Loading...
The URL can be used to link to this page
Your browser does not support the video tag.
Home
My WebLink
About
Monthly Investment Report
CITY OF SEAL BEACH Preliminary Investment Report 10/31/2019 Investments: Book Value Market Value LAIF City 8,561,971.27 8,561,971.27 LAIF Successor Agency 383.20 383.20 Securities 27,363,675.92 27,864,877.16 Total Investments: 35,926,030.39 36,427,231.63 Cash,Deposits,&Accrued Interest: Bank of the West General Account 2,873,523.64 Bank of the West Successor Agency 3,911.05 Deposit in transit 206,938.01 Less outstanding checks/ACH (430,566.15) Farmers&Merchants Bank(Parking) 21,904.56 Cash with Bank of New York 89,852.33 Total Cash&Deposits: 2,765,563.44 Total Investments,Cash,and Deposits: 38,691,593.83 In compliance with the California Government Code Section 53646 and Resolution Number 6038;the City Treasurer of Seal Beach hereby certifies that sufficient investment liquidity and anticipated revenue are available to meet the City's budgeted expenditure requirements for the next six months. Investments in this report meet the requirements of the City of Seal Beach's adopted investment policy. NOTED AND APPROVED: Respectfully submitted, \ I � vat, •li i Victoria L.Beatley L�2 ,101 cw Jil :ram Director of Finance/City Treasurer f Ci v ager 3 CITY OF SEAL BEACH Preliminary Investments Detail Report 10/31/2019 Years to Source of Market Issuer Settlement Date Maturity Date Interest Rate Book Value Market Value Maturity Valuation LAIF CITY: N/A N/A 2.190% 8,561,971.27 8,561,971.27 N/A LAIF Statement LAIF RDA: N/A N/A 2.190% 383.20 383.20 N/A LAIF Statement Total LAIF: 8,562,354.47 8,562,354.47 US Treasury Notes 02/03/17 04/30/21 1.375% 176,400.00 179,416.44 1.50 Bank of New York US Treasury Notes 08/03/17 05/31/21 1.375% 148,376.95 149,484.30 1.58 Bank of New York US Treasury Notes 07/07/17 05/31/21 1.375% 373,869.53 378,693.56 1.58 Bank of New York US Treasury Notes 11/23/16 07/31/21 2.250% 270,631.25 268,063.93 1.75 Bank of New York US Treasury Notes 12/05/16 08/31/21 2.000% 762,671.88 765,877.84 1.84 Bank of New York US Treasury Notes 04/05/17 10/31/21 2.000% 503,105.47 504,336.00 2.00 Bank of New York US Treasury Notes 01/05/17 10/31/21 2.000% 526,168.94 529,552.80 2.00 Bank of New York US Treasury Notes 03/05/18 10/31/21 2.000% 580,251.17 595,116.48 2.00 Bank of New York US Treasury Notes 07/11/17 01/31/22 1.875% 274,495.12 276,976.70 2.25 Bank of New York US Treasury Notes 03/17/17 02/28/22 1.750% 240,482.81 246,186.78 2.33 Bank of New York US Treasury Notes 12/05/17 03/31/22 1.875% 346,732.42 352,843.75 2.42 Bank of New York US Treasury Notes 11/20/17 03/31/22 1.875% 372,993.16 378,046.88 2.42 Bank of New York US Treasury Notes 01/04/18 03/31/22 1.875% 493,886.72 504,062.50 2.42 Bank of New York US Treasury Notes 09/06/18 03/31/22 1.875% 718,175.78 746,012.50 2.42 Bank of New York US Treasury Notes 08/03/18 03/31/22 1.875% 967,187.50 1,008,125.00 2.42 Bank of New York US Treasury Notes 08/31/17 07/31/22 2.000% 556,810.55 557,111.50 2.75 Bank of New York US Treasury Notes 10/06/17 09/30/22 1.750% 406,508.59 412,738.80 2.92 Bank of New York US Treasury Notes 06/06/18 09/30/22 1.750% 623,466.80 654,342.00 2.92 Bank of New York US Treasury N/B Notes 05/04/18 10/31/22 2.000% 357,657.03 375,174.08 3.00 Bank of New York US Treasury Notes 10/04/18 01/31/23 1.750% 214,259.77 226,581.98 3.25 Bank of New York US Treasury Notes 07/05/18 02/28/23 1.500% 473,046.88 499,609.50 3.33 Bank of New York US Treasury Notes 02/12/19 03/31/23 1.500% 197,448.63 204,887.87 3.42 Bank of New York US Treasury Notes 03/15/19 06/30/23 1.375% 316,258.59 328,247.04 3.67 Bank of New York US Treasury Notes 02/12/19 07/31/23 1.250% 199,491.80 207,957.33 3.75 Bank of New York US Treasury Notes 03/08/19 11/15/23 2.750% 580,817.38 602,312.50 4.04 Bank of New York US Treasury Notes 01/09/19 11/30/23 2.125% 712,029.30 741,992.55 4.08 Bank of New York US Treasury N/B 01/31/19 12/31/23 2.625% 125,371.09 130,507.75 4.17 Bank of New York US Treasury N/B 06/05/19 04/30/24 2.000% 964,350.00 979,237.44 4.50 Bank of New York US Treasury N/B 07/03/19 06/30/24 2.000% 282,887.50 285,785.92 4.67 Bank of New York US Treasury N/B 09/05/19 08/31/24 1.875% 718,238.28 710,992.10 4.84 Bank of New York US Treasury N/B 10/01/19 09/30/24 2.125% 226,264.84 226,041.42 4.92 Bank of New York US Treasury N/B 10/03/19 09/30/24 2.125% 319,263.67 318,512.91 4.92 Bank of New York CA ST TXBL Go Bonds 10/24/19 10/01/23 2.400% 275,402.70 274,822.20 3.92 Bank of New York FNMA Notes 04/13/18 04/13/21 2.500% 264,605.15 268,537.49 1.45 Bank of New York FNMA Notes 08/19/16 08/17/21 1.125% 189,350.01 188,877.29 1.80 Bank of New York FNMA Notes 09/02/16 08/17/21 1.250% 372,705.00 372,784.13 1.80 Bank of New York FNMA Notes 08/19/16 08/17/21 1.250% 607,529.50 606,395.51 1.80 Bank of New York 1 CITY OF SEAL BEACH Preliminary Investments Detail Report 10/31/2019 Years to Source of Market Issuer Settlement Date Maturity Date Interest Rate Book Value Market Value Maturity Valuation Fannie Mae Notes 06/29/17 01/05/22 2.000% 478,035.25 479,418.45 2.18 Bank of New York Fannie Mae Notes 01/11/19 01/11/22 2.625% 279,798.40 286,358.52 2.20 Bank of New York Fannie Mae Notes 06/29/17 04/05/22 1.875% 489,926.50 493,585.33 2.43 Bank of New York Freddie Mac Notes 01/09/19 06/19/23 2.750% 755,265.00 781,633.50 3.64 Bank of New York Fannie Mae Notes 12/06/18 09/12/23 2.875% 688,606.20 723,698.22 3.87 Bank of New York Federal Home Loan Bank 01/31/19 12/08/23 3.375% 360,315.86 374,811.15 4.11 Bank of New York Fannie Mae Notes 02/08/19 02/05/24 2.500% 273,977.00 285,230.83 4.27 Bank of New York American Express Credit Corp 03/03/17 03/03/20 2.200% 289,698.40 290,160.66 0.34 Bank of New York Wal-Mart Stores Inc 10/20/17 12/15/20 1.900% 199,710.00 200,472.80 1.13 Bank of New York Branch Banking&Trust Corp 10/26/17 02/01/21 2.150% 134,937.90 135,462.38 1.26 Bank of New York Toyota Motor Credit Corp 04/13/18 04/13/21 2.950% 124,950.00 126,960.25 1.45 Bank of New York Pepsico Inc Corp Note 10/10/17 04/15/21 2.000% 319,936.00 321,268.80 1.46 Bank of New York Bank of New York 09/11/17 04/15/21 2.500% 508,860.00 504,571.00 1.46 Bank of New York Bank of America Corp 11/03/17 04/19/21 2.625% 261,947.40 262,780.96 1.47 Bank of New York Goldman Sachs Group Corp 11/07/17 07/27/21 5.250% 257,534.15 247,722.43 1.74 Bank of New York American Honda Finance Corp Notes 09/14/16 09/09/21 1.700% 382,370.45 383,965.89 1.86 Bank of New York Citigroup Inc Corp 11/22/17 12/08/21 2.900% 261,775.80 264,397.38 2.11 Bank of New York American Express Credit Corp 04/05/18 03/03/22 2.700% 195,958.00 203,455.20 2.34 Bank of New York BB&T CORP 04/05/18 04/01/22 2.750% 132,493.05 137,287.71 2.42 Bank of New York National Rural Util Coop Corp 04/05/18 04/25/22 2.400% 243,162.50 253,192.00 2.48 Bank of New York JPMorgan Chase&Co Corp Notes 04/05/18 09/23/22 3.250% 264,189.10 274,195.77 2.90 Bank of New York Caterpillar Fin Services Corp 04/05/18 03/01/23 2.625% 243,572.50 255,769.25 3.33 Bank of New York Home Depot Inc Corp 04/05/18 04/01/23 2.700% 245,250.00 257,176.00 3.42 Bank of New York Toyota Motor Credit Corp 01/31/19 01/08/24 3.350% 166,277.10 173,926.50 4.19 Bank of New York PFIZER Inc 04/04/19 03/15/24 2.950% 202,420.00 208,961.40 4.38 Bank of New York Walt Disney Company 09/06/19 08/30/24 1.750% 273,878.00 272,794.23 4.84 Bank of New York Credit Suisse New York Cert Depos 02/08/18 02/07/20 2.670% 265,000.00 265,756.31 0.27 Bank of New York Canadian IMP BK Comm NY FLT Cert 04/10/18 04/10/20 2.731% 260,000.00 260,416.00 0.44 Bank of New York Bank of Montreal Chicago Cert 08/01/18 08/03/20 3.190% 465,000.00 469,255.22 0.76 Bank of New York WestPac Banking Corp NY CD 08/07/17 08/03/20 2.050% 470,000.00 471,582.49 0.76 Bank of New York Sumitomo Mitsui Bank NY 11/17/17 11/16/20 2.270% 264,639.60 269,314.47 1.05 Bank of New York Swedbank Cert Depos 11/17/17 11/16/20 2.270% 530,000.00 531,452.73 1.05 Bank of New York MUFG Bank LTD/NY Cert 02/28/19 02/26/21 2.970% 265,000.00 269,339.91 1.33 Bank of New York Credit Agricole CIB NY Cert Depos 04/04/19 04/02/21 2.830% 255,000.00 257,743.80 1.42 Bank of New York Nordea Bank ABP New York Cert Depc 08/29/19 08/26/22 1.850% 395,000.00 394,708.89 2.82 Bank of New York Skandinaviska Enskilda Banken 09/03/19 08/26/22 1.860% 420,000.00 419,805.96 2.82 Bank of New York Total Securities 27,363,675.92 27,864,877.16 Total Investments: 35,926,030.39 36,427,231.63 2 • pfm CITY OF SEAL BEACH Investment Performance Review For the Quarter Ended September 30, 2019 Client Management Team PFM Asset Management LLC Sarah Meacham, Managing Director 601 South Figueroa, Suite 4500 213 Market Street Richard Babbe, CCM, Senior Managing Consultant Los Angeles, CA 90017 Harrisburg, PA 17101-2141 213-489-4075 717-232-2723 Market Update For the Quarter Ended September 30, 2019 QUARTERLY MARKET SUMMARY Fixed Income Management S UMMARY INTEREST RATES • In the third quarter, U.S. economic conditions were characterized by: (1) slowing • U.S.Treasury yields across the curve continued their descent,falling for the fourth projected growth; (2)a low unemployment rate with moderating wage gains; (3)two consecutive quarter.The yields on the majority of U.S.Treasury maturities ended the Fed rate cuts; (4) growing risks to the economic outlook, including escalating trade quarter near two-year lows.At quarter-end,the yield on a 3-month Treasury bill was conflicts,further weakening in manufacturing, and deteriorating business confidence 1.81%,the 2-year note was 1.62%,the 10-year note was 1.67%, and the 30-year and investment; (5)worsening conditions abroad, including a messy Brexit and Treasury ended Q3 at 2.11%after briefly falling below 2%for the first time ever. geopolitical conflicts with Iran/Saudi Arabia, Syria/Turkey and Ukraine/Russia, and; (6) The yield curve neared the greatest level of inversion over the past 15 years in late U.S. presidential impeachment proceedings that created a new political wildcard. August, as the spread between the 3-month and 10-year Treasuries reached-50 basis • Bond yields fell modestly during the quarter, continuing the year-long trend. For the points(-0.50%), although it finished the quarter at-14 basis points. In response to back- year,yields are down nearly 1% across the intermediate and longer-term portions of to-back rate cuts at the July and September FOMC meetings, short-term yields fell, the yield curve,while shorter-term yields generally tracked the Fed's two rate cuts. which decreased the severity of the inversion by the end of September. Somewhat counterintuitively, despite growing uncertainty on a number of fronts, U.S. • As the long-end of the yield curve declined more significantly than any other key rates equity markets continued to rally.The S&P 500 index returned 1.7%for Q3. during the quarter, longer-duration portfolios benefited the most. For example, the • While a recession in the U.S. does not appear imminent,forecasts for economic growth 3-month Treasury bill index generated 0.56%of total return for the quarter,while 10- continue to be pared. The global growth forecast for 2019 from the Organisation for year and 30-year Treasuries returned 3.18%and 9.20%, respectively.As a result of the Economic Co-operation and Development was revised down from 3.2%to 2.9%,which significant decline in rates, 12-month trailing Treasury benchmarks have posted their would mark the slowest pace in over 10 years. strongest total returns in nearly twenty years. • The Federal Open Market Committee cut the overnight fed funds target rate twice SECTOR PERFORMANCE during the quarter—in July and again in September—to the new range of 1.75%to • Absolute fixed income returns were strong across the board. Diversification was a 2.00%. The July rate cut marked the first rate reduction since December 2008.While mixed bag for performance. Credit sectors boosted portfolio returns as credit markets both cuts were well-telegraphed and characterized as"mid-cycle policy adjustments," shrugged off weaker growth prospects, resulting in tighter spreads. On the flip side, the committee is divided on future policy action.With that said, the factors supporting municipal debt generally underperformed as lower yields inspired a flurry of new the recent rate cuts remain in place, such as the weaker global growth outlook, Brexit, issuance and refinancing activity that caused spreads to widen in the sector. trade policy tensions, and lower business investment and exports. • Federal agency and supranational allocations generated slightly positive excess returns E CONOMIC SNAPSHOT for the quarter even though spreads remained near all-time tights across the curve. • U.S. GDP grew 2.0% in Q2, a moderate figure expected by economist estimates, but Continuing the trend over the past several quarters, callable securities underperformed well short of the 3.1%growth in 01. Growth in Q2 was driven by consumer spending, as declining yields drove increased redemption activity. accounting for 3%of the quarterly growth figure,the strongest consumption growth • The investment-grade corporate sector continued to be one of the best performing fixed since 2017. Fixed investment, private inventories, and lower exports all detracted from income sectors for Q3 and YTD. Positive earnings, stable fundamentals, and easier the headline GDP. Forecasts for Q3 are generally in the 1.5%to 2.0% range. monetary policy outweighed trade tensions and geopolitical risks during Q3. Despite • The U.S. labor market remained positive, although it may be showing signs of losing one of the highest issuance months on record in September, investor demand remained momentum. For example, average monthly job growth for Q3 was 157,000,well short strong, absorbing the new deals and resulting in spreads grinding back near YTD lows. of the 223,000 average of monthly gains in 2018. Nevertheless,the unemployment rate • AAA-rated asset backed securities were slightly additive to performance, despite ticked lower to 3.5%, marking the lowest jobless figure in over 50 years. modestly wider spreads.The incremental income offset the adverse effect of wider • Inflation remains tame, but core measures have gradually drifted higher as of late.Year- spreads and buoyed excess returns. over-year growth in the core Consumer Price Index(CPI) reached 2.4%,while the Fed's • Mortgage-Backed Securities(MBS)generated modest positive excess returns, preferred inflation gauge, the core Personal Consumption Expenditure price index, rose although relative performance belied the volatility during Q3 and was dependent on to 1.8%,just a bit below the Fed's 2%target. collateral term and coupon structure. The decline in longer-term Treasury yields— • U.S. manufacturing activity continued to decelerate.The ISM Manufacturing PMI survey which translates to increased refinancings and shorter MBS durations—weighed on fell to 47.8, the lowest level since 2009, an indication that the manufacturing part of the the sector. Higher coupon 30-year MBS were great performers, but 15-year collateral economy may be slipping into recession. Uncertainty caused by the ongoing trade war pools posted negative excess returns.Agency-backed commercial mortgage-backed with China contributed to this slowdown. securities have been a top-of-class performer for much of 2019, as these structures are generally less sensitive to interest rate volatility and ultimately, prepayment risks. PFM Asset Management LLC 1 For the Quarter Ended September 30, 2019 QUARTERLY MARKET SUMMARY Fixed Income Management Economic Snapshot Labor Market Latest Jun'19 Sep'18 Unemployment Rate Sep'19 3.5% 3.7% 3.7% Unemployment Rate(left)vs.Change in NonFarm Payrolls(right) Change In Non-Farm Payrolls Unemployment Rate 6% 450K Change In Non-Farm Payrolls Sep'19 136,000 178,000 108,000 5% I 300K Average Hourly Earnings (YoY) Sep'19 2.9% 3.2% 3.0% 4 I 1 I1 4% SII 1 liii 1I "" 150K Personal Income(YoY) Aug'19 4.6% 4.9% 5.4% I I I I I I I I,IIIIIIII(IIIIIIIIII'IIIc 3% 0 Initial Jobless Claims (week) 10/12/19 214,000 222,000 218,000 Sep'16 Mar'17 Sep'17 Mar'18 Sep'18 Mar'19 Sep'19 Growth Real GDP (QoQ SAAR) 2019Q2 2.0% 3.1%1 3.5%2 Real GDP (QoQ) 4% 1 2 GDP Personal Consumption(QoQ SAAR) 2019Q2 4.6% 1.1% 4.0% Retail Sales(YoY) Sep'19 4.1% 3.3% 3.9% 2% ISM Manufacturing Survey(month) Sep'19 47.8 51.7 59.5 IIIIIIIIIIIII 0% Existing Home Sales SAAR(month) Aug'19 5.49 mil. 5.29 mil. 5.18 mil. Jun'16 Dec'16 Jun'17 Dec'17 Jun'18 Dec'18 Jun'19 Inflation/Prices Personal Consumption Expenditures(YoY) Aug'19 1.4% 1.4% 2.0% Consumer Price Index -CPI(YoY) Core CPI(YoY) 4% Consumer Price Index(YoY) Sep'19 1.7% 1.6% 2.3% 3% Consumer Price Index Core(YoY) Sep'19 2.4% 2.1% 2.2% 2% � .1N,_ Crude Oil Futures(WTI, per barrel) Sep 30 $54.07 $58.47 $73.25 1% V �- 0% Sep'16 Mar'17 Sep'17 Mar'18 Sep'18 Mar'19 Sep'19 Gold Futures (oz.) Sep 30 $1,466 $1,414 $1,192 1.Data as of First Quarter 2019. 2.Data as of Second Quarter 2018. Note:YoY=year-over-year, QoQ=quarter-over-quarter, SAAR=seasonally adjusted annual rate, WTI=West Texas Intermediate crude oil. Source:Bloomberg. PFM Asset Management LLC 2 For the Quarter Ended September 30, 2019 QUARTERLY MARKET SUMMARY Fixed Income Management Interest Rate Overview U.S.Treasury Note Yields U.S. Treasury Yield Curve 3.5% 4% 3.0% 3% 2.5% v 2.0% v 2% m m } 1.5% 1% 1.0% 0 0.5% 0/o w—nJw CT -.1w 3 0 0 0 .0% O 9/30/18 12/31/18 3/31/19 6/30/19 9/30/19 Maturity 2-Year 5-Year 10-Year September 30,2019 June 30,2019 September 30,2018 U.S. Treasury Yields Yield Curves as of 9/30/19 Change over Change over 4% Maturity Sep'19 Jun'19 Quarter Sep'18 Year 3-Month 1.82% 2.09% 2.20% 3% 1-Year 1.76% 1.93% 2.57% 'a 2% To ..--"."•%--_,,_.2-Year 1.62% 1 76% 2.82% 5-Year 1 55% 1.77% 2.95% 1 10-Year 1.67% 2.01% 3.06% 0% —n.)w Cuo- ro w ,' ,,,5, ,5, 4, o Ln o 30-Year 2.11% 2.53% 3.21% Maturity U.S.Treasury Federal Agency Corporates,A Rated Source:Bloomberg. PFM Asset Management LLC 3 For the Quarter Ended September 30, 2019 QUARTERLY MARKET SUMMARY Fixed Income Management ICE BofAML Index Returns As of 9/30/19 Returns for Periods ended 9/30/19 September 30, 2019 Duration Yield 3 Month 1 Year 3 Years U.S. Treasury 1.88 1.68% 0.58% 4.36% 1.52% Federal Agency 1.52 1.71% 0.62% 4.19% 1.66% U.S. Corporates, A-AAA rated 1.84 2.11% 0.93% 5.11% 2.39% Agency MBS (0 to 3 years) 3.20 2.45% 1.41% 7.58% 2.48% Taxable Municipals 1.77 1.95% 0.95% 5.13% 2.69% U.S. Treasury 2.62 1.64% 0.75% 5.62% 1.62% Federal Agency 1.97 1.67% 0.72% 4.77% 1.70% U.S. Corporates, A-AAA rated 2.61 2.16% 1.11% 6.53% 2.62% Agency MBS (0 to 5 years) 1.79 2.33% 1.32% 6.83% 1.95% Taxable Municipals 2.22 2.22% 1.14% 5.71% 2.66% U.S. Treasury 6.85 1.73% 2.51% 10.75% 2.30% Federal Agency 4.18 1.78% 1.74% 8.07% 2.43% U.S. Corporates, A-AAA rated 7.70 2.63% 2.97% 12.62% 4.03% Agency MBS (0 to 30 years) 3.08 2.51% 1.44% 7.98% 2.38% Taxable Municipals 11.11 3.00% 4.70% 17.37% 5.74% Returns for periods greater than one year are annualized. Source:ICE BofAML Indices. PFM Asset Management LLC 4 For the Quarter Ended September 30, 2019 QUARTERLY MARKET SUMMARY Fixed Income Management DISCLOSURES PFM is the marketing name for a group of affiliated companies providing a range of services. All services are provided through separate agreements with each company. This material is for general information purposes only and is not intended to provide specific advice or a specific recommendation. Investment advisory services are provided by PFM Asset Management LLC, which is registered with the Securities and Exchange Commission under the Investment Advisers Act of 1940. The information contained is not an offer to purchase or sell any securities. Additional applicable regulatory information is available upon request. For more information regarding PFM's services or entities, please visit www.pfm.com. The views expressed within this material constitute the perspective and judgment of PFM Asset Management LLC at the time of distribution and are subject to change. Information is obtained from sources generally believed to be reliable and available to the public;however, PFM Asset Management LLC cannot guarantee its accuracy, completeness, or suitability. This material is for general information purposes only and is not intended to provide specific advice or recommendation. The information contained in this report is not an offer to purchase or sell any securities. ©2019 PFM Asset Management LLC. Further distribution is not permitted without prior written consent. Spfm PFM Asset Management LLC 5 Investment Strategy & Portfolio Review I For the Quarter Ended September 30, 2019 CITY OF SEAL BEACH Portfolio Review Portfolio Recap • Our strategy throughout the quarter included the following elements: • We continued to maintain the portfolio's duration in line with its benchmark, as we have since the beginning of the year, because of growing certainty that the Fed would cut rates, perhaps multiple times. Maintaining the portfolio's duration— despite the inverted yield curve—was just as vital as in previous quarters as the continued drop in yields drove strong fixed income returns. In fact, longer-duration strategies outperformed shorter ones for the fourth quarter in a row. • We continued to rotate out of the federal agency sector as their yield spreads remained unattractive relative to comparable treasuries. Even new issue concessions were less attractive than in prior quarters. While limited supply is partly to blame, insatiable market demand has essentially capped any upside. As a result, we continued to prefer Treasuries over agencies, and avoided callable agencies, due to significant early redemptions. • Corporate bonds rallied, pushing yield spreads back to near 12-month lows during the quarter as a more accommodative Fed and a temporary lull in the trade war offensive mitigated some of the imminent risk to the economy. As a result, investment-grade (IG) corporates generated attractive excess returns for the third quarter, with lower quality issuers outperforming higher quality ones. A bevy of new-issue corporates in September provided many opportunities, albeit at somewhat modest yield spreads. Our strategy in the third quarter was to maintain corporate allocations, make purchases a bit farther out on the yield curve within the sector, and selectively take advantage of new issues. Our focus remained on those issuers with lower leverage and less relative exposure to international trade risks. • After narrowing in the first half of 2019, yield spreads on short-term negotiable bank CDs gradually increased from multi- year lows. Short-term credit sectors once again offered favorable incremental yield opportunities for ultra-short-term investors. PFM Asset Management LLC 6 For the Quarter Ended September 30, 2019 CITY OF SEAL BEACH Portfolio Compliance Sector Allocation & Compliance •The portfolio is in compliance with the City's Investment Policy and the California Government Code. Security Type Market Value % of % Change Permitted by In Compliance Portfolio vs. 6/30/19 Policy U.S. Treasury $14,057,341 50.5% +1.0% 100% ✓ Federal Agency $4,855,355 17.4% -0.1% 100% ✓ Corporate Notes $5,213,674 18.7% -0.9% 30% ✓ Negotiable CDs $3,609,419 13.0% -0.1% 30% ✓ Securities Sub-Total $27,735,788 99.6% Accrued Interest $150,470 Securities Total $27,886,258 Money Market Fund $111,868 0.4% +0.2% 20% ✓ Total Investments $27,998,126 100.0% Market values,excluding accrued interest. Detail may not add to total due to rounding. Current investment policy as of September 2012. PFM Asset Management LLC 7 I For the Quarter Ended September 30, 2019 CITY OF SEAL BEACH Portfolio Snapshot Credit Quality (S&P Ratings)** Sector Allocation A Certificate ggg+ 8.9% of Deposit 1 8% —A- , 13.0% Portfolio Statistics 4.7% * ., Corporate As of September 30,2019 i A+ '"" 18.8% 4.0% i MA-1 A-1 —_ 3.6% Par Value: $27,400,000 A-1+ Total Market Value: $27,998,126 1 1.7% AA Security Market Value: $27,735,788 1.9% i Accrued Interest: $150,470 1111.11' Federal Cash: $111,868 AA- U.S. Agency/GSE AA+ 5.2% Treasury 17.5% Amortized Cost: $27,298,263 68.2% 50 7% Yield at Market: 1 74% Yield at Cost: 2.31% Effective Duration: 2.55 Years Maturity Distribution 35% Duration to Worst: 2.55 Years 32.1% Average Maturity: 2.66 Years 30% Average Credit:' AA 25% 25.2% 20% 18.2% 17.7% 15% 10% 6.8% 5% 0% 0.0% 0-1 Year 1 -2 Years 2-3 Years 3-4 Years 4-5 Years >5 Years 'An average of each secunfy's credit rating assigned a numeric value and adjusted for its relative weighting in the portfolio. "Securities held in the portfolio am in compliance with California Government Code and the Cily's Investment Policy dated September 2012. PFM Asset Management LLC 8 For the Quarter Ended September 30, 2019 CITY OF SEAL BEACH Portfolio Composition Sector Allocation September 30,2019 June 30,2019 March 31,2019 December 31,2018 Sector MV($MM) %of Total MV($MM) %of Total MV($MM) %of Total MV($MM) %of Total U.S.Treasury 14.1 50.7% 13.7 49.6% 12.9 47.5% 12.6 47.2% Corporate 5.2 18.8% 5.4 19.7% 5.3 19.6% 5.2 19.6% Federal Agency/GSE 4.9 17.5% 4.8 17.6% 4.8 17.6% 4.2 15.7% Certificate of Deposit 3.6 13.0% 3.6 13.1% 4.1 15.3% 4.4 16.3% Municipal 0.0 0.0% 0.0 0.0% 0.0 0.0% 0.3 1.2% Total $27.7 100.0% $27.5 100.0% $27.0 100.0% $26.7 100.0% 100% 90% 80% 70% • Municipal 60% Certificate of Deposit ■ Federal Agency/GSE 50% Corporate U.S.Treasury 40% 30% 20% 10% 0% September 2019 June 2019 March 2019 December 2018 Detail may not add to total due to rounding PFM Asset Management LLC 9 For the Quarter Ended September 30, 2019 CITY OF SEAL BEACH Portfolio Composition Maturity Distribution As of September 30, 2019 Yield Average 0-1 1-2 2-3 3-4 4-5 >5 Portfolio/Benchmark at Market Maturity Years Years Years Years Years Years CITY OF SEAL BEACH 1.74% 2.66 yrs 6.8% 25.2% 32.1% 17.7% 18.2% 0.0% CITY OF SEAL BEACH Custom Index 1.64% 2.74 yrs 1.7% 33.0% 27.3% 19.7% 18.3% 0.0% 35% 33.0% 32.1% 30% 27.3% 25.2% 25% 20% 19.7% 17.7% 18.2% 18.3% 15% 10% 6.8% 5% 1.7% 0% 0.0% 0.0% 0-1 Years 1-2 Years 2-3 Years 3-4 Years 4-5 Years >5 Years ■ CITY OF SEAL BEACH City Of Seal Beach Custom Index PFM Asset Management LLC 10 For the Quarter Ended September 30, 2019 CITY OF SEAL BEACH Portfolio Performance Portfolio Performance (Total Return) Annualized Return Effective Current Portfolio/Benchmark Duration Quarter 1 Year 3 Year 5 Year 10 Year Since Inception (03/31/13) CITY OF SEAL BEACH 2.55 0.88% 5.69% 1.98% 2.00% - 1.73% City Of Seal Beach Custom Index 2.56 0.75% 5.62% 1.62% 1.71% - 1.46% Difference 0.13% 0.07% 0.36% 0.29% - 0.27% 6.0% 5.69% 5.62% 5.0% 4.0% c I- IY 3.0% ~ 2.0% 1.98% 2.00% ° 1.62% 1.71% 1.73% 1.46% 1.0% 0.88% 0.75% o ■ 0.0% Current Quarter 1 Year 3 Year 5 Year 10 Year Since Inception ■ CITY OF SEAL BEACH City Of Seal Beach Custom Index Portfolio performance is gross of fees unless otherwise indicated. PFM Asset Management LLC 11 For the Quarter Ended September 30, 2019 CITY OF SEAL BEACH Portfolio Performance Portfolio Earnings Quarter-Ended September 30, 2019 Market Value Basis Accrual (Amortized Cost) Basis Beginning Value(06/30/2019) $27,519,222.30 $27,160,930.34 Net Purchases/Sales $124,340.62 $124,340.62 Change in Value $92,224.98 $12,992.37 Ending Value(09/30/2019) $27,735,787.90 $27,298,263.33 Interest Earned $151,733.80 $151,733.80 Portfolio Earnings $243,958.78 $164,726.17 PFM Asset Management LLC 12 For the Quarter Ended September 30, 2019 CITY OF SEAL BEACH Outlook Investment Strategy Outlook • Our strategy as we enter the final quarter of 2019 is to maintain a well-diversified portfolio as we seek to balance portfolio earnings potential with profit-taking in sectors that appear overly expensive. Issue selection has become increasingly important, regardless of sector, as market cross-currents have created both risks and opportunities. • Our outlook for the major investment-grade fixed income sectors is as follows: • Federal agency yield spreads remain very tight. In some cases, agencies offer yields less than those on Treasuries of similar maturity. The U.S. Treasury Department also released an updated housing reform plan that seeks to reduce the role of the Federal Government, but implementation faces many political and practical difficulties. We continue to favor further reductions in agency holdings because their upside is limited. • In the investment-grade (IG) corporate sector, we remain cautiously optimistic. Stable fundamentals, positive earnings growth, and a resilient equity market support the underlying stability of the credit markets; however, in addition to the myriad of geopolitical issues that have yet to be resolved, increased balance sheet leverage translates into somewhat elevated financial risks, especially in light of the narrow spreads currently available. As a result, we plan to reduce "rich" corporate holdings while creating room for new corporate opportunities as they become available. • On the heels of two Fed rate cuts in the third quarter, money market investors may see further rate adjustments in the coming months. Short-term credit spreads have widened recently, creating investment opportunities that offset some of the Fed's lower overnight target rate. PFM Asset Management LLC 13 For the Quarter Ended September 30, 2019 CITY OF SEAL BEACH Portfolio Review Fixed-Income Sector Outlook — November 2019 Sector Our Investment Preferences Comments COMMERCIAL PAPER �- • Recent spread widening has increased attractiveness of fixed-rate money / C D market credit issues. - TREASURIES • Treasury Bill purchases by the Fed are expected to exceed new supply T-Bill • +. through the first quarter of 2020 which may cause Bills to become expensive. • Treasury yields are expected to be more stable and the yield curve has T-Note IIIIIIsteepened returning the value of roll-down. FEDERAL AGENCIES • Federal agency spreads remain near historic tights, outside of a few new Bullets0 111. issues. Treasuries continue to be preferable to agencies. • Callable agencies offer little value as the interest-rate dependent range of fillaill Callables • future outperformance is very narrow. • Supranational spreads remain tight; Treasuries continue to have better value. S U P R A N A T I O N A L S • • There are few swap opportunities as bid/ask spreads have widened headed into year end.. CORPORATES • A flat credit curve and tighter credit spreads have reduced the attractiveness • dmof the corporate sector. Financials • But,corporate profits have surprised to the upside and economic • fundamentals remain sound. Spreads are likely to remain firm amid reduced Industrials supply I in Q4. SECURITIZED • Yield spreads on AAA-rated ABS have moved wider, in some cases now Asset-Backed ......0. above high-grade corporate spreads, and offer value. • Increased supply from refinance activity, coupled with ongoing Fed balance Agency Mortgage-Backed •il sheet wind-down has put upward pressure on spreads and created better buying opportunities in the agency MBS sector. Agency CMBS •1_ • Though the agency CMBS curve is relatively flat,they remain a lower risk alternative to other MBS and other government sectors. MUNICIPALS • We are finding value in new taxable deals driven by the surge in new taxable issuance done as alternatives to advance refundings. • Current outlook Outlook one month ago Negative i SlightlyNeutral Negat PFM Asset Management LLC 14 Issuer Distribution For the Quarter Ended September 30, 2019 CITY OF SEAL BEACH Portfolio Composition Issuer Distribution As of September 30, 2019 Issuer Market Value ($) %of Portfolio UNITED STATES TREASURY 14,057,341 50.7% FANNIE MAE 3,700,561 13.3% r FREDDIE MAC 780,321 2.8% U, a SWEDBANK AB 530,995 1.9% WAL-MART STORES INC 521,155 1.9% THE BANK OF NEW YORK MELLON CORPORATION 503,831 1.8% AMERICAN EXPRESS CO 493,530 1.8% WESTPAC BANKING CORP 470,984 1.7% BANK OF MONTREAL 468,947 1.7% SKANDINAVISKA ENSKILDA BANKEN AB 420,583 1.5% NORDEA BANK AB 395,435 1.4% AMERICAN HONDA FINANCE 383,295 1.4% FEDERAL HOME LOAN BANKS 374,473 1.4% PEPSICO INC 320,993 1.2% TOYOTA MOTOR CORP 300,924 1.1% JP MORGAN CHASE&CO 273,904 1.0% THE WALT DISNEY CORPORATION 272,290 1.0% BB&T CORPORATION 272,224 1.0% PFM Asset Management LLC 15 For the Quarter Ended September 30, 2019 CITY OF SEAL BEACH Portfolio Composition Issuer Market Value ($) %of Portfolio SUMITOMO MITSUI FINANCIAL GROUP INC 269,339 1.0% MITSUBISHI UFJ FINANCIAL GROUP INC 269,322 1.0% CREDIT SUISSE GROUP 265,683 1.0% CITIGROUP INC 263,836 1.0% BANK OF AMERICA CO 262,322 1.0% CANADIAN IMPERIAL BANK OF COMMERCE 260,498 0.9% CREDIT AGRICOLE SA 257,635 0.9% HOME DEPOT INC 257,329 0.9% CATERPILLAR INC 255,145 0.9% NATIONAL RURAL UTILITIES CO FINANCE CORP 252,438 0.9% GOLDMAN SACHS GROUP INC 247,660 0.9% PFIZER INC 207,798 0.8% BURLINGTON NORTHERN SANTA FE 125,000 0.5% Grand Total: 27,735,788 100.0% PFM Asset Management LLC 16 Portfolio Transactions For the Quarter Ended September 30, 2019 CITY OF SEAL BEACH Portfolio Activity Quarterly Portfolio Transactions Tran. Trade Settle Maturity Transact Realized Par($) CUSIP Security Description Coupon Yield Type Date Date Date Amt($) G/L(BV) BUY 7/1/19 7/3/19 550,000.00 912828XX3 US TREASURY N/B NOTES 2.00% 6/30/24 (555,761.55) 1.78% SELL 7/1/19 7/3/19 500,000.00 36962G4D3 GENERAL ELECTRIC CAPITAL CORP NOTES 6.00% 8/7/19 513,746.67 2.58% (412 88) INTEREST 7/2/19 7/2/19 0.00 MONEY0002 MONEY MARKET FUND 102.83 INTEREST 7/5/19 7/5/19 475,000.00 3135G0S38 FANNIE MAE NOTES 2.00% 1/5/22 4,750.00 INTEREST 7/8/19 7/8/19 165,000.00 89236TFS9 TOYOTA MOTOR CREDIT CORP CORP NOTES 3.35% 1/8/24 2,763.75 INTEREST 7/10/19 7/10/19 260,000.00 13606BVF0 CANADIAN IMP BK COMM NY FLT CERT DEPOS 2.73% 4/10/20 1,961.15 INTEREST 7/11/19 7/11/19 280,000.00 3135G0U92 FANNIE MAE NOTES 2.62% 1/11/22 3,675.00 INTEREST 7/27/19 7/27/19 235,000.00 38141GGQ1 GOLDMAN SACHS GROUP CORP NOTES 5.25% 7/27/21 6,168.75 INTEREST 7/31/19 7/31/19 550,000.00 912828XQ8 US TREASURY NOTES 2.00% 7/31/22 5,500.00 INTEREST 7/31/19 7/31/19 275,000.00 912828V72 US TREASURY NOTES 1.87% 1/31/22 2,578.13 INTEREST 7/31/19 7/31/19 265,000.00 912828WY2 US TREASURY NOTES 2.25% 7/31/21 2,981.25 INTEREST 7/31/19 7/31/19 225,000.00 912828P38 US TREASURY NOTES 1.75% 1/31/23 1,968.75 INTEREST 7/31/19 7/31/19 210,000.00 912828S92 US TREASURY NOTES 1.25% 7/31/23 1,312.50 INTEREST 8/1/19 8/1/19 135,000.00 05531FAZ6 BRANCH BANKING&TRUST(CALLABLE)NOTES 2.15% 2/1/21 1,451.25 INTEREST 8/2/19 8/2/19 0.00 MONEY0002 MONEY MARKET FUND 61.69 INTEREST 8/5/19 8/5/19 465,000.00 06370REU9 BANK OF MONTREAL CHICAGO CERT DEPOS 3.19% 8/3/20 15,121.93 INTEREST 8/5/19 8/5/19 275,000.00 3135G0V34 FANNIE MAE NOTES 2.50% 2/5/24 3,380.21 INTEREST 8/7/19 8/7/19 470,000.00 96121T4A3 WESTPAC BANKING CORP NY CD 2.05% 8/3/20 4,817.50 INTEREST 8/17/19 8/17/19 190,000.00 3135G0N82 FNMA NOTES 1.25% 8/17/21 1,187.50 INTEREST 8/17/19 8/17/19 610,000.00 3135G0N82 FNMA NOTES 1.25% 8/17/21 3,812.50 PFM Asset Management LLC 17 For the Quarter Ended September 30, 2019 CITY OF SEAL BEACH Portfolio Activity Tran. Trade Settle Maturity Transact Realized Par($) CUSIP Security Description Coupon Amt($) Yield G/L(BV) Type Date Date Date INTEREST 8/17/19 8/17/19 375,000.00 3135G0N82 FNMA NOTES 1.25% 8/17/21 2,343.75 INTEREST 8/20/19 8/20/19 395,000.00 65590ASN7 NORDEA BANK AB NY CD 2.72% 2/20/20 5,372.00 BUY 8/27/19 8/29/19 395,000.00 65558TLL7 NORDEA BANK ABP NEW YORK CERT DEPOS 1.85% 8/26/22 (395,000.00) 1.87% SELL 8/27/19 8/29/19 395,000.00 65590ASN7 NORDEA BANK AB NY CD 2.72% 2/20/20 396,613.59 2.00% 1,344.99 BUY 8/29/19 9/3/19 420,000.00 83050PDR7 SKANDINAV ENSKILDA BANK LT CD 1.86% 8/26/22 (420,000.00) 1.88% SELL 8/29/19 9/3/19 420,000.00 06417GU22 BANK OF NOVA SCOTIA HOUSTON CD 3.08% 6/5/20 426,558.32 1.99% 3,457.94 INTEREST 8/31/19 8/31/19 500,000.00 912828P79 US TREASURY NOTES 1.50% 2/28/23 3,750.00 INTEREST 8/31/19 8/31/19 635,000.00 912828B90 US TREASURY NOTES 2.00% 2/28/21 6,350.00 INTEREST 8/31/19 8/31/19 760,000.00 912828D72 US TREASURY NOTES 2.00% 8/31/21 7,600.00 INTEREST 8/31/19 8/31/19 245,000.00 912828J43 US TREASURY NOTES 1.75% 2/28/22 2,143.75 INTEREST 9/1/19 9/1/19 250,000.00 14912L500 CATERPILLAR FIN SERVICES CORP CORP NOTES 2.62% 3/1/23 3,281.25 INTEREST 9/3/19 9/3/19 290,000.00 0258M0EE5 AMERICAN EXPRESS CREDIT(CALLABLE)NOTE 2.20% 3/3/20 3,190.00 INTEREST 9/3/19 9/3/19 0.00 MONEY0002 MONEY MARKET FUND 133.80 INTEREST 9/3/19 9/3/19 200,000.00 0258M0EG0 AMERICAN EXPRESS CREDIT(CALLABLE)NOTES 2.70% 3/3/22 2,700.00 BUY 9/3/19 9/5/19 700,000.00 9128282U3 US TREASURY N/B NOTES 1.87% 8/31/24 (718,418.57) 1.33% SELL 9/3/19 9/5/19 635,000.00 912828890 US TREASURY NOTES 2.00% 2/28/21 639,316.83 1.55% (3.792.28) BUY 9/3/19 9/6/19 275,000.00 254687FK7 WALT DISNEY COMPANY/THE 1.75% 8/30/24 (273,878.00) 1.84% SELL 9/3/19 9/6/19 270,000.00 912828XX3 US TREASURY N/B NOTES 2.00% 6/30/24 278,981.81 1.36% 5,294.18 INTEREST 9/9/19 9/9/19 385,000.00 02665WBG5 AMERICAN HONDA FINANCE CORP NOTES 1.70% 9/9/21 3,272.50 INTEREST 9/12/19 9/12/19 690,000.00 3135G0U43 FANNIE MAE NOTES 2.87% 9/12/23 9,918.75 INTEREST 9/15/19 9/15/19 200,000.00 717081ES8 PFIZER INC CORP NOTES 2.95% 3/15/24 3,015.56 INTEREST 9/23/19 9/23/19 265,000.00 46625HJE1 JPMORGAN CHASE&CO CORP NOTES 3.25% 9/23/22 4,306.25 PFM Asset Management LLC 18 For the Quarter Ended September 30, 2019 CITY OF SEAL BEACH Portfolio Activity Tran. Trade Settle Maturity Transact Realized Par($) CUSIP Security Description Coupon Yield Type Date Date Date Amt($) G/L(BV) INTEREST 9/30/19 9/30/19 500,000.00 912828W89 US TREASURY NOTES 1.87% 3/31/22 4,687.50 INTEREST 9/30/19 9/30/19 350,000.00 912828W89 US TREASURY NOTES 1.87% 3/31/22 3,281.25 INTEREST 9/30/19 9/30/19 410,000.00 912828L57 US TREASURY NOTES 1.75% 9/30/22 3,587.50 INTEREST 9/30/19 9/30/19 1,000,000.00 912828W89 US TREASURY NOTES 1.87% 3/31/22 9,375.00 INTEREST 9/30/19 9/30/19 375,000.00 912828W89 US TREASURY NOTES 1.87% 3/31/22 3,515.63 INTEREST 9/30/19 9/30/19 650,000.00 912828L57 US TREASURY NOTES 1.75% 9/30/22 5,687.50 INTEREST 9/30/19 9/30/19 205,000.00 912828Q29 US TREASURY NOTES 1.50% 3/31/23 1,537.50 INTEREST 9/30/19 9/30/19 740,000.00 912828W89 US TREASURY NOTES 1.87% 3/31/22 6,937.50 TOTALS 51,740.78 5,891.95 PFM Asset Management LLC 19 Portfolio Holdings For the Quarter Ended September 30, 2019 CITY OF SEAL BEACH Portfolio Holdings Managed Account Detail of Securities Held Security Type/Description S&P Moody's Trade Settle Original YTM Accrued Amortized Market Dated Date/Coupon/Maturity CUSIP Par Rating Rating Date Date Cost at Cost Interest Cost Value U.S.Treasury Bond I Note US TREASURY NOTES 912828Q78 180,000.00 AA+ Aaa 2/1/2017 2/3/2017 176,400.00 1.87 1,035.73 178,623.97 179,008.56 DTD 05/02/2016 1.375%04/30/2021 US TREASURY NOTES 912828R77 380,000.00 AA+ Aaa 7/6/2017 7/7/2017 373,869.53 1.81 1,755.94 377,332.68 377,862.50 DTD 05/31/2016 1.375%05/31/2021 US TREASURY NOTES 912828R77 150,000.00 AA+ Aaa 8/2/2017 8/3/2017 148,376.95 1.67 693.14 149,281.91 149,156.25 DTD 05/31/2016 1.375%05/31/2021 US TREASURY NOTES 912828WY2 265,000.00 AA+ Aaa 11/22/2016 11/23/2016 270,631.25 1.78 1,004.55 267,256.60 267,681.01 DTD 07/31/2014 2.250%07/31/2021 US TREASURY NOTES 912828D72 760,000.00 AA+ Aaa 12/1/2016 12/5/2016 762,671.88 1.92 1,294.51 761,113.34 764,690.72 DTD 09/02/2014 2.000%08/31/2021 US TREASURY NOTES 912828F96 525,000.00 AA+ Aaa 1/3/2017 1/5/2017 526,168.94 1.95 4,394.02 525,521.03 528,670.80 DTD 10/31/2014 2.000%10/31/2021 US TREASURY NOTES 912828F96 500,000.00 AA+ Aaa 4/3/2017 4/5/2017 503,105.47 1.86 4,184.78 501,448.40 503,496.00 DTD 10/31/2014 2.000%10/31/2021 US TREASURY NOTES 912828F96 590,000.00 AA+ Aaa 3/1/2018 3/5/2018 580,251.17 2.48 4,938.04 584,345.99 594,125.28 DTD 10/31/2014 2.000%10/31/2021 US TREASURY NOTES 912828V72 275,000.00 AA+ Aaa 7/6/2017 7/11/2017 274,495.12 1.92 868.72 274,736.80 276,525.43 DTD 01/31/2017 1.875%01/31/2022 US TREASURY NOTES 912828J43 245,000.00 AA+ Aaa 3/15/2017 3/17/2017 240,482.81 2.14 365.14 242,739.19 245,775.18 DTD 03/02/2015 1.750%02/28/2022 US TREASURY NOTES 912828W89 350,000.00 AA+ Aaa 12/1/2017 12/5/2017 346,732.42 2.10 17.93 348,076.98 352,378.95 DTD 03/31/2017 1.875%03/31/2022 US TREASURY NOTES 912828W89 500,000.00 AA+ Aaa 1/3/2018 1/4/2018 493,886.72 2.18 25.61 496,332.37 503,398.50 DTD 03/31/2017 1.875%03/31/2022 US TREASURY NOTES 912828W89 375,000.00 AA+ Aaa 11/17/2017 11/20/2017 372,993.16 2.00 19.21 373,831.29 377,548.88 DTD 03/31/2017 1.875%03/31/2022 US TREASURY NOTES 912828W89 740,000.00 AA+ Aaa 9/4/2018 9/6/2018 718,175.78 2.75 37.91 724,497.22 745,029.78 DTD 03/31/2017 1.875%03/31/2022 US TREASURY NOTES 912828W89 1,000,000.00 AA+ Aaa 8/1/2018 8/3/2018 967,187.50 2.82 51.23 977,249.83 1,006,797.00 DTD 03/31/2017 1.875%03/31/2022 PFM Asset Management LLC 20 For the Quarter Ended September 30, 2019 CITY OF SEAL BEACH Portfolio Holdings Managed Account Detail of Securities Held Security Type/Description S&P Moody's Trade Settle Original YTM Accrued Amortized Market Dated Date/Coupon/Maturity CUSIP Par Rating Rating Date Date Cost at Cost Interest Cost Value U.S.Treasury Bond/Note US TREASURY NOTES 912828XQ8 550,000.00 AA+ Aaa 8/30/2017 8/31/2017 556,810.55 1.74 1,853.26 553,994.72 556,337.65 DTD 07/31/2015 2.000%07/31/2022 US TREASURY NOTES 912828L57 650,000.00 M+ Aaa 6/4/2018 6/6/2018 623,466.80 2.76 31.08 631,253.93 653,224.65 DTD 09/30/2015 1.750%09/30/2022 US TREASURY NOTES 912828L57 410,000.00 AA+ Aaa 10/3/2017 10/6/2017 406,508.59 1.93 19.60 407,860.57 412,034.01 DTD 09/30/2015 1.750%09/30/2022 US TREASURY N/B NOTES 9128283C2 370,000.00 AA+ Aaa 5/2/2018 5/4/2018 357,657.03 2.80 3,096.74 361,364.70 374,552.85 DTD 10/31/2017 2.000%10/31/2022 US TREASURY NOTES 912828P38 225,000.00 AA+ Aaa 10/2/2018 10/4/2018 214,259.77 2.93 663.38 216,610.12 226,186.43 DTD 02/01/2016 1.750%01/31/2023 US TREASURY NOTES 912828P79 500,000.00 AA+ Aaa 7/2/2018 7/5/2018 473,046.88 2.74 638.74 479,903.54 498,691.50 DTD 02/29/2016 1.500%02/28/2023 US TREASURY NOTES 912828Q29 205,000.00 AA+ Aaa 2/8/2019 2/12/2019 197,448.63 2.44 8.40 198,557.24 204,527.48 DTD 03/31/2016 1.500%03/31/2023 US TREASURY NOTES 912828S35 330,000.00 AA+ Aaa 3/15/2019 3/15/2019 316,258.59 2.40 1,146.71 317,940.32 327,589.35 DTD 06/30/2016 1.375%06/30/2023 US TREASURY NOTES 912828S92 210,000.00 AA+ Aaa 2/8/2019 2/12/2019 199,491.80 2.44 442.26 200,919.85 207,465.30 DTD 08/01/2016 1.250%07/31/2023 US TREASURY NOTES 912828WE6 840,000.00 M+ Aaa 3/6/2019 3/8/2019 848,498.44 2.52 8,725.27 847,539.29 879,243.96 DTD 11/15/2013 2.750%11/15/2023 US TREASURY NOTES 912828U57 725,000.00 AA+ Aaa 1/7/2019 1/9/2019 712,029.30 2.52 5,177.51 713,865.45 740,972.48 DTD 11/30/2016 2.125%11/30/2023 US TREASURY N/B 9128285U0 125,000.00 AA+ Aaa 1/30/2019 1/31/2019 125,371.09 2.56 829.23 125,324.63 130,390.63 DTD 12/31/2018 2.625%12/31/2023 US TREASURY N/B NOTES 912828X70 960,000.00 AA+ Aaa 6/3/2019 6/5/2019 964,350.00 1.90 8,034.78 964,082.68 978,262.08 DTD 05/01/2017 2.000%04/30/2024 US TREASURY N/B NOTES 912828XX3 280,000.00 AA+ Aaa 7/1/2019 7/3/2019 282,887.50 1.78 1,415.22 282,751.71 285,435.92 DTD 06/30/2017 2.000%06/30/2024 US TREASURY N/B NOTES 9128282U3 700,000.00 AA+ Aaa 9/3/2019 9/5/2019 718,238.28 1.33 1,117.79 717,984.83 710,281.60 DTD 08/31/2017 1.875%08/31/2024 PFM Asset Management LLC 21 For the Quarter Ended September 30, 2019 CITY OF SEAL BEACH Portfolio Holdings Managed Account Detail of Securities Held Security Type/Description S&P Moody's Trade Settle Original YTM Accrued Amortized Market Dated Date/Coupon/Maturity CUSIP Par Rating Rating Date Date Cost at Cost Interest Cost Value Security Type Sub-Total 13,915,000.00 13,751,751.95 2.23 53,886.43 13,802,341.18 14,057,340.73 Federal Agency Bond/Note FANNIE MAE NOTES 3135G0U27 265,000.00 AA+ Aaa 4/12/2018 4/13/2018 264,605.15 2.55 3,091.67 264,794.46 268,156.95 DTD 04/13/2018 2.500%04/13/2021 FNMA NOTES 3135G0N82 190,000.00 AA+ Aaa 8/17/2016 8/19/2016 189,350.01 1.32 290.28 189,750.62 188,577.47 DTD 08/19/2016 1.250%08/17/2021 FNMA NOTES 3135G0N82 375,000.00 AA+ Aaa 9/1/2016 9/2/2016 372,705.00 1.38 572.92 374,112.75 372,192.38 DTD 08/19/2016 1.250%08/17/2021 FNMA NOTES 3135G0N82 610,000.00 AA+ Aaa 8/17/2016 8/19/2016 607,529.50 1.33 931.94 609,051.96 605,432.93 DTD 08/19/2016 1.250%08/17/2021 FANNIE MAE NOTES 3135G0S38 475,000.00 AA+ Aaa 6/27/2017 6/29/2017 478,035.25 1.85 2,269.44 476,551.03 478,398.63 DTD 01/09/2017 2.000%01/05/2022 FANNIE MAE NOTES 3135G0U92 280,000.00 AA+ Aaa 1/9/2019 1/11/2019 279,798.40 2.65 1,633.33 279,845.54 285,981.36 DTD 01/11/2019 2.625%01/11/2022 FANNIE MAE NOTES 3135G0T45 490,000.00 AA+ Aaa 6/27/2017 6/29/2017 489,926.50 1.88 4,491.67 489,963.00 493,336.90 DTD 04/10/2017 1.875%04/05/2022 FREDDIE MAC NOTES 3137EAEN5 750,000.00 AA+ Aaa 1/7/2019 1/9/2019 755,265.00 2.58 5,843.75 754,448.03 780,321.00 DTD 06/11/2018 2.750%06/19/2023 FANNIE MAE NOTES 3135G0U43 690,000.00 AA+ Aaa 12/3/2018 12/6/2018 688,606.20 2.92 1,046.98 688,846.68 723,115.86 DTD 09/14/2018 2.875%09/12/2023 FEDERAL HOME LOAN BANKS NOTES 3130A0F70 350,000.00 AA+ Aaa 1/30/2019 1/31/2019 360,315.86 2.72 3,707.81 358,983.21 374,473.05 DTD 12/09/2013 3.375% 12/08/2023 FANNIE MAE NOTES 3135G0V34 275,000.00 AA+ Aaa 2/7/2019 2/8/2019 273,977.00 2.58 1,069.44 274,102.20 285,368.05 DTD 02/08/2019 2.500%02/05/2024 Security Type Sub-Total 4,750,000.00 4,760,113.87 2.20 24,949.23 4,760,449.48 4,855,354.58 Corporate Note BURLINGTON NRTH CORP NOTE 12189TBC7 125,000.00 A+ A3 6/3/2016 6/8/2016 137,987.50 1.48 2,937.50 125,000.00 125,000.00 DTD 09/24/2009 4.700%10/01/2019 PFM Asset Management LLC 2') For the Quarter Ended September 30, 2019 CITY OF SEAL BEACH Portfolio Holdings Managed Account Detail of Securities Held Security Type/Description S&P Moody's Trade Settle Original YTM Accrued Amortized Market Dated Date/Coupon/Maturity CUSIP Par Rating Rating Date Date Cost at Cost Interest Cost Value Corporate Note AMERICAN EXPRESS CREDIT 0258M0EE5 290,000.00 A- A2 2/28/2017 3/3/2017 289,698.40 2.24 496.22 289,956.36 290,045.24 (CALLABLE)NOTE DTD 03/03/2017 2.200%03/03/2020 WAL-MART STORES INC CORP NOTE 931142EA7 520,000.00 AA Aa2 10/11/2017 10/20/2017 519,246.00 1.95 2,909.11 519,704.40 521,154.92 DTD 10/20/2017 1.900% 12/15/2020 BRANCH BANKING&TRUST 05531FAZ6 135,000.00 A- A2 10/23/2017 10/26/2017 134,937.90 2.17 483.75 134,973.31 135,222.08 (CALLABLE)NOTES DTD 10/26/2017 2.150%02/01/2021 TOYOTA MOTOR CREDIT CORP 89236TEU5 125,000.00 AA- Aa3 4/10/2018 4/13/2018 124,950.00 2.96 1,720.83 124,973.90 127,014.25 NOTES DTD 04/13/2018 2.950%04/13/2021 PEPSICO INC CORP(CALLABLE) 713448DX3 320,000.00 A+ Al 10/5/2017 10/10/2017 319,936.00 2.01 2,951.11 319,971.23 320,993.28 NOTE DTD 10/10/2017 2.000%04/15/2021 BANK OF NEW YORK MELLON CORP 06406FAA1 500,000.00 A Al 9/7/2017 9/11/2017 508,860.00 1.99 5,763.89 503,751.32 503,830.50 (CALLABLE) DTD 02/19/2016 2.500%04/15/2021 BANK OF AMERICA CORP NOTE 06051GFW4 260,000.00 A- A2 11/1/2017 11/3/2017 261,947.40 2.40 3,071.25 260,892.52 262,322.06 DTD 04/19/2016 2.625%04/19/2021 GOLDMAN SACHS GROUP CORP 38141GGQ1 235,000.00 BBB+ A3 11/3/2017 11/7/2017 257,534.15 2.53 2,193.33 246,295.91 247,660.16 NOTES DTD 07/27/2011 5.250%07/27/2021 AMERICAN HONDA FINANCE CORP 02665WBG5 385,000.00 A A2 9/9/2016 9/14/2016 382,370.45 1.84 399.97 383,949.08 383,295.22 NOTES DTD 09/09/2016 1.700%09/09/2021 CITIGROUP INC CORP(CALLABLE) 172967LC3 260,000.00 BBB+ A3 11/20/2017 11/22/2017 261,775.80 2.72 2,366.72 260,968.68 263,836.04 NOTE DTD 12/08/2016 2.900% 12/08/2021 AMERICAN EXPRESS CREDIT 0258M0EG0 200,000.00 A- A2 4/3/2018 4/5/2018 195,958.00 3.25 420.00 197,439.44 203,484.80 (CALLABLE)NOTES DTD 03/03/2017 2.700%03/03/2022 PFM Asset Management LLC .3 For the Quarter Ended September 30, 2019 CITY OF SEAL BEACH Portfolio Holdings Managed Account Detail of Securities Held Security Type/Description S&P Moody's Trade Settle Original YTM Accrued Amortized Market Dated Date/Coupon/Maturity CUSIP Par Rating Rating Date Date Cost at Cost Interest Cost Value Corporate Note BB&T CORP(CALLABLE)NOTES 05531FAX1 135,000.00 A- A2 4/3/2018 4/5/2018 132,493.05 3.25 1,856.25 133,391.51 137,001.92 DTD 03/21/2017 2.750%04/01/2022 NATIONAL RURAL UTIL COOP CORP 637432NM3 250,000.00 A Al 4/3/2018 4/5/2018 243,162.50 3.12 2,600.00 245,575.69 252,437.50 NOTES DTD 04/25/2017 2.400%04/25/2022 JPMORGAN CHASE&CO CORP 46625HJE1 265,000.00 A- A2 4/3/2018 4/5/2018 264,189.10 3.32 191.39 264,447.78 273,904.00 NOTES DTD 09/24/2012 3.250%09/23/2022 CATERPILLAR FIN SERVICES CORP 14912L5Q0 250,000.00 A A3 4/3/2018 4/5/2018 243,572.50 3.20 546.88 245,422.33 255,144.50 CORP NOTES DTD 02/28/2013 2.625%03/01/2023 HOME DEPOT INC CORP NOTES 437076AZ5 250,000.00 A A2 4/3/2018 4/5/2018 245,250.00 3.11 3,375.00 246,592.17 257,328.75 DTD 04/05/2013 2.700%04/01/2023 TOYOTA MOTOR CREDIT CORP CORP 89236TFS9 165,000.00 AA- Aa3 1/30/2019 1/31/2019 166,277.10 3.18 1,274.40 166,117.88 173,910.00 NOTES DTD 01/08/2019 3.350%01/08/2024 PFIZER INC CORP NOTES 717081ES8 200,000.00 AA- Al 4/2/2019 4/4/2019 202,420.00 2.69 262.22 202,195.80 207,798.20 DTD 03/11/2019 2.950%03/15/2024 WALT DISNEY COMPANY/THE 254687FK7 275,000.00 A A2 9/3/2019 9/6/2019 273,878.00 1.84 334.20 273,892.95 272,290.15 DTD 09/06/2019 1.750%08/30/2024 Security Type Sub-Total 5,145,000.00 5,166,443.85 2.47 36,154.02 5,145,512.26 5,213,673.57 Certificate of Deposit CREDIT SUISSE NEW YORK CERT 22549LFR1 265,000.00 A-1 P-1 2/7/2018 2/8/2018 265,000.00 2.67 11,654.92 265,000.00 265,682.91 DEPOS DTD 02/08/2018 2.670%02/07/2020 CANADIAN IMP BK COMM NY FLT 13606BVF0 260,000.00 A-1 P-1 4/6/2018 4/10/2018 260,000.00 2.78 1,641.13 260,000.00 260,497.90 CERT DEPOS DTD 04/10/2018 2.738%04/10/2020 PFM Asset Management LLC )4 For the Quarter Ended September 30, 2019 CITY OF SEAL BEACH Portfolio Holdings Managed Account Detail of Securities Held Security Type/Description S&P Moody's Trade Settle Original YTM Accrued Amortized Market Dated Date/Coupon/Maturity CUSIP Par Rating Rating Date Date Cost at Cost Interest Cost Value Certificate of Deposit WESTPAC BANKING CORP NY CD 96121T4A3 470,000.00 A-1+ P-1 8/3/2017 8/7/2017 470,000.00 2.05 1,445.25 470,000.00 470,983.71 DTD 08/07/2017 2.050%08/03/2020 BANK OF MONTREAL CHICAGO CERT 06370REU9 465,000.00 A-1 P-1 8/1/2018 8/3/2018 465,000.00 3.23 2,348.64 465,000.00 468,947.39 DEPOS DTD 08/03/2018 3.190%08/03/2020 SUMITOMO MITSUI BANK NY CERT 86565BPC9 265,000.00 A Al 10/16/2018 10/18/2018 264,639.60 3.46 4,192.30 264,960.41 269,338.58 DEPOS DTD 10/18/2018 3.390%10/16/2020 SWEDBANK(NEW YORK)CERT 87019U6D6 530,000.00 AA- Aa2 11/16/2017 11/17/2017 530,000.00 2.30 4,611.88 530,000.00 530,994.81 DEPOS DTD 11/17/2017 2.270%11/16/2020 MUFG BANK LTD/NY CERT DEPOS 55379WZT6 265,000.00 A Al 2/27/2019 2/28/2019 265,000.00 2.99 4,700.44 265,000.00 269,321.62 DTD 02/28/2019 2.970%02/26/2021 CREDIT AGRICOLE CIB NY CERT 22535CDU2 255,000.00 A+ Aa3 4/3/2019 4/4/2019 255,000.00 2.85 3,608.25 255,000.00 257,634.66 DEPOS DTD 04/04/2019 2.830%04/02/2021 SKANDINAV ENSKILDA BANK LT CD 83050PDR7 420,000.00 A+ Aa2 8/29/2019 9/3/2019 420,000.00 1.88 607.60 420,000.00 420,582.54 DTD 09/03/2019 1.860%08/26/2022 NORDEA BANK ABP NEW YORK CERT 65558TLL7 395,000.00 AA- Aa3 8/27/2019 8/29/2019 395,000.00 1.87 669.85 395,000.00 395,434.90 DEPOS DTD 08/29/2019 1.850%08/26/2022 Security Type Sub-Total 3,590,000.00 3,589,639.60 2.53 35,480.26 3,589,960.41 3,609,419.02 Managed Account Sub Total 27,400,000.00 27,267,949.27 2.31 150,469.94 27,298,263.33 27,735,787.90 Securities Sub-Total $27,400,000.00 $27,267,949.27 2.31% $150,469.94 $27,298,263.33 $27,735,787.90 Accrued Interest $150,469.94 Total Investments $27,886,257.84 Bolded items are forward settling trades. PFM Asset Management LLC >5 For the Quarter Ended September 30, 2019 CITY OF SEAL BEACH Appendix IMPORTANT DISCLOSURES This material is based on information obtained from sources generally believed to be reliable and available to the public; however, PFM Asset Management LLC cannot guarantee its accuracy, completeness or suitability. This material is for general information purposes only and is not intended to provide specific advice or a specific recommendation. All statements as to what will or may happen under certain circumstances are based on assumptions, some, but not all of which, are noted in the presentation.Assumptions may or may not be proven correct as actual events occur, and results may depend on events outside of your or our control. Changes in assumptions may have a material effect on results. Past performance does not necessarily reflect and is not a guaranty of future results. The information contained in this presentation is not an offer to purchase or sell any securities. • Market values that include accrued interest are derived from closing bid prices as of the last business day of the month as supplied by Interactive Data, Bloomberg, or Telerate. Where prices are not available from generally recognized sources,the securities are priced using a yield based matrix system to arrive at an estimated market value. • In accordance with generally accepted accounting principles, information is presented on a trade date basis; forward settling purchases are included in the monthly balances, and forward settling sales are excluded. • Performance is presented in accordance with the CFA Institute's Global Investment Performance Standards(GIPS). Unless otherwise noted, performance is shown gross of fees. Quarterly returns are presented on an unannualized basis. Returns for periods greater than one year are presented on an annualized basis. Past performance is not indicative of future returns. • Bank of America/Merrill Lynch Indices provided by Bloomberg Financial Markets. • Money market fund/cash balances are included in performance and duration computations. • Standard&Poor's is the source of the credit ratings. Distribution of credit rating is exclusive of money market fund/LGIP holdings. • Callable securities in the portfolio are included in the maturity distribution analysis to their stated maturity date, although,they may be called prior to maturity. • MBS maturities are represented by expected average life. PFM Asset Management LLC 26 For the Quarter Ended September 30, 2019 CITY OF SEAL BEACH Appendix GLOSSARY • ACCRUED INTEREST: Interest that is due on a bond or other fixed income security since the last interest payment was made. • AGENCIES: Federal agency securities and/or Government-sponsored enterprises. • AMORTIZED COST:The original cost of the principal of the security is adjusted for the amount of the periodic reduction of any discount or premium from the purchase date until the date of the report. Discount or premium with respect to short-term securities(those with less than one year to maturity at time of issuance) is amortized on a straight line basis. Such discount or premium with respect to longer-term securities is amortized using the constant yield basis. • BANKERS'ACCEPTANCE:A draft or bill or exchange accepted by a bank or trust company. The accepting institution guarantees payment of the bill as well as the insurer. • COMMERCIAL PAPER:An unsecured obligation issued by a corporation or bank to finance its short-term credit needs, such as accounts receivable and inventory. • CONTRIBUTION TO DURATION: Represents each sector or maturity range's relative contribution to the overall duration of the portfolio measured as a percentage weighting. Since duration is a key measure of interest rate sensitivity,the contribution to duration measures the relative amount or contribution of that sector or maturity range to the total rate sensitivity of the portfolio. • DURATION TO WORST:A measure of the sensitivity of a security's price to a change in interest rates, stated in years, computed from cash flows to the maturity date or to the put date,whichever results in the highest yield to the investor. • EFFECTIVE DURATION:A measure of the sensitivity of a security's price to a change in interest rates, stated in years. • EFFECTIVE YIELD:The total yield an investor receives in relation to the nominal yield or coupon of a bond. Effective yield takes into account the power of compounding on investment returns,while nominal yield does not. • FDIC: Federal Deposit Insurance Corporation. A federal agency that insures bank deposits to a specified amount. • INTEREST RATE: Interest per year divided by principal amount and expressed as a percentage. • MARKET VALUE:The value that would be received or paid for an investment in an orderly transaction between market participants at the measurement date. • MATURITY:The date upon which the principal or stated value of an investment becomes due and payable. • NEGOTIABLE CERTIFICATES OF DEPOSIT:A CD with a very large denomination, usually$1 million or more, that can be traded in secondary markets. • PAR VALUE:The nominal dollar face amount of a security. PFM Asset Management LLC 27 For the Quarter Ended September 30, 2019 CITY OF SEAL BEACH Appendix GLOSSARY • PASS THROUGH SECURITY:A security representing pooled debt obligations that passes income from debtors to its shareholders. The most common type is the mortgage-backed security. • REPURCHASE AGREEMENTS:A holder of securities sells these securities to an investor with an agreement to repurchase them at a fixed price on a fixed date. • SETTLE DATE: The date on which the transaction is settled and monies/securities are exchanged. If the settle date of the transaction (i.e., coupon payments and maturity proceeds)occurs on a non-business day, the funds are exchanged on the next business day. • TRADE DATE:The date on which the transaction occurred; however, the final consummation of the security transaction and payment has not yet taken place. • UNSETTLED TRADE:A trade which has been executed; however,the final consummation of the security transaction and payment has not yet taken place. • U.S.TREASURY: The department of the U.S. government that issues Treasury securities. • YIELD:The rate of return based on the current market value, the annual interest receipts, maturity value, and the time period remaining until maturity, stated as a percentage on an annualized basis. • YTM AT COST:The yield to maturity at cost is the expected rate of return based on the original cost, the annual interest receipts, maturity value, and the time period from purchase date to maturity, stated as a percentage on an annualized basis. • YTM AT MARKET:The yield to maturity at market is the rate of return based on the current market value, the annual interest receipts, maturity value, and the time period remaining until maturity, stated as a percentage on an annualized basis. PFM Asset Management LLC )h