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Home My WebLink About2026 05 11 Awards and Presentations 102 - PFM Asset Management LLC Presentation on Quarterly Investment Report for Period Ending 03.31.2026AWARDS AND PRESENTATIONS ITEM 102 CITY COMMISSION AGENDA | MAY 11, 2026 REGULAR MEETING TITLE PFM Asset Management LLC presentation on the highlights of the most recent Quarterly Investment Report for the period ending 3/31/2026 SUMMARY Sean Gannon and Dani Metz from PFM Asset Management Group LLC will provide a brief presentation on the highlights of the most recent Quarterly Investment Report for the period ending 3/31/2026. FUNDING SOURCE RECOMMENDATION No action required at this time 7 City Commissioners Investment Report For the Quarter Ended March 31, 2026 Client Management Team PFM Asset Management A division of U.S. Bancorp Asset Management, Inc 213 Market Street Harrisburg, PA 17101-2141 717-232-2723 225 East Robinson Street | Suite 250 Orlando, FL 32801 689-263-8906 CITY OF WINTER SPRINGS Datnilza Metz, CTP, Institutional Sales and Relationship Manager Sean Gannon, CTP, Institutional Sales and Relationship Manager Richard Pengelly, CFA, CIMA, CTP, Managing Director NOT FDIC INSURED : NO BANK GUARANTEE : MAY LOSE VALUE This material is for client use8 PFM Asset Management | pfmam.com Market Update Page 2 of 189 Current Market Themes Source: Details on market themes and economic indicators provided throughout the body of the presentation. Bloomberg Finance L.P., as of March 31, 2026. For the Quarter Ended March 31,2026 Market Update ▸Geopolitics has overtaken U.S. macro fundamentals as the market’s primary focus ▹Conflict in Iran has increased near-term inflation risks due to higher commodity prices ▹Unemployment rate remains stable with net new job creation near zero ▹Consumer spending and business investment continue to support growth, though momentum is slowing ▸The Federal Reserve paused during both meetings in Q1, keeping rates at 3.50-3.75% ▹The median “dot plot” projection continues to show one 25 basis point cut in 2026, though individual projections showed less easing ▹Fed Chair Powell acknowledged the path forward is complicated by geopolitical uncertainty, making it more difficult for the Fed to balance its dual mandate ▸Rising front-end yields unwound the inversion in the Treasury curve ▹Rate cut expectations were pushed further out, lifting front-end yields ▹Escalating Middle East conflict drove a spike in volatility ▹Credit spreads widened from historically tight levels amid heavy supply and geopolitical pressure PFM Asset Management | pfmam.com CITY OF WINTER SPRINGS Page 3 of 18 10 Source: Bloomberg Finance L.P., as of March 31, 2026. Market implied inflation expectations shown using 1-year and 5-year inflation swaps. For the Quarter Ended March 31, 2026 Market Update ▸Closure of the Strait of Hormuz creates a supply shock ▹Higher oil prices pressure agricultural and industrial inputs ▹Duration of price shock more important than magnitude ▸Federal Reserve likely to remain on hold as it assesses evolving risks ▹Headline inflation expected to rise though uncertainty remains regarding passthrough to core inflation and labor markets ▹Fed to look through supply-side energy shock if inflation expectations remain anchored 44% 61% 55% 34%32% 0% 25% 50% 75% Brent Crude $96.79 Nat. Gas (Eur) €55.28 Urea Ammonia Polyethylene Price Change of Energy Commodities* Since February 27 3.2% 2% 3% 4% Jan-25 Apr-25 Jul-25 Oct-25 Jan-26 Hu n d r e d s Forward Inflation Expectations January 1, 2025 to March 31, 2026 1-year 5-year *Brent Crude are quoted in dollars per barrel based on the front -month futures contract. Natural gas prices are quoted in euros per megawatt-hour. Ammonia, and urea prices are based on the front -month exchange-traded futures contract. Polyethylene is price are based on the active exchange -traded futures contract. Market Pricing Conflict In Iran PFM Asset Management | pfmam.com CITY OF WINTER SPRINGS Page 4 of 18 11 Source: FOMC Chair Jerome Powell Press Conference, March 18, 2026. Bureau of Labor Statistics and Bloomberg Finance L.P. CPI Inflation as of February 2026 and Unemployment Rate as of March 2026. Survey responses after March 27, 2026, included in mean and forecast range for CPI Inflat ion and Unemployment Rate. Shading represents the central 80% of the forecasts. Fed Chair Powell: “What we have is some tension between the goals, and we’re trying to manage our way through it.” Macro Data Takes a Back Seat For the Quarter Ended March 31,2026 Market Update 2Q26 3.3%4Q26 3.1% 2Q27 2.2% Feb ‘26 2.4% 1% 2% 3% 4% 5% 6% Mar-23 Mar-24 Mar-25 Mar-26 Mar-27 CPI Inflation (YoY) Mean Forecast Actual 2Q26 4.5% 4Q26 4.5% 2Q27 4.4%Mar ‘26 4.3% 3% 4% 5% Mar-23 Mar-24 Mar-25 Mar-26 Mar-27 Unemployment Rate Mean Forecast Actual PFM Asset Management | pfmam.com CITY OF WINTER SPRINGS Page 5 of 18 12 Fed Chair Powell: “We feel like the framework calls to balance the risks. We feel where we are now is on the higher borderline of restrictive versus not restrictive, we feel like that is the right place to be.” 2026 2027 2028 The Latest Fed “Dot Plot” Longer Term 3.1%1 cut 1 cut 0 cuts Source: FOMC Chair Jerome Powell Press Conference, March 18, 2026. Federal Reserve; Bloomberg Finance L.P. Individual dots re present each Fed members’ judgement of the midpoint of the appropriate target range for the federal funds rate at each year -end. As of March 2026. For the Quarter Ended March 31,2026 Market Update Fed Participants’ Assessments of ‘Appropriate’ Monetary Policy5% 4% 3% 2% 1% 0% PFM Asset Management | pfmam.com CITY OF WINTER SPRINGS Page 6 of 18 13 Source: Bloomberg Finance L.P., as of March 31, 2026. Treasury Yields Reach 8-Month High For the Quarter Ended March 31,2026 Market Update 3.00% 3.25% 3.50% 3.75% 4.00% Dec-25 Jan-26 Feb-26 Mar-26 2-Year U.S. Treasury Yield December 31, 2025 – March 31, 2026 Feb 5th Weak labor market data +42 bps Feb 28th– March 31st U.S. and Israeli strikes In Iran result in the closure of the Strait of Hormuz Jan 9th Unemployment rate beats expectations and falls to 4.4% PFM Asset Management | pfmam.com CITY OF WINTER SPRINGS Page 7 of 18 14 Source: Bloomberg Finance L.P., as of March 31, 2026. For the Quarter Ended March 31, 2026 Market Update 3.67% 3.79% 3.94% 4.13% 4.32% 4.91% 3.00% 3.50% 4.00% 4.50% 5.00% 5.50% Yi e l d Maturity U.S. Treasury Yield Curve 1 Year Range March 31, 2026 December 31, 2025 3mo 2yr 5yr 7yr 10yr 20yr 30yr Treasury Yields Rise Across the Curve PFM Asset Management | pfmam.com CITY OF WINTER SPRINGS Page 8 of 18 15 PFM Asset Management | pfmam.com Portfolio Review: WINTER SPRINGS GENERAL CITY ACCOUNT Page 9 of 1816 PFM Asset Management | pfmam.com CITY OF WINTER SPRINGS For the Quarter Ended March 31, 2026 Account Summary Sector Allocation Analytics For informational/analytical purposes only and is not provided for compliance assurance. Includes accrued interest. *Sector Limit for Analysis is as derived from our interpretation of your most recent Investment Policy as provided. Local Government Investment Pool - $8,535,325 8.3% 0.7% 17.5% 4.1% 3.7% 6.7% 59.0% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0% Money Market Fund - $724,447 Corporate - $17,906,503 Commercial Paper - $4,158,273 Agency CMBS - $3,830,088 ABS - $6,912,855 U.S. Treasury - $60,427,272 Portfolio Allocation Sector Limit for Analysis* Page 10 of 1817 PFM Asset Management | pfmam.com CITY OF WINTER SPRINGS For the Quarter Ended March 31, 2026 Portfolio Snapshot Yield and duration calculations exclude cash and cash equivalents. Sector allocation includes market values and accrued interest. The portfolio’s benchmark is currently the ICE BofA 1 Year U.S Treasury Index. Prior to 6/30/11 it was the ICE BofA 1-3 Year Government Index. Source: Bloomberg Financial LP. An average of each security’s credit rating was assigned a numeric value and adjusted for its relative weighting in the portfolio. 1. Portfolio Snapshot - WINTER SPRINGS GENERAL CITY ACCOUNT¹ Credit Quality - S&P 52%47% 1% 0% 20% 40% 60% 0-1 Yr 1-2 Yrs 2-3 Yrs Portfolio Duration Distribution U.S. Treasury | 65% Corporate | 19% ABS | 8% Commercial Paper | 5% Agency CMBS | 4% Sector Allocation AAA | 4% AA+ | 69% AA | 1% AA- | 3% A+ | 7% A | 5% A- | 4% A-1 | 5% Not Rated | 4% Portfolio Statistics Portfolio Effective Duration Benchmark Effective Duration Portfolio Credit Quality Yield At Market Yield At Cost Total Market Value Securities Sub-Total Cash $93,961,843.32 $92,466,798.24 $770,598.01 $724,447.07 0.99 years 0.88 years 4.05% 3.88% AA Accrued Interest Page 11 of 1818 PFM Asset Management | pfmam.com CITY OF WINTER SPRINGS For the Quarter Ended March 31, 2026 Portfolio Performance The lesser of 10 years or since inception is shown. Since inception returns for periods one year or less are not shown. Performance inception date is March 31, 2011.1. Interest earned calculated as the ending accrued interest less beginning accrued interest, plus net interest activity.2. Returns for periods one year or less are presented on a periodic basis. Returns for periods greater than one year are presented on an annualized basis.3. The portfolio’s benchmark is currently the ICE BofA 1 Year U.S Treasury Index. Prior to 6/30/11 it was the ICE BofA 1-3 Year Government Index. Source: Bloomberg Financial LP.4. 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% Re t u r n Portfolio Benchmark Portfolio Performance Market Value Basis Earnings 3 Months 1 Year 3 Years 5 Years 10 Years Interest Earned² Change in Market Value Total Dollar Return Total Return³ Portfolio 0.68%4.15%4.80%2.96%2.24% Benchmark⁴0.59%3.67%4.32%2.58%2.05% 3 Months 1 Year 3 Years 5 Years 10 Years $867,757 $3,592,500 $10,030,654 $11,324,266 $14,380,651 $(250,089)$191,608 $3,337,223 $2,609,550 $4,133,164 $617,668 $3,784,108 $13,367,878 $13,933,816 $18,513,814 Pagel-ylofl-/ Gross Margin 0.09%0.49%0.48%0.38%0.19% 19 PFM Asset Management | pfmam.com CITY OF WINTER SPRINGS For the Quarter Ended March 31, 2026 Portfolio Performance The lesser of 10 years or since inception is shown. Performance inception date is March 31, 2011.1. Interest earned calculated as the ending accrued interest less beginning accrued interest, plus net interest activity.2. Realized gains / (losses) are shown on an amortized cost basis.3. Accrual Basis Earnings - WINTER SPRINGS GENERAL CITY ACCOUNT Accrual Basis Earnings Interest Earned² Realized Gains / (Losses)³ Change in Amortized Cost Total Earnings 3 Months $887,740 $10,292 $85,968 $984,001 1 Year $3,662,720 $23,031 $492,699 $4,178,450 3 Years $10,100,875 ($82,208) $2,579,630 $12,598,297 5 Year $11,394,486 ($180,163) $2,972,120 $14,186,443 10 Year¹ $14,450,871 ($10,371) $4,168,016 $18,608,516 Page 13 of 1820 PFM Asset Management | pfmam.com CITY OF WINTER SPRINGS For the Quarter Ended March 31, 2026 Account Summary Ratings shown are calculated by assigning a numeral value to each security rating, then calculating a weighted average rating for each security type / issuer category using all available security ratings, excluding Not-Rated (NR) ratings. For security type / issuer categories where a rating from the applicable NRSRO is not available, a rating of NR is assigned. Includes accrued interest and excludes balances invested in overnight funds. Issuer Diversification Market Value (%)S&P / Moody's / FitchSecurity Type / Issuer 64.8%U.S. Treasury United States Treasury 64.8%AA / Aa / AA 4.1%Agency CMBS Federal Home Loan Mortgage Corp 4.1%AA / Aa / AA 4.5%Commercial Paper Bank of America Corp 1.3% A / NR / AA Barclays PLC 1.1% A / NR / A National Bank of Canada 2.1% A / Aa / AA 19.2%Corporate AbbVie Inc 0.4% A / A / NR Amazon.com Inc 1.3% AA / A / AA American Express Co 0.7%A / A / A Analog Devices Inc 0.8%A / A / A ANZ Group Holdings Ltd 0.8%AA / Aa / AA Bank of America Corp 0.4%A / A / AA Caterpillar Inc 0.5%A / A / A Citigroup Inc 1.4%A / Aa / A Cooperatieve Rabobank UA 1.2%A / Aa / AA Deere & Co 0.8%A / A / A Goldman Sachs Group Inc 0.7%A / A / A Home Depot Inc 0.8%A / A / A JPMorgan Chase & Co 1.6%A / Aa / AA Mercedes-Benz Group AG 1.1%A / A / NR National Rural Utilities Cooperative Fi 0.8%A / A / A PACCAR Inc 0.5%A / A / NR PepsiCo Inc 0.5%A / A / NR Shell PLC 0.8%A / Aa / AA Market Value (%)S&P / Moody's / FitchSecurity Type / Issuer 19.2%Corporate State Street Corp 1.1%A / Aa / AA Toronto-Dominion Bank 0.9%A / A / AA Toyota Motor Corp 0.8%A / A / A UnitedHealth Group Inc 0.8%A / A / A Westpac Banking Corp 0.8%AA / Aa / NR 7.4%ABS American Express Co 0.5% AAA / NR / AAA BMW Vehicle Lease Trust 0.4% AAA / Aaa / AAA GM Financial Consumer Automobile Receiv 0.3%NR / Aaa / AAA Honda Auto Receivables Owner Trust 1.8% AAA / Aaa / AAA Hyundai Auto Receivables Trust 1.7% AAA / NR / AAA John Deere Owner Trust 0.4%NR / Aaa / AAA Mercedes-Benz Auto Receivables Trust 0.4% AAA / Aaa / AAA Toyota Auto Receivables Owner Trust 0.2%NR / Aaa / AAA Verizon Master Trust 1.1%NR / Aaa / AAA World Omni Auto Trust 0.6% AAA / NR / AAA 100.0%Total Page 14 of 1821 PFM Asset Management | pfmam.com CITY OF WINTER SPRINGS For the Quarter Ended March 31, 2026 Appendix Important Disclosures This material is for general information purposes only and is not intended to provide specific advice or a specific recommendation, as it was prepared without regard to any specific objectives or financial circumstances. PFMAM professionals have exercised reasonable professional care in the preparation of this performance report. Information in this report is obtained from sources external to PFMAM and is generally believed to be reliable and available to the public; however, we cannot guarantee its accuracy, completeness or suitability. We rely on the client's custodian for security holdings and market values. Transaction dates reported by the custodian may differ from money manager statements. While efforts are made to ensure the data contained herein is accurate and complete, we disclaim all responsibility for any errors that may occur. References to particular issuers are for illustrative purposes only and are not intended to be recommendations or advice regarding such issuers. Fixed income manager and index characteristics are gathered from external sources. When average credit quality is not available, it is estimated by taking the market value weights of individual credit tiers on the portion of the strategy rated by a NRSRO. It is not possible to invest directly in an index. The index returns shown throughout this material do not represent the results of actual trading of investor assets. Third-party providers maintain the indices shown and calculate the index levels and performance shown or discussed. Index returns do not reflect payment of any sales charges or fees an investor would pay to purchase the securities they represent. The imposition of these fees and charges would cause investment performance to be lower than the performance shown. The views expressed within this material constitute the perspective and judgment of PFMAM at the time of distribution and are subject to change. Any forecast, projection, or prediction of the market, the economy, economic trends, and equity or fixed-income markets are based upon certain assumptions and current opinion as of the date of issue and are also subject to change. Some, but not all assumptions are noted in the report. Assumptions may or may not be proven correct as actual events occur, and results may depend on events outside of your or our control. Changes in assumptions may have a material effect on results. Opinions and data presented are not necessarily indicative of future events or expected performance. PFM Asset Management serves clients in the public sector and is a division of U.S. Bancorp Asset Management, Inc., which is the legal entity providing investment advisory services. U.S. Bancorp Asset Management, Inc. is a registered investment adviser, a direct subsidiary of U.S. Bank N.A. and an indirect subsidiary of U.S. Bancorp. U.S. Bank N.A. is not responsible for and does not guarantee the products, services, or performance of U.S. Bancorp Asset Management, Inc. The information contained is not an offer to purchase or sell any securities. Additional applicable regulatory information is available upon request. For more information regarding PFMAM's services or entities, please visit www.pfmam.com. Further distribution is not permitted without prior written consent. Page 15 of 1822 PFM Asset Management | pfmam.com CITY OF WINTER SPRINGS For the Quarter Ended March 31, 2026 Appendix Important Disclosures Generally, PFMAM’s market prices are derived from closing bid prices as of the last business day of the month as supplied by ICE Data Services. There may be differences in the values shown for investments due to accrued but uncollected income and the use of differing valuation sources and methods. Non-negotiable FDIC-insured bank certificates of deposit are priced at par. Although PFMAM believes the prices to be reliable, the values of the securities may not represent the prices at which the securities could have been bought or sold. Explanation of the valuation methods for a registered investment company or local government investment program is contained in the appropriate fund offering documentation or information statement. In accordance with generally accepted accounting principles, information is presented on a trade date basis; forward settling purchases are included in the monthly balances, and forward settling sales are excluded. Performance is presented in accordance with the CFA Institute's Global Investment Performance Standards (GIPS). Unless otherwise noted, performance is shown gross of fees. Quarterly returns are presented on an unannualized basis. Returns for periods greater than one year are presented on an annualized basis. Past performance is not indicative of future returns. ICE Bank of America Indices provided by Bloomberg Financial Markets. Money market fund/cash balances are included in performance and duration computations. Standard & Poor's is the source of the credit ratings. Distribution of credit rating is exclusive of money market fund/LGIP holdings. Callable securities in the portfolio are included in the maturity distribution analysis to their stated maturity date, although, they may be called prior to maturity. MBS maturities are represented by expected average life. Page 16 of 1823 PFM Asset Management | pfmam.com CITY OF WINTER SPRINGS For the Quarter Ended March 31, 2026 Appendix Glossary Accrued Interest: Interest that is due on a bond or other fixed income security since the last interest payment was made. Agencies: Federal agency securities and/or Government-sponsored enterprises. 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 straight line basis. Such discount or premium with respect to longer-term securities is amortized using the constant yield basis. Asset-Backed Security: A financial instrument collateralized by an underlying pool of assets – usually ones that generate a cash flow from debt, such as loans, leases, credit card balances, and receivables. Bankers’ Acceptance: A draft or bill or exchange accepted by a bank or trust company. The accepting institution guarantees payment of the bill as well as the insurer. Commercial Paper: An unsecured obligation issued by a corporation or bank to finance its short-term credit needs, such as accounts receivable and inventory. Contribution to Total Return: The weight of each individual security multiplied by its return, then summed for each sector to determine how much each sector added or subtracted from the overall portfolio performance. Effective Duration: A measure of the sensitivity of a security’s price to a change in interest rates, stated in years. Effective Yield: The total yield an investor receives in relation to the nominal yield or coupon of a bond. Effective yield takes into account the power of compounding on investment returns, while nominal yield does not. FDIC: Federal Deposit Insurance Corporation. A federal agency that insures bank deposits to a specified amount. Interest Rate: Interest per year divided by principal amount and expressed as a percentage. Market Value: The value that would be received or paid for an investment in an orderly transaction between market participants at the measurement date. Maturity: The date upon which the principal or stated value of an investment becomes due and payable. Negotiable Certificates of Deposit: A CD with a very large denomination, usually $1 million or more, that can be traded in secondary markets. Par Value: The nominal dollar face amount of a security. Pass-through Security: A security representing pooled debt obligations that passes income from debtors to its shareholders. The most common type is the mortgage-backed security. Page 17 of 1824 PFM Asset Management | pfmam.com CITY OF WINTER SPRINGS For the Quarter Ended March 31, 2026 Appendix Glossary Repurchase Agreements: A holder of securities sells these securities to an investor with an agreement to repurchase them at a fixed price on a fixed date. Settle Date: The date on which the transaction is settled and monies/securities are exchanged. If the settle date of the transaction (i.e., coupon payments and maturity proceeds) occurs on a non-business day, the funds are exchanged on the next business day. Supranational: A multinational union or association in which member countries cede authority and sovereignty on at least some internal matters to the group, whose decisions are binding on its members. Trade Date: The date on which the transaction occurred; however, the final consummation of the security transaction and payment has not yet taken place. Unsettled Trade: A trade which has been executed; however, the final consummation of the security transaction and payment has not yet taken place. U.S. Treasury: The department of the U.S. government that issues Treasury securities. Yield: 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. 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. Page 18 of 1825