NORTH EAST I.S.D. ANNUAL INVESTMENT REPORT

Transcription

1 ANNUAL INVESTMENT REPORT for the year ended June 30, 2016

2 TABLE OF CONTENTS Investment Officers Certification 1 Current Investment Instruments.. 2 Portfolio Compliance Review.. 3 Review of Activities 4 Investment Controls 5 Investment Strategies 6 Market Strategy 6 Enhancements and Recommended Improvements 6 Investment Plan for Portfolio Composition.. 8 Maturity Aging/Portfolio Performance.. 9 General Fund only Portfolio Composition. 11 General Fund Maturity Aging and Cash Receipts. 12 General Fund vs Pools and Investment Pools Performance Purchases (by fund) 14 Maturities/Calls/Sales (by fund) 16 Changes in Managed Pool Balances (by fund) 19 Changes in Values (by fund) 21 Earnings/Yields (by fund) ANNUAL INVESTMENT REPORT Tab: TOC

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4 2 North East Independent School District Current Investment Instruments for the year ended June 30, 2016 Local Governmental Investment Pools Local Governmental Investment Pools (LGIPs) serve as vehicles for the pooled investment of public moneys of state or local governmental entities. LGIPs serve as short-term investments for funds that may be needed on a day-to-day basis. Commercial Paper Commercial Paper is an unsecured short-term debt instrument issued by a corporation with maturities ranging from three (3) to nine (9) months. The District's investment policy restricts investments in Commercial Paper to the highest quality credits rated superior by Moody's (P1), S&P (A1) or Fitch (F1). Municipal Bonds Municipal Bonds are issued by a city, school, county or other governmental agency. Municipal bonds may be general obligations of the issuer or secured by specified revenues. U.S. Agency Securities U.S. Agency bonds are issued by a government-sponsored agency. These securities are purchased directly by the District from investment brokerage firms registered to do business with the District. The securities are issued in the District's name, cleared through the Federal Reserve Bank system, and held in safekeeping by Wells Fargo Securities. Certificates of Deposit (CDs) Certificates of Deposit are negotiable certificates in denominations of $10,000 or more. They are issued by commercial banks against funds deposited for specified periods and earn specified rates of interest.

5 3 North East Independent School District Compliance Review for the year ended June 30, 2016 Category Compliant Comments Investments / Securities Yes Securities purchased were authorized by the Public Funds Investment Act and the District's approved local and legal investment policy. Certification from Broker/Dealers Yes Broker/Dealer Certifications on file. Training Diversity Liquidity Maturity Standard of Care Collateral pledges Required Credit Ratings Internal Management Reports Yes Yes Yes Yes Yes Yes Yes Yes CFO, Treasurer, Treasury Accountant and Executive Director of Finance and Accounting have completed the required amount of hours needed. Investment portfolio is diversified to reduce risk of loss. Maintain sufficient liquidity of portfolio to meet anticipated cash flow requirements. Maximum maturity dates in all funds are within legal limits of investment policies. In order of priority, investments are governed by the objectives of safety of principal, liquidity, and yield. Pledged collateral provided in accordance with local investment policy. Prudent measures are in place to liquidate a downgraded investment. No investments were downgraded. Quarterly Investment Reports are provided to the Board of Trustees.

6 4 ANNUAL INVESTMENT REPORT As required by NEISD s investment policies, the District s investment officers are providing this comprehensive annual report on the investment program and investment activity to the Board of Trustees. This report includes NEISD s portfolio performance and recommendations of policies, strategies and improvements necessary to enhance the investment program. Finally, the report includes an investment plan for the ensuing year. Review of Activities During fiscal year , NEISD s operating funds received approximately $960.5 million in local, state, and federal cash receipts. In this context, operating funds refer to all funds of the day-to-day operations of the District, including grant funds; it is not solely the General Fund as defined for budget and accounting purposes. The operating fund also acts as a pass-through account for accounts payable transactions of the School Nutrition Services and Capital Projects funds. Included in the $960.5 million of receipts, are approximately $123.8 million of Interest & Sinking tax payments for the Debt Service Fund. All deposits from the Bexar County Tax Assessor/Collector (BCTAC) are received by the General Fund, with the Interest & Sinking portion transferred to the Debt Service Fund when the BCTAC provides the appropriate breakout data for the month. All funds were actively managed throughout the year and invested in pools, money market funds, agency bonds, municipal bonds and highly rated commercial paper. As of June 30, 2016, the ending book value of North East s portfolio was $319,775,019. The yield earned for the District s portfolio was 0.50% with total interest earnings of $1,744,795 during the fiscal year, compared to the investment pools average earnings rate of 0.27%. A comprehensive benchmark analysis of NEISD s overall portfolio begins on page 8 of this report. The weighted average maturity of total portfolio was 97 days. The General Fund ended the year with a book value of $161,231,610. It earned $996,126, or a 0.54%. The weighted average maturity of the General Fund as of June 30, 2016 was 149 days. A benchmark analysis of the General Fund s performance begins on page 12 of this report. NEISD s Debt Service Fund ended the year with a portfolio balance of $94.8 million. Of the balance, $74.3 million was required to pay August 1, 2016 debt service payments. The fund earned $265,650 during the year.

7 5 The following table summarizes the various Capital Projects Funds as of June 30, 2016: Series Date Original Amount Remaining Amount Series 2007 August 23, 2007 $498.0 million $4.6 million Series 2012 August 21, 2012 $114.7 million $1.4 million Series /27/13 (VRDO); 7/31/13 (fixed rate bonds) $212.3 million $11.4 million Series 2014 June 5, 2013 $71.4 million $14.5 million In all Capital Projects funds, securities are purchased with maturity dates to match the expected drawdown of funds. Investment Controls Several controls are in place to ensure the safety of NEISD s investments. Highlights of those include: The Board of Trustees has adopted policies and strategies that comply with the Public Funds Investment Act and provides investment officers the flexibility needed to make day-to-day investment decisions. NEISD has cash management and investment management procedures documented for the use and training of NEISD staff. These procedures are updated as needed to account for changes in technology and processes. Contracts are in place between NEISD and its depository bank and safekeeping bank. Certifications are executed with each change in investment policies with the entities NEISD uses to invest securities, e.g., pools and brokers/dealers. NEISD keeps its investments at a third-party safekeeping bank. All trades settle on a delivery versus payment (DVP) basis which ensures that no funds leave the District s possession until a security is placed in the District s safekeeping account. Cash flow analyses are conducted to ensure funds are available when needed. Investment officers receive and file original confirmations and receipts from each investment purchase and wire transaction. The Office of Budget & Financial Analysis and the Office of Accounting & Payroll ensure that clear separation of duties is provided for investment and cash management functions. Competitive bidding is always utilized; bids from at least three brokers/dealers are solicited before a purchasing decision is made.

8 6 Quarterly investment reports are prepared by the District s investment officers and provided to the Board of Trustees. Investment Strategies Each fund has a general strategy outlined within the investment policy of the District. The primary objectives of the District s operating funds are safety, liquidity, and maturity sufficient to meet anticipated cash flow requirements. The investment officers of the District will utilize a weekly cash flow requirement report during the year for the general operating fund budget to anticipate the cash needs. The cash budget enables the investment officers of the District to develop strategies based on interest rate forecasts to earn a higher yield than if the anticipated cash flows were not forecasted. All securities are purchased with the intent to hold to maturity. The agency and debt service funds have safety, liquidity, and maturity sufficient to meet anticipated cash flow requirements as their primary objectives. The debt service funds have limited cash outflows annually and the dates and amounts are known; therefore, investments of these funds are more easily matched to the actual cash outflow requirements. Diversification can be met through the use of an authorized investment pool. All securities are purchased with the intent to hold to maturity. The investment strategy and primary objective for capital project fund portfolios is the assurance that anticipated cash flows are matched with adequate investment liquidity for the safety of the fund and the completion of the targeted projects. A diversified portfolio structured with maturities to match anticipated cash flow is used to provide a reasonable market yield. Maturities may extend beyond one year. Market Strategy The main goal of NEISD s investment program is to ensure its safety, as well as maintain a reasonable financial return under current market conditions, in accordance with policies. The investment officers observe financial market indicators, study financial trends, and utilize available educational tools in order to maintain appropriate investment strategies. Investments are purchased with the expectation of holding to maturity, thereby ensuring the preservation of capital. The local government investment pool (LGIP) rates are tracked daily by the investment officers. If rates on the 30, 60, and 90 day paper are not significantly higher than the LGIP s, then short term investments will only be made to ensure diversity in the portfolio. Enhancements and Recommended Improvements The recommendation for the fiscal year is to continue to maintain an active management philosophy for the District s funds. Interest earnings can be gained by actively managing the portfolio, even if the current market is dismal. Evaluating and modifying cash flow forecasts can improve the yield of a portfolio when current and anticipated market conditions are taken into account. In a normal yield curve environment, with low interest rates at the short end of the curve, the investment officers will have to evaluate the value of marketable securities over investment pools that may be currently earning higher rates but have non-

9 7 guaranteed yields, that over time, could fall below what could be earned in fixed income securities. Some economists predicted rises in yields likely to begin in the second quarter to mid-2015, but that did not happen. They then predicted a rate hike in December 2015, which happened at an increase of 25 basis points. This brought the fed funds rate to Since then there have been several false starts for an additional rate increase, but the economy has continually set back plans for future rates hikes. For example, the British exit, which is also known as Brexit. For the NEISD portfolio, this means investments should be purchased to mature not too far out in the future, so that those funds can start to be reinvested at the higher yields and not be under water when rates start to rise. Investment Plan for The investment plan for is a continuation of the plan which includes monitoring of market information, interest rates, forecasted and actual cash flows, and managing every fund in the portfolio on an individual, consistent, and frequent basis. Investment Officers must evaluate the market on an ongoing basis to determine where the District s funds are best utilized in the existing market. Continuing to monitor rating changes in investments as well as changes in the District s cash flow forecast will remain important in the coming year. The effective and efficient management of the portfolio can ensure a reasonable yield on the portfolio without exposing the District to unacceptable levels of risk.

10 8 ENTIRE PORTFOLIO COMPOSITION As of 06/30/15 & 06/30/16 MUNICIPAL BONDS 18.6% FHLB 3.3% Portfolio Composition - 06/30/15 Book Value $379,803,199 MONEY MARKET 0.03% COMMERCIAL PAPER 11.8% FHLMC 1.8% FNMA 5.5% POOLS 45.0% FFCB 4.5% FAMCA 1.06% FIXED RATE POOL 7.90% CDs 0.44% FHLB 6.1% Portfolio Composition - 06/30/16 Book Value $319,775,019 COMMERCIAL PAPER 16.6% MUNICIPAL BONDS 14.5% ` FHLMC 2.5% FNMA 1.9% FFCB 4.4% FAMCA 0.63% FIXED RATE POOL 3.13% CDs 0.15% POOLS 50.2% Legend: FDIC Floater LIBOR Floater guaranteed by FDIC (U.S. Government Guaranteed) BLACKROCK MMF BlackRock Money Market Fund Managed by BlackRock Investments CDs Fully insured and collateralized Certificates of Deposit COMMERCIAL PAPER Short-term promissory notes issued by a corporation, Rated at least A-1, P-1 or F-1 FAMCA Federal Agricultural Mortgage Corporation (Farmer Mac) FFCB Federal Farm Credit Bank Bonds FHLB Federal Home Loan Bank Bonds FHLB DISCOUNT Federal Home Loan Bank Discount Notes FHLMC Federal Home Loan Mortgage Corporation (Freddie Mac) Bonds FHLMC DISCOUNT Federal Home Loan Mortgage Corporation (Freddie Mac) Discount Notes FNMA Federal National Mortgage Association (Fannie Mae) Bonds FIXED RATE POOL TexasTERM Fixed Rate Series FNMA DISCOUNT Federal National Mortgage Association (Fannie Mae) Discount Notes MUNICIPAL BONDS Municipal Bonds issued by state and local governments POOLS Various Investment Pools Note: Due to rounding, portfolio composition may not equal 100.0%

11 9 MATURITY AGING/ENTIRE PORTFOLIO PERFORMANCE As of 06/30/15 & 06/30/16 Maturity Aging - 06/30/15 vs. 06/30/16 $300,000,000 $250,000,000 $200,000,000 $150,000,000 $100,000,000 $50,000,000 $ Days Days Days Days Days 1-4 Years 10 + Years Previous Period Current Period Weighted Average Maturity: 96.9 days 0.30% NEISD Total Portfolio versus Investment Pools Yield Spread 07/31/13-06/30/ % 0.20% 0.15% 0.10% 0.05% 0.00% Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 NEISD Total Portfolio versus T-Bills Yield Spread 07/31/13-06/30/ % 0.40% 0.30% 0.20% 0.10% 0.00% -0.10% Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun Day T-bill 90-Day T-bill 180-Day T-bill

12 10 NEISD Total Portfolio versus T-Notes Yield Spread 7/31/13-06/30/ % 0.20% 0.10% 0.00% -0.10% -0.20% -0.30% -0.40% -0.50% -0.60% Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 1 Year T-Note 2 Year T-Note

13 11 GENERAL FUND ONLY PORTFOLIO COMPOSITION As of 06/30/15 & 06/30/16 FHLB 7.4% Portfolio Composition - 06/30/15 Book Value $135,890,588 COMMERCIAL PAPER 7.4% POOLS 32.1% MUNICIPAL BONDS 32.9% FHLMC 5.1% FNMA 9.1% FFCB 5.2% CDs 0.9% Portfolio Composition - 06/30/16 Book Value $161,231,610 FHLB 12.1% COMMERCIAL PAPER 16.1% MUNICIPAL BONDS 24.2% POOLS 25.6% FHLMC 5.0% FNMA 3.7% FFCB 8.7% FAMCA 1.2% FIXED RATE POOL 3.1% CDs 0.3% Legend: FDIC Floater LIBOR Floater guaranteed by FDIC (U.S. Government Guaranteed) BLACKROCK MMF BlackRock Money Market Fund Managed by BlackRock Investments CDs Fully insured and collateralized Certificates of Deposit COMMERCIAL PAPER Short-term promissory notes issued by a corporation, Rated at least A-1, P-1 or F-1 FAMCA Federal Agricultural Mortgage Corporation (Farmer Mac) FFCB Federal Farm Credit Bank Bonds FHLB Federal Home Loan Bank Bonds FHLB DISCOUNT Federal Home Loan Bank Discount Notes FHLMC Federal Home Loan Mortgage Corporation (Freddie Mac) Bonds FHLMC DISCOUNT Federal Home Loan Mortgage Corporation (Freddie Mac) Discount Notes FLEX REPO Flexible Repurchase Agreements FNMA Federal National Mortgage Association (Fannie Mae) Bonds FNMA DISCOUNT Federal National Mortgage Association (Fannie Mae) Discount Notes FIXED RATE POOL TexasTERM Fixed Rate Series MUNICIPAL BONDS Municipal Bonds issued by state and local governments POOLS Various Investment Pools Note: Due to rounding, portfolio composition may not equal 100.0%

14 12 MATURITY AGING/CASH RECEIPTS GENERAL FUND ONLY Maturity Aging - 06/30/15 vs. 06/30/16 $70,000,000 $60,000,000 $50,000,000 $40,000,000 $30,000,000 $20,000,000 $10,000,000 $ Days Days Days Days Days 1-4 Years Previous Period Current Period Weighted Average Maturity: days FOR FY14, FY15, & FY16 CASH RECEIPTS Fiscal Year to Date Cash Receipts $300,000,000 $250,000,000 $200,000,000 $150,000,000 $100,000,000 $50,000,000 $0 July August September October November December January February March April May June FY13-14 FY14-15 FY15-16

15 13 GENERAL FUND VERSUS POOLS/ENTIRE INVESTMENT POOL PERFORMANCE PORTFOLIO PERFORMANCE 0.45% 0.40% 0.35% 0.30% 0.25% 0.20% 0.15% 0.10% 0.05% 0.00% Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 General Fund versus Investment Pools Yield Spread 7/31/13-06/30/16 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 ENTIRE INVESTMENT POOL PERFORMANCE Daily Rates of Investment Pools Fiscal Year % 0.60% 0.50% 0.40% 0.30% 0.20% 0.10% 0.00% TexPool TP Prime LOGIC Lone Star Texas CLASS TexSTAR TexasDaily BlackRock Federated Federated Prime Obs Fidelity

16 14 PURCHASES Investment Investment Purchase Maturity Face Principal Yield to Number Description Date Date Value Invested Maturity GENERAL OPERATING FUND JP Morgan Securities LLC 12/02/15 08/26/16 $ 3,000, $ 2,980, % Toyota Motor Credit Corp 12/18/15 09/13/16 3,000, ,979, Societe Generale 12/21/15 07/15/16 5,000, ,977, ING (US) Funding LLC 01/19/16 07/26/16 5,000, ,978, Dexia Credit Local SA NY 01/21/16 07/25/16 5,000, ,979, Bayerische Landesbk Giro 01/29/16 07/26/16 5,000, ,977, FAMCA 01/25/16 12/22/17 2,000, ,009, FFCB 10/19/15 04/19/17 2,000, ,000, FFCB 10/28/15 11/25/16 1,000, ,000, FFCB 11/03/15 11/03/16 3,000, ,000, FFCB 11/05/15 11/03/16 1,000, , FFCB 02/25/16 10/20/17 3,000, ,995, FHLB 10/29/15 10/26/17 2,000, ,998, FHLB 11/03/15 11/03/17 3,000, ,000, FHLB 11/12/15 09/28/16 1,000, , FHLB 11/12/15 11/23/16 1,000, ,000, FHLB 11/23/15 11/23/16 1,000, ,000, FHLB 11/23/15 11/17/17 1,500, ,619, FHLB 01/11/16 06/30/16 5,000, ,999, FHLB 02/11/16 02/15/17 2,000, ,000, FHLB 03/23/16 05/24/17 1,915, ,918, FHLMC 10/30/15 10/27/17 3,000, ,000, FHLMC 11/30/15 11/26/18 1,000, ,000, FHLMC 03/23/16 09/29/17 2,000, ,006, FHLMC 03/28/16 12/28/18 2,000, ,000, TexasTERM 02/17/16 08/15/16 5,000, ,000, FNMA 01/25/16 04/20/17 2,000, ,000, Austin TX-Txbl Ref Public 10/28/15 09/01/16 2,000, ,008, New York City, NY Transit 11/09/15 11/01/16 2,000, ,013, Arizona St Wtr Infrastruc 12/10/15 10/01/16 1,520, ,525, New York St Urban Dev Cor 12/18/15 03/15/16 3,905, ,904, New York, NY Txbl-Subser 01/12/16 08/01/16 2,530, ,534, Pennsylvania St Turnpike 01/28/16 12/01/18 500, , New York St Urban Dev Cor 02/02/16 03/15/17 2,000, ,005, Florida St Hurricane Cata 02/05/16 07/01/18 3,260, ,314, Arizona St Sch Facs Brd C 02/19/16 09/01/16 3,000, ,005, Flat Rock MI Cmnty Sch Di 02/23/16 05/01/17 1,540, ,542, Dallas TX 03/03/16 02/15/17 2,500, ,518, New York St Dorm Auth Rev 03/07/16 07/01/17 1,925, ,938, Corpus Christi TX 03/11/16 03/01/17 2,200, ,205, GENERAL OPERATING FUND TOTAL 100,295, ,440, SCHOOL NUTRITION FUND Toyota Motor Credit Corp 12/03/15 08/29/16 2,000, ,988, El Paso TX Txbl-Ref 03/16/16 08/15/16 1,305, ,307, Harris Cnty TX Muni Utili 05/16/16 03/01/17 465, , SCHOOL NUTRITION FUND TOTAL 3,770, ,776, DEBT SERVICE FUND Bayerische Landesbk Giro 02/04/16 07/26/16 5,000, ,977, JP Morgan Securities LLC 02/04/16 07/26/16 5,000, ,980,

17 15 PURCHASES Investment Investment Purchase Maturity Face Principal Yield to Number Description Date Date Value Invested Maturity Credit Agricole Cib NY 02/04/16 07/26/16 5,000, ,981, Abby Natl Treasury Serv 02/04/16 07/01/16 5,000, ,985, TexasTERM 02/16/16 07/15/16 5,000, ,000, Hartsville SC Wtr & Swr R 08/13/15 06/01/16 500, , Maine St HSG Auth MTGE Re 09/11/15 11/15/15 990, , Iniv of Hawaii HI Revenue 09/24/15 10/01/16 335, , DEBT SERVICE FUND TOTAL 26,825, ,761, BOND FUND Collateralized CP Co LLC 12/18/15 07/12/16 5,000, ,974, BOND FUND TOTAL 5,000, ,974, HEALTH INSURANCE FUND Laredo TX CTFS Oblig-Ser 07/31/15 02/15/16 200, , Kansas St Dev Fin Auth Re 08/20/15 04/15/17 250, , Contra Costa Cnty Pensn O 02/04/16 06/01/16 350, , Arizona St Sch Facs Brd C 03/01/16 09/01/16 255, , Indianapolis, IN Local Pu 05/09/16 01/15/17 110, , Racine Cnty WI, Build Ame 05/09/16 06/01/17 100, , HEALTH INSURANCE FUND TOTAL 1,265, ,276, DENTAL INSURANCE Manhattan Beach CA Unif S 02/04/16 09/01/16 300, , San Antonio TX Wtr Revenu 05/16/16 05/15/17 125, , Richardson TX Txbl-Ser B 05/25/16 02/15/17 140, , DENTAL INSURANCE FUND TOTAL 565, , WORKERS' COMP INSURANCE FUND Comal TX Indpt Sch Dist U 08/12/15 02/01/16 450, , Erie Cnty PA Txbl-Ref-Ser 02/05/16 09/01/16 350, , Paulsboro NJ Txbl 06/30/16 03/15/17 60, , WORKERS' COMP INSURANCE FUND TOTAL 860, , TOTALS: $ 138,580, $ 138,667,780.54

18 MATURITIES/CALLS/SALES 16 Investment Investment Purchase Maturity Face Principal Yield to Number Description Date Date Called Value Invested Maturity GENERAL OPERATING Citizens St Bank 12/30/13 12/30/15 Open $ 245, $ 245, % Capital One Bank 11/19/14 05/19/16 Open 240, , GE Capital Bank 11/21/14 05/23/16 Open 240, , Bank of China/Hong Kong 11/05/14 07/24/15 Open 5,000, ,971, ING (US) Funding LLC 01/29/15 07/01/15 Open 5,000, ,994, FFCB 12/10/13 12/10/15 Open 3,000, ,998, FHLB 04/18/13 11/20/15 Open 2,000, ,010, FHLB 01/13/15 01/12/16 Open 2,000, ,999, FHLB 01/11/16 06/30/16 Open 5,000, ,999, FHLMC 06/03/13 09/04/15 Open 1,000, ,002, FHLMC 03/19/14 09/19/16 Open 2,000, ,999, FHLMC 02/25/15 08/25/17 08/25/15 2,000, ,000, FHLMC 03/03/15 11/25/16 11/25/15 1,980, ,979, FNMA 09/26/13 12/21/15 Open 2,000, ,994, FNMA 10/17/13 10/26/15 Open 2,000, ,049, FNMA 04/02/14 03/30/16 Open 2,000, ,003, FNMA 01/14/15 03/10/16 Open 2,216, ,417, Flower Mound TX 03/07/13 09/01/15 Open 200, , Mckinney - Ref 04/09/13 08/15/15 Open 490, , Port of Seattle WA 05/24/13 12/01/15 Open 500, , Massachusetts St Wtr Poll 10/15/13 02/01/16 Open 1,000, , Virginia St Hsg Auth Dev 10/15/13 01/01/16 Open 2,000, ,006, New York St Dorm Auth Rev 11/05/13 12/01/15 Open 1,000, ,051, Bucks Cnty PA 11/15/13 12/15/15 Open 790, , Montgomery Cnty MD Limite 12/09/13 11/01/15 Open 1,000, ,002, Assn Cnty Comm of Georgia 01/31/14 09/01/15 Open 1,475, ,535, West Virginia St HSG Dev 01/31/14 11/01/15 Open 500, , Colorado St Hsg / Fin Aut 05/01/14 05/15/16 Open 5,310, ,417, Harris Cnty TX Ref-Senior 11/18/14 08/15/15 Open 860, , Carlisle PA Area Sch Dist 12/03/14 03/01/16 Open 1,725, ,781, Regl Transprtn Auth IL Tx 12/18/14 04/01/16 Open 1,000, ,000, Alamo TX Cmnty Clg Dist 01/23/15 08/15/15 Open 300, , Broward Cnty FL Sch Brd 01/23/15 07/01/15 07/01/15 1,100, ,123, South Carolina St Jobs-Ec 01/28/15 04/01/16 Open 300, , Menasha WI Wtrwks Sys & S 02/09/15 05/01/16 Open 565, , Wisconsin St Gen Fund Ann 02/09/15 05/01/16 Open 350, , Wisconsin St Gen Fund Ann 02/18/15 05/01/16 Open 2,000, ,014, Mississippi St Txbl-Ser 6 02/18/15 10/01/15 Open 1,000, ,000, Garland TX Elec Utility S 02/19/15 03/01/16 Open 1,250, ,284, Houston TX Indep Sch Dist 03/04/15 09/15/15 Open 1,325, ,323, Regl Transprtn Auth IL Tx 03/13/15 04/01/16 Open 2,000, ,000, Texas St Tech Univ Revenu 04/09/15 02/15/16 Open 1,015, ,015, New York St Urban Dev Cor 12/18/15 03/15/16 Open 3,905, ,904, Royse City Indep Sch Dist 04/25/14 08/15/15 Open 1,437, ,432, GENERAL OPERATING TOTAL 72,318, ,021, SCHOOL NUTRITION FUND FFCB 05/16/14 05/16/16 Open 1,500, ,500, FNMA 05/13/14 03/30/16 Open 1,000, ,003, Arizona St WTR Infrastruc 10/22/13 10/01/15 Open 490, , Scott Cnty TN Ref-Rural S 06/30/14 06/01/16 Open 265, , Gwinnett Cnty GA Sch Dist 10/21/14 02/01/16 Open 385, , Regl Transprtn Auth IL Tx 03/24/15 04/01/16 Open 1,000, ,000, South Carolina St Public 04/23/15 01/01/16 Open 250, , SCHOOL NUTRITION FUND TOTAL 4,890, ,935, DEBT SERVICE FUND Abbey Nat'l N America LLC 03/24/15 07/30/15 Open 5,000, ,994, Bank of Tokyo-Mit UFJ NY 03/24/15 07/30/15 Open 10,000, ,991, TexasTERM 03/27/15 07/28/15 Open 30,000, ,000, Leander ISD - CABS 12/16/10 08/15/15 Open 1,000, , Danville IN Sch Corp Bldg 04/23/15 07/15/15 Open 875, ,

19 MATURITIES/CALLS/SALES 17 Investment Investment Purchase Maturity Face Principal Yield to Number Description Date Date Called Value Invested Maturity Phoenix AZ Civic Excise T 04/09/15 07/01/15 Open 500, , San Antonio TX Arpt Sys R 04/14/15 07/01/15 Open 500, , Baltimore MD Revenue Ref- 04/16/15 07/01/15 Open 200, , Indiana St Fin Auth Reven 04/16/15 07/01/15 Open 350, , Mississippi St Dev Bank S 05/15/15 07/01/15 Open 1,355, ,363, Hartsville SC Wtr & Swr R 08/13/15 06/01/16 Open 500, , Maine St HSG Auth MTGE Re 09/11/15 11/15/15 Open 990, , DEBT SERVICE FUND TOTAL 51,270, ,191, BOND FUND Abbey Natl N America LLC 11/04/14 07/31/15 Open 5,000, FAMCA 08/14/13 09/15/15 Open 4,000, FFCB 08/14/13 10/26/15 Open 1,000, FFCB 08/14/13 07/13/15 Open 5,000, FFCB 08/23/13 05/09/16 Open 1,000, FHLB 08/14/13 12/11/15 Open 1,510, FHLB 08/14/13 12/11/15 Open 1,000, FNMA 08/14/13 10/27/15 Open 1,000, FNMA 08/14/13 12/03/15 Open 1,000, FNMA 08/14/13 10/26/15 Open 1,500, FNMA 02/24/14 12/21/15 Open 2,000, FNMA 06/11/14 12/21/15 Open 2,000, Univ of Houston TX Txbl-R 09/17/13 02/15/16 Open 2,890, Dallas TX Wtrwks & Swr Sy 03/11/14 10/01/15 Open 805, Austin TX Elec Utility Sy 04/09/14 11/15/15 Open 565, Univ oftexas TX Build Ame 06/17/14 08/15/15 Open 300, BOND FUND TOTAL 30,570, ,940, VRDO BOND FUND Apple Bk Savings 11/19/14 12/31/15 Open 240, , Pacific Western 11/19/14 11/19/15 Open 240, , Abbey Natl N America LLC 11/04/14 07/31/15 Open 5,000, ,984, Credit Agricole CIB NY 11/06/14 08/03/15 Open 5,000, ,983, Collateralized CP Co LLC 01/30/15 07/27/15 Open 5,000, ,992, Glendale AZ Wtr & Swr Rev 01/09/15 07/01/15 Open 815, , Victoria Cnty TX Jnr Clg 01/14/15 08/15/15 Open 595, , Northbrook IL Txbl-Ref-Se 02/02/15 12/01/15 Open 220, , Arlington Cnty VA Txbl-Re 04/01/15 08/01/15 Open 3,750, ,752, Greensburg Salem PA Sch D 05/18/15 09/15/15 Open 1,000, ,005, VRDO BOND FUND TOTAL 21,860, ,857, HEALTH INSURANCE FUND FFCB 05/16/14 05/16/16 Open 1,500, ,500, Crow Wing Cnty MN Ref-Ser 01/09/15 02/01/16 Open 375, , New York St Thruway Auth 01/26/15 07/01/15 Open 400, , Grapevine TX Ref-Ser A 02/26/15 08/15/15 Open 375, , Regl Transprtn Auth IL Tx 03/24/15 04/01/16 Open 1,000, ,000, Honolulu City & Cnty HI 04/02/15 10/01/15 Open 640, , Grossmomt-Cuyamaca CA Cmn 06/02/15 08/01/15 Open 375, , Laredo TX CTFS Oblig-Ser 07/31/15 02/15/16 Open 200, , Contra Costa Cnty Pensn O 02/04/16 06/01/16 Open 350, , HEALTH INSURANCE FUND TOTAL 5,215, ,253, DENTAL INSURANCE Texas St Womans Univ Fing 05/06/14 07/01/15 Open 430, , Nebraska St Inv Fin Auth 06/09/14 09/01/15 Open 20, , Nebraska St Inv Fin Auth 06/09/14 09/01/15 Open 30, , Nebraska St Inv Fin Auth 06/09/14 09/01/15 Open 20, , South Calorina St Econ De 03/30/15 10/01/15 Open 275, , DENTAL INSURANCE TOTAL 775, ,

20 MATURITIES/CALLS/SALES 18 Investment Investment Purchase Maturity Face Principal Yield to Number Description Date Date Called Value Invested Maturity WORKERS' COMP INSURANCE FUND Poth TX Consol ISD SCH Bl 09/10/13 08/15/15 Open 150, , Nebraska St Inv Fin Auth 06/09/14 09/01/15 Open 100, , Nebraska St Inv Fin Auth 06/09/14 09/01/15 Open 90, , Nebraska St Inv Fin Auth 06/09/14 09/01/15 Open 110, , Wimberley TX Indep Sch Di 10/21/14 08/15/15 Open 65, , Comal TX Indpt Sch Dist U 08/12/15 02/01/16 Open 450, , WORKERS' COMP INSURANCE FUND TOTAL 965, , TOTALS: $ 187,863, $ 188,965,863.34

21 19 CHANGES IN MANAGED POOL BALANCES Investment Beginning Ending Change in Description Book Balance Book Balance Book Balance GENERAL OPERATING TexPool $ 11,381, $ 11,102, $ (279,160.81) TexPool Prime 5,243, ,712, ,468, LOGIC 9,848, ,439, , Texas CLASS - MBIA - 7,406, ,406, Lone Star 17,119, ,580, (11,538,778.09) GENERAL OPERATING TOTAL 43,593, ,241, (2,352,083.77) SCHOOL NUTRITION SERVICES TexPool 289, , (199,728.35) TexPool Prime 863, ,367, , LOGIC 1,642, ,256, ,614, SCHOOL NUTRITION SERVICES TOTAL 2,795, ,714, ,918, STUDENT ACTIVITY FUND TexPool 35, , , STUDENT ACTIVITY FUND TOTAL 35, , , DEBT SERVICE TexPool 462, , (4,726.87) TexPool Prime 24,199, ,907, ,708, LOGIC 6,622, ,132, (1,489,403.11) DEBT SERVICE TOTAL 31,283, ,497, ,213, QSCB - DEBT SERVICE TexPool Prime 5,381, ,169, ,787, QSCB - DEBT SERVICE TOTAL 5,381, ,169, ,787, CAPITAL PROJECTS 2012 BOND SALE Fidelity 104, (104,685.89) TexPool 29, , (4,955.59) TexPool Prime 2,644, , (2,156,428.35) LOGIC 1,146, , (304,026.28) CAPITAL PROJECTS 2012 BOND SALE TOTAL 3,924, ,354, (2,570,096.11) BOND FUND TexPool (33.09) TexPool Prime 25,616, ,397, (24,219,393.09) LOGIC 15,102, ,360, (13,741,671.36) Texas CLASS - MBIA - 3,653, ,653, BOND FUND TOTAL 40,719, ,411, (34,307,996.18) VRDO BONDS TexPool Prime 8,504, ,428, (5,076,014.98) LOGIC 17,213, ,754, (14,458,806.80) Texas CLASS - MBIA - 8,365, ,365, VRDO BONDS TOTAL 25,717, ,548, (11,169,659.16)

22 20 CHANGES IN MANAGED POOL BALANCES Investment Beginning Ending Change in Description Book Balance Book Balance Book Balance BOND FUND TexPool Prime - 2,881, ,881, BOND FUND TOTAL - 2,881, ,881, CAPITAL PROJECTS $498 MILLION TexPool 55, , TexPool Prime 8,357, ,524, (3,832,553.83) CAPITAL PROJECTS $498 MILLION TOTAL 8,412, ,580, (3,832,435.54) CAPITAL PROJECTS $498 MILLION TexPool Prime 1, , CAPITAL PROJECTS $498 MILLION TOTAL 1, , HEALTH INSURANCE TexPool 76, , TexPool Prime 298, ,629, ,330, LOGIC 5,881, ,245, (3,636,218.65) HEALTH INSURANCE TOTAL 6,256, ,950, (2,305,568.11) DENTAL TexPool Prime 133, , (59,422.87) LOGIC 690, ,182, , DENTAL TOTAL 824, ,257, , WORKERS' COMPENSATION TexPool , , TexPool Prime 978, , (817,149.98) LOGIC 948, ,650, , WORKERS' COMPENSATION TOTAL 1,927, ,816, (111,208.33) SERIES B BOND FUND TexPool Prime - 1,000, ,000, SERIES B BOND FUND TOTAL - 1,000, ,000, TOTAL: $ 170,873, $ 160,468, $ (10,405,670.50)

23 21 CHANGES IN VALUES Investment Investment Purchase Maturity Face Beginning Ending Change in Beginning Ending Change in Accrued Number Description Date Date Value Market Value Market Value Market Value Book Value Book Value Book Value Interest GENERAL OPERATING Flower Mound TX 03/07/13 09/01/15 $ 200, $ 201, $ - $ (201,484.00) $ 201, $ - $ (201,517.05) $ Mckinney - Ref 04/09/13 08/15/15 490, , (490,984.90) 490, (490,946.50) FHLB 04/18/13 11/20/15 2,000, ,002, (2,002,440.00) 2,001, (2,001,530.19) Port of Seattle WA 05/24/13 12/01/15 500, , (509,615.00) 509, (509,481.26) FHLMC 06/03/13 09/04/15 1,000, ,000, (1,000,710.00) 1,000, (1,000,174.09) FNMA 09/26/13 12/21/15 2,000, ,001, (2,001,420.00) 1,998, (1,998,825.84) Massachusetts St Wtr Poll 10/15/13 02/01/16 1,000, , (999,090.00) 999, (999,130.51) Virginia St Hsg Auth Dev 10/15/13 01/01/16 2,000, ,005, (2,005,140.00) 2,001, (2,001,478.89) FNMA 10/17/13 10/26/15 2,000, ,009, (2,009,460.00) 2,007, (2,007,786.87) New York St Dorm Auth Rev 11/05/13 12/01/15 1,000, ,011, (1,011,090.00) 1,010, (1,010,437.67) Goldman Sachs Bank USA 11/13/13 11/14/16 240, , , , , Bucks Cnty PA 11/15/13 12/15/15 790, , (790,442.40) 790, (790,435.32) Montgomery Cnty MD Limite 12/09/13 11/01/15 1,000, , (999,840.00) 1,000, (1,000,429.33) FFCB 12/10/13 12/10/15 3,000, ,000, (3,000,030.00) 3,000, (3,000,000.00) New York St Txbl-Ser F 12/20/13 12/15/16 2,830, ,871, ,842, (29,601.80) 2,864, ,840, (23,740.40) 2, Citizens St Bank 12/30/13 12/30/15 245, , (245,000.00) 245, (245,000.00) Assn Cnty Comm of Georgia 01/31/14 09/01/15 1,475, ,480, (1,480,973.75) 1,481, (1,481,339.39) West Virginia St HSG Dev 01/31/14 11/01/15 500, , (500,285.00) 500, (500,645.71) FNMA 02/06/14 08/26/16 2,000, ,004, ,000, (4,360.00) 2,002, ,000, (2,480.71) 4, FHLMC 03/19/14 09/19/16 2,000, ,002, (2,002,120.00) 2,000, (2,000,000.00) 2, New York St Mortgage Agen 03/27/14 10/01/16 980, , , , , (2,033.28) 2, FNMA 04/02/14 03/30/16 2,000, ,002, (2,002,780.00) 2,001, (2,001,338.13) Royse City Indep Sch Dist 04/25/14 08/15/15 1,437, ,252, (1,252,059.46) 1,437, (1,437,025.30) Colorado St Hsg / Fin Aut 05/01/14 05/15/16 5,310, ,359, (5,359,064.40) 5,355, (5,355,954.07) FNMA 10/08/14 01/30/17 2,000, ,020, ,009, (11,700.00) 2,016, ,006, (10,491.06) 10, Florida St Hurricane Cata 10/14/14 07/01/16 805, , , (3,888.15) 810, , (5,377.97) 5, Florida St Hurricane Cata 10/21/14 07/01/16 1,635, ,642, ,635, (7,897.05) 1,648, ,635, (13,788.68) 10, Bank of China/Hong Kong 11/05/14 07/24/15 5,000, ,999, (4,999,810.85) 4,997, (4,997,476.39) Harris Cnty TX Ref-Senior 11/18/14 08/15/15 860, , (860,498.80) 860, (860,496.03) Discover Bank 11/19/14 11/21/16 240, , , , , Capital One Bank 11/19/14 05/19/16 240, , (240,000.00) 240, (240,000.00) GE Capital Bank 11/21/14 05/23/16 240, , (240,000.00) 240, (240,000.00) Carlisle PA Area Sch Dist 12/03/14 03/01/16 1,725, ,754, (1,754,635.50) 1,755, (1,755,375.40) FHLB 12/12/14 12/12/16 2,000, ,002, ,001, (400.00) 1,998, ,999, , New York St Urban Corp Re 12/18/14 03/15/17 1,000, ,000, ,002, , ,002, ,000, (1,280.30) 3, Regl Transprtn Auth IL Tx 12/18/14 04/01/16 1,000, ,000, (1,000,200.00) 1,000, (1,000,367.39) FHLB 01/09/15 09/09/16 2,000, ,076, ,012, (63,760.00) 2,075, ,012, (63,816.00) 23, Stratford CT Txbl 01/13/15 08/15/16 500, , , (5,935.00) 507, , (6,787.76) 3, FHLB 01/13/15 01/12/16 2,000, ,000, (2,000,160.00) 1,999, (1,999,787.19) FNMA 01/14/15 03/10/16 2,216, ,336, (2,336,993.60) 2,336, (2,336,450.73) Harris Cnty Flood Control 01/15/15 10/01/16 2,000, ,999, ,000, ,000, ,000, (724.67) 3, Florida St Hurricane Cata 01/21/15 07/01/16 1,530, ,537, ,530, (7,389.90) 1,541, ,530, (11,227.85) 9, Alamo TX Cmnty Clg Dist 01/23/15 08/15/15 300, , (301,728.00) 301, (301,738.87) Broward Cnty FL Sch Brd 01/23/15 07/01/15 1,100, ,100, (1,100,000.00) 1,123, (1,123,144.00) West Univ Place TX 01/26/15 02/01/17 1,000, , ,002, , ,003, ,001, (1,981.25) 3, South Carolina St Jobs-Ec 01/28/15 04/01/16 300, , (303,051.00) 303, (303,199.79) ING (US) Funding LLC 01/29/15 07/01/15 5,000, ,999, (4,999,975.25) 4,994, (4,994,475.00) FHLB 02/09/15 08/09/16 2,000, ,000, ,000, (580.00) 1,998, ,999, , , Menasha WI Wtrwks Sys & S 02/09/15 05/01/16 565, , (571,525.75) 572, (572,029.26) Wisconsin St Gen Fund Ann 02/09/15 05/01/16 350, , (351,582.00) 351, (351,819.68) FFCB 02/17/15 08/17/16 2,000, ,004, ,000, (4,320.00) 2,000, ,000, ,094.44

24 22 CHANGES IN VALUES Investment Investment Purchase Maturity Face Beginning Ending Change in Beginning Ending Change in Accrued Number Description Date Date Value Market Value Market Value Market Value Book Value Book Value Book Value Interest Wisconsin St Gen Fund Ann 02/18/15 05/01/16 2,000, ,009, (2,009,040.00) 2,009, (2,009,893.76) Mississippi St Txbl-Ser 6 02/18/15 10/01/15 1,000, , (999,710.00) 1,000, (1,000,072.65) Garland TX Elec Utility S 02/19/15 03/01/16 1,250, ,269, (1,269,987.50) 1,271, (1,271,935.48) FHLMC 02/25/15 08/25/17 2,000, ,002, (2,002,520.00) 2,000, (2,000,000.00) FHLMC 03/03/15 11/25/16 1,980, ,983, (1,983,484.80) 1,979, (1,979,597.35) Houston TX Indep Sch Dist 03/04/15 09/15/15 1,325, ,323, (1,323,622.00) 1,324, (1,324,450.71) Anderson IN Sch Bldg Corp 03/10/15 07/05/16 800, , , (1,688.00) 801, , (1,588.55) 3, Regl Transprtn Auth IL Tx 03/13/15 04/01/16 2,000, ,000, (2,000,400.00) 2,000, (2,000,000.00) FFCB 03/16/15 08/16/16 2,000, ,002, ,000, (1,920.00) 2,000, ,000, , Texas St Tech Univ Revenu 04/09/15 02/15/16 1,015, ,014, (1,014,512.80) 1,015, (1,015,000.00) Lake Cnty IL Swr Sys Reve 06/01/15 12/01/16 830, , , (23,472.40) 868, , (27,196.33) 2, FFCB 10/19/15 04/19/17 2,000, ,000, ,000, ,000, ,000, , FFCB 10/28/15 11/25/16 1,000, , , ,000, ,000, Austin TX-Txbl Ref Public 10/28/15 09/01/16 2,000, ,001, ,001, ,001, ,001, , FHLB 10/29/15 10/26/17 2,000, ,000, ,000, ,998, ,998, , FHLMC 10/30/15 10/27/17 3,000, ,000, ,000, ,000, ,000, , FHLB 11/03/15 11/03/17 3,000, ,000, ,000, ,000, ,000, , FFCB 11/03/15 11/03/16 3,000, ,999, ,999, ,000, ,000, , FFCB 11/05/15 11/03/16 1,000, , , , , New York City, NY Transit 11/09/15 11/01/16 2,000, ,003, ,003, ,004, ,004, , FHLB 11/12/15 09/28/16 1,000, ,000, ,000, , , , FHLB 11/12/15 11/23/16 1,000, ,000, ,000, ,000, ,000, FHLB 11/23/15 11/23/16 1,000, ,000, ,000, ,000, ,000, FHLB 11/23/15 11/17/17 1,500, ,589, ,589, ,582, ,582, , FHLMC 11/30/15 11/26/18 1,000, ,000, ,000, ,000, ,000, , JP Morgan Securities LLC 12/02/15 08/26/16 3,000, ,999, ,999, ,996, ,996, Arizona St Wtr Infrastruc 12/10/15 10/01/16 1,520, ,521, ,521, ,521, ,521, , Toyota Motor Credit Corp 12/18/15 09/13/16 3,000, ,998, ,998, ,994, ,994, Societe Generale 12/21/15 07/15/16 5,000, ,999, ,999, ,998, ,998, New York, NY Txbl-Subser 01/12/16 08/01/16 2,530, ,531, ,531, ,530, ,530, , ING (US) Funding LLC 01/19/16 07/26/16 5,000, ,999, ,999, ,997, ,997, Dexia Credit Local SA NY 01/21/16 07/25/16 5,000, ,999, ,999, ,997, ,997, FAMCA 01/25/16 12/22/17 2,000, ,015, ,015, ,007, ,007, FNMA 01/25/16 04/20/17 2,000, ,004, ,004, ,000, ,000, , Pennsylvania St Turnpike 01/28/16 12/01/18 500, , , , , Bayerische Landesbk Giro 01/29/16 07/26/16 5,000, ,999, ,999, ,996, ,996, New York St Urban Dev Cor 02/02/16 03/15/17 2,000, ,007, ,007, ,003, ,003, , Florida St Hurricane Cata 02/05/16 07/01/18 3,260, ,313, ,313, ,305, ,305, , FHLB 02/11/16 02/15/17 2,000, ,002, ,002, ,000, ,000, , TexasTERM 02/17/16 08/15/16 5,000, ,000, ,000, ,000, ,000, , Arizona St Sch Facs Brd C 02/19/16 09/01/16 3,000, ,000, ,000, ,001, ,001, , Flat Rock MI Cmnty Sch Di 02/23/16 05/01/17 1,540, ,545, ,545, ,541, ,541, , FFCB 02/25/16 10/20/17 3,000, ,994, ,994, ,997, ,997, , Dallas TX 03/03/16 02/15/17 2,500, ,517, ,517, ,511, ,511, , New York St Dorm Auth Rev 03/07/16 07/01/17 1,925, ,940, ,940, ,935, ,935, , Corpus Christi TX 03/11/16 03/01/17 2,200, ,207, ,207, ,203, ,203, , FHLB 03/23/16 05/24/17 1,915, ,920, ,920, ,917, ,917, , FHLMC 03/23/16 09/29/17 2,000, ,009, ,009, ,005, ,005, , FHLMC 03/28/16 12/28/18 2,000, ,001, ,001, ,000, ,000, , GENERAL OPERATING FUND TOTAL 183,193, ,133, ,079, ,946, ,314, ,990, ,675, ,578.93