City of WeatherfordInvestment Report

4th Quarter, 201802/12/2019

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

Slide 2

BB1 Brad Burnett, 2/19/2018

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

Slide 3

BB1 Brad Burnett, 2/19/2018

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

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

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

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$

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

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

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

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

Where is your money

$-

$20.00

$40.00

$60.00

$80.00

$100.00

$120.00

12/1

/200

9

4/1/

2010

8/1/

2010

12/1

/201

0

4/1/

2011

8/1/

2011

12/1

/201

1

4/1/

2012

8/1/

2012

12/1

/201

2

4/1/

2013

8/1/

2013

12/1

/201

3

4/1/

2014

8/1/

2014

12/1

/201

4

4/1/

2015

8/1/

2015

12/1

/201

5

4/1/

2016

8/1/

2016

12/1

/201

6

4/1/

2017

8/1/

2017

12/1

/201

7

4/1/

2018

8/1/

2018

12/1

/201

8

Mill

ions

Portfolio Composition

TEXPOOL TEXSTAR TEXAS CLASS US TREAS NOTES BONDS CASH US GOVT AGENCIES CD

Debt Service