was 2.1% on an annual basis, unchanged from the Marchreading.The second estimate for first quarter US Gross Domestic Product (GDP) was releasedon May 30 at 2.2% versus the original estimate of 2.3%. Personal consumption wassimilarly revised downward by 0.1% to 1.0% growth in the first quarter. The GDPreport showedimproving after-tax corporate profits and business fixedinvestment.Interest Rate SummaryAt the end of May, the 3-month US Treasury bill yielded 1.90%,the 6-month USTreasury bill yielded 2.08%, the 2-year US Treasury note yielded 2.43%, the 5-year USTreasury note yielded 2.70% and the 10-year US Treasury noteyielded 2.86%. (SeeChart2).2.04.06.08.010.012.014.016.0Apr-13 Apr-14 Apr-15 Apr-16 Apr-17 Apr-18RateUnemploymentUnderemployment0.00%0.50%1.00%1.50%2.00%2.50%3.00%3 m 6 m 1 yr 2 yr 3 yr 4 yr 5 yr 6 yr 7 yr 8 yr 9 yr 10 yrPercentage5/31/20185/31/20173 ACTIVITY AND PERFORMANCE SUMMARYFor the period May 1, 2018 - May 31, 2018SAN RAFAELAmortized Cost Basis Activity Summary24,836,807.54Opening balance25,647.08Income received25,647.08Total receipts(144.23)Expenses paid(144.23)Total disbursements0.00Interportfolio transfers0.00Total Interportfolio transfers0.00Realized gain (loss)(3,853.10)Total amortization expense2,351.43Total OID/MKT accretion income0.00Return of capitalClosing balance24,860,808.72Ending fair value24,596,477.30(264,331.42)Unrealized gain (loss)Comparative Rates of Return (%)* Twelvemonth trailing* Sixmonth trailing* One monthFed Funds1.32 0.75 0.14Overnight Repo1.31 0.76 0.15Merrill Lynch 3m US Treas Bill 1.31 0.78 0.15Merrill Lynch 6m US Treas Bill 1.43 0.86 0.17ML 1 Year US Treasury Note 1.65 0.99 0.19ML 2 Year US Treasury Note 1.85 1.09 0.21ML 5 Year US Treasury Note 2.21 1.26 0.24* rates reflected are cumulativeSummary of Amortized Cost Basis Return for the PeriodTotal portfolioInterest earned36,974.56Accretion (amortization)(1,501.67)Realized gain (loss) on sales0.00Total income on portfolio35,472.89Average daily amortized cost24,845,574.28Period return (%)Weighted average final maturity in days746YTD return (%)Detail of Amortized Cost Basis ReturnInterestearnedRealizedgain (loss)Accretion(amortization)Totalincome0.00Cash and Cash Equivalents 126.25 0.00 126.250.00Corporate Bonds 4,562.50 (923.29) 3,639.210.00Government Agencies 20,031.44 (1,074.35) 18,957.090.00Government Bonds 5,673.40 495.97 6,169.370.00Municipal/Provincial Bonds 6,580.97 0.00 6,580.97Total 36,974.56 (1,501.67) 0.00 35,472.890.140.694 ACTIVITY AND PERFORMANCE SUMMARYFor the period May 1, 2018 - May 31, 2018SAN RAFAELFair Value Basis Activity Summary24,532,089.50Opening balance25,647.08Income received25,647.08Total receipts(144.23)Expenses paid(144.23)Total disbursements0.00Interportfolio transfers0.00Total Interportfolio transfers0.00Unrealized gain (loss) on security movements0.00Return of capitalChange in fair value for the period38,884.95Ending fair value24,596,477.30Comparative Rates of Return (%)* Twelvemonth trailing* Sixmonth trailing* One monthFed Funds1.32 0.75 0.14Overnight Repo1.31 0.76 0.15ICE ML 3m US Treas Bill 1.28 0.75 0.15ICE ML 6m US Treas Bill 1.32 0.74 0.17ICE ML 1 Year US Treasury Note 0.83 0.57 0.22ICE ML US Treasury 1-3 (0.02) 0.09 0.36ICE ML US Treasury 1-5 (0.50) (0.25) 0.48* rates reflected are cumulativeDetail of Fair Value Basis ReturnInterestearnedChange infair valueTotalincomeCash and Cash Equivalents 126.25 0.00 126.25Corporate Bonds 4,562.50 935.90 5,498.40Government Agencies 20,031.44 28,956.90 48,988.34Government Bonds 5,673.40 8,992.15 14,665.55Municipal/Provincial Bonds 6,580.97 0.00 6,580.97Total36,974.56 38,884.95 75,859.51Summary of Fair Value Basis Return for the PeriodTotal portfolioInterest earned36,974.56Total income on portfolio75,859.51Average daily total value *24,650,923.37Period return (%)0.31Weighted average final maturity in days746Change in fair value38,884.95YTD return (%)0.39* Total value equals market value and accrued interest5 RECAP OF SECURITIES HELDAs of May 31, 2018SAN RAFAELWeightedaveragefinalmaturity (days)Weightedaverageeffectiveduration (years)PercentofportfolioAmortizedcostHistoricalcostFair value Unrealizedgain (loss)Cash and Cash Equivalents 146,605.45 146,605.45 146,605.45 0.00 0.59 0.001Corporate Bonds 3,073,451.50 3,057,146.13 3,033,651.70(23,494.43) 260 12.35 0.70Government Agencies 15,728,410.14 15,707,846.53 15,522,559.10 (185,287.43) 483 63.18 1.29Government Bonds 4,491,687.51 4,493,510.61 4,437,961.05 (55,549.56) 577 18.04 1.54Municipal/Provincial Bonds 1,455,700.00 1,455,700.00 1,455,700.00 0.00 5,208 5.85 9.86Total24,895,854.60 24,860,808.72 24,596,477.30 (264,331.42)746 100.00 1.76Cash and Cash Equivalents 0.59Corporate Bonds 12.35Government Agencies 63.18Government Bonds 18.04Municipal/Provincial Bonds 5.85Portfolio diversification (%)6 MATURITY DISTRIBUTION OF SECURITIES HELDAs of May 31, 2018SAN RAFAELMaturityHistoric cost PercentUnder 90 days646,960.45 2.6090 to 179 days1,565,273.50 6.29180 days to 1 year4,793,263.03 19.251 to 2 years12,429,445.43 49.932 to 3 years4,005,212.19 16.093 to 4 years0.00 0.004 to 5 years0.00 0.00Over 5 years1,455,700.00 5.8524,895,854.60 100.00Maturity distribution7 SECURITIES HELDAs of May 31, 2018SAN RAFAELAmortized cost/Accretion(amortization)Fair value/Change in fairvalueInterestreceivedInterestearnedUnrealizedgain(loss)Coupon Maturity/Call dateHistorical cost/Accrued interestpurchasedCusip/DescriptionTotalaccruedinterest%PortcostPar value orsharesCash and Cash Equivalents0.000146,605.45 146,605.450.000.00 0.00 0.00 0.000.00 0.00Cash and Cash Equivalents0.59146,605.45146,605.45Total Cash and Cash Equivalents146,605.45 146,605.45 146,605.45 0.00 0.00 0.000.00 0.000.590.000.00146,605.45Corporate Bonds084670BX5 1.150 08/15/2018 500,355.00 500,036.72565.50(1,186.22) 0.00 495.14 1,693.060.00 (14.69)BERKSHIRE HATHAWAY INC1.15% 15AUG20182.01498,850.50500,000.0025468PDD5 1.500 09/17/2018 555,351.50 550,790.90(331.10)(2,136.20) 0.00 710.41 1,695.830.00 (221.75)WALT DISNEY COMPANY/THE1.5% 17SEP20182.23548,654.70550,000.0091159HHE3 1.950 11/15/2018 509,425.00 501,901.13(121.00)(2,984.13) 4,875.00 839.58 433.3310/15/20180.00 (345.66)US BANCORP 1.95%15NOV2018 (CALLABLE15OCT18)2.05498,917.00500,000.00713448CK2 2.250 01/07/2019 505,530.00 501,832.08(632.50)(2,708.58) 0.00 968.75 4,500.0012/07/20180.00 (253.28)PEPSICO INC 2.25% 07JAN2019(CALLABLE 07DEC18)2.03499,123.50500,000.0014912L6R7 1.350 05/18/2019 498,245.00 499,346.80799.00(5,330.30) 3,375.00 581.25 243.750.00 56.31CATERPILLAR FINL SERVICE1.35% 18MAY20192.00494,016.50500,000.0089236TCF0 2.150 03/12/2020 504,545.00 503,238.50631.00(9,149.00) 0.00 925.70 2,359.030.00 (151.33)TOYOTA MOTOR CREDIT CORP2.15% 12MAR20202.03494,089.50500,000.00Total Corporate Bonds3,073,451.50 3,057,146.13 3,033,651.70 (23,494.43) 8,250.00 4,520.830.00 (930.40)12.3510,925.00910.903,050,000.008 SECURITIES HELDAs of May 31, 2018SAN RAFAELAmortized cost/Accretion(amortization)Fair value/Change in fairvalueInterestreceivedInterestearnedUnrealizedgain(loss)Coupon Maturity/Call dateHistorical cost/Accrued interestpurchasedCusip/DescriptionTotalaccruedinterest%PortcostPar value orsharesGovernment Agencies3133EGFQ3 0.875 09/14/2018 500,497.00 500,063.97410.00(1,663.97) 0.00 376.73 935.760.00 (18.45)FEDERAL FARM CREDIT BANK0.875% 14SEP20182.01498,400.00500,000.003133EGM69 1.100 12/05/2018 1,247,248.75 1,249,294.061,475.00(6,181.56) 0.00 1,184.03 6,722.220.00 114.47FEDERAL FARM CREDIT BANK1.1% 05DEC20185.011,243,112.501,250,000.003135G0H63 1.375 01/28/2019 1,012,490.00 1,003,336.27862.00(8,662.27) 0.00 1,184.03 4,697.920.00 (420.54)FANNIE MAE 1.375%28JAN20194.07994,674.001,000,000.003133782M2 1.500 03/08/2019 1,014,124.28 1,004,217.56890.00(9,757.56) 0.00 1,291.66 3,458.330.00 (455.13)FEDERAL HOME LOAN BANK1.5% 08MAR20194.07994,460.001,000,000.003133X72S2 5.375 05/15/2019 515,625.00 514,413.44(1,080.00)131.56 13,437.50 2,090.27 1,194.44(12,541.67) (1,211.56)FEDERAL HOME LOAN BANK5.375% 15MAY20192.07514,545.00500,000.00313379EE5 1.625 06/14/2019 993,180.00 994,418.642,037.00(705.64) 0.00 1,399.30 7,538.190.00 447.70FEDERAL HOME LOAN BANK1.625% 14JUN20193.99993,713.001,000,000.003135G0L76 1.075 07/11/2019 599,100.00 599,642.321,350.00(7,478.32) 0.00 555.41 2,508.3307/11/20180.00 26.76FANNIE MAE 1.075%11JUL2019 (CALLABLE11JUL18)2.41592,164.00600,000.003133EGSC0 1.000 08/26/2019 1,000,610.00 1,000,250.982,880.00(15,800.98) 0.00 861.11 2,638.890.00 (16.88)FEDERAL FARM CREDIT BANK1% 26AUG20194.02984,450.001,000,000.00313380FB8 1.375 09/13/2019 1,011,510.00 1,004,999.181,850.00(17,389.18) 0.00 1,184.03 2,979.170.00 (323.93)FEDERAL HOME LOAN BANK1.375% 13SEP20194.06987,610.001,000,000.003134G3M49 1.500 09/26/2019 1,001,001.00 1,000,600.101,890.00(13,350.10) 0.00 1,291.66 2,708.330.00 (37.82)FREDDIE MAC 1.5% 26SEP2019CALLABLE4.02987,250.001,000,000.009 SECURITIES HELDAs of May 31, 2018SAN RAFAELAmortized cost/Accretion(amortization)Fair value/Change in fairvalueInterestreceivedInterestearnedUnrealizedgain(loss)Coupon Maturity/Call dateHistorical cost/Accrued interestpurchasedCusip/DescriptionTotalaccruedinterest%PortcostPar value orsharesGovernment Agencies3137EADM8 1.250 10/02/2019 993,010.00 995,186.892,111.00(9,644.89) 0.00 1,076.39 2,048.610.00 299.58FREDDIE MAC 1.25%02OCT20193.99985,542.001,000,000.003135G0R39 1.000 10/24/2019 589,095.11 591,358.391,448.40(2,613.79) 0.00 516.67 616.670.00 514.38FANNIE MAE 1% 24OCT20192.37588,744.60600,000.003130ABCH7 1.500 11/04/2019 750,030.00 750,018.061,282.50(9,558.06) 5,625.00 968.75 843.750.00 (1.05)FEDERAL HOME LOAN BANK1.5% 04NOV20193.01740,460.00750,000.003133ECEY6 1.450 02/11/2020 1,003,130.00 1,001,637.353,390.00(17,277.35) 0.00 1,248.62 4,430.560.00 (80.40)FEDERAL FARM CREDIT BANK1.45% 11FEB20204.03984,360.001,000,000.003134G3K58 1.500 03/19/2020 498,289.00 498,920.861,225.00(7,325.86) 0.00 645.83 1,500.000.00 49.89FREDDIE MAC 1.5%19MAR2020 CALLABLE2.00491,595.00500,000.00313383HU8 1.750 06/12/2020 996,870.00 997,498.732,006.00(12,279.73) 0.00 1,506.95 8,215.280.00 102.51FEDERAL HOME LOAN BANK1.75% 12JUN20204.00985,219.001,000,000.003133EHVX8 1.500 08/24/2020 999,190.00 999,387.361,970.00(22,577.36) 0.00 1,291.67 4,041.670.00 22.86FEDERAL FARM CREDIT BANK1.5% 24AUG20204.01976,810.001,000,000.003135G0RM7 1.630 10/30/2020 1,003,410.00 1,002,602.372,960.00(23,152.37) 0.00 1,358.33 1,358.330.00 (86.74)FANNIE MAE 1.63%30OCT2020 CALLABLE4.03979,450.001,000,000.00Total Government Agencies15,728,410.14 15,707,846.53 15,522,559.10 (185,287.43)19,062.50 20,031.44(12,541.67) (1,074.35)63.1858,436.4528,956.9015,700,000.00Government Bonds912828WL0 1.500 05/31/2019 501,230.47 500,550.39547.00(4,319.89) 3,750.00 638.74 0.000.00 (46.75)USA TREASURY 1.5%31MAY20192.01496,230.50500,000.0010 SECURITIES HELDAs of May 31, 2018SAN RAFAELAmortized cost/Accretion(amortization)Fair value/Change in fairvalueInterestreceivedInterestearnedUnrealizedgain(loss)Coupon Maturity/Call dateHistorical cost/Accrued interestpurchasedCusip/DescriptionTotalaccruedinterest%PortcostPar value orsharesGovernment Bonds912828WS5 1.625 06/30/2019 993,281.25 994,572.791,094.00(1,642.79) 0.00 1,391.58 6,778.320.00 425.93USA TREASURY 1.625%30JUN20193.99992,930.001,000,000.00912828TV2 1.250 10/31/2019 649,009.77 649,444.871,294.80(9,270.92) 0.00 684.44 684.440.00 33.22USA TREASURY 1.25%31OCT20192.61640,173.95650,000.00912828H52 1.250 01/31/2020 745,869.14 747,358.671,728.75(11,098.67) 0.00 802.84 3,107.740.00 134.23USA TREASURY 1.25%31JAN20203.00736,260.00750,000.00912828X96 1.500 05/15/2020 596,554.69 597,313.641,593.60(7,720.04) 4,500.00 764.23 391.300.00 116.48USA TREASURY 1.5%15MAY20202.40589,593.60600,000.00912828XM7 1.625 07/31/2020 1,005,742.19 1,004,270.252,734.00(21,497.25) 0.00 1,391.57 5,386.740.00 (167.14)USA TREASURY 1.625%31JUL20204.04982,773.001,000,000.00Total Government Bonds4,491,687.51 4,493,510.61 4,437,961.05 (55,549.56) 8,250.00 5,673.400.00 495.9718.0416,348.548,992.154,500,000.00Municipal/Provincial Bonds888599LS4 5.250 09/02/2032 1,455,700.00 1,455,700.000.000.00 0.00 6,580.97 18,893.770.00 0.00PT. SAN ASSESS DISTRICT5.25% 144A 02SEP2032SANRAF$015.851,455,700.001,455,700.00Total Municipal/Provincial Bonds1,455,700.00 1,455,700.00 1,455,700.00 0.00 0.00 6,580.970.00 0.005.8518,893.770.001,455,700.00Grand total24,895,854.60 24,860,808.7238,859.95(264,331.42) 35,562.50 36,806.6424,852,305.45(12,541.67) (1,508.78)100.00104,603.7624,596,477.3011 GASB 40 - DEPOSIT AND INVESTMENT RISK DISCLOSUREAs of May 31, 2018SAN RAFAELCusipS&PratingMoodyratingHistoricalcost% Portfoliohist costMarketvalue% Portfoliomkt valueEffectivedur (yrs)Description Coupon MaturitydateCall date Par value orsharesFederal Home Loan Banks3133782M2FEDERAL HOME LOAN 1.500 03/08/2019 AA+ Aaa 1,014,124.28 4.07 994,460.00 4.04 0.761,000,000.003133X72S2FEDERAL HOME LOAN 5.375 05/15/2019 AA+ Aaa 515,625.00 2.07 514,545.00 2.09 0.93500,000.00313379EE5FEDERAL HOME LOAN 1.625 06/14/2019 AA+ Aaa 993,180.00 3.99 993,713.00 4.04 1.011,000,000.00313380FB8FEDERAL HOME LOAN 1.375 09/13/2019 AA+ Aaa 1,011,510.00 4.06 987,610.00 4.02 1.261,000,000.003130ABCH7FEDERAL HOME LOAN 1.500 11/04/2019 AA+ Aaa 750,030.00 3.01 740,460.00 3.01 1.40750,000.00313383HU8FEDERAL HOME LOAN 1.750 06/12/2020 AA+ Aaa 996,870.00 4.00 985,219.00 4.01 1.971,000,000.00Issuer total5,250,000.00 5,281,339.28 21.21 5,216,007.00 21.21 1.24Federal Farm Credit Banks3133EGFQ3FEDERAL FARM CREDIT 0.875 09/14/2018 AA+ Aaa 500,497.00 2.01 498,400.00 2.03 0.29500,000.003133EGM69FEDERAL FARM CREDIT 1.100 12/05/2018 AA+ Aaa 1,247,248.75 5.01 1,243,112.50 5.05 0.511,250,000.003133EGSC0FEDERAL FARM CREDIT 1.000 08/26/2019 AA+ Aaa 1,000,610.00 4.02 984,450.00 4.00 1.221,000,000.003133ECEY6FEDERAL FARM CREDIT 1.450 02/11/2020 AA+ Aaa 1,003,130.00 4.03 984,360.00 4.00 1.661,000,000.003133EHVX8FEDERAL FARM CREDIT 1.500 08/24/2020 AA+ Aaa 999,190.00 4.01 976,810.00 3.97 2.171,000,000.00Issuer total4,750,000.00 4,750,675.75 19.08 4,687,132.50 19.06 1.23United States Treasury Note/Bond912828WL0USA TREASURY 1.5% 1.500 05/31/2019 AA+ Aaa 501,230.47 2.01 496,230.50 2.02 0.98500,000.00912828WS5USA TREASURY 1.625% 1.625 06/30/2019 AA+ Aaa 993,281.25 3.99 992,930.00 4.04 1.061,000,000.00912828TV2USA TREASURY 1.25% 1.250 10/31/2019 AA+ Aaa 649,009.77 2.61 640,173.95 2.60 1.39650,000.00912828H52USA TREASURY 1.25% 1.250 01/31/2020 AA+ Aaa 745,869.14 3.00 736,260.00 2.99 1.63750,000.00912828X96USA TREASURY 1.5% 1.500 05/15/2020 AA+ Aaa 596,554.69 2.40 589,593.60 2.40 1.91600,000.00912828XM7USA TREASURY 1.625% 1.625 07/31/2020 AA+ Aaa 1,005,742.19 4.04 982,773.00 4.00 2.101,000,000.00Issuer total4,500,000.00 4,491,687.51 18.04 4,437,961.05 18.04 1.5412 GASB 40 - DEPOSIT AND INVESTMENT RISK DISCLOSUREAs of May 31, 2018SAN RAFAELCusipS&PratingMoodyratingHistoricalcost% Portfoliohist costMarketvalue% Portfoliomkt valueEffectivedur (yrs)Description Coupon MaturitydateCall datePar value orsharesFederal National Mortgage Association3135G0H63FANNIE MAE 1.375% 1.375 01/28/2019AA+ Aaa1,012,490.00 4.07 994,674.00 4.04 0.651,000,000.003135G0L76FANNIE MAE 1.075% 1.075 07/11/2019 07/11/2018 AA+ Aaa599,100.00 2.41 592,164.00 2.41 1.09600,000.003135G0R39FANNIE MAE 1%1.000 10/24/2019AA+ Aaa589,095.11 2.37 588,744.60 2.39 1.38600,000.003135G0RM7FANNIE MAE 1.63%1.630 10/30/2020AA+ Aaa1,003,410.00 4.03 979,450.00 3.98 2.351,000,000.00Issuer total3,200,000.00 3,204,095.11 12.87 3,155,032.60 12.83 1.40Federal Home Loan Mortgage Corp3134G3M49FREDDIE MAC 1.5%1.500 09/26/2019AA+ Aaa1,001,001.00 4.02 987,250.00 4.01 1.301,000,000.003137EADM8FREDDIE MAC 1.25% 1.250 10/02/2019AA+ Aaa993,010.00 3.99 985,542.00 4.01 1.311,000,000.003134G3K58FREDDIE MAC 1.5%1.500 03/19/2020AA+ Aaa498,289.00 2.00 491,595.00 2.00 1.76500,000.00Issuer total2,500,000.00 2,492,300.00 10.01 2,464,387.00 10.02 1.40Pt. San Assess District888599LS4 PT. SAN ASSESS5.250 09/02/2032NR NR1,455,700.00 5.85 1,455,700.00 5.92 9.861,455,700.00Issuer total1,455,700.00 1,455,700.00 5.85 1,455,700.00 5.92 9.86Walt Disney Co/The25468PDD5WALT DISNEY1.500 09/17/2018A+ A2555,351.50 2.23 548,654.70 2.23 0.30550,000.00Issuer total550,000.00 555,351.50 2.23 548,654.70 2.23 0.30PepsiCo Inc713448CK2PEPSICO INC 2.25%2.250 01/07/2019 12/07/2018 A+ A1505,530.00 2.03 499,123.50 2.03 0.59500,000.00Issuer total500,000.00 505,530.00 2.03 499,123.50 2.03 0.59US Bancorp91159HHE3US BANCORP 1.95%1.950 11/15/2018 10/15/2018 A+ A1509,425.00 2.05 498,917.00 2.03 0.45500,000.00Issuer total500,000.00 509,425.00 2.05 498,917.00 2.03 0.4513 GASB 40 - DEPOSIT AND INVESTMENT RISK DISCLOSUREAs of May 31, 2018SAN RAFAELCusipS&PratingMoodyratingHistoricalcost% Portfoliohist costMarketvalue% Portfoliomkt valueEffectivedur (yrs)Description Coupon MaturitydateCall date Par value orsharesBerkshire Hathaway Inc084670BX5BERKSHIRE HATHAWAY 1.150 08/15/2018 AA Aa2 500,355.00 2.01 498,850.50 2.03 0.21500,000.00Issuer total500,000.00 500,355.00 2.01 498,850.50 2.03 0.21Toyota Motor Credit Corp89236TCF0TOYOTA MOTOR CREDIT 2.150 03/12/2020 AA- Aa3 504,545.00 2.03 494,089.50 2.01 1.73500,000.00Issuer total500,000.00 504,545.00 2.03 494,089.50 2.01 1.73Caterpillar Financial Services Corp14912L6R7CATERPILLAR FINL 1.350 05/18/2019 A A3 498,245.00 2.00 494,016.50 2.01 0.95500,000.00Issuer total500,000.00 498,245.00 2.00 494,016.50 2.01 0.95Cash and Cash EquivalentsINVESTED CASH 0.000146,605.45 0.59 146,605.45 0.60 0.00146,605.45Issuer total146,605.45 146,605.45 0.59 146,605.45 0.60 0.00Grand total24,852,305.45 24,895,854.60 100.00 24,596,477.30 100.001.7614 SECURITIES PURCHASEDFor the period May 1, 2018 - May 31, 2018SAN RAFAELPar value orsharesUnit cost Accruedinterest purchasedTrade dateSettle dateCoupon Maturity/Call datePrincipalcostCusip / Description / BrokerGovernment Agencies3133X72S25.37505/02/2018 05/15/2019 500,000.00 103.13 (515,625.00) (12,541.67)FEDERAL HOME LOAN BANK 5.375% 15MAY2019 05/03/2018MORGAN STANLEY AND CO., LLC500,000.00 (515,625.00) (12,541.67)Total Government AgenciesGrand totalGrand total500,000.00 (515,625.00) (12,541.67)15 SECURITIES SOLD AND MATUREDFor the period May 1, 2018 - May 31, 2018SAN RAFAELHistorical cost Amortized costat sale or maturity/Accr (amort)Fair value atsale or maturity /Chg.in fair valueRealizedgain(loss)PriceCouponTrade dateSettle dateMaturity/Call datePar value orsharesCusip/Description/BrokerAccruedinterestsoldInterestreceivedInterestearnedCorporate Bonds037833AJ9APPLE INC 1% DUE05-03-20181.00005/03/2018 (500,000.00) 498,090.00 500,000.007.110.0025.00500,000.00 0.00 0.00 2,500.00 41.6705/03/2018(500,000.00)0.00498,090.007.11500,000.0025.00500,000.00 0.00 2,500.00 41.67Total (Corporate Bonds)Grand totalGrand total(500,000.00)0.00498,090.007.11500,000.00 500,000.00 0.00 2,500.00 41.6725.0016 TRANSACTION REPORTFor the period May 1, 2018 - May 31, 2018SAN RAFAELMaturity Par value orsharesInterest Transaction totalPrincipalTransactionCusip Sec type DescriptionTrade dateSettle dateRealizedgain(loss)(12,541.67)05/02/201805/03/2018Bought3133X72S2 Government Agencies FEDERAL HOME LOAN BANK 05/15/2019 500,000.00 (515,625.00) (528,166.67)0.002,500.0005/03/201805/03/2018Income037833AJ9 Corporate Bonds APPLE INC 1% DUE 05-03-201805/03/2018 500,000.00 0.00 2,500.000.000.0005/03/201805/03/2018Capital Change037833AJ9 Corporate Bonds APPLE INC 1% DUE 05-03-201805/03/2018 (500,000.00) 500,000.00 500,000.000.005,625.0005/04/201805/04/2018Income3130ABCH7 Government Agencies FEDERAL HOME LOAN BANK 11/04/2019 750,000.00 0.00 5,625.000.0013,437.5005/15/201805/15/2018Income3133X72S2 Government Agencies FEDERAL HOME LOAN BANK 05/15/2019 500,000.00 0.00 13,437.500.004,875.0005/15/201805/15/2018Income91159HHE3 Corporate Bonds US BANCORP 1.95% 11/15/2018 500,000.00 0.00 4,875.000.004,500.0005/15/201805/15/2018Income912828X96 Government Bonds USA TREASURY 1.5% 05/15/2020 600,000.00 0.00 4,500.000.003,375.0005/18/201805/18/2018Income14912L6R7 Corporate Bonds CATERPILLAR FINL SERVICE 05/18/2019 500,000.00 0.00 3,375.000.003,750.0005/31/201805/31/2018Income912828WL0 Government Bonds USA TREASURY 1.5% 05/31/2019 500,000.00 0.00 3,750.000.00126.25Income Cash and Cash Equivalents Cash126.250.00 0.000.0005/31/201817 ADDITIONAL INFORMATIONAs of May 31, 2018SAN RAFAELPast performance is not a guide to future performance. The value of investments and any income from them will fluctuate and is not guaranteed (this may partly be due to exchange rate changes) and investors may not getback the amount invested. Transactions in foreign securities may be executed and settled in local markets. Performance comparisons will be affected by changes in interest rates. Investment returns fluctuate due to changesin market conditions. Investment involves risk, including the possible loss of principal. No assurance can be given that the performance objectives of a given strategy will be achieved. The information contained herein is foryour reference only and is being provided in response to your specific request and has been obtained from sources believed to be reliable; however, no representation is made regarding its accuracy or completeness. Thisdocument must not be used for the purpose of an offer or solicitation in any jurisdiction or in any circumstances in which such offer or solicitation is unlawful or otherwise not permitted. This document should not beduplicated, amended, or forwarded to a third party without consent from Insight. This is a marketing document intended for professional clients only and should not be made available to or relied upon by retail clientsInvestment advisory services in North America are provided through four different SEC-registered investment advisers using the brand Insight Investment: Cutwater Asset Management Corp. (CAMC), Cutwater InvestorServices Corp. (CISC), Insight North America LLC (INA) and Insight Investment International Limited (IIIL). The North American investment advisers are associated with a broader group of global investment managers that also(individually and collectively) use the corporate brand Insight Investment and may be referred to as Insight, Insight Group or Insight Investment.Both CISC and CAMC are investment advisers registered with the Securities and Exchange Commission (SEC), under the Investment Advisers Act of 1940, as amended. Registration with the SEC does not imply a certain level ofskill or training. You may request, without charge, additional information about Insight. Moreover, specific information relating to Insights strategies, including investment advisory fees, may be obtained from CAMCs andCISCs Forms ADV Part 2A, which are available without charge upon request.Where indicated, performance numbers used in the analysis are gross returns. The performance reflects the reinvestment of all dividends and income. CAMC and CISC charge management fees on all portfolios managed andthese fees will reduce the returns on the portfolios. For example, assume that $30 million is invested in an account with either CAMC or CISC, and this account achieves a 5.0% annual return compounded monthly, gross of fees,for a period of five years. At the end of five years that account would have grown to $38,500,760 before the deduction of management fees. Assuming management fees of 0.25% per year are deducted monthly from theaccount, the value at the end of the five year period would be $38,022,447. Actual fees for new accounts are dependent on size and subject to negotiation. CAMCS and CISC's investment advisory fees are discussed in Part 2Aof the Firms Form ADV.Unless otherwise stated, the source of information is Insight. Any forecasts or opinions are Insights own at the date of this document (or as otherwise specified) and may change. Material in this publication is for generalinformation only and is not advice, investment advice, or the recommendation of any purchase or sale of any security. Insight makes no implied or expressed recommendations concerning the manner in which an accountshould or would be handled, as appropriate investment strategies depend upon specific investment guidelines and objectives and should not be construed to be an assurance that any particular security in a strategy willremain in any fund, account, or strategy, or that a previously held security will not be repurchased. It should not be assumed that any of the security transactions or holdings referenced herein have been or will prove to beprofitable or that future investment decisions will be profitable or will equal or exceed the past investment performance of the securities listed.For trading activity the Clearing broker will be reflected. In certain cases the Clearing broker will differ from the Executing broker.In calculating ratings distributions and weighted average portfolio quality, Insight assigns U.S Treasury and U.S agency securities a quality rating based on the methodology used within the respective benchmark index. WhenMoodys, S&P and Fitch rate a security, Bank of America and Merrill Lynch indexes assign a simple weighted average statistic while Barclays indexes assign the median statistic. Insight assigns all other securities the lower ofMoodys and S&P ratings.Information about the indices shown here is provided to allow for comparison of the performance of the strategy to that of certain well-known and widely recognized indices. There is no representation that such index is anappropriate benchmark for such comparison. You cannot invest directly in an index and the indices represented do not take into account trading commissions and/or other brokerage or custodial costs. The volatility of theindices may be materially different from that of the strategy. In addition, the strategys holdings may differ substantially from the securities that comprise the indices shown.The BofA Merrill Lynch 3 Mo US T-Bill index is an unmanaged market index of U.S. Treasury securities maturing in 90 days that assumes reinvestment of all income.The BofA Merrill Lynch 6 Mo US T-Bill index measures the performance of Treasury bills with time to maturity of less than 6 months.The BofA Merrill Lynch Current 1-Year US Treasury Index is a one-security index comprised of the most recently issued 1-year US Treasury note. The index is rebalanced monthly. In order to qualify for inclusion, a 1-year notemust be auctioned on or before the third business day before the last business day of the month.The BofA Merrill Lynch Current 3-Year US Treasury Index is a one-security index comprised of the most recently issued 3-year US Treasury note. The index is rebalanced monthly. In order to qualify for inclusion, a 3-year notemust be auctioned on or before the third business day before the last business day of the month.The BofA Merrill Lynch Current 5-Year US Treasury Index is a one-security index comprised of the most recently issued 5-year US Treasury note. The index is rebalanced monthly. In order to qualify for inclusion, a 5-year notemust be auctioned on or before the third business day before the last business day of the month.The BofA Merrill Lynch 1-3 US Year Treasury Index is an unmanaged index that tracks the performance of the direct sovereign debt of the U.S. Government having a maturity of at least one year and less than three years.The BofA Merrill Lynch 1-5 US Year Treasury Index is an unmanaged index that tracks the performance of the direct sovereign debt of the U.S. Government having a maturity of at least one year and less than five years.Insight does not provide tax or legal advice to its clients and all investors are strongly urged to consult their tax and legal advisors regarding any potential strategy or investment.18 ADDITIONAL INFORMATIONAs of May 31, 2018SAN RAFAELInsight is a group of wholly owned subsidiaries of The Bank of New York Mellon Corporation. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation and may also be used as a generic term to referencethe Corporation as a whole or its various subsidiaries generally. Products and services may be provided under various brand names and in various countries by subsidiaries, affiliates and joint ventures of The Bank of New YorkMellon Corporation where authorized and regulated as required within each jurisdiction. Unless you are notified to the contrary, the products and services mentioned are not insured by the FDIC (or by any governmental entity)and are not guaranteed by or obligations of The Bank of New York Mellon Corporation or any of its affiliates. The Bank of New York Corporation assumes no responsibility for the accuracy or completeness of the above data anddisclaims all expressed or implied warranties in connection therewith.© 2018 Insight Investment. All rights reserved.19 SAN RAFAELJune 2018FOR PROFESSIONAL CLIENTS ONLYNOT TO BE DISTRIBUTED TO RETAIL CLIENTSTHIS DOCUMENT SHOULD NOT BE REPRODUCED INANY FORM WITHOUT PRIOR WRITTEN APPROVAL ContentsFixed income market review 3Activity and performance summary 4Recap of securities held6Maturity distribution of securities held 7Securities held8GASB 40 - Deposit and investment risk disclosure 12Transaction report15Additional information16 FIXED INCOME MARKET REVIEWAs of June 30, 2018SAN RAFAELChart 1: Fed funds target rate: 6/30/2007—6/30/2018Source: BloombergFinance LP, June 30, 2018.Chart 2: Treasury yield curve: 6/30/2017 and 6/30/2018Source: Bloomberg Finance LP, June 30, 2018.Economic Indicators and Monetary PolicyOn June 13, the Federal Open Market Committee (FOMC) met and unanimouslyagreed to increase the federal funds target range by 25 basispoints to 1.75% to 2%.(See Chart 1). The FOMC statement noted a strengthening labor market and solideconomic activity since the May meeting. The statement alsoreflected that the FOMCexpects further gradual increases in the target rate will beconsistent with continuedeconomic expansion, strong labor market conditions and inflation near the FOMC’s 2%symmetrical target over the medium-term. Forward guidancefrom the FOMCmeeting revealed that the median forecast for the upper range of the federal fundstarget rate at year-end 2018 is 2.375%, indicating that one-to-two additional rateincreases areexpectedthis year as of the June meeting.The employment report released on June 1 showed an increase of 223,000 jobs inMay, better than expectations for 190,000 jobs added. The unemployment ratedecreased 0.1% to 3.8% and the underemployment rate fell 0.2% to 7.6% in May.Average hourly earnings increased 0.1% to 2.7% annual growth, better thanexpectationsfor2.6% growth.At the start of June, the Institute for Supply Management (ISM) Manufacturing andNon-Manufacturing Indices both pushed higher for May readings of 58.7% and 58.6%respectively. The final estimate for first quarter Gross Domestic Product (GDP) wasreleased on June 28 showing 2% growth, revised down from the second estimate of2.2% and an original estimate of 2.3% growth. Personal consumption was reviseddownward to 0.9% growth and inventories and net exports subtracted from the finalestimateof first quarterGDP.The Consumer Price Index (CPI) data released on June 12 showed 0.2% increases inthe headline and core readings, in line with expectations. On an annual basis, theheadline CPI was 2.8% for May and factoring out food and energy, the core level was2.2%.Interest Rate SummaryAt the end of June, the 3-month US Treasury bill yielded 1.92%, the 6-month USTreasury bill yielded 2.11%, the 2-year US Treasury note yielded 2.53%, the 5-year USTreasury note yielded 2.74% and the 10-year US Treasury noteyielded 2.86%. (SeeChart2).0.00%1.00%2.00%3.00%4.00%5.00%6.00%Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 Jun-16 Jun-17 Jun-18Percentage0.00%0.50%1.00%1.50%2.00%2.50%3.00%3 m 6 m 1 yr 2 yr 3 yr 4 yr 5 yr 6 yr 7 yr 8 yr 9 yr 10 yrPercentage6/30/20186/30/20173 ACTIVITY AND PERFORMANCE SUMMARYFor the period June 1, 2018 - June 30, 2018SAN RAFAELAmortized Cost Basis Activity Summary24,860,808.72Opening balance23,895.98Income received23,895.98Total receipts(144.63)Expenses paid(144.63)Total disbursements0.00Interportfolio transfers0.00Total Interportfolio transfers0.00Realized gain (loss)(3,893.97)Total amortization expense2,321.42Total OID/MKT accretion income0.00Return of capitalClosing balance24,882,987.52Ending fair value24,610,026.50(272,961.02)Unrealized gain (loss)Comparative Rates of Return (%)* Twelvemonth trailing* Sixmonth trailing* One monthFed Funds1.38 0.79 0.15Overnight Repo1.38 0.80 0.15Merrill Lynch 3m US Treas Bill 1.38 0.83 0.15Merrill Lynch 6m US Treas Bill 1.51 0.90 0.17ML 1 Year US Treasury Note 1.74 1.03 0.19ML 2 Year US Treasury Note 1.95 1.14 0.21ML 5 Year US Treasury Note 2.29 1.31 0.23* rates reflected are cumulativeSummary of Amortized Cost Basis Return for the PeriodTotal portfolioInterest earned35,048.95Accretion (amortization)(1,572.55)Realized gain (loss) on sales0.00Total income on portfolio33,476.40Average daily amortized cost24,876,237.01Period return (%)Weighted average final maturity in days716YTD return (%)Detail of Amortized Cost Basis ReturnInterestearnedRealizedgain (loss)Accretion(amortization)Totalincome0.00Cash and Cash Equivalents 145.98 0.00 145.980.00Corporate Bonds 4,229.17 (930.41) 3,298.760.00Government Agencies 19,036.28 (1,122.12) 17,914.160.00Government Bonds 5,481.12 479.98 5,961.100.00Municipal/Provincial Bonds 6,156.40 0.00 6,156.40Total 35,048.95 (1,572.55) 0.00 33,476.400.130.834 ACTIVITY AND PERFORMANCE SUMMARYFor the period June 1, 2018 - June 30, 2018SAN RAFAELFair Value Basis Activity Summary24,596,477.30Opening balance23,895.98Income received23,895.98Total receipts(144.63)Expenses paid(144.63)Total disbursements0.00Interportfolio transfers0.00Total Interportfolio transfers0.00Unrealized gain (loss) on security movements0.00Return of capitalChange in fair value for the period(10,202.15)Ending fair value24,610,026.50Comparative Rates of Return (%)* Twelvemonth trailing* Sixmonth trailing* One monthFed Funds1.38 0.79 0.15Overnight Repo1.38 0.80 0.15ICE ML 3m US Treas Bill 1.36 0.81 0.17ICE ML 6m US Treas Bill 1.39 0.80 0.16ICE ML 1 Year US Treasury Note 0.92 0.65 0.12ICE ML US Treasury 1-3 0.08 0.09 0.02ICE ML US Treasury 1-5 (0.35) (0.25) (0.01)* rates reflected are cumulativeDetail of Fair Value Basis ReturnInterestearnedChange infair valueTotalincomeCash and Cash Equivalents 145.98 0.00 145.98Corporate Bonds 4,229.17 874.25 5,103.42Government Agencies 19,036.28 (7,472.30) 11,563.98Government Bonds 5,481.12 (3,604.10) 1,877.02Municipal/Provincial Bonds 6,156.40 0.00 6,156.40Total35,048.95 (10,202.15) 24,846.80Summary of Fair Value Basis Return for the PeriodTotal portfolioInterest earned35,048.95Total income on portfolio24,846.80Average daily total value *24,699,280.61Period return (%)0.10Weighted average final maturity in days716Change in fair value(10,202.15)YTD return (%)0.50* Total value equals market value and accrued interest5 RECAP OF SECURITIES HELDAs of June 30, 2018SAN RAFAELWeightedaveragefinalmaturity (days)Weightedaverageeffectiveduration (years)PercentofportfolioAmortizedcostHistoricalcostFair value Unrealizedgain (loss)Cash and Cash Equivalents 170,356.80 170,356.80 170,356.80 0.00 0.68 0.001Corporate Bonds 3,073,451.50 3,056,215.72 3,034,525.95(21,689.77) 231 12.33 0.62Government Agencies 15,728,410.14 15,706,724.41 15,515,086.80 (191,637.61) 454 63.12 1.21Government Bonds 4,491,687.51 4,493,990.59 4,434,356.95 (59,633.64) 548 18.02 1.46Municipal/Provincial Bonds 1,455,700.00 1,455,700.00 1,455,700.00 0.00 5,179 5.84 9.77Total24,919,605.95 24,882,987.52 24,610,026.50 (272,961.02)716 100.00 1.68Cash and Cash Equivalents 0.68Corporate Bonds 12.33Government Agencies 63.12Government Bonds 18.02Municipal/Provincial Bonds 5.84Portfolio diversification (%)6 MATURITY DISTRIBUTION OF SECURITIES HELDAs of June 30, 2018SAN RAFAELMaturityHistoric cost PercentUnder 90 days1,726,560.30 6.9390 to 179 days1,756,673.75 7.05180 days to 1 year5,040,424.75 20.231 to 2 years11,931,904.96 47.882 to 3 years3,008,342.19 12.073 to 4 years0.00 0.004 to 5 years0.00 0.00Over 5 years1,455,700.00 5.8424,919,605.95 100.00Maturity distribution7 SECURITIES HELDAs of June 30, 2018SAN RAFAELAmortized cost/Accretion(amortization)Fair value/Change in fairvalueInterestreceivedInterestearnedUnrealizedgain(loss)Coupon Maturity/Call dateHistorical cost/Accrued interestpurchasedCusip/DescriptionTotalaccruedinterest%PortcostPar value orsharesCash and Cash Equivalents0.000170,356.80 170,356.800.000.00 0.00 0.00 0.000.00 0.00Cash and Cash Equivalents0.68170,356.80170,356.80Total Cash and Cash Equivalents170,356.80 170,356.80 170,356.80 0.00 0.00 0.000.00 0.000.680.000.00170,356.80Corporate Bonds084670BX5 1.150 08/15/2018 500,355.00 500,022.03478.50(693.03) 0.00 463.19 2,156.250.00 (14.69)BERKSHIRE HATHAWAY INC1.15% 15AUG20182.01499,329.00500,000.0025468PDD5 1.500 09/17/2018 555,351.50 550,569.15206.25(1,708.20) 0.00 664.59 2,360.420.00 (221.75)WALT DISNEY COMPANY/THE1.5% 17SEP20182.23548,860.95550,000.0091159HHE3 1.950 11/15/2018 509,425.00 501,555.4723.00(2,615.47) 0.00 785.42 1,218.7510/15/20180.00 (345.66)US BANCORP 1.95%15NOV2018 (CALLABLE15OCT18)2.04498,940.00500,000.00713448CK2 2.250 01/07/2019 505,530.00 501,578.7967.50(2,387.79) 0.00 906.25 5,406.2512/07/20180.00 (253.29)PEPSICO INC 2.25% 07JAN2019(CALLABLE 07DEC18)2.03499,191.00500,000.0014912L6R7 1.350 05/18/2019 498,245.00 499,403.11208.50(5,178.11) 0.00 543.75 787.500.00 56.31CATERPILLAR FINL SERVICE1.35% 18MAY20192.00494,225.00500,000.0089236TCF0 2.150 03/12/2020 504,545.00 503,087.17(109.50)(9,107.17) 0.00 865.97 3,225.000.00 (151.33)TOYOTA MOTOR CREDIT CORP2.15% 12MAR20202.02493,980.00500,000.00Total Corporate Bonds3,073,451.50 3,056,215.72 3,034,525.95 (21,689.77) 0.004,229.170.00 (930.41)12.3315,154.17874.253,050,000.008 SECURITIES HELDAs of June 30, 2018SAN RAFAELAmortized cost/Accretion(amortization)Fair value/Change in fairvalueInterestreceivedInterestearnedUnrealizedgain(loss)Coupon Maturity/Call dateHistorical cost/Accrued interestpurchasedCusip/DescriptionTotalaccruedinterest%PortcostPar value orsharesGovernment Agencies3133EGFQ3 0.875 09/14/2018 500,497.00 500,045.52505.00(1,140.52) 0.00 352.43 1,288.190.00 (18.45)FEDERAL FARM CREDIT BANK0.875% 14SEP20182.01498,905.00500,000.003133EGM69 1.100 12/05/2018 1,247,248.75 1,249,408.541,050.00(5,246.04) 6,875.00 1,107.64 954.860.00 114.48FEDERAL FARM CREDIT BANK1.1% 05DEC20185.011,244,162.501,250,000.003135G0H63 1.375 01/28/2019 1,012,490.00 1,002,915.74395.00(7,846.74) 0.00 1,107.64 5,805.560.00 (420.53)FANNIE MAE 1.375%28JAN20194.06995,069.001,000,000.003133782M2 1.500 03/08/2019 1,014,124.28 1,003,762.43490.00(8,812.43) 0.00 1,208.34 4,666.670.00 (455.13)FEDERAL HOME LOAN BANK1.5% 08MAR20194.07994,950.001,000,000.003133X72S2 5.375 05/15/2019 515,625.00 513,160.09(1,650.00)(265.09) 0.00 2,164.94 3,359.380.00 (1,253.35)FEDERAL HOME LOAN BANK5.375% 15MAY20192.07512,895.00500,000.00313379EE5 1.625 06/14/2019 993,180.00 994,866.35(971.00)(2,124.35) 8,125.00 1,309.03 722.220.00 447.71FEDERAL HOME LOAN BANK1.625% 14JUN20193.99992,742.001,000,000.003135G0L76 1.075 07/11/2019 599,100.00 599,669.08(84.00)(7,589.08) 0.00 519.59 3,027.9207/11/20180.00 26.76FANNIE MAE 1.075%11JUL2019 (CALLABLE11OCT18)2.40592,080.00600,000.003133EGSC0 1.000 08/26/2019 1,000,610.00 1,000,234.10(390.00)(16,174.10) 0.00 805.55 3,444.440.00 (16.88)FEDERAL FARM CREDIT BANK1% 26AUG20194.02984,060.001,000,000.00313380FB8 1.375 09/13/2019 1,011,510.00 1,004,675.26420.00(16,645.26) 0.00 1,107.64 4,086.810.00 (323.92)FEDERAL HOME LOAN BANK1.375% 13SEP20194.06988,030.001,000,000.003134G3M49 1.500 09/26/2019 1,001,001.00 1,000,562.27(800.00)(14,112.27) 0.00 1,208.34 3,916.670.00 (37.83)FREDDIE MAC 1.5% 26SEP2019CALLABLE4.02986,450.001,000,000.009 SECURITIES HELDAs of June 30, 2018SAN RAFAELAmortized cost/Accretion(amortization)Fair value/Change in fairvalueInterestreceivedInterestearnedUnrealizedgain(loss)Coupon Maturity/Call dateHistorical cost/Accrued interestpurchasedCusip/DescriptionTotalaccruedinterest%PortcostPar value orsharesGovernment Agencies3137EADM8 1.250 10/02/2019 993,010.00 995,486.46(736.00)(10,680.46) 0.00 1,006.95 3,055.560.00 299.57FREDDIE MAC 1.25%02OCT20193.98984,806.001,000,000.003135G0R39 1.000 10/24/2019 589,095.11 591,872.77(166.80)(3,294.97) 0.00 483.33 1,100.000.00 514.38FANNIE MAE 1% 24OCT20192.36588,577.80600,000.003130ABCH7 1.500 11/04/2019 750,030.00 750,017.00(292.50)(9,849.50) 0.00 906.25 1,750.000.00 (1.06)FEDERAL HOME LOAN BANK1.5% 04NOV20193.01740,167.50750,000.003133ECEY6 1.450 02/11/2020 1,003,130.00 1,001,556.96(1,380.00)(18,576.96) 0.00 1,168.05 5,598.610.00 (80.39)FEDERAL FARM CREDIT BANK1.45% 11FEB20204.03982,980.001,000,000.003134G3K58 1.500 03/19/2020 498,289.00 498,970.74(680.00)(8,055.74) 0.00 604.17 2,104.170.00 49.88FREDDIE MAC 1.5%19MAR2020 CALLABLE2.00490,915.00500,000.00313383HU8 1.750 06/12/2020 996,870.00 997,601.24(1,492.00)(13,874.24) 8,750.00 1,409.72 875.000.00 102.51FEDERAL HOME LOAN BANK1.75% 12JUN20204.00983,727.001,000,000.003133EHVX8 1.500 08/24/2020 999,190.00 999,410.22(110.00)(22,710.22) 0.00 1,208.33 5,250.000.00 22.86FEDERAL FARM CREDIT BANK1.5% 24AUG20204.01976,700.001,000,000.003135G0RM7 1.630 10/30/2020 1,003,410.00 1,002,509.64(1,580.00)(24,639.64) 0.00 1,358.34 2,716.670.00 (92.73)FANNIE MAE 1.63%30OCT2020 CALLABLE4.03977,870.001,000,000.00Total Government Agencies15,728,410.14 15,706,724.41 15,515,086.80 (191,637.61)23,750.00 19,036.280.00 (1,122.12)63.1253,722.73(7,472.30)15,700,000.00Government Bonds912828WL0 1.500 05/31/2019 501,230.47 500,505.160.00(4,274.66) 0.00 614.75 614.750.00 (45.23)USA TREASURY 1.5%31MAY20192.01496,230.50500,000.0010 SECURITIES HELDAs of June 30, 2018SAN RAFAELAmortized cost/Accretion(amortization)Fair value/Change in fairvalueInterestreceivedInterestearnedUnrealizedgain(loss)Coupon Maturity/Call dateHistorical cost/Accrued interestpurchasedCusip/DescriptionTotalaccruedinterest%PortcostPar value orsharesGovernment Bonds912828WS5 1.625 06/30/2019 993,281.25 994,984.98(235.00)(2,289.98) 0.00 1,346.68 8,125.000.00 412.19USA TREASURY 1.625%30JUN20193.99992,695.001,000,000.00912828TV2 1.250 10/31/2019 649,009.77 649,477.02(355.55)(9,658.62) 0.00 662.37 1,346.810.00 32.15USA TREASURY 1.25%31OCT20192.60639,818.40650,000.00912828H52 1.250 01/31/2020 745,869.14 747,488.58(615.75)(11,844.33) 0.00 776.93 3,884.670.00 129.91USA TREASURY 1.25%31JAN20202.99735,644.25750,000.00912828X96 1.500 05/15/2020 596,554.69 597,426.35(796.80)(8,629.55) 0.00 733.70 1,125.000.00 112.71USA TREASURY 1.5%15MAY20202.39588,796.80600,000.00912828XM7 1.625 07/31/2020 1,005,742.19 1,004,108.50(1,601.00)(22,936.50) 0.00 1,346.69 6,733.430.00 (161.75)USA TREASURY 1.625%31JUL20204.04981,172.001,000,000.00Total Government Bonds4,491,687.51 4,493,990.59 4,434,356.95 (59,633.64) 0.005,481.120.00 479.9818.0221,829.66(3,604.10)4,500,000.00Municipal/Provincial Bonds888599LS4 5.250 09/02/2032 1,455,700.00 1,455,700.000.000.00 0.00 6,156.40 25,050.170.00 0.00PT. SAN ASSESS DISTRICT5.25% 144A 02SEP2032SANRAF$015.841,455,700.001,455,700.00Total Municipal/Provincial Bonds1,455,700.00 1,455,700.00 1,455,700.00 0.00 0.00 6,156.400.00 0.005.8425,050.170.001,455,700.00Grand total24,919,605.95 24,882,987.52(10,202.15)(272,961.02) 23,750.00 34,902.9724,876,056.800.00 (1,572.55)100.00115,756.7324,610,026.5011 GASB 40 - DEPOSIT AND INVESTMENT RISK DISCLOSUREAs of June 30, 2018SAN RAFAELCusipS&PratingMoodyratingHistoricalcost% Portfoliohist costMarketvalue% Portfoliomkt valueEffectivedur (yrs)Description Coupon MaturitydateCall date Par value orsharesFederal Home Loan Banks3133782M2FEDERAL HOME LOAN 1.500 03/08/2019 AA+ Aaa 1,014,124.28 4.07 994,950.00 4.04 0.681,000,000.003133X72S2FEDERAL HOME LOAN 5.375 05/15/2019 AA+ Aaa 515,625.00 2.07 512,895.00 2.08 0.85500,000.00313379EE5FEDERAL HOME LOAN 1.625 06/14/2019 AA+ Aaa 993,180.00 3.99 992,742.00 4.03 0.941,000,000.00313380FB8FEDERAL HOME LOAN 1.375 09/13/2019 AA+ Aaa 1,011,510.00 4.06 988,030.00 4.01 1.181,000,000.003130ABCH7FEDERAL HOME LOAN 1.500 11/04/2019 AA+ Aaa 750,030.00 3.01 740,167.50 3.01 1.32750,000.00313383HU8FEDERAL HOME LOAN 1.750 06/12/2020 AA+ Aaa 996,870.00 4.00 983,727.00 4.00 1.901,000,000.00Issuer total5,250,000.00 5,281,339.28 21.19 5,212,511.50 21.18 1.16Federal Farm Credit Banks3133EGFQ3FEDERAL FARM CREDIT 0.875 09/14/2018 AA+ Aaa 500,497.00 2.01 498,905.00 2.03 0.21500,000.003133EGM69FEDERAL FARM CREDIT 1.100 12/05/2018 AA+ Aaa 1,247,248.75 5.01 1,244,162.50 5.06 0.431,250,000.003133EGSC0FEDERAL FARM CREDIT 1.000 08/26/2019 AA+ Aaa 1,000,610.00 4.02 984,060.00 4.00 1.141,000,000.003133ECEY6FEDERAL FARM CREDIT 1.450 02/11/2020 AA+ Aaa 1,003,130.00 4.03 982,980.00 3.99 1.581,000,000.003133EHVX8FEDERAL FARM CREDIT 1.500 08/24/2020 AA+ Aaa 999,190.00 4.01 976,700.00 3.97 2.091,000,000.00Issuer total4,750,000.00 4,750,675.75 19.06 4,686,807.50 19.04 1.15United States Treasury Note/Bond912828WL0USA TREASURY 1.5% 1.500 05/31/2019 AA+ Aaa 501,230.47 2.01 496,230.50 2.02 0.91500,000.00912828WS5USA TREASURY 1.625% 1.625 06/30/2019 AA+ Aaa 993,281.25 3.99 992,695.00 4.03 0.981,000,000.00912828TV2USA TREASURY 1.25% 1.250 10/31/2019 AA+ Aaa 649,009.77 2.60 639,818.40 2.60 1.31650,000.00912828H52USA TREASURY 1.25% 1.250 01/31/2020 AA+ Aaa 745,869.14 2.99 735,644.25 2.99 1.55750,000.00912828X96USA TREASURY 1.5% 1.500 05/15/2020 AA+ Aaa 596,554.69 2.39 588,796.80 2.39 1.83600,000.00912828XM7USA TREASURY 1.625% 1.625 07/31/2020 AA+ Aaa 1,005,742.19 4.04 981,172.00 3.99 2.021,000,000.00Issuer total4,500,000.00 4,491,687.51 18.02 4,434,356.95 18.02 1.4612 GASB 40 - DEPOSIT AND INVESTMENT RISK DISCLOSUREAs of June 30, 2018SAN RAFAELCusipS&PratingMoodyratingHistoricalcost% Portfoliohist costMarketvalue% Portfoliomkt valueEffectivedur (yrs)DescriptionCoupon MaturitydateCall datePar value orsharesFederal National Mortgage Association3135G0H63FANNIE MAE 1.375% 1.375 01/28/2019AA+ Aaa1,012,490.00 4.06 995,069.00 4.04 0.571,000,000.003135G0L76FANNIE MAE 1.075% 1.075 07/11/2019 07/11/2018 AA+ Aaa599,100.00 2.40 592,080.00 2.41 1.00600,000.003135G0R39FANNIE MAE 1%1.000 10/24/2019AA+ Aaa589,095.11 2.36 588,577.80 2.39 1.29600,000.003135G0RM7FANNIE MAE 1.63%1.630 10/30/2020AA+ Aaa1,003,410.00 4.03 977,870.00 3.97 2.271,000,000.00Issuer total3,200,000.00 3,204,095.11 12.86 3,153,596.80 12.81 1.32Federal Home Loan Mortgage Corp3134G3M49FREDDIE MAC 1.5%1.500 09/26/2019AA+ Aaa1,001,001.00 4.02 986,450.00 4.01 1.221,000,000.003137EADM8FREDDIE MAC 1.25% 1.250 10/02/2019AA+ Aaa993,010.00 3.98 984,806.00 4.00 1.231,000,000.003134G3K58FREDDIE MAC 1.5%1.500 03/19/2020AA+ Aaa498,289.00 2.00 490,915.00 1.99 1.68500,000.00Issuer total2,500,000.00 2,492,300.00 10.00 2,462,171.00 10.00 1.32Pt. San Assess District888599LS4PT. SAN ASSESS5.250 09/02/2032NR NR1,455,700.00 5.84 1,455,700.00 5.92 9.771,455,700.00Issuer total1,455,700.00 1,455,700.00 5.84 1,455,700.00 5.92 9.77Walt Disney Co/The25468PDD5WALT DISNEY1.500 09/17/2018A+ A2555,351.50 2.23 548,860.95 2.23 0.22550,000.00Issuer total550,000.00 555,351.50 2.23 548,860.95 2.23 0.22Berkshire Hathaway Inc084670BX5BERKSHIRE HATHAWAY 1.150 08/15/2018AA Aa2500,355.00 2.01 499,329.00 2.03 0.13500,000.00Issuer total500,000.00 500,355.00 2.01 499,329.00 2.03 0.13PepsiCo Inc713448CK2PEPSICO INC 2.25%2.250 01/07/2019 12/07/2018 A+ A1505,530.00 2.03 499,191.00 2.03 0.51500,000.00Issuer total500,000.00 505,530.00 2.03 499,191.00 2.03 0.5113 GASB 40 - DEPOSIT AND INVESTMENT RISK DISCLOSUREAs of June 30, 2018SAN RAFAELCusipS&PratingMoodyratingHistoricalcost% Portfoliohist costMarketvalue% Portfoliomkt valueEffectivedur (yrs)Description Coupon MaturitydateCall date Par value orsharesUS Bancorp91159HHE3US BANCORP 1.95% 1.950 11/15/2018 10/15/2018 A+ A1 509,425.00 2.04 498,940.00 2.03 0.38500,000.00Issuer total500,000.00 509,425.00 2.04 498,940.00 2.03 0.38Caterpillar Financial Services Corp14912L6R7CATERPILLAR FINL 1.350 05/18/2019 A A3 498,245.00 2.00 494,225.00 2.01 0.87500,000.00Issuer total500,000.00 498,245.00 2.00 494,225.00 2.01 0.87Toyota Motor Credit Corp89236TCF0TOYOTA MOTOR CREDIT 2.150 03/12/2020 AA- Aa3 504,545.00 2.02 493,980.00 2.01 1.64500,000.00Issuer total500,000.00 504,545.00 2.02 493,980.00 2.01 1.64Cash and Cash EquivalentsINVESTED CASH 0.000170,356.80 0.68 170,356.80 0.69 0.00170,356.80Issuer total170,356.80 170,356.80 0.68 170,356.80 0.69 0.00Grand total24,876,056.80 24,919,605.95 100.00 24,610,026.50 100.001.6814 TRANSACTION REPORTFor the period June 1, 2018 - June 30, 2018SAN RAFAELMaturity Par value orsharesInterest Transaction totalPrincipalTransactionCusip Sec type DescriptionTrade dateSettle dateRealizedgain(loss)6,875.0006/05/201806/05/2018Income3133EGM69 Government Agencies FEDERAL FARM CREDIT BANK 12/05/2018 1,250,000.00 0.00 6,875.000.008,750.0006/12/201806/12/2018Income313383HU8 Government Agencies FEDERAL HOME LOAN BANK 06/12/2020 1,000,000.00 0.00 8,750.000.008,125.0006/14/201806/14/2018Income313379EE5 Government Agencies FEDERAL HOME LOAN BANK 06/14/2019 1,000,000.00 0.00 8,125.000.00145.98Income Cash and Cash Equivalents Cash145.980.00 0.000.0006/30/201815 ADDITIONAL INFORMATIONAs of June 30, 2018SAN RAFAELPast performance is not a guide to future performance. The value of investments and any income from them will fluctuate and is not guaranteed (this may partly be due to exchange rate changes) and investors may not getback the amount invested. Transactions in foreign securities may be executed and settled in local markets. Performance comparisons will be affected by changes in interest rates. Investment returns fluctuate due to changesin market conditions. Investment involves risk, including the possible loss of principal. No assurance can be given that the performance objectives of a given strategy will be achieved. The information contained herein is foryour reference only and is being provided in response to your specific request and has been obtained from sources believed to be reliable; however, no representation is made regarding its accuracy or completeness. Thisdocument must not be used for the purpose of an offer or solicitation in any jurisdiction or in any circumstances in which such offer or solicitation is unlawful or otherwise not permitted. This document should not beduplicated, amended, or forwarded to a third party without consent from Insight. This is a marketing document intended for professional clients only and should not be made available to or relied upon by retail clientsInvestment advisory services in North America are provided through four different SEC-registered investment advisers using the brand Insight Investment: Cutwater Asset Management Corp. (CAMC), Cutwater InvestorServices Corp. (CISC), Insight North America LLC (INA) and Insight Investment International Limited (IIIL). The North American investment advisers are associated with a broader group of global investment managers that also(individually and collectively) use the corporate brand Insight Investment and may be referred to as Insight, Insight Group or Insight Investment.Both CISC and CAMC are investment advisers registered with the Securities and Exchange Commission (SEC), under the Investment Advisers Act of 1940, as amended. Registration with the SEC does not imply a certain level ofskill or training. You may request, without charge, additional information about Insight. Moreover, specific information relating to Insights strategies, including investment advisory fees, may be obtained from CAMCs andCISCs Forms ADV Part 2A, which are available without charge upon request.Where indicated, performance numbers used in the analysis are gross returns. The performance reflects the reinvestment of all dividends and income. CAMC and CISC charge management fees on all portfolios managed andthese fees will reduce the returns on the portfolios. For example, assume that $30 million is invested in an account with either CAMC or CISC, and this account achieves a 5.0% annual return compounded monthly, gross of fees,for a period of five years. At the end of five years that account would have grown to $38,500,760 before the deduction of management fees. Assuming management fees of 0.25% per year are deducted monthly from theaccount, the value at the end of the five year period would be $38,022,447. Actual fees for new accounts are dependent on size and subject to negotiation. CAMCS and CISC's investment advisory fees are discussed in Part 2Aof the Firms Form ADV.Unless otherwise stated, the source of information is Insight. Any forecasts or opinions are Insights own at the date of this document (or as otherwise specified) and may change. Material in this publication is for generalinformation only and is not advice, investment advice, or the recommendation of any purchase or sale of any security. Insight makes no implied or expressed recommendations concerning the manner in which an accountshould or would be handled, as appropriate investment strategies depend upon specific investment guidelines and objectives and should not be construed to be an assurance that any particular security in a strategy willremain in any fund, account, or strategy, or that a previously held security will not be repurchased. It should not be assumed that any of the security transactions or holdings referenced herein have been or will prove to beprofitable or that future investment decisions will be profitable or will equal or exceed the past investment performance of the securities listed.For trading activity the Clearing broker will be reflected. In certain cases the Clearing broker will differ from the Executing broker.In calculating ratings distributions and weighted average portfolio quality, Insight assigns U.S Treasury and U.S agency securities a quality rating based on the methodology used within the respective benchmark index. WhenMoodys, S&P and Fitch rate a security, Bank of America and Merrill Lynch indexes assign a simple weighted average statistic while Barclays indexes assign the median statistic. Insight assigns all other securities the lower ofMoodys and S&P ratings.Information about the indices shown here is provided to allow for comparison of the performance of the strategy to that of certain well-known and widely recognized indices. There is no representation that such index is anappropriate benchmark for such comparison. You cannot invest directly in an index and the indices represented do not take into account trading commissions and/or other brokerage or custodial costs. The volatility of theindices may be materially different from that of the strategy. In addition, the strategys holdings may differ substantially from the securities that comprise the indices shown.The BofA Merrill Lynch 3 Mo US T-Bill index is an unmanaged market index of U.S. Treasury securities maturing in 90 days that assumes reinvestment of all income.The BofA Merrill Lynch 6 Mo US T-Bill index measures the performance of Treasury bills with time to maturity of less than 6 months.The BofA Merrill Lynch Current 1-Year US Treasury Index is a one-security index comprised of the most recently issued 1-year US Treasury note. The index is rebalanced monthly. In order to qualify for inclusion, a 1-year notemust be auctioned on or before the third business day before the last business day of the month.The BofA Merrill Lynch Current 3-Year US Treasury Index is a one-security index comprised of the most recently issued 3-year US Treasury note. The index is rebalanced monthly. In order to qualify for inclusion, a 3-year notemust be auctioned on or before the third business day before the last business day of the month.The BofA Merrill Lynch Current 5-Year US Treasury Index is a one-security index comprised of the most recently issued 5-year US Treasury note. The index is rebalanced monthly. In order to qualify for inclusion, a 5-year notemust be auctioned on or before the third business day before the last business day of the month.The BofA Merrill Lynch 1-3 US Year Treasury Index is an unmanaged index that tracks the performance of the direct sovereign debt of the U.S. Government having a maturity of at least one year and less than three years.The BofA Merrill Lynch 1-5 US Year Treasury Index is an unmanaged index that tracks the performance of the direct sovereign debt of the U.S. Government having a maturity of at least one year and less than five years.Insight does not provide tax or legal advice to its clients and all investors are strongly urged to consult their tax and legal advisors regarding any potential strategy or investment.16 ADDITIONAL INFORMATIONAs of June 30, 2018SAN RAFAELInsight is a group of wholly owned subsidiaries of The Bank of New York Mellon Corporation. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation and may also be used as a generic term to referencethe Corporation as a whole or its various subsidiaries generally. Products and services may be provided under various brand names and in various countries by subsidiaries, affiliates and joint ventures of The Bank of New YorkMellon Corporation where authorized and regulated as required within each jurisdiction. Unless you are notified to the contrary, the products and services mentioned are not insured by the FDIC (or by any governmental entity)and are not guaranteed by or obligations of The Bank of New York Mellon Corporation or any of its affiliates. The Bank of New York Corporation assumes no responsibility for the accuracy or completeness of the above data anddisclaims all expressed or implied warranties in connection therewith.© 2018 Insight Investment. All rights reserved.17