CITY OF TYLER CITY COUNCIL COMMUNICATION Agenda Number: C-A-3 Date: August 25, 2021 Subject: Request that the City Council consider reviewing and accepting the Investment Report for the quarter ending June 30, 2021. Page: Page 1 of Item Reference: The City of Tyler Investment Portfolio Summary includes all of the core information required under the Public Funds Investment Act plus some additional supporting information that has been prepared to assist the City Council in the quarterly review process. Please reference the attachment labeled as Investments held on June 30. RECOMMENDATION: It is recommended that the City Council consider reviewing and accepting the Investment Report for the quarter ending June 30, 2021. ATTACHMENTS: Investment Portfolio 2021 06 30 Federal Reserve Bank of Dallas 2nd Quarter Investments_held_on_June_30 Drafted/Recommended By: Department Leader Keidric Trimble, CFO Edited/Submitted By: City Manager 1 INVESTMENT PORTFOLIO SUMMARY For the Quarter Ended June 30, 2021 Prepared by Valley View Consulting, L.L.C. The investment portfolio of the City of Tyler is in compliance with the Public Funds Investment Act and the Investment Policy. Chief Financial Officer Accounting Manager Treasury Manager Disclaimer: These reports were compiled using information provided by the City. No procedures were performed to test the accuracy or completeness of this information. The market values included in these reports were obtained by Valley View Consulting, L.L.C. from sources believed to be accurate and represent proprietary valuation. Due to market fluctuations these levels are not necessarily reflective of current liquidation values. Yield calculations are not determined using standard performance formulas, are not representative of total return yields and do not account for investment advisor fees. 2 Summary Quarter End Results by Investment Category City Funds March 31, 2021 June 30, 2021 Asset Type Ave. Yield Book Value Market Value Ave. Yield Book Value Market Value Pools/Bank 0.50% $ 39,103,022 $ 39,103,022 0.49% $ 47,196,005 $ 47,196,005 Securities/CDs 0.95% 79,243,762 79,243,762 0.67% 79,339,238 79,339,238 Totals 0.80% $ 118,346,784 $ 118,346,784 0.60% $ 126,535,244 $ 126,535,244 Current Quarter Average Yield (1) Fiscal Year-to-Date Average Yield (2) Total Portfolio 0.60% Total Portfolio 0.84% Interest Earnings Bank Fees Offset Quarterly Interest Income $ 275,548 Approximate Quarterly Bank Fees Offset $ 9,737 Year-to-date Interest Income $ 843,555 Approximate Year-to-date Bank Fees Offset $ 30,307 Hotel Bond March 31, 2021 June 30, 2021 Asset Type Ave. Yield Book Value Market Value Ave. Yield Book Value Market Value Pools/Bank 0.00% $ – $ – 0.06% $ 10,752,807 $ 10,752,807 Totals 0.00% $ – $ – 0.06% $ 10,752,807 $ 10,752,807 Current Quarter Average Yield (1) Fiscal Year-to-Date Average Yield (2) Total Portfolio 0.06% Total Portfolio 0.06% Interest Earnings Quarterly Interest Income $ 370 Approximate Year-to-date Interest Income $ 370 Approximate 1 City of Tyler Valley View Consulting, L.L.C. 3 Summary Quarter End Results by Investment Category Revenue Bond March 31, 2021 June 30, 2021 Asset Type Ave. Yield Book Value Market Value Ave. Yield Book Value Market Value Pools/Bank 0.23% $ 9,624,208 $ 9,624,208 0.05% $ 34,161,451 $ 34,161,451 Securities/CDs 0.00% – – 0.00% – – Totals 0.23% $ 9,624,208 $ 9,624,208 0.05% $ 34,161,451 $ 34,161,451 Current Quarter Average Yield (1) Fiscal Year-to-Date Average Yield (2) Total Portfolio 0.05% Total Portfolio 0.20% Interest Earnings Quarterly Interest Income $ 4,978 Approximate Year-to-date Interest Income $ 27,513 Approximate Total Portfolio Current Quarter Average Yield (1) Fiscal Year-to-Date Average Yield (2) Total Portfolio 0.46% Total Portfolio 0.75% Rolling Three Month Treasury 0.02% Rolling Three Month Treasury 0.06% Rolling Six Month Treasury 0.06% Rolling Six Month Treasury 0.09% TexPool 0.01% TexPool 0.04% (1) Current Quarter Weighted Average Yield - calculated using quarter end report yields and adjusted book values; does not reflect a total return analysis, realized or unrealized gains/losses, or account for investment advisory fees. The yield for the reporting month is used for bank, pool, and money market balances. (2) Fiscal Year-to-Date Weighted Average Yields - calculated using quarter end report yields and adjusted book values and does not reflect a total return analysis or account for advisory fees. 2 City of Tyler Valley View Consulting, L.L.C. 4 Economic Overview 6/30/2021 The Federal Open Market Committee (FOMC) maintained the Fed Funds target range at 0.00% to 0.25% (Effective Fed Funds are trading <0.10%), and projects that reduced rates could remain into 2023. First Quarter GDP posted +6.4% (Final). In June, Payrolls added 850k and Unemployment (U2) rose slightly to 5.9%. Crude oil traded up to +/-$75 per barrel. The Stock Markets reached new highs. Housing, Industrial Production, Durable Goods, Consumer Spending, and other indicators moderated and showed signs of strain. The Biden administration and Congress continue to negotiate an infrastructure package. Inflation surged over the FOMC 2+% target, but is considered to be temporary. The Yield Curve "humped" slightly in the two-to-three year maturity sector while the long end fell. Treasury Yield Curves S&P 500 2.00 4,750 1.80 4,500 4,250 1.60 4,000 3,750 1.40 3,500 3,250 1.20 3,000 2,750 1.00 2,500 0.80 2,250 2,000 0.60 1,750 1,500 0.40 1,250 1,000 0.20 750 500 0.00 250 0 June 30, 2020 March 31, 2021 June 30, 2021 US Treasury Historical Yields - Since 2006 US Treasury Historical Yields - Since Nov 2015 6.00 3.50 5.50 5.00 3.00 4.50 2.50 4.00 3.50 2.00 3.00 2.50 1.50 2.00 1.00 1.50 1.00 0.50 0.50 0.00 0.00 Six Month T-Bill Two Year T-Note Ten Year T-Note Six Month T-Bill Two Year T-Note Ten Year T-Note 3 Valley View Consulting, L.L.C. 5 Investment Holdings June 30, 2021 Coupon/ Maturity Settlement Book Market Market Life Description Ratings Discount Date Date Par Value Value Price Value (days) Yield City Funds Cash - Pooled (3) 0.47% 07/01/21 06/30/21 $ 5,451,763 $ 5,451,763 1.00 $ 5,451,763 1 0.47% NOW 0.50% 07/01/21 06/30/21 40,219,901 40,219,901 1.00 40,219,901 1 0.50% NOW #2 0.21% 07/01/21 06/30/21 1,308,294 1,308,294 1.00 1,308,294 1 0.21% TexPool AAAm 0.01% 07/01/21 06/30/21 216,047 216,047 1.00 216,047 1 0.01% Bank OZK CDARS 2.10% 07/25/21 07/25/19 3,123,232 3,123,232 100.00 3,123,232 25 2.10% East West Bank CD 2.04% 08/05/21 08/05/19 3,113,770 3,113,770 100.00 3,113,770 36 2.06% East West Bank CD 1.69% 11/18/21 11/18/19 3,078,471 3,078,471 100.00 3,078,471 141 1.69% Third Coast Bank CD 1.65% 01/10/22 01/10/20 3,061,392 3,061,392 100.00 3,061,392 194 1.66% Prosperity Bank CD 0.20% 02/24/22 02/24/21 3,001,973 3,001,973 100.00 3,001,973 239 0.20% Prosperity Bank CD 1.45% 03/18/22 03/18/20 3,210,439 3,210,439 100.00 3,210,439 261 1.46% Allegiance Bank CD 0.75% 05/18/22 05/18/20 4,231,589 4,231,589 100.00 4,231,589 322 0.76% Bank OZK CD 0.65% 06/03/22 06/03/20 3,019,588 3,019,588 100.00 3,019,588 338 0.65% Prosperity Bank CD 0.75% 06/30/22 06/26/20 3,197,908 3,197,908 100.00 3,197,908 365 0.75% Prosperity Bank CD 0.75% 07/11/22 07/09/20 3,016,893 3,016,893 100.00 3,016,893 376 0.75% Bank OZK CD 0.40% 08/24/22 08/25/20 4,013,379 4,013,379 100.00 4,013,379 420 0.40% Prosperity Bank CD 0.50% 09/22/22 09/22/20 6,022,453 6,022,453 100.00 6,022,453 449 0.50% Prosperity Bank CD 0.40% 10/20/22 10/20/20 3,196,891 3,196,891 100.00 3,196,891 477 0.40% Prosperity Bank CD 0.40% 11/28/22 11/27/20 3,195,887 3,195,887 100.00 3,195,887 516 0.40% Bank OZK CD 0.24% 12/15/22 03/15/21 3,000,614 3,000,614 100.00 3,000,614 533 0.24% Prosperity Bank CD 0.30% 01/25/23 01/25/21 6,007,450 6,007,450 100.00 6,007,450 574 0.30% Prosperity Bank CD 0.25% 02/24/23 02/24/21 6,329,382 6,329,382 100.00 6,329,382 604 0.25% Bank OZK CD 0.26% 03/15/23 03/15/21 6,116,735 6,116,735 100.00 6,116,735 623 0.26% Prosperity Bank CD 0.21% 04/12/23 04/12/21 3,401,193 3,401,193 100.00 3,401,193 651 0.21% Citizen's 1st Bank CD 0.25% 05/07/23 05/07/21 3,000,000 3,000,000 100.00 3,000,000 676 0.25% Citizen's 1st Bank CD 0.25% 06/03/23 06/03/21 3,000,000 3,000,000 100.00 3,000,000 703 0.25% City Funds - Sub Total $ 126,535,244 $ 126,535,244 $ 126,535,244 270 0.60% (1) (2) City of Tyler Valley View Consulting, L.L.C.