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City of Centerville, Minnesota <br />Notes to the Financial Statements <br />December 31, 2021 <br /> <br />Note 3: Detailed Notes on All Funds (Continued) <br /> <br />Investments <br />As of December 31, 2021, the City had the following investments that are insured or registered, or securities held by the <br /> <br /> <br />The investments of the City are subject to the following risks: <br /> <br />Credit Risk. The credit risk for investments is the risk that an issuer or other counterparty to an investment will not <br />fulfill its obligations. Ratings are provided by various credit rating agencies and where applicable, indicate <br />associated credit risk. Minnesota st47 of the notes. <br /> <br />Custodial Credit Risk. The custodial credit risk for investments is the risk that, in the event of the failure of the <br />counterparty to a transaction, a government will not be able to recover the value of investment or collateral <br />securities that are in the possession of an outside party. Generally, the City limits its securities purchases to those <br /> <br /> <br />Concentration of Credit Risk. The concentration of credit risk for investments is the risk of loss attributed to the <br />invested more than 5 percent of <br />investments in Discover Bank CD (9.3 percent), Capital One CD (9.3 percent), Texas Exchange Bank CD (7.8 <br />percent), Pathfinder Bank CD (9.3 percent), CIT SLC Bank CD (9.5 percent), JPMorgan Chase Bank CD <br />(9.3 percent), MS Bank CD (9.6 percent) and HBSC Bank CD (9.3 percent). <br /> <br />Interest Rate Risk. The interest rate risk for investments is the risk that changes in interest rates will adversely <br />affect the fair value of an investment. <br /> <br />The City does not currently have a formal investment policy that addresses the above-mentioned risks. <br /> <br />54 <br /> <br />