Agenda Item 8F - Material Available — Torrance City Council, February 25, 2025

8F
Date: February 25, 2025
To: Honorable Mayor and Members of the City Council
From: Tim Goodrich, City Treasurer
By: Jasmine Allen, Deputy City Treasurer | [email protected] Subject: MATERIAL AVAILABLE #1 FOR ITEM 8F

DISCUSSION

At the time of agenda posting, the Investment Report for the month of December 2024 for the subject agenda item was not readily available. The attached report is now available.

ATTACHMENT

1. Investment Report for the month of December 2024

1 City of Torrance, California
Monthly Investment Portfolio
Report

Dec
ember

, 2024
Table of Content
s

Page

Portfolio Report Summary

Table of
Contents………………………………………………………………………………..

1 Summary Notes………………
…………………………………………………………………..

2 -
3 I
I
.

Pooled Funds

Portfolio Highlights………………………………………………………………………………

4 Portfolio Activity Summary…………………………………………………………………..

4 Portfolio Summary…………………………………………………………………………….…

5 Portfolio Monthly Activity

Detail
………………………………………
………………….

6 Portfolio Performance………………………………………………………………………….

7 Portfolio Earnings Summary…………………………………………………………………

7 Portfolio Distribution

Maturity Distribution……………………………………………………………………………

8 Assigned Credit Ratings
of Investments………………………………………………..
9 Federal Agencies Distribution………………………………………………………………

9 Portfolio Sectors…………………………………………………………………………………..

9 Value of Portfolio per GASB 31..
…………………………………………………………..
1 0
Detailed Reports

Investment Portfolio……………………………………………………………………………
.
11-14
IV.

Appendix A
Notes to Investment Report

………………………………………………………………
1 5

-1

6 V.

Appendix B
Glossary ……………………………………………………………………………………………
1 7

-2

2 Attachment

1 1
2 City of Torrance, California
Investment Report Summary Notes
For the Month of:

December

2024

Prepared
by
the
Office of the Treasurer

for the Investment Advisory Committee

Summary

The City's investment objectives, in order of priority, shall be safety, which is investing in the highest quality securities, liquidity, which can be converted into cash and necessary to meet our cash flow disbursement requirements, and yield, which is earning a higher yield than the market rate of return.

City’s portfolio yielded 4.322% for December, a decrease of 8.5 basis points over the previous month. The fiscal year-to-date earnings were $6,870,452.

As of December 31, 2024, the ending balance of total funds was $335.1M, an increase of $13.8M from the previous month, which included investments of $315.9M and cash of $19.2M. The increase was largely due to property tax repayment.

For the month of December, California Asset Management Program (CAMP)’s balance was $74M, earning a yield of 4.730%. The Local Agency Investment Funds ( LAIF)’s yield remains lower, at 4.434%. Staff continue to monitor these rates relative to the cash flow needs of City operations and invest the funds accordingly.

Six new purchases, totaling $48M, were made. Two investments, totaling $495K, matured or were called.

Purchases:

Maturities/Calls:

Liquidity of the Portfolio

❖ A yield curve is typically defined as the difference between the 3-month and 10-year treasury rate. However, the City uses the 1-year and 5-year yield curve, as the City is allowed to purchase investments for up to five years per the City's investment policy. As of December 31, 2024, the 1-year, 3-year and 5-year treasury yields were

4.16%, 4.27% and 4.38%, respectively.

❖ The City is in compliance with California Government Code Section 53646 which $ 321,268,020.08
$ 335,078,487.08
$ 13,810,467.00
Ending Balance of Total Funds as of December 31, 2024
Difference
Ending Balance of Total Funds as of November 30, 2024
2 3
City of Torrance, California
Investment Report Summary Notes
For the Month of:

December

2024

Prepared
by
the
Office of the Treasurer

for the Investment Advisory Committee

requires the local agency to report on its ability to meet pooled expenditure requirements for the next six (6) months. Over the next 6 months, cash, cash equivalents (LAIF , CAMP, Sweep Money Market ) and projected inflows exceed projected cash outflows by $159.8M.

Investment Comparison to Benchmark

As stated above for the month of December, the City's portfolio yielded 4.322%. The 1- year and 2 -year U.S. Constant Maturing Treasury (CMT) is at 4.16% and 4.25%, respectively. The City's portfolio has a current average maturity of 646 days or 1.77 years. $ 19.2
$ 74.0
Money Market Account as of December 31, 2024 $ 18.2
Cash Inflows $ 254.8
Cash Outflows $ 206.5
Projected Cash/Liquidity Balance $ 159.8
Cash Activity/Balances projected over the next 6 months (millions):

Cash Balance as of December 31, 2024
CAMP/LAIF Balance as of December 31, 2024
3 4
Investment Report
December 2024
Portfolio Highlights
Purchases/Deposits*
Maturities/Redemptions*
INCOME
*Includes LAIF/CAMP and MMA activity
**Transaction count does not include LAIF/CAMP or MMA activity Fiscal Year to Date
Current Month

MATURITY
$64,995,020.61
Prior Month
$5,751,973.21
$1,115,942.83
517

1.77 $54,008,490.31
Total Volume ($)* # of Transactions**
2 Prior MonthRETURN
City Portfolio YTM
U.S. Treasury Constant Maturity (2 year)
CAMP Monthly Return
Current Month

4.407%

4.130%

4.870%

4.322%

4.250%

4.730%
LAIF Monthly Return 4.434% 4.477%
6 Prior Month

VOLUMES
Current Month
646Days to Maturity
Average Maturity (Years) 1.42

4.510%
$6,870,451.84

4.350%Sweep Money Market Monthly Return
Current Month
$1,134,766.31
4 5
6 Investment Report
December 2024
Portfolio Monthly Activity Detail
Purchases Broker Purchase
Date Description NRSRO
Rating
Maturity
Date Term (YR) YTM 365 (%) Par Value ($) Book Value ($) 11472 Stiffel 12/19/2024 Treasury AA+ 5/31/2026 1.4 4.211% $5,000,000.00 $4,765,299.48 11473 MBS 12/19/2024 Treasury AA+ 6/30/2028 3.5 4.289% $5,000,000.00 $4,511,732.31 11474 FHN 12/19/2024 Treasury AA+ 8/31/2028 3.7 4.242% $10,000,000.00 $8,953,913.77 11475 MBS 12/19/2024 Treasury AA+ 6/15/2027 2.5 4.245% $10,000,000.00 $10,087,633.36 11476 MBS 12/19/2024 Treasury AA+ 6/30/2029 4.5 4.249% $10,000,000.00 $10,000,000.00 11477 Higgins 12/19/2024 Treasury AA+ 9/30/2026 1.8 4.230% $10,000,000.00 $9,878,186.00 Average Rate / Totals 4.244% $50,000,000.00 $48,196,764.92 Maturities/
Calls/Sales
Broker Purchase Date Description NRSRO
Rating
Maturity/Call/
Sale Date
Days Held/Days
to
Maturity/Sale
YTM 365 (%) Par Value ($) Book Value ($)
11419 OP 4/5/2023 FFCB AA+ 10/9/2024 1.5 5.336% $850,000.00 $850,000.00 Beginning Balance Coupon ( % ) Yield (%) Montly Interest Earned ($)
$50,235,923.46 4.350% 4.350% $133,225.57
Beginning Balance Coupon (%) Yield (%) Quarterly Interest Earned ($)
$11.34 4.434% 4.434% $0.00
Beginning Balance Coupon (%) Yield (%) Monthly Interest Earned ($)
$78,687,362.19 4.730% 4.730% $307,429.91CAMP Pool $0.00 $5,000,000.00 $73,994,792.10 LAIF
General
Withdrawals ($)
$0.00
Withdrawals ($)
$0.00
Deposits ($)
US Bank
Ending Balance ($)
$18,228,534.80
Ending Balance ($)
$11.34
Ending Balance ($)
Money Market
Deposits ($)
Deposits ($)
$16,379,876.08
Withdrawals ($)
$48,520,490.31
CAMP
Maturities/ Calls/Sales
6 7
Investment Report
December 2024
Portfolio Performance

4.47%
Portfolio Earnings Summary
Notes :

As long as a bond is held to maturity there will be no capital loss or gain to report. (590,884.07)
$942,874.08
Total Capital Gains or Loss (Unrealized)
$5,899,988.57
Adjusted by Premiums/Discounts represents the premium or discount cost involved to secure higher or lower yield securties. The cost of the premium or discount is amoritized down or up respectively to par over the life of the bond until reaching maturity.

By amortizing, the amount of taxable interest is reduced for each year the city owns the bond. This is because the amortized premium or discounts offsets the ordinary income of the coupon payment. *Accrued Interest: Interest that has accumulated between the most recent payment and the sale of a bond or other fixed-income security. At the time of sale, the buyer pays the seller the bond's price plus "accrued interest," calculated by multiplying the coupon rate by the fraction of the coupon period that has elapsed since the last payment. (If a bondholder receives $40 in coupon payments per bond semiannually and sells the bond one-quarter of the way into the coupon period, the buyer pays the seller $10 as the latter's proportion of interest earned.)
CD/Coupon/Discount Investments:

Interest Collected
$698,278.28
Plus Accrued Interest* at End of Period
$863,073.37
1,998,832.23
244,595.80
(2,163,627.32)
75,706.00

0.00 75,706.00

0.00 $773,984.28
232,558.37
41,483.15
(29,445.72) (92,064.83) 938,862.78
$5,840,028.29
650,844.35
(590,884.07)
$4,961,125.79
989,444.46
41,483.15
$4,520,549.79
1,998,829.13
(1,618,213.41)
$4,901,165.51
650,844.35
Plus Accrued Interest at End of Period
Total Earnings this Period
Less Accrued Interest* at Beginning of Period
Interest Earned during this Period
Adjusted By Premiums/Discounts
Earnings during Periods
Cash/Checking Accounts:

Less Interest at Beginning of Period
Interest Earned this Period
Total Interest Earned
Total Adjustments from Premium and Discounts
Interest Collected
$1,018,580.08

0.1%

0.4%

0.7%

1.0%

1.3%

1.6%

1.9%

2.2%

2.5%

2.8%

3.1%

3.4%

3.7%

4.0%

4.3%

4.6%

4.9%

5.2%

5.5%
Yield %
Constant Maturity Treasury - 2 Year (Benchmark) LAIF Monthly City Yield 7 8
Investment Report
December 2024

4.47%
Maturity Distribution

0.22%

2.23%

2.66%

0.55%

21.76%

21.65%

9.92%

16.48%

17.80%

22.42%

10.89%

19.08%

15.40%

17.59%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%
November
December
Duration to Maturity (%)
1 to 30 Days 31 Days to 6 Months 6 Months to 1 Year 1 Year to 2 Years 2 Years to 3 Years 3 Years to 4 Years 4 Years to 5 Years NOTE: SB 564 passed in 1995, effective February 1, 1996, requires that local agencies submit a quarterly report to the legislative body containing detailed information on all securities, investments, and monies of the local agency was eliminated by AB 2853 on September 29, 2004 .

CA GC

§
53646(b)(3) requires a statement of compliance of the portfolio with the statement of investment policy and a statement of the local agency’s ability to meet the expenditure requirements of the pool for the next six months. We are in compliance with the section. 8 9
Investment Report
December 2024
Portfolio Distribution
Federal Agencies Distribution Assigned Credit Ratings of Investments (Total Portfolio) Portfolio Sectors (Book Value)

64.92%

35.08%
Federal Farm Credit Bank
Federal Home Loan Bank
$73,994,792
$5,085,935
$81,206,367
$61,439,369
$75,540,941
$18,228,535
$349,082
-
10,000,000.00
20,000,000.00
30,000,000.00
40,000,000.00
50,000,000.00
60,000,000.00
70,000,000.00
80,000,000.00
90,000,000.00
CAMP
Negotiable CDs
Federal Agency
Securities
Treasury Securities
Medium-Term
Notes/Corps
Money Market Sweep
Municipal Bonds

45.72%

25.68%

21.19%

1.62%

5.79%
AAA/Aaa/AA3
AA+
AA-
FDIC
A-1
9 10
11 YTM

Page 1 ends

Par Value Book Value
Maturity
Date
Stated
RateMarket Value
December 31, 2024
Portfolio Details - Investments
Average
BalanceIssuer
Portfolio Management
Deputy Treasurer Monthly Reports
Days to
MaturityS&PCUSIP Investment #
Purchase
Date
Local Agency Investment Funds

4.434Local Agency Invest Fund GEN'L10000 11.34 11.34 4.43407/01/2022 11.34 LAIFSYS10000 1

11.3411.3411.3411.34Subtotal and Average 4.434 1
Money Market Sweep Account

4.350US Bank10001 18,228,534.80 18,228,534.80 4.35007/01/2022 18,228,534.80 A-1316175108 1 18,228,534.8018,228,534.8018,228,534.8033,465,072.77Subtotal and Average 4.350 1 Federal Agency Issues - Coupon

4.120FEDERAL FARM CREDIT BANK11381 13,000,000.00 12,764,642.05 09/15/2027 3.37510/07/2022 12,695,930.00 AA+3133ENL99 987

4.322FEDERAL FARM CREDIT BANK11383 10,000,000.00 9,994,910.81 09/30/2025 4.25010/07/2022 9,997,500.00 AA+3133ENP95 272

4.300FEDERAL FARM CREDIT BANK11384 10,000,000.00 9,996,465.14 09/30/2025 4.25010/07/2022 9,997,500.00 AA+3133ENP95 272

4.125FEDERAL FARM CREDIT BANK11385 10,000,000.00 9,968,981.65 09/29/2027 4.00010/07/2022 9,916,700.00 AA+3133ENQ29 1,001

4.300FEDERAL FARM CREDIT BANK11386 10,000,000.00 9,996,465.14 09/30/2025 4.25010/07/2022 9,997,500.00 AA+3133ENP95 272

0.871FEDERAL HOME LOAN BANK11363 2,500,000.00 2,500,096.36 11/26/2025 0.87506/14/2021 2,424,450.00 AA+3130AMKK7 329

0.800FEDERAL HOME LOAN BANK11364 1,000,000.00 1,000,000.00 09/29/2025 0.80006/29/2021 974,800.00 AA+3130AMSY9 271

0.800FEDERAL HOME LOAN BANK11365 1,000,000.00 1,000,000.00 09/29/2025 0.80006/29/2021 974,800.00 AA+3130AMSY9 271

0.800FEDERAL HOME LOAN BANK11366 1,000,000.00 1,000,000.00 09/29/2025 0.80006/29/2021 974,800.00 AA+3130AMSY9 271

1.575FEDERAL HOME LOAN BANK11372 5,000,000.00 5,000,000.00 10/28/2025 2.12501/28/2022 4,927,550.00 AA+3130AQMQ3 300

1.633FEDERAL HOME LOAN BANK11375 3,000,000.00 2,999,718.22 11/18/2025 1.62502/18/2022 2,930,970.00 AA+3130AQPP2 321

1.477FEDERAL HOME LOAN BANK11377 1,000,000.00 999,966.10 08/01/2025 2.12502/22/2022 987,390.00 AA+3130AQSG9 212

4.214FEDERAL HOME LOAN BANK11380 7,000,000.00 7,003,895.54 09/11/2026 4.25010/07/2022 6,995,520.00 AA+3130ATHV2 618

4.816FEDERAL HOME LOAN BANK11414 2,000,000.00
1,995,264.09 06/30/20274.70003/30/2023 1,998,360.00 AA+3130ASH44 910

4.748FEDERAL HOME LOAN BANK11467 5,000,000.00 4,985,961.71 06/11/20274.62505/24/2024 5,039,800.00 AA+3130B1EF0 891 81,206,366.8180,833,570.0081,500,000.0081,201,680.90Subtotal and Average 3.750 562 Treasury Securities - Coupon

0.677U.S.TREASURY NOTE11361 2,500,000.00 2,491,289.57 10/31/2025 0.25005/28/2021 2,419,425.00 N/A91282CAT8 303

1.428U.S.TREASURY NOTE11370 1,000,000.00 990,695.48 11/30/2025 0.37501/25/2022 965,660.00 N/A91282CAZ4 333

3.909U.S.TREASURY NOTE11388 5,000,000.00 4,923,949.82 02/28/2026 2.50012/16/2022 4,901,850.00 N/A9128286F2 423

3.900U.S.TREASURY NOTE11391 5,000,000.00 4,836,669.28 11/15/2026 2.00012/22/2022 4,798,800.00 N/A912828U24 683

4.211U.S.TREASURY NOTE11472 5,000,000.00 4,765,299.48 05/31/2026 0.75012/19/2024 4,762,100.00 N/A91282CCF6 515

4.289U.S.TREASURY NOTE11473 5,000,000.00 4,511,732.31 06/30/2028 1.25012/19/2024 4,505,100.00 N/A91282CCH2 1,276

4.242U.S.TREASURY NOTE11474 10,000,000.00 8,953,913.77 08/31/2028 1.12512/19/2024 8,919,200.00 N/A91282CCV1 1,338

4.245U.S.TREASURY NOTE11475 10,000,000.00 10,087,633.36 06/15/2027 4.62512/19/2024 10,083,800.00 N/A91282CKV2 895

4.249U.S.TREASURY NOTE11476 10,000,000.00 10,000,000.00 06/30/2029 4.25012/19/2024 9,944,600.00 N/A91282CKX8 1,641

4.230U.S.TREASURY NOTE11477 10,000,000.00 9,878,186.00 09/30/2026 3.50012/19/2024 9,874,000.00 N/A91282CLP4 637 61,439,369.0761,174,535.0063,500,000.0033,442,705.07Subtotal and Average 3.999 950 Portfolio CITY
APData Updated: : 01/14/2025 11:57
Run Date: 01/14/2025 - 11:57 PM (PRF_PM2) 7.3.11
Report Ver. 7.3.11
11 12
YTM

Page 2 ends

4.399BANK OF NEW YORK11445 3,000,000.00 2,951,118.02 04/28/2028 3.85005/18/2023 2,926,470.00 A06406RAH0 1,213

4.601Cargill Inc11471 8,000,000.00 8,516,161.10 06/18/2027 7.41010/29/2024 8,431,760.00 N/A141784AM0 898

4.965Citigroup/Smith Barney11461 5,709,000.00 5,866,536.16 09/29/2028 5.80301/09/2024 5,887,234.98 A+17325FBB3 1,367

4.791Citigroup/Smith Barney11463 2,000,000.00 2,067,116.98 09/29/2028 5.80302/12/2024 2,062,440.00 A+17325FBB3 1,367

5.540JPMORGAN11460 3,600,000.00 3,487,382.90 06/15/2026 3.20010/10/2023 3,531,852.00 A146625HRS1 530

4.737Mercy Heathcare11464 3,390,000.00 3,343,850.49 07/01/2028 4.30202/12/2024 3,315,691.20 A+58942HAC5 1,277

5.130META Platforms11459 3,000,000.00 2,952,643.00 05/15/2028 4.60010/10/2023 3,003,840.00 A130303M8L9 1,230

4.770Mutual of Omaha11468 10,000,000.00 9,991,317.29 10/15/2029 4.75010/28/2024 9,844,900.00 A+62829D2E9 1,748

4.911Pacific Life Global11462 4,200,000.00 4,198,351.27 01/11/2029 4.90002/08/2024 4,204,914.00 AA-6944PL2Z1 1,471

4.970Pacific Life Global11465 1,900,000.00 1,931,667.13 07/18/2028 5.50003/28/2024 1,933,003.00 AA-6944PL2U2 1,294

4.471Pacific Life Global11469 10,000,000.00 10,011,854.66 08/28/2029 4.50010/28/2024 9,866,800.00 AA-6944PL3C1 1,700

4.889Prime Alliance Bank11466 5,000,000.00 5,100,028.46 12/08/2028 5.46703/28/2024 5,083,150.00 AA-74368CBV5 1,437

4.550Prime Alliance Bank11470 5,000,000.00 5,131,764.99 06/12/2029 5.21510/28/2024 5,030,500.00 AA-74368CBY9 1,623

5.051US Bank11439 5,000,000.00
4,992,099.17 01/21/20252.05005/16/2023 4,992,500.00 A+90331HPL1 20 70,541,891.6270,115,055.1869,799,000.0070,544,708.29Subtotal and Average 4.786 1,286 CAMP

4.730CAMP10002 73,994,792.10 73,994,792.10 4.73007/11/2023 73,994,792.10SYS10002 1 73,994,792.1073,994,792.1073,994,792.1076,600,505.09Subtotal and Average 4.730 1 Municipal Bonds

4.554Napa Valley USD11423 105,000.00 97,163.27 08/01/2027 1.34204/21/2023 96,961.20 N/A630362ES6 942

4.387Ponoma USD11424 270,000.00 251,919.17 08/01/2027 1.51604/21/2023 251,397.00 N/A732098PH5 942 349,082.44348,358.20375,000.00348,691.38Subtotal and Average 4.434 942 Negotiable CD

5.003Alliant Credit Union11396 245,000.00 245,000.00 12/30/2027 5.00012/30/2022 251,882.05 FDIC01882MAC6 1,093

4.404BANK FIVE NINE11434 245,000.00 245,000.00 05/12/2027 4.40005/12/2023 247,133.95 FDIC062119BU5 861

4.799BMO HARRIS C11426 243,000.00 243,000.00 05/09/2025 4.80005/09/2023 243,430.11 FDIC05600XQA1 128

0.546BMW Bank of No America #3514111362 200,000.00 199,934.71 09/25/2025 0.50006/24/2021 194,804.00 FDIC05580AXF6 267

4.504Capital One#429711440 243,000.00 243,000.00 05/17/2027 4.50005/17/2023 245,648.70 FDIC14042RVT5 866

1.449CBC Fed Credit Union11374 245,000.00 245,000.00 08/18/2025 1.45002/18/2022 240,849.70 FDIC12481GAW7 229

4.807CIBC BK USA11438 243,000.00 243,000.00 05/16/2025 4.80005/16/2023 243,466.56 FDIC12547CBG2 135

4.704CIT Bank11401 245,000.00 245,000.00 01/06/2026 4.70001/06/2023 246,389.15 FDIC20416TAX0 370

4.404Comenity Capital Bank11431 245,000.00 245,000.00 05/10/2027 4.40005/10/2023 247,129.05 FDIC597338AJ1 859

4.605COMMUNITY FI11448 245,000.00 245,000.00 05/19/2026 4.60005/19/2023 246,688.05 FDIC20368TDL1 503

4.857CROSS RIVER11449 243,000.00 243,000.00 05/19/2025 4.85005/19/2023 243,527.31 FDIC227563CJ0 138

4.555Discover Bank #564911430 243,000.00 243,000.00 05/11/2026 4.55005/10/2023 244,487.16 FDIC2546734T0 495 Portfolio CITY
APData Updated: : 01/14/2025 11:57
Run Date: 01/14/2025 - 11:57 PM (PRF_PM2) 7.3.11
12 13
YTM

Page 3 ends

4.555GULF CAP BK11442 243,000.00 243,000.00 05/17/2026 4.55005/17/2023 244,516.32 FDIC40219MAG9 501

4.800Medallion Bank Salt Lake City11452 245,000.00 245,000.00 05/22/2025 4.80005/22/2023 245,516.95 FDIC58404DSD4 141

4.604Morgan Stanley Bank11432 243,000.00 243,000.00 05/10/2027 4.60005/10/2023 246,166.29 FDIC61690U5T3 859

4.505SOUTHERN STS11427 245,000.00 245,000.00 05/11/2026 4.50005/09/2023 246,332.80 FDIC843879EC7 495

4.505SOUTHERN STS11443 245,000.00 245,000.00 05/15/2026 4.50005/17/2023 246,345.05 FDIC843383CR9 499

4.655SOUTHERN FIR11453 245,000.00 245,000.00 05/26/2026 4.65005/26/2023 246,886.50 FDIC84287PHR6 510

4.454UNIVEST NATL BK11435 245,000.00 245,000.00 05/12/2027 4.45005/12/2023 247,408.35 FDIC91527PBX4 861

4.395BANK UTAH OGDEN11429 245,000.00 245,000.00 05/11/2026 4.50005/10/2023 246,332.80 FDIC065427AE6 495

4.803Valley Strong11393 245,000.00 245,000.00 06/23/2025 4.80012/23/2022 245,690.90 FDIC920133AK1 173 5,085,934.715,110,631.755,086,000.005,432,511.69Subtotal and Average 4.313 501 Non-US Corporate Bond

4.905Australia National Bank11457 5,000,000.00 4,999,049.49 06/13/2028 4.90007/19/2023 5,025,900.00 AA-63253QAE4 1,259 4,999,049.495,025,900.005,000,000.004,999,038.75Subtotal and Average 4.905 1,259 306,034,925.28 317,483,338.24 4.322 646314,831,388.37 315,845,032.38Total and Average Portfolio CITY
APData Updated: : 01/14/2025 11:57
Run Date: 01/14/2025 - 11:57 PM (PRF_PM2) 7.3.11
13 14
YTM

Page 4 ends

Par Value Book Value
Stated
RateMarket Value
December 31, 2024
Portfolio Details - Cash
Average
BalanceIssuer
Portfolio Management
Deputy Treasurer Monthly Reports
Days to
MaturityS&PCUSIP Investment #
Purchase
Date

0.00 306,034,925.28 317,483,338.24 4.322 646
0 211,550.78
211,550.78
211,550.78
211,550.78
Subtotal
Accrued Interest at PurchaseAverage Balance
315,042,939.15 316,056,583.16Total Cash and Investments Portfolio CITY
APData Updated: : 01/14/2025 11:57
Run Date: 01/14/2025 - 11:57 PM (PRF_PM2) 7.3.11
14 15
Notes to Investment Report

1. REPORTING

ENTITY
City of Torrance was established May 31, 1921 and adopted a city charter form of government on January 7,

1947.

Under City Charter section

630 CITY TREASURER.

It
shall

the duty of the City Treasurer to receive and
safely keep all moneys which shall come into his/her hands as

City Treasurer. He/S he shall comply with
all

provisions of law

governing the deposit and securing of public funds.

He/She shall

also comply with
all

the provisions of the general

laws of the State governing the handling of such trust funds as

may

come

into his/her possession.

He/She shall pay

out moneys only on warrants s igned by persons
designated by law, or ordinance, as

the proper persons to sign warrants and as

to trust funds which may

come

into his/her possession or control by virtue of some law, ordinance or resolution, by warrant or other order,

in accordance with the provisions of such law, ordina nce or resolution. He/She shall at regular intervals, at least once each month, submit to the Director of Finance

a written report and
accounting of all

receipts, disbursements and fund balances, a copy of which report he/she shall

file

with
the City Council.

The City Treasurer

may

appoint a deputy, or depu ties, from an eligible list to be prepared in accordance with the proceedings prescribed

in the civil service system of the City,

such deputy or deputies to
receive such compensation as

may

provided by the City Council. (Ratified Gen. Mun. Elec.

4/10/56,
Amend. No. 8; Approved by State Le gislature Concurrent Res. No. 3 on 1/9/57).

2. BASIS

FOR REPORTING
This Investment Report has been prepared in accordance with the State of California Government Code §53600 and City of Torrance Investment Policy as

noted in the City Charter.

The
City of Torrance
Investment

Policy is approved

and adopted annually by City Council. The Investment

Policy is annually
submitted by the City Trea surer to the Investment Advisory Committee for review before being forwarded to the City Council.

The
investment Advisory Committee

is made

up of City Treasurer,

City
Manager, City Attorney, Finance Director, and Deputy City Treasurer.

3. ASSUMPTIONS
The Investment Report represents a specific snapshot in time and is compared to other market performers

during that same

period which includes but

is not limited to: Constant Maturing Treasury 2‐
year term rates, Local

Agency Investment Fund (State of California), and prior year performance.

All

investment activity calculations are results from Sy mPro portfolio management software v7.3.6.

Adjusted by Premiums/Discounts represent the premium/discount cost involved to secure higher or lower

yield securities. The cost of the premium or discount is amortized down or up to par over the life

of the bond until reaching maturity. By amortizing, the amount

of taxable

interest
is reduced for each
year the ci
ty owns the bond.

This is because the amortized premium or discount

offsets the ordinary

income of the coupon payment.

There

is no capital

loss or gain

to report if bonds are kept to maturity.

15 16
Notes to Investment Report

4. COMPLIANCE
The Investment Report is required to be submitted to City Council on a monthly basis. State of California statutes requires quarterly reporting. GASB 31

section requires market changes be

booked annually but

reported monthly as

part of this report.SB 564 requires quarterly reporting to the legislative

body.

5. LAIF RISK

LAIF statute §16429.3 Deposits; prohibited transfers and loans; impoundment or seizure:

Moneys placed

with the Treasurer for deposit in the Local

Agency Investment Fund by cities, counties,

special districts,

nonprofit corporations, or qualified quasi‐

governmental
agencies shall

not be subject to
either of the following:
a. Transfer or loan pursuant to Section

163 10, 16312, or16313.
b. Impoundment or seizure by any

state official

or state agency

LAIF statute §16429.4 Right

of withdrawal:

The right of a city, county, city and county, special district, nonprofit corporation, or qualified quasi‐ governmental agency to withdraw its deposited moneys from the Local

Agency Investment

Fund, up on
demand, may not be

altered, impaired, or denied, in any

way,

by any state official

or state agency based
upon

the state’s failure to adopt a State Budget by July 1 of each new fiscal year.

Additional information about LAIF

may

be found on the California State Treasurer Website:
http://www.treasurer.ca.gov/pmia‐

laif/answer/laifstatutes.asp

16 17
Glossary
ACCRUED INTEREST. Interest that has accumulated between the most recent payment and the sale of a bond or other fixed

‐

income
security. At the time of sale,

the buyer pays the seller the bond's price

plus "accrued interest," calculated
by multiplying the coupon rate

by the fraction of the coupon period that

has ela psed since the last payment. (If a
bondholder receives $40

in coupon payments per bond semiannually and sells the bond one‐

quarter
of the way into the
coupon period, the buyer pays the seller $10

the latter's proportion of interest earned.)
AGENCIES. Also referred to as

Federal

Agencies or Fed Agenci es and include such organizations or enterprises as the:

Federal

Home Loan Bank (FHLB),

Federal

Home

Loan Mortgage

Corporation (FHLMC), Federal Farm Credit Banks (FFCB),
and Government

National Mortgage Association

(GNMA).

See FEDERAL AGENCIES or the specific
organization/enterprise in this glossary

for

additional information.

AMORTIZATION. The spreading out of capital

expenses for

intangi ble assets over a specific period of time (usually over the asset's useful life) for

accounting and tax purposes.

Amortization

is similar to depreciation, which is used

for

tangible
assets,

and to depletion, which is used with natural

resources.

ASKED. The price at which securities are offered.

BANKER'S

ACCEPTANCE ("BA"). A
draft, bill, or exchange

accepted by a bank

or a trust company. Both the issuer and the
accepting institution guarantee payment of the bill.

BASIS POINT. Common unit

of measure used

for

expressing changes

interest

rates; one basis point

equates to 1/100th
of 1%. (i.e. 0.1% equals 10 basis points.)
BID. The price offered by a buyer of securities (when one sells securities,

one asks for

a bid). See

"Offer".

BOND.

Bonds
are commonly referred to as

fixed

‐

income
securities and are one of the three main

generic asset classes,
along with stocks (equities)

and cash equivalents. Many corporate and government bonds are publicly traded on exchanges, while

others are traded only over‐

the
‐counter (OTC).

BROKER. A broker is an individual or firm that charges a fee or commission for executing buy and sell orders submitted by an investor. It is also the role of a firm when it acts as an agent for a customer and charges the customer a commission for its services.

BULLET BOND
. Bullet Bonds are non‐callable bonds, which cannot be

redeemed early by the issuer.

CALLABLE BOND. A

bond that can be redeemed by the issuer earlier

than the bond’s maturity date. Callable

bonds with
specific details as

to when the bond may be

called back

are noted. Embedded options attached

to callable bonds detail
how

the issuer may

“call” back the security. Three
forms of embedded options for

callable bonds are:

 American Option

Bond may

be called

back by the issuer at any

time

after the lockout period
expires. (continuously callable)
 Bermudian Option: The issuer has the right to call the bond on the pr edetermined interest payment dates only.
 European

Option: Allows the holder to exercise the option (i.e. to buy) only on the option expiration date.
 1X: One time

callable only
 6M: Callable

only after

predetermined 6 month

lockout period.

CERTIFICATE OF

DEPOSIT

("CD"). A time deposit with a specific maturity, as evidenced by a certificate. Large‐ 17 18
Glossary

denomination CDs are typically negotiable. A certificate of deposit (CD) is a savings certificate entitling the bearer to receive interest. A CD

bears a maturity date, a specified

fixed interest rate and can be issued in

any denomination. CDs

are generally issued by commercial banks and are insured

by the FDIC. The ter m of a CD generally ranges from one month to five years.

COLLATERAL. Securities, evidence of deposit, or other property which

a borrower pledges to secure repayment of a loan.

Also refers

to securities pledged by a bank

to secure deposits of public monies.

COMPREHENSIVE ANNUAL FINANCIAL REPORT ("CAFR").

The official

annual rep ort for the City of Torrance. It includes
combined statements for each individual fund and account group, which are prepared in conformity with GAAP. It also includes supporting schedules that are necessary to demonstrate compliance

with finance

‐
related legal

and contractual
provisions, extensive introductory material, and a detailed statistical

section.

CORPORATE BOND/NOTES. A

deb
t security issued by a corporation

and sold to investors. The backing for the bond

is
usually the payment ability of the company, which is typically money to be

earned from future operations.

COUPON. The annual rate of interest that a bond's issuer promises to pay

the b ondholder on the bond's face value. It can
also be

a certificate attached to a bond, which evidences interest due on a payment date. The annual interest rate paid on a bond, expressed as

a percentage of the face value.

DEALER. A

dealer, as

opposed

to a broker, acts as

a principal in

all transactions, buying and selling

for his own accou nt.

DEBENTURE. A

bond secured only by the general credit of the issuer.

DELIVERY VERSUS PAYMENT.

There are two methods

of delivery of securities:

(1) delivery versus payment (DVP); and (2)
delivery

versus receipt (DVR). DVP is delivery of securities with an exchange

of money

for the securities. DVR is deliver y of
securities with an exchanged of a signed receipt for the securities.

DERIVATIVES.

(1)

Financial instruments that are linked to, or derived from,

the movement of one or more underlying

indexes or securities,

and may

include

a leveraging fac tor; or (2) financial contracts based upon a notional amount whose value is derived from an underlying index or security (e.g., interest

rates, foreign exchange rates, equities, or
commodities).

DISCOUNT.

The difference between the acquisition cost of a security and its value at maturity,

when quoted at lower

than face

value. A security that sells below original offering price shortly after sale

is also co nsidered to be at a
discount. In finance, discount refers to the condition of the price of a bond that

is lower

than par,

or face value. The
discount equals the difference between the price paid

for a security and th e security's par value.

DISCOUNT

SECURITIES. Non

‐

interest
bearing money

market instruments that are issued a discount and that are redeemed at maturity for full face value (e.g., U.S. Treasury Bills).

DIVERSIFICATION. Dividing investment funds among a variety of securities that offer

independent

returns.

FEDERAL AGENCIES. Special government organiza tions set up for a specific purpose such as the management of resources, financial oversight of industries or national security issues. These organizations are typically created by legislative

action, but may

initially be

set

up by a Presidential Order as

well. The directors of these agencies are
typically selected by Presidential appoi ntment. A number of these organizations issue securities such as stocks and bonds that have been historically popular with investors.

Agencies
of the Federal Government that were
established to supply credit to various classes of institutions and individuals (e.g., S&Ls, small business firms, 18 19
Glossary

students, farmers, farm cooperative, and exporters).

FEDERAL DEPOSIT

INSURANCE CORPORATION ("FDIC").

federal agency that

insures

bank deposits, currently up to $
250,000.00 per deposit.

FEDERAL FARM

CREDIT BANK (“FFCB”).

the United States, a network of federally‐

chartered
financial institutions
designed to provide credit‐related services to the agricultural and f arming sectors of the economy. In total, this government‐sponsored enterprise comprises approximately 100 financial institutions that serve all

50 states and
Puerto Rico
FEDERAL FUNDS

RATE.

The rate of interest at which Fed

funds are traded. This rate is currently pegged by the
Federal

Reserve through open‐

market
operations.

FEDERAL HO ME LOAN BANKS ("FHLB"). Government ‐ sponsored wholesale banks (currently 12 regional banks) which lend funds and provide correspondent banking services to member commercial banks, thrift institutions, credit unions, and insurance companies. The mission of the FHLBs is to liquefy the housing‐

related
assets of its member, who must
purchase stock in their District Bank. FH LB ‐ An organization created by the Federal Home Loan Bank Act of 1932 to increase the amount

of funds available for lending institutions who

provide mortgages and similar loan agreements to
individuals. This system was created in response to the depressive economic conditions of the era, which had im paired the U.S. banking system.

FEDERAL HOME

LOAN MORTGAGE CORP (“Freddie

Mac or FHLMC”). FHLMC

is a stockholder

‐

owned,
government‐
sponsored enterprise (GSE)

chartered by Congress in

1970 to keep money

flowing to mortgage lenders in support of
homeownership and rental housing for middle income Americans. The FHLMC purchases, gua rantees and securitizes mortgages to form mortgage‐

backed
securities. The mortgage‐backed securities that it issues tend to be very liquid and carry a credit rating

close to that of U.S. Treasuries.

FEDERAL NATIONAL MORTGAGE ASSOCIATION

(`FNMA").

FNMA, like GNMA, was charted

under the Federal

National
Mortgage Association

Act of 1938. FN MA is a federal corporation working under the auspices of the Department of Housing

and Urban Development (HUD). It is the largest single provider of residential

mortgage

funds in the United
States. Fannie Mae, as

the corporation

is called, is a private stockholder

‐

owned
corporation. The corporation's
purchases include a variety of adjustable mortgag es and second loans, in addition to fixed‐ rate mortgages. FNMA's securities are also highly liquid and are widely accepted. FNMA assures and guarantees that all

security holders will
receive timely payment of principal and interest. Fannie Mae is a publicly‐

traded
company which operates under a
congressional chart er that directs Fannie Mae to channel its efforts into increasing the availability and affordability of homeownership for low

‐

,
moderate

‐
and middle‐

income
Americans.

FEDERAL OPEN MARKET COMMITTEE

("FOMC"). The FOMC consist of seven members

of the Federal Reserve Board
and five of the 12

Federal

Reserve Bank Presidents. Th e President of the New York Federal Reserve Bank is a permanent member while the other Presidents serve on a rotating basis. The Committee periodically meets to set Federal

Reserve guidelines regarding purchases and sales of government securities in

the open market as

a means of
influencing the volume of bank cr edit and money.

FEDERAL RESERVE SYSTEM.

Also
known as “The Fed.” The central bank of the United States created by Congress and consisting of a seven‐

member
Board of Governors in

Washington, D.C., 12

regional banks, and about 5,700 commercial
banks that are members of the system.

GOVERNMENT NATIONAL MORTGAGE ASSOCIATI ONS ("GNMA" or "Ginnie Mae"). Securities that influence the volume of bank credit that is guaranteed by GNMA and issued

by mortgage bankers, commercial banks,

savings and loan
19 20
Glossary

associations, and other institutions. The full faith and credit of the U.S. Government protect a security holder. Ginnie Mae securities are backed by the FHA, VA,

or FMHM mortgages. The term "pass‐

through"
is often used to describe Ginnie
Maes.

GOVERNMENTAL ACCOUNTING

STANDARDS BOARD (“GASB”). An organization whose main

purpose is to improve an d
create accounting reporting standards or generally accepted accounting principles (GAAP). These standards make it easier for users to understand and use the financial records of both state and local governments. The Government

Accounting
Standards Board (GASB) is funded and monitored by the Financial Accounting

Foundation

(FAF).

IMPLIED RATING (“IMP”). Government Sponsored Enterprises ex: Federal Home Loan Bank, Federal Home Loan Mortgage Corp, Federal National Mortgage Association

each carrier

the rate of the US Treasury.

There are GSE that are
not officially rated by a credit

rating agency but

carry an implied rating because they are GSE. An example

of this is
Farmer

Mac.

LIQUIDITY. A Liquid asset is one that can be converted easily and rapidly into cash without a substantial loss of value. In the money

market,

a security is said

to be liquid if the spread between bid and asked prices is narrow,

and reasonable

size can be done at those quotes.

LOCAL AGENCY

INVESTMENT FUND ("LAIF"). Monies from local governmental units may

be remitted

to the California
State Treasurer

for deposit in

this special fund for the purpose of investment.

LOCKOUT (BOND FEATURE). The period of time when a security may

not be redeemed by the issuer.

MARKET VALUE. The price at which a security is tradi ng and could presumably be purchased or sold.

MASTER REPURCHASE AGREEMENT. A written contract covering all future transactions between the parties to repurchase‐

reverse
repurchase

agreements that establishes each party's rights in

the transactions.

master

agreement
will often specify, among other things, the right of the buyer (lender) to liquidate the underlying securities in

the event
of default by the seller (bo rrower).

MATURITY.

The date upon which the principal or stated value of an investment becomes due and payable.

Medium Term Notes

‐
A corporate note continuously offered by a company to investors through a dealer. Investors can choose from differing maturities, ranging from nine months to 30 years.

MONEY MARKET.

The market in w hich short‐ term debt instruments (e.g., bills, commercial paper, and banker's acceptances) are issued and traded.

NOT

RATED (“NR”). GSE (government sponsored enterprises) or any security that are not officially rated by a credit rating

agency.

OFFER. The price asked by a seller of securities (when

one buys securities,

one asks for an offer). See '`Ask ed" and "Bid."
OPEN MARKET OPERATIONS. Purchases and sales of government and certain other securities in

the open market by the
New York Federal

Reserve Bank, as

directed by the FOMC in order to influence

the volume of money and credit in the
economy.

Purchases inject re serves into the bank system and stimulate growth of money and credit; sales have the opposite effect.

Open market operations are the Federal

Reserve's

most important and most flexible monetary

policy tool.
20 21
Glossary

PORTFOLIO. A collection of securities that an investor holds.

PREMIUM ‐ A

premium is the total cost of an option. The difference between the higher price paid

for a fixed‐

income

security and the security's face amount

at issue.

PRIMARY DEALER. A

group of government securities dealers that submit daily reports of mark et activity and positions, and monthly financial statements to the Federal Reserve

Bank

of New

York,

and are subject to its informal oversight.

Primary dealers

include Securities and Exchange Commission (SEC)

— registered securities broker‐

dealers,
banks, and a
few

unregulated

firms.

PRUDENT INVESTOR RULE. An investment standard. A

fiduciary, such as

a trus tee, may invest in a security if it is one that would

bought

by a prudent

investor acting in

like capacity, who is seeking reasonable

income and preservation of
capital.

QUALIFIED PUBLIC DEPOSITORIES. A

financial institution that: (1)

does not claim exemption from the payment of any
sales, compe
nsating use, or ad valorem taxes under the laws of this State; (2)

has segregated for the benefit of the
commission eligible collateral having a value of not less than its maximum

liability; and (3) has been approved

by the Public
Deposit Protections Commission to hold public

deposits.

RATE OF RET URN. The yield obtainable on a security based on its purchase price or it current market price.

REPURCHASE

AGREEMENT ("RP" OR "REPO"). A holder of securities sells them

to an investor with an agreement to
repurchase the securities at a fixed

price on a fixed

date. The security "buyer” in effect,

lends the "seller " money for the
period of the agreement, and the terms

of the agreement are structured to compensate him for this.

Dealers use RP
extensively to finance their positions.

Exception: when

the Fed

is said

to be

doing RP, it is lending money

(increasing bank
reserves).

SAFEKEEPING. A

service to customers r endered by banks for a fee whereby securities and valuables of all types and descriptions are held in the bank's vaults for protection.

SECONDARY MARKET.

A market made for the purchase and sale

of outstanding issues following the initial distribution.

SECURITIES AND EXCHANGE COMMISSION. An agency created by Congress to administer securities le gislation for the purpose of protecting investors in

securities transactions.

SEC

RULE 15c3

‐

1. See

"Uniform Net Capital

Rule." SEC Rule 15c3‐

1 requires broker‐

dealers
to maintain the following
minimum net capital requirements in

order to offer sufficient

protection for the firm's customers:
 $250,000 for broker‐ dealers who conduct general securities business and carry customer funds and securities  $50,000 for broker‐ dealers who introduce accounts to another broker‐ dealer on a fully disclosed basis, receive but

do not hold customer securities for delivery

to the clearing broker‐

dealer
and do not carry customer
accounts
 $25,000 for broker‐ dealers that only handle mutual fund transactions and do not hold customer funds or securities
 $5,000 for broker‐ dealers who do not directly or indirectly receive securities from customers (known as introducing brokers)
21 22
Glossary

STEP‐ UP BOND. A bond that pays an initial coupon rate for the first period, and then a higher coupon rate for the following periods.

step‐up bond

is one in

which subsequent future coupon payments are received at a higher, predetermined amount

than

previous or current periods.

These
bonds usually have a callabl e component.

STRUCTURED NOTES. Notes issued by instrumentalities (e.g., FHLB, FNMA,

SLMA) and by corporations, that have
imbedded options (e.g., call features,

step‐

up
coupons, floating rate coupons, derivative‐

based
returns)

in their debt
structure, The market performance of structured notes is affected

by fluctuating

interest rates; the volatil ity of
imbedded options;

and shifts in

the yield curve.

TAX AND REVENUE ANTICIPATION

NOTES (TRANs).

Notes issued in anticipation of receiving future tax receipts and revenues at a future

date.

TREASURY BILLS. A non‐

interest
‐

bearing
discount security that

is issued

by the U.S. Treasury to finance the national
debt. Mo
st T‐bills are issued to mature in three

months, six months, or one year.

TREASURY BONDS. Long‐

term,
coupon‐bearing U.S.

Treasury securities that

are issued as

direct obligations of the U.S.

Government, and having initial maturities of more than

10 years.

TREASURY NOTES. Medium‐

term,
coupon‐bearing U. S. Treasury securities that are issued as direct obligations of the U.S.

Government, and having initial maturities of two to 10 years. U S Notes ‐

treasury

note is a marketable U.S.

government
debt

security with a fixed interest rate and a maturity between one and 10

years. Treasury notes can be

bought

eithe r
directly from the U.S. government or through a bank.

UNIFORM NET CAPITAL RULE. SEC requirement that member

firms, as

well

non‐

member

broker‐

dealers
in

securities,
maintain a maximum ratio of indebtedness to liquid capital

of 15

to one.

Also called net capital rule and net capital ratio.

Indeb
tedness covers all money that is owed

to a firm, including margin loans and commitments to purchase securities (one reason that new public

issues are spread among members of underwriting syndicates). Liquid capital includes cash and assets easily converted

to cash.

YIELD. The rate of annual

income

return on an inves tment, expressed as a percentage. (a) INCOME YIELD is obtained by dividing the current dollar income by the current market price for the security. (b)

NET YIELD OR YIELD TO MATURITY is
the current income yield minus any

premium above par

or plus any

discount from par

in pur chase price, with the
adjustment spread over the period from the date of purchase to the date of maturity of the bond.

YIELD TO

MATURITY (YTM). The percentage rate of return paid

on a bond or note if the investor buys and holds it to its maturity date.

The calculation for YT M is based on the coupon rate, length of time to maturity, and market price. It assumes that coupon interest paid over the life of the bond will be

reinvested at the same rate.

Sources:
 www.investopedia.com
 www.thefreedictionary.com

 www.msrb.org/glossary/definition/note.aspx
 CALIFORNIA DEBT AND INVESTMENT ADVISORY COMMISSION (CDIAC) California Public Fund Investment Primer, December 2009
22 23

Torrance City CouncilFebruary 25, 2025

Torrance City Council
February 25, 2025