The state treasury earned $71.9 million in interest earnings last quarter on its $11 billion portfolio, an official in the state treasurer’s office reported to the state Board of Finance on Wednesday.
In the same quarter a year ago, the state treasury reported $17.5 million in interest earnings based on what was then a $6 billion investment portfolio.
Rising interest rates coupled with the larger investment portfolio have fueled the state treasury’s interest earnings. Director of Investment Accounting Steven Kilgore said the state treasury earned $43.8 million in interest earnings on its long-term investment portfolio in the quarter that ended March 31.
“There was a month-by-month increase as interest rates were rising,” he said.
The treasury’s long-term investment portfolio consists of mortgage-backed securities, U.S. treasury, municipal and agency bonds, and U.S. Small Business Administration loans, according to a written report from the state treasurer's office.
Kilgore said the state treasury earned $28 million in interest earnings on its short-term investment portfolio in the quarter that ended March 31.
The treasury’s short-term investment portfolio includes commercial paper, certificates of deposit and demand and money market accounts, according to the treasurer’s office written report.
The state treasury’s interest earnings in the quarter that ended March 31 totaled $71.9 million, compared to interest earnings of $59.2 million in the quarter that ended Dec. 31, Kilgore said.
“Rising rates have boosted the portfolio yield as older bonds mature and the funds are reinvested,” he said.
Senior Investment Manager Steve Pulley said the state treasury’s investment return last quarter was 3.02%, which exceeded the board’s target range of 2.8% to 2.9%.
The state Board of Finance voted to increase its target range range of 3% to 3.1% for the state treasury’s investment portfolio for the quarter that started April 1 and ends June 30.
STATE TREASURER
In a video shown to the state Board of Finance on which he serves, state Treasurer Mark Lowery said he appreciates the board’s role in overseeing the state treasury
“I appreciate the opportunity to be able to make this video in lieu of not being able to attend as I recover and continue my rehab in Maryland with my daughter and my granddaughters,” the Republican from Maumelle said.
He said he also appreciates people who have checked in with him.
Lowery said he wanted to thank his staff “for the amazing job that they have done in keeping the office running tight and also assuring that the returns on investment of this state are at their best,” and his office’s Chief of Staff Wil Cheatman “for his diligence in keeping me updated on everything that is going on.”
He said he wants to thank the board members for being in attendance at Tuesday’s meeting, and there are a number of actions that the board will take that are extremely important, and “I appreciate that you are doing this in my absence.”
Last month, Lowery spokeswoman Heather McKim said Lowery suffered a stroke in mid-March.
“Following his release from the rehabilitation facility on Thursday, April 6, 2023, Treasurer Lowery’s daughter, Erin Lowery, decided it would be best for her dad’s continued recovery for him to be with her in Maryland where he would constantly be surrounded by family, especially his grandchildren, while continuing to seek professional treatment and rehabilitation services there,” McKim said last month.
The state treasurer oversees the state treasury's investment portfolio and serves on the board of trustees for the Arkansas Public Employees Retirement System, the Arkansas Teacher Retirement System, and the Arkansas State Highway Employees' Retirement System.
Lowery, a former state representative, was elected as state treasurer in the November general election.