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HomeMy WebLinkAboutFin Investment Report 2016.03CITY OF Agenda Item No: L tA. Meeting Date: May 2, 2016 SAN RAFAEL CITY COUNCIL AGENDA REPORT Department: FINANCE Prepared by: Van Bach City Manager Approval: Accounting Manager SUBJECT: QUARTERLY INVESTMENT REPORT RECOMMENDATION: ACCEPT INVESTMENT REPORT FOR THE QUARTER ENDING MARCH 31, 2016, AS PRESENTED BACKGROUND: Pursuant to the State of California Government Code Section 53601 and the City's investment policy, last reviewed and approved by Council on June 15, 2015, staff provides the governing body a report on the City's investment activities. The report outlines the investment activity for the preceding quarter. Included on the report are the cost of each investment, the interest rates (yield), maturity dates, and market value. Separate schedules are prepared for both the City and the Successor Agency to San Rafael Redevelopment Agency. Since December 2011, the City's pooled funds not used for current operations have been invested almost exclusively in the Local Agency Investment Fund (LAIF), a State-run investment pool. The one exception to this was a $1,750,000 investment in assessment district bonds. Beginning in March 2014, the City returned to an investment strategy that included purchases of securities outside of LAIF with the assistance of its investment advisor, Cutwater Asset Management, now Insight Investment. ANALYSIS: As of March 31, 2016, the primary LAIF account had a balance of $28,170,969. The other LAIF account containing housing funds for future administrative expenses contained $143,959. Portfolio returns on LAIF deposits were 0.47% for the quarter. The remaining investment assets included the $1,582,700 balance of Pt. San Pedro Assessment District bonds, and $21,003,427 in government agency securities and corporate bonds (including T -Note, FHLB, FHLML, FFCB, FNMA, General Elec., Toyota, John Deere Capital and Wells Fargo). The overall portfolio return for the quarter ended March 31, 2016 was 0.77%. The City's Westamerica account had a balance of $9,370,833 at quarter end. Exhibit A is composed of the Quarterly Investment Portfolio Report summarizing the City's investments for the quarter ended March 31, 2016 as well as the three monthly investment reports from Insight Investment. FOR CITY CLERK ONLY File No.: 8-18 x 8-9 Council Meeting: 05/02/2016 Disposition: Accepted Report SAN RAFAEL CITY COUNCIL AGENDA REPORT / Paee: 2 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. OPTIONS/ACTION REQUIRED: The City Council should adopt the report as presented in order to satisfy current State Investment Code requirements and City policy. Attachment WACouncil Material\Staff Reports\2015\City\cityinvrp093015.doc SAN RAFAEL CITY COUNCIL AGENDA REPORT / Paze: 3 TREASURER'S CERTIFICATION 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. MARK MOSES FINANCE DIRECTOR City of Rafael Quarterly Investment Portfolio Report March 31, 2016 LAIF $ 28,170,969 99.5% 0.47% LAIF - Housing $ 143,959 0.5% 0.47% Total Internally Managed $ 28,314,928 55.6% Weighted Average Yield Effective Average Duration - Internal Weighted Average Maturity - Internal Cash Commercial Paper Treasury Securities Instrumentality Securities Corporate Notes Municipal Total Externally Managed Weighted Average Yield $ 73,758 $ 498,681 $ 6,255,351 $ 10,622,440 $ 3,553,197 $ 1,582,700 $ 22,586,127 Effective Average Duration - External Weighted Average Maturity - External 0.3% 2.2% 27.7% 47.0% 15.7% 7.0% 44.4% 0.47% Days 1 1 0.00% 0.82% 0.76% 0.84% 1.07% 5.25% LAIF, 99.5% LAIF - Housing, Corporate Cash, 0.3%� Notes, 15.7% Exhibit A Commercial Treasury Paper, 2.2% Securities, 27.7% 1.14% Years 14 1.86 Instrumentality 2.25 Securities, 47.0% Total Portfolio Assets 0.77% % Return 1.38 LAIF $ 28,314,928 55.6% 0.47% Cash $ 73,758 0.1% 0.00% Corporate Municipal Notes Commercial Paper $ 498,681 1.0% 0.82% Instrumentality Securities Treasury Securities $ 6,255,351 12.3% 0.76% 21% Instrumentality Securities $ 10,622,440 20.9% 0.84% Corporate Notes $ 3,553,197 7.0% 1.07% Municipal $ 1,582,700 3.1% 5.25% Total Portfolio Assets $ 50,901,055 Weighted Average Yield 0.77% Years Effective Average Duration - Total 1.38 Weighted Average Maturity - Total 1.55 Based on Market Values Treasury, Securities 12% Commercial -J Cash Paper 0% 1% LAIF 56% SAN RAFAEL January 2016 >- A BNY MELLON COMPANY'^^ FOR PROFESSIONAL CLIENTS ONLY NOT TO BE DISTRIBUTED TO RETAIL CLIENTS THIS DOCUMENT SHOULD NOT BE REPRODUCED IN ANY FORM WITHOUT PRIOR WRITTEN APPROVAL Insight INVESTMENT Contents Fixed income market review Activity and performance summary Recap of securities held Maturity distribution of securities held Securities held GASB 40 - Deposit and investment risk disclosure 12 Transaction report 15 Additional information 16 FIXED INCOME MARKET REVIEW As of January 31, 2016 Chart 1: Monthly Job Creation 12/2010 - 12/2015 450.0 400.0 l 350.0 o ' 0 300.0 ' 1 250.0 200.0 1 0 150.0 Y 3 ' Z 100.0 1� 50.0 1`} 0.0 Dec -10 Dec -11 Dec -12 Dec -13 Chart 2: Treasury Yield Curves 12/31/2015-01/31/2016 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% SAN RAFAEL Economic Indicators & Monetary Policy: As expected, Gross Domestic Product (GDP) decreased in the fourth quarter of 2015. The initial estimate showed the economy grew at a 0.7 percent rate in the fourth quarter, compared to a 2.0 percent rate in the third quarter. The year -over -year GDP growth fell to 1.8 percent, dropping below 2 percent for the first time since the first quarter of 2014. Lower spending in the energy sector and diminished exports as a result of the strong US dollar negatively impacted fourth quarter GDP. The strong dollar continues to hurt domestic manufacturing, as the Institute for Supply Management (ISM) manufacturing index fell to 48.2 from 48.6. The ISM non- manufacturing index remains strong at 55.3. Once again, employment proved to be a strong suit of the US economy as 292,000 jobs were created in December, bringing the total 2015 job creation to 2.6 million (See Chart 1). The unemployment rate remained at 5.0 percent and the labor force participation rate rose to 62.6 percent. Wage growth remained unchanged on a month -over -month basis, and increased 2.5 percent on a year -over -year basis. Inflation indicators were mixed in December. The Producer Price index (PPI) including food and energy Dec -14 Dec -15 fell 0.2 percent on a month -over -month basis, while the core PPI increased 0.1 percent. On a month - over -month basis the Consumer Price index (CPI) including food and energy fell by 0.1 percent, while the core CPI grew 0.1 percent. The decreasing price of oil continues to have a direct effect on domestic inflation. In addition, retail sales decreased 0.1 percent in December, indicating that shoppers have chosen not to spend the savings incurred as a result of lower prices on gasoline. 0.00% 3 m 6 m 1 yr 2 yr 3 yr 4 yr 5 yr 6 yr 7 yr Syr 9 yr 10 yr Charts sourced from Bloomberg Finance LP, December 31, 2015, January 31, 2016. Past performance is not indicative of future returns. Please see Additional information. Existing home sales bounced back from a slow start to the fourth quarter to grow at 14.7 percent, the strongest month in more than 15 years. Existing homes are now selling at an annualized rate of 5.46 million. New home sales also had a strong December, growing 10.8 percent to an annualized rate of 544,000. Low supply has had a positive impact on home values throughout 2015 as the Case -Schiller index, which measures home prices, increased at an average of 5.0 percent over the past twelve months. The Federal Open Market Committee (FOMC) voted to maintain its Fed funds target rate at 0.25-0.50 percent. The FOMC indicated that global economic conditions may have a negative impact on the domestic economy and, therefore, may influence the Committee's decisions to raise interest rates during upcoming meetings. The next meeting of the FOMC will take place March 15th and 16th. Yield Curve & Spreads: At the end of January, the 3 -month Treasury bill yielded 0.31 percent, the 6 - month Treasury bill yielded 0.43 percent, the 2 -year Treasury note yielded 0.78 percent, the 5 -year Treasury note yielded 1.33 percent, and the 10 -year Treasury note yielded 1.92 percent (See Chart 2).. 3 ACTIVITY AND PERFORMANCE SUMMARY For the period January 1, 2016 - January 31, 2016 Amortized Cost Basis Activitv Summary Opening balance Income received Total receipts Expenses paid Total disbursements Interportfolio transfers Total Interportfolio transfers Realized gain (loss) Total amortization expense Total OID/MKT accretion income Return of capital Closing balance Ending fair value Unrealized gain (loss) Fed Funds Overnight Repo Merrill Lynch 3m US Treas Bill Merrill Lynch 6m US Treas Bill ML 1 Year US Treasury Note ML 2 Year US Treasury Note ML 5 Year US Treasury Note 22,498,031.92 * Six 6,569.61 month trailing 6,569.61 (amortization) 0.15 Cash and Cash Equivalents (130.42) Corporate Bonds (130.42) Government Agencies 0.00 Government Bonds 0.00 Municipal/Provincial Bonds 0.11 Total 0.00 0.22 (4,710.87) 0.71 565.91 0.08 0.00 0.78 22,500,326.15 6,924.31 22,514,865.88 (4,144.96) 14,539.73 20,020.98 Comparative Rates of Return W * Twelve * Six * One month month trailing month trailing (amortization) 0.15 0.09 0.03 0.21 0.12 0.04 0.06 0.05 0.02 0.15 0.11 0.03 0.34 0.22 0.05 0.71 0.40 0.08 1.55 0.78 0.13 * rates reflected are cumulative SAN RAFAEL Detail of Amortized Cost Basis Return Interest Accretion Realized Total earned (amortization) gain (loss) income 7.11 0.00 0.00 7.11 5,645.83 (3,525.93) 0.00 2,119.90 7,737.50 (789.85) 0.00 6,947.65 3,851.19 170.82 0.00 4,022.01 6,924.31 0.00 0.00 6,924.31 24,165.94 (4,144.96) 0.00 20,020.98 Summary of Amortized Cost Basis Return for the Period Total portfolio Excl. cash eq. Interest earned 24,165.94 24,158.83 Accretion (amortization) (4,144.96) (4,144.96) Realized gain (loss) on sales 0.00 0.00 Total income on portfolio 20,020.98 20,013.87 Average daily amortized cost 22,575,923.37 20,468,320.17 Period return (%) 0.09 0.10 YTD return (%) 0.09 0.10 Weighted average final maturity in days 828 914 ACTIVITY AND PERFORMANCE SUMMARY For the period January 1, 2016 - January 31, 2016 Fair Value Basis Activitv Summary * Six Opening balance 22,449,608.69 Income received 6,569.61 Change in Total receipts 6,569.61 Expenses paid (130.42) 0.21 Total disbursements (130.42) Interportfolio transfers 0.00 0.05 Total Interportfolio transfers 0.00 Unrealized gain (loss) on security movements 0.00 Return of capital 0.00 Change in fair value for the period 58,818.00 Ending fair value 22,514,865.88 Fed Funds Overnight Repo Merrill Lynch 3m US Treas Bill Merrill Lynch 6m US Treas Bill ML 1 Year US Treasury Note ML US Treasury 1-3 ML US Treasury 1-5 Comparative Rates of Return W * Twelve * Six * One month month trailing month trailing Change in 0.15 0.09 0.03 0.21 0.12 0.04 0.05 0.05 0.00 0.28 0.20 0.09 0.25 0.12 0.20 0.65 0.43 0.61 1.05 0.93 1.08 * rates reflected are cumulative SAN RAFAEL Summary of Fair Value Basis Return for the Period Detail of Fair Value Basis Return Total portfolio Interest Change in Total 24,158.83 earned fair value income Cash and Cash Equivalents 7.11 0.00 7.11 Corporate Bonds 5,645.83 308.25 5,954.08 Government Agencies 7,737.50 38,549.50 46,287.00 Government Bonds 3,851.19 19,960.25 23,811.44 Municipal/Provincial Bonds 6,924.31 0.00 6,924.31 Total 24,165.94 58,818.00 82,983.94 Summary of Fair Value Basis Return for the Period Total portfolio Excl. cash eq. Interest earned 24,165.94 24,158.83 Change in fair value 58,818.00 58,818.00 Total income on portfolio 82,983.94 82,976.83 Average daily total value* 22,569,742.33 20,462,139.13 Period return (%) 0.37 0.41 YTD return (%) 0.37 0.41 Weighted average final maturity in days 828 914 * Total value equals market value and accrued interest 5 RECAP OF SECURITIES HELD As of January 31, 2016 Historical Amortized cost cost Fair value Unrealized gain (loss) Cash and Cash Equivalents 2,110,613.13 2,110,613.13 2,110,613.13 0.00 Corporate Bonds 2,617,550.00 2,550,261.60 2,550,749.75 488.15 Government Agencies 10,023,285.00 10,011,237.99 10,020,041.50 8,803.51 Government Bonds 6,244,785.17 6,245,513.43 6,250,761.50 5,248.07 Municipal/Provincial Bonds 1,582,700.00 1,582,700.00 1,582,700.00 0.00 Weighted Percent Weighted average of average final portfolio effective maturity (days) Total duration (years) 1 9.35 0.00 395 11.59 1.06 517 44.39 1.38 464 27.66 1.26 6,059 7.01 11.12 Portfolio diversification (%) ■ Cash and Cash Equivalents 9.35 ■ Corporate Bonds 11.59 ■ Government Agencies 44.39 ■ Government Bonds 27.66 ■ Municipal/Provincial Bonds 7.01 Total 100.00 SAN RAFAEL 6 MATURITY DISTRIBUTION OF SECURITIES HELD As of January 31, 2016 Maturity Under 90 days 90 to 179 days 180 days to 1 year 1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years Over 5 years 12.00 10.00 E E 8.00 0 U 6.00 U 0 4.00 = 2.00 19% Maturity distribution J�ae`CO� 6,0 %0 o �O Historic cost 2,110,613.13 500,670.00 4,560,391.26 11,819,088.91 2,005,470.00 0.00 0.00 1,582,700.00 Percent 9.35 2.22 20.20 52.35 8.88 0.00 0.00 7.01 SAN RAFAEL 7 � OJ Percent 9.35 2.22 20.20 52.35 8.88 0.00 0.00 7.01 SAN RAFAEL 7 SECURITIES HELD SAN RAFAEL As of January 31, 2016 Cusip/ Coupon Maturity/ Par value or Historical cost/ Amortized cost/ Fair value/ Unrealized Interest Interest Total Description Call date shares Accrued interest Accretion Change in fair gain received earned accrued Port purchased (amortization) value (loss) interest cost Cash and Cash Equivalents Cash and Cash Equivalents 0.000 2,110,613.13 2,110,613.13 2,110,613.13 2,110,613.13 0.00 0.00 0.00 0.00 9.35 0.00 0.00 0.00 Total Cash and Cash Equivalents 2,110,613.13 2,110,613.13 2,110,613.1 0.00 0.00 0.0 0.00 0.00 0.0 Corporate Bonds 89233P5E2 2.000 09/15/2016 500,000.00 513,850.00 503,880.76 503,666.50 (214.26) 0.00 833.34 3,777.78 2.28 TOYOTA MOTOR CREDIT CORP 0.00 (517.43) (369.00) 2% 15/09/2016 36962G51-13 3.350 10/17/2016 500,000.00 530,685.00 508,685.07 508,280.50 (404.57) 0.00 1,395.83 4,838.89 2.35 GENERAL ELECTRIC CO 3.35% 0.00 (1,013.82) (1,349.50) 17/10/2016 24422ERN1 1.400 03/15/2017 500,000.00 504,785.00 502,691.56 501,860.50 (831.06) 0.00 583.33 2,644.44 2.24 JOHN DEERE CAPITAL CORP 0.00 (199.38) 1,072.00 1.4% 15/03/2017 717081DJ9 1.100 05/15/2017 500,000.00 499,595.00 499,782.03 501,238.75 1,456.72 0.00 458.33 1,161.11 2.21 PFIZER INC 1.1 % 15/05/2017 0.00 14.06 1,542.25 459200GJ4 5.700 09/14/2017 500,000.00 568,635.00 535,222.18 535,703.50 481.32 0.00 2,375.00 10,845.83 2.52 IBM CORP 5.7% 14/09/2017 09/13/2017 0.00 (1,809.36) (587.50) Total Corporate Bonds 2,500,000.00 2,617,550.00 2,550,261.60 2,550,749.75 488.1 0.00 5,645.83 23,268.05 11.59 0.00 (3,525.93) 308.25 Government Agencies 3133EDDP4 0.520 06/17/2016 500,000.00 500,670.00 500,112.63 500,235.00 122.37 0.00 216.67 317.78 2.22 FEDERAL FARM CREDIT BANK 0.00 (24.66) 430.00 0.52% 17/06/2016 3135GOCM3 1.250 09/28/2016 1,000,000.00 1,014,450.00 1,003,808.53 1,004,244.00 435.47 0.00 1,041.66 4,270.83 4.49 FANNIE MAE 1.25%28/09/2016 0.00 (480.06) 620.00 8 SECURITIES HELD As of January 31, 2016 Cusip/ Coupon Maturity/ Par value or Historical cost/ Amortized cost/ Fair value/ Unrealized Interest Description Call date shares Accrued interest Accretion Change in fair gain received purchased (amortization) value (loss) Government Agencies 3133EDYQ9 0.750 01/20/2017 500,000.00 500,000.00 500,000.00 500,005.00 5.00 1,875.00 FEDERAL FARM CREDIT BANK 0.00 0.00 845.00 0.75% 20/01/2017 (CALLABLE 10/02/16) 3137EADC0 1.000 03/08/2017 500,000.00 501,500.00 500,561.62 501,369.50 807.88 0.00 FREDDIE MAC 1% 08/03/2017 0.00 (42.33) 955.00 3135GOZB2 0.750 04/20/2017 500,000.00 496,725.00 498,695.93 500,152.00 1,456.07 0.00 FANNIE MAE 0.75% 20/04/2017 0.00 88.92 1,569.50 3133EEX62 0.800 06/16/2017 1,000,000.00 999,770.00 999,841.99 1,001,130.00 1,288.01 0.00 FEDERAL FARM CREDIT BANK 0.00 9.55 4,140.00 0.8% 16/06/2017 3137EADV8 0.750 07/14/2017 1,000,000.00 998,530.00 998,972.96 999,746.00 773.04 4,687.50 FREDDIE MAC 0.75% 0.00 58.80 5,176.00 14/07/2017 3136GOZH7 1.050 09/05/2017 1,000,000.00 1,005,150.00 1,003,840.79 1,002,530.00 (1,310.79) 0.00 FANNIE MAE 1.05%05/09/2017 0.00 (200.39) 2,940.00 CALLABLE 313380EC7 0.750 09/08/2017 1,000,000.00 998,790.00 999,053.61 998,655.00 (398.61) 0.00 FEDERAL HOME LOAN BANK 0.00 49.12 5,030.00 0.75% 08/09/2017 3130A51-56 0.900 10/27/2017 1,000,000.00 999,070.00 999,316.40 1,002,060.00 2,743.60 0.00 FEDERAL HOME LOAN BANK 0.00 32.71 5,150.00 0.9% 27/10/2017 3130A6D87 0.900 11/20/2017 1,000,000.00 1,000,660.00 1,000,528.98 1,000,470.00 (58.98) 0.00 FEDERAL HOME LOAN BANK 0.00 (24.41) 5,390.00 0.9% 20/11/2017 SAN RAFAEL Interest Total 354.17 earned accrued Port interest cost 312.50 114.58 2.21 416.67 1,986.11 2.22 312.50 1,052.08 2.20 666.67 1,000.00 4.43 625.00 354.17 4.42 875.00 4,258.33 4.45 625.00 2,979.17 4.42 750.00 2,350.00 4.42 750.00 1,775.00 4.43 9 SECURITIES HELD SAN RAFAEL As of January 31, 2016 Cusip/ Coupon Maturity/ Par value or Historical cost/ Amortized cost/ Fair value/ Unrealized Interest Interest Total Description Call date shares Accrued interest Accretion Change in fair gain received earned accrued Port purchased (amortization) value (loss) interest cost Government Agencies 313378A43 1.375 03/09/2018 1,000,000.00 1,007,970.00 1,006,504.55 1,009,445.00 2,940.45 0.00 1,145.83 5,423.61 4.46 FEDERAL HOME LOAN BANK 0.00 (257.10) 6,304.00 1.375% 09/03/2018 Total Government Agencies 10,000,000.00 10,023,285.00 10,011,237.99 10,020,041.50 8,803.51 6,562.50 7,737.50 25,881.66 44.39 0.00 (789.85) 38,549.50 i Government Bonds 912828VR8 0.625 08/15/2016 1,000,000.00 1,001,640.63 1,000,412.25 1,000,556.00 143.75 0.00 526.50 2,870.25 4.44 USA TREASURY 0.625% 0.00 (64.87) 790.00 15/08/2016 912828WF3 0.625 11/15/2016 1,000,000.00 999,765.63 999,921.21 1,000,117.00 195.79 0.00 532.28 1,322.12 4.43 USA TREASURY 0.625% 0.00 8.45 1,445.00 15/11/2016 912828SJO 0.875 02/28/2017 750,000.00 751,464.84 750,588.33 751,552.50 964.17 0.00 558.89 2,758.41 3.33 USA TREASURY 0.875% 0.00 (46.28) 1,259.25 28/02/2017 912828032 0.750 03/15/2017 500,000.00 499,453.13 499,769.89 500,371.00 601.11 0.00 319.36 1,421.70 2.21 USA TREASURY 0.75% 0.00 17.44 1,093.50 15/03/2017 912828WP1 0.875 06/15/2017 500,000.00 499,414.06 499,675.99 501,094.00 1,418.01 0.00 370.56 561.82 2.21 USA TREASURY 0.875% 0.00 20.05 1,641.00 15/06/2017 912828TM2 0.625 08/31/2017 1,000,000.00 994,921.88 996,802.67 997,852.00 1,049.33 0.00 532.28 2,627.06 4.41 USA TREASURY 0.625% 0.00 171.49 4,258.00 31/08/2017 912828G20 0.875 11/15/2017 500,000.00 500,625.00 500,477.51 500,742.00 264.49 0.00 372.59 925.48 2.22 USA TREASURY 0.875% 0.00 (22.64) 2,480.50 15/11/2017 10 SECURITIES HELD As of January 31, 2016 Cusip/ Coupon Maturity/ Par value or Historical cost/ Amortized cost/ Fair value/ Unrealized Description Call date shares Accrued interest Accretion Change in fair gain purchased (amortization) value (loss) Government Bonds 912828UR9 0.750 02/28/2018 1,000,000.00 USA TREASURY 0.75% 28/02/2018 Tot�nment Bonds 6,250,000.00 Municipal/Provincial Bonds 888599LS4 5.250 09/02/2032 1,582,700.00 PT. SAN ASSESS DISTRICT 5.25% 144A 02/09/2032 SANRAF$01 Total Municipal/Provincial Bonds w 1,582,700.00 SAN RAFAEL Interest Interest Total received earned accrued Port interest cost 997,500.00 997,865.58 998,477.00 611.42 0.00 638.73 3,152.47 4.42 0.00 87.18 6,993.00 6,244,785. 6,245,513.43 6,250,761.5 3,851.19 15,639.31 27.66 0.00 170.82 1,582,700.00 1,582,700.00 1,582,700.00 0.00 0.00 6,924.31 27,697.25 7.01 0.00 0.00 0.00 1,582,700.00 0.00 1,582,700.00 0.00 1,582,700.00 0.00 0.00 6,924.31 27,697.25 7.01 iTi GASB 40 - DEPOSIT AND INVESTMENT RISK DISCLOSURE As of January 31, 2016 SAN RAFAEL Cusip Description Coupon Maturity Call date 5&P Moody Par value or Historical % Portfolio Market % Portfolio Effective date rating rating shares cost hist cost value mkt value dur (yrs) United States Treasury Note/Bond 912828VR8 USA TREASURY 0.625% 0.625 08/15/2016 AA+ Aaa 1,000,000.00 1,001,640.63 4.44 1,000,556.00 4.44 0.54 912828WF3 USA TREASURY 0.625% 0.625 11/15/2016 AA+ Aaa 1,000,000.00 999,765.63 4.43 1,000,117.00 4.44 0.79 9128285/0 USA TREASURY 0.875% 0.875 02/28/2017 AA+ Aaa 750,000.00 751,464.84 3.33 751,552.50 3.34 1.07 912828032 USA TREASURY 0.75% 0.750 03/15/2017 AA+ Aaa 500,000.00 499,453.13 2.21 500,371.00 2.22 1.11 912828WP1 USA TREASURY 0.875% 0.875 06/15/2017 AA+ Aaa 500,000.00 499,414.06 2.21 501,094.00 2.23 1.36 912828TM2 USA TREASURY 0.625% 0.625 08/31/2017 AA+ Aaa 1,000,000.00 994,921.88 4.41 997,852.00 4.43 1.57 912828G20 USA TREASURY 0.875% 0.875 11/15/2017 AA+ Aaa 500,000.00 500,625.00 2.22 500,742.00 2.22 1.78 912828UR9 USA TREASURY 0.75% 0.750 02/28/2018 AA+ Aaa 1,000,000.00 997,500.00 4.42 998,477.00 4.43 2.06 Issuer total 6,250,000.00 6,244,785.17 27.66 6,250,761.50 27.76 1.26 Federal Home Loan Banks 313380EC7 FEDERAL HOME LOAN 0.750 09/08/2017 AA+ Aaa 1,000,000.00 998,790.00 4.42 998,655.00 4.44 1.59 3130A51-56 FEDERAL HOME LOAN 0.900 10/27/2017 AA+ Aaa 1,000,000.00 999,070.00 4.42 1,002,060.00 4.45 1.72 3130A6D87 FEDERAL HOME LOAN 0.900 11/20/2017 AA+ Aaa 1,000,000.00 1,000,660.00 4.43 1,000,470.00 4.44 1.79 313378A43 FEDERAL HOME LOAN 1.375 03/09/2018 AA+ Aaa 1,000,000.00 1,007,970.00 4.46 1,009,445.00 4.48 2.07 Issuer total 4,000,000.00 4,006,490.00 17.74 4,010,630.00 17.81 1.79 Federal National Mortgage Association 3135GOCM3 FANNIE MAE 1.25% 1.250 09/28/2016 AA+ Aaa 1,000,000.00 1,014,450.00 4.49 1,004,244.00 4.46 0.66 3135GOZB2 FANNIE MAE 0.75% 0.750 04/20/2017 AA+ Aaa 500,000.00 496,725.00 2.20 500,152.00 2.22 1.21 3136GOZH7 FANNIE MAE 1.05% 1.050 09/05/2017 AA+ Aaa 1,000,000.00 1,005,150.00 4.45 1,002,530.00 4.45 1.58 Issuer total 2,500,000.00 2,516,325.00 11.14 2,506,926.00 11.13 1.14 Cash and Cash Equivalents INVESTED CASH 0.000 2,110,613.13 2,110,613.13 0.00 2,110,613.13 9.37 0.00 Issuer total 2,110,613.13 2,110,613.13 0.00 2,110,613.13 9.37 0.00 IT, GASB 40 - DEPOSIT AND INVESTMENT RISK DISCLOSURE As of January 31, 2016 SAN RAFAEL Cusip Description Coupon Maturity Call date 5&P Moody Par value or Historical % Portfolio Market % Portfolio Effective date rating rating shares cost hist cost value mkt value dur (yrs) Federal Farm Credit Banks 3133EDDP4 FEDERAL FARM CREDIT 0.520 06/17/2016 AA+ Aaa 500,000.00 500,670.00 2.22 500,235.00 2.22 0.38 3133EDYQ9 FEDERAL FARM CREDIT 0.750 01/20/2017 AA+ Aaa 500,000.00 500,000.00 2.21 500,005.00 2.22 0.58 3133EEX62 FEDERAL FARM CREDIT 0.800 06/16/2017 AA+ Aaa 1,000,000.00 999,770.00 4.43 1,001,130.00 4.45 1.37 Issuer total 2,000,000.00 2,000,440.00 8.86 2,001,370.00 8.89 0.92 Pt. San Assess District 888599LS4 PT. SAN ASSESS 5.250 09/02/2032 NR NR 1,582,700.00 1,582,700.00 7.01 1,582,700.00 7.03 11.12 Issuer total 1,582,700.00 1,582,700.00 7.01 1,582,700.00 7.03 11.12 Federal Home Loan Mortgage Corp 3137EADCO FREDDIEMAC1% 1.000 03/08/2017 AA+ Aaa 500,000.00 501,500.00 2.22 501,369.50 2.23 1.09 3137EADV8 FREDDIE MAC 0.75% 0.750 07/14/2017 AA+ Aaa 1,000,000.00 998,530.00 4.42 999,746.00 4.44 1.44 Issuer total 1,500,000.00 1,500,030.00 6.64 1,501,115.50 6.67 1.32 International Business Machines Corp 4592000/4 IBM CORP 5.7% 5.700 09/14/2017 09/13/2017 AA- Aa3 500,000.00 568,635.00 2.52 535,703.50 2.38 1.54 Issuer total 500,000.00 568,635.00 2.52 535,703.50 2.38 1.54 General Electric Co 36962G51-13 GENERAL ELECTRIC CO 3.350 10/17/2016 AA+ Al 500,000.00 530,685.00 2.35 508,280.50 2.26 0.70 Issuer total 500,000.00 530,685.00 2.35 508,280.50 2.26 0.70 Toyota Motor Credit Corp 89233P5E2 TOYOTA MOTOR CREDIT 2.000 09/15/2016 AA- Aa3 500,000.00 513,850.00 2.28 503,666.50 2.24 0.62 Issuer total 500,000.00 513,850.00 2.28 503,666.50 2.24 0.62 13 GASB 40 - DEPOSIT AND INVESTMENT RISK DISCLOSURE SAN RAFAEL As of January 31, 2016 Cusip Description Coupon Maturity Call date 5&P Moody Par value or Historical % Portfolio Market % Portfolio Effective date rating rating shares cost hist cost value mkt value dur (yrs) John Deere Capital Corp 24422ERN1 JOHN DEERE CAPITAL 1.400 03/15/2017 A A2 500,000.00 504,785.00 2.24 501,860.50 2.23 1.11 Issuer total 500,000.00 504,785.00 2.24 501,860.50 2.23 1.11 Pfizer Inc 717081 DJ9 PFIZER INC 1.1 % 1.100 05/15/2017 AA Al 500,000.00 499,595.00 2.21 501,238.75 2.23 1.28 Issuer total 500,000.00 499,595.00 2.21 501,238.75 2.23 1.28 14 TRANSACTION REPORT For the period January 1, 2016 - January 31, 2016 Trade date Cusip Transaction Sec type Description Maturity Par value or Realized Settle date shares gain(loss) 01/14/2016 3137EADV8 Income Government Agencies FREDDIE MAC 0.75% 07/14/2017 1,000,000.00 0.00 01/14/2016 01/20/2016 3133EDYQ9 Income Government Agencies FEDERAL FARM CREDIT BANK 01/20/2017 500,000.00 0.00 01/20/2016 01/31/2016 Income Cash and Cash Equivalents Cash 0.00 0.00 SAN RAFAEL Principal Interest Transaction total 0.00 4,687.50 4,687.50 0.00 1,875.00 1,875.00 0.00 7.11 7.11 15 ADDITIONAL INFORMATION As of January 31, 2016 SAN RAFAEL 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. When Moodys, 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 of Moodys and S&P ratings. You cannot invest in an index. The volatility of the benchmark may be materially different from that of the Composite. The benchmark is presented merely to show general trends in the market for the period and is not intended to imply that a clients account is benchmarked to the indices either in composition, volatility, or level of risk. An index has no expenses. Index data is provided for comparative purposes only. A variety of factors may cause an index to be an inaccurate benchmark. 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 note must 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 note must 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 note must 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. Past 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 get back 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. 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BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation and may also be used as a generic term to reference the 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 York Mellon 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 and disclaims all expressed or implied warranties in connection therewith. © 2015 Insight Investment. All rights reserved. 16 SAN RAFAEL February 2016 3 A BNY MELLON COMPANY'"^ FOR PROFESSIONAL CLIENTS ONLY NOT TO BE DISTRIBUTED TO RETAIL CLIENTS THIS DOCUMENT SHOULD NOT BE REPRODUCED IN ANY FORM WITHOUT PRIOR WRITTEN APPROVAL Insight INVESTMENT Contents Fixed income market review Activity and performance summary Recap of securities held Maturity distribution of securities held Securities held GASB 40 - Deposit and investment risk disclosure 12 Securities purchased 15 Transaction report 16 Securities bid and offer 17 Additional information 18 FIXED INCOME MARKET REVIEW As of February 29, 2016 Chart 1: Consumer Price Index 1/2011 - 1/2016 4.5 4.0 3.5 3.0 U 2.5 2.0 v 1.5 1.0 0.5 _ 0.0 (0.5) Jan -11 Jan -12 Jan -13 Jan -14 Jan -15 Jan -16 CPI CPI Ex Food & Energy Chart 2: Treasury Yield Curves 01/31/2016 - 02/29/2016 3.00% 2.50% 2.00% 1.50% 1.00% 2/29/2016 0.50% -1/31/2016 0.00% 3 m 6 m 1 yr 2 yr 3 yr 4 yr 5 yr 6 yr 7 yr 8 yr 9 yrl 0 yr Charts sourced from Bloomberg Finance LP January 31, 2016, February 29, 2016. Past performance is no assurance of future returns. Please refer to the important disclosures at the back of this presentation. SAN RAFAEL Economic Indicators & Monetary Policv: Fourth quarter Gross Domestic Product (GDP) was revised upward to 1.0 percent from its initially reported 0.7 percent growth rate, as businesses increased inventories. The final estimate of fourth quarter GDP will be released on March 25th. The Institute for Supply Management's manufacturing index remained unchanged at 48.2 in January after the December index was revised upward to 48.2 from 48.0. The ISM non -manufacturing index fell to 53.5 from 55.3. Retail sales improved in January, growing 0.2 percent on a month -over -month basis, compared to a 0.1 percent decline in December. Removing automobiles and gasoline, retail sales increased 0.4 percent. The labor force continued its strong and steady growth as 151,000 jobs were added in January. The unemployment rate fell to 4.9 percent and the underemployment rate remained unchanged at 9.9 percent. The labor force participation rate continues to improve, increasing to 62.7 percent, its highest level in eight months. Wage inflation also showed signs of strength in January as average hourly earnings increased 0.5 percent on a month -over -month basis, its strongest month since January, 2015. On an annual basis, wages increased at an average rate of 2.5 percent. The Consumer Price Indices (CPI) and the Producer Price Indices (PPI) showed signs of strength in January. The month -over -month CPI including food and energy was flat in January after decreasing 0.1 percent in December. The core CPI increased 0.3 percent. On an annual basis, the headline and core CPI indices increased 1.4 percent and 2.2 percent respectively (See Chart 1). The month -over - month PPI index returned to positive figures, growing 0.1 percent following a 0.2 percent decline in December. The core PPI increased to 0.6 percent from 0.3 percent. The inflation target of the Fed is 2.0 percent. January was a difficult month for the housing market as many of the leading metrics declined. Housing starts fell 3.8 percent in January, marking the second consecutive month of declines, while new home sales fell 9.2 percent, after increasing by 10.2 percent in December. Existing home sales registered a small increase, growing at 0.4 percent to an annualized rate of 5.47 million. The Federal Open Market Committee (FOMC) did not meet in February. The next meeting of the FOMC will take place on March 15th and 16th Yield Curve & Spreads: At the end of February, the 3 -month Treasury bill yielded 0.32 percent, the 6 - month Treasury bill yielded 0.47 percent, the 2 -year Treasury note yielded 0.78 percent, the 5 -year Treasury note yielded 1.21 percent, and the 10 -year Treasury note yielded 1.74 percent (See Chart 2). 3 ACTIVITY AND PERFORMANCE SUMMARY For the period February 1, 2016 - February 29, 2016 Amortized Cost Basis Activitv Summary Opening balance Income received Total receipts Expenses paid Total disbursements Interportfolio transfers Total Interportfolio transfers Realized gain (loss) Total amortization expense Total OID/MKT accretion income Return of capital Closing balance Ending fair value Unrealized gain (loss) Fed Funds Overnight Repo Merrill Lynch 3m US Treas Bill Merrill Lynch 6m US Treas Bill ML 1 Year US Treasury Note ML 2 Year US Treasury Note ML 5 Year US Treasury Note 22,500,326.15 0.11 11,484.72 0.14 11, 484.72 0.07 0.17 Commercial Paper (130.83) Corporate Bonds (130.83) Government Agencies 0.00 Government Bonds 0.00 Municipal/Provincial Bonds (3,523.73) Total 0.00 7,221.68 (4,754.05) 0.00 825.39 3,605.37 0.00 0.00 22,507,751.38 6,693.50 22,521,785.28 0.00 14, 033.90 23,292.09 Comparative Rates of Return 1%) * Twelve * Six month trailing month trailing 0.18 0.11 0.23 0.14 0.08 0.07 0.17 0.13 0.37 0.23 0.72 0.40 1.54 0.76 * rates reflected are cumulative SAN RAFAEL Detail of Amortized Cost Basis Return Summary of Amortized Cost Basis Return for the Period Interest Accretion Realized Total earned (amortization) gain (loss) income 0.00 225.19 0.00 225.19 5,771.54 (3,523.73) 0.00 2,247.81 7,221.68 (789.88) 0.00 6,431.80 3,605.37 159.76 0.00 3,765.13 6,693.50 0.00 0.00 6,693.50 23,292.09 (3,928.66) 0.00 19,363.43 4 Summary of Amortized Cost Basis Return for the Period * One month Total portfolio 0.03 Interest earned 23,292.09 0.04 Accretion (amortization) (3,928.66) 0.02 Realized gain (loss) on sales 0.00 0.03 Total income on portfolio 19,363.43 0.04 Average daily amortized cost 22,498,919.65 0.06 0.10 Period return 1%) 0.09 YTD return (%) 0.17 Weighted average final maturity in days 835 4 ACTIVITY AND PERFORMANCE SUMMARY For the period February 1, 2016 - February 29, 2016 Fair Value Basis Activitv Summary * Six Opening balance 22,514,865.88 Income received 11,484.72 Change in Total receipts 11,484.72 Expenses paid (130.83) 0.23 Total disbursements (130.83) Interportfolio transfers 0.00 0.06 Total Interportfolio transfers 0.00 Unrealized gain (loss) on security movements 0.00 Return of capital 0.00 Change in fair value for the period (4,434.49) Ending fair value 22,521,785.28 Fed Funds Overnight Repo Merrill Lynch 3m US Treas Bill Merrill Lynch 6m US Treas Bill ML 1 Year US Treasury Note ML US Treasury 1-3 ML US Treasury 1-5 Comparative Rates of Return W * Twelve * Six * One month month trailing month trailing Change in 0.18 0.11 0.03 0.23 0.14 0.04 0.08 0.06 0.02 0.30 0.23 0.04 0.29 0.14 0.02 0.98 0.59 0.12 1.81 1.20 0.25 * rates reflected are cumulative SAN RAFAEL Summary of Fair Value Basis Return for the Period Total portfolio Interest earned Detail of Fair Value Basis Return Change in fair value (4,434.49) Interest Change in Total 22,623,924.06 earned fair value income Commercial Paper 0.00 273.76 273.76 Corporate Bonds 5,771.54 (2,702.75) 3,068.79 Government Agencies 7,221.68 (1,654.00) 5,567.68 Government Bonds 3,605.37 (351.50) 3,253.87 Municipal/Provincial Bonds 6,693.50 0.00 6,693.50 Total 23,292.09 (4,434.49) 18,857.60 Summary of Fair Value Basis Return for the Period Total portfolio Interest earned 23,292.09 Change in fair value (4,434.49) Total income on portfolio 18,857.60 Average daily total value * 22,623,924.06 Period return (%) 0.08 YTD return (%) 0.45 Weighted average final maturity in days 835 * Total value equals market value and accrued interest 5 RECAP OF SECURITIES HELD As of February 29, 2016 Portfolio diversification (%) ■ Cash and Cash Equivalents Historical Amortized Fair value Unrealized Weighted Percent Weighted ■ Government Bonds cost cost 7.01 gain (loss) average of average final portfolio effective maturity (days) duration (years) Cash and Cash Equivalents 624,075.08 624,075.08 624,075.08 0.00 1 2.76 0.00 Commercial Paper 497,871.94 498,097.13 498,145.70 48.57 0 2.20 0.46 Corporate Bonds 3,617,570.00 3,546,757.87 3,548,067.00 1,309.13 470 16.01 1.26 Government Agencies 10,023,285.00 10,010,448.11 10,018,387.50 7,939.39 488 44.37 1.30 Government Bonds 6,244,785.17 6,245,673.19 6,250,410.00 4,736.81 435 27.64 1.18 Municipal/Provincial Bonds 1,582,700.00 1,582,700.00 1,582,700.00 0.00 6,030 7.01 11.03 22,590,287.19 22,507,751.38 22,521,785.28 14,033.90 835 100.00 Portfolio diversification (%) ■ Cash and Cash Equivalents 2.76 ■ Commercial Paper 2.20 ■ Corporate Bonds 16.01 ■ Government Agencies 44.37 ■ Government Bonds 27.64 ■ Municipal/Provincial Bonds 7.01 Total 100.00 SAN RAFAEL 6 MATURITY DISTRIBUTION OF SECURITIES HELD As of February 29, 2016 Maturity Under 90 days 90 to 179 days 180 days to 1 year 1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years Over 5 years 14.00 12.00 E 10.00 0 8.00 U 6.00 4.00 x 2.00 0.00 CP J° oo aa� �o Maturity distribution �11 o�e�`� Historic cost 624,075.08 2,000,182.57 3, 558, 750.63 12,321,018.91 2,503,560.00 0.00 0.00 1,582,700.00 Percent 2.76 8.85 15.75 54.54 11.08 0.00 0.00 7.01 SAN RAFAEL � OJ Percent 2.76 8.85 15.75 54.54 11.08 0.00 0.00 7.01 SAN RAFAEL SECURITIES HELD SAN RAFAEL As of February 29, 2016 Cusip/ Coupon Maturity/ Par value or Historical cost/ Amortized cost/ Fair value/ Unrealized Interest Interest Total Description Call date shares Accrued interest Accretion Change in fair gain received earned accrued Port purchased (amortization) value (loss) interest cost Cash and Cash Equivalents Cash and Cash Equivalents 0.000 624,075.08 624,075.08 624,075.08 624,075.08 0.00 0.00 0.00 0.00 2.76 0.00 0.00 0.00 Total Cash and Cash Equivalents 624,075.08 624,075.08 624,075.08 624,075.08 0.00 0.00 0.00 0.00 2.76 0.00 0.00 0.00 Commercial Paper 21687AHG1 0.000 08/16/2016 500,000.00 497,871.94 498,097.13 498,145.70 48.57 0.00 0.00 0.00 2.20 CP RABOBANK 0.00 225.19 273.76 INTERNATIONAL, UTRECHT 0% 16/08/2016 Total Commercial Paper 500,000.00 497,871.94 498,097.13 498,145.70 0.00 0.00 225.19 273.76 Corporate Bonds 89233P5E2 2.000 09/15/2016 500,000.00 513,850.00 503,363.33 502,886.50 (476.83) 0.00 777.78 4,555.56 2.27 TOYOTA MOTOR CREDIT CORP 0.00 (517.43) (780.00) 2% 15/09/2016 36962G51-13 3.350 10/17/2016 500,000.00 530,685.00 507,671.25 507,093.00 (578.25) 0.00 1,302.78 6,141.67 2.35 GENERAL ELECTRIC CO 3.35% 0.00 (1,013.82) (1,187.50) 17/10/2016 24422ERN1 1.400 03/15/2017 500,000.00 504,785.00 502,492.19 501,542.00 (950.19) 0.00 544.45 3,188.89 2.23 JOHN DEERE CAPITAL CORP 0.00 (199.37) (318.50) 1.4% 15/03/2017 717081 D.19 1.100 05/15/2017 500,000.00 499,595.00 499,796.09 501,353.50 1,557.41 0.00 427.78 1,588.89 2.21 PFIZER INC 1.1 % 15/05/2017 0.00 14.06 114.75 459200GJ4 5.700 09/14/2017 500,000.00 568,635.00 533,412.82 534,452.50 1,039.68 0.00 2,216.67 13,062.50 2.52 IBM CORP 5.7% 14/09/2017 09/13/2017 0.00 (1,809.36) (1,251.00) 94988J5A1 1.650 01/22/2018 500,000.00 501,930.00 501,877.69 502,053.00 175.31 0.00 252.08 687.50 2.22 WELLS FARGO BANK NA 1.65% (435.42) (52.31) 123.00 22/01/2018 8 SECURITIES HELD SAN RAFAEL As of February 29, 2016 Cusip/ Coupon Maturity/ Par value or Historical cost/ Amortized cost/ Fair value/ Unrealized Interest Interest Total Description Call date shares Accrued interest Accretion Change in fair gain received earned accrued Port purchased (amortization) value (loss) interest cost Corporate Bonds 037833AJ9 1.000 05/03/2018 500,000.00 498,090.00 498,144.50 498,686.50 542.00 0.00 250.00 1,611.11 2.20 APPLE INC 1%03/05/2018 (1,361.11) 54.50 596.50 Total Corporate Bonds 3,500,000.00 3,617,570.00 3,546,757.87 3,548,067.00 1,309. 0.00 16.01 (1,796.53) (3,523.73) (2,702.75) ]0&836.12 Government Agencies 3133EDDP4 0.520 06/17/2016 500,000.00 500,670.00 500,087.96 500,220.00 132.04 0.00 202.22 520.00 2.22 FEDERAL FARM CREDIT BANK 0.00 (24.67) (15.00) 0.52% 17/06/2016 3135GOCM3 1.250 09/28/2016 1,000,000.00 1,014,450.00 1,003,328.46 1,003,660.00 331.54 0.00 972.23 5,243.06 4.49 FANNIE MAE 1.25%28/09/2016 0.00 (480.07) (584.00) 3133EDYQ9 0.750 01/20/2017 500,000.00 500,000.00 500,000.00 500,005.00 5.00 0.00 291.67 406.25 2.21 FEDERAL FARM CREDIT BANK 0.00 0.00 0.00 0.75% 2010112017 (CALLABLE 10/03/16) 3137EADCO 1.000 03/08/2017 500,000.00 501,500.00 500,519.29 501,292.00 772.71 0.00 388.89 2,375.00 2.22 FREDDIE MAC 1% 08/03/2017 0.00 (42.33) (77.50) 3135GOZB2 0.750 04/20/2017 500,000.00 496,725.00 498,784.84 500,118.50 1,333.66 0.00 291.67 1,343.75 2.20 FANNIE MAE 0.75%20/04/2017 0.00 88.91 (33.50) 3133EEX62 0.800 06/16/2017 1,000,000.00 999,770.00 999,851.55 999,930.00 78.45 0.00 622.22 1,622.22 4.43 FEDERAL FARM CREDIT BANK 0.00 9.56 (1,200.00) 0.8% 16/06/2017 3137EADV8 0.750 07/14/2017 1,000,000.00 998,530.00 999,031.76 999,477.00 445.24 0.00 583.33 937.50 4.42 FREDDIE MAC 0.75% 0.00 58.80 (269.00) 14/07/2017 3136GOZH7 1.050 09/05/2017 1,000,000.00 1,005,150.00 1,003,640.40 1,003,140.00 (500.40) 0.00 816.67 5,075.00 4.45 FANNIE MAE 1.05%05/09/2017 0.00 (200.39) 610.00 CALLABLE 9 SECURITIES HELD As of February 29, 2016 Cusip/ Coupon Maturity/ Par value or Historical cost/ Amortized cost/ Fair value/ Unrealized Interest Description Call date shares Accrued interest Accretion Change in fair gain received 3,050.00 4.42 purchased (amortization) value (loss) 1,069.45 Government Agencies 6,493.06 4.46 7,221.68 33,103.34 44.37 495.14 313380EC7 0.750 09/08/2017 1,000,000.00 998,790.00 999,102.73 998,889.00 (213.73) 0.00 FEDERAL HOME LOAN BANK 0.00 3.33 0.00 49.12 234.00 2.21 346.65 0.75% 08/09/2017 908.47 2.21 10 3130A51-56 0.900 10/27/2017 1,000,000.00 999,070.00 999,349.11 1,001,940.00 2,590.89 0.00 FEDERAL HOME LOAN BANK 0.00 32.71 (120.00) 0.9% 27/10/2017 3130A6D87 0.900 11/20/2017 1,000,000.00 1,000,660.00 1,000,504.56 1,000,390.00 (114.56) 0.00 FEDERAL HOME LOAN BANK 0.00 (24.42) (80.00) 0.9% 20/11/2017 313378A43 1.375 03/09/2018 1,000,000.00 1,007,970.00 1,006,247.45 1,009,326.00 3,078.55 0.00 FEDERAL HOME LOAN BANK 0.00 (257.10) (119.00) 1.375% 09/03/2018 overnment A encies 10,000,000.00 10,023,285.00 10,010,448.11 10,018,387.50 MP 0.00 w 0.00 (789.88) (1,654.00) Government Bonds 912828VR8 0.625 08/15/2016 1,000,000.00 1,001,640.63 1,000,351.56 1,000,517.00 165.44 3,125.00 USA TREASURY 0.625% 0.00 (60.69) (39.00) 15/08/2016 912828WF3 0.625 11/15/2016 1,000,000.00 999,765.63 999,929.11 999,961.00 31.89 0.00 USA TREASURY 0.625% 0.00 7.90 (156.00) 15/11/2016 912828SJ0 0.875 02/28/2017 750,000.00 751,464.84 750,545.02 751,201.50 656.48 3,281.25 USA TREASURY 0.875% 0.00 (43.31) (351.00) 28/02/2017 912828032 0.750 03/15/2017 500,000.00 499,453.13 499,786.20 500,215.00 428.80 0.00 USA TREASURY 0.75% 0.00 16.31 (156.00) 15/03/2017 912828WP1 0.875 06/15/2017 500,000.00 499,414.06 499,694.74 500,879.00 1,184.26 0.00 USA TREASURY 0.875% 0.00 18.75 (215.00) 15/06/2017 SAN RAFAEL Interest Total % earned accrued Port interest cost 583.33 3,562.50 4.42 700.00 3,050.00 4.42 700.00 2,475.00 4.43 1,069.45 6,493.06 4.46 7,221.68 33,103.34 44.37 495.14 240.39 4.43 497.94 1,820.06 4.43 522.84 0.00 3.33 298.77 1,720.47 2.21 346.65 908.47 2.21 10 SECURITIES HELD SAN RAFAEL As of February 29, 2016 Cusip/ Coupon Maturity/ Par value or Historical cost/ Amortized cost/ Fair value/ Unrealized Interest Interest Total Description Call date shares Accrued interest Accretion Change in fair gain received earned accrued Port purchased (amortization) value (loss) interest cost Government Bonds 912828TM2 0.625 08/31/2017 1,000,000.00 994,921.88 996,963.09 997,812.00 848.91 3,125.00 497.94 0.00 4.40 USA TREASURY 0.625% 0.00 160.42 (40.00) 31/08/2017 912828G20 0.875 11/15/2017 500,000.00 500,625.00 500,456.34 500,683.50 227.16 0.00 348.56 1,274.04 2.22 USA TREASURY 0.875% 0.00 (21.17) (58.50) 15/11/2017 912828UR9 0.750 02/28/2018 1,000,000.00 997,500.00 997,947.13 999,141.00 1,193.87 3,750.00 597.53 0.00 4.42 USA TREASURY 0.75% 0.00 81.55 664.00 28/02/2018 Total Government Bonds 6,250,000.00 6,244,785.17 6,245,673.19 6,250,410.00 4,736.81 13,281.25 3,605.37 5,963.43 27.64 0.00 159.76 (351.50) Municipal/Provincial Bonds 888599LS4 5.250 09/02/2032 1,582,700.00 1,582,700.00 1,582,700.00 1,582,700.00 0.00 0.00 6,693.50 34,390.75 7.01 PT. SAN ASSESS DISTRICT 0.00 0.00 0.00 5.25% 144A 02/09/2032 SANRAF$01 Total Municipal/Provincial Bonds 1,582,700.00 1,582,700.00 1,582,700.00 0.00 0.00 6,693.50 34,390.75 7.01 0.00 0.00 0.00 III GASB 40 - DEPOSIT AND INVESTMENT RISK DISCLOSURE As of February 29, 2016 SAN RAFAEL Cusip Description Coupon Maturity Call date 5&P Moody Par value or Historical % Portfolio Market % Portfolio Effective date rating rating shares cost hist cost value mkt value dur (yrs) United States Treasury Note/Bond 912828VR8 USA TREASURY 0.625% 0.625 08/15/2016 AA+ Aaa 1,000,000.00 1,001,640.63 4.43 1,000,517.00 4.44 0.46 912828WF3 USA TREASURY 0.625% 0.625 11/15/2016 AA+ Aaa 1,000,000.00 999,765.63 4.43 999,961.00 4.44 0.71 9128285/0 USA TREASURY 0.875% 0.875 02/28/2017 AA+ Aaa 750,000.00 751,464.84 3.33 751,201.50 3.34 0.99 912828032 USA TREASURY 0.75% 0.750 03/15/2017 AA+ Aaa 500,000.00 499,453.13 2.21 500,215.00 2.22 1.03 912828WP1 USA TREASURY 0.875% 0.875 06/15/2017 AA+ Aaa 500,000.00 499,414.06 2.21 500,879.00 2.22 1.28 912828TM2 USA TREASURY 0.625% 0.625 08/31/2017 AA+ Aaa 1,000,000.00 994,921.88 4.40 997,812.00 4.43 1.49 912828G20 USA TREASURY 0.875% 0.875 11/15/2017 AA+ Aaa 500,000.00 500,625.00 2.22 500,683.50 2.22 1.69 912828UR9 USA TREASURY 0.75% 0.750 02/28/2018 AA+ Aaa 1,000,000.00 997,500.00 4.42 999,141.00 4.44 1.98 Issuer total 6,250,000.00 6,244,785.17 27.64 6,250,410.00 27.75 1.18 Federal Home Loan Banks 313380EC7 FEDERAL HOME LOAN 0.750 09/08/2017 AA+ Aaa 1,000,000.00 998,790.00 4.42 998,889.00 4.44 1.51 3130A5L56 FEDERAL HOME LOAN 0.900 10/27/2017 AA+ Aaa 1,000,000.00 999,070.00 4.42 1,001,940.00 4.45 1.64 3130A6D87 FEDERAL HOME LOAN 0.900 11/20/2017 AA+ Aaa 1,000,000.00 1,000,660.00 4.43 1,000,390.00 4.44 1.70 313378A43 FEDERAL HOME LOAN 1.375 03/09/2018 AA+ Aaa 1,000,000.00 1,007,970.00 4.46 1,009,326.00 4.48 1.98 Issuer total 4,000,000.00 4,006,490.00 17.74 4,010,545.00 17.81 1.71 Federal National Mortgage Association 3135GOCM3 FANNIE MAE 1.25% 1.250 09/28/2016 AA+ Aaa 1,000,000.00 1,014,450.00 4.49 1,003,660.00 4.46 0.57 3135GOZB2 FANNIE MAE 0.75% 0.750 04/20/2017 AA+ Aaa 500,000.00 496,725.00 2.20 500,118.50 2.22 1.13 3136GOZH7 FANNIE MAE 1.05% 1.050 09/05/2017 AA+ Aaa 1,000,000.00 1,005,150.00 4.45 1,003,140.00 4.45 1.49 Issuer total 2,500,000.00 2,516,325.00 11.14 2,506,918.50 11.13 1.05 Federal Farm Credit Banks 3133EDDP4 FEDERAL FARM CREDIT 0.520 06/17/2016 AA+ Aaa 500,000.00 500,670.00 2.22 500,220.00 2.22 0.29 3133EDYQ9 FEDERAL FARM CREDIT 0.750 01/20/2017 AA+ Aaa 500,000.00 500,000.00 2.21 500,005.00 2.22 0.50 IT, GASB 40 - DEPOSIT AND INVESTMENT RISK DISCLOSURE SAN RAFAEL As of February 29, 2016 Cusip Description Coupon Maturity Call date 5&P Moody Par value or Historical % Portfolio Market % Portfolio Effective date rating rating shares cost hist cost value mkt value dur (yrs) Federal Farm Credit Banks 3133EEX62 FEDERAL FARM CREDIT 0.800 06/16/2017 AA+ Aaa 1,000,000.00 999,770.00 4.43 999,930.00 4.44 1.28 Issuer total 2,000,000.00 2,000,440.00 8.86 2,000,155.00 8.88 0.84 Pt. San Assess District 888599LS4 PT. SAN ASSESS 5.250 09/02/2032 NR NR 1,582,700.00 1,582,700.00 7.01 1,582,700.00 7.03 11.03 Issuer total 1,582,700.00 1,582,700.00 7.01 1,582,700.00 7.03 11.03 Federal Home Loan Mortgage Corp 3137EADCO FREDDIEMAC1% 1.000 03/08/2017 AA+ Aaa 500,000.00 501,500.00 2.22 501,292.00 2.23 1.01 3137EADV8 FREDDIE MAC 0.75% 0.750 07/14/2017 AA+ Aaa 1,000,000.00 998,530.00 4.42 999,477.00 4.44 1.36 Issuer total 1,500,000.00 1,500,030.00 6.64 1,500,769.00 6.66 1.24 Cash and Cash Equivalents INVESTED CASH 0.000 624,075.08 624,075.08 0.00 624,075.08 2.77 0.00 Issuer total 624,075.08 624,075.08 0.00 624,075.08 2.77 0.00 International Business Machines Corp 4592000J4 IBM CORP 5.7% 5.700 09/14/2017 09/13/2017 AA- Aa3 500,000.00 568,635.00 2.52 534,452.50 2.37 1.46 Issuer total 500,000.00 568,635.00 2.52 534,452.50 2.37 1.46 General Electric Co 36962G5H3 GENERAL ELECTRIC CO 3.350 10/17/2016 AA+ Al 500,000.00 530,685.00 2.35 507,093.00 2.25 0.62 Issuer total 500,000.00 530,685.00 2.35 507,093.00 2.25 0.62 Toyota Motor Credit Corp 89233P5E2 TOYOTA MOTOR CREDIT 2.000 09/15/2016 AA- Aa3 500,000.00 513,850.00 2.27 502,886.50 2.23 0.53 Issuer total 500,000.00 513,850.00 2.27 502,886.50 2.23 0.53 13 GASB 40 - DEPOSIT AND INVESTMENT RISK DISCLOSURE SAN RAFAEL As of February 29, 2016 Cusip Description Coupon Maturity Call date 5&P Moody Par value or Historical % Portfolio Market % Portfolio Effective date rating rating shares cost hist cost value mkt value dur (yrs) Wells Fargo Bank NA 94988J5A1 WELLS FARGO BANK NA 1.650 01/22/2018 AA- Aa2 500,000.00 501,930.00 2.22 502,053.00 2.23 1.87 Issuer total 500,000.00 501,930.00 2.22 502,053.00 2.23 1.87 John Deere Capital Corp 24422ERN1 JOHN DEERE CAPITAL 1.400 03/15/2017 A A2 500,000.00 504,785.00 2.23 501,542.00 2.23 1.03 Issuer total 500,000.00 504,785.00 2.23 501,542.00 2.23 1.03 Pfizer Inc 717081DJ9 PFIZER INC 1.1% 1.100 05/15/2017 AA Al 500,000.00 499,595.00 2.21 501,353.50 2.23 1.19 Issuer total 500,000.00 499,595.00 2.21 501,353.50 2.23 1.19 Apple Inc 037833AJ9 APPLE INC 1%03/05/2018 1.000 05/03/2018 AA+ Aal 500,000.00 498,090.00 2.20 498,686.50 2.21 2.14 Issuer total 500,000.00 498,090.00 2.20 498,686.50 2.21 2.14 Rabobank 21687AHG1 CP RABOBANK 0.000 08/16/2016 A-1 P-1 500,000.00 497,871.94 2.20 498,145.70 2.21 0.46 Issuer total 500,000.00 497,871.94 2.20 498,145.70 2.21 0.46 14 SECURITIES PURCHASED SAN RAFAEL For the period February 1, 2016 - February 29, 2016 Cusip / Description / Broker Trade date Coupon Maturity/ Par value or Unit cost Principal Accrued Settle date Call date shares cost interest purchased Commercial Paper 21687AHG1 02/09/2016 0.000 08/16/2016 500,000.00 99.57 (497,871.94) 0.00 CP RABOBANK INTERNATIONAL, UTRECHT 0% 16/08/2016 02/10/2016 RBC DOMINION SECURITIES INC. Total Commercial Paper 500,000.00 (497,871.94) 0.00 Corporate Bonds 037833AJ9 02/08/2016 1.000 05/03/2018 500,000.00 99.62 (498,090.00) (1,361.11) APPLE INC 1%03/05/2018 02/11/2016 WELLS FARGO SECURITIES INTL LTD 94988J5A1 02/12/2016 1.650 01/22/2018 500,000.00 100.39 (501,930.00) (435.42) WELLS FARGO BANK NA 1.65% 22/01/2018 02/18/2016 WELLS FARGO SECURITIES INTL LTD Total Corporate Bonds 1,000,000.00 (1,000,020.00) (1,796.53) 15 TRANSACTION REPORT For the period February 1, 2016 - February 29, 2016 Trade date Cusip Transaction Sec type Description Maturity Par value or Realized Principal Settle date shares gain(loss) 02/08/2016 037833AJ9 Bought Corporate Bonds APPLE INC 1% 03/05/2018 05/03/2018 500,000.00 0.00 (498,090.00) 02/11/2016 02/09/2016 21687AHG1 Bought Commercial Paper CP RABOBANK 08/16/2016 500,000.00 0.00 (497,871.94) 02/10/2016 02/12/2016 94988J5A1 Bought Corporate Bonds WELLS FARGO BANK NA 1.65% 01/22/2018 500,000.00 0.00 (501,930.00) 02/18/2016 02/15/2016 912828VR8 Income Government Bonds USA TREASURY 0.625% 08/15/2016 1,000,000.00 0.00 0.00 02/15/2016 02/29/2016 912828SJO Income Government Bonds USA TREASURY 0.875% 02/28/2017 750,000.00 0.00 0.00 02/29/2016 02/29/2016 912828TM2 Income Government Bonds USA TREASURY 0.625% 08/31/2017 1,000,000.00 0.00 0.00 02/29/2016 02/29/2016 912828UR9 Income Government Bonds USA TREASURY 0.75% 02/28/2018 1,000,000.00 0.00 0.00 02/29/2016 SAN RAFAEL Interest Transaction total (1,361.11) 0.00 (435.42) 3,125.00 3,281.25 3,125.00 3,750.00 SECURITIES BID AND OFFER For the period February 1, 2016 - February 29, 2016 Trans Settle Description Call date Broker BUY 02/11/2016 Apple Inc 1%03/05/2018 WELLFA BUY 02/10/2016 Rabobank Nederland 16/08/2016 RBCMM BUY 02/18/2016 Wells Fargo Bank Na 1.65% WELLFA Par value Discount Price YTM/YTC Competitive 500,000 0.00 99.62 1.18 JPMSFI @ 99.6830 MLUSFI @ 99.6614 500,000 0.00 99.57 0.82 BCUSFI @ 0.81 GSUSFI @ 0.81 500,000 0.00 100.39 1.45 - MIZUFI @ 100.4630 SAN RAFAEL 17 ADDITIONAL INFORMATION As of February 29, 2016 SAN RAFAEL 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. When Moodys, 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 of Moodys and S&P ratings. You cannot invest in an index. The volatility of the benchmark may be materially different from that of the Composite. The benchmark is presented merely to show general trends in the market for the period and is not intended to imply that a clients account is benchmarked to the indices either in composition, volatility, or level of risk. An index has no expenses. Index data is provided for comparative purposes only. A variety of factors may cause an index to be an inaccurate benchmark. 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 note must 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 note must 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 note must 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. Past 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 get back 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 changes in 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 for your 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. This document 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 be duplicated, 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 clients Investment 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 Investor Services Corp. (CISC), Pareto New York LLC (PNY) and Pareto Investment Management Limited (PIML). 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 of skill or training. 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Insight makes no implied or expressed recommendations concerning the manner in which an account should 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 will remain 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 be profitable or that future investment decisions will be profitable or will equal or exceed the past investment performance of the securities listed. 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. Insight 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 reference the 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 York Mellon 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 and disclaims all expressed or implied warranties in connection therewith. © 2016 Insight Investment. All rights reserved. 18 SAN RAFAEL March 2016 3 A BNY MELLON COMPANY'"^ FOR PROFESSIONAL CLIENTS ONLY NOT TO BE DISTRIBUTED TO RETAIL CLIENTS THIS DOCUMENT SHOULD NOT BE REPRODUCED IN ANY FORM WITHOUT PRIOR WRITTEN APPROVAL Insight INVESTMENT Contents Fixed income market review Activity and performance summary Recap of securities held Maturity distribution of securities held Securities held GASB 40 - Deposit and investment risk disclosure 12 Securities purchased 15 Transaction report 16 Securities bid and offer 17 Additional information 18 FIXED INCOME MARKET REVIEW As of March 31, 2016 SAN RAFAEL Chart 1: Institute for Supply Management Indices 02/2011 - 02/2016 Economic Indicators & Monetary Policv: The final estimate of 2015 fourth quarter Gross 70.0 - Domestic Product (GDP) was revised upward to 1.4 percent from 1.0 percent. Strong consumer spending helped support the increase in GDP. Manufacturing showed signs of growth in February as the Institute for Supply Management's (ISM) manufacturing index value increased to 49.5 from 48.2. While the index value remains below 50 indicating economic Z 60.0 contraction, the February increase was the largest since April 2015. The ISM non- manufacturing index value fell slightly, but remains strong at 53.4 (See Chart 1). a) 50.0 V 242,000 jobs were added to the work force in February, as the labor market continues its strong momentum. The unemployment rate remained at 4.9 percent, but the L underemployment rate dropped to 9.7 percent from 9.9 percent. The underemployment rate 40.0 once again reached a post -recession low. Further strength in employment was reported in 2 February as the labor force participation rate increased to 62.9 percent from 62.7 percent. Wages fell slightly on a month -over -month basis, but grew at a 2.2 percent rate on an annual basis. 30.0 Feb -11 Feb -12 Feb -13 Feb -14 Feb -15 Feb -16 Inflation indices were mixed in February. The Producer Price Index (PPI) including food and energy decreased to negative 0.2 percent on a month -over -month basis. Core PPI decreased Non -Manufacturing Manufacturing as well, falling to 0.1 percent from 0.2 percent. On an annual basis, however, the headline PPI increased to 1.2 percent from 0.6 percent and the core PPI increased to 0.9 percent from 0.8 percent. On the consumer side, the headline Consumer Price Index (CPI) fell to negative 0.2 Chart 2: Treasury Yield Curves 02/29/2016 - 03/31/2016 percent while the core CPI remained unchanged at 0.3 percent on a month -over -month basis. The year -over -year headline CPI was 1.0 percent while the core CPI was 2.3 percent. Inflation 3.00% indicators may get a boost in March as oil prices have increased to roughly $40 dollars a barrel from $30 dollars a barrel in February. 2.50% Housing starts bounced back in February, growing 5.2 percent to an annualized rate of 1.1 million. Existing home sales however, decreased 7.1 percent to an annualized rate of 5.08 2.00% million. N @ The Federal Open Market Committee (FOMC) voted to maintain the Fed funds target rate at C: 1.50% 0.25 percent to 0.50 percent during the March 16° meeting. The FOMC also revised its 2016 a outlook, and now expects to raise the Fed funds target rate twice this year. Following the 1.00% 3/31/2016 December meeting, the Committee projected three to four interest rate movements in 2016. 2/29/2016 Yield Curve & Spreads: At the end of March, the 3 -month Treasury bill yielded 0.20 percent, 0.50% the 6 -month Treasury bill yielded 0.38 percent, the 2 -year Treasury note yielded 0.72 percent, the 5 -year Treasury note yielded 1.21 percent, and the 10 -year Treasury note yielded 1.77 percent (See Chart 2). 0.00% 3 m 6 m 1 yr 2 yr 3 yr 4 yr 5 yr 6 yr 7 yr 8 yr 9 yr 10 yr Charts sourced from Bloomberg Finance LP February 29, 2016, March 31, 2016. Past performance is no assurance of future returns. Please refer to the important disclosures at the back of this presentation. ACTIVITY AND PERFORMANCE SUMMARY For the period March 1, 2016 - March 31, 2016 Amortized Cost Basis Activitv Summary Opening balance Income received Total receipts Participant withdrawals Expenses paid Total disbursements Interportfolio transfers Total Interportfolio transfers Realized gain (loss) Total amortization expense Total OID/MKT accretion income Return of capital Closing balance Ending fair value Unrealized gain (loss) Fed Funds Overnight Repo Merrill Lynch 3m US Treas Bill Merrill Lynch 6m US Treas Bill ML 1 Year US Treasury Note ML 2 Year US Treasury Note ML 5 Year US Treasury Note 22,507,751.38 90,795.88 * Six 90,795.88 month trailing month trailing Commercial Paper (41,545.88) Corporate Bonds (130.87) Government Agencies (41,676.75) Government Bonds 0.00 Municipal/Provincial Bonds 0.02 Total 0.00 0.00 (4,793.51) 1,003.70 0.00 22,553,080.70 22,586,126.80 33,046.10 Comnarative Rates of Return W * Twelve * Six * One month month trailing month trailing earned 0.20 0.13 0.03 0.25 0.17 0.04 0.11 0.10 0.02 0.20 0.16 0.03 0.40 0.26 0.06 0.74 0.42 0.07 1.52 0.74 0.12 * rates reflected are cumulative SAN RAFAEL Detail of Amortized Cost Basis Return Interest Accretion Realized Total earned (amortization) gain (loss) income 0.00 349.05 0.00 349.05 7,199.99 (3,537.43) 0.00 3,662.56 8,386.65 (772.23) 0.00 7,614.42 3,836.40 170.80 0.00 4,007.20 7,155.13 0.00 0.00 7,155.13 26,578.17 (3,789.81) 0.00 22,788.36 Summary of Amortized Cost Basis Return for the Period Total portfolio Interest earned 26,578.17 Accretion (amortization) (3,789.81) Realized gain (loss) on sales 0.00 Total income on portfolio 22,788.36 Average daily amortized cost 22,534,686.96 Period return (%) 0.10 YTD return (%) 0.28 Weighted average final maturity in days 822 ACTIVITY AND PERFORMANCE SUMMARY For the period March 1, 2016 - March 31, 2016 Fair Value Basis Activitv Summary * Six Opening balance 22,521,785.28 Income received 90,795.88 Change in Total receipts 90,795.88 Participant withdrawals (41,545.88) 0.25 Expenses paid (130.87) 0.04 Total disbursements (41,676.75) Interportfolio transfers 0.00 0.39 Total Interportfolio transfers 0.00 Unrealized gain (loss) on security movements 0.00 Return of capital 0.00 Change in fair value for the period 15,222.39 Ending fair value 22,586,126.80 Fed Funds Overnight Repo Merrill Lynch 3m US Treas Bill Merrill Lynch 6m US Treas Bill ML 1 Year US Treasury Note ML US Treasury 1-3 ML US Treasury 1-5 Comparative Rates of Return W * Twelve * Six * One month month trailing month trailing Change in 0.20 0.13 0.03 0.25 0.17 0.04 0.12 0.10 0.05 0.39 0.22 0.09 0.40 0.19 0.14 0.92 0.46 0.17 1.62 0.89 0.23 * rates reflected are cumulative SAN RAFAEL Summary of Fair Value Basis Return for the Period Total portfolio Interest earned Detail of Fair Value Basis Return Change in fair value 15,222.39 Interest Change in Total 22,626,179.73 earned fair value income Commercial Paper 0.00 535.64 535.64 Corporate Bonds 7,199.99 5,129.75 12,329.74 Government Agencies 8,386.65 4,616.00 13,002.65 Government Bonds 3,836.40 4,941.00 8,777.40 Municipal/Provincial Bonds 7,155.13 0.00 7,155.13 Total 26,578.17 15,222.39 41,800.56 Summary of Fair Value Basis Return for the Period Total portfolio Interest earned 26,578.17 Change in fair value 15,222.39 Total income on portfolio 41,800.56 Average daily total value * 22,626,179.73 Period return (%) 0.18 YTD return (%) 0.64 Weighted average final maturity in days 822 * Total value equals market value and accrued interest 5 RECAP OF SECURITIES HELD As of March 31, 2016 Portfolio diversification (%) Weighted Historical Amortized Fair value Unrealized average cost cost effective gain (loss) Cash and Cash Equivalents 73,758.21 73,758.21 73,758.21 0.00 Commercial Paper 497,871.94 498,446.18 498,681.34 235.16 Corporate Bonds 3,617,570.00 3,543,220.44 3,553,196.75 9,976.31 Government Agencies 10,622,721.00 10,609,111.88 10,622,439.50 13,327.62 Government Bonds 6,244,785.17 6,245,843.99 6,255,351.00 9,507.01 Municipal/Provincial Bonds 1,582,700.00 1,582,700.00 1,582,700.00 0.00 Portfolio diversification (%) Weighted Percent Weighted average of average final portfolio effective maturity (days) ■ Municipal/Provincial Bonds duration (years) 1 0.33 0.00 0 2.20 0.37 439 15.98 1.18 472 46.92 1.22 404 27.58 1.10 5,999 6.99 11.24 ■ Cash and Cash Equivalents 0.33 ■ Commercial Paper 2.20 ■ Corporate Bonds 15.98 ■ Government Agencies 46.92 ■ Government Bonds 27.58 ■ Municipal/Provincial Bonds 6.99 Total 100.00 SAN RAFAEL 6 MATURITY DISTRIBUTION OF SECURITIES HELD As of March 31, 2016 Maturity Under 90 days 90 to 179 days 180 days to 1 year 1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years Over 5 years 14.00 ID.1BIll E 10.00 0 8.00 U u 6.00 4.00 x 2.00 KIM Maturity distribution aa�� J�ae`Co C§o-as o o �O Historic cost Percent 574, 428.21 2.54 2,612,798.57 11.54 5,302,103.60 23.42 12,069,285.94 53.31 498,090.00 2.20 0.00 0.00 0.00 0.00 1,582,700.00 6.99 SAN RAFAEL 7 SECURITIES HELD SAN RAFAEL As of March 31, 2016 Cusip/ Coupon Maturity/ Par value or Historical cost/ Amortized cost/ Fair value/ Unrealized Interest Interest Total Description Call date shares Accrued interest Accretion Change in fair gain received earned accrued Port purchased (amortization) value (loss) interest cost Cash and Cash Equivalents Cash and Cash Equivalents 0.000 73,758.21 73,758.21 73,758.21 73,758.21 0.00 0.00 0.00 0.00 0.33 0.00 0.00 0.00 Total Cash and Cash Equivalents 73,758.21 1 73,758.21 73,758.21 73,758.21 0.00 0.00 0.00 0.00 0.33 0.00 0.00 0.00 Commercial Paper 21687AHG1 0.000 08/16/2016 500,000.00 497,871.94 498,446.18 498,681.34 235.16 0.00 0.00 0.00 2.20 CP RABOBANK 0.00 349.05 535.64 INTERNATIONAL, UTRECHT 0% 16/08/2016 Total Commercial Paper 500,000.00 497,871.94 498,446.18 498,681.34 235.16 0.00 0.00 349.05 535.64 Corporate Bonds 89233P5E2 2.000 09/15/2016 500,000.00 513,850.00 502,845.89 503,018.50 172.61 5,000.00 888.88 444.44 2.27 TOYOTA MOTOR CREDIT CORP 0.00 (517.44) 132.00 2% 15/09/2016 36962G51-13 3.350 10/17/2016 500,000.00 530,685.00 506,657.43 506,872.50 215.07 0.00 1,488.89 7,630.56 2.34 GENERAL ELECTRIC CO 3.35% 0.00 (1,013.82) (220.50) 17/10/2016 24422ERN1 1.400 03/15/2017 500,000.00 504,785.00 502,292.81 502,844.00 551.19 3,500.00 622.22 311.11 2.23 JOHN DEERE CAPITAL CORP 0.00 (199.38) 1,302.00 1.4% 15/03/2017 717081 D.19 1.100 05/15/2017 500,000.00 499,595.00 499,810.16 501,807.75 1,997.59 0.00 488.89 2,077.78 2.21 PFIZER INC 1.1 % 15/05/2017 0.00 14.07 454.25 459200GJ4 5.700 09/14/2017 500,000.00 568,635.00 531,603.46 533,863.50 2,260.04 14,250.00 2,533.33 1,345.83 2.51 IBM CORP 5.7% 14/09/2017 09/13/2017 0.00 (1,809.36) (589.00) 94988J5A1 1.650 01/22/2018 500,000.00 501,930.00 501,795.09 503,760.00 1,964.91 0.00 733.33 1,420.83 2.22 WELLS FARGO BANK NA 1.65% 0.00 (82.60) 1,707.00 22/01/2018 8 SECURITIES HELD As of March 31, 2016 Cusip/ Coupon Maturity/ Par value or Historical cost/ Amortized cost/ Fair value/ Unrealized Interest Description Call date shares Accrued interest Accretion Change in fair gain received 15,286.11 15.98 purchased (amortization) value (loss) 1,111.11 Corporate Bonds 104.17 4.48 333.33 739.58 2.21 444.44 037833AJ9 1.000 05/03/2018 500,000.00 498,090.00 498,215.60 501,030.50 2,814.90 0.00 APPLE INC 1%03/05/2018 2,333.33 4.42 0.00 71.10 2,344.00 4.41 933.33 Total Corporate Bonds 758.33 3,500,000.00 3,617,570.00 3,543,220.44 3,553,196.75 9,976.31 22,750.00 0.00 (3,537.43) 5,129.75 Government Agencies 3133EDDP4 0.520 06/17/2016 500,000.00 500,670.00 500,063.30 500,360.00 296.70 0.00 FEDERAL FARM CREDIT BANK 0.00 (24.66) 140.00 0.52% 17/06/2016 3135GOCM3 1.250 09/28/2016 1,000,000.00 1,014,450.00 1,002,848.39 1,003,564.00 715.61 6,250.00 FANNIE MAE 1.25%28/09/2016 0.00 (480.07) (96.00) 3133EDYQ9 0.750 01/20/2017 500,000.00 500,000.00 500,000.00 500,005.00 5.00 0.00 FEDERAL FARM CREDIT BANK 0.00 0.00 0.00 0.75% 2010112017 (CALLABLE 20/04/16) 3137EADCO 1.000 03/08/2017 500,000.00 501,500.00 500,476.95 501,527.50 1,050.55 2,500.00 FREDDIE MAC 1% 08/03/2017 0.00 (42.34) 235.50 3135GOZB2 0.750 04/20/2017 500,000.00 496,725.00 498,873.76 500,184.00 1,310.24 0.00 FANNIE MAE 0.75%20/04/2017 0.00 88.92 65.50 3133EEX62 0.800 06/16/2017 1,000,000.00 999,770.00 999,861.11 1,000,660.00 798.89 0.00 FEDERAL FARM CREDIT BANK 0.00 9.56 730.00 0.8% 16/06/2017 3137EADV8 0.750 07/14/2017 1,000,000.00 998,530.00 999,090.56 1,000,358.00 1,267.44 0.00 FREDDIE MAC 0.75% 0.00 58.80 881.00 14/07/2017 3136GOZH7 1.050 09/05/2017 1,000,000.00 1,005,150.00 1,003,440.01 1,001,580.00 (1,860.01) 5,250.00 FANNIE MAE 1.05%05/09/2017 0.00 (200.39) (1,560.00) CALLABLE SAN RAFAEL Interest Total earned accrued Port interest cost 444.45 2,055.56 2.20 7,199.99 15,286.11 15.98 231.11 751.11 2.21 1,111.11 104.17 4.48 333.33 739.58 2.21 444.44 319.44 2.22 333.33 1,677.08 2.19 711.11 2,333.33 4.42 666.67 1,604.17 4.41 933.33 758.33 4.44 9 SECURITIES HELD SAN RAFAEL As of March 31, 2016 Cusip/ Coupon Maturity/ Par value or Historical cost/ Amortized cost/ Fair value/ Unrealized Interest Interest Total % Description Call date shares Accrued interest Accretion Change in fair gain received earned accrued Port purchased (amortization) value (loss) interest cost Government Agencies 313380EC7 0.750 09/08/2017 1,000,000.00 998,790.00 999,151.85 999,483.00 331.15 3,750.00 666.67 479.17 4.41 FEDERAL HOME LOAN BANK 0.00 49.12 594.00 0.75% 08/09/2017 3130A51-56 0.900 10/27/2017 1,000,000.00 999,070.00 999,381.82 1,002,160.00 2,778.18 0.00 800.00 3,850.00 4.41 FEDERAL HOME LOAN BANK 0.00 32.71 220.00 0.9% 27/10/2017 3130A6D87 0.900 11/20/2017 1,000,000.00 1,000,660.00 1,000,480.15 1,001,350.00 869.85 0.00 800.00 3,275.00 4.42 FEDERAL HOME LOAN BANK 0.00 (24.41) 960.00 0.9% 20/11/2017 313378A43 1.375 03/09/2018 1,000,000.00 1,007,970.00 1,005,990.35 1,010,980.00 4,989.65 6,875.00 1,222.22 840.28 4.45 FEDERAL HOME LOAN BANK 0.00 (257.10) 1,654.00 1.375% 09/03/2018 3134G8NY1 1.000 03/23/2018 600,000.00 599,436.00 599,453.63 600,228.00 774.37 0.00 133.33 133.33 2.65 FREDDIE MAC 1% 23/03/2018 09/23/2016 0.00 17.63 792.00 (CALLABLE 23/09/16) Total Government Agencies 10,600,000.00 10,622,721.00 10,609,111.88 10,622,439.50 13,327.62 24,625.00 8,386.65 16,864.99 46.92 0.00 (772.23) 4,616.00 Government Bonds 912828VR8 0.625 08/15/2016 1,000,000.00 1,001,640.63 1,000,286.69 1,000,889.00 602.31 0.00 532.28 772.67 4.42 USA TREASURY 0.625% 0.00 (64.87) 372.00 15/08/2016 912828WF3 0.625 11/15/2016 1,000,000.00 999,765.63 999,937.56 1,000,781.00 843.44 0.00 532.28 2,352.34 4.42 USA TREASURY 0.625% 0.00 8.45 820.00 15/11/2016 912828SJ0 0.875 02/28/2017 750,000.00 751,464.84 750,498.73 751,611.00 1,112.27 0.00 552.82 552.82 3.32 USA TREASURY 0.875% 0.00 (46.29) 409.50 28/02/2017 912828C32 0.750 03/15/2017 500,000.00 499,453.13 499,803.64 500,566.50 762.86 1,875.00 317.57 163.04 2.21 USA TREASURY 0.75% 0.00 17.44 351.50 15/03/2017 10 SECURITIES HELD As of March 31, 2016 Cusip/ Coupon Maturity/ Par value or Historical cost/ Amortized cost/ Fair value/ Unrealized Interest Description Call date shares Accrued interest Accretion Change in fair gain received purchased (amortization) value (loss) Government Bonds 912828WP1 0.875 06/15/2017 500,000.00 499,414.06 499,714.79 501,230.50 1,515.71 0.00 USA TREASURY 0.875% 0.00 20.05 351.50 15/06/2017 912828TM2 0.625 08/31/2017 1,000,000.00 994,921.88 997,134.57 998,789.00 1,654.43 0.00 USA TREASURY 0.625% 0.00 171.48 977.00 31/08/2017 912828G20 0.875 11/15/2017 500,000.00 500,625.00 500,433.70 501,250.00 816.30 0.00 USA TREASURY 0.875% 0.00 (22.64) 566.50 15/11/2017 912828UR9 0.750 02/28/2018 1,000,000.00 997,500.00 998,034.31 1,000,234.00 2,199.69 0.00 USA TREASURY 0.75% 0.00 87.18 1,093.00 28/02/2018 Total Government Bonds 6,250,000.00 6,244,785.17 6,245,843.99 6,255,351.00 9,507.01 1,875.00 0.00 170.80 4,941.00 Municipal/Provincial Bonds 888599LS4 5.250 09/02/2032 1,582,700.00 1,582,700.00 1,582,700.00 1,582,700.00 0.00 41,545.88 PT. SAN ASSESS DISTRICT 0.00 0.00 0.00 5.25% 144A 02/09/2032 SANRAF$01 Total Municipal/Provincial Bonds1,582,700.00 1,582,700.00 1,582,700.00 1,582,700.00 0.00 41,545.88 0.00 0.00 0.00 SAN RAFAEL Interest Total % earned accrued Port interest cost 370.56 1,279.03 2.21 526.50 526.50 4.39 372.60 1,646.64 2.21 631.79 631.79 4.41 3,836.40 7,924.83 27.58 7,155.13 0.00 6.99 7,155.13 0.00 6.99 III GASB 40 - DEPOSIT AND INVESTMENT RISK DISCLOSURE As of March 31, 2016 SAN RAFAEL Cusip Description Coupon Maturity Call date 5&P Moody Par value or Historical % Portfolio Market % Portfolio Effective date rating rating shares cost hist cost value mkt value dur (yrs) United States Treasury Note/Bond 912828VR8 USA TREASURY 0.625% 0.625 08/15/2016 AA+ Aaa 1,000,000.00 1,001,640.63 4.42 1,000,889.00 4.43 0.37 912828WF3 USA TREASURY 0.625% 0.625 11/15/2016 AA+ Aaa 1,000,000.00 999,765.63 4.42 1,000,781.00 4.43 0.62 9128285/0 USA TREASURY 0.875% 0.875 02/28/2017 AA+ Aaa 750,000.00 751,464.84 3.32 751,611.00 3.33 0.91 912828032 USA TREASURY 0.75% 0.750 03/15/2017 AA+ Aaa 500,000.00 499,453.13 2.21 500,566.50 2.22 0.95 912828WP1 USA TREASURY 0.875% 0.875 06/15/2017 AA+ Aaa 500,000.00 499,414.06 2.21 501,230.50 2.22 1.20 912828TM2 USA TREASURY 0.625% 0.625 08/31/2017 AA+ Aaa 1,000,000.00 994,921.88 4.39 998,789.00 4.42 1.41 912828G20 USA TREASURY 0.875% 0.875 11/15/2017 AA+ Aaa 500,000.00 500,625.00 2.21 501,250.00 2.22 1.61 912828UR9 USA TREASURY 0.75% 0.750 02/28/2018 AA+ Aaa 1,000,000.00 997,500.00 4.41 1,000,234.00 4.43 1.90 Issuer total 6,250,000.00 6,244,785.17 27.58 6,255,351.00 27.70 1.10 Federal Home Loan Banks 313380EC7 FEDERAL HOME LOAN 0.750 09/08/2017 AA+ Aaa 1,000,000.00 998,790.00 4.41 999,483.00 4.43 1.43 3130A5L56 FEDERAL HOME LOAN 0.900 10/27/2017 AA+ Aaa 1,000,000.00 999,070.00 4.41 1,002,160.00 4.44 1.55 3130A6D87 FEDERAL HOME LOAN 0.900 11/20/2017 AA+ Aaa 1,000,000.00 1,000,660.00 4.42 1,001,350.00 4.43 1.62 313378A43 FEDERAL HOME LOAN 1.375 03/09/2018 AA+ Aaa 1,000,000.00 1,007,970.00 4.45 1,010,980.00 4.48 1.91 Issuer total 4,000,000.00 4,006,490.00 17.70 4,013,973.00 17.77 1.63 Federal National Mortgage Association 3135GOCM3 FANNIE MAE 1.25% 1.250 09/28/2016 AA+ Aaa 1,000,000.00 1,014,450.00 4.48 1,003,564.00 4.44 0.49 3135GOZB2 FANNIE MAE 0.75% 0.750 04/20/2017 AA+ Aaa 500,000.00 496,725.00 2.19 500,184.00 2.21 1.04 3136GOZH7 FANNIE MAE 1.05% 1.050 09/05/2017 AA+ Aaa 1,000,000.00 1,005,150.00 4.44 1,001,580.00 4.43 1.42 Issuer total 2,500,000.00 2,516,325.00 11.11 2,505,328.00 11.09 0.97 Federal Home Loan Mortgage Corp 3137EADCO FREDDIEMAC1% 1.000 03/08/2017 AA+ Aaa 500,000.00 501,500.00 2.22 501,527.50 2.22 0.93 3137EADV8 FREDDIE MAC 0.75% 0.750 07/14/2017 AA+ Aaa 1,000,000.00 998,530.00 4.41 1,000,358.00 4.43 1.28 IT, GASB 40 - DEPOSIT AND INVESTMENT RISK DISCLOSURE As of March 31, 2016 SAN RAFAEL Cusip Description Coupon Maturity Call date 5&P Moody Par value or Historical % Portfolio Market % Portfolio Effective date rating rating shares cost hist cost value mkt value dur (yrs) Federal Home Loan Mortgage Corp 3134G8NY1 FREDDIE MAC 1 % 1.000 03/23/2018 09/23/2016 AA+ Aaa 600,000.00 599,436.00 2.65 600,228.00 2.66 1.18 Issuer total 2,100,000.00 2,099,466.00 9.27 2,102,113.50 9.31 1.17 Federal Farm Credit Banks 3133EDDP4 FEDERAL FARM CREDIT 3133EDYQ9 FEDERAL FARM CREDIT 3133EEX62 FEDERAL FARM CREDIT Issuer total 0.520 0.750 0.800 06/17/2016 01/20/2017 06/16/2017 AA+ AA+ AA+ Aaa Aaa Aaa 500,000.00 500,000.00 1,000,000.00 2,000,000.00 500,670.00 500,000.00 999,770.00 2,000,440.00 2.21 2.21 4.42 8.84 500,360.00 500,005.00 1,000,660.00 2,001,025.00 2.22 2.21 4.43 8.86 0.21 0.53 1.20 0.78 Pt. San Assess District 888599LS4 PT. SAN ASSESS 5.250 09/02/2032 NR NR 1,582,700.00 1,582,700.00 6.99 1,582,700.00 7.01 11.24 Issuer total 1,582,700.00 1,582,700.00 6.99 1,582,700.00 7.01 11.24 International Business Machines Corp 4592000J4 IBM CORP 5.7% 5.700 09/14/2017 09/13/2017 AA- Aa3 500,000.00 568,635.00 2.51 533,863.50 2.36 1.41 Issuer total 500,000.00 568,635.00 2.51 533,863.50 2.36 1.41 General Electric Co 36962G51-13 GENERAL ELECTRIC CO 3.350 10/17/2016 AA+ Al 500,000.00 530,685.00 2.34 506,872.50 2.24 0.53 Issuer total 500,000.00 530,685.00 2.34 506,872.50 2.24 0.53 Wells Fargo Bank NA 94988J5A1 WELLS FARGO BANK NA 1.650 01/22/2018 AA- Aa2 500,000.00 501,930.00 2.22 503,760.00 2.23 1.78 Issuer total 500,000.00 501,930.00 2.22 503,760.00 2.23 1.78 Toyota Motor Credit Corp 89233P5E2 TOYOTA MOTOR CREDIT 2.000 09/15/2016 AA- Aa3 500,000.00 513,850.00 2.27 503,018.50 2.23 0.46 Issuer total 500,000.00 513,850.00 2.27 503,018.50 2.23 0.46 13 GASB 40 - DEPOSIT AND INVESTMENT RISK DISCLOSURE SAN RAFAEL As of March 31, 2016 Cusip Description Coupon Maturity Call date 5&P Moody Par value or Historical % Portfolio Market % Portfolio Effective date rating rating shares cost hist cost value mkt value dur (yrs) John Deere Capital Corp 24422ERN1 JOHN DEERE CAPITAL 1.400 03/15/2017 A A2 500,000.00 504,785.00 2.23 502,844.00 2.23 0.95 Issuer total 500,000.00 504,785.00 2.23 502,844.00 2.23 0.95 Pfizer Inc 717081 DJ9 PFIZER INC 1.1 % 1.100 05/15/2017 AA Al 500,000.00 499,595.00 2.21 501,807.75 2.22 1.11 Issuer total 500,000.00 499,595.00 2.21 501,807.75 2.22 1.11 Apple Inc 037833AJ9 APPLE INC 1%03/05/2018 1.000 05/03/2018 AA+ Aal 500,000.00 498,090.00 2.20 501,030.50 2.22 2.06 Issuer total 500,000.00 498,090.00 2.20 501,030.50 2.22 2.06 Rabobank 21687AHG1 CP RABOBANK 0.000 08/16/2016 A-1 P-1 500,000.00 497,871.94 2.20 498,681.34 2.21 0.37 Issuer total 500,000.00 497,871.94 2.20 498,681.34 2.21 0.37 Cash and Cash Equivalents INVESTED CASH 0.000 73,758.21 73,758.21 0.00 73,758.21 0.33 0.00 Issuer total 73,758.21 73,758.21 0.00 73,758.21 0.33 0.00 14 SECURITIES PURCHASED For the period March 1, 2016 - March 31, 2016 Cusip / Description / Broker Trade date Settle date Government Agencies 3134G8NY1 03/08/2016 FREDDIE MAC 1% 23/03/2018 (CALLABLE 23/09/16) 03/23/2016 RBC DOMINION SECURITIES Total Government Agencies Coupon Maturity/ Par value or Unit cost Call date shares SAN RAFAEL Principal Accrued cost interest purchased 1.000 03/23/2018 600,000.00 99.91 (599,436.00) 0.00 09/23/2016 600,000.00 (599,436.00) 0.00 15 TRANSACTION REPORT SAN RAFAEL For the period March 1, 2016 - March 31, 2016 Trade date Cusip Transaction Sec type Description Maturity Par value or Realized Principal Interest Transaction total Settle date shares gain(loss) 03/05/2016 3136GOZH7 Income Government Agencies FANNIE MAE 1.05% 05/09/2017 09/05/2017 1,000,000.00 0.00 0.00 5,250.00 5,250.00 03/05/2016 03/08/2016 313380EC7 Income Government Agencies FEDERAL HOME LOAN BANK 09/08/2017 1,000,000.00 0.00 0.00 3,750.00 3,750.00 03/08/2016 03/08/2016 3134G8NY1 Bought Government Agencies FREDDIE MAC 1%23/03/2018 03/23/2018 600,000.00 0.00 (599,436.00) 0.00 (599,436.00) 03/23/2016 03/08/2016 3137EADCO Income Government Agencies FREDDIE MAC 1%08/03/2017 03/08/2017 500,000.00 0.00 0.00 2,500.00 2,500.00 03/08/2016 03/09/2016 313378A43 Income Government Agencies FEDERAL HOME LOAN BANK 03/09/2018 1,000,000.00 0.00 0.00 6,875.00 6,875.00 03/09/2016 03/14/2016 459200GJ4 Income Corporate Bonds IBM CORP 5.7% 14/09/2017 09/14/2017 500,000.00 0.00 0.00 14,250.00 14,250.00 03/14/2016 03/15/2016 24422ERN1 Income Corporate Bonds JOHN DEERE CAPITAL CORP 03/15/2017 500,000.00 0.00 0.00 3,500.00 3,500.00 03/15/2016 03/15/2016 89233P5E2 Income Corporate Bonds TOYOTA MOTOR CREDIT CORP 09/15/2016 500,000.00 0.00 0.00 5,000.00 5,000.00 03/15/2016 03/15/2016 912828C32 Income Government Bonds USA TREASURY 0.75% 03/15/2017 500,000.00 0.00 0.00 1,875.00 1,875.00 03/15/2016 03/28/2016 3135GOCM3 Income Government Agencies FANNIE MAE 1.25% 28/09/2016 09/28/2016 1,000,000.00 0.00 0.00 6,250.00 6,250.00 03/28/2016 03/31/2016 888599LS4 Income Municipal/Provincial Bonds PT. SAN ASSESS DISTRICT 09/02/2032 1,582,700.00 0.00 0.00 41,545.88 41,545.88 03/31/2016 16 SECURITIES BID AND OFFER For the period March 1, 2016 - March 31, 2016 Trans Settle Description Call date Broker BUY 03/23/2016 Freddie Mac 1% 23/03/2018 (callable 9/23/2016 RBCUFI Par value Discount 600,000 0.00 Price YTM/YTC Competitive 99.91 1.05 JEFFFI @ 99.9200 WELLFA @ 99.9250 SAN RAFAEL 17 ADDITIONAL INFORMATION SAN RAFAEL As of March 31, 2016 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. When Moodys, 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 of Moodys and S&P ratings. You cannot invest in an index. The volatility of the benchmark may be materially different from that of the Composite. The benchmark is presented merely to show general trends in the market for the period and is not intended to imply that a clients account is benchmarked to the indices either in composition, volatility, or level of risk. An index has no expenses. Index data is provided for comparative purposes only. A variety of factors may cause an index to be an inaccurate benchmark. 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 note must 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 note must 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 note must 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. Past 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 get back 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 changes in market conditions. Investment involves risk, including the possible loss of principal. 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Save staff report (including this cover sheet) along with all related attachments in the Team Drive (T:) --> CITY COUNCIL AGENDA ITEMS 4 AGENDA ITEM APPROVAL PROCESS 4 [DEPT - AGENDA TOPIC] Agenda Item # Date of Meeting: 5/2/2016 From: Mark Moses/Van Bach Department: Finance Date: 4/21/2016 Topic: CITY -QUARTERLY INVESTMENT REPORT Subject: CITY -QUARTERLY INVESTMENT REPORT Type: ❑ Resolution ❑ Ordinance ❑ Professional Services Agreement ❑ Other: APPROVALS ® Finance Director Remarks: Ready for City Manager's approval ❑ City Attorney Remarks: N/A ❑ Author, review and accept City Attorney / Finance changes Remarks: N/A ® City Manager Remarks: