09-30-2012 Investment Performance ReviewVillage of North Palm Beach, Florida
Investment Advisors
Steven Alexander, CTP, CGFO, Managing Director
Gregg Manjerovic, CFA, Portfolio Manager
D. Scott Stitcher, CFA, Senior Managing Consultant
Rebecca Geyer, CTP, Senior Analyst
Investment Performance Review
Quarter Ended September 30, 2012
r,. North
MR-
firf_
PFM Asset Management LLC
300 S. Orange Avenue, Suite 1170 One Keystone Plaza, Suite 300
Orlando, FL 32801 North Front & Market Streets
(407) 648 -2208 Harrisburg, PA 1 71 01 -2044
(407) 648 -1323 fax 717- 232 -2723
717 - 233 -6073 fax
Village of North Palm Beach, Florida Investment Report - Quarter Ended September 30, 2012
Table of Contents
Tab I.
Section A Market Review
Tab II.
Section A Quarterly Summary Report
Section B Investment Portfolio & Performance
Section C Asset Allocation Chart as of September 30, 2012
Tab III. September 30, 2012 PFM Month -End Statement
(statements are available online at www.pfm.com)
This material is based on information obtained from sources generally believed to be reliable and available to the public,
however PFM Asset Management LLC cannot guarantee its accuracy, completeness or suitability. This material is for general
information purposes only and is not intended to provide specific advice or recommendation. The information contained in this
report is not an offer to purchase or sell any securities.
Table of Contents Section i
Village of North Palm Beach, Florida Investment Report - Quarter Ended September 30, 2012
TAB I
Village of North Palm Beach, Florida
Summary
During the third quarter, further easing measures by central banks
around the world spurred investors' demand for riskier assets,
resulting in strong performance for corporate bonds, mortgage -
backed securities, and equities.
While the U.S. housing recovery seemed to be building
momentum, manufacturing activity and job growth have continued
to show persistent weakness.
The domestic economy will likely continue its sluggish recovery,
despite uncertainties about the U.S. election and the looming fiscal
Cliff.
Economic Snapshot
• The unemployment rate fell to 7.8% in September. The economy
added 437,000 jobs in the third quarter, up from 200,000 in the
prior period.
• The S &P Case - Shiller Index of home prices for July marked a year -
over -year increase that was more than consensus predicted,
reflecting a continued housing recovery.
• The Institute for Supply Management's manufacturing survey fell
slightly below 50 for June, July, and August, indicating a weakening
of the important manufacturing base, but rose to 51.5 in
September, suggesting slow growth (A measure above 50 is the
dividing point between growth and expansion.)
• The Consumer Price Index increased by 0.6% in August on a
seasonally adjusted basis, its largest gain since June 2009; this was
primarily due to increases in food and energy prices.
• Most economists expect U.S. gross domestic product (GDP) to
grow by only 1.8% to 2% for the year.
Investment Report — Quarter Ended September 30, 2012
Interest Rates
Interest rates ended the quarter modestly lower, while yield
spreads on Federal Agencies, corporates, and mortgage- backed
securities (MBS) tightened significantly.
Long -term Treasury yields experienced significant intra - quarter
volatility, while two -year Treasury yields remained in a tight range
of 0.20% to 0.30% for the quarter.
The Federal Reserve announced that it will keep short -term rates
at extremely low levels through mid -2015. It also initiated a third
round of Quantitative Easing (QE3), a new program to purchase
$40 billion in agency MBS each month until economic conditions
improve.
Sector Performance
• Accommodative measures by global central banks gave investors
confidence in the prospects for economic growth. The resulting
shift from Treasuries and Agencies to high - quality corporate bonds
helped corporate bonds to outperform. Bonds issued by financial
firms did particularly well, outpacing those in the industrial and
utility sectors.
• Supported by the new QE3 purchase program, Agency MBS
performed well, but returns were tempered as a result of
increased pre - payments, which shortened their average lives.
• While the Municipal sector lagged the corporate sector, it
generated returns in excess of Treasuries and Agencies, and
offered the additional value of diversification.
• Supply reductions should keep Agency spreads narrow, as Fannie
Mae and Freddie Mac reduce their retained portfolios by 15% per
year, as mandated by the Treasury Department.
The views expressed within this material constitute the perspective and judgment of PFM Asset Management LLC ( PFMAM) at the time of distribution and are
subject to change. Information is obtained from sources generally believed to be reliable and available to the public, however, PFMAM cannot guarantee its
accuracy, completeness, or suitability. This material is for general information purposes only and is not intended to provide specific advice or
recommendation. The information contained in this report is not an offer to purchase or sell any securities.
PFM Asset Management LLC Section A -1
Village of North Palm Beach, Florida
Economic Snaashot
Investment Report - Quarter Ended September 30, 2012
Labo 12 Sep 211111
Unemployment Rate Sep 7.8% 8.2% 9.0% Unemployment Rate (left) vs. Change!n Nonfarm Payrol Is (right)
11.0% 600K
Change In Non -Farm Payrolls 10.0% 400K
Average Hourly Earnings (YoY) Sep 1.8% 2.0% 2.0% 9.0% 200K
8.0% 0
Personal Income (YoY) Aug 7.0% -200K
6.0% -400K
Initial Jobless Claims Oct 12 388,000 376,000 402,000 9/30/09 3/31/10 9/30/10 4/30/11 10/31/11 4/30/12
• 0 1 Real GDP (QoQ)
Real GDP (QoQ SAAR) Q2 1./0 3 2.0 /0 1.3%
5.0
GDP Personal Consumption (QoQ SAAR) Q2 NJ 3.0%
Retail Sales (YoY) Sep 5.4% 3.5% 8.3% 2.0%
1.0%
ISM Manufacturing Survey Sep 51.5 49.7 52.5 I 0.0%
1.0%
Existing Home Sales (millions) Sep 4.75 4.37 4.28 6/30/09 12/31/09 6/30/10 12/31/10 6/30/11 12/31/11 6/30/12
Inflation • 0 0 o
Personal Consumption Expenditures (YoY) Aug 12 1./0 5 1.5/0 2.9/0 Consumer Price Index
5.0
Consumer Price Index (YoY) Sep 12 2.0% 4.0%
3.0
2.0
Consumer Price Index Core (YoY) Sep 12 2.1% 0.7% 7.0% 1.0%
0.0
r0 il Futures (WTI, per barrel) Sep 30 $92.19 $7 1.0% -CPI (YoY) -CPI Core (YoY)
Gold Futures (oz) Sep 30 $1,771 $1,604 $1,620 8/31/09 2/28/10 8/31/10 3/31/11 9/30/11 3/31/12
1. Data as of First Quarter 2012
Note: YoY = year over year, QoQ = quarter over quarter, SAAR = seasonally adjusted annual rate, WTI = West Texas Intermediate crude oil
Source: Bloomber
PFM Asset Management LLC Section A -2
Village of North Palm Beach, Florida
3.0%
2.5%
2.0%
v
6 1.5%
5-
1.0%
0.5%
0.0%
9/30/11 11/30/11
— — 2 -Yea
U.S. Treasury Note Yields
Investment Report — Quarter Ended September 30, 2012
Interest Rate Overview
1/31/12 3/31/12 5/31/12 7/31/12 9/30/12
r .•••••• 5 -Year 10 -Year
U.S. Treasury Note Yields
3 -month
i
0.12%
i
0.11%
Change
Quarter
0.00%
9130111
0.02%
over Year
0.09%
1 -year
0.16%
0.26%
(0.10 %)
0.17%
(0.02 %)
2 -year
0.25%
0.32%
(0.08 %)
0.28%
(0.04 %)
5 -year
0.63%
0.75%
(0.11%)
0.96%
(0.33 %)
10 -year
1.70%
1.73%
(0.04 %)
2.01%
(0.31%)
30 -year
2.82%
2.78%
0.04%
2.95%
(0.13 %)
Source: Bloomber
U.S. Treasury Note Yield Curve
4%
3% -- -- -- - - - - --
--- - - - - -- _
1%
0%
361 2 3 5 7 10 30
mnyyy y y y y
Maturity
September 30, 2012 June 30, 2012 September 30, 2011
Yield Curves as of 9/30/12
4%
i
} 2%
-
-�
- - - -- ---'
s� - - - -
- - - --
- - - - - -- --------------------------
1 %
_ f�
0%
361 2 3
5 7
10 25 30
mny y y
y y
y y y
Maturity
U.S. Treasury
Federal Agency Industrial Corporates, A Rated
PFM Asset Management LLC Section A -3
Village of North Palm Beach, Florida
Investment Report - Quarter Ended September 30, 2012
B of A Merrill Lynch Index Returns
As of 9/30/2012 Periods Ended 9/30/2012
Year •
U.S. Treasury
gency
Duration
1.89
1.60
Yield
0.25%
0.31%
3 Month
0.26%
1 Year
0.56%
3 Years
1.43%
1.58%
0.92%
U.S. Corporates, A -AAA Rated
1.98
1.02%
1.50%
4.10%
3.63%
Age 0 to 3 years)
1.78
0.87%
2.29%
3.78%
Municipals
1.84
0.52%
0.33%
1.33%
1.75%
Year •
U.S. Treasury
2.74
0.34%
0.47%
1.29%
2.58%
Federal AMi
0.42%
0.46%
1.53%
2.29%
U.S. Corporates, A -AAA Rated
2.79
1.26%
2.18%
5.92%
4.98%
Age nBS (0 to 5 years)
0.91%
1.08%
3.63%
4.73%
Municipals
2.59
0.71%
0.62%
2.23%
2.65%
Master • -
U.S. Treasury
6.05
0.91%
0.58%
3.19%
5.46%
enc
0.79%
2.83%
3.95%
9.97%
8.26%
U.S. Corporates, A -AAA Rated
6.78
2.38%
3.53%
MB
W.
0.92%
1.■
IN
-
Municipals
7.39
2.48%
2.51%
8.96%
6.20%
Returns for periods greater than one year are annualized
3 Month return is periodic
Source: Bloomber
PFM Asset Management LLC Section A -4
Village of North Palm Beach, Florida Investment Report - Quarter Ended September 30, 2012
TAB II
Village of North Palm Beach, Florida Investment Report - Quarter Ended September 30, 2012
Quarterly Summary Report
Total Portfolio Value'' September 30,2012' June 30, 2012
Market Value $8,311,077.27 $8,289,853.88
Amortized Cost $8.280.301.18 $8.262.416.12
1.00%
0.75%
0.50%
0.25%
0.00%
-0.25%
0.50
Quarter Total Return Comparison
Quarter Ended 09/30/12
1.00 1.50 2.00 2.50 3.00
Effective Duration (Years)
2.50%
2.00%
1.50%
1.00%
0.50%
0.00%
0.50
Total Return Comparison Since Inception as of
Quarter Ended 09/30/12
1.00 1.50 2.00 2.50 3.00
Effective Duration (Years)
Quarterly Return
Annualized
Last
Last
Since Inception
Total Return'2' 4's1''
September 30, 2012
Quarter
12 Months
24 Months
June 30, 2009
Investment Portfolio
0.26%
1.02%
0.65%
0.86%
1.51%
Merrill Lynch 1 -3 Year U.S. Treasury Index
0.26%
1.02%
0.56%
0.88%
1.56%
Total
Current Quarter
Previous Quarter
Total
Current Quarter
Previous Quarter
Effective Duration(Years) °
September 30, 2012
June 30, 2012
Yields
September 30, 2012
June 30, 2012
Investment Portfolio
1.82
1.80
Yield at Market
0.25%
0.33%
Merrill Lynch 1 -3 Year U.S. Treasury Index
1.82
1.83
Yield at Cost
0.50%
0.58%
Portfolio Duration % of Benchmark Duration
100%
99%
1.00%
0.75%
0.50%
0.25%
0.00%
-0.25%
0.50
Quarter Total Return Comparison
Quarter Ended 09/30/12
1.00 1.50 2.00 2.50 3.00
Effective Duration (Years)
2.50%
2.00%
1.50%
1.00%
0.50%
0.00%
0.50
Total Return Comparison Since Inception as of
Quarter Ended 09/30/12
1.00 1.50 2.00 2.50 3.00
Effective Duration (Years)
Notes:
1. In order to comply with GASB accrual accounting reporting requirements.
2. End of quarter trade -date market values of portfolio holdings, including accrued interest.
3. Performance on trade date basis, gross (i.e., before fees), is in accordance with The CFA Institute's Global Investment Performance Standards (GIPS).
4. Merrill Lynch Indices provided by Bloomberg Financial Markets.
5. Quarterly returns are presented on an unannuali -c! basis.
6. Includes money market fund /cash in performance and duration computations.
7. Returns presented for 12 months or longer are presented on an annual basis.
8. Past performance is not indicative of future results.
PFM Asset Management LLC Section A - 1
Current Quarter
Previous Quarter
Fiscal Year 2012
Fiscal Year 2011
Quarterly Interest Income
September 30, 2012
June 30, 2012
Fiscal Year Interest Income
Year to Date
Year to Date
Investment Portfolio
$10,908.74
$24,817.77
Investment Portfolio
$82,633.24
$96,644.68
TD Bank Money Market Fund
0.96
1.34
TD Bank Money Market Fund
5.47
34.78
Total
$10,909.70
$24,819.11
Total
$82,638.71
$96,679.46
Current Quarter
Previous Quarter
Fiscal Year 2012
Fiscal Year 2011
Quarterly Realized Gain /Loss on Cost
September 30, 2012
June 30, 2012
Fiscal Year Realized Gain /Loss on Cost
Year to Date
Year to Date
Investment Portfolio
$6,018.77
$11,166.28
Investment Portfolio
$19,132.88
$24,540.42
Notes:
1. In order to comply with GASB accrual accounting reporting requirements.
2. End of quarter trade -date market values of portfolio holdings, including accrued interest.
3. Performance on trade date basis, gross (i.e., before fees), is in accordance with The CFA Institute's Global Investment Performance Standards (GIPS).
4. Merrill Lynch Indices provided by Bloomberg Financial Markets.
5. Quarterly returns are presented on an unannuali -c! basis.
6. Includes money market fund /cash in performance and duration computations.
7. Returns presented for 12 months or longer are presented on an annual basis.
8. Past performance is not indicative of future results.
PFM Asset Management LLC Section A - 1
Village of North Palm Beach, Florida Investment Report - Quarter Ended September 30, 2012
Executive Summary
PORTFOLIO STRATEGY
➢ The Village's Investment Portfolio is of high credit quality and invested in U.S. Treasury and Federal Agency securities.
➢ PFM continued to actively manage the Investment Portfolio during the third quarter and found value in the market, taking
advantage of market inefficiencies or changes in economic outlook. As a result the Portfolio realized over $6,800 in gains on sales
during the quarter. PFM is continually in the market monitoring for opportunities to add value to the Portfolio.
➢ The Investment Portfolio's quarterly total return performance was 0.26 %, performing in -line with the benchmark's performance of
0.26 %. Over the past year, the Portfolio earned 0.65 %, versus 0.56% for the benchmark.
➢ Bond yields remained highly correlated with headlines out of Europe. Weakening economic conditions in the Eurozone triggered a
flight -to- quality that drove intermediate -term Treasury yields to new all -time record lows in July. The development of an European
Central Bank ( "ECB ") sovereign debt purchase program reversed the trend, causing yields to rebound sharply. Despite several
periods of sharp temporary yield movements, Treasury yields ended the quarter only modestly lower in most maturities.
➢ Agency notes received a boost during the quarter when the Treasury Department accelerated the wind down of Fannie Mae's and
Freddie Mac's investment portfolio holdings, an action which will shrink Agency bond and discount note supply by $1 trillion over
the next few years.
➢ With the ECB's sovereign debt support program in place, we are turning our attention away from Europe and focusing on domestic
issues, such as U.S. economic conditions, the upcoming election and the looming fiscal cliff, and other global issues, like the
troubling slowdown in China and turmoil in the Middle East. These conditions create uncertainties that are hard to handicap, and
virtually impossible to predict with any degree of certainty.
➢ Since all of these factors have more downside risk to economic growth than upside potential, and thus a greater chance of
keeping yields low in Q4, we plan to keep the portfolio's duration generally in line with benchmark's duration.
➢ With central banks around the globe pumping an unprecedented amount of liquidity into the market and embarking on new large
scale bond purchase programs, we are faced with a scenario of more dollars chasing fewer assets. As a result, our outlook for
most "spread sectors" remains positive. We anticipate relatively low volatility in yields and expect income to be a major
component of total returns in the upcoming quarter.
➢ As always, we strive to maintain safety of principal and appropriate liquidity, while seeking opportunities to add value through
active management. Our strategy will remain flexible and may change in response to changes in interest rates, economic data,
market outlook or specific opportunities that arise.
PFM Asset Management LLC Section B - 1
Village of North Palm Beach, Florida Investment Report - Quarter Ended September 30, 2012
Investment Portfolio Composition and Credit Quality Characteristics
Security Type
September 30, 2012
% of Portfolio
June 30, 2012
% of Portfolio
U.S. Treasuries
$6,930,825.46
83.4%
$6,562,395.05
79.2%
Federal Agencies
1,333,316.97
16.0%
1,690,903.92
20.4%
Commercial Paper
0.00
0.0%
0.00
0.0%
Certificates of Deposit
0.00
0.0%
0.00
0.0%
Bankers Acceptances
0.00
0.0%
0.00
0.0%
Repurchase Agreements
0.00
0.0%
0.00
0.0%
Municipal Obligations
0.00
0.0%
0.00
0.0%
Corporate Notes /Bonds
0.00
0.0%
0.00
0.0%
Corporate Notes /Bonds - FDIC Insured
0.00
0.0%
0.00
0.0%
Mortgage Backed
0.00
0.0%
0.00
0.0%
Money Market Fund /Cash
46,934.84
0.6%
36,554.91
0.4%
Totals
$8,311,077.27
100.0%
$8,289,853.88
100.0%
U.S. Treasuries
83%
Portfolio Composition
as of 09/30/12
Federal Agency
Obligations
16%
�y Market
id /Cash
0.56%
Notes:
1. End of quarter trade -date market values of portfolio holdings, including accrued interest.
2. Credit rating of securities held in portfolio, exclusive of money market fund /LGIP. Standard & Poor's is the source of the credit ratings.
Credit Quality Distribution
as of 09/30/12
AA+
100%
PFM Asset Management LLC Section B - 2
Village of North Palm Beach, Florida
Investment Report - Quarter Ended September 30, 2012
loo °% o
Investment Portfolio Maturity Distribution
Maturity Distribution' September 30, 2012
June 30, 2012
Overnight (Monedy Market Fund)
$46,934.84
$36,554.91
Under 6 Months
0.00
0.00
6 - 12 Months
186,431.57
349,319.10
1 - 2 Years
4,476,496.45
4,484,517.42
2 - 3 Years
2,897,193.09
3,419,462.45
3 - 4 Years
704,021.32
0.00
4 - 5 Years
0.00
0.00
5 Years and Over
0.00
0.00
Totals $8,311,077.27 $8,289,853.88
Notes:
1. Callable securities in portfolio are included in the maturity distribution analysis to their stated maturity date, although they may be called prior to maturity.
PFM Asset Management LLC Section B - 3
Portfolio Maturity Distribution'
loo °% o
90%
[]September 30, 2012
80%
■June 30, 2012
0
70%
a
60%
54% 54%
is
50%
0
41%
40%
35%
0
30%
c�
c
20%
0
8 /0
d
10%
2% 4%
1% 0%-: 0% 0%
0% 0% 0% 0% 0%
0%
Overnight Under 6 Months 6-12 Months 1 - 2 Years 2 - 3 Years
3 - 4 Years 4 - 5 Years 5 Years and Over
Notes:
1. Callable securities in portfolio are included in the maturity distribution analysis to their stated maturity date, although they may be called prior to maturity.
PFM Asset Management LLC Section B - 3
Village of North Palm Beach, Florida Investment Report - Quarter Ended September 30, 2012
Investment Portfolio Maturity Distribution versus the Benchmark'
Notes:
1. Due to the nature of the security, Mortgage- Backed Securities are represented based on their average life maturity rather than their final maturity.
PFM Asset Management LLC Section B - 4
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
Years to Maturity
■ Investment Portfolio
❑ Merrill Lynch 1 -3 Year U.S. Treasury Note Index
Notes:
1. Due to the nature of the security, Mortgage- Backed Securities are represented based on their average life maturity rather than their final maturity.
PFM Asset Management LLC Section B - 4
Village of North Palm Beach, Florida' Asset Allocation as of September 30, 2012*
Security Type
September 30, 2012
September 30, 2012
Notes Permitted by Policy
Florida SBA Prime Fund and Fund B
489,028.68
3.03%
2 25%
United States Treasury Securities
6,912,670.39
42.84%
100%
United States Government Agency Securities
-
0.00%
100%
Federal Instrumentalities
1,320,695.95
8.18%
50%
Mortgage - Backed Securities
-
0.00%
50%
Certificates of Deposit
-
0.00%
100%
Repurchase Agreements
-
0.00%
0%
Commercial Paper
-
0.00%
0%
Corporate Notes
-
0.00%
25%
Bankers' Acceptances
-
0.00%
0%
Money Market Mutual Funds
193,551.96
1.20%
50%
Intergovernmental Investment Pool
-
0.00%
25%
Interest Bearing Checking or Savings Account
7,220,164.70
44.75%
2 100%
Village Managed
$7,709,193.38
47.78%
PFM Managed
$8,233,366.34
51.02%
Total
$15,942,559.72
98.80%
Individual Issuer Breakdown
September 30, 2012
September 30, 2012
Notes Permitted by Policy
Individual Issuer Breakdown
September 30, 2012
September 30, 2012
Notes
Permitted by Policy
Government National Mortgage Association (GNMA)
-
0.00%
100%
Interest Bearing Checking or Savings Account - Wells Fargo
4,215,934.83
26.13%
2
50%
US Export-Import Bank(Ex -Im)
-
0.00%
100%
Interest Bearing Checking or Savings Account - Chase
3,004,229.87
18.62%
50%
Farmers Home Administration (FMHA)
-
0.00%
100%
Money Market Fund - TD Bank Sweep Account
42,653.59
0.26%
33%
Federal Financing Bank
-
0.00%
100%
Money Market Fund - Wells Fargo Advantage Fund
150,898.37
0.94%
2
33%
Federal Housing Administration (FHA)
-
0.00%
100%
Florida Prime
279,875.39
1.73%
2
25%
General Services Administration
-
0.00%
100%
SBA Fund
209,153.29
1.30%
2
N/A
New Communities Ad Debentures
-
0.00%
100%
US Public Housing Notes & Bonds
-
0.00%
100%
US Dept. of Housing and Urban Development
-
0.00%
100%
Federal Farm Credit Bank (FFCB)
273,148.87
1.69%
10
Federal Home Loan Bank (FHLB)
341,357.49
2.12%
10%
Federal National Mortgage Association (FNMA)
304,762.88
1.89%
10%
Federal Home Loan Mortgage Corporation (FHLMC)
401,426.71
2.49%
10%
Notes:
1. All Assets.
2. These Accounts are managed by the Village.
*PFM managed securities are shown on Amortized Cost plus Accrued Interest basis.
PFM Asset Management LLC Section C - 1
Village of North Palm Beach, Florida Investment Report - Quarter Ended September 30, 2012
TAB III
Village of North Palm Beach, Florida Investment Report - Quarter Ended September 30, 2012
Insert Month End Statement here to complete the report.
Statements are available online at www.pfm.com
login and click on the link to "Monthly Statements"
on the left side of the screen.
x A..
,
Customer Service
PO Box 11813
Harrisburg, PA 17108 -1813
ACCOUNT STATEMENT
Client Management Team
Steven Alexander, CTP, CGFO
Managing Director
300 South Orange Avenue, Suite 1170
Orlando, FL 32801
407 -648 -2208
alexanders @pfm.com
Gregg Manjerovic, CFA
Senior Portfolio Manager
One Keystone Plaza, Suite 300
Harrisburg, PA 17101
717 - 232 -2723
manjerovicg @pfm.com
Rebecca Dole, CTP
Consultant
300 South Orange Street, Suite 1170
Orlando, FL 32801
407 -648 -2208
doler @pfm.com
Contents
Cove r /Disclosu res
Summary Statement
Individual Accounts
Accounts included in Statement
NORTH PALM BEACH INVESTMENT PORTFOLIO
VILLAGE OF NORTH PALM BEACH
SAMIA JANJUA
501 US HIGHWAY 1
NORTH PALM BEACH, FL 33408
Online Access http: / /www.pfm.com Customer Service 1- 717 - 232 -2723
�PFM Y
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intended to provide specific advice or recommendations. PFM Asset
Management LLC ( "PFM ") is an investment advisor registered with the
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please contact Service Operations at the address below.
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Voting Policy is available upon request by contacting Service Operations
at the address below.
Questions About an Account PFM's monthly statement is intended to
detail our investment advisory activity as well as the activity of any
accounts held by clients in pools that are managed by PFM. The custodian
bank maintains the control of assets and executes (i.e., settles) all
investment transactions. The custodian statement is the official record of
security and cash holdings and transactions. PFM recognizes that clients
may use these reports to facilitate record keeping; therefore the custodian
bank statement and the PFM statement should be reconciled and
differences resolved. Many custodians use a settlement date basis which
may result in the need to reconcile due to a timing difference.
Account Control PFM does not have the authority to withdraw funds from
or deposit funds to the custodian. Our clients retain responsibility for their
internal accounting policies; implementing and enforcing internal controls
and generating ledger entries or otherwise recording transactions.
Market Value Generally, PFM's market prices are derived from closing bid
prices as of the last business day of the month as supplied by Interactive
Data, Bloomberg or Telerate. Where prices are not available from
generally recognized sources the securities are priced using a yield -based
matrix system to arrive at an estimated market value. Prices that fall
between data points are interpolated. Non - negotiable FDIC - insured bank
certificates of deposit are priced at par. Although PFM believes the prices
to be reliable, the values of the securities do not always represent the
prices at which the securities could have been bought or sold. Explanation
of the valuation methods for money market and TERM funds is contained
in the appropriate fund information statement.
Amortized Cost The original cost of the principal of the security is
adjusted for the amount of the periodic reduction of any discount or
premium from the purchase date until the date of the report. Discount or
premium with respect to short term securities (those with less than one
year to maturity at time of issuance) is amortized on a straightline basis.
Such discount or premium with respect to longer term securities is
amortized using the constant yield basis.
Important Disclosures
Tax Reporting Cost data and realized gains / losses are provided for
informational purposes only. Please review for accuracy and consult your
tax advisor to determine the tax consequences of your security transactions.
PFM does not report such information to the IRS or other taxing authorities
and is not responsible for the accuracy of such information that may be
required to be reported to federal, state or other taxing authorities.
Financial Situation In order to better serve you, PFM should be promptly
noted of any material change in your investment objective or financial
situation.
Callable Securities Securities subject to redemption prior to maturity may
be redeemed in whole or in part before maturity, which could affect the yield
represented.
Portfolio The securities in this portfolio, including shares of mutual funds,
are not guaranteed or otherwise protected by PFM, the FDIC (except for
certain non - negotiable certificates of deposit) or any government agency.
Investment in securities involves risks, including the possible loss of the
amount invested.
Rating Information provided for ratings is based upon a good faith inquiry of
selected sources, but its accuracy and completeness cannot be guaranteed.
Shares of some money market and TERM funds are marketed through
representatives of PFM's wholly owned subsidiary, PFM Fund Distributors,
Inc. PFM Fund Distributors, Inc. is registered with the SEC as a
broker /dealer and is a member of the Financial Industry Regulatory Authority
( "FINRA ") and the Municipal Securities Rulemaking Board ( "MSRB "). You
may reach the FINRA by calling the FINRA Regulator Public Disclosure
Hotline at 1 -888- 289 -9999 or at the FINRA Regulation Internet website
address www.nasd.com. A brochure describing the FINRA Regulation Public
Disclosure Program is also available from the FINRA upon request.
Key Terms and Definitions
Dividends on money market funds consist of interest earned, plus any
discount ratably amortized to the date of maturity, plus all realized gains and
losses on the sale of securities prior to maturity, less ratable amortization of
any premium and all accrued expenses to the fund. Dividends are accrued
daily and may be paid either monthly or quarterly. The monthly earnings on
this statement represent the estimated dividend accrued for the month for
any program that distributes earnings on a quarterly basis. There is no
guarantee that the estimated amount will be paid on the actual distribution
date.
Current Yield is the net change, exclusive of capital changes and income
other than investment income, in the value of a hypothetical fund account
with a balance of one share over the seven -day base period including the
statement date, expressed as a percentage of the value of one share
(normally $1.00 per share) at the beginning of the seven -day period. This
resulting net change in account value is then annualized by multiplying it by
365 and dividing the result by 7. The yields quoted should not be considered
a representation of the yield of the fund in the future, since the yield is not
fixed.
Account Statement
For the Month Ending September 30, 2012
Average maturity represents the average maturity of all securities and
investments of a portfolio, determined by multiplying the par or
principal value of each security or investment by its maturity (days or
years), summing the products, and dividing the sum by the total
principal value of the portfolio. The stated maturity date of mortgage
backed or callable securities are used in this statement. However the
actual maturity of these securities could vary depending on the level or
prepayments on the underlying mortgages or whether a callable
security has or is still able to be called.
Monthly distribution yield represents the net change in the value of one
share (normally $1.00 per share) resulting from all dividends declared
during the month by a fund expressed as a percentage of the value of
one share at the beginning of the month. This resulting net change is
then annualized by multiplying it by 365 and dividing it by the number of
calendar days in the month.
YTM at Cost The yield to maturity at cost is the expected rate of return,
based on the original cost, the annual interest receipts, maturity value
and the time period from purchase date to maturity, stated as a
percentage, on an annualized basis.
YTM at Market The yield to maturity at market is the rate of return,
based on the current market value, the annual interest receipts,
maturity value and the time period remaining until maturity, stated as a
percentage, on an annualized basis.
Managed AccountA portfolio of investments managed discretely by
PFM according to the client's specific investment policy and
requirements. The investments are directly owned by the client and
held by the client's custodian.
Unsettled Trade A trade which has been executed however the final
consummation of the security transaction and payment has not yet
taken place.
Please review the detail pages of this statement carefully. If you think
your statement is wrong, missing account information, or if you need
more information about a transaction, please contact PFM within 60
days of receipt. If you have other concerns or questions regarding your
account you should contact a member of your client management team
or PFM Service Operations at the address below.
PFM Asset Management LLC
Attn: Service Operations
One Keystone Plaza, Suite 300
N. Front & Market Sts
Harrisburg, PA 17101
Managed Account Summary Statement
NORTH PALM BEACH INVESTMENT PORTFOLIO - 61350001
Transaction Summary - Managed Account
Opening Market Value $8,250,462.80
Maturities/Calls
Principal Dispositions
Principal Acquisitions
Unsettled Trades
Change in Current Value
Closing Market Value
0.00
(387,246.18)
385,312.50
0.00
(5,170.02)
$8,243,359.10
For the Month Ending September 30, 2012
Maturities /Calls
Sale Proceeds
Coupon /Interest /Dividend Income
Principal Payments
Security Purchases
Net Cash Contribution
Reconciling Transactions
Earnings Reconciliation (Cash Basis) - Managed Account Cash Balance
Interest /Dividends /Coupons Received 9,765.47 Closing Cash Balance
Less Purchased Interest Related to Interest /Coupons (2,087.60)
Plus Net Realized Gains /Losses 793.41
Total Cash Basis Earnings $8,471.28
Ending Amortized Value of Securities
8,212,583.01
Ending Accrued Interest
20,783.33
Plus Proceeds from Sales
388,676.95
Plus Proceeds of Maturities /Calls /Principal Payments
0.00
Plus Coupons /Dividends Received
8,334.70
Less Cost of New Purchases
(387,400.10)
Less Beginning Amortized Value of Securities
(8,215,639.98)
Less Beginning Accrued Interest
(22,194.75)
Total Accrual Basis Earnings $5,143.16
0.00
388,676.95
8,334.70
0.00
(387,400.10)
0.00
0.00
$46,934.84
Account Page 1
PFM Asset Management LLC
PFM'
Portfolio Summary and Statistics
NORTH PALM BEACH INVESTMENT PORTFOLIO - 61350001
Description
Par Value
Market Value
Percent
U.S. Treasury Bond / Note
6,840,000.00
6,916,831.78
83.91
Federal Agency Bond / Note
1,305,000.00
1,326,527.32
16.09
Managed Account Sub -Total
8,145,000.00
8,243,359.10
100.00%
Accrued Interest
1
20,783.33
Total Portfolio
8,145,000.00
8,264,142.43
Unsettled Trades
Maturity Distribution
2.26%
0.00% - _
0 - 6 Months 6 - 12 Months 1 - 2 Years 2 - 3 Years
0.00 0.00
0.00% 0.00% 0.00%
3- 4 Years 4- 5 Years Over 5 Years
US TSY Bond /
83.91%
For the Month Ending September 30, 2012
Fed Agy Bond /
Note
16.09%
Characteristics
Yield to Maturity at Cost 0.50%
Yield to Maturity at Market 0.25%
Duration to Worst 1.82
Weighted Average Days to Maturity 673
Account Page 2
PFM Asset Management LLC
.,
Managed Account Issuer Summary
NORTH PALM BEACH INVESTMENT PORTFOLIO - 61350001
Total
=PFM'
qu PFM Asset Management LLC
$8,243,359.10 100.000/0
AA+
100.00%
For the Month Ending September 30, 2012
Account
Page 3
A
P.a,,
Managed Account Detail of Securities Held For the Month Ending September 30, 2012
NORTH PALM BEACH INVESTMENT PORTFOLIO - 61350001
Security Type/ Description S &P Moody's Trade Settle Original If TM Accrued Amortized Market
Dated Date /Coupon /Maturity CUSIP Par Rating Rating Date Date Cost at Cost Interest Cost Value
U.S. Treasury Bond / Note
US TREASURY NOTES
525,000.00 AA+ Aaa 06/27/12 06/29/12 524,528.32 0.41 87.02 524,573.15 526,271.48
DTD 03/15/2012 0.375% 03/15/2015
-%I= Account Page 4
WF PFM Asset Management LLC
Managed Account Detail of Securities Held For the Month Ending September 30, 2012
NORTH PALM BEACH INVESTMENT PORTFOLIO - 61350001
Security Type/ Description
S &P
Moody's
Trade
Settle
Original
YTM
Accrued
Amortized
Market
Dated Date /Coupon /Maturity
U.S. Treasury Bond / Note
CUSIP
Par
Rating
Rating
Date
Date
Cost
at Cost
Interest
Cost
Value
US TREASURY NOTES
375,000.00
AA+
Aaa
09/06/12
09/10/12
385,312.50
0.34
12.88
385,118.27
385,400.25
DTD 09/30/2010 1.250% 09/30/2015
Security Type Sub -Total
Federal Agency :. Note
6,840,000.00
6,907,974.43
0.42
13,993.68
6,898,676.71
6,916,831.78
FANNIE MAE GLOBAL NOTES
120,000.00
AA+
Aaa
04/17/12
04/19/12
119,653.20
0.59
206.67
119,703.70
120,371.52
DTD 04/19/2012 0.500% 05/27/2015
Security Type Sub -Total
1,305,000.00
1,324,325.45
0.90
6,789.65
1,313,906.30
1,326,527.32
Managed Account Sub -Total
8,145,000.00
8,232,299.88
0.50
20,783.33
8,212,583.01
8,243,359.10
Securities Sub -Total
$8,145,000.00
$8,232,299.88
0.50%
$20,783.33
$8,212,583.01
$8,243,359.10
Accrued Interest
$20,783.33
Total Investments
$8,264,142.43
r
�PF r1 Account Page 5
WPFM Asset Management LLC
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Managed Account Fair Market Value & Analytics For the Month Ending September 30, 2012
NORTH PALM BEACH INVESTMENT PORTFOLIO - 61350001
Security Type/ Description
Next Call Market
Market
Unreal G/L
Unreal G/L
Effective
Duration
YTM
Dated Date /Coupon /Maturity
U.S. Treasury :. Note
CUSIP
Par Broker
Date Price
Value
On Cost
Amort Cost
Duration
to Worst at Mkt
US TREASURY NOTES
375.000.00 MERRILL
102.77
385,400.25
87.75
281.98
2.95
2.95
0.32
DTD 09/30/2010 1.250% 09/30/2015
-V1
Account Page 6
qu PFM Asset Management LLC
r
PFX1
Managed Account Fair Market Value & Analytics For the Month Ending September 30, 2012
NORTH PALM BEACH INVESTMENT PORTFOLIO - 61350001
Security Type/ Description
Next Call Market
Market
Unreal G/L
Unreal G/L
Effective
Duration
YTM
Dated Date /Coupon /Maturity
CUSIP
Par Broker
Date Price
Value
On Cost
Amort Cost
Duration
to Worst at Mkt
Security Type Sub -Total
Federal Agency :. Note
6,840,000.00
6,916,831.78
8,857.35
18,155.07
1.87
1.87
0.25
FANNIE MAE GLOBAL NOTES
120,000.00 CITIGRP
100.31
120,371.52
718.32
667.82
2.63
2.63
0.38
DTD 04/19/2012 0.500% 05/27/2015
Security Type Sub -Total
1,305,000.00
1,326,527.32
2,201.87
12,621.02
1.60
1.60
0.26
Managed Account Sub -Total
8,145,000.00
8,243,359.10 11,059.22 30,776.09
Securities Sub -Total $8,145,000.00 $8,243,359.10 $11,059.22 $30,776.09
Accrued Interest $20,783.33
Total Investments $8,264,142.43
1.82 1.82 0.25
1.82 1.82 0.25%
Account Page 7
PFM Asset Management LLC
PFN'I,
Managed Account Security Transactions & Interest
NORTH PALM BEACH INVESTMENT PORTFOLIO - 61350001
Transaction Type Principal Accrued
Trade Settle Security Description CUSIP Par Proceeds Interest
Total
For the Month Ending September 30, 2012
Realized G/L Realized G/L Sale
Cost Amort Cost Method
09/06/12 09/10/12 US TREASURY NOTES
375,000.00
(385,312.50)
(2,087.60)
(387,400.10)
DTD 09/30/2010 1.250% 09/30/2015
Transaction Type Sub -Total
INTEREST
375,000.00
(385,312.50)
(2,087.60)
(387,400.10)
I
09/04/12 09/04/12 MONEY MARKET FUND
310,000.00
0.00
1.937.50
1,937.50
DTD 09/30/2010 1.250% 09/30/2015
Transaction Type Sub -Total
2,295,000.00
0.00
8,334.70
8,334.70
09/06/12 09/10/12 US TREASURY NOTES
40,000.00
40,320.40
185.56
40,505.96
427.20
363.58 SPEC LOT
DTD 08/06/2010 1.000% 09/23/2013
Transaction Type Sub -Total
385,000.00
387,246.18
1,430.77
388,676.95
793.41
1,753.20
Managed Account Sub -Total
1,933.68
7,677.87
9,611.55
793.41
1,753.20
Account Page 8
PFM Asset Management LLC
-Miii
Managed Account Security Transactions & Interest
NORTH PALM BEACH INVESTMENT PORTFOLIO - 61350001
Total Security Transactions
For the Month Ending September 30, 2012
$1,933.68 $7,677.87 $9,611.55 $793.41 $1,753.20
i
Account Page 9
PFM Asset Management LLC