city of weatherford investment report€¦ · city of weatherford investment report 4th quarter,...
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City of WeatherfordInvestment Report
4th Quarter, 201802/12/2019
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What’s Happening?
Employment Look• Nonfarm Payrolls rose by +304k in January. Average monthly gain in
the last 12 months has been 223,000.• Leisure/hospitality +74k• Construction +52k• Health care +42k• Transportation and warehousing +27k.
• Unemployment grew marginally from 3.7% to 4%• Long-term unemployed rate remains static• Expectations are for unemployment to remain low
BB1
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Slide 2
BB1 Brad Burnett, 2/19/2018
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Economic Outlook• Sources: the Conference Board Leading Economic Index; Federal
Reserve; Goldman Sachs• Economy remains on a moderate growth path, gradually slowing in 2019• Robust growth in early 2019, job openings/low unemployment• Flat yield curve - growth slowing down in 2nd half of 2019 • Federal Reserve: Two hikes possible in 2019 (down from three in last
estimate)• Median Fed estimates:
• 2.9% rate by the end of 2019 • 3.1% in 2020
• Would strengthen higher returns for CDs/short-term instruments
T-Bill Yields (12/18) 6-month: 2.56% 1-year: 2.63% 2-year: 2.48% 3-year: 2.46% 5-year: 2.51% 10-year: 2.69% 30-year: 3.02%
What’s Happening?
BB1
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Slide 3
BB1 Brad Burnett, 2/19/2018
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Current Portfolio9/30/2018 12/31/2018 Difference
First Financial Bank 9,390,962.53 8,957,558.42 (433,404.11)TEXPOOL 4,814,915.11 4,841,803.66 26,888.55TEXSTAR 7,589,704.48 6,630,153.67 (959,550.81)TEXAS CLASS 17,191,395.26 26,884,511.65 9,693,116.39CDs (10 total) 23,100,000.00 22,200,000.00 (900,000.00)
Subtotal 62,086,977.38 69,514,027.40 7,427,050.02Municipal Bonds 294,828.90 0.00 (294,828.90)Agencies 38,004,500.00 33,241,036.00 (4,763,464.00)
Subtotal 38,299,328.90 33,241,036.00 (5,058,292.90)Grand Total 100,386,306.28 102,755,063.40 2,368,757.12
Cash/Cash Equivalents
Bonds/ Agencies
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Weighted Average Maturity – Indicates liquidity andmeasures the combined average length of maturities. Thisquarter our WAM went from 182 days to 288 days. Duringour last quarter, we actually saw this WAM go downsignificantly due to interest rates trending upward.However, staff reinvested substantial dollars in longer-terminvestments in order to adhere to the City’s ladderingstrategy. Given the market’s yield curve, the City’s WAM isnot likely to increase significantly in the next quarter.
9/30/2018 12/31/2018288 Days 248 Days
WAM
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Bonds and Agencies Par Value vs Purchase Value
Par Value Market Value
Unrealized Gain (Loss)
FED FARM CR 3133EGJ48 4,991,000.00$ 5,000,000.00$ 9,000.00$
US TREASURY N/B 912828C65 298,818.00$ 299,412.00$ 594.00$
FHLB 3130A8NN9 1,973,720.00$ 1,982,280.00$ 8,560.00$
FREDDIE MAC 3137EADM8 4,931,100.00$ 4,948,350.00$ 17,250.00$
FANNIE MAE 313586RC5 1,944,880.00$ 1,958,360.00$ 13,480.00$
US TREASURY N/B 912828F62 4,344,472.00$ 4,358,904.00$ 14,432.00$
FANNIE MAE 3136G3W92 3,894,360.00$ 3,923,480.00$ 29,120.00$
FHLB 313370US5 7,002,100.00$ 7,037,030.00$ 34,930.00$
FANNIE MAE 3135G0F73 1,943,800.00$ 1,960,360.00$ 16,560.00$
FHLB 3130A8QS5 3,814,200.00$ 3,863,040.00$ 48,840.00$
FANNIE MAE 3135G0Q89 2,866,050.00$ 2,909,820.00$ 43,770.00$
38,004,500.00$ 38,241,036.00$ 236,536.00$
$- $1.00 $2.00 $3.00 $4.00 $5.00 $6.00 $7.00 $8.00
Mill
ions
Par Value vs. Book Value
Par Book
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Yield – Yield is thestated rate of interest paidin intervals or at maturity.Yield to maturity (YTM)uses purchase price andspreads premiums ordiscounts over the
time remaining to maturity
Purchase Price Coupon Rate YTM
CERTIFICATES OF DEPOSIT
CD TEXASBANK 7165 4,000,000.00$ 2.750% 2.750% 110,000.00$
CD TEXASBANK 7194 3,000,000.00$ 2.600% 2.600% 78,000.00$
CD TEXASBANK 7164 3,200,000.00$ 2.750% 2.750% 88,000.00$
CD TEXASBANK 7180 2,000,000.00$ 2.800% 2.800% 56,000.00$
CD LEGACYTEXAS 60050002017 3,000,000.00$ 1.750% 1.750% 52,500.00$
CD TEXASBANK 7195 1,500,000.00$ 2.800% 2.800% 42,000.00$
CD TEXASBANK 7196 1,500,000.00$ 3.100% 3.100% 46,500.00$
CD LEGACYTEXAS 60050006105 4,000,000.00$ 3.160% 3.160% 126,400.00$
US GOVT AGENCIES
US TREASURY N/B 912828C65 298,851.56$ 1.625% 2.420% 7,232.21$
FHLB 3130A8NN9 1,994,280.00$ 0.800% 2.640% 52,648.99$
FREDDIE MAC 3137EADM8 4,932,000.00$ 1.250% 2.660% 131,191.20$
FANNIE MAE 313586RC5 1,907,390.20$ 0.000% 1.645% 31,376.57$
US TREASURY N/B 912828F62 4,345,907.02$ 1.500% 2.650% 115,166.54$
FANNIE MAE 3136G3W92 3,999,000.00$ 1.350% 2.550% 101,974.50$
FHLB 313370US5 7,003,493.00$ 2.875% 2.550% 178,589.07$
FANNIE MAE 3135G0F73 1,996,869.70$ 1.500% 2.570% 51,319.55$
FHLB 3130A8QS5 3,987,536.00$ 1.125% 2.530% 100,884.66$
FANNIE MAE 3135G0Q89 2,945,620.71$ 1.375% 2.510% 73,935.08$
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Portfolio Performance –The benchmark will move quickly with the markets and the portfolio will always lag behind
1.568%
2.478%
2.700%2.526% 2.462%
2.560% 2.630%
0.000%
0.500%
1.000%
1.500%
2.000%
2.500%
3.000%
Bank Pools CD's Agencies Overall Six Month T-Bill -
Benchmark
One Year T-Bill -
Benchmark
Yield
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Comparison of City Yield to T-Bill Rates
2.31%
2.71%
2.63%
2.17%
3.16%
2.54%
2.39%
2.56%
2.63%
2.48%
2.46%
2.51%
0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50%
Liquid
0-12 Mos
1 Year
2 Years
3 Years
4 Years
City Yield vs. T-Bill
T-Bill City Yield
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12/31 Portfolio Summary
0%
5%
10%
15%
20%
25%
30%
35%
40%
$-
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
$35,000,000
$40,000,000
$45,000,000
Cash Investment GradePools
Certificates ofDeposit
Municipal Bonds US GovernmentAgencies
Diversification
% of Portfolio 12/31/2018
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Maturities
0%10%20%30%40%50%60%70%80%90%
100%
Laddered Maturities
Liquid 0-12 Mos 1 Year 2 Years 3 Years 4 Years
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Where is your money
$-
$20.00
$40.00
$60.00
$80.00
$100.00
$120.00
12/1
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9
4/1/
2010
8/1/
2010
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4/1/
2011
8/1/
2011
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4/1/
2012
8/1/
2012
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4/1/
2013
8/1/
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4/1/
2014
8/1/
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2016
8/1/
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2017
8/1/
2017
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4/1/
2018
8/1/
2018
12/1
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8
Mill
ions
Portfolio Composition
TEXPOOL TEXSTAR TEXAS CLASS US TREAS NOTES BONDS CASH US GOVT AGENCIES CD
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Debt Service