12-31-2014 VNPB Investment Performance ReviewVillage of North Palm Beach, Florida
North Palrp-Oeg
Investment Performance Review
Quarter Ended December 31, 2014
Investment Advisors PFM Asset Management LLC
Steven Alexander, CTP, CGFO, CPPT, Managing Director
D. Scott Stitcher, CFA, Senior Managing Consultant
Richard Pengelly, CFA, CTP, Senior Managing Consultant
Gregg Manjerovic, CFA, Portfolio Manager
Rebecca Geyer, CTP, Senior Analyst
One Keystone Plaza, Suite 300
North Front & Market Streets
Harrisburg, PA 1 71 01 -2044
717 - 232 -2723 • 717 - 233 -6073 fax
300 S. Orange Avenue, Suite 1170
Orlando, FL 32801
(407) 648 -2208
(407) 648 -1323 fax
Village of North Palm Beach, Florida
Table of Contents
&T. om
Section A Market Review
Investment Report - Quarter Ended December 31, 2014
Tab II.
Section A Quarterly Summary Report
Section B Investment Portfolio & Performance
Section C Asset Allocation Chart as of December 31, 2014
Tab III. December 31, 2014 PFM Month -End Statement
(statements are available online at www.pfm.com)
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 recommendation. The information contained in this
report is not an offer to purchase or sell any securities.
Table of Contents Section i
Village of North Palm Beach, Florida Investment Report - Quarter Ended December 31, 2014
TAB I
Village of North Palm Beach, Florida
Summary
■ The fourth - quarter markets were characterized by heightened
volatility, a continued strengthening of the U.S. dollar, and soaring U.S.
equity markets, which reached new all -time highs.
■ Globally, economic growth patterns diverged during the quarter, with
the U.S. strengthening while other areas of the developed world (such
as Europe and Japan) struggled with stagnation.
■ Oil prices plummeted as global demand slowed, while the supply of oil
continued to climb as a result of strong domestic output combined
with the Organization of Petroleum Exporting Countries' (OPEC's)
decision not to reduce the pace of its oil production.
Economic Snapshot
■ Third - quarter gross domestic product (GDP) grew at 5 %, reflecting
increases in personal consumption expenditures, exports, and federal,
state, and local government spending, among other factors.
■ The U.S. labor market continued to improve, as the unemployment
rate fell from 5.9% in September to 5.6% in December. The business
services, retail, transportation, healthcare, and manufacturing sectors
all saw job gains.
■ The housing market had a lackluster quarter as both new- and existing -
home sales fell and home price increases slowed to just 4.5% year over
year through October 2014, compared to an increase of 10.9% in the
prior year.
■ The Consumer Price Index, which measures inflation, fell 0.3% in
November, marking its largest decline since December 2008. Lower oil
prices were a major contributor to the falling prices.
Interest Rates
■ The Federal Open Market Committee (FOMC) rephrased its
"considerable time" language in its statement released after its
December meeting, saying that it would be "patient" when
Investment Report — Quarter Ended December 31, 2014
normalizing monetary policy after taking extraordinary steps to
support economic recovery after the financial crisis.
■ The yield curve flattened over the quarter as short and
intermediate rates rose, while longer maturities continued to see
downward pressure. The two -year Treasury reached 0.7 %, a
three -year high, in late December. The 10 -year Treasury ended the
year at 2.2 %, down from 2.5% at the beginning of the fourth
quarter and 3% at the beginning of 2014.
Sector Performance
■ Fixed - income market performance for the quarter depended on
both maturity and sector.
■ In short /intermediate maturities, the steep yield curve provided
enough income and "roll down" to offset a slight increase in
interest rates during the quarter. In the aggregate, these market
dynamics helped to produce modest positive returns that
essentially mirrored initial yields.
■ Longer- duration investments were the strongest performers as
they continued to benefit from falling long -term rates.
■ Shorter - duration Agency spreads reversed the temporary
widening that occurred in the third quarter and returned to
historically tight levels. As a result, Agencies with shorter
maturities performed better relative to Treasuries than Agencies
with longer maturities.
■ Corporate spreads widened modestly; however, their higher yields
provided enough extra earnings to produce performance generally
on par with Treasuries.
■ Mortgage - backed securities had a strong quarter, while municipals
lagged Treasuries significantly in all maturity ranges.
■ Yields on money market securities, especially those with
maturities greater than six months, rose notably towards the end
of the quarter, reflecting an expected hike in the federal funds
rate in the late spring of 2015.
PFM Asset Management LLC Section A -1
Village of North Palm Beach, Florida
Investment Report - Quarter Ended December 31, 2014
Economic Snapshot
7Changeln o-
ate Dec'14 5.6% 5.9% 6.7% Unemployment Rate (left) vs. Change in Nonfarm Payrolls (right)
10 % 400K
Change In Non -Fans Payrolls 350K
arm Payrolls - unemployment Rate
8% 300K
0K
Average Hourly Earnings (YoY) Dec'14 1.7% 2.0% 1.9% 6% 22550K
111 11 150K
Personal Income (YoY) 4% 100K
_ 50K
2% 0
Initial Jobless Claims (week) Jan 02 294,000 288,000 344,000 12/31/11 6/30/12 12/31/12 6/30/13 12/31/13 6/30/14 12/31/14
•
Real GDP (QoQ SAAR) 2014Q3 5.0% 4.6%1 3.5%2 6.0 ReaIGDP (QoQ)
5.0
GDP Personal Consumption (QoQ SAAR) &3 3.2% 2.5% 4.0%
3.0
2.0
Retail Sales (YoY) Nov'14 5.1% 4.6% 3.4% 1.0%
0.0
ISM Manufacturing Survey (month) Dec'14 55.5 56.6 -1.0%
-2.0
3.0
Existing Home Sales SAAR (month) NOd14 4.93 mil. 5.18 mil. 4.87 mil. 9/30/11 3/31/12 9/30/12 3/31/13 9/30/13 3/31/14 9/30/14
Inflation
Personal Consumption Expenditures (YoY) Nov'14 1.2% 1.4% 1.2% Consumer Price Index
4.0%
3.5% -CPI(YoY) -Core CPI YoY
Consumer Price Index (YoY) 3.0%
2.5
Consumer Price Index Core (YoY) Nov'14 1.7% 1.7% 1.7% 2.0%
1.5%
1.0%
it Futures (WTI, per barrel) Dec 31 $53.27 0.5%
0.0%
Gold Futures (oz.) Dec 31 $1,184 $1,211 $1,202 11/30/11 5/31/12 11/30/12 5/31/13 11/30/13 5/31/14 11/30/14
1. Data as of Second Quarter 2014 2. Data as of Fourth Quarter 2013
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 Section A -2
Village of North Palm Beach, Florida
3.570
3.0%
2.5%
2.0%
m
} 1.5%
1.0%
0.5%
0.0%
9/30/14
U.S. Treasury Note Yields
Investment Report — Quarter Ended December 31, 2014
Investment Rate Overview
10/31/14 11/30/14
- 2 -Year ...... • • 5 -Year —
U.S. Treasury Yields
10 -Year
WKINEI
Maturity
3 -month
12/31/14
0.04%
9/30/14
0.02%
Change
over
Quarter
0.02%
12/31/13
0.07%
Change
over Year
(0.03 %)
1 -year
0.22%
0.10%
0.12%
0.11%
0.11%
2 -year
0.67%
0.57%
0.10%
0.38%
0.29%
5 -year
1.65%
1.76%
(0.11%)
1.74%
(0.09 %)
10 -year
2.17%
2.49%
(0.32 %)
3.03%
(0.86 %)
30 -year
2.75%
3.20%
(0.45 %)
3.97%
(1.22 %)
Source: Bloomberg
PFM Asset Management LLC
570
4%
3%
2%
1%
0%
W N W Ut v
3���
O
Maturity
December 31, 2014 — — — September 30, 2014
U.S. Treasury Yield Curve
W
O
December 31. 2013
Yield Curves as of 12/31/2014
5%
4% ----------------------------------- --------------------------------------- - - - -- -- - --
3% -------------------- - - - - -- +'� .. ��r_
-------- - - - - --
-- - -- ---- - - - - -- -
} 2% - - - - - -- - ♦ -------------------------------------------------------------------
le
1% / ------------------------------------------------------------------------
0%
W N W M --I N W
3 O Ul O
O
Maturity
U.S. Treasury — — — Federal Agency — — Industrial Corporates, A Rated
Section A -3
Village of North Palm Beach, Florida
Investment Report - Quarter Ended December 31, 2014
BofA Merrill Lynch Index Returns
As of 12/31/2014 Returns for Periods ended 12/31/2014
Returns for periods greater than one year are annualized
Source: BofA Merrill Lynch Indices
Source: BofA Merrill Lynch Indices
PFM Asset Management LLC Section A -4
Duration
Yield
3 Month
1 Year
3 Years
Year •
U.S. Treasury
1.89
0.67%
0.17%
0.62%
0.47%
80°
0.70%
.660
U.S. Corporates, A -AAA rated
1.98
1.34%
0.15%
1.08%
2.16%
Age 0 to 3 years)
1.94
1.29%
8%
Municipals
1.79
0.67%
0.01%
0.72%
Year •
U.S. Treasury
2.69
0.98%
0.49%
1.24%
0.65%
Federal Agency
2.35
1.01%
0.42%
1.30%
0.90%
U.S. Corporates, A -AAA rated
2.79
1.73%
0.49%
2.12%
3.02%
Agency MBS (0 to 5 years)
3.23
1.16%
AWE
A
Municipals
2.57
0.96%
(0.02 %)
1.300%
1.390%
Indices Master
or
U.S. Treasury
6.13
1.52%
2.280%
6.02%
1.54%
Federal Agency
3.94
AMi
U.S. Corporates, A -AAA rated
6.87
2.73%
2.05%
7.34%
4.77%
AgenBS (0 to 30 years)
4.00
6.07%
2.3
2.30%
Municipals
6.85
2.41%
1.330%
9.78%
4.56%
Returns for periods greater than one year are annualized
Source: BofA Merrill Lynch Indices
Source: BofA Merrill Lynch Indices
PFM Asset Management LLC Section A -4
Village of North Palm Beach, Florida
Disclosures
Investment Report — Quarter Ended December 31, 2014
The views expressed within this material constitute the perspective and judgment of PFM Asset Management LLC ( PFMAM) 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, PFMAM
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.
Further distribution is not permitted without prior written consent.
PFM Asset Management LLC Section A -5
Village of North Palm Beach, Florida Investment Report - Quarter Ended December 31, 2014
TAB II
Village of North Palm Beach, Florida Investment Report - Quarter Ended December 31, 2014
Quarterly Summary Report
Total Portfolio Value' December 31,2014' September 30, 2014
Market Value
Amortized Cost
$8,403,999.45
$8,402,389.22
$8,386,908.94
$8,387,249.96
Fiscal Year Interest Income
Investment Portfolio
TD Bank Money Market Fund
R Fiscal Year 2015
Year to Date
$22,631.56
0.73
Fiscal Year 2014
$99,538.13
6.50
Total
$22,632-291
Quarterly Return
Last
Last
Last
Last
Since Inception
Total Return "°
December 31, 2014
12 Months
2 Years
3 Years
5 Years
June 30, 2009
Investment Portfolio
0.20%
0.68%
0.52%
0.52%
1.02%
1.09%
Merrill Lynch 1 -3 Year U.S. Treasury Index
0.17%
0.62%
0.49%
0.47%
1.06%
1.11%
Current Quarter ,
Previous Quarter
Current Quarter
, Previous Quarter
Effective Duration(Yearsl °°
December 31, 2014
September 30, 2014
not indicative of future results.
Yields
December 31, 2014
September 30, 2014
Investment Portfolio
1.73
1.69
4. Merrill Lynch Indices provided by Bloomberg Financial Markets.
Yield at Market
0.70%
0.63%
Merrill Lynch 1 -3 Year U.S. Treasury Index
1.82
1.84
Yield at Cost
0.71%
0.63%
Portfolio Duration % of Benchmark Duration
Kb. 95%
92%
Quarter Ended 12/31/14
1.50 2.00
Quarter Ended 12/31/14
ML 1 -3 Year U.S. Treasury Index
1.09% *101.11%
Investment Portfolio
1.50 2.00
rff—t — n ref r,r, /V- -1
Quarterly Interest Income
Investment Portfolio
TD Bank Money Market Fund
Current Quarter
December 31, 2014
$22,631.56
0.73
Previous Quarter
September 30, 2014
$25,883.89
223
Fiscal Year Interest Income
Investment Portfolio
TD Bank Money Market Fund
R Fiscal Year 2015
Year to Date
$22,631.56
0.73
Fiscal Year 2014
$99,538.13
6.50
Total
$22,632-291
$25,886.12
Total
$22,632.29
$99,544.63
Current Quarter
Previous Quarter
Fiscal Year 2015
Fiscal Year 2014
Quarterly Realized Gain /Loss on Cost
December 31, 2014
September 30, 2014
Fiscal Year Realized Gain /Loss on Cost
Year to Date
Investment Portfolio
($882.9
($9,500.08)
Investment Portfolio
($882.90)
(29,087.79)
Notes:
1. In order to comply with GASS accrual accounting reporting requirements.
End of quarter trade -date market values of portfolio holdings, including accrued interest.
2. Performance on trade date basis, gross (i.e., before fees), is in accordance with The CFA Institute's Global Investment Performance
Standards (GIPS). Quarterly retumsare presented
on an unannualized basis. Returns presented for 12 months or
longer are presented on an annual basis. Past performance is
not indicative of future results.
3. Since inception the benchmark has been the Merrill Lynch 1 -3 Year
U.S. Treasury Note Index.
4. Merrill Lynch Indices provided by Bloomberg Financial Markets.
5. Includes money market fund /cash in performance and duration computations.
PFM Asset Management LLC Section A - 1
Village of North Palm Beach, Florida Investment Report - Quarter Ended December 31, 2014
Executive Summary
F ff RTFOL15 STRATEGY
➢ The Village's Investment Portfolio is of high credit quality and invested in U.S. Treasury, Federal Agency, commercial paper,
municipal obligations, and high quality corporate securities.
➢ PFM continued to actively manage the Investment Portfolio during the fourth quarter and found value in the market, taking
advantage of market inefficiencies or changes in economic outlook. As a result, the Portfolio realized $1,342 in gains on
sales (based on amortized cost) during the quarter. PFM is continually in the market monitoring for opportunities to add
value to the Portfolio.
➢ The Investment Portfolio's quarterly total return performance of 0.20 %, outperformed the benchmark's performance of
0.17% by 0.03 %. Over the past year, the Portfolio earned 0.68 %, versus 0.62% for the benchmark.
➢ U.S. Treasury yields experienced heightened volatility in the fourth quarter as market participants continued to balance the
convergence of an improving domestic economy, declining global growth prospects, deflationary pressures, and varying
stages of support from central banks around the world. Shorter maturities (under 3 years) ended the quarter modestly
higher, while longer maturities continued to trend lower causing the yield curve to flatten.
➢ Yield spreads on Federal Agency securities reversed their temporary widening that occurred in the third quarter to return to
historically tight levels. This provided an opportunity in certain instances to swap Agency securities into Treasuries;
positioning portfolios for future opportunities while improving overall liquidity.
➢ While the broader yield curve flattened further in the fourth quarter, the shorter end of the yield curve (under 5 years)
remained near historically steep levels; increasing the relative attractiveness of longer duration investments.
➢ We expect that the new year will see a continuation of the narrative that dominated the latter half of 2014: the response of
central banks to improving domestic economic data contrasted against the headwinds of global uncertainty. Additionally,
the recent plummet of oil prices, combined with a strengthening US Dollar have injected a new dynamic to the global
inflationary outlook and its impact on market volatility and geopolitical risks.
➢ We continue to closely monitor the movements of the FOMC as it remains a significant, but uncertain market force. While
the market generally expects the Fed to finally raise rates in 2015, the Committee has stated its intention to be "patient in
beginning to normalize the stance of monetary policy," which means the timing and pace of future rate hikes is still
uncertain. As we have for much of the past year, we start the year with a modestly conservative and defensive duration
posture to reflect that uncertainty.
➢ We expect the corporate sector to continue to offer opportunities for return enhancement. While we also expect further
corporate ratings pressure in 2015, any potential dislocations may present opportunities in a sector that continues to benefit
from a strengthening economy.
➢ PFM will continue to navigate the market environment with a keen focus on relative value sector analysis, prudent duration
management, and efficient yield curve placement. While producing strong investment returns remains a priority, it is
secondary to maintaining safety and liquidity, particularly in the current environment where we expect yields to trend higher.
PFM Asset Management LLC Section B - 1
Village of North Palm Beach, Florida Investment Report - Quarter Ended December 31, 2014
Investment Portfolio Composition and Credit Quality Characteristics
Security Type'
December 31, 2014
% of Portfolio
September 30, 2014
% of Portfolio
U.S. Treasuries
$5,463,799.81
65.0%
$4,758,250.43
56.7%
Federal Agencies
1,288,838.57
15.3%
1,485,577.66
17.7%
Commercial Paper
199,742.00
2.4%
399,947.60
4.8%
Certificates of Deposit
0.00
0.0%
0.00
0.0%
Bankers Acceptances
0.00
0.0%
0.00
0.0%
Repurchase Agreements
0.00
0.0%
0.00
0.0%
Municipal Obligations
121,105.60
1.4%
121,117.00
1.4%
Corporate Notes /Bonds
1,293,465.02
15.4%
1,572,902.18
18.8%
Corporate Notes /Bonds - FDIC Insured
0.00
0.0%
0.00
0.0%
Mortgage Backed
0.00
0.0%
0.00
0.0%
Money Market Fund /Cash
37,048.45
0.4%
49,114.07
0.6%
Totals
$8,403,999.45
100.0%
$8,386,908.94
100.0%
Portfolio Composition
as of 12/31/14
A-
1.75
A
3.82%
A+
4.09
A
3.`
1.80%
Credit Quality Distribution
A -1 (Short- as of 12/31/14
term)
Notes:
1. End of quarter trade -date market values of portfolio holdings, including accrued interest.
2. Credit rating of securities held in portfolio, exclusive of money market fund /LGIP. Standard & Poor's is the source of the credit ratings.
AA+
82.51%
PFM Asset Management LLC Section B - 2
Village of North Palm Beach, Florida
Investment Report - Quarter Ended December 31, 2014
Investment Portfolio Maturity Distribution
Maturity Distribution' December 31, 2014
September 30, 2014
Overnight (Money Market Fund)
$37,048.46
$49,114.07
Under 6 Months
199,742.00
399,947.60
6 - 12 Months
0.00
0.00
1 - 2 Years
4,631,981.99
4,889,443.78
2 - 3 Years
3,636,227.01
3,048,403.49
3 - 4 Years
0.00
0.00
4 - 5 Years
0.00
0.00
5 Years and Over
0.00
0.00
Totals $8.403.999.46 $8,386,908.94
rut uuttu tvtaLut ny utz:,u tuuuut t
■December 31, 2014
■September 30, 2014
4.8%
2.4% 0.0% 0.0%
Under 6 Months 6 - 12 Months
Notes:
1. Callable securities in portfolio are included in the maturity distribution analysis to their stated maturity date, although they may be called prior to maturity.
5 Years ana UVE
PFM Asset Management LLC Section B - 3
Village of North Palm Beach, Florida Investment Report - Quarter Ended December 31, 2014
Investment Portfolio Maturity Distribution versus the Benchmark'
oo, � . �O, ��, oo, � , �O, � , oo, ��, �O, 1�, oo, � , �O,
Years to Maturity
■ Investment Portfolio ■ Merrill Lynch 1 -3 Year U.S. Treasury Note Index
Notes:
1. Due to the nature of the security, Mortgage- Backed Securities are represented based on their average life maturity rather than their final maturity.
PFM Asset Management LLC Section B - 4
Money Market
Interest Bearing
Municipals Mutual Funds
Checking or Savings
0.55% 0.85%
Account
2.22%
59.06%
Corporate Notes
United States Treasury Securities
5.84%
24.74%
Commercial Paper
0.90%
Federal
Instrumentalities
5.83% United States
Treasury Securities Florida
24.74%
1 Amortized Cost
Security Type (Includes Interest)
Prime (SBA)
2.22%
Allocation
Percentage
Permitted
Notes by Policy
In
Compliance
Florida Prime (SBA)
490,653.22
2.22%
2 25%
YES
United States Treasury Securities
5,466,087.09
24.74%
100%
YES
United States Government Agency Securities
-
0.00%
100%
YES
Federal Instrumentalities
1,287,783.03
5.83%
75%
YES
Supranationals
-
0.00%
25%
YES
Agency Mortgage- Backed Securities
-
0.00%
25%
YES
Asset - Backed Securities
-
0.00%
25%
YES
Non - Negotiable Certificates of Deposit
-
0.00%
50%
YES
Commercial Paper
199,771.78
0.90%
50%
YES
Corporate Notes
1,291,103.56
5.84%
50%
YES
Municipals
120,595.31
0.55%
25%
YES
Money Market Mutual Funds
187,983.10
0.85%
50%
YES
Intergovernmental Investment Pool
-
0.00%
50%
YES
Interest Bearing Checking or Savings Account
13,049,518.03
59.06%
2 100%
YES
Village Managed
13,691,105.70
61.97%
PFM Managed
8,402,389.42
38.03%
Total
$22,093,495.12
100.00%
Notes:
1. All Assets.
2. These Accounts are managed by the Village.
'PFM managed securities are shown on Amortized Cost plus Accrued Interest basis
Individual Issuer Breakdown
Amortized Cost
(Includes Interest)
Allocation
Percentage
Notes
Permitted
by Policy
In
Compliance
Government National Mortgage Association (GNMA)
-
0.00%
40%
YES
Federal Farm Credit Bank (FFCB)
-
0.00%
40%
YES
Federal Home Loan Bank (FHLB)
391,469.44
1.77%
40%
YES
Federal National Mortgage Association (FNMA)
554,894.87
2.51%
40%
YES
Federal Home Loan Mortgage Corporation (FHLMC)
341,418.72
1.55%
40%
YES
PNC Bank Commercial Paper
199,771.78
0.90%
5%
YES
Toyota Corporate Notes
100,079.00
0.45%
5%
YES
Wells Fargo & Company Corporate Notes
150,231.39
0.68%
5%
YES
General Electric Corporate Notes
150,297.03
0.68%
5%
YES
Berkshire Hathaway Corporate Notes
100,250.21
0.45%
5%
YES
American Honda Corporate Notes
70,040.00
0.32%
5%
YES
John Deere Corporate Notes
100,158.13
0.45%
5%
YES
Coca -Cola Corporate Notes
50,027.35
0.23%
5%
YES
IBM Corporate Notes
200,095.74
0.91%
5%
YES
PepsiCo Corporate Notes
150,387.79
0.68%
5%
YES
Walt Disney Corporate Notes
219,536.92
0.99%
5%
YES
California State Taxable GO Bonds
120,595.31
0.55%
5%
YES
Interest Bearing Checking /Savings Acct -Wells Fargo
10,520,397.97
47.62%
2
50%
YES
Interest Bearing Checking /Savings Acct -Chase
11,574.66
0.05%
2
50%
YES
Interest Bearing Checking /Savings Acct- BankUnited
2,517,545.40
11.39%
2
50%
YES
Money Market Fund - TD Bank Sweep Account
37,048.65
0.17%
25%
YES
Money Market Fund - Wells Fargo Advantage Fund
150,934.45
0.68%
2
33%
YES
Florida Prime (SBA)
490,653.22
2.22%
2
25%
YES
Notes:
1. All Assets.
2. These Accounts are managed by the Village.
'PFM managed securities are shown on Amortized Cost plus Accrued Interest basis.
Village of North Palm Beach, Florida Investment Report - Quarter Ended December 31, 2014
TAB III
�PFM
Customer Service
PO Box 11813
Harrisburg, PA 17108 -1813
ACCOUNT STATEMENT
Contents
Cover /Disclosures
Summary Statement
Individual Accounts
Accounts included in Statement
NORTH PALM BEACH INVESTMENT PORTFOLIO
VILLAGE OF NORTH PALM BEACH
SAMIAJANJUA
501 US HIGHWAY 1
NORTH PALM BEACH, FL 33408
Online Access http: / /www.pfm.com Customer Service 1- 717 - 232 -2723
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Management LLC ( "PFM ") is an investment advisor registered with the
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If you would like to receive a copy of our current disclosure statement,
please contact Service Operations at the address below.
Proxy Voting PFM does not normally receive proxies to vote on behalf of
its clients. However, it does on occasion receive consent requests. In the
event a consent request is received the portfolio manager contacts the
client and then proceeds according to their instructions. PFM's Proxy
Voting Policy is available upon request by contacting Service Operations
at the address below.
Questions About an Account PFM's monthly statement is intended to
detail our investment advisory activity as well as the activity of any
accounts held by clients in pools that are managed by PFM. The custodian
bank maintains the control of assets and executes (i.e., settles) all
investment transactions. The custodian statement is the official record of
security and cash holdings and transactions. PFM recognizes that clients
may use these reports to facilitate record keeping and that the custodian
bank statement and the PFM statement should be reconciled and
differences resolved. Many custodians use a settlement date basis which
may result in the need to reconcile due to a timing difference.
Account Control PFM does not have the authority to withdraw funds from
or deposit funds to the custodian. Our clients retain responsibility for their
internal accounting policies; implementing and enforcing internal controls
and generating ledger entries or otherwise recording transactions.
Market Value Generally, PFM's market prices 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. Prices that fall
between data points are interpolated. Non - negotiable FDIC - insured bank
certificates of deposit are priced at par. Although PFM believes the prices
to be reliable, the values of the securities do not always represent the
prices at which the securities could have been bought or sold. Explanation
of the valuation methods for money market and TERM funds is contained
in the appropriate fund information statement.
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 straightline basis.
Such discount or premium with respect to longer term securities is
amortized using the constant yield basis.
Important Disclosures
Tax Reporting Cost data and realized gains / losses are provided for
informational purposes only. Please review for accuracy and consult your
tax advisor to determine the tax consequences of your security transactions.
PFM does not report such information to the IRS or other taxing authorities
and is not responsible for the accuracy of such information that may be
required to be reported to federal, state or other taxing authorities.
Financial Situation In order to better serve you, PFM should be promptly
notified of any material change in your investment objective or financial
situation.
Callable Securities Securities subject to redemption prior to maturity may
be redeemed in whole or in part before maturity, which could affect the yield
represented.
Portfolio The securities in this portfolio, including shares of mutual funds,
are not guaranteed or otherwise protected by PFM, the FDIC (except for
certain non - negotiable certificates of deposit) or any government agency.
Investment in securities involves risks, including the possible loss of the
amount invested.
Rating Information provided for ratings is based upon a good faith inquiry of
selected sources, but its accuracy and completeness cannot be guaranteed.
Shares of some money market and TERM funds are marketed through
representatives of PFM's wholly owned subsidiary, PFM Fund Distributors,
Inc. PFM Fund Distributors, Inc. is registered with the SEC as a
broker /dealer and is a member of the Financial Industry Regulatory
Authority ( "FINRA ") and the Municipal Securities Rulemaking Board
( "MSRB "). You may reach the FINRA by calling the FINRA Regulator Public
Disclosure Hotline at 1- 888 - 289 -9999 or at the FINRA Regulation Internet
website address www.nasd.com. A brochure describing the FINRA
Regulation Public Disclosure Program is also available from the FINRA
upon request.
Key Terms and Definitions
Dividends on money market funds consist of interest earned, plus any
discount ratably amortized to the date of maturity, plus all realized gains and
losses on the sale of securities prior to maturity, less ratable amortization of
any premium and all accrued expenses to the fund. Dividends are accrued
daily and may be paid either monthly or quarterly. The monthly earnings on
this statement represent the estimated dividend accrued for the month for
any program that distributes earnings on a quarterly basis. There is no
guarantee that the estimated amount will be paid on the actual distribution
date.
Current Yield is the net change, exclusive of capital changes and income
other than investment income, in the value of a hypothetical fund account
with a balance of one share over the seven -day base period including the
statement date, expressed as a percentage of the value of one share
(normally $1.00 per share) at the beginning of the seven -day period. This
resulting net change in account value is then annualized by multiplying it by
365 and dividing the result by 7. The yields quoted should not be considered
a representation of the yield of the fund in the future, since the yield is not
fixed.
Account Statement
For the Month Ending December 31, 2014
Average maturity represents the average maturity of all securities and
investments of a portfolio, determined by multiplying the par or
principal value of each security or investment by its maturity (days or
years), summing the products, and dividing the sum by the total
principal value of the portfolio. The stated maturity date of mortgage
backed or callable securities are used in this statement. However the
actual maturity of these securities could vary depending on the level or
prepayments on the underlying mortgages or whether a callable
security has or is still able to be called.
Monthly distribution yield represents the net change in the value of one
share (normally $1.00 per share) resulting from all dividends declared
during the month by a fund expressed as a percentage of the value of
one share at the beginning of the month. This resulting net change is
then annualized by multiplying it by 365 and dividing it by the number of
calendar days in the month.
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.
Managed Account A portfolio of investments managed discretely by
PFM according to the client's specific investment policy and
requirements. The investments are directly owned by the client and
held by the client's custodian.
Unsettled Trade A trade which has been executed however the final
consummation of the security transaction and payment has not yet
taken place.
Please review the detail pages of this statement carefully. If you think
your statement is wrong, missing account information, or if you need
more information about a transaction, please contact PFM within 60
days of receipt. If you have other concerns or questions regarding your
account you should contact a member of your client management team
or PFM Service Operations at the address below.
PFM Asset Management LLC
Attn: Service Operations
One Keystone Plaza, Suite 300
N. Front & Market Sts
Harrisburg, PA 17101
Managed Account Summary Statement For the Month Ending December 31, 2014
Transaction Summary - Managed Account Cash Transactions Summary - Managed Account
Opening Market Value $8,386,477.71 Matu,me$[m|b 0.00
Sale Proceeds 58O93�.9O
Maturities/Calls 0.00 '
Principal Dispositions (580'501.06) Coupon/[nterest/DiNdund[ncome 10,900.61
Principal Acquisitions 509'396.09 Principal Payments 0.00
Unsettled Trades 0.00 Security Purchases (570,641.58)
Change in Current Value (26,984.07) Net Cash Contribution 0.00
Reconciling Transactions 0.00
Closing Market Value $8,348,468'67
Earnings Reconciliation (Cash Basis) - Managed Account Cash Balance
Imarest/Dkhdend$Couponsmeceived 11'340.51 Closing Cash Balance $37,048'45
Less Purchased Interest Related mInterest/Coupons (1,2+5.49)
Plus Net Realized Gains/Losses 359.97
Total Cash Basis sanminms $10,454.99
Ending Amortized Value of Securities
8,346,85/4
Ending Accrued Interest
18/482.33
Plus Proceeds from Sales
580'93+.96
Plus Proceeds o[Matunties/Ca)|$nincipa|Payments
0.00
Plus Coupons/Dividends Received
10'906.61
Less Cost of New Purchases
(570,6+1.58)
Less Beginning Amortized Value ofSecurities
(8'300'560.50)
Less Beginning Accrued Interest
(20'711.01)
Total Accrual Basis Earnings $5,269.25
Account 61350001 Page 1
PFM Asset Management LLC
Portfolio Summary and Statistics For the Month Ending December 31, 2014
Account Summary Sector Allocation
,,,� pal C � � STMENT PORTFOLIO .�6I350.001 , � t
" •�. iJ�. �1. G. ��NLwb:.Ciu..Wl.mo.;dwu:LBw...W L.w,v,9:r.w.., .u.�i.�oW"r.w,., �...�..w4..L:w .w �...ke;.i) .,, �,,.,.: 5.. ,. e,.H: �.m.uuCJ.�,.' ,..,S..ao3�....t ,.a .t..,o '; .. .�_o_.:c ,., ... ... .3.,. ,:: �.�...�.l..0
Description
Par Value
Market Value
Percent
U.S. Treasury Bond / Note
5,420,000.00
5,454,400.02
65.33
Municipal Bond / Note
120,000.00
120,855.60
1.45
Federal Agency Bond / Note
1,285,000.00
1,285,389.57
15.40
Corporate Note
1,270,000.00
1,288,081.48
15.43
Commercial Paper
200,000.00
199 742.00
2.39
Managed Account Sub -Total
8,295,000.00
8,348,468.67
100.00%
Accrued Interest
18,482.33
Total Portfolio
8,295,000.00
8,366,951.00
Unsettled Trades
54.17%
Maturity Distribution
0.00 0.00
0 - 6 Months 6 - 12 Months 1 - 2 Years 2 - 3 Years 3 - 4 Years 4 - 5 Years Over 5 Years
US TSY Bond /
65.33%
Commercial Paper
'/o
Yield to Maturity at Cost
orate Note
3%
4gy Bond /
Note
Bond / Note
YO
0.71%
Yield to Maturity at Market 0.70%
Duration to Worst 1,79
Weighted Average Days to Maturity 681
Aff--
W=M Account 61350001 Page 2
PFM Asset Management LLe
El
Managed Account Issuer Summary
Total $8,348,468.67 100.000/0
AA-
3.60%
AA+
82.54%
For the Month Ending December 31, 2014
9%
9%
9%
9%
0%
�,1• Account 61350001 Page 3
PFM Asset Management LLC
Market Value
Issuer
of Holdings
Percent
AMERICAN HONDA FINANCE
70,323.68
0.84
BERKSHIRE HATHAWAY INC
100,329.30
1.20
COCA -COLA COMPANY
49,987.40
0.60
DEERE & COMPANY
100,141.50
1.20
FANNIE MAE
555,253.60
6.65
FEDERAL HOME LOAN BANKS
390,263.47
4.67
FREDDIE MAC
339,872.50
4.07
GENERAL ELECTRIC CO
151,021.95
1.81
IBM CORP
199,973.20
2.40
PEPSICO, INC
149,493.00
1.79
PNC FINANCIAL GROUP
199,742.00
2.39
STATE OF CALIFORNIA
120,855.60
1.45
THE WALT DISNEY CORPORATION
216,192.40
2.59
TOYOTA MOTOR CORP
100,157.50
1.20
UNITED STATES TREASURY
5,454,400.02
65.34
WELLS FARGO & COMPANY
150,461.55
1.80
Total $8,348,468.67 100.000/0
AA-
3.60%
AA+
82.54%
For the Month Ending December 31, 2014
9%
9%
9%
9%
0%
�,1• Account 61350001 Page 3
PFM Asset Management LLC
��PW
Managed Account Detail of Securities Held For the Month Ending December 31, 2014
NO TH�P-A�I�� BEACH, {INVESTMENT PORTFOL1I0 � , ,,. ,
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 ------ M
US TREASURY NOTES
295,000.00 AA+ Aaa 03/19/14 03/21/14 295,633.79 0.93 753.71 295,469.90 296,244.61
DTD 03/31/2012 1.000% 03/31/2017
-PF,N.f Account 61350001 Page 4
_-� PFM Asset Management LLC
25/2012 1.000% 07/28/2017
PF M.
Account 61350001 Page 5
PFM Asset Management LLC
28/2014 0.950% 02/22/2017
Security Type Sub -Total 1,270,000.00 1,292,503.90 0.83 5,383.54 1,285,720.02 1,288,081.48
-Zff--
=FFM Account 61350001 Page 6
WPFM Asset Management LLC
PNC BANK NA COMM PAPER 200,000.00 A -1 P -1 10/31/14 10/31/14 199,682.22 0.26 0.00 199,771.78 199,742.00
-- 0.000% 06/08/2015
Security Type Sub -Total
200,000.00
199,682.22
0.26
0.00
199,771.78
199,742.00
Managed Account Sub -Total
8,295,000.00
8,395,667.93
0.71
18,482.33
8,346,858.44
8,348,468.67
Securities Sub -Total $8,295,000.00 $8,395,667.93 0.710/a $18,482.33 $8,346,858.44 $8,348,468.67
Accrued Interest $18,482.33
Total Investments $8,366,951.00
_= . Account 61350001 Page 7
WF PFM Asset Management LLe
AMENEr-
PFW
Managed Account Fair Market Value & Analytics For the Month Ending December 31, 2014
PFiNf Account 61350001 Page 8
V- PFM asset Management LLC
:
Security Type/ Description
Next Call
Market
Market
Unreal G/L
Unreal G/L
Effective
Duration
YTM
Dated Date /Coupon /Maturity
U.S. Treasury :o
CUSIP
Par Broker Date
Price
Value
On Cost
Amort Cost
Duration
to Worst at Mkt
31/2012 0.625% 08/31/2017
PFiNf Account 61350001 Page 8
V- PFM asset Management LLC
US TREASURY NOTES
200,000.00 BNP PARI 99.99 199,973.20 (26.80)
DTD 02/12/2014 0.302% 02/05/2016
1,055.54
1.62
1.58
0.84
(26.80)
0.25
1.10
0.32
;,q• Account 61350001 Page 9
= PFM Asset Management LLC
PFMO
Managed Account Fair Market Value & Analytics For the Month Ending December 31, 2014
1. 1 c
r
r
Security Type/ Description
Next Call Market
Market
Unreal G/L
Unreal G/L
Effective
Duration
YTM
Dated Date /Coupon /Maturity
Corporate
CUSIP
Par Broker
Date Price
Value
On Cost
Amort Cost
Duration
to Worst at Mkt
200,000.00 )PMCHASE 99.87 199,742.00 59.78 (29.78) 0.44 0.44 0.29
- 0.000% 06/08/2015
Security Type Sub -Total 200,000.00
199,742.00 59.78 (29.78) 0.44 0.44 0.29
Managed Account Sub -Total 8,295,000.00 8,348,468.67 (47,199.26) 1,610.23 1.73 1.79 0.70
=PFIA'i Account 61350001 Page 10
WF PFM Asset Management LLC
A=PFMa
Managed Account Fair Market Value & Analytics For the Month Ending December 31, 2014
a., e,,, , e, �� us n c � � �� ,.a i i , t , s i t ,t t f ,^ t �. •; s , , ...... ,.
at � �, a s• tyre i4 f� � s,.,' } } G , ^, 1. , ,. 1 r 1 1; !
6
N �' Pd� . �. C�I�INVESTI�IENT�.P,ORTFOLIO - 61350001 i+�.� � r a t. f f
t ,
Q t EA
9�
Securities Sub -Total $8,295,000.00 $8,348,468.67 ($47,199.26) $1,610.23 1.73 1.79 0.70%
Accrued Interest $18,482.33
Total Investments $8,366,951.00
PFIXr Account 61350001 Page 11
PFM Asset Management LLC
P M6
Managed Account Security Transactions & Interest For the Month Ending December 31, 2014
,
i r5 i 11. i , i t i
NO�tTH {fPALM' BEACH;fINV;ESTMENT.PORTFOLIO 61350001
Transaction Type Principal Accrued Realized G/L Realized G/L Sale
Trade Settle Security Description CUSIP Par Proceeds Interest Total Cost Amort Cost Method
12/01/14 12/03/14 US TREASURY NOTES
-- 0.000% 05/06/2015
Transaction Type Sub -Total
580,000.00
580,501.06
433.90
580,934.96
359.97
470.76
Managed Account Sub -Total 11,104.97 10,095.02 21,199.99 359.97 470.76
Total Security Transactions $11,104.97 $10,095.02 $21,199.99 $359.97 $470.76
PFIsf Page 12
PFM Asset Management LLC