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HomeMy WebLinkAboutFin City Quarterly Investment ReportSAN RAFAEL 6. 1,, THE CITY WITH A MISSION Agenda Item No: 4.c Meeting Date: August 7, 2017 SAN RAFAEL CITY COUNCIL AGENDA REPORT Department: Finance Department Prepared by: Mark Moses City Manager Approval: Finance Director SUBJECT: QUARTERLY INVESTMENT REPORT RECOMMENDATION: ACCEPT INVESTMENT REPORT FOR THE QUARTER ENDING JUNE 30, 2017, AS PRESENTED BACKGROUND: Pursuant to the State of California Government Code Section 53601 and the City's investment policy, last approved by Council on June 20, 2016 (and being presented separately on this City Council Agenda for annual review), 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's invested funds almost exclusively comprise legally restricted and committed funds. For example, gas tax funds legally obligated for street maintenance, development fees restricted to traffic mitigation purposes, funds set aside by policy for the San Rafael Essential Facilities project, and the City's emergency and cash flow reserve account for most of the cash and investments held throughout the fiscal year. 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. ANALYSIS: As of June 30, 2017, the primary LAIF account had a balance of $34,063,133. The other LAIF account holding housing funds for future administrative expenses contained $145,064. Portfolio returns on LAIF deposits were 0.92% for the quarter. The remaining investment assets included the $1,520,800 balance of Pt. San Pedro Assessment District bonds, and $23,068,385 in government agency securities and corporate bonds (including T -Note, John Deere Cap. Corp. Apple Inc. IBM Corp. Pepsico Inc., FNMA). The overall portfolio return for the quarter ended June 30, 2017 was 1.09%. The City's Westamerica account had a balance of $9,084,369 at quarter end. 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. FOR CITY CLERK ONLY File No.: 8-18 x 8-9 Council Meeting: 08/07/2017 Disposition: Accepted report SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 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. RECOMMENDATION: The City Council should accept the report as presented in order to satisfy State Investment Code requirements and City policy. ATTACHMENTS: Quarterly Investment Portfolio Report Historical Activity by Quarter Report Insight Investment Statements April through June 2017 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. MARK MOSES FINANCE DIRECTOR City of Rafael Quarterly Investment Portfolio Report June 30, 2017 LAIF $ 34,063,133 99.6% 0.91% LAIF - Housing $ 145,064 0.4% 0.91% Total Internally Managed $ 34,208,197 58.2% Weighted Average Yield 0.91% Days Effective Average Duration - Internal 1 LAIF, 99.6% Weighted Average Maturity - Internal 1 Cash Treasury Securities Instrumentality Securities Corporate Notes Municipal Total Externally Managed Weighted Average Yield $ 34,392 0.1% 0.00% $ 4,146,098 16.9% 1.08% $ 14,829,261 60.3% 1.02% $ 4,058,635 16.5% 1.27% $ 1,520,800 6.2% 5.25% $ 24,589,185 41.8% 14,829,261 Effective Average Duration - External Weighted Average Maturity - External I AIF - Hnucina. Corporate Cash, 0.1%— Treasury Notes, 16.5% Securities, ji" 16.9% 1.33% Years Instrumentality 1.68 Securities, 2.03 60.3% LAIF $ 34,208,197 58.2% 0.91% Cash $ 34,392 0.1% 0.00% Treasury Securities $ 4,146,098 7.1% 1.08% Instrumentality Securities $ 14,829,261 25.2% 1.02% Corporate Notes $ 4,058,635 6.9% 1.27% Municipal $ 1,520,800 2.6% 5.25% Total Portfolio Assets $ 58,797,383 Weighted Average Yield 1.09% Years Effective Average Duration - Total 0.70 Weighted Average Maturity - Total 0.85 Based on Market Values Corporate Notes 7% Instrumer Securit 25% Treasury—/ TP' Securities Cash 7% 0% / Municipal 3% LAIF 58% Exhibit A City of San Rafael Historical Activity -By Quarter Internally Managed Assets June 30, 2017 % Return March 31, 2017 % Return December 31, 2016 % Return September 30, 2016 % Return June 30, 2016 % Return LAIF $ 34,063,133 99.6% 0.91% $ 24,021,598 99.4% 0.78% $ 15,987,701 99.1% 0.72% $ 24,669,361 99.4% 0.61% $ 23,953,234 99.4% 0.58% LAIF- Housing $ 145,064 0.4% 0.91% $ 144,787 0.6% 0.78% $ 144,541 0.9% 0.72% $ 144,126 0.6% 0.61% $ 144,126 0.6% 0.58% Total Internally Managed $ 34,208,197 58.2% $ 24,166,385 49.6% $ 16,132,242 39.7% $ 24,813,487 50.3% $ 24,097,360 51.6% Weighted Average Yield 0.91% 0.78% 0.72% 0.61% 0.58% Days Days Days Days Days Effective Average Duration - Internal 1 1 1 1 1 Weighted Average Maturity- Internal 1 1 1 1 1 Externally Managed Assets Cash $ 34,392 % 0.1% Return 0.00% $ % 152,566 0.6% Return 0.00% $ 67,092 % Return 0.3% 0.00% $ 24,880 % Return 0.1% 0.00% $ 110,082 % 0.5% Return 0.00% Commercial Paper $ 4,146,098 16.9% 1.08% $ 3,498,184 14.2% 0.93% $ - 0.0% 0.00% $ - 0.0% 0.00% $ 499,703 2.2% 0.82% Treasury Securities $ 14,829,261 60.3% 1.02% $ 14,823,678 60.4% 0.96% $ 2,997,481 12.2% 0.85% $ 5,254,701 21.4% 0.80% $ 6,261,745 27.7% 0.76% Instrumentality Securities $ 4,058,635 16.5% 1.27% $ 4,559,554 18.6% 1.26% $ 15,326,190 62.6% 0.96% $ 13,150,097 53.6% 0.91% $ 10,634,528 47.0% 0.86% Corporate Notes $ 1,520,800 6.2% 5.25% $ 1,520,800 6.2% 5.25% $ 4,557,757 18.6% 1.18% $ 4,584,779 18.7% 0.87% $ 3,541,815 15.7% 1.07% Municipal $ 24,589,185 41.8% $ 24,554,781 50.4% $ 1,520,800 6.2% 5.25% $ 1,520,800 6.2% 5.25% $ 1,582,700 7.0% 5.25% Total Externally Managed $ 24,469,318 60.3% $ 24,535,257 49.7% $ 22,630,572 48.4% Weighted Average Yield 1.33% 1.27% 1.25% 1.15% 1.15% Years Years Years Years Years Effective Average Duration - External 1.68 1.76 1.91 1.87 1.66 Weighted Average Maturity - External Total Portfolio Assets % 2.03 Return % 2.07 Return % Return 2.25 % Return 2.22 % 2.06 Return, LAIF $ 34,208,197 58.2% 0.91% $ 24,166,385 49.6% 0.78% $ 16,132,242 39.7% 0.72% $ 24,813,487 50.3% 0.61% $ 24,097,360 51.6% 0.58% Cash $ 34,392 0.1% 0.00% $ 152,566 0.3% 0.00% $ 67,092 0.2% 0.00% $ 24,880 0.1% 0.00% $ 110,082 0.2% 0.00% Commercial Paper $ 4,146,098 7.1% 1.08% $ 3,498,184 7.2% 0.93% $ - 0.0% 0.00% $ - 0.0% 0.00% $ 499,703 1.1% 0.82% Treasury Securities $ 14,829,261 25.2% 1.02% $ 14,823,678 30.4% 0.96% $ 2,997,481 7.4% 0.85% $ 5,254,701 10.6% 0.82% $ 6,261,745 13.4% 0.76% Instrumentality Securities $ 4,058,635 6.9% 1.27% $ 4,559,554 9.4% 1.26% $ 15,326,190 37.7% 0.96% $ 13,150,097 26.6% 0.91% $ 10,634,528 22.8% 0.86% Corporate Notes $ 1,520,800 2.6% 5.25% $ 1,520,800 3.1% 5.25% $ 4,557,757 11.2% 1.18% $ 4,584,779 9.3% 0.87% $ 3,541,815 7.6% 1.07% Municipal $ 58,797,383 $ 48,721,166 $ 1,520,800 3.7% 5.25% $ 1,520,800 3.1% 5.25% $ 1,582,700 3.4% 5.25% Total Portfolio Assets $ 40,601,560 $ 49,348,744 $ 46,727,932 Weighted Average Yield 1.09% 1.03% 1.04% 0.88% 0.86% Years Years Years Years Years Effective Average Duration -Total 0.70 0.89 1.15 1.43 1.32 Weighted Average Maturity - Total 0.85 1.04 1.36 1.61 1.51 Performance Recap -The weighted average quarterly portfolio yield increase slightly from 1.03% to 1.09% during the past quarter. The yield has increased over the past year, from .86% in the quarter ended June 30, 2016 to 1.09% 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 dropped, from 1.51 to .85 years as the City shortens its investments in preparation for drawing on funds accumulated for the San Rafael Essential Facilities Project. -The total portfolio assets increased by approximately $10 million during the quarter. This is due to the collection of property tax received in late December and April. W:\Accounting and Budgeting\Finance\Bank Reconciliations\Statements\36-17\June 2017\Quarterly Report combined 6-30-17.x1sx SAN RAFAEL April 2017 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 Securities sold and matured 16 Transaction report 17 Additional information 18 FIXED INCOME MARKET REVIEW As of April 30, 2017 Chart 1: Unemployment and underemployment: 3/31/2012-3/31/2017 16.0 14.0 12.0 10.0 cc Of 8.0 6.0 4.0 2.0 Mar -12 Mar -13 Mar -14 Mar -15 Mar -16 Mar -17 Unemployment Underemployment Source: Bloomberg Finance LP, April 7, 2017. Chart 2: Treasury yield curve: 4/30/2016 and 4/30/2017 3.00% - 2.50% 2.00% 00 1.50% U 1.00% 4/30/2017 0.50% 4/30/2016 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 Source: Bloomberg Finance LP, April 30, 2017. SAN RAFAEL Economic Indicators and Monetary Policv The Institute for Supply Management (ISM) Manufacturing Index for March was released on April 3 at 57.2%, in line with expectations but less than the February reading of 57.7%. The ISM Non -Manufacturing Index released on April 5 decreased to 55.2% from 57.6% in February and was less than expectations of 57.0%. The March payroll report was released on April 7. US employers added 98,000 jobs in March compared to expectations for 180,000 new jobs and February job gains were revised down to 219,000 from 235,000. The unemployment rate fell 0.2% to 4.5% in March and the underemployment rate decreased to 8.9% from 9.2% in February. (See Chart 1). The March Producer Price Index (PPI) was released on April 13. Including food and energy, the headline PPI increased 2.3% on a year -over -year basis, the fastest pace since 2012 but less than expectations of 2.4%. For the month, PPI declined 0.1% led by lower energy prices. Excluding food and energy, the core PPI increased 1.6% year -over -year. The March Consumer Price Index (CPI) was released on April 14, showing annual gains of 2.4% at the headline level and 2.0% excluding food and energy. Although grocery prices increased the most since May 2014, the CPI came in softer than expected reflecting a slump in energy prices as well as cheaper motor vehicles, wireless phone services and apparel. The initial estimate of first quarter 2017 GDP released on April 28 was 0.7%, which was weaker than the forecagst. Expectations were for growth of 1.0% in the first quarter, down from 2.1 % GDP growth in the fourth quarter 2016. Personal consumption slowed to 0.3% in the preliminary estimate for the first quarter compared to 3.5% growth at the end of last year. Interest Rate Summary At the end of April the 3 -month US Treasury bill yielded 0.80%, the 6 -month US Treasury bill yielded 0.97%, the 2 -year US Treasury note yielded 1.26%, the 5 -year US Treasury note yielded 1.81 % and the 10 -year US Treasury note yielded 2.28%. (See Chart 2). 3 ACTIVITY AND PERFORMANCE SUMMARY For the period April 1, 2017 - April 30, 2017 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 24, 630, 683.15 * Six 2,544.93 month trailing 2,544.93 Realized 0.52 Cash and Cash Equivalents (143.96) Corporate Bonds (143.96) Government Agencies 0.00 Government Bonds 0.00 Municipal/Provincial Bonds 0.34 Total 0.00 0.44 (4,591.71) 0.97 772.61 0.10 0.00 0.92 24,629,265.02 6,653.50 24,563,460.34 0.00 (65,804.68) 29,348.64 Comparative Rates of Return W * Twelve * Six * One month month trailing month trailing Realized 0.52 0.33 0.07 0.52 0.29 0.07 0.42 0.28 0.06 0.53 0.34 0.07 0.73 0.44 0.09 0.97 0.59 0.10 1.52 0.92 0.15 * rates reflected are cumulative SAN RAFAEL Detail of Amortized Cost Basis Return Interest Accretion Realized Total earned (amortization) gain (loss) income 30.43 0.00 0.00 30.43 7,169.45 (2,585.88) 0.00 4,583.57 12,831.05 (1,446.52) 0.00 11,384.53 2,664.21 213.30 0.00 2,877.51 6,653.50 0.00 0.00 6,653.50 29,348.64 (3,819.10) 0.00 25,529.54 Summary of Amortized Cost Basis Return for the Period Total portfolio Interest earned 29,348.64 Accretion (amortization) (3,819.10) Realized gain (loss) on sales 0.00 Total income on portfolio 25,529.54 Average daily amortized cost 24,628,643.00 Period return (%) 0.10 YTD return (%) 0.42 Weighted average final maturity in days 753 ACTIVITY AND PERFORMANCE SUMMARY For the period April 1, 2017 - April 30, 2017 Fair Value Basis Activitv Summary * Twelve Opening balance 24,554,780.99 Income received 2,544.93 month trailing Total receipts 2,544.93 Expenses paid (143.96) 0.52 Total disbursements (143.96) Interportfolio transfers 0.00 0.52 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 6,278.38 Ending fair value 24,563,460.34 Comparative Rates of Return W * rates reflected are cumulative SAN RAFAEL * Twelve * Six * One month Interest month trailing month trailing 24,628,091.83 Fed Funds 0.52 0.33 0.07 Overnight Repo 0.52 0.29 0.07 Merrill Lynch 3m US Treas Bill 0.40 0.23 0.07 Merrill Lynch 6m US Treas Bill 0.60 0.28 0.08 ML 1 Year US Treasury Note 0.54 0.24 0.08 ML US Treasury 1-3 0.35 0.03 0.14 ML US Treasury 1-5 0.21 (0.22) 0.31 * 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 6,278.38 Interest Change in Total 24,628,091.83 earned fair value income Cash and Cash Equivalents 30.43 0.00 30.43 Corporate Bonds 7,169.45 2,006.75 9,176.20 Government Agencies 12,831.05 5,439.50 18,270.55 Government Bonds 2,664.21 (1,167.87) 1,496.34 Municipal/Provincial Bonds 6,653.50 0.00 6,653.50 Total 29,348.64 6,278.38 35,627.02 Summary of Fair Value Basis Return for the Period Total portfolio Interest earned 29,348.64 Change in fair value 6,278.38 Total income on portfolio 35,627.02 Average daily total value * 24,628,091.83 Period return (%) 0.14 YTD return (%) 0.48 Weighted average final maturity in days 753 * Total value equals market value and accrued interest 5 RECAP OF SECURITIES HELD As of April 30, 2017 Portfolio diversification (%) ■ Cash and Cash Equivalents Historical Amortized Fair value Unrealized Weighted Percent Weighted ■ Municipal/Provincial Bonds cost cost 100.00 gain (loss) average of average final portfolio effective maturity (days) duration (years) Cash and Cash Equivalents 5,956.94 5,956.94 5,956.94 0.00 1 0.02 0.00 Corporate Bonds 4,637,156.50 4,571,971.43 4,561,560.50 (10,410.93) 410 18.77 1.08 Government Agencies 14,398,650.03 14,381,788.37 14,329,117.50 (52,670.87) 462 58.28 1.23 Government Bonds 4,142,701.18 4,148,748.28 4,146,025.40 (2,722.88) 370 16.77 0.99 Municipal/Provincial Bonds 1,520,800.00 1,520,800.00 1,520,800.00 0.00 5,606 6.16 10.66 24,705,264.65 24,629,265.02 24,563,460.34 (65,804.68) 753 100.00 1.74 Portfolio diversification (%) ■ Cash and Cash Equivalents 0.02 ■ Corporate Bonds 18.77 ■ Government Agencies 58.28 ■ Government Bonds 16.77 ■ Municipal/Provincial Bonds 6.16 Total 100.00 SAN RAFAEL 6 MATURITY DISTRIBUTION OF SECURITIES HELD As of April 30, 2017 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 8.00 E 6.00 E 0 0 4.00 u 0 x 2.00 KIN Maturity distribution J C§1 �O Historic cost 3,003,266.00 3,567,496.88 5,007,755.00 6,343,111.53 5,262,835.24 0.00 0.00 1,520,800.00 Percent 12.16 14.44 20.27 25.68 21.30 0.00 0.00 6.16 SAN RAFAEL 7 SECURITIES HELD SAN RAFAEL As of April 30, 2017 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 5,956.94 5,956.94 5,956.94 5,956.94 0.00 0.00 0.00 0.00 0.02 0.00 0.00 0.00 Total Cash and Cash Equivalents 5,956.94 5,956.94 5,956.94 5,956.94 0.00 0.00 0.00 0.00 0.02 0.00 0.00 0.00 Corporate Bonds 717081 DJ9 1.100 05/15/2017 500,000.00 499,595.00 499,992.97 500,019.50 26.53 0.00 443.05 2,520.83 2.02 PFIZER INC 1.1 % 15/05/2017 0.00 14.06 126.25 459200GJ4 5.700 09/14/2017 500,000.00 568,635.00 508,081.80 508,337.00 255.20 0.00 2,295.84 3,641.67 2.30 IBM CORP 5.7% 14/09/2017 09/13/2017 0.00 (1,809.36) (1,708.50) 94988J5A1 1.650 01/22/2018 500,000.00 501,930.00 500,721.34 500,797.50 76.16 0.00 664.58 2,245.83 2.03 WELLS FARGO BANK NA 1.65% 0.00 (82.60) 1,076.50 22/01/2018 037833AJ9 1.000 05/03/2018 500,000.00 498,090.00 499,139.79 498,760.00 (379.79) 0.00 402.77 2,458.33 2.02 APPLE INC 1%03/05/2018 0.00 71.09 272.00 084670BX5 1.150 08/15/2018 500,000.00 500,355.00 500,227.69 498,431.50 (1,796.19) 0.00 463.20 1,197.92 2.03 BERKSHIRE HATHAWAY INC 0.00 (14.69) 947.50 1.15% 15/08/2018 25468PDD5 1.500 09/17/2018 550,000.00 555,351.50 553,673.61 550,891.00 (2,782.61) 0.00 664.59 985.42 2.25 WALT DISNEY COMPANY/THE 0.00 (221.75) (258.50) 1.5% 17/09/2018 91159HHE3 1.950 11/15/2018 500,000.00 509,425.00 506,394.71 502,773.00 (3,621.71) 0.00 785.42 4,468.75 2.06 US BANCORP 1.95% 10/15/2018 0.00 (345.66) (222.00) 15/11/2018 (CALLABLE 15/10/18) 713448CK2 2.250 01/07/2019 500,000.00 505,530.00 505,124.75 505,746.50 621.75 0.00 906.25 3,531.25 2.05 PEPSICO INC 2.25% 07/01/2019 12/07/2018 0.00 (253.28) (75.50) (CALLABLE 07/12/18) 8 SECURITIES HELD SAN RAFAEL As of April 30, 2017 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 149121-6R7 1.350 05/18/2019 500,000.00 498,245.00 498,614.77 495,804.50 (2,810.27) 0.00 543.75 3,037.50 2.02 CATERPILLAR FINL SERVICE 0.00 56.31 1,849.00 1.35% 18/05/2019 Total Corporate Bonds4,550,000.00 4,637,156.50 4,571,971.43 4,561,560.50 (10,410.93) 0.00 7,169.45 24,087.50 18.77 am� 0.00 (2,585.88) 2,006.75 Government Agencies 3133EEX62 0.800 06/16/2017 1,000,000.00 999,770.00 999,985.35 999,958.00 (27.35) 0.00 644.45 2,977.78 4.05 FEDERAL FARM CREDIT BANK 0.00 9.56 79.00 0.8% 16/06/2017 3137EADV8 0.750 07/14/2017 1,000,000.00 998,530.00 999,854.96 999,809.00 (45.96) 0.00 604.16 2,208.33 4.04 FREDDIE MAC 0.75% 0.00 58.80 178.00 14/07/2017 3136GOZH7 1.050 09/05/2017 1,000,000.00 1,005,150.00 1,000,834.95 1,000,520.00 (314.95) 0.00 845.84 1,604.17 4.07 FANNIE MAE 1.05%05/09/2017 0.00 (200.39) (290.00) CALLABLE 313380EC7 0.750 09/08/2017 1,000,000.00 998,790.00 999,790.42 999,330.00 (460.42) 0.00 604.16 1,083.33 4.04 FEDERAL HOME LOAN BANK 0.00 49.12 230.00 0.75% 08/09/2017 3130A51-56 0.900 10/27/2017 1,000,000.00 999,070.00 999,807.02 999,660.00 (147.02) 4,500.00 725.00 75.00 4.04 FEDERAL HOME LOAN BANK 0.00 32.71 250.00 0.9% 27/10/2017 3130A6D87 0.900 11/20/2017 1,000,000.00 1,000,660.00 1,000,162.76 999,570.00 (592.76) 0.00 725.00 4,000.00 4.05 FEDERAL HOME LOAN BANK 0.00 (24.42) 270.00 0.9% 20/11/2017 313378A43 1.375 03/09/2018 1,000,000.00 1,007,970.00 1,002,648.10 1,002,755.00 106.90 0.00 1,107.64 1,947.92 4.08 FEDERAL HOME LOAN BANK 0.00 (257.09) 461.00 1.375% 09/03/2018 3133EGFQ3 0.875 09/14/2018 500,000.00 500,497.00 500,303.86 497,382.50 (2,921.36) 0.00 352.43 559.03 2.03 FEDERAL FARM CREDIT BANK 0.00 (18.45) (265.50) 0.875% 14/09/2018 9 SECURITIES HELD SAN RAFAEL As of April 30, 2017 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 3133EGM69 1.100 12/05/2018 1,250,000.00 1,247,248.75 1,247,805.87 1,246,875.00 (930.87) 0.00 1,107.63 5,538.19 5.05 FEDERAL FARM CREDIT BANK 0.00 114.48 125.00 1.1% 05/12/2018 3135GOH63 1.375 01/28/2019 1,000,000.00 1,012,490.00 1,008,803.28 1,000,859.00 (7,944.28) 0.00 1,107.64 3,513.89 4.10 FANNIE MAE 1.375% 0.00 (420.54) (281.00) 2810112019 3133782M2 1.500 03/08/2019 1,000,000.00 1,014,124.28 1,010,134.28 1,003,023.00 (7,111.28) 0.00 1,208.34 2,166.67 4.10 FEDERAL HOME LOAN BANK 0.00 (455.14) 382.00 1.5% 08/03/2019 3135GOL76 1.075 07/11/2019 600,000.00 599,100.00 599,294.45 594,696.00 (4,598.45) 0.00 519.59 1,952.92 2.42 FANNIE MAE 1.075% 07/11/2017 0.00 26.76 300.00 11 /07/2019 (CALLABLE 11/07/17) 3133EGSC0 1.000 08/26/2019 1,000,000.00 1,000,610.00 1,000,470.44 986,660.00 (13,810.44) 0.00 805.56 1,777.78 4.05 FEDERAL FARM CREDIT BANK 0.00 (16.88) 410.00 1% 26/08/2019 313380FB8 1.375 09/13/2019 1,000,000.00 1,011,510.00 1,009,210.16 997,960.00 (11,250.16) 0.00 1,107.64 1,795.14 4.09 FEDERAL HOME LOAN BANK 0.00 (323.92) 1,190.00 1.375% 13/09/2019 3133ECEY6 1.450 02/11/2020 1,000,000.00 1,003,130.00 1,002,682.47 1,000,060.00 (2,622.47) 0.00 1,168.05 3,181.94 4.06 FEDERAL FARM CREDIT BANK 0.00 (80.40) 2,390.00 1.45% 11/02/2020 Total Government Agencies 14,350,000.00 14,398,650.03 14,381,788.37 14,329,117.50 (52,670.87) 4,500.00 12,633.13 34,382.09 58.28 J& 0.00 (1,505.80) 5,428.50 Government Bonds 912828WP1 0.875 06/15/2017 500,000.00 499,414.06 499,970.25 500,088.00 117.75 0.00 360.58 1,634.62 2.02 USA TREASURY 0.875% 0.00 19.40 10.00 15/06/2017 10 SECURITIES HELD SAN RAFAEL As of April 30, 2017 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 1,000,000.00 994,921.88 999,319.60 998,867.00 (452.60) 0.00 509.51 1,036.01 4.03 USA TREASURY 0.625% 0.00 165.95 (117.00) 31/08/2017 912828G20 0.875 11/15/2017 500,000.00 500,625.00 500,145.30 499,609.50 (535.80) 0.00 362.57 2,006.22 2.03 USA TREASURY 0.875% 0.00 (21.90) (156.00) 15/11/2017 912828UR9 0.750 02/28/2018 1,000,000.00 997,500.00 999,145.11 997,031.00 (2,114.11) 0.00 611.42 1,243.21 4.04 USA TREASURY 0.75% 0.00 84.37 (157.00) 28/02/2018 912828WLO 1.500 05/31/2019 500,000.00 501,230.47 501,147.53 502,207.00 1,059.47 0.00 618.13 3,111.26 2.03 USA TREASURY 1.5% 0.00 (45.24) 39.00 31/05/2019 912828TV2 1.250 10/31/2019 650,000.00 649,009.77 649,020.49 648,222.90 (797.59) 0.00 202.00 4,062.50 2.63 USA TREASURY 1.25% (3,860.50) 10.72 (786.87) 31/10/2019 Total Government Bonds 4,150,000.00 4,142,701.18 4,148,748.28 4,146,025.40 (2,722.88) 0.00 2,664.21 13,093.82 16.77 (3,860.50) 213.30 (1,167.87) Municipal/Provincial Bonds 888599LS4 5.250 09/02/2032 PT. SAN ASSESS DISTRICT 5.25% 144A 02/09/2032 SANRAF$01 Total Municipal/Provincial Bonds 1,520,800.00 1,520,800.00 1,520,800.00 1,520,800.00 0.00 0.00 6,653.50 6,653.50 6.16 0.00 0.00 0.00 1,520,800.00 1,520,800.00 1,520,800. 1,520,800.00 0.00 0.00 6,653.50 6,653.50 6.16 0.00 0.00 0.00 III GASB 40 - DEPOSIT AND INVESTMENT RISK DISCLOSURE As of April 30, 2017 Cusip Description Coupon Maturity Call date 5&P Moody Par value or Historical % Portfolio Market % Portfolio date rating rating shares cost hist cost value mkt value Federal Home Loan Banks SAN RAFAEL Effective dur (yrs) 313380EC7 FEDERAL HOME LOAN 0.750 09/08/2017 AA+ Aaa 1,000,000.00 998,790.00 4.04 999,330.00 4.07 0.35 3130A5L56 FEDERAL HOME LOAN 0.900 10/27/2017 AA+ Aaa 1,000,000.00 999,070.00 4.04 999,660.00 4.07 0.49 3130A6D87 FEDERAL HOME LOAN 0.900 11/20/2017 AA+ Aaa 1,000,000.00 1,000,660.00 4.05 999,570.00 4.07 0.55 313378A43 FEDERAL HOME LOAN 1.375 03/09/2018 AA+ Aaa 1,000,000.00 1,007,970.00 4.08 1,002,755.00 4.08 0.85 3133782M2 FEDERAL HOME LOAN 1.500 03/08/2019 AA+ Aaa 1,000,000.00 1,014,124.28 4.10 1,003,023.00 4.08 1.82 313380FB8 FEDERAL HOME LOAN 1.375 09/13/2019 AA+ Aaa 1,000,000.00 1,011,510.00 4.09 997,960.00 4.06 2.32 Issuer total 19.23 4,730,935.50 19.26 1.64 649,009.77 6,000,000.00 6,032,124.28 24.42 6,002,298.00 24.44 1.07 Federal Farm Credit Banks 912828WP1 3133EEX62 FEDERAL FARM CREDIT 0.800 06/16/2017 AA+ Aaa 1,000,000.00 999,770.00 4.05 999,958.00 4.07 0.13 3133EGFQ3 FEDERAL FARM CREDIT 0.875 09/14/2018 AA+ Aaa 500,000.00 500,497.00 2.03 497,382.50 2.02 1.36 3133EGM69 FEDERAL FARM CREDIT 1.100 12/05/2018 AA+ Aaa 1,250,000.00 1,247,248.75 5.05 1,246,875.00 5.08 1.57 3133EGSCO FEDERAL FARM CREDIT 1.000 08/26/2019 AA+ Aaa 1,000,000.00 1,000,610.00 4.05 986,660.00 4.02 2.28 3133ECEY6 FEDERAL FARM CREDIT 1.450 02/11/2020 AA+ Aaa 1,000,000.00 1,003,130.00 4.06 1,000,060.00 4.07 2.71 Issuer total 502,207.00 2.04 2.03 912828Tv2 4,750,000.00 4,751,255.75 19.23 4,730,935.50 19.26 1.64 United States Treasury Note/Bond 912828WP1 USA TREASURY 0.875% 0.875 06/15/2017 AA+ Aaa 500,000.00 499,414.06 2.02 500,088.00 2.04 0.12 912828TM2 USA TREASURY 0.625% 0.625 08/31/2017 AA+ Aaa 1,000,000.00 994,921.88 4.03 998,867.00 4.07 0.33 912828620 USA TREASURY 0.875% 0.875 11/15/2017 AA+ Aaa 500,000.00 500,625.00 2.03 499,609.50 2.03 0.54 912828UR9 USA TREASURY 0.75% 0.750 02/28/2018 AA+ Aaa 1,000,000.00 997,500.00 4.04 997,031.00 4.06 0.82 912828WLO USA TREASURY 1.5% 1.500 05/31/2019 AA+ Aaa 500,000.00 501,230.47 2.03 502,207.00 2.04 2.03 912828Tv2 USA TREASURY 1.25% 1.250 10/31/2019 AA+ Aaa 650,000.00 649,009.77 2.63 648,222.90 2.64 2.46 Issuer total 4,150,000.00 4,142,701.18 16.77 4,146,025.40 16.88 0.99 IT, GASB 40 - DEPOSIT AND INVESTMENT RISK DISCLOSURE SAN RAFAEL As of April 30, 2017 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 National Mortgage Association 3137EADV8 FREDDIE MAC 0.75% 0.750 07/14/2017 3136GOZH7 FANNIE MAE 1.05% 1.050 09/05/2017 AA+ Aaa 1,000,000.00 1,005,150.00 4.07 1,000,520.00 4.07 0.35 3135GOH63 FANNIE MAE 1.375% 1.375 01/28/2019 AA+ Aaa 1,000,000.00 1,012,490.00 4.10 1,000,859.00 4.07 1.72 3135GOL76 FANNIE MAE 1.075% 1.075 07/11/2019 07/11/2017 AA+ Aaa 600,000.00 599,100.00 2.42 594,696.00 2.42 1.92 Issuer total 2.25 550,891.00 2.24 1.36 2,600,000.00 2,616,740.00 10.59 2,596,075.00 10.57 1.24 Pt. San Assess District 888599LS4 PT. SAN ASSESS 5.250 09/02/2032 NR NR 1,520,800.00 1,520,800.00 6.16 1,520,800.00 6.19 10.66 Issuer total 1,520,800.00 1,520,800.00 6.16 1,520,800.00 6.19 10.66 Federal Home Loan Mortgage Corp 3137EADV8 FREDDIE MAC 0.75% 0.750 07/14/2017 AA+ Aaa 1,000,000.00 998,530.00 4.04 999,809.00 4.07 0.20 Issuer total 1,000,000.00 998,530.00 4.04 999,809.00 4.07 0.20 Walt Disney Co/The 25468PDD5 WALT DISNEY 1.500 09/17/2018 A A2 550,000.00 555,351.50 2.25 550,891.00 2.24 1.36 Issuer total 550,000.00 555,351.50 2.25 550,891.00 2.24 1.36 International Business Machines Corp 45920OG14 IBM CORP 5.7% 5.700 09/14/2017 09/13/2017 AA- Aa3 500,000.00 568,635.00 2.30 508,337.00 2.07 0.37 Issuer total 500,000.00 568,635.00 2.30 508,337.00 2.07 0.37 PepsiCo Inc 713448CK2 PEPSICOINC2.25% 2.250 01/07/2019 12/07/2018 A+ Al 500,000.00 505,530.00 2.05 505,746.50 2.06 1.58 Issuer total 500,000.00 505,530.00 2.05 505,746.50 2.06 1.58 US Bancorp 91159HHE3 US BANCORP 1.95% 1.950 11/15/2018 10/15/2018 A+ Al 500,000.00 509,425.00 2.06 502,773.00 2.05 1.46 Issuer total 500,000.00 509,425.00 2.06 502,773.00 2.05 1.46 13 GASB 40 - DEPOSIT AND INVESTMENT RISK DISCLOSURE SAN RAFAEL As of April 30, 2017 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 2.03 500,797.50 2.04 0.72 Issuer total 500,000.00 501,930.00 2.03 500,797.50 2.04 0.72 Pfizer Inc 717081DJ9 PFIZER INC 1.1% 1.100 05/15/2017 AA Al 500,000.00 499,595.00 2.02 500,019.50 2.04 0.04 Issuer total 500,000.00 499,595.00 2.02 500,019.50 2.04 0.04 Apple Inc 037833AJ9 APPLE INC 1%03/05/2018 1.000 05/03/2018 AA+ Aal 500,000.00 498,090.00 2.02 498,760.00 2.03 0.99 Issuer total 500,000.00 498,090.00 2.02 498,760.00 2.03 0.99 Berkshire Hathaway Inc 0846706x5 BERKSHIRE HATHAWAY 1.150 08/15/2018 AA Aa2 500,000.00 500,355.00 2.03 498,431.50 2.03 1.27 Issuer total 500,000.00 500,355.00 2.03 498,431.50 2.03 1.27 Caterpillar Financial Services Corp 14912L6R7 CATERPILLAR FINL 1.350 05/18/2019 A A3 500,000.00 498,245.00 2.02 495,804.50 2.02 2.01 Issuer total 500,000.00 498,245.00 2.02 495,804.50 2.02 2.01 Cash and Cash Equivalents INVESTED CASH 0.000 5,956.94 5,956.94 0.02 5,956.94 0.02 0.00 Issuer total 5,956.94 5,956.94 0.02 5,956.94 0.02 0.00 24,576,756.94 24,705,264.65 100.00 24,563,460.34 100.00 1.74 14 SECURITIES PURCHASED For the period April 1, 2017 - April 30, 2017 Cusip / Description / Broker Trade date Settle date Government Bonds 912828TV2 04/20/2017 USA TREASURY 1.25% 31/10/2019 0412112017 GOLDMAN, SACHS AND CO. Total Government Bonds Grand tota Coupon Maturity/ Par value or Unit cost Call date shares SAN RAFAEL Principal Accrued cost interest purchased 1.250 10/31/2019 650,000.00 99.85 (649,009.77) (3,860.50) 650,000.00 (649,009.77) (3,860.50) 15 SECURITIES SOLD AND MATURED For the period April 1, 2017 - April 30, 2017 Cusip/ Trade date Coupon Maturity/ Par value or Historical cost Amortized cost Description/ Settle date Call date shares at sale or maturity Broker /Accr (amort) Government Agencies 3135GOZB2 04/20/2017 0.750 (500,000.00) 496,725.00 500,000.00 FNMA .75 DUE 04-20-2017 04/20/2017 59.28 REG Total (Government Agencies) (500,000.00) 496,725.00 500,000.00 SAN RAFAEL Price Fair value at Realized Accrued Interest Interest sale or maturity / gain interest received earned Chg.in fair value (loss) sold 0.00 500,000.00 0.00 0.00 1,875.00 197.92 11.00 500,000.00 0.00 0.00 1,875.00 197.92 16 TRANSACTION REPORT SAN RAFAEL For the period April 1, 2017 - April 30, 2017 Trade date Cusip Transaction Sec type Description Maturity Par value or Realized Principal Interest Transaction total Settle date shares gain(loss) 04/20/2017 3135GOZB2 Income Government Agencies FNMA .75 DUE 04-20-2017 REG 04/20/2017 500,000.00 0.00 0.00 1,875.00 1,875.00 04/20/2017 04/20/2017 3135GOZB2 Capital Change Government Agencies FNMA .75 DUE 04-20-2017 REG 04/20/2017 (500,000.00) 0.00 500,000.00 0.00 500,000.00 04/20/2017 04/20/2017 912828TV2 Bought Government Bonds USA TREASURY 1.25% 10/31/2019 650,000.00 0.00 (649,009.77) (3,860.50) (652,870.27) 04/21/2017 04/27/2017 3130A51-56 Income Government Agencies FEDERAL HOME LOAN BANK 10/27/2017 1,000,000.00 0.00 0.00 4,500.00 4,500.00 04/27/2017 04/30/2017 Income Cash and Cash Equivalents Cash 0.00 0.00 0.00 30.43 30.43 17 ADDITIONAL INFORMATION As of April 30, 2017 SAN RAFAEL 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), Insight North America LLC (INA) 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. 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 and CISCs 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 and these 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 the account, 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 2A of 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 general information 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 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. 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. 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. 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 an appropriate 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 the indices 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 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. 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. ADDITIONAL INFORMATION As of April 30, 2017 SAN RAFAEL 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. © 2017 Insight Investment. All rights reserved. 19 SAN RAFAEL May 2017 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 Securities sold and matured 16 Transaction report 17 Additional information 18 FIXED INCOME MARKET REVIEW As of May 31, 2017 Chart 1: ISM Manufacturing and Non -Manufacturing: 4/30/2014-4/30/2017 65 60 X 55 50 45 c 2i 40 35 30 Apr -14 Apr -15 Apr -16 Apr -17 Manufacturing Non -Manufacturing Source: Bloomberg Finance LP, May 31, 2017. Chart 2: Treasury yield curve: 5/31/2016 and 5/31/2017 2.50% - 2.00% 00 u 1.50% - o_ 1.00% —5/31/2017 0.50% —5/31/2016 0.00% 3 m 6m 1 yr 2 yr 3 yr 4 yr 5 yr 6 yr 7 yr 8 yr 9 yr 10 yr Source: Bloomberg Finance LP, May 31, 2017. SAN RAFAEL Economic Indicators and Monetary Policv The Federal Open Market Committee (FOMC) met on May 3° and voted to maintain the fed funds target rate in a range of 0.75% - 1.00%. The FOMC statement noted decreasing consumer prices since the last meeting as well as continued strength in the labor market. The FOMC characterized the slowing in growth during the first quarter as likely to be transitory and expected that economic activity will expand at a moderate pace with gradual adjustments in monetary policy. The next meeting of the FOMC is on June 14. The payroll report released on May 5° showed that US employers added 211,000 jobs in April, better than expectations for 190,000. March job growth, however, was revised lower to 79,000 from 98,000. The unemployment rate fell 0.1% to 4.4% in April and the underemployment rate decreased to 8.6% from 8.9% in March. The Institute for Supply Management (ISM) Manufacturing Index for April was released on May 1. at 54.8%, less than expectations of 56.5% and down from the average of 57.0% for the first quarter. The ISM Non -Manufacturing Index released on May 3° increased to 57.5%, exceeding the average of 56.4% for the first quarter. Both survey results are in positive territory and reflect expanding environments. (See Chart 1). The April Consumer Price Index (CPI) released on May 12� was lower than expected. At the headline level, CPI was 2.2% in April on a year -over -year -year basis, compared to 2.4% in March. Excluding food and energy CPI was 1.9% on a year -over basis compared to 2.0% for the prior month. The second estimate of first quarter 2017 GDP released on May 2& increased to 1.2% from the original reading of 0.7% growth and exceeded expectations of 0.9% growth. Personal consumption was revised upward to 0.6% on the second estimate from 0.3%. Interest Rate Summary At the end of May the 3 -month US Treasury bill yielded 0.97%, the 6 -month US Treasury bill yielded 1.07 %, the 2 -year US Treasury note yielded 1.28%, the 5 -year US Treasury note yielded 1.75% and the 10 -year US Treasury note yielded 2.20%. (See Chart 2). 3 ACTIVITY AND PERFORMANCE SUMMARY For the period May 1, 2017 - May 31, 2017 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 24,629,265.02 * Six 26,867.71 month trailing 26,867.71 Realized 0.57 Cash and Cash Equivalents (144.02) Corporate Bonds (144.02) Government Agencies 0.00 Government Bonds 0.00 Municipal/Provincial Bonds 0.37 Total 0.00 0.47 (4,593.91) 1.02 771.03 0.11 0.00 0.95 24,652,165.83 6,653.50 24,589,185.28 0.00 (62,980.55) 31,170.57 Comparative Rates of Return W * Twelve * Six * One month month trailing month trailing Realized 0.57 0.37 0.08 0.57 0.33 0.07 0.47 0.32 0.07 0.58 0.37 0.08 0.78 0.47 0.09 1.02 0.62 0.11 1.57 0.95 0.15 * rates reflected are cumulative SAN RAFAEL Detail of Amortized Cost Basis Return Interest Accretion Realized Total earned (amortization) gain (loss) income 34.38 0.00 0.00 34.38 7,419.44 (2,592.90) 0.00 4,826.54 13,837.70 (1,472.52) 0.00 12,365.18 3,225.55 242.54 0.00 3,468.09 6,653.50 0.00 0.00 6,653.50 31,170.57 (3,822.88) 0.00 27,347.69 Summary of Amortized Cost Basis Return for the Period Total portfolio Interest earned 31,170.57 Accretion (amortization) (3,822.88) Realized gain (loss) on sales 0.00 Total income on portfolio 27,347.69 Average daily amortized cost 24,641,362.57 Period return (%) 0.11 YTD return (%) 0.53 Weighted average final maturity in days 740 ACTIVITY AND PERFORMANCE SUMMARY For the period May 1, 2017 - May 31, 2017 Fair Value Basis Activitv Summary * Six Opening balance 24,563,460.34 Income received 26,867.71 Change in Total receipts 26,867.71 Expenses paid (144.02) 0.57 Total disbursements (144.02) Interportfolio transfers 0.00 0.26 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 (998.75) Ending fair value 24,589,185.28 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 0.57 0.37 0.08 0.57 0.33 0.07 0.44 0.26 0.05 0.65 0.32 0.06 0.61 0.33 0.03 0.57 0.55 0.12 0.58 0.93 0.22 * 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 (998.75) Interest Change in Total 24,651,356.14 earned fair value income Cash and Cash Equivalents 34.38 0.00 34.38 Corporate Bonds 7,419.44 (2,925.40) 4,494.04 Government Agencies 13,837.70 1,854.50 15,692.20 Government Bonds 3,225.55 72.15 3,297.70 Municipal/Provincial Bonds 6,653.50 0.00 6,653.50 Total 31,170.57 (998.75) 30,171.82 Summary of Fair Value Basis Return for the Period Total portfolio Interest earned 31,170.57 Change in fair value (998.75) Total income on portfolio 30,171.82 Average daily total value * 24,651,356.14 Period return (%) 0.12 YTD return (%) 0.60 Weighted average final maturity in days 740 * Total value equals market value and accrued interest 5 RECAP OF SECURITIES HELD As of May 31, 2017 Portfolio diversification (%) ■ Cash and Cash Equivalents Historical Amortized Fair value Unrealized Weighted Percent Weighted ■ Municipal/Provincial Bonds cost cost 100.00 gain (loss) average of average final portfolio effective maturity (days) duration (years) Cash and Cash Equivalents 34,391.63 34,391.63 34,391.63 0.00 1 0.14 0.00 Corporate Bonds 4,137,561.50 4,069,378.53 4,058,635.10 (10,743.43) 424 16.73 1.13 Government Agencies 14,896,939.03 14,878,604.85 14,829,261.00 (49,343.85) 449 60.23 1.14 Government Bonds 4,142,701.18 4,148,990.82 4,146,097.55 (2,893.27) 337 16.75 0.91 Municipal/Provincial Bonds 1,520,800.00 1,520,800.00 1,520,800.00 0.00 5,573 6.15 10.58 24,732,393.34 1 24,652,165.83 24,589,185.28 (62,980.55) 740 100.04, - Portfolio diversification (%) ■ Cash and Cash Equivalents 0.14 ■ Corporate Bonds 16.73 ■ Government Agencies 60.23 ■ Government Bonds 16.75 ■ Municipal/Provincial Bonds 6.15 Total 100.00 SAN RAFAEL 6 MATURITY DISTRIBUTION OF SECURITIES HELD As of May 31, 2017 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 8.00 E 6.00 E 0 0 4.00 u 0 x 2.00 KIN Historic cost Percent 2,532,105.69 10.24 6, 067, 851.88 24.53 3,005,490.00 12.15 6,343,266.53 25.65 5,262,879.24 21.28 0.00 0.00 0.00 0.00 1,520,800.00 6.15 24,732,39334 100.00 Maturity distribution J C§l �O SAN RAFAEL 7 SECURITIES HELD SAN RAFAEL As of May 31, 2017 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 34,391.63 34,391.63 34,391.63 34,391.63 0.00 0.00 0.00 0.00 0.14 0.00 0.00 0.00 Total Cash and Cash Equivalents 34,391.63 34,391.63 34,391.63 * 34,391.63 0.00 0.00 0.00 0.00 0.14 0.00 0.00 0.00 Corporate Bonds -J& 459200GJ4 5.700 09/14/2017 500,000.00 568,635.00 506,272.44 506,132.50 (139.94) 0.00 2,454.16 6,095.83 2.30 IBM CORP 5.7% 14/09/2017 09/13/2017 0.00 (1,809.36) (2,204.50) 94988J5A1 1.650 01/22/2018 500,000.00 501,930.00 500,638.74 500,517.50 (121.24) 0.00 710.42 2,956.25 2.03 WELLS FARGO BANK NA 1.65% 0.00 (82.60) (280.00) 22/01/2018 037833AJ9 1.000 05/03/2018 500,000.00 498,090.00 499,210.88 498,479.50 (731.38) 2,500.00 430.56 388.89 2.01 APPLE INC 1%03/05/2018 0.00 71.09 (280.50) 084670BX5 1.150 08/15/2018 500,000.00 500,355.00 500,213.00 498,548.00 (1,665.00) 0.00 495.14 1,693.06 2.02 BERKSHIRE HATHAWAY INC 0.00 (14.69) 116.50 1.15% 15/08/2018 25468PDD5 1.500 09/17/2018 550,000.00 555,351.50 553,451.87 550,446.60 (3,005.27) 0.00 710.41 1,695.83 2.25 WALT DISNEY COMPANY/THE 0.00 (221.74) (444.40) 1.5% 17/09/2018 91159HHE3 1.950 11/15/2018 500,000.00 509,425.00 506,049.05 502,753.00 (3,296.05) 4,875.00 839.58 433.33 2.06 US BANCORP 1.95% 10/15/2018 0.00 (345.66) (20.00) 15/11/2018 (CALLABLE 15/10/18) 713448CK2 2.250 01/07/2019 500,000.00 505,530.00 504,871.47 505,620.50 749.03 0.00 968.75 4,500.00 2.04 PEPSICO INC 2.25% 07/01/2019 12/07/2018 0.00 (253.28) (126.00) (CALLABLE 07/12/18) 8 SECURITIES HELD SAN RAFAEL As of May 31, 2017 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 149121-6R7 1.350 05/18/2019 500,000.00 498,245.00 498,671.08 496,137.50 (2,533.58) 3,375.00 581.25 243.75 2.01 CATERPILLAR FINL SERVICE 0.00 56.31 333.00 1.35% 18/05/2019 Total Corporate Bonds4,050,000.00 4,137,561.50 4,069,378.53 4,058,635.10 (10,743.43) 10,750.00 7,190.27 18,006.94 16.73 0.00 (2,599.93) (2,905.90) am� i Government Agencies 3133EEX62 0.800 06/16/2017 1,000,000.00 999,770.00 999,994.90 999,968.00 (26.90) 0.00 688.89 3,666.67 4.04 FEDERAL FARM CREDIT BANK 0.00 9.55 10.00 0.8% 16/06/2017 3137EADV8 0.750 07/14/2017 1,000,000.00 998,530.00 999,913.76 999,719.00 (194.76) 0.00 645.84 2,854.17 4.04 FREDDIE MAC 0.75% 0.00 58.80 (90.00) 14/07/2017 3136GOZH7 1.050 09/05/2017 1,000,000.00 1,005,150.00 1,000,634.57 1,000,290.00 (344.57) 0.00 904.16 2,508.33 4.06 FANNIE MAE 1.05%05/09/2017 0.00 (200.38) (230.00) CALLABLE 313380EC7 0.750 09/08/2017 1,000,000.00 998,790.00 999,839.54 999,230.00 (609.54) 0.00 645.84 1,729.17 4.04 FEDERAL HOME LOAN BANK 0.00 49.12 (100.00) 0.75% 08/09/2017 3130A51-56 0.900 10/27/2017 1,000,000.00 999,070.00 999,839.73 999,490.00 (349.73) 0.00 775.00 850.00 4.04 FEDERAL HOME LOAN BANK 0.00 32.71 (170.00) 0.9% 27/10/2017 3130A6D87 0.900 11/20/2017 1,000,000.00 1,000,660.00 1,000,138.35 999,310.00 (828.35) 4,500.00 775.00 275.00 4.05 FEDERAL HOME LOAN BANK 0.00 (24.41) (260.00) 0.9% 20/11/2017 313378A43 1.375 03/09/2018 1,000,000.00 1,007,970.00 1,002,391.00 1,000,743.00 (1,648.00) 0.00 1,184.02 3,131.94 4.08 FEDERAL HOME LOAN BANK 0.00 (257.10) (2,012.00) 1.375% 09/03/2018 3133EGFQ3 0.875 09/14/2018 500,000.00 500,497.00 500,285.41 497,504.50 (2,780.91) 0.00 376.73 935.76 2.02 FEDERAL FARM CREDIT BANK 0.00 (18.45) 122.00 0.875% 14/09/2018 9 SECURITIES HELD As of May 31, 2017 SAN RAFAEL 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 3133EGM69 1.100 12/05/2018 1,250,000.00 1,247,248.75 1,247,920.35 1,246,962.50 (957.85) 0.00 1,184.03 6,722.22 5.04 FEDERAL FARM CREDIT BANK 0.00 114.48 87.50 1.1% 05/12/2018 3135GOH63 1.375 01/28/2019 1,000,000.00 1,012,490.00 1,008,382.74 1,001,206.00 (7,176.74) 0.00 1,184.03 4,697.92 4.09 FANNIE MAE 1.375% 0.00 (420.54) 347.00 28/01/2019 3133782M2 1.500 03/08/2019 1,000,000.00 1,014,124.28 1,009,679.15 1,002,789.00 (6,890.15) 0.00 1,291.66 3,458.33 4.10 FEDERAL HOME LOAN BANK 0.00 (455.13) (234.00) 1.5% 08/03/2019 3135GOL76 1.075 07/11/2019 600,000.00 599,100.00 599,321.21 594,984.00 (4,337.21) 0.00 555.41 2,508.33 2.42 FANNIE MAE 1.075% 07/11/2017 0.00 26.76 288.00 11 /07/2019 (CALLABLE 11/07/17) 3133EGSC0 1.000 08/26/2019 1,000,000.00 1,000,610.00 1,000,453.56 987,020.00 (13,433.56) 0.00 861.11 2,638.89 4.05 FEDERAL FARM CREDIT BANK 0.00 (16.88) 360.00 1% 26/08/2019 313380FB8 1.375 09/13/2019 1,000,000.00 1,011,510.00 1,008,886.24 999,150.00 (9,736.24) 0.00 1,184.03 2,979.17 4.09 FEDERAL HOME LOAN BANK 0.00 (323.92) 1,190.00 1.375% 13/09/2019 3133ECEY6 1.450 02/11/2020 1,000,000.00 1,003,130.00 1,002,602.08 1,001,060.00 (1,542.08) 0.00 1,248.62 4,430.56 4.06 FEDERAL FARM CREDIT BANK 0.00 (80.39) 1,000.00 1.45% 11/02/2020 3134G3K58 1.500 03/19/2020 500,000.00 498,289.00 498,322.26 499,835.00 1,512.74 0.00 333.33 1,500.00 2.01 FREDDIE MAC 1.5% 19/03/2020 (1,166.67) 33.26 1,546.00 CALLABLE Total Government Agencie 14,850,000.00 14,896,939.03 14,878,604.85 14,829,261.00 (49,343.85) 4,500.00 13,837.70 44,886.46 60.23 (1,166.67) (1,472.52) 1,854.50 10 SECURITIES HELD SAN RAFAEL As of May 31, 2017 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 912828WP1 0.875 06/15/2017 500,000.00 499,414.06 499,990.30 500,023.50 33.20 0.00 372.59 2,007.21 2.02 USA TREASURY 0.875% 0.00 20.05 (64.50) 15/06/2017 912828TM2 0.625 08/31/2017 1,000,000.00 994,921.88 999,491.08 998,984.00 (507.08) 0.00 526.49 1,562.50 4.02 USA TREASURY 0.625% 0.00 171.48 117.00 3110812017 912828G20 0.875 11/15/2017 500,000.00 500,625.00 500,122.66 499,453.00 (669.66) 2,187.50 371.50 190.22 2.02 USA TREASURY 0.875% 0.00 (22.64) (156.50) 15/11/2017 912828UR9 0.750 02/28/2018 1,000,000.00 997,500.00 999,232.28 996,758.00 (2,474.28) 0.00 631.79 1,875.00 4.03 USA TREASURY 0.75% 0.00 87.17 (273.00) 28/02/2018 912828WLO 1.500 05/31/2019 500,000.00 501,230.47 501,100.79 502,148.50 1,047.71 3,750.00 638.74 0.00 2.03 USA TREASURY 1.5% 0.00 (46.74) (58.50) 31105/2019 912828TV2 1.250 10/31/2019 650,000.00 649,009.77 649,053.71 648,730.55 (323.16) 4,062.50 684.44 684.44 2.62 USA TREASURY 1.25% 0.00 33.22 507.65 31/10/2019 Total Government Bonds 4,150,000.00 4,142,701.18 4,148,990.82 4,146,097.55 (2,893.27) 10,000.00 3,225.55 6,319.37 16.75 0.00 242.54 72.15 Municipal/Provincial Bonds 888599LS4 5.250 09/02/2032 1,520,800.00 1,520,800.00 1,520,800.00 1,520,800.00 0.00 0.00 6,653.50 13,307.00 6.15 PT. SAN ASSESS DISTRICT 0.00 0.00 0.00 5.25% 144A 02/09/2032 SANRAF$01 Total Municipal/Provincial Bonds 1,520,800.00 1,520,800.00 1,520,800.00 1,520,800.00 0.00 0.00 6,653.50 13,307.00 6.15 71 0.00 0.00 0.00 III GASB 40 - DEPOSIT AND INVESTMENT RISK DISCLOSURE SAN RAFAEL As of May 31, 2017 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 Banks 313380EC7 FEDERAL HOME LOAN 0.750 09/08/2017 AA+ Aaa 1,000,000.00 998,790.00 4.04 999,230.00 4.06 0.27 3130A5L56 FEDERAL HOME LOAN 0.900 10/27/2017 AA+ Aaa 1,000,000.00 999,070.00 4.04 999,490.00 4.06 0.40 3130A6D87 FEDERAL HOME LOAN 0.900 11/20/2017 AA+ Aaa 1,000,000.00 1,000,660.00 4.05 999,310.00 4.06 0.47 313378A43 FEDERAL HOME LOAN 1.375 03/09/2018 AA+ Aaa 1,000,000.00 1,007,970.00 4.08 1,000,743.00 4.07 0.76 3133782M2 FEDERAL HOME LOAN 1.500 03/08/2019 AA+ Aaa 1,000,000.00 1,014,124.28 4.10 1,002,789.00 4.08 1.73 313380FB8 FEDERAL HOME LOAN 1.375 09/13/2019 AA+ Aaa 1,000,000.00 1,011,510.00 4.09 999,150.00 4.06 2.24 Issuer total 6,000,000.00 6,032,124.28 24.39 6,000,712.00 24.40 0.98 Federal Farm Credit Banks 3133EEX62 FEDERAL FARM CREDIT 0.800 06/16/2017 AA+ Aaa 1,000,000.00 999,770.00 4.04 999,968.00 4.07 0.04 3133EGFQ3 FEDERAL FARM CREDIT 0.875 09/14/2018 AA+ Aaa 500,000.00 500,497.00 2.02 497,504.50 2.02 1.27 3133EGM69 FEDERAL FARM CREDIT 1.100 12/05/2018 AA+ Aaa 1,250,000.00 1,247,248.75 5.04 1,246,962.50 5.07 1.49 3133EGSCO FEDERAL FARM CREDIT 1.000 08/26/2019 AA+ Aaa 1,000,000.00 1,000,610.00 4.05 987,020.00 4.01 2.20 3133ECEY6 FEDERAL FARM CREDIT 1.450 0211112020 AA+ Aaa 1,000,000.00 1,003,130.00 4.06 1,001,060.00 4.07 2.63 Issuer total 4,750,000.00 4,751,255.75 19.21 4,732,515.00 19.25 1.55 United States Treasury Note/Bond 912828WP1 USA TREASURY 0.875% 0.875 06/15/2017 AA+ Aaa 500,000.00 499,414.06 2.02 500,023.50 2.03 0.04 912828TM2 USA TREASURY 0.625% 0.625 08/31/2017 AA+ Aaa 1,000,000.00 994,921.88 4.02 998,984.00 4.06 0.25 912828620 USA TREASURY 0.875% 0.875 11/15/2017 AA+ Aaa 500,000.00 500,625.00 2.02 499,453.00 2.03 0.45 912828UR9 USA TREASURY 0.75% 0.750 02/28/2018 AA+ Aaa 1,000,000.00 997,500.00 4.03 996,758.00 4.05 0.74 912828WLO USA TREASURY 1.5% 1.500 05/31/2019 AA+ Aaa 500,000.00 501,230.47 2.03 502,148.50 2.04 1.96 912828Tv2 USA TREASURY 1.25% 1.250 10/31/2019 AA+ Aaa 650,000.00 649,009.77 2.62 648,730.55 2.64 2.37 Issuer total 4,150,000.00 4,142,701.18 16.75 4,146,097.55 16.86 0.91 IT, GASB 40 - DEPOSIT AND INVESTMENT RISK DISCLOSURE SAN RAFAEL As of May 31, 2017 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 National Mortgage Association Issuer total 550,000.00 555,351.50 2.25 550,446.60 2.24 1.28 International Business Machines Corp 3136GOZH7 FANNIE MAE 1.05% 1.050 09/05/2017 AA+ Aaa 1,000,000.00 1,005,150.00 4.06 1,000,290.00 4.07 0.26 3135GOH63 FANNIE MAE 1.375% 1.375 01/28/2019 AA+ Aaa 1,000,000.00 1,012,490.00 4.09 1,001,206.00 4.07 1.63 3135GOL76 FANNIE MAE 1.075% 1.075 07/11/2019 07/11/2017 AA+ Aaa 600,000.00 599,100.00 2.42 594,984.00 2.42 1.84 Issuer total 2.06 1.49 Issuer total 2,600,000.00 2,616,740.00 10.58 2,596,480.00 10.56 1.15 Pt. San Assess District 888599LS4 PT. SAN ASSESS 5.250 09/02/2032 NR NR 1,520,800.00 1,520,800.00 6.15 1,520,800.00 6.18 10.58 Issuer total 1,520,800.00 1,520,800.00 6.15 1,520,800.00 6.18 10.58 Federal Home Loan Mortgage Corp 3137EADV8 FREDDIE MAC 0.75% 0.750 07/14/2017 AA+ Aaa 1,000,000.00 998,530.00 4.04 999,719.00 4.07 0.12 3134G3K58 FREDDIE MAC 1.5% 1.500 03/19/2020 AA+ Aaa 500,000.00 498,289.00 2.01 499,835.00 2.03 1.03 Issuer total 1,500,000.00 1,496,819.00 6.05 1,499,554.00 6.10 0.42 Walt Disney Co/The 25468PDD5 WALT DISNEY 1.500 09/17/2018 A+ A2 550,000.00 555,351.50 2.25 550,446.60 2.24 1.28 Issuer total 550,000.00 555,351.50 2.25 550,446.60 2.24 1.28 International Business Machines Corp 45920OG14 IBM CORP 5.7% 5.700 09/14/2017 09/13/2017 A+ Al 500,000.00 568,635.00 2.30 506,132.50 2.06 0.29 Issuer total 500,000.00 568,635.00 2.30 506,132.50 2.06 0.29 PepsiCo Inc 713448CK2 PEPSICOINC2.25% 2.250 01/07/2019 12/07/2018 A+ Al 500,000.00 505,530.00 2.04 505,620.50 2.06 1.49 Issuer total 500,000.00 505,530.00 2.04 505,620.50 2.06 1.49 13 GASB 40 - DEPOSIT AND INVESTMENT RISK DISCLOSURE SAN RAFAEL As of May 31, 2017 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) US Bancorp 91159HHE3 US BANCORP 1.95% 1.950 11/15/2018 10/15/2018 A+ Al 500,000.00 509,425.00 2.06 502,753.00 2.04 1.38 Issuer total 500,000.00 509,425.00 2.06 502,753.00 2.04 1.38 Wells Fargo Bank NA 94988J5A1 WELLS FARGO BANK NA 1.650 01/22/2018 AA- Aa2 500,000.00 501,930.00 2.03 500,517.50 2.04 0.64 Issuer total 500,000.00 501,930.00 2.03 500,517.50 2.04 0.64 Berkshire Hathaway Inc 084670Bx5 BERKSHIRE HATHAWAY 1.150 08/15/2018 AA Aa2 500,000.00 500,355.00 2.02 498,548.00 2.03 1.19 Issuer total 500,000.00 500,355.00 2.02 498,548.00 2.03 1.19 Apple Inc 037833AJ9 APPLE INC 1%03/05/2018 1.000 05/03/2018 AA+ Aal 500,000.00 498,090.00 2.01 498,479.50 2.03 0.91 Issuer total 500,000.00 498,090.00 2.01 498,479.50 2.03 0.91 Caterpillar Financial Services Corp 14912L6R7 CATERPILLAR FINL 1.350 05/18/2019 A A3 500,000.00 498,245.00 2.01 496,137.50 2.02 1.94 Issuer total 500,000.00 498,245.00 2.01 496,137.50 2.02 1.94 Cash and Cash Equivalents INVESTED CASH 0.000 34,391.63 34,391.63 0.14 34,391.63 0.14 0.00 Issuer total 34,391.63 34,391.63 0.14 34,391.63 0.14 0.00 24,605,191.63 24,732,393.34 100.00 24,589,185.28 100.00 1.68 14 SECURITIES PURCHASED For the period May 1, 2017 - May 31, 2017 Cusip / Description / Broker Trade date Settle date Government Agencies 3134G3K58 05/11/2017 FREDDIE MAC 1.5% 19/03/2020 CALLABLE 05/15/2017 WELLS FARGO SECURITIES INTL LTD Total Government Agencies Coupon Maturity/ Par value or Unit cost Call date shares SAN RAFAEL Principal Accrued cost interest purchased 1.500 03/19/2020 500,000.00 99.66 (498,289.00) (1,166.67) 500,000.00 (498,289.00) (1,166.67) 15 SECURITIES SOLD AND MATURED For the period May 1, 2017 - May 31, 2017 Cusip/ Trade date Coupon Maturity/ Par value or Historical cost Amortized cost Description/ Settle date Call date shares at sale or maturity Broker /Accr (amort) Corporate Bonds 717081 DJ9 05/15/2017 1.100 (500,000.00) 499,595.00 500,000.00 PFIZER INC 1.1 % BDS 05/15/2017 7.03 15/05/17 USD2000 Total (Corporate Bonds) (500,000.00) 499,595.00 500,000.00 SAN RAFAEL Price Fair value at Realized Accrued Interest Interest sale or maturity / gain interest received earned Chg.in fair value (loss) sold 0.00 500,000.00 0.00 0.00 2,750.00 229.17 (19.50) 500,000.00 0.00 0.00 2,750.00 229.17 16 TRANSACTION REPORT SAN RAFAEL For the period May 1, 2017 - May 31, 2017 Trade date Cusip Transaction Sec type Description Maturity Par value or Realized Principal Interest Transaction total Settle date shares gain(loss) 04/30/2017 912828TV2 Income Government Bonds USA TREASURY 1.25% 10/31/2019 650,000.00 0.00 0.00 4,062.50 4,062.50 04/30/2017 05/03/2017 037833AJ9 Income Corporate Bonds APPLE INC 1%03/05/2018 05/03/2018 500,000.00 0.00 0.00 2,500.00 2,500.00 05/03/2017 05/11/2017 3134G3K58 Bought Government Agencies FREDDIE MAC 1.5% 19/03/2020 03/19/2020 500,000.00 0.00 (498,289.00) (1,166.67) (499,455.67) 05/15/2017 05/15/2017 717081D.19 Income Corporate Bonds PFIZER INC 1.1 % BIDS 15/05/17 05/15/2017 500,000.00 0.00 0.00 2,750.00 2,750.00 05/15/2017 05/15/2017 717081D.19 Capital Change Corporate Bonds PFIZER INC 1.1 % BIDS 15/05/17 05/15/2017 (500,000.00) 0.00 500,000.00 0.00 500,000.00 05/15/2017 05/15/2017 91159HHE3 Income Corporate Bonds US BANCORP 1.95% 15/11/2018 11/15/2018 500,000.00 0.00 0.00 4,875.00 4,875.00 05/15/2017 05/15/2017 912828G20 Income Government Bonds USA TREASURY 0.875% 11/15/2017 500,000.00 0.00 0.00 2,187.50 2,187.50 05/15/2017 05/18/2017 14912L6R7 Income Corporate Bonds CATERPILLAR FINL SERVICE 05/18/2019 500,000.00 0.00 0.00 3,375.00 3,375.00 05/18/2017 05/20/2017 3130A6D87 Income Government Agencies FEDERAL HOME LOAN BANK 11/20/2017 1,000,000.00 0.00 0.00 4,500.00 4,500.00 05/20/2017 05/31/2017 912828WLO Income Government Bonds USA TREASURY 1.5% 05/31/2019 500,000.00 0.00 0.00 3,750.00 3,750.00 05/31/2017 05/31/2017 Income Cash and Cash Equivalents Cash 0.00 0.00 0.00 34.38 34.38 17 ADDITIONAL INFORMATION As of May 31, 2017 SAN RAFAEL 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), Insight North America LLC (INA) 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. 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 and CISCs 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 and these 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 the account, 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 2A of 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 general information 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 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. 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. 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. 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 an appropriate 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 the indices 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 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. 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. ADDITIONAL INFORMATION As of May 31, 2017 SAN RAFAEL 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. © 2017 Insight Investment. All rights reserved. 19 SAN RAFAEL June 2017 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 Securities sold and matured 16 Transaction report 17 Additional information 18 FIXED INCOME MARKET REVIEW As of June 30, 2017 Chart 1: US Gross Domestic Product: 3/31/2012-3/31/2017 10.0 - 8.0 6.0 a) 00 4.0 5 2.0 �3 0.0 : 2.0 a SAN RAFAEL Economic Indicators and Monetary Policv On June 14, the Federal Open Market Committee (FOMC) increased the fed funds target rate to a range of 1.00% to 1.25%. In the accompanying statement, the FOMC noted that information released since the last FOMC meeting indicated strengthening labor market conditions, improvements in household spending and business fixed investment. Inflation, however, remains below Fed target levels. The FOMC further communicated that if market conditions evolve as anticipated, it will begin to implement a balance sheet normalization program this year. The program will gradually decrease the Federal Reserve holdings by reducing the reinvestment of principal payments in portfolio positions. -4.0 -6.0 The May payroll report released on June 2 was weaker than expected. US employers added 138,000 jobs in May compared to expectations for 182,000 new jobs, and April job 8.0 gains were revised down to 174,000 from 211,000. The household survey showed that the -10.0 unemployment rate fell 0.1 % to 4.3% in May and the underemployment rate decreased to Mar -12 Mar -13 Mar -14 Mar -15 Mar -16 Mar -17 8.4% from 8.6% in April. Source: Bloomberg Finance LP, June 29, 2017. Chart 2: Treasury yield curve: 6/30/2016 and 6/30/2017 3.00% - 2.50% - (u2.00% 00 ro C u 1.50% a 1.00% 6/30/2017 0.50% - 6/30/2016 0.00% 3 m 6m 1 yr 2 yr 3 yr 4 yr 5 yr 6 yr 7 yr 8 yr 9 yr 10 yr Source: Bloomberg Finance LP, June 30, 2017. The May Consumer Price Index (CPI) was released on June 14, and both headline and core year -over -year levels fell below 2.0%. Headline CPI was negative 0.1% for the month of May, and the year -over -year reading fell to 1.9% from 2.2% in April. Excluding food and energy, the May reading was positive 0.1 % while the year -over -year reading decreased to 1.7% from 1.9% in April The final estimate of first quarter 2017 GDP was released on June 29 at 1.4%, better than expectations of 1.2% growth but down from 2.1% GDP growth in the fourth quarter 2016 and 3.5% growth in the third quarter of last year. (See Chart 1). Interest Rate Summary At the end of June the 3 -month US Treasury bill yielded 1.01 %, the 6 -month US Treasury bill yielded 1.13%, the 2 -year US Treasury note yielded 1.38%, the 5 -year US Treasury note yielded 1.89% and the 10 -year US Treasury note yielded 2.31 %. (See Chart 2). 3 ACTIVITY AND PERFORMANCE SUMMARY For the period June 1, 2017 - June 30, 2017 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 7,892.12 (144.18) Comparative Rates of Return 1%) * Twelve * Six month trailing month trailing 0.62 0.41 0.61 0.38 0.53 0.36 0.64 0.41 0.83 0.50 1.07 0.63 1.62 0.93 * rates reflected are cumulative SAN RAFAEL 4 Detail of Amortized Cost Basis Return 24,652,165.83 Interest Accretion Realized Total earned (amortization) gain (loss) income 7,892.12 Cash and Cash Equivalents 7.11 0.00 0.00 7.11 Corporate Bonds 6,726.40 (2,599.94) 0.00 4,126.46 (144.18) Government Agencies 13,176.18 (1,460.74) 0.00 11,715.44 Government Bonds 3,142.17 263.35 0.65 3,406.17 0.00 Municipal/Provincial Bonds 6,653.50 0.00 0.00 6,653.50 Total 29,705.36 (3,797.33) 0.65 25,908.68 0.65 (4,592.06) 794.73 0.00 24, 656,117.09 24,576,626.78 (79,490.31) Summary of Amortized Cost Basis Return for the Period * One month Total portfolio 0.09 Interest earned 29,705.36 0.08 Accretion (amortization) (3,797.33) 0.08 Realized gain (loss) on sales 0.65 0.09 Total income on portfolio 25,908.68 0.10 Average daily amortized cost 24,657,627.26 0.11 0.14 Period return 1%) 0.10 YTD return (%) 0.63 Weighted average final maturity in days 765 4 ACTIVITY AND PERFORMANCE SUMMARY For the period June 1, 2017 - June 30, 2017 Fair Value Basis Activitv Summary * Twelve Opening balance 24,589,185.28 Income received 7,892.12 month trailing Total receipts 7,892.12 Expenses paid (144.18) 0.62 Total disbursements (144.18) Interportfolio transfers 0.00 0.61 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 (20,306.44) Ending fair value 24,576,626.78 Comparative Rates of Return W * rates reflected are cumulative SAN RAFAEL * Twelve * Six * One month Interest month trailing month trailing 24,673,682.35 Fed Funds 0.62 0.41 0.09 Overnight Repo 0.61 0.38 0.08 Merrill Lynch 3m US Treas Bill 0.49 0.31 0.08 Merrill Lynch 6m US Treas Bill 0.62 0.36 0.09 ML 1 Year US Treasury Note 0.40 0.30 0.03 ML US Treasury 1-3 (0.11) 0.43 (0.08) ML US Treasury 1-5 (0.53) 0.75 (0.15) * 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 (20,306.44) Interest Change in Total 24,673,682.35 earned fair value income Cash and Cash Equivalents 7.11 0.00 7.11 Corporate Bonds 6,726.40 (4,347.05) 2,379.35 Government Agencies 13,176.18 (13,769.50) (593.32) Government Bonds 3,142.17 (2,189.89) 952.28 Municipal/Provincial Bonds 6,653.50 0.00 6,653.50 Total 29,705.36 (20,306.44) 9,398.92 Summary of Fair Value Basis Return for the Period Total portfolio Interest earned 29,705.36 Change in fair value (20,306.44) Total income on portfolio 9,398.92 Average daily total value * 24,673,682.35 Period return (%) 0.04 YTD return (%) 0.64 Weighted average final maturity in days 765 * Total value equals market value and accrued interest RECAP OF SECURITIES HELD As of June 30, 2017 Portfolio diversification (%) ■ Cash and Cash Equivalents Historical Amortized Fair value Unrealized Weighted Percent Weighted ■ Municipal/Provincial Bonds cost cost 100.00 gain (loss) average of average final portfolio effective maturity (days) duration (years) Cash and Cash Equivalents 46,240.43 46,240.43 46,240.43 0.00 1 0.19 0.00 Corporate Bonds 4,137,561.50 4,066,778.59 4,054,288.05 (12,490.54) 394 16.72 1.04 Government Agencies 14,647,199.03 14,627,174.11 14,565,521.50 (61,652.61) 470 59.20 1.23 Government Bonds 4,389,156.26 4,395,123.96 4,389,776.80 (5,347.16) 452 17.74 1.21 Municipal/Provincial Bonds 1,520,800.00 1,520,800.00 1,520,800.00 0.00 5,543 6.15 10.47 24,740,957.22 24,656,117.09 24,576,626.78 (79,490.31) 765 100.00 Portfolio diversification (%) ■ Cash and Cash Equivalents 0.19 ■ Corporate Bonds 16.72 ■ Government Agencies 59.20 ■ Government Bonds 17.74 ■ Municipal/Provincial Bonds 6.15 Total 100.00 SAN RAFAEL 6 MATURITY DISTRIBUTION OF SECURITIES HELD As of June 30, 2017 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 8.00 E 6.00 E 0 0 4.00 u 0 x 2.00 KIN Maturity distribution J C§l �O Historic cost Percent 4,612,267.31 18.64 2,500,355.00 10.11 3,005,490.00 12.15 6,844,497.00 27.67 6,257,547.91 25.29 0.00 0.00 0.00 0.00 1,520,800.00 6.15 --24,740,957.22 100.00 SAN RAFAEL 7 SECURITIES HELD SAN RAFAEL As of June 30, 2017 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 46,240.43 46,240.43 46,240.43 46,240.43 0.00 0.00 0.00 0.00 0.19 0.00 0.00 0.00 Total Cash and Cash Equivalents 46,240.4346,240.43 46,240.43 0.00 0.00 0.00 0.00 0.19 0.00 0.00 Corporate Bonds 459200GJ4 5.700 09/14/2017 500,000.00 568,635.00 504,463.08 504,304.00 (159.08) 0.00 2,295.84 8,391.67 2.30 IBM CORP 5.7% 14/09/2017 09/13/2017 0.00 (1,809.36) (1,828.50) 94988J5A1 1.650 01/22/2018 500,000.00 501,930.00 500,556.15 500,339.00 (217.15) 0.00 664.58 3,620.83 2.03 WELLS FARGO BANK NA 1.65% 0.00 (82.59) (178.50) 22/01/2018 037833AJ9 1.000 05/03/2018 500,000.00 498,090.00 499,281.97 498,187.50 (1,094.47) 0.00 402.78 791.67 2.01 APPLE INC 1%03/05/2018 0.00 71.09 (292.00) 084670BX5 1.150 08/15/2018 500,000.00 500,355.00 500,198.31 498,203.00 (1,995.31) 0.00 463.19 2,156.25 2.02 BERKSHIRE HATHAWAY INC 0.00 (14.69) (345.00) 1.15% 15/08/2018 25468PDD5 1.500 09/17/2018 550,000.00 555,351.50 553,230.12 549,940.05 (3,290.07) 0.00 664.59 2,360.42 2.24 WALT DISNEY COMPANY/THE 0.00 (221.75) (506.55) 1.5% 17/09/2018 91159HHE3 1.950 11/15/2018 500,000.00 509,425.00 505,703.39 502,571.50 (3,131.89) 0.00 785.42 1,218.75 2.06 US BANCORP 1.95% 10/15/2018 0.00 (345.66) (181.50) 15/11/2018 (CALLABLE 15/10/18) 713448CK2 2.250 01/07/2019 500,000.00 505,530.00 504,618.18 504,850.50 232.32 0.00 906.25 5,406.25 2.04 PEPSICO INC 2.25% 07/01/2019 12/07/2018 0.00 (253.29) (770.00) (CALLABLE 07/12/18) 8 SECURITIES HELD As of June 30, 2017 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) Corporate Bonds 149121-6R7 1.350 05/18/2019 500,000.00 498,245.00 498,727.39 495,892.50 (2,834.89) 0.00 CATERPILLAR FINL SERVICE 0.00 56.31 (245.00) 1.35% 18/05/2019 Total Corporate Bonds 4,050,000.00 4,137,561.50 4,066,778.59 4,054,288.05 (12,490.54) 0.00 i 0.00 (2,599.94) (4,347.05) � Government Agencies 3137EADV8 0.750 07/14/2017 1,000,000.00 998,530.00 999,972.56 999,904.00 (68.56) 0.00 FREDDIE MAC 0.75% 0.00 58.80 185.00 14/07/2017 3136GOZH7 1.050 09/05/2017 1,000,000.00 1,005,150.00 1,000,434.18 1,000,170.00 (264.18) 0.00 FANNIE MAE 1.05%05/09/2017 0.00 (200.39) (120.00) CALLABLE 313380EC7 0.750 09/08/2017 1,000,000.00 998,790.00 999,888.66 999,410.00 (478.66) 0.00 FEDERAL HOME LOAN BANK 0.00 49.12 180.00 0.75% 08/09/2017 3130A51-56 0.900 10/27/2017 1,000,000.00 999,070.00 999,872.44 999,290.00 (582.44) 0.00 FEDERAL HOME LOAN BANK 0.00 32.71 (200.00) 0.9% 27/10/2017 3130A6D87 0.900 11/20/2017 1,000,000.00 1,000,660.00 1,000,113.93 999,220.00 (893.93) 0.00 FEDERAL HOME LOAN BANK 0.00 (24.42) (90.00) 0.9% 2011112017 313378A43 1.375 03/09/2018 1,000,000.00 1,007,970.00 1,002,133.90 1,001,001.00 (1,132.90) 0.00 FEDERAL HOME LOAN BANK 0.00 (257.10) 258.00 1.375% 09/03/2018 3133EGFQ3 0.875 09/14/2018 500,000.00 500,497.00 500,266.95 497,230.00 (3,036.95) 0.00 FEDERAL FARM CREDIT BANK 0.00 (18.46) (274.50) 0.875% 14/09/2018 3133EGM69 1.100 12/05/2018 1,250,000.00 1,247,248.75 1,248,034.82 1,245,450.00 (2,584.82) 6,875.00 FEDERAL FARM CREDIT BANK 0.00 114.47 (1,512.50) 1.1% 05/12/2018 SAN RAFAEL Interest Total earned accrued Port interest cost 543.75 787.50 2.01 6,726.40 24,733.34 16.72 10 604.16 3,458.33 4.04 845.84 3,354.17 4.06 604.16 2,333.33 4.04 725.00 1,575.00 4.04 725.00 1,000.00 4.04 1,107.64 4,239.58 4.07 352.43 1,288.19 2.02 1,107.64 954.86 5.04 9 SECURITIES HELD As of June 30, 2017 SAN RAFAEL 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 3135GOH63 1.375 01/28/2019 1,000,000.00 1,012,490.00 1,007,962.20 999,863.00 (8,099.20) 0.00 1,107.64 5,805.56 4.09 FANNIE MAE 1.375% 0.00 (420.54) (1,343.00) 28/01/2019 3133782M2 1.500 03/08/2019 1,000,000.00 1,014,124.28 1,009,224.02 1,001,228.00 (7,996.02) 0.00 1,208.34 4,666.67 4.10 FEDERAL HOME LOAN BANK 0.00 (455.13) (1,561.00) 1.5% 08/03/2019 3135GOL76 1.075 07/11/2019 600,000.00 599,100.00 599,347.97 593,178.00 (6,169.97) 0.00 519.59 3,027.92 2.42 FANNIE MAE 1.075% 07/11/2017 0.00 26.76 (1,806.00) 11 /07/2019 (CALLABLE 11/10/17) 3133EGSC0 1.000 08/26/2019 1,000,000.00 1,000,610.00 1,000,436.68 985,520.00 (14,916.68) 0.00 805.55 3,444.44 4.04 FEDERAL FARM CREDIT BANK 0.00 (16.88) (1,500.00) 1% 26/08/2019 313380FB8 1.375 09/13/2019 1,000,000.00 1,011,510.00 1,008,562.32 997,810.00 (10,752.32) 0.00 1,107.64 4,086.81 4.09 FEDERAL HOME LOAN BANK 0.00 (323.92) (1,340.00) 1.375% 13/09/2019 3130ABCH7 1.500 11/04/2019 750,000.00 750,030.00 750,029.65 749,677.50 (352.15) 0.00 250.00 1,750.00 3.03 FEDERAL HOME LOAN BANK (1,500.00) (0.35) (352.50) 1.5% 04/11/2019 3133ECEY6 1.450 02/11/2020 1,000,000.00 1,003,130.00 1,002,521.69 998,230.00 (4,291.69) 0.00 1,168.05 5,598.61 4.05 FEDERAL FARM CREDIT BANK 0.00 (80.39) (2,830.00) 1.45% 11/02/2020 3134G3K58 1.500 03/19/2020 500,000.00 498,289.00 498,372.14 498,340.00 (32.14) 0.00 604.17 2,104.17 2.01 FREDDIE MAC 1.5% 19/03/2020 0.00 49.88 (1,495.00) CALLABLE Total Government Agencie 14,600,000.00 14,647,199.03 14,627,174.11 14,565,521.50 i (61,652.61) 6,875.00 12 (1,500.00) (1,465.84) (13,801.50) 10 SECURITIES HELD SAN RAFAEL As of June 30, 2017 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 1,000,000.00 994,921.88 999,657.03 999,375.00 (282.03) 0.00 509.51 2,072.01 4.02 USA TREASURY 0.625% 0.00 165.95 391.00 31/08/2017 912828G20 0.875 11/15/2017 500,000.00 500,625.00 500,100.76 499,550.00 (550.76) 0.00 356.66 546.88 2.02 USA TREASURY 0.875% 0.00 (21.90) 97.00 15/11/2017 912828UR9 0.750 02/28/2018 1,000,000.00 997,500.00 999,316.65 996,953.00 (2,363.65) 0.00 611.41 2,486.41 4.03 USA TREASURY 0.75% 0.00 84.37 195.00 28/02/2018 912828WLO 1.500 05/31/2019 500,000.00 501,230.47 501,055.55 501,113.50 57.95 0.00 614.75 614.75 2.03 USA TREASURY 1.5% 0.00 (45.24) (1,035.00) 31/05/2019 912828TV2 1.250 10/31/2019 650,000.00 649,009.77 649,085.86 647,385.05 (1,700.81) 0.00 662.37 1,346.81 2.62 USA TREASURY 1.25% 0.00 32.15 (1,345.50) 3111012019 912828H52 1.250 01/31/2020 750,000.00 745,869.14 745,908.11 745,400.25 (507.86) 0.00 207.18 3,884.67 3.01 USA TREASURY 1.25% (3,677.49) 38.97 (468.89) 31/01/2020 Total Government Bonds 4,400,000.00 4,389,156.26 4,395,123.96 4,389,776.80 (5,347.16) 0.00 2,961.88 10,951.53 17.74 (3,677.49) 254.30 (2,166.39) Municipal/Provincial Bonds 888599LS4 5.250 09/02/2032 1,520,800.00 1,520,800.00 1,520,800.00 1,520,800.00 0.00 0.00 6,653.50 19,960.50 6.15 PT. SAN ASSESS DISTRICT 0.00 0.00 0.00 5.25% 144A 02/09/2032 SANRAF$01 Total Municipal/Provincial Bonds 1,520,800.00 1,520,800.00 1,520,800.00 1,520,800.00 0.00 0.00 6,653.50 19,960.50 6.15 lip 0.00 0.00 0.00 III GASB 40 - DEPOSIT AND INVESTMENT RISK DISCLOSURE SAN RAFAEL As of June 30, 2017 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 Banks 313380EC7 FEDERAL HOME LOAN 0.750 09/08/2017 AA+ Aaa 1,000,000.00 998,790.00 4.04 999,410.00 4.07 0.19 3130A5L56 FEDERAL HOME LOAN 0.900 10/27/2017 AA+ Aaa 1,000,000.00 999,070.00 4.04 999,290.00 4.07 0.32 3130A6D87 FEDERAL HOME LOAN 0.900 11/20/2017 AA+ Aaa 1,000,000.00 1,000,660.00 4.04 999,220.00 4.07 0.39 313378A43 FEDERAL HOME LOAN 1.375 03/09/2018 AA+ Aaa 1,000,000.00 1,007,970.00 4.07 1,001,001.00 4.07 0.68 3133782M2 FEDERAL HOME LOAN 1.500 03/08/2019 AA+ Aaa 1,000,000.00 1,014,124.28 4.10 1,001,228.00 4.07 1.65 313380FB8 FEDERAL HOME LOAN 1.375 09/13/2019 AA+ Aaa 1,000,000.00 1,011,510.00 4.09 997,810.00 4.06 2.16 3130ABCH7 FEDERAL HOME LOAN 1.500 11/04/2019 AA+ Aaa 750,000.00 750,030.00 3.03 749,677.50 3.05 2.29 Issuer total 6,750,000.00 6,782,154.28 27.41 6,747,636.50 27.46 1.06 United States Treasury Note/Bond 912828TM2 USA TREASURY 0.625% 0.625 08/31/2017 AA+ Aaa 1,000,000.00 994,921.88 4.02 999,375.00 4.07 0.17 912828G20 USA TREASURY 0.875% 0.875 11/15/2017 AA+ Aaa 500,000.00 500,625.00 2.02 499,550.00 2.03 0.37 912828UR9 USA TREASURY 0.75% 0.750 02/28/2018 AA+ Aaa 1,000,000.00 997,500.00 4.03 996,953.00 4.06 0.66 912828WLO USA TREASURY 1.5% 1.500 05/31/2019 AA+ Aaa 500,000.00 501,230.47 2.03 501,113.50 2.04 1.88 912828TV2 USA TREASURY 1.25% 1.250 10/31/2019 AA+ Aaa 650,000.00 649,009.77 2.62 647,385.05 2.63 2.29 912828H52 USA TREASURY 1.25% 1.250 01/31/2020 AA+ Aaa 750,000.00 745,869.14 3.01 745,400.25 3.03 2.52 Issuer total 4,400,000.00 4,389,156.26 17.74 4,389,776.80 17.86 1.21 Federal Farm Credit Banks 3133EGFQ3 FEDERAL FARM CREDIT 0.875 09/14/2018 AA+ Aaa 500,000.00 500,497.00 2.02 497,230.00 2.02 1.19 3133EGM69 FEDERAL FARM CREDIT 1.100 12/05/2018 AA+ Aaa 1,250,000.00 1,247,248.75 5.04 1,245,450.00 5.07 1.41 3133EGSCO FEDERAL FARM CREDIT 1.000 08/26/2019 AA+ Aaa 1,000,000.00 1,000,610.00 4.04 985,520.00 4.01 2.12 3133ECEY6 FEDERAL FARM CREDIT 1.450 02/11/2020 AA+ Aaa 1,000,000.00 1,003,130.00 4.05 998,230.00 4.06 2.55 Issuer total 3,750,000.00 3,751,485.75 15.16 3,726,430.00 15.16 1.87 IT, GASB 40 - DEPOSIT AND INVESTMENT RISK DISCLOSURE As of June 30, 2017 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 National Mortgage Association 3136GOZH7 FANNIE MAE 1.05% 1.050 09/05/2017 AA+ Aaa 1,000,000.00 1,005,150.00 4.06 1,000,170.00 4.07 0.18 3135GOH63 FANNIE MAE 1.375% 1.375 01/28/2019 AA+ Aaa 1,000,000.00 1,012,490.00 4.09 999,863.00 4.07 1.55 3135GOL76 FANNIE MAE 1.075% 1.075 07/11/2019 07/11/2017 AA+ Aaa 600,000.00 599,100.00 2.42 593,178.00 2.41 1.89 Issuer total 2,600,000.00 2,616,740.00 10.58 2,593,211.00 10.55 1.10 Pt. San Assess District 888599LS4 PT. SAN ASSESS 5.250 09/02/2032 NR NR 1,520,800.00 1,520,800.00 6.15 1,520,800.00 6.19 10.47 Issuer total 1,520,800.00 1,520,800.00 6.15 1,520,800.00 6.19 10.47 Federal Home Loan Mortgage Corp 3137EADV8 FREDDIE MAC 0.75% 0.750 07/14/2017 AA+ Aaa 1,000,000.00 998,530.00 4.04 999,904.00 4.07 0.04 3134G3K58 FREDDIE MAC 1.5% 1.500 03/19/2020 AA+ Aaa 500,000.00 498,289.00 2.01 498,340.00 2.03 1.69 Issuer total 1,500,000.00 1,496,819.00 6.05 1,498,244.00 6.10 0.59 Walt Disney Co/The 25468PDD5 WALT DISNEY 1.500 09/17/2018 A+ A2 550,000.00 555,351.50 2.24 549,940.05 2.24 1.20 Issuer total 550,000.00 555,351.50 2.24 549,940.05 2.24 1.20 PepsiCo Inc 713448CK2 PEPSICOINC2.25% 2.250 01/07/2019 12/07/2018 A+ Al 500,000.00 505,530.00 2.04 504,850.50 2.05 1.41 Issuer total 500,000.00 505,530.00 2.04 504,850.50 2.05 1.41 International Business Machines Corp 45920OG14 IBM CORP 5.7% 5.700 09/14/2017 09/13/2017 A+ Al 500,000.00 568,635.00 2.30 504,304.00 2.05 0.20 Issuer total 500,000.00 568,635.00 2.30 504,304.00 2.05 0.20 13 GASB 40 - DEPOSIT AND INVESTMENT RISK DISCLOSURE SAN RAFAEL As of June 30, 2017 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) US Bancorp 91159HHE3 US BANCORP 1.95% 1.950 11/15/2018 10/15/2018 A+ Al 500,000.00 509,425.00 2.06 502,571.50 2.04 1.30 Issuer total 500,000.00 509,425.00 2.06 502,571.50 2.04 1.30 Wells Fargo Bank NA 94988J5A1 WELLS FARGO BANK NA 1.650 01/22/2018 AA- Aa2 500,000.00 501,930.00 2.03 500,339.00 2.04 0.55 Issuer total 500,000.00 501,930.00 2.03 500,339.00 2.04 0.55 Berkshire Hathaway Inc 084670Bx5 BERKSHIRE HATHAWAY 1.150 08/15/2018 AA Aa2 500,000.00 500,355.00 2.02 498,203.00 2.03 1.11 Issuer total 500,000.00 500,355.00 2.02 498,203.00 2.03 1.11 Apple Inc 037833AJ9 APPLE INC 1%03/05/2018 1.000 05/03/2018 AA+ Aal 500,000.00 498,090.00 2.01 498,187.50 2.03 0.83 Issuer total 500,000.00 498,090.00 2.01 498,187.50 2.03 0.83 Caterpillar Financial Services Corp 14912L6R7 CATERPILLAR FINL 1.350 05/18/2019 A A3 500,000.00 498,245.00 2.01 495,892.50 2.02 1.85 Issuer total 500,000.00 498,245.00 2.01 495,892.50 2.02 1.85 Cash and Cash Equivalents INVESTED CASH 0.000 46,240.43 46,240.43 0.19 46,240.43 0.19 0.00 Issuer total 46,240.43 46,240.43 0.19 46,240.43 0.19 0.00 24,617,040.43 24,740,957.22 100.00 24,576,626.78 100.00 1.76 14 SECURITIES PURCHASED For the period June 1, 2017 - June 30, 2017 Cusip / Description / Broker Trade date Settle date Government Agencies 3130ABCH7 06/21/2017 FEDERAL HOME LOAN BANK 1.5%04/11/2019 06/22/2017 WELLS FARGO SECURITIES INTL LTD Total Government Agencies Government Bonds 912828H52 06/21/2017 USA TREASURY 1.25% 31/01/2020 06/22/2017 HSBC SECURITIES (USA) INC Total Government Bonds Coupon Maturity/ Par value or Unit cost Call date shares SAN RAFAEL Principal Accrued cost interest purchased 1.500 11/04/2019 750,000.00 100.00 (750,030.00) (1,500.00) 750,000.00 (750,030.00) (1,500.00) 1.250 01/31/2020 750,000.00 99.45 (745,869.14) (3,677.49) 750,000.00 (745,869.14) (3,677.49) 15 SECURITIES SOLD AND MATURED SAN RAFAEL For the period June 1, 2017 - June 30, 2017 Cusip/ Trade date Coupon Maturity/ Par value or Historical cost Amortized cost Price Fair value at Realized Accrued Interest Interest Description/ Settle date Call date shares at sale or maturity sale or maturity / gain interest received earned Broker /Accr (amort) Chg.in fair value (loss) sold Government Agencies 3133EEX62 06/16/2017 0.800 (1,000,000.00) 999,770.00 1,000,000.00 0.00 1,000,000.00 0.00 0.00 4,000.00 333.33 FEDERAL FARM CREDIT 06/16/2017 5.10 32.00 BANK BNDS .8% DUE 06-16-2017 REG Total (Government Agencies) (1,000,000.00) 999,770.00 1,000,000.00 1,000,000.00 0.00 0.00 4,000.00 333.33 5.10 32.00 Government Bonds 912828WP1 06/15/2017 0.875 UNITED STATES TREAS NTS 06/15/2017 DTD 06/15/2014.875% DUE 06-15-2017 REG Total (Government Bonds) bw w (500,000.00) 500,000.00 499,999.35 0.00 500,000.00 0.65 0.00 2,187.50 180.29 9.05 (23.50) (500,000.00) 500,000.00 499,999.35 500,000.00 0.65 0.00 2,187.50 180.29 9.05 (23.50) TRANSACTION REPORT For the period June 1, 2017 - June 30, 2017 Trade date Cusip Transaction Sec type Description Maturity Par value or Realized Principal Settle date shares gain(loss) 06/05/2017 3133EGM69 Income Government Agencies FEDERAL FARM CREDIT BANK 12/05/2018 1,250,000.00 0.00 0.00 06/05/2017 06/15/2017 912828WP1 Income Government Bonds UNITED STATES TREAS NTS 06/15/2017 500,000.00 0.00 0.00 06/15/2017 06/15/2017 912828WP1 Capital Change Government Bonds UNITED STATES TREAS NTS 06/15/2017 (500,000.00) 0.65 500,000.00 06/15/2017 06/16/2017 3133EEX62 Income Government Agencies FEDERAL FARM CREDIT BANK 06/16/2017 1,000,000.00 0.00 0.00 06/16/2017 06/16/2017 3133EEX62 Capital Change Government Agencies FEDERAL FARM CREDIT BANK 06/16/2017 (1,000,000.00) 0.00 1,000,000.00 06/16/2017 06/21/2017 3130ABCH7 Bought Government Agencies FEDERAL HOME LOAN BANK 11/04/2019 750,000.00 0.00 (750,030.00) 06/22/2017 06/21/2017 912828H52 Bought Government Bonds USA TREASURY 1.25% 01/31/2020 750,000.00 0.00 (745,869.14) 06/22/2017 06/30/2017 Income Cash and Cash Equivalents Cash 0.00 0.00 0.00 SAN RAFAEL Interest Transaction total 6,875.00 2,187.50 0.00 4,000.00 0.00 (1,500.00) (3,677.49) 7.11 ADDITIONAL INFORMATION As of June 30, 2017 SAN RAFAEL 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), Insight North America LLC (INA) 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. 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 and CISCs 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 and these 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 the account, 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 2A of 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 general information 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 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. 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. 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. 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 an appropriate 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 the indices 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 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. 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. ADDITIONAL INFORMATION As of June 30, 2017 SAN RAFAEL 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. © 2017 Insight Investment. All rights reserved. 19 SAN RAFAEL STAFF REPORT APPROVAL THE CITY WITH AMISSION ROUTING SLIP Staff Report Author: Van Bach Date of Meeting: 08/07/2017 Department: Finance Topic: City Quarterly Investment Report Subject: Click here to enter text. Type: (check all that apply) ❑ Consent Calendar ❑ Public Hearing ❑ Discussion Item 0 Resolution ❑ Ordinance ❑ Professional Services Agreement ❑ Informational Report *If PSA, City Attorney approval is required prior to start of staff report approval process Was agenda item publicly noticed? ❑ Yes El No I Date noticed: I ❑Mailed ❑Site posted ❑Marin U Due Date Responsibility Description CompletedDate Initial / Comment PRELIMINARY REVIEW FRI, 7/21 Author Submit draft report to 7/21/2017 0 Director Van Bach MON, 7/24 Director Submit draft report to ACM 7/24/2017 0 7/26/2017 Mark Moses Assistant City Manager Readiness review, 0 City Attorney preliminary legal and LG Finance financial impact review CONTENT REVIEW FRI, 7/28 Assistant City Manager Content review 7/24/2017 0 7/26/2017 CA Author Revisions added 0 language based MM on discussion with Cristine on 7/24 FINAL REVIEW MON, 7/31 City Attorney Final legal review 8/1/2017 Click here to LG Finance Final financial review enter a date. 0 Click here to Author Revisions / accept changes enter a date. TUES, 8/1 City Manager Final review and approval Click here to enter a date.