[WESMARK BALANCED FUND LOGO APPEARS HERE]
Balanced Fund
Annual Report
January 31, 2000
[WESMARK FUNDS LOGO APPEARS HERE]
President's Message
Dear Shareholder:
I am pleased to present the Annual Report to Shareholders for WesMark Balanced
Fund. This report covers the 12-month period from February 1, 1999 through
January 31, 2000. It gives you a complete picture of the fund's operations,
beginning with an overview of the stock and bond markets and fund strategy by
the portfolio manager, followed by a complete list of fund holdings and the
financial statements.
WesMark Balanced Fund gives you access to a diversified, professionally managed
portfolio of high-quality stocks and bonds. At the end of the reporting period,
more than 67% of the fund's $73.9 million in assets were invested in common and
preferred stocks. The rest of the fund's assets were invested across U.S.
government agency bonds, corporate bonds, commercial paper and a money market
mutual fund.
During the 12-month reporting period, the fund produced a total return of
13.52%.1 Contributing to the total return was a net asset value increase of
$0.83, income distributions totaling $0.25 per share and capital gain
distributions totaling $0.24 per share.
Thank you for selecting WesMark Balanced Fund to pursue your financial goals
through two key financial markets.
Sincerely,
/s/Edward C. Gonzales
President
March 15, 2000
1 Performance quoted is based on net asset value. Past performance is no
guarantee of future results. Investment return and principal value will
fluctuate, so that an investor's shares, when redeemed, may be worth more or
less than their original cost. Total return for the one-year period ended
January 31, 2000 based on offering price (i.e., less any applicable sales
charge) was 8.12%.
Investment Review
It is our pleasure to review with you the results for the WesMark Balanced Fund.
This report covers the period from February 1, 1999 to January 31, 2000. The
fund provided a total return of 13.52%1 during the report period. We think it is
important that you understand our investment approach so that you can feel
comfortable with your investment regardless of short-term market fluctuations.
We believe that the primary objective of the Balanced Fund is to attain a
balance between current income and growth of capital. This continues to be
difficult, given current economic and financial market conditions. The dividend
yield for the Standard & Poor's 500 Index reached new lows during the year and
even though interest rates increased, they remained at fairly low levels.2 The
level of income being produced by the fund is impacted by both of these factors.
The fund increased its exposure to non-callable corporate bonds and reduced its
exposure to callable federal agency issues as yields increased in the corporate
sector. The average maturity for the bond portion was also extended during the
period. As of January 31, 2000, the 30-day SEC yield3 was 2.62%, an increase
from the previous fiscal year-end. The stock allocation at year end was 67.2%,
near the maximum allowed allocation of 70%. This enabled the fund to more fully
participate in the strong equity markets and enhance the total return. This
allocation has been reduced, and sector shifts have occured during the final
months of the fiscal year.
We maintain our long-term allocation objective in common stocks of 50-60%,
within the permitted range of 30 to 70%, with market conditions and expectations
determining the allocation at any particular point in time.
1 Performance quoted is based on net asset value.Past performance is no
guarantee of future results.Investment return and principal value will
fluctuate,so that an investor's shares,when redeemed,may be worth more or
less than their original cost.Total return for the one-year period ended
January 31,2000 based on offering price (i.e.,less any applicable sales
charge) was 8.12%.
2 The S&P Index is an unmanaged capitalization-weighted index of 500 stocks
designed to measure performance of the broad domestic economy through changes
in the aggregate market value of 500 stocks representing all major
industries.Investments cannot be made in an index.
3 The 30-day SEC yield is calculated by dividing the net investment income per
share for the 30 days ended on the date of calculation by the maximum
offering price per share on that date.The figure is then compounded and
annualized.
Last Meeting of Shareholders
A Special Meeting of Trust shareholders was held on December 17, 1999. As of
October 27, 1999, the record date for shareholder voting at the meeting, there
were 6,888,880 total outstanding Shares. The following items were considered by
shareholders and the results of their voting were as follows:
Agenda Item 1. To elect five Trustees*
<TABLE>
<CAPTION>
For Withheld Authority To Vote
- -----------------------------------------------------------------------------------
<S> <C> <C>
Nicholas P. Constantakis 6,619,314 3,707
John F. Cunningham 6,619,314 3,707
J. Christopher Donahue 6,619,314 3,707
Charles F. Mansfield, Jr. 6,619,314 3,707
John S. Walsh 6,619,314 3,707
</TABLE>
* The following Trustees continued their terms as Trustees of the Trust: John F.
Donahue, Thomas G. Bigley, John T. Conroy, Jr., Lawrence D. Ellis, M.D., Peter
E. Madden, John E. Murray, Jr., Marjorie P. Smuts.
Agenda Item 2. To make changes to the fund's fundamental investment policies:
a. To amend the fund's fundamental investment policies regarding borrowing
money and issuing senior securities.
<TABLE>
<CAPTION>
For Against Abstentions
- --------------------------------------------------
<S> <C> <C>
6,620,630 1,335 1,056
</TABLE>
b. To amend the fund's fundamental investment policies regarding investments in
real estate.
<TABLE>
<CAPTION>
For Against Abstentions
- --------------------------------------------------
<S> <C> <C>
6,615,978 237 1,056
</TABLE>
c. To amend the fund's fundamental investment policies regarding investments in
commodities.
<TABLE>
<CAPTION>
For Against Abstentions
- --------------------------------------------------
<S> <C> <C>
6,615,693 741 6,588
</TABLE>
d. To amend the fund's fundamental investment policy regarding underwriting
securities.
<TABLE>
<CAPTION>
For Against Abstentions
- --------------------------------------------------
<S> <C> <C>
6,615,479 237 7,306
</TABLE>
e. To amend the fund's fundamental investment policy regarding lending by the
fund.
<TABLE>
<CAPTION>
For Against Abstentions
- --------------------------------------------------
<S> <C> <C>
6,615,541 402 7,079
</TABLE>
Last Meeting of Shareholders
f. To amend the fund's fundamental investment policy regarding concentration of
the Fund's investments in the securities of companies in the same industry.
<TABLE>
<CAPTION>
For Against Abstentions
- ---------------------------------------------------
<S> <C> <C>
6,618,258 0 4,764
</TABLE>
g. To amend, and to make non-fundamental, the fund's fundamental investment
policy regarding buying securities on margin.
<TABLE>
<CAPTION>
For Against Abstentions
- ---------------------------------------------------
<S> <C> <C>
6,615,693 237 7,092
</TABLE>
Agenda Item 3. To eliminate the fund's fundamental investment policy on selling
securities short.
<TABLE>
<CAPTION>
For Against Abstentions
- --------------------------------------------------
<S> <C> <C>
6,615,818 237 6,967
</TABLE>
WesMark Balanced Fund
Growth of $10,000 invested in WesMark Balanced Fund
The graph below illustrates the hypothetical investment of $10,000* in the
WesMark Balanced Fund (the "Fund")++ from January 31, 1990 to January 31, 2000,
compared to the Standard and Poor's 500 Index ("S&P 500")**, the Lipper Balanced
Funds Average ("LBFA")+ and the Lehman Brothers Intermediate Government
Corporate Index (Total) ("LBIGCI").**
The graphic presentation displayed here consists of a line graph. The
corresponding components of the line graph are listed in the upper left hand
corner. The WesMark Balanced Fund (the "Fund") is represented by a solid line.
The Standard & Poor's 500 Index ("S&P 500") is represented by a dotted line, the
Lipper Balanced Fund Average ("LBFA") is represented by a dashed line and the
Lehman Brothers Intermediate Government Corporate Index ("LBIGCI") is
represented by a broken line. The line graph is a visual representation of a
comparison of change in value of a $10,000 hypothetical investment in the Fund,
the S&P 500, LBFA and the LBIGCI. The "x" axis reflects computation periods from
1/31/90 to 1/31/00. The "y" axis reflects the cost of the investment, beginning
with $10,000 and going up to $45,000, in increments of $5,000. The right margin
reflects the ending value of the hypothetical investment in the Fund as compared
to the S&P 500, LBFA and the LBIGCI. The ending values were $31,426, $43,132,
$31,185 and $20,124, respectively.
Past performance is no guarantee of future results. Your investment return and
principal value will fluctuate so when shares are redeemed, they may be worth
more or less than original cost. Mutual funds are not obligations of or
guaranteed by any bank and are not federally insured.
* Represents a hypothetical investment of $10,000 in the Fund after deducting
the maximum sales charge of 4.75% ($10,000 minus $475 sales charge =
$9,525), which became effective October 1, 1999. The Fund's performance
assumes the reinvestment of all dividends and distributions. The S&P500,
the LBFA and the LBIGCI have been adjusted to reflect reinvestment of
dividends on securities in the index and average.
** The S&P 500 and LBIGCI are not adjusted to reflect sales charges, expenses,
or other fees that the Securities and Exchange Commission requires to be
reflected in the Fund's performance. The indices are unmanaged.
+ Lipper figures represent the average of the total returns reported by all
of the mutual funds designated by Lipper Analytical Services, Inc. as
falling into the respective categories indicated. These figures do not
reflect sales charges.
++ WesMark Balanced Fund is the successor to a common trust fund. The quoted
performance data includes performance of the common trust fund for the
period from 1/31/91 to 4/20/98, as adjusted to reflect the Fund's
anticipated expenses. The common trust fund was not registered under the
Investment Company Act of 1940 ("1940 Act") and therefore was not subject
to certain investment restrictions imposed by the 1940 Act. If the common
trust fund had been registered under the 1940 Act, the performance may have
been adversely affected.
+++ Total returns quoted reflect all applicable sales charges.
WesMark Balanced Fund
Portfolio of Investments
January 31, 2000
<TABLE>
<CAPTION>
Shares
Value
Common Stocks--65.1%
<S>
<C>
<C>
Banks - Major Regional--3.3%
50,000 PNC Bank
Corp. $
2,400,000
- -------------
Beverages - Soft--1.9%
40,000 PepsiCo,
Inc.
1,365,000
- -------------
Beverages/Alcohol--0.9%
10,000 Anheuser - Busch Cos.,
Inc. 675,000
- -------------
Biomedical--1.7%
20,000 (a)Amgen,
Inc.
1,273,750
- -------------
Business Information--0.6%
5,000 Reuters Holdings PLC,
ADR 450,625
- -------------
Chemical - Specialty--3.1%
15,000 Corning,
Inc.
2,313,750
- -------------
Diversified Operations--6.3%
35,000 General Electric
Co. 4,668,125
- -------------
Drugs & Health Care--4.5%
20,000 Bristol-Myers Squibb
Co. 1,320,000
25,000 Merck & Co.,
Inc.
1,970,313
- -------------
Total
3,290,313
- -------------
Electronic Components - Semiconductor--5.9%
40,000 Texas Instruments,
Inc. 4,315,000
- -------------
Instruments - Control--5.6%
86,250 Honeywell International,
Inc. 4,140,000
- -------------
Insurance Property & Casualty--0.9%
6,250 American International Group,
Inc. 650,781
- -------------
Insurance - Life--1.3%
8,000 American General
Corp. 491,500
Insurance - Life--continued
20,000 Financial Services, Inc., Class
A $ 497,500
- -------------
Total
989,000
- -------------
Office - Automation & Equipment--0.4%
15,000 Xerox
Corp.
313,125
- -------------
Oil & Gas Equipment & Services--4.2%
80,000 Williams Cos., Inc.
(The) 3,100,000
- -------------
Oil Components - Exploration & Production--2.3%
40,000 Burlington Resources,
Inc. 1,282,500
25,000 EOG Resources,
Inc.
396,875
- -------------
Total
1,679,375
- -------------
Oil Field Services--1.2%
30,000 Tidewater,
Inc.
853,125
- -------------
Oil - Integrated--7.3%
8,000 Atlantic Richfield
Co. 616,000
30,000 BPAmoco PLC,
ADR
1,612,500
12,284 Conoco, Inc., Class
B 289,442
70,000 Phillips Petroleum
Co. 2,861,250
- -------------
Total
5,379,192
- -------------
Protection - Safety--1.7%
30,000 Tyco International
Ltd. 1,282,500
- -------------
Retail - Apparel & Shoes--0.7%
25,000 Abercrombie & Fitch Co., Class
A 534,375
- -------------
Retail - Consumer Electronics --1.0%
20,000 Circuit City Stores,
Inc. 770,000
- -------------
Telecommunication Services--0.6%
10,000 SBC Communications,
Inc. 431,250
- -------------
Telecommunications Equipment--0.7%
10,000(a) Tellabs,
Inc.
540,000
- -------------
Utility - Electric Power--4.6%
100,000 DPL,
Inc.
$ 1,918,750
15,666 Duke Energy
Corp.
904,711
30,000 TECO Energy,
Inc.
588,750
- -------------
Total
3,412,211
- -------------
Utility - Telephone--4.4%
20,000 AT&T
Corp.
1,055,000
30,000 GTE
Corp.
2,199,375
- -------------
Total
3,254,375
- -------------
Total Common Stocks (identified cost
$36,103,234) 48,080,872
- -------------
Preferred Stocks--2.1%
Finance--1.1%
15,000 Merrill Lynch Preferred Capital Trust III,
Pfd. 308,438
25,000 Merrill Lynch Preferred Capital Trust IV,
Pfd. 517,188
- -------------
Total
825,626
- -------------
Telecommunications - Cellular--0.6%
20,000 Motorola Capital Trust,
Pfd. 403,750
- -------------
Utility - Gas Distribution--0.4%
7,000 MCN Energy Group, Inc., PRIDES,
8.00% 302,750
- -------------
Total Preferred Stocks (identified cost
$1,875,919) 1,532,126
- -------------
Corporate Bonds--14.5%
Auto/Truck - Parts & Equipment--1.2%
$1,000,000 Delphi Auto Systems Corp., Note, 6.50%,
5/1/2009 901,127
- -------------
Banking--1.3%
1,000,000 BankAmerica Corp., Sub. Note, 7.20%,
4/15/2006 962,759
- -------------
Computers - Mainframe--1.3%
1,000,000 International Business Machines Corp., Deb., 7.50%,
6/15/2013 986,317
- -------------
Finance--0.6%
$ 500,000 PNC Funding Corp., Sub. Note, 6.125%,
2/15/2009 $ 442,050
- -------------
Oil Components - Exploration & Production--1.8%
1,500,000 EOG Resources, Inc., Note, 6.50%,
12/1/2007 1,374,756
- -------------
Oil - Integrated -- 5.8%
1,000,000 Coastal Corp., Deb., 9.625%,
5/15/2012 1,125,150
1,000,000 Conoco, Inc., Sr. Note, 6.35%,
4/15/2009 913,416
2,000,000 Phillips Petroleum Co., Deb., 9.375%,
2/15/2011 2,221,590
- -------------
Total
4,260,156
- -------------
Protection - Safety--1.2%
1,000,000 Tyco International Group, Sr. Note, 6.125%,
1/15/2009 878,140
- -------------
Retail Trade--1.3%
1,000,000 Dillard Department Stores, Inc., Note, 7.85%,
10/1/2012 935,182
- -------------
Total Corporate Bonds (identified cost
$11,323,365) 10,740,487
- -------------
Government Agencies--12.8%
Federal Farm Credit Bank--2.7%
2,000,000 7.10%,
11/12/2002
2,000,618
- -------------
Federal Home Loan Mortgage Corporation--10.1%
7,872,859 6.00%-6.50%, 3/1/2013 -
9/1/2018 7,419,865
- -------------
Total Government Agencies (identified cost
$9,972,869) 9,420,483
- -------------
(b) Commercial Paper --4.0%
1,000,000 General Electric Capital Corp., 5.57%,
2/14/2000 997,989
2,000,000 Ford Motor Credit Co., 5.58%,
3/3/2000 1,990,390
- -------------
Total Commercial Paper (at amortized
cost) 2,988,379
- -------------
1,177,219 Federated U.S. Treasury Cash Reserves Fund (at net asset
value) $ 1,177,219
- -------------
Total Investments (identified cost
$63,440,985)(c) $ 73,939,566
- -------------
</TABLE>
(a) Non-income producing security.
(b) Each Issue shows the rate of discount at the time of purchase for discount
issues, or the coupon for interest bearing issues.
(c) The cost of investments for federal tax purposes amounts to $63,440,985. The
net unrealized appreciation of investments on a federal tax basis amounts to
$10,498,581 which is comprised of $13,905,798 appreciation and $3,407,217
depreciation at January 31, 2000.
Note: The categories of investments are shown as a percentage of net assets
($73,860,557) at January 31, 2000.
The following acronyms are used throughout this portfolio:
ADR -- American Depositary Receipt
PRIDES -- Preferred Redeemable Increased Dividend Equity Securities
(See Notes which are an integral part of the Financial Statements)
WesMark Balanced Fund
January 31, 2000
<TABLE>
<CAPTION>
<S>
<C> <C>
Assets:
Total investments in securities, at value (identified and tax cost
$63,440,985) $ 73,939,566
Income
receivable
321,296
Receivable for shares
sold
20,000
- -----------
Total
assets
74,280,862
Liabilities:
Payable for investments
purchased $ 402,375
Payable for shares
redeemed
1,500
Accrued
expenses
16,430
- --------
Total
liabilities
420,305
- -----------
Net Assets for 6,944,025 shares
outstanding
$ 73,860,557
- -----------
Net Assets Consist of:
Paid in
capital
$ 60,240,328
Net unrealized appreciation of
investments
10,498,581
Accumulated net realized gain on
investments
3,121,648
- -----------
Total Net
Assets
$ 73,860,557
- -----------
Net Asset Value, Offering Price and Redemption Proceeds Per Share:
Net Asset Value Per Share ($73,860,557 / 6,944,025 shares
outstanding) $ 10.64
- -----------
Offering Price Per Share (100/95.25 of $10.64)
(a) $ 11.17
- -----------
Redemptions Proceeds Per
Share
$ 10.64
- -----------
</TABLE>
(a) See "What Do Shares Cost?" in the Prospectus.
(See Notes which are an integral part of the Financial Statements) WesMark
Balanced Fund Statement of Operations
Year Ended January 31, 2000
<TABLE>
<CAPTION>
<S>
<C> <C>
Investment Income:
Dividends (net of foreign taxes withheld of
$1,000) $ 987,875
Interest
1,332,571
- ----------
Total
income
2,320,446
Expenses:
Investment adviser
fee $ 530,435
Administrative personnel and services
fee 98,891
Custodian
fees
14,937
Transfer and dividend disbursing agent fees and
expenses 12,945
Directors'/Trustees'
fees 2,995
Auditing
fees
9,683
Legal
fees
1,680
Portfolio accounting
fees 42,252
Share registration
costs 16,957
Printing and
postage
11,254
Insurance
premiums
821
Miscellaneous
1,997
- --------
Total
expenses
744,847
Waivers --
Waiver of investment adviser
fee (106,091)
- --------
Net
expenses
638,756
- ---------
Net investment
income
1,681,690
- ---------
Realized and Unrealized Gain on Investments:
Net realized gain on
investments
3,851,990
Net change in unrealized appreciation of
investments 2,992,458
- ---------
Net realized and unrealized gain on
investments 6,844,448
- ---------
Change in net assets resulting from
operations $8,526,138
- ---------
</TABLE>
(See Notes which are an integral part of the Financial Statements) WesMark
Balanced Fund Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Year
Ended Period Ended
January 31,
2000 January 31, 1999(a)
<S>
<C> <C>
Increase (Decrease) in Net Assets:
Operations --
Net investment income $
1,681,690 $ 1,371,156
Net realized gain on investments ($3,851,990 and $3,910,679,
respectively, as computed for federal tax purposes)
3,851,990 3,910,501
Net change in unrealized appreciation of investments
2,992,458 (1,990,218)
- ----------- -----------
Change in net assets resulting from operations
8,526,138 3,291,439
- ----------- -----------
Distributions to Shareholders --
Distributions from net investment income
(1,660,374) (1,392,294)
Distributions from net realized gains
(1,633,127) (3,007,894)
- ----------- -----------
Change in net assets resulting from distributions
to shareholders
(3,293,501) (4,400,188)
- ----------- -----------
Share Transactions --
Proceeds from sale of shares
13,683,589 11,694,585
Proceeds from shares issued in connection with the merger
of Common Trust Funds
- -- 53,660,556(b)
Net asset value of shares issued to shareholders in payment
of distributions declared
384,158 245,179
Cost of shares redeemed
(6,326,453) (3,604,945)
- ----------- -----------
Change in net assets resulting from share transactions
7,741,294 61,995,375
- ----------- -----------
Change in net assets
12,997,931 60,886,626
Net Assets:
Beginning of period
60,886,626 --
- ----------- -----------
End of period
$73,860,557 $60,886,626
- ----------- -----------
</TABLE>
(a) Reflects operations for the period from April 20, 1998 (date of initial
public investment) to January 31, 1999. (b) Includes $9,496,341 of unrealized
appreciation at April 20, 1998, related to the acquisition of Common Trust
Funds.
(See Notes which are an integral part of the Financial Statements) WesMark
Balanced Fund Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year
Ended Period Ended
January 31, January 31,
<S>
<C> <C>
2000 1999(a)
Net asset value, beginning of period $
9.81 $ 10.00
Income from investment operations
Net investment income
0.25 0.24
Net realized and unrealized gain on investments
1.07 0.30
- ------- -------
Total from investment operations
1.32 0.54
- ------- -------
Less distributions
Distributions from net investment income
(0.25) (0.24)
Distributions from net realized gain on investments
(0.24) (0.49)
- ------- -------
Total distributions
(0.49) (0.73)
- ------- -------
Net asset value, end of period $
10.64 $ 9.81
- ------- -------
Total return (b)
13.52% 5.50%
Ratios to average net assets
Expenses
0.90% 1.15%*
Net investment income
2.38% 3.03%*
Expenses waiver/reimbursement (c)
0.15% 0.09%*
Supplemental data
Net assets, end of period (000 omitted)
$73,864 $60,887
Portfolio turnover
44% 57%
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from April 20, 1998 (date of initial
public investment) to January 31, 1999. (b) Based on net asset value, which does
not reflect the sales charge or contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and the net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements) WesMark
Balanced Fund Notes to Financial Statements
January 31, 2000
1. Organization
WesMark Funds (the "Trust") is registered under the Investment Company Act of
1940, as amended (the
"Act") as an open-end, management investment company. The Trust consists of four
portfolios. The financial statements included herein are only those of WesMark
Balanced Fund (the "Fund"), a diversified portfolio. The financial statements of
the other portfolios are presented separately. The assets of each portfolio are
segregated and a shareholder's interest is limited to the portfolio in which
shares are held. The investment objective of the Fund is to provide capital
appreciation and income.
On April 20, 1998, the Fund acquired a portfolio of a common trust fund managed
by WesBanco Bank Wheeling, the Fund's investment adviser. The acquisition was a
tax-free exchange of 5,366,055 shares of the Fund valued at $53,660,556 and
unrealized appreciation of $9,496,341.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
Investment Valuation -- U.S. government securities, listed corporate bonds,
and other fixed income and asset-backed securities are generally valued at
the mean of the latest bid and asked price as furnished by an independent
pricing service. Listed equity securities are valued at the last sale price
reported on a national securities exchange. Short-term securities are valued
at the prices provided by an independent pricing service. However, short-term
securities with remaining maturities of sixty days or less at the time of
purchase may be valued at amortized cost, which approximates fair market
value. Investments in other open-end regulated investment companies are
valued at net asset value.
Investment Income, Expenses and Distributions -- Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized as
required by the Internal Revenue Code, as amended (the "Code"). Dividend
income and distributions to shareholders are recorded on the ex-dividend
date.
Federal Taxes -- It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provision for federal tax is necessary.
When-Issued and Delayed Delivery Transactions -- The Fund may engage in when-
issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the securities
purchased. Securities purchased on a when-issued or delayed delivery basis
are marked to market daily and begin earning interest on the settlement date.
Losses may occur on these transactions due to changes in market conditions or
the failure of counterparties to perform under the contract.
WesMark Balanced Fund
Use of Estimates -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts of assets, liabilities,
expenses and revenues reported in the financial statements. Actual results
could differ from those estimated.
Other -- Investment transactions are accounted for on a trade date basis.
3. Shares of Beneficial Interest
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value).
Transactions in shares were as follows:
<TABLE>
<CAPTION>
Year
Ended Period Ended
January
31, 2000 January 31, 1999(a)
<S>
<C> <C>
Shares sold
1,296,249 1,184,327
Proceeds from shares issued in connection with the merger
of Common Trust
Funds
- -- 5,366,055
Shares issued to shareholders in payment of
distributions declared
35,955 24,813
Shares redeemed
(596,275) (367,099)
- --------- ---------
Net change resulting from share transactions
735,929 6,208,096
</TABLE>
(a) Reflects operations for the period from April 20, 1998 (date of initial
public investment) to January 31, 1999.
4. Investment Adviser Fee and Other Transactions with Affiliates
Investment Adviser Fee -- WesBanco Trust and Investment Services, the Fund's
investment adviser (the "Adviser" or "WesBanco"), receives for its services
an annual investment adviser fee equal to 0.75% of the Fund's average daily
net assets. The Adviser may voluntarily choose to waive any portion of its
fee. The Adviser can modify or terminate this voluntary waiver at any time at
its sole discretion.
Administrative Fee -- Federated Services Company ("FServ") provides the Fund
with certain administrative personnel and services. The fee paid to FServ is
based on a scale that ranges from 0.15% to 0. 075% of the average aggregate
net assets of the Trust for the period.
Distribution (12b-1) Fee -- The Fund has adopted a Distribution Plan (the
"Plan") pursuant to Rule 12b-1 under the Act. Under the terms of the Plan,
the Fund will compensate Edgewood Services, Inc., the principal distributor,
from the net assets of the Fund to finance activities intended to result in
the sale of the Fund's shares. The Plan provides that the Fund may incur
distribution expenses up to 0.25% of the average daily net assets of the
Fund's shares, annually, to compensate Edgewood Services, Inc. For the year
ended January 31, 2000, the Fund did not incur fees under the Plan.
WesMark Balanced Fund
Shareholder Services Fee -- Under the terms of a Shareholder Services
Agreement with WesBanco, the Fund will pay WesBanco up to 0.25% of average
daily net assets of the Fund for the period. The fee paid to WesBanco is used
to finance certain services for shareholders and to maintain shareholder
accounts. For the year ended January 31, 2000, the Fund did not incur a
shareholder services fee.
Transfer and Dividend Disbursing Agent Fees and Expenses -- FServ, through
its subsidiary, Federated Shareholder Services Company ("FSSC") serves as
transfer and dividend disbursing agent for the Fund. The fee paid to FSSC is
based on the size, type, and number of accounts and transactions made by
shareholders.
Portfolio Accounting Fees -- FServ maintains the Fund's accounting records
for which it receives a fee. The fee is based on the level of the Fund's
average daily net assets for the period, plus out-of-pocket expenses.
Custodian Fees -- WesBanco is the Fund's custodian. The fee is based on the
level of the Fund's average daily net assets for the period, plus out-of-
pocket expenses.
Interfund Transactions -- During the year ended January 31, 2000, the Fund
engaged in purchase and sale transactions with funds that have a common
investment adviser (or affiliated investment advisers), common
Directors/Trustees, and/or common Officers. These purchase and sale
transactions complied with Rule 17a-7 under the Act, and amounted to
$37,341,333 and $37,259,815, respectively.
Other Affiliated Parties and Transactions -- Pursuant to an exemptive order
issued by the SEC, the Fund may invest in certain affiliated money market
funds. As of January 31, 2000, the Fund owned 0.04% of outstanding shares of
Federated U.S. Treasury Cash Reserve Fund, which is distributed by an
affiliate of the Fund's distributor.
General -- Certain of the Officers and Trustees of the Trust are Officers and
Directors or Trustees of the above companies.
5. Investment Transactions
Purchases and sales of investments, excluding short-term securities, for the
year ended January 31, 2000, were as follows:
<TABLE>
<S> <C>
Purchases $34,988,170
Sales $29,486,800
</TABLE>
Independent Auditors' Report
To the Board of Trustees of WESMARK FUNDS and Shareholders of WESMARK BALANCED
FUND:
We have audited the accompanying statement of assets and liabilities of WesMark
Balanced Fund (a portfolio of WesMark Funds), including the portfolio of
investments, as of January 31, 2000, and the related statement of operations for
the year then ended, the statements of changes in net assets for the year ended
January 31, 2000 and the period from April 20, 1998 (date of initial public
investment) to January 31, 1999, and the financial highlights for the periods
presented. These financial statements and financial highlights are the
responsibility of WesMark Balanced Fund's management. Our responsibility is to
express an opinion on these financial statements and financial highlights based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of the securities owned as of
January 31, 2000, by correspondence with the custodian and brokers; where
replies were not received from brokers, we performed other auditing procedures.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
WesMark Balanced Fund as of January 31, 2000, the results of its operations for
the year then ended, the changes in its net assets for the year ended January
31, 2000 and the period from April 20, 1998 (date of initial public investment)
to January 31, 1999, and its financial highlights for the respective stated
periods, in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Boston, Massachusetts March 22, 2000
Trustees
John F. Donahue
Thomas G. Bigley
John T. Conroy, Jr.
Nicholas P. Constantakis John F. Cunningham
J. Christopher Donahue
Lawrence D. Ellis, M.D.
Peter E. Madden
Charles F. Mansfield, Jr.
John E. Murray, Jr., J.D., S.J.D.
Marjorie P. Smuts
John S. Walsh
Officers
John F. Donahue
Chairman
Edward C. Gonzales
President and Treasurer
J. Christopher Donahue
Executive Vice President
John W. McGonigle
Executive Vice President and Secretary
Richard B. Fisher
Vice President
Beth S. Broderick
Vice President and Assistant Treasurer
C. Todd Gibson
Assistant Secretary
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves investment risk,
including the possible loss of principal.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the fund's prospectus which contains facts concerning
its objective and policies, management fees, expenses and other information.
[WESMARK BALANCED FUND LOGO APPEARS HERE]
Annual Report
Dated January 31, 2000
[WESBANCO LOGO APPEARS HERE]
Edgewood Services, Inc. Distributor
Cusip 951025303
G02160-12 (3/00)
[Logo of Wesmark]
Bond Fund
Annual Report
January 31, 2000
[Logo of WesMark]
President's Message
Dear Shareholder:
I am pleased to present the Annual Report to Shareholders for WesMark Bond Fund.
This report covers the 12-month period from February 1, 1999 through January 31,
2000. It gives you a complete picture of the fund's operations, beginning with
an overview of the bond market and fund strategy by the portfolio manager,
followed by a complete list of fund holdings and the financial statements.
WesMark Bond Fund is managed to help your money earn income through a
diversified, professionally managed portfolio that consists primarily of high-
quality bonds. At the end of the reporting period, the fund's $123.8 million
portfolio was invested most heavily in government agency securities. I urge you
to read the portfolio manager's discussion on the following page, which will
familiarize you with how your investment is managed.
During the fiscal year, the fund produced and paid income totaling $0.56 per
share and paid capital gains totaling $0.01 per share. Due to a rising interest
rate environment that caused the prices of bonds to decline, the fund's net
asset value declined by $0.90 per share, which resulted in a negative total
return of (3.41%).1 The fund's net assets totaled $125.1 million at the end of
the period.
Thank you for selecting WesMark Bond Fund to pursue your financial goals through
a diversified portfolio of bonds.
Sincerely,
Edward C. Gonzales
President
March 15, 2000
1 Performance quoted is based on net asset value. Past performance is no
guarantee of future results. Investment return and principal value will
fluctuate, so that an investor's shares, when redeemed, may be worth more or
less than their original cost. Total return for the one year period ended
January 31, 2000 based on offering price (i.e., less any applicable sales
charge) was (7.00%).
Investment Review
Interest rates began rising in mid-1999 as it became apparent that the expected
slowing in the economy during the second half of the year was not likely to
occur. Instead, the growth rate of the economy increased strongly and Y2K fears
were proven to be unfounded. The Federal Reserve Board (the "Fed") increased
interest rates three times during the second half of the year. However, long-
term interest rates rose less than short-term interest rates resulting in a
flattening of the yield curve. Because inflation expectations have not yet begun
to rise, the Fed is moving to raise interest rates very early before inflation
psychology begins to become embedded in the financial markets. However, the
economy has not yet responded to rising interest rates. We anticipate several
additional increases in interest rates by the Fed by mid-year.
The Fund provided a total return of (3.41%)1 for the fiscal year ended January
31, 2000. The income return for the year was 5.39%. As of January 31, 2000, the
30-day SEC yield2 was 6.66%. As of the year-end 1999, we continued to maintain
our focus on high quality bonds with 53% of the Fund invested in bonds rated
AAA.3
Corporate bond yields rose more rapidly than U.S. Treasury securities resulting
in historically wide yield spreads. A very large calendar of new corporate
issues contributed to this widening in the yield curve. However, rising interest
rates on mortgages reduced refinancing activity sharply. As a result, there were
reduced offerings of mortgage securities resulting in a narrowing of the yield
spread in mortgage securities. At the beginning of the year, the portfolio was
represented by the following sectors; agencies 33.6%, mortgage securities 53.0%,
and corporate securities 6.1%. By the end of the year, we had realigned the
portfolio to increase the weighting in corporate securities and our allocation
to these three sectors; agencies 17.5%, mortgage securities 36.6%, and corporate
securities 39.1%. This change in allocation among sectors of the bond market did
not detract from our emphasis on maintaining high quality. Corporate bonds held
in the portfolio at year end had an average credit rating of A. Duration for the
portfolio increased as we utilized the rise in interest rates to improve the
yield for the portfolio. Duration of the portfolio during the year increased
from 4.07 to 5.62.4 We believe these portfolio decisions should contribute to a
positive rate of return when interest rates begin to slow the growth of the U.S.
economy.
1 Past performance is no guarantee of future results. Investment return and
principal value will fluctuate, so that an investor's shares, when redeemed,
may be worth more or less than their original cost. Total return for the one-
year period ended January 31, 2000 based on offering price (i.e., less any
applicable sales charge) was (7.00%).
2 The 30-day SEC yield is calculated by dividing the net investment income per
share for the 30 days ended on the date of calculation by the maximum
offering price per place on that date. The figure is then compounded and
annualized.
3 These ratings pertain only to the securities in the portfolio and do not
protect fund shares against market risk.
4 Duration in the measure of a security's price sensitivity to changes in
interest rates. Securities with longer durations are more sensitive to
changes in interest rates than securities of shorter durations.
Last Meeting of Shareholders
A Special Meeting of Trust shareholders was held on December 17, 1999. As of
October 27, 1999, the record date for shareholder voting at the meeting, there
were 13,183,723 total outstanding Shares. The following items were considered by
shareholders and the results of their voting were as follows:
Agenda Item 1. To elect five Trustees*
<TABLE>
<CAPTION>
For Withheld Authority To Vote
- --------------------------------------------------------------------------------
<S> <C> <C>
Nicholas P. Constantakis 12,529,981 0
John F. Cunningham 12,529,981 0
J. Christopher Donahue 12,529,981 0
Charles F. Mansfield, Jr. 12,529,981 0
John S. Walsh 12,529,981 0
</TABLE>
* The following Trustees continued their terms as Trustees of the Trust: John
F. Donahue, Thomas G. Bigley, John T. Conroy, Jr., Lawrence D. Ellis, M.D.,
Peter E. Madden, John E. Murray, Jr., Marjorie P. Smuts.
Agenda Item 2. To make changes to the fund's fundamental investment policies:
a. To amend the fund's fundamental investment policies regarding borrowing
money and issuing senior securities.
<TABLE>
<CAPTION>
For Against Abstentions
- -----------------------------------------------------
<S> <C> <C>
12,525,129 3,619 1,233
</TABLE>
b. To amend the fund's fundamental investment policies regarding investments
in real estate.
<TABLE>
<CAPTION>
For Against Abstentions
- -------------------------------------------------------
<S> <C> <C>
12,517,227 3,619 9,135
</TABLE>
c. To amend the fund's fundamental investment policies regarding investments
in commodities.
<TABLE>
<CAPTION>
For Against Abstentions
- ---------------------------------------------------
<S> <C> <C>
12,506,881 21,867 1,233
</TABLE>
d. To amend the fund's fundamental investment policy regarding underwriting
securities.
<TABLE>
<CAPTION>
For Against Abstentions
- --------------------------------------------------
<S> <C> <C>
12,525,129 3,619 1,233
</TABLE>
e. To amend the fund's fundamental investment policy regarding lending by the
fund.
<TABLE>
For Against Abstentions
- --------------------------------------------------
<S> <C> <C>
12,517,222 11,521 1,238
</TABLE>
f. To amend the fund's fundamental investment policy regarding concentration of
the Fund's investments in the securities of companies in the same industry.
<TABLE>
<CAPTION>
For Against Abstentions
- --------------------------------------------------
<S> <C> <C>
12,506,881 21,867 1,233
</TABLE>
g. To amend, and to make non-fundamental, the fund's fundamental investment
policy regarding buying securities on margin.
<TABLE>
<CAPTION>
For Against Abstentions
- ------------------------------------------------
<S> <C> <C>
12,525,129 3,619 1,233
</TABLE>
Agenda Item 3. To eliminate the fund's fundamental investment policy on
selling securities short.
<TABLE>
<CAPTION>
For Against Abstentions
- --------------------------------------------------
<S> <C> <C>
12,506,881 21,867 1,233
</TABLE>
WesMark Bond Fund
Growth of $10,000 invested in WesMark Bond Fund
The graph below illustrates the hypothetical investment of $10,000* in the
WesMark Bond Fund (the "Fund") from April 20, 1998 (start of performance) to
January 31, 2000, compared to the Lipper Intermediate Government Funds
("LIGFA")** and the Lehman Brothers Intermediate Government/ Corporate Index
("LBIGCI").+
The graphic presentation displayed here consists of a line graph. The
corresponding components of the line graph are listed in the upper left hand
corner. The WesMark Bond Fund (the "Fund") is represented by a solid line. The
Lehman Brothers Intermediate Government Corporate Index ("LBIGCI") is
represented by a dotted line and the Lipper Intermediate Government Funds
("LIGFA") is represented by a dashed line. The line graph is a visual
representation of a comparison of change in value of a $10,000 hypothetical
investment in the Fund, the LBIGCI and the LIGFA. The "x" axis reflects
computation periods from 4/20/98 (the Fund's start of performance) to 1/31/00.
The "y" axis reflects the cost of the investment, beginning with $10,000 and
going up to $12,000, in increments of $500. The right margin reflects the ending
value of the hypothetical investment in the Fund as compared to the LBIGCI and
the LIGFA. The ending values were $10,210, $11,008 and $10,372, respectively.
Past performance is no guarantee of future results. Your investment return and
principal value will fluctuate so when shares are redeemed, they may be worth
more or less than original cost. Mutual funds are not obligations of or
guaranteed by any bank and are not federally insured.
* Represents a hypothetical investment of $10,000 in the Fund after deducting
the maximum sales charge of 3.75% ($10,000 minus $375 sales charge = $9,625),
which became effective October 1, 1999. The Fund's performance assumes the
reinvestment of all dividends and distributions. The LIGFA and the LBIGCI
have been adjusted to reflect reinvestment of dividends on securities in the
index and average.
** Lipper figures represent the average of the total returns reported by all of
the mutual funds designated by Lipper Analytical Services, Inc. as falling
into the respective categories indicated. These figures do not reflect sales
charges.
+ LBIGCI is not adjusted to reflect sales loads, expenses, or other fees that
the Securities and Exchange Commission requires to be reflected in the Fund's
performance. Investments cannot be made in an index.
++ Total returns quoted reflect all applicable sales charges.
WesMark Bond Fund
Portfolio of Investments
January 31, 2000
<TABLE>
<CAPTION>
Principal
Amount
Value
Corporate Bonds--39.1%
Automotive -- 2.9%
<S> <C>
<C>
$ 3,000,000 Delphi Auto Systems Corp., Note, 6.50%, 5/1/2009 $
2,703,381
1,000,000 Goodyear Tire & Rubber Co., Sr. Note, 6.625%,
12/1/2006 926,861
- -----------
Total
3,630,242
- -----------
Banking -- 4.0%
1,000,000 Bank of America Corp., Sr. Note, 5.875%,
2/15/2009 873,404
2,000,000 Bank of America Corp., Sub. Note, 9.375%, 9/15/2009
2,182,102
2,000,000 NationsBank Corp., Sub. Note, 7.80%, 9/15/2016
1,965,562
- -----------
Total
5,021,068
- -----------
Basic Materials -- 0.8%
1,000,000 Worthington Industries, Inc., 7.125%,
5/15/2006 947,132
Computer Services -- 1.5%
1,000,000 Dell Computer Corp., Sr. Note, 6.55%,
4/15/2008 921,891
1,000,000 First Data Corp., MTN, Series D, 6.375%,
12/15/2007 924,760
- -----------
Total
1,846,651
- -----------
Computers - Mainframe -- 2.4%
3,000,000 International Business Machines Corp., Deb., 7.50%, 6/15/2013
2,958,951
- -----------
Computers - Mini -- 3.2%
4,000,000 Sun Microsystems, Inc., Sr. Note, 7.65%, 8/15/2009
3,970,564
- -----------
Energy -- 0.8%
1,000,000 Columbia Energy Group, Note, 7.32%,
11/28/2010 939,571
- -----------
Finance -- 4.9%
1,000,000 Donaldson, Lufkin and Jenrette Securities Corp., Note, MTN,
6.90%, 935,398
10/1/2007 935,398
1,000,000 FINOVA Capital Corp., Sr. Note, 6.75%,
3/9/2009 917,990
750,000 Merrill Lynch & Co., Inc., Note, 7.00%,
1/15/2007 717,572
1,000,000 National City Corp., Sub. Note, 6.625%,
3/1/2004 958,192
2,000,000 National City Corp., Sub. Note, 6.875%, 5/15/2019
1,772,408
1,000,000 PNC Funding Corp., Sub. Note, 6.125%,
2/15/2009 884,100
- -----------
Total
6,185,660
- -----------
Finance - Automotive--2.9%
3,000,000 Ford Motor Credit Corp., Sr. Note, 5.80%, 1/12/2009
2,607,390
1,000,000 General Motors Acceptance Corp., Note, 7.00%, 3/1/2000
1,000,327
- -----------
Total
3,607,717
- -----------
Instruments - Control -- 0.8%
1,000,000 Honeywell, Inc., 7.00%,
3/15/2007 955,376
- -----------
Insurance -- 1.4%
2,000,000 Progressive Corp., OH, Note, 7.00%, 10/1/2013
1,810,618
- -----------
Metals & Mining--0.7%
1,000,000 Commercial Metals Corp., Note, 6.75%,
2/15/2009 904,031
- -----------
Oil -- 1.3%
1,400,000 Coastal Corp., Deb., 9.625%, 5/15/2012
1,575,210
- -----------
Oil Components - Exploration & Production -- 2.5%
3,500,000 EOG Resources, Inc., Note, 6.50%, 12/1/2007
3,207,764
- -----------
Oil Refining & Marketing -- 1.2%
500,000 Union Oil of California, 9.125%,
2/15/2006 525,285
1,000,000 Union Oil of California, Sr. Note, Series C, 6.70%,
10/15/2007 928,749
- -----------
Total
1,454,034
- -----------
Pharmaceuticals -- 1.4%
2,000,000 Lilly (Eli) & Co., Unsecd. Note, 6.57%, 1/1/2016
1,835,350
- -----------
Protection - Safety -- 2.1%
3,000,000 Tyco International Group, Sr. Note, 6.125%, 1/15/2009
2,634,420
- -----------
Retail - Major Department Stores -- 2.1%
500,000 Penney (J.C.) Co., Inc., Deb., 7.65%,
8/15/2016 426,165
1,000,000 Penney (J.C.) Co., Inc., Note, 7.60%,
4/1/2007 912,591
1,500,000 Sears Roebuck Acceptance Corp., Note, 6.875%, 10/15/2017
1,304,622
- -----------
Total
2,643,378
- -----------
Utility - Telephone -- 2.2%
2,000,000 Alltel Corp., Deb., 7.00%, 3/15/2016
1,824,918
1,000,000 GTE Northwest, Inc., Deb., 6.30%,
6/1/2010 903,448
- -----------
Total
2,728,366
- -----------
Total Corporate Bonds (identified cost $55,543,153)
48,856,103
- -----------
Government Agencies -- 54.1%
Federal Farm Credit Bank -- 3.8%
5,000,000 6.46%, 4/2/2008
4,665,060
- -----------
Federal Home Loan Bank -- 10.9%
3,000,000 5.475%, 1/12/2009
2,640,594
6,335,000 5.83%, 9/30/2013
5,410,502
3,000,000 6.50%, 9/9/2008
2,779,395
3,000,000 6.865%, 10/23/2007
2,849,316
- -----------
Total
13,679,807
- -----------
Federal Home Loan Mortgage Corporation -- 28.8%
12,295,527 6.00%, 4/1/2013 - 10/01/2013
11,516,795
10,838,653 6.50%, 3/1/2013 - 5/1/2013
10,364,353
4,000,000 6.69%, 4/23/2008
3,752,236
4,000,000 6.846%, 10/10/2007
3,797,276
6,837,735 7.00%, 7/1/2011 - 3/1/2018
6,635,041
- -----------
Total
36,065,701
- -----------
Federal National Mortgage Association -- 7.8%
6,939,292 6.50%, 5/1/2018 - 9/1/2018
6,542,365
2,000,000 6.59%, 5/21/2008
1,877,142
1,404,385 7.00%, 2/1/2018
1,352,142
- -----------
Total
9,771,649
- -----------
Tennessee Valley Authority -- 2.8%
$ 4,000,000 Tennessee Valley Authority, Series C, 6.00%, 3/15/2013 $
3,516,480
- -----------
Total Government Agencies (identified cost $68,863,514)
67,698,697
- -----------
(a)Commercial Paper -- 1.6%
2,000,000 Three Rivers Funding Corp., 5.62%, 2/10/2000 (at amortized cost)
1,997,190
- -----------
Preferred Stocks -- 1.9%
Finance--1.6%
50,000 Merrill Lynch Preferred Capital Trust III, Pfd.
1,028,125
25,000 Merrill Lynch Preferred Capital Trust IV,
Pfd. 517,188
20,500 Reliastar Financing I,
Pfd. 452,281
- ----------
Total
1,997,594
- -----------
Telecommunications - Cellular -- 0.3%
20,000 Motorola Capital Trust,
Pfd. 403,750
- -----------
Total Preferred Stocks (identified cost $2,876,538)
2,401,344
- -----------
Mutual Fund -- 2.2%
2,802,419 Federated Prime Obligations Fund (at net asset value)
2,802,419
- ------------
Total Investments (identified cost $132,082,814)(b)
123,755,753
- -----------
</TABLE>
(a) Each issue shows the rate of discount at the time of purchase for discount
issues, or the coupon for interest bearing issues.
(b) The cost of investments for federal tax purposes amounts to $132,082,814.
The net unrealized depreciation of investments on a federal tax basis
amounts to $8,327,061 which comprised $1,554 appreciation and $8,328,615
depreciation at January 31, 2000.
Note: The categories of investments are shown as a percentage of net assets
($125,123,400) at January 31, 2000.
The following acronym is used throughout this portfolio: MTN --Medium Term Note
(See Notes which are an integral part of the Financial Statements)
WesMark Bond Fund
Statement of Assets and Liabilities
January 31, 2000
<TABLE>
<CAPTION>
Assets:
- ---------------------------------------------------------------------------------------------------------------
<S>
<C> <C>
Total investments in securities, at value (identified and tax cost
$132,082,814)
$ 123,755,753
Income
receivable
1,870,669
Receivable for shares
sold
2,000
- ------------------
Total
assets
125,628,422
Liabilities:
Income distribution payable $ 499,625
Accrued expenses 5,397
------------
Total
liabilities
505,022
- ------------------
Net Assets for 13,592,287 shares
outstanding $ 125,123,400
- ------------------
Net Assets Consist of:
Paid in
capital
$ 134,067,924
Net unrealized depreciation of
investments (8,327,061)
Accumulated net realized loss on
investments (710,764)
Undistributed net investment
income 93,301
- ------------------
Total Net
Assets
$ 125,123,400
- ------------------
Net Asset Value, Offering Price and Redemption Proceeds Per Share:
Net Asset Value Per Share ($125,123,400 / 13,592,287 shares
outstanding)
$ 9.21
- ------------------
Offering Price Per Share (100/96.25 of
$9.21)(a) $ 9.57
- ------------------
Redemption Proceeds Per
Share $
9.21
- ------------------
</TABLE>
(a) See "What Do Shares Cost?" in the Prospectus.
(See Notes which are an integral part of the Financial Statements)
WesMark Bond Fund
Statement of Operations
Year Ended January 31, 2000
<TABLE>
<CAPTION>
Investment Income:
<S>
<C> <C>
Dividends
$ 204,457
Interest
7,730,599
- ------------------
Total
income
7,935,056
Expenses:
Investment adviser fee $ 725,072
Administrative personnel and services fee 169,017
Custodian fees 18,691
Transfer and dividend disbursing agent fees and
expenses 6,233
Directors'/Trustees' fees 3,046
Auditing fees 16,203
Legal fees 1,097
Portfolio accounting fees 24,457
Share registration costs 16,640
Printing and postage 7,992
Insurance premiums 1,050
Miscellaneous 1,499
--------------
Total expenses 990,997
Waivers--
Waiver of investment adviser fee (120,845)
--------------
Net
expenses
870,152
- ------------------
Net investment
income
7,064,904
- ------------------
Realized and Unrealized Loss on Investments:
Net realized loss on
investments
(710,764)
Net change in unrealized appreciation of
investments (10,581,038)
- ------------------
Net realized and unrealized loss on
investments (11,291,802)
- ------------------
Change in net assets resulting from
operations (4,226,898)
- ------------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
WesMark Bond Fund
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended
Period Ended
January 31, 2000 January
31, 1999(a)
----------------
- --------------------
<S> <C> <C>
Increase (Decrease) in Net Assets:
Operations--
Net investment income $ 7,064,904 $
4,572,517
Net realized gain (loss) on investments (($710,764) and
$337,566, respectively, as computed for federal tax
purposes) (710,764)
337,566
Net change in unrealized appreciation of investments (10,581,038)
951,644
---------------
- ----------------
Change in net assets resulting from operations (4,226,898)
5,861,727
---------------
- ----------------
Distributions to Shareholders--
Distributions from net investment income (6,971,603)
(4,572,517)
Distributions from net realized gains (70,876)
(266,690)
---------------
- ----------------
Change in net assets resulting from distributions to
shareholders (7,042,479)
(4,839,207)
---------------
- ----------------
Share Transactions--
Proceeds from sale of shares 26,937,178
29,836,051
Proceeds from shares issued in connection with the
merger of Common Trust Funds --
94,009,198(b)
Net asset value of shares issued to shareholders in
payment of distributions declared 1,664,577
1,030,624
Cost of shares redeemed (9,854,641)
(8,252,730)
---------------
- ----------------
Change in net assets resulting from share transactions 18,747,114
116,623,143
---------------
- ----------------
Change in net assets 7,477,737
117,645,663
Net Assets:
Beginning of period
117,645,663 --
---------------
- ----------------
End of period (including undistributed net investment
income of $93,301 and $70,876, respectively) $ 125,123,400 $
117,645,663
---------------
- ----------------
</TABLE>
(a) For the period from April 20, 1998 (date of initial public investment) to
January 31, 1999.
(b) Includes $1,302,333 of unrealized appreciation at April 20, 1998, related to
the acquisition of Common Trust Funds.
(See Notes which are an integral part of the Financial Statements)
WesMark Bond Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended
Period Ended
January 31, 2000
January 31, 1999(a)
----------------
- ------------------
<S> <C> <C>
Net asset value, beginning of period
$10.11 $10.00
Income from investment operations
Net investment income
0.56 0.43
Net realized and unrealized gain (loss) on investments
(0.89) 0.13
- ------- -------
Total from investment operations
(0.33) 0.56
- ------- -------
Less distributions
Distributions from net investment income
(0.56) (0.43)
Distributions from net realized gain on investments
(0.01) (0.02)
- ------- -------
Total distributions
(0.57) (0.45)
- ------- -------
Net asset value, end of period $
9.21 $10.11
- ------- -------
Total return (b)
(3.41%) 5.70%
Ratios to average net assets
Expenses
0.72% 0.90%*
Net investment income
5.85% 5.47%*
Expense waiver/reimbursement (c)
0.10% 0.07%*
Supplemental data
Net assets, end of period (000 omitted) $125,123
$117,646
Portfolio turnover
26% 39%
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from April 20, 1998 (date of initial
public investment) to January 31, 1999.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and the net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
WesMark Bond Fund
Notes to Financial Statements
January 31, 2000
1. Organization
WesMark Funds (the "Trust") is registered under the Investment Company Act of
1940, as amended (the "Act") as an open-end, management investment company. The
Trust consists of four portfolios. The financial statements included herein are
only those of WesMark Bond Fund (the "Fund"), a diversified portfolio. The
financial statements of the other portfolios are presented separately. The
assets of each portfolio are segregated and a shareholder's interest is limited
to the portfolio in which shares are held. The investment objective of the Fund
is to provide high current income consistent with preservation of capital.
On April 20, 1998, the Fund acquired the assets of two common trust funds
managed by WesBanco Bank Wheeling, the Fund's investment adviser. The
acquisition was a tax-free exchange of 9,400,919 shares of the Fund valued at
$94,009,198 and unrealized appreciation of $1,302,333.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
Investment Valuations -- U.S. government securities, listed corporate bonds, are
generally valued at the mean of the latest bid and asked price as furnished by
an independent pricing service. Listed equity securities are valued at the last
sale price reported on a national securities exchange. Short-term securities are
valued at the prices provided by an independent pricing service. However, short-
term securities with remaining maturities of sixty days or less at the time of
purchase may be valued at amortized cost, which approximates fair market value.
Investments in other open-end regulated investment companies are valued at net
asset value.
Investment Income, Expenses and Distributions -- Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized as
required by the Internal Revenue Code, as amended (the "Code"). Dividend income
and distributions to shareholders are recorded on the ex-dividend date. Non-cash
dividends included in dividend income, if any, are recorded at fair value.
Federal Taxes -- It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provision for federal tax is necessary.
When-Issued and Delayed Delivery Transactions -- The Fund may engage in when-
issued or delayed delivery transactions. The Fund records when-issued securities
on the trade date and maintains security positions such that sufficient liquid
assets will be available to make payment for the securities purchased.
Securities purchased on a when-issued or delayed delivery basis are marked to
market daily and begin earning interest on the settlement date. Losses may occur
on these transactions due to changes in market conditions or the failure of
counterparties to perform under the contract.
Use of Estimates -- The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts of assets, liabilities, expenses and
revenues reported in the financial statements. Actual results could differ from
those estimated.
Other -- Investment transactions are accounted for on a trade date basis.
3. Shares of Beneficial Interest
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value).
Transactions in shares were as follows:
<TABLE>
<CAPTION>
Year Ended
Period Ended
January 31, 2000
January 31, 1999(a)
----------------
- -------------------
<S> <C> <C>
Shares sold 2,802,070
2,955,796
Proceeds from shares issued in connection with the
merger of Common Trust Funds --
9,400,919
Shares issued to shareholders in payment of
distributions declared
173,886 102,148
Shares redeemed
(1,023,579) (818,953)
-----------
- -----------
Net change resulting from share transactions 1,952,377
11,639,910
-----------
- -----------
</TABLE>
(a) Reflects operations for the period from April 20, 1998 (date of initial
public investments) to January 31, 1999.
4. Investment Adviser Fee and Other Transactions with Affiliates
Investment Adviser Fee -- WesBanco Trust and Investment Services, the Fund's
investment adviser (the "Adviser" or "WesBanco"), receives for its services an
annual investment adviser fee equal to 0.60% of the Fund's average daily net
assets. The Adviser may voluntarily choose to waive any portion of its fee. The
Adviser can modify or terminate this voluntary waiver at any time at its sole
discretion.
Administrative Fee -- Federated Services Company ("FServ") provides the Fund
with certain administrative personnel and services. The fee paid to FServ is
based on a scale that ranges from 0.15% to 0.075% of the average aggregate net
assets of the Trust for the period.
Distribution (12b-1) Fee -- The Fund has adopted a Distribution Plan (the
"Plan") pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the
Fund will compensate Edgewood Services, Inc., the principal distributor, from
the net assets of the Fund to finance activities intended to result in the sale
of the Fund's shares. The Plan provides that the Fund may incur distribution
expenses up to 0.25% of the average daily net assets of the Fund's shares,
annually, to compensate Edgewood Services, Inc. For the year ended January 31,
2000, the Fund did not incur fees under the plan.
Shareholder Services Fee -- Under the terms of a Shareholder Services Agreement
with WesBanco, the Fund will pay WesBanco up to 0.25% of average daily net
assets of the Fund's shares for the period. The fee paid to WesBanco is used to
finance certain services for shareholders and to maintain shareholder accounts.
For the year ended January 31, 2000, the Fund did not incur a shareholder
services fee.
Transfer and Dividend Disbursing Agent Fees and Expenses -- FServ, through its
subsidiary, Federated Shareholder Services Company ("FSSC") serves as transfer
and dividend disbursing agent for the Fund. The fee paid to FSSC is based on the
size, type, and number of accounts and transactions made by shareholders.
Portfolio Accounting Fees -- FServ maintains the Fund's accounting records for
which it receives a fee. The fee is based on the level of the Fund's average
daily net assets for the period, plus out-of-pocket expenses.
Custodian Fees -- WesBanco is the Fund's custodian. The fee is based on the
level of the Fund's average daily net assets for the period, plus out-of-pocket
expenses.
Interfund Transactions -- During the year ended January 31, 2000, the Fund
engaged in purchase and sale transactions with funds that have a common
investment adviser (or affiliated investment advisers), common
Directors/Trustees, and/or common Officers. These purchase and sale transactions
were made at current market value pursuant with Rule 17a-7 under the Act
amounting to $51,781,317 and $54,016,948, respectively.
Other Affiliated Parties and Transactions -- Pursuant to an exemptive order
issued by the SEC, the Fund may invest in certain affiliated money market funds.
As of January 31, 2000, the Fund owned 0.03% of outstanding shares of Federated
Prime Obligations Fund, which is distributed by an affiliate of the Fund's
distributor.
General -- Certain of the Officers and Trustees of the Trust are Officers and
Directors or Trustees of the above companies.
5. Investment Transactions
Purchases and sales of investments, excluding short-term securities, for the
year ended January 31, 2000, were as follows:
<TABLE>
<S> <C>
Purchases $49,743,964
- ---------------------------------
Sales $31,008,717
- ---------------------------------
</TABLE>
Independent Auditors' Report
To the Board of Trustees of WESMARK FUNDS and Shareholders of WESMARK BOND FUND:
We have audited the accompanying statement of assets and liabilities of WesMark
Bond Fund (a portfolio of WesMark Funds), including the portfolio of
investments, as of January 31, 2000, and the related statement of operations for
the year then ended, the statements of changes in net assets for the year ended
January 31, 2000 and the period from April 20, 1998 (date of initial public
investment) to January 31, 1999, and the financial highlights for the periods
presented. These financial statements and financial highlights are the
responsibility of WesMark Bond Fund's management. Our responsibility is to
express an opinion on these financial statements and financial highlights based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of the securities owned as of
January 31, 2000, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
WesMark Bond Fund as of January 31, 2000, the results of its operations for the
year then ended, the changes in its net assets for the year ended January 31,
2000 and the period from April 20, 1998 (date of initial public investment) to
January 31, 1999, and its financial highlights for the respective stated
periods, in conformity with generally accepted accounting principles.
Deloitte & Touche LLP|
Boston, Massachusetts
March 22, 2000
Trustees
John F. Donahue
Thomas G. Bigley
John T. Conroy, Jr.
Nicholas P. Constantakis
John F. Cunningham
J. Christopher Donahue
Lawrence D. Ellis, M.D.
Peter E. Madden
Charles F. Mansfield, Jr.
John E. Murray, Jr., J.D., S.J.D.
Marjorie P. Smuts
John S. Walsh
Officers
John F. Donahue
Chairman
Edward C. Gonzales
President and Treasurer
J. Christopher Donahue
Executive Vice President
John W. McGonigle
Executive Vice President and Secretary
Richard B. Fisher
Vice President
Beth S. Broderick
Vice President and Assistant Treasurer
C. Todd Gibson
Assistant Secretary
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves investment risk,
including the possible loss of principal.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the fund's prospectus which contains facts concerning
its objective and policies, management fees, expenses and other information.
[Logo of WesMark]
Annual Report
Dated January 31, 2000
Edgewood Services, Inc., Distributor
Cusip 951025402
G02160-12 (3/00)
[Logo of WesBanco]
Investment Adviser
A Division of WesBanco Bank, Inc.
[WESMARK GROWTH FUND LOGO APPEARS HERE]
Growth
Fund
Annual Report
January 31, 2000
[WESMARK FUNDS LOGO APPEARS HERE]
President's Message
Dear Shareholder:
I am extremely pleased to present the Annual Report to Shareholders for WesMark
Growth Fund. This report covers the 12-month period from February 1, 1999
through January 31, 2000. It gives you a complete picture of the fund's
operations, beginning with an overview of the stock market and fund strategy by
the fund's manager, followed by a complete list of fund holdings and the
financial statements. WesMark Growth Fund is managed to help your money grow
over time. To pursue that objective, the fund invests in a diversified portfolio
of stocks selected for their long-term potential to provide above-average
returns. During the fiscal year, the fund produced a total return of 31.22%1.
Contributing to the total return were a net asset value increase of $2.35,
income distributions totaling $0.01 per share, and capital gain distributions
totaling $1.60 per share. The fund's net assets totaled $183.3 million at the
end of the reporting period.
Thank you for pursuing your longer-term financial goals through the professional
management and diversification of WesMark Growth Fund. Sincerely,
/s/Edward C. Gonzales
Edward C. Gonzales
President
March 15, 2000
1 Performance quoted is based on net asset value. Past performance is no
guarantee of future results. Investment return and principal value will
fluctuate, so that an investor's shares, when redeemed, may be worth more or
less than their original cost. Total return for the one-year period ended
January 31, 2000 based on offering price (i.e., less any applicable sales
charge) was 24.94%.
Investment Review
For the second consecutive year, the United States economy grew strongly, while
most stock market indices such as the Standard & Poor's 500 ("S&P")/1/ and, in
particular, the NASDAQ Composite/2/, surged in value. The fourth quarter
represented one of the strongest quarters on record for many market indices.
Unfortunately, most stocks did not fully participate as more than half of the
stocks in the S&P declined in price.
By any measure, the performance of the U.S. economy is astounding. Corporate
profits rose at such a strong rate that even rising interest rates did not
impact the positive rate of return for many stocks, particularly
telecommunications and technology stocks. Companies in both sectors reported
extremely strong earnings results and accounted for a disproportionate share of
the rising earnings reported for the S&P in total. Many companies reported
improved results, but not sufficiently strong to overcome the impact of rising
interest rates.
During 1998, our overweighted position in technology stocks detracted from the
rate of return on the Growth Fund. The rise in price in this past year more than
compensated so that the rate of return for the fund since its inception has
exceeded that of the S&P/3/. The fund's rate of return for calendar year end
1999 was 41.99% (vs. 30.42% for the S&P) and since the fund's inception on
4/14/97 has been 27.85%/4/ (vs.21.05% for the S&P) annualized. While we believe
that the technology sector will continue to provide strong earnings growth,
stock prices of most companies have risen too rapidly. We began during the
fourth quarter to reduce our holdings because we believe that excessive optimism
has now led to extreme valuations. We are in the process of redeploying sales
proceeds into other sectors such as financial services and energy, where low
price-earnings ratios reflect excessive pessimism. We expect that companies in
these sectors will report much stronger earnings than the expectation which is
reflected in such low absolute and relative price-earnings ratios.
1 The S&P Index is an unmanaged capitalization-weighted index of 500 stocks
designed to measure performance of the broad domestic economy through changes
in the aggregate market value of 500 stocks representing all major
industries. Investments cannot be made in an index.
2 The NASDAQ Composite Index measures all domestic and non-U.S. based common
stocks listed on the NASDAQ Stock Market, Inc.
3 Funds that have a higher concentration of investments in a specific industry
or sector, such as technology, may be subject to a higher degree of market
risk than funds whose investments are more diversified.
4 Total return for calendar year end 1999 based on offering price (i.e., less
any applicable sales charge) was 35.26% and the annualized return (since
inception) was 25.58%.
Last Meeting of Shareholders
A Special Meeting of Trust shareholders was held on December 17, 1999. As of
October 27, 1999, the record date for shareholder voting at the meeting, there
were 11,437,514 total outstanding Shares. The following items were considered by
shareholders and the results of their voting were as follows:
Agenda Item 1. To elect five Trustees*
<TABLE>
<CAPTION>
For Withheld Authority To Vote
---------------------------------------
<S> <C> <C>
Nicholas P. Constantakis 10,672,598 1,558
John F. Cunningham 10,672,598 1,558
J. Christopher Donahue 10,672,598 1,558
Charles F. Mansfield, Jr. 10,672,598 1,558
John S. Walsh 10,672,598 1,558
</TABLE>
* The following Trustees continued their terms as Trustees of the Trust: John F.
Donahue, Thomas G. Bigley, John T. Conroy, Jr., Lawrence D. Ellis, M.D., Peter
E. Madden, John E. Murray, Jr., Marjorie P. Smuts.
Agenda Item 2. To make changes to the fund's fundamental investment policies: a.
To amend the fund's fundamental investment policies regarding borrowing money
and issuing senior securities.
<TABLE>
<CAPTION>
For Against Abstentions
- ---------------------------------------------------
<S> <C> <C>
10,661,032 9,074 4,050
</TABLE>
b. To amend the fund's fundamental investment policies regarding investments
in real estate.
<TABLE>
<CAPTION>
For Against Abstentions
- --------------------------------------------------
<S> <C> <C>
10,667,386 2,648 4,122
</TABLE>
c. To amend the fund's fundamental investment policies regarding investments
in commodities.
<TABLE>
<CAPTION>
For Against Abstentions
- --------------------------------------------------
<S> <C> <C>
10,663,704 994 9,458
</TABLE>
d. To amend the fund's fundamental investment policy regarding underwriting
securities.
<TABLE>
<CAPTION>
For Against Abstentions
- --------------------------------------------------
<S> <C> <C>
10,778,053 472 5,631
</TABLE>
e. To amend the fund's fundamental investment policy regarding lending by the
fund.
<TABLE>
<CAPTION>
For Against Abstentions
- --------------------------------------------------
<S> <C> <C>
10,662,767 1,076 10,313
</TABLE>
f. To amend the fund's fundamental investment policy regarding concentration of
the Fund's investments in the securities of companies in the same industry.
<TABLE>
<CAPTION>
For Against Abstentions
- --------------------------------------------------
<S> <C> <C>
10,670,147 175 3,834
</TABLE>
g. To amend, and to make non-fundamental, the fund's fundamental investment
policy regarding buying securities on margin.
<TABLE>
<CAPTION>
For Against Abstentions
- --------------------------------------------------
<S> <C> <C>
10,665,242 5,080 3,834
</TABLE>
Agenda Item 3. To eliminate the fund's fundamental investment policy on selling
securities short.
<TABLE>
<CAPTION>
For Against Abstentions
- --------------------------------------------------
<S> <C> <C>
10,665,574 2,891 5,691
</TABLE>
WesMark Growth Fund
Growth of $10,000 invested in WesMark Growth Fund
The graph below illustrates the hypothetical investment of $10,000* in the
WesMark Growth Fund (the "Fund") from April 14, 1997 (start of performance) to
January 31, 2000, compared to the Standard and Poor's 500 Index ("S&P 500")**
and Lipper Growth Funds Average ("LGFA").+
The graphic presentation displayed here consists of a line graph. The
corresponding components of the line graph are listed in the upper left hand
corner. The WesMark Growth Fund (the "Fund") is represented by a solid line. The
Standard & Poor's 500 Index ("S&P 500") is represented by a dotted line and the
Lipper Growth Funds Average ("LGFA") is represented by a dashed line. The line
graph is a visual representation of a comparison of change in value of a $10,000
hypothetical investment in the Fund, the S&P 500 and the LGFA. The "x" axis
reflects computation periods from 4/14/97 (the Fund's start of performance) to
1/31/00. The "y" axis reflects the cost of the investment, beginning with
$10,000 and going up to $22,000, in increments of $2,000. The right margin
reflects the ending value of the hypothetical investment in the Fund as compared
to the S&P 500 and the LGFA. The ending values were $19,019, $20,761 and
$19,421, respectively.
AVERAGE ANNUAL TOTAL RETURN FOR THE YEAR ENDED JANUARY 31, 2000++
1 Year 24.94%
Start of Performance (4/14/97). 23.61%
Start of Performance (4/14/97) (cumulative 81.13%
Past performance is no guarantee of future results. Your investment return and
principal value will fluctuate so when shares are redeemed, they may be worth
more or less than original cost. Mutual funds are not obligations of or
guaranteed by any bank and are not federally insured.
* Represents a hypothetical investment of $10,000 in the Fund after deducting
the maximum sales charge of 4.75% ($10,000 minus $475 sales charge = $9,525),
which became effective October 1, 1999. The Fund's performance assumes the
reinvestment of all dividends and distributions. The S&P 500 and the LGFA have
been adjusted to reflect reinvestment of dividends on securities in the index
and average.
<TABLE>
<S> <C>
** The S&P 500 is not adjusted to reflect sales charges, expenses, or other
fees that the Securities and Exchange Commission requires to be reflected in
the Fund's performance. The index is unmanaged.
+ Lipper figures represent the average of the total returns reported by all of
the mutual funds designated by Lipper Analytical Services, Inc. as falling
into the respective categories indicated.
These figures do not reflect sales charges.
++ Total returns quoted reflect all applicable sales charges.
WesMark Growth Fund
Portfolio of Investments
</TABLE>
January 31, 2000
<TABLE>
<CAPTION>
Shares
Value
Common Stocks--87.3%
<S>
<C>
<C>
Advertising Agencies-- 2.2%
25,000 Omnicom Group,
Inc. $
2,342,187
30,000 Young & Rubicam,
Inc. 1,616,250
- --------------
Total
3,958,437
- --------------
Banks - Major Regional-- 4.9%
25,000 First Union
Corp.
839,063
125,000 PNC Bank
Corp.
6,000,000
55,000 Wells Fargo
Co.
2,200,000
- --------------
Total
9,039,063
- --------------
Beverages/Alcohol-- 1.8%
50,000 Anheuser-Busch Cos.,
Inc. 3,375,000
- --------------
Biomedical-- 4.9%
140,000 (a)Amgen,
Inc.
8,916,250
- --------------
Business Information-- 0.5%
10,000 Reuters Holdings PLC,
ADR 901,250
- --------------
Chemical - Specialty-- 3.4%
40,000 Corning,
Inc.
6,170,000
- --------------
Computer Services-- 3.6%
135,000 First Data
Corp.
6,623,437
- --------------
Computers - Mainframe-- 1.2%
20,000 International Business Machines
Corp. 2,243,750
- --------------
Computers - Mini-- 3.0%
70,000 (a)Sun Microsystems,
Inc. 5,499,375
- --------------
Diversified Operations-- 2.2%
30,000 General Electric
Co. 4,001,250
- --------------
Drugs & Health Care-- 4.6%
70,000 Bristol-Myers Squibb
Co. 4,620,000
50,000 Merck & Co.,
Inc.
3,940,625
- --------------
Total
8,560,625
- --------------
Electronic Components - Semiconductor-- 6.3%
75,000 (a)Adaptec,
Inc. $
3,928,125
70,000 Texas Instruments,
Inc. 7,551,250
- --------------
Total
11,479,375
- --------------
Forest Products-- 0.3%
10,000 Weyerhaeuser
Co.
573,750
- --------------
Instruments - Control-- 6.1%
231,250 Honeywell International,
Inc. 11,100,000
- --------------
Insurance - Property & Casualty-- 3.9%
68,750 American International Group,
Inc. 7,158,594
- --------------
Insurance - Life-- 1.1%
80,000 Nationwide Financial Services, Inc., Class
A 1,990,000
- --------------
Networking Products-- 4.2%
70,000 (a)Cisco Systems,
Inc. 7,665,000
- --------------
Oil & Gas Drilling-- 0.9%
50,000 Transocean Offshore,
Inc. 1,590,625
- --------------
Oil & Gas Equipment & Services-- 2.1%
100,000 Williams Cos., Inc.
(The) 3,875,000
- --------------
Oil Components - Exploration & Production-- 8.8%
300,000 Burlington Resources,
Inc. 9,618,750
415,000 EOG Resources,
Inc.
6,588,125
- --------------
Total
16,206,875
- --------------
Oil Field - Machinery & Equipment-- 1.1%
45,000 Baker Hughes,
Inc.
1,108,125
15,000 Schlumberger
Ltd.
915,938
- --------------
Total
2,024,063
- --------------
Oil - Integrated-- 6.8%
115,000 BPAmoco PLC,
ADR $
6,181,250
155,000 Phillips Petroleum
Co. 6,335,625
- --------------
Total
12,516,875
- --------------
Protection - Safety-- 4.0%
170,000 Tyco International
Ltd. 7,267,500
- --------------
Publishing - Newspaper-- 0.2%
10,000 Tribune
Co.
421,875
- --------------
Retail - Apparel & Shoes-- 0.3%
30,000 Abercrombie & Fitch Co., Class
A 641,250
- --------------
Retail - Consumer Electronics-- 0.6%
30,000 Circuit City Stores,
Inc. 1,155,000
- --------------
Retail - Discount-- 1.5%
50,000 Wal-Mart Stores,
Inc. 2,737,500
- --------------
Telecommunication Services-- 0.2%
10,000 SBC Communications,
Inc. 431,250
- --------------
Telecommunications Equipment-- 5.3%
55,000 (a)Gilat Satellite Networks
Ltd. 5,871,250
70,000 (a)Tellabs,
Inc.
3,780,000
- --------------
Total
9,651,250
- --------------
Transportation - Airline-- 1.3%
50,000 Delta Air Lines,
Inc. 2,315,625
- --------------
Total Common Stocks (identified cost
$124,909,134) 160,089,844
- --------------
(b)Commercial Paper -- 13.6%
Finance - Automotive-- 4.9%
$8,000,000 Ford Motor Credit Corp., 5.58%,
3/3/00 7,961,560
1,000,000 Ford Motor Credit Corp., 5.66%,
3/16/00 993,082
- --------------
Total
8,954,642
- --------------
Finance - Commercial -- 8.7%
$2,000,000 General Electric Capital Corp., 5.63%,
2/25/00 $ 1,992,493
7,000,000 General Electric Capital Corp., 5.53%,
2/9/00 6,991,398
7,045,000 Sweetwater Capital Corp., 5.38%,
2/1/00 7,045,000
- --------------
Total
16,028,891
- --------------
Total Commercial Paper (at amortized
cost) 24,983,533
- --------------
Mutual Fund -- 0.5%
924,859 Federated U.S. Treasury Cash Reserves Fund (at net asset
value) 924,859
- --------------
Total Investments (identified cost
$150,817,526)(c) $ 185,998,236
- --------------
</TABLE>
(a) Non-income producing security.
(b) Each issue shows the rate of discount at the time of purchase for discount
issues, or the coupon for interest bearing issues. (c) The cost of investments
for federal tax purposes amounts to $150,817,526. The net unrealized
appreciation of investments on a federal tax basis amounts to $35,180,710, which
comprised $42,411,673 appreciation and $7,230,963 depreciation at January31,
2000.
Note: The categories of investments are shown as a percentage of net assets
($183,304,477) at January 31, 2000. The following acronym is used throughout
this portfolio: ADR --American Depositary Receipt (See Notes which are an
integral part of the Financial Statements) WesMark Growth Fund Statement of
Assets and Liabilities January 31, 2000 <TABLE> <CAPTION> <S> <C> <C> Assets:
Total investments in securities, at value (identified and tax cost $150,817,526)
$185,998,236 Income receivable 81,547 Receivable for shares sold 37,169 Deferred
organizational costs 2,369
- -------------
Total
assets
186,119,321
Liabilities:
Payable for investments
purchased $2,790,443
Accrued
expenses
24,401
- ----------
Total
liabilities
2,814,844
- -------------
Net Assets for 12,145,275 shares
outstanding
$183,304,477
- -------------
Net Assets Consist of:
Paid in
capital
$124,508,005
Net unrealized appreciation of
investments
35,180,710
Accumulated net realized gain on
investments
23,520,780
Undistributed net investment
income
94,982
- -------------
Total Net
Assets
$183,304,477
- -------------
Net Asset Value, Offering Price and Redemption Proceeds Per Share:
Net Asset Value Per Share ($183,304,477 / 12,145,275 shares
outstanding) $ 15.09
- -------------
Offering Price Per Share (100/95.25 of
$15.09)(a) $
15.84
- -------------
Redemption Proceeds Per
Share
$ 15.09
- -------------
</TABLE>
(a) See "What Do Shares Cost?" in the Prospectus.
(See Notes which are an integral part of the Financial Statements)
WesMark Growth Fund Statement of Operations
Year Ended January 31, 2000
<TABLE>
<CAPTION>
<S>
<C> <C>
Investment Income:
Dividends (net of foreign taxes withheld of
$1,333) $ 1,226,540
Interest
505,100
- -----------
Total
income
1,731,640
Expenses:
Investment adviser
fee $1,229,625
Administrative personnel and services
fee 229,182
Custodian
fees
27,477
Transfer and dividend disbursing agent fees and
expenses 8,436
Directors'/Trustees'
fees 3,700
Auditing
fees
14,828
Legal
fees
2,197
Portfolio accounting
fees 26,114
Share registration
costs 24,019
Printing and
postage
7,853
Insurance
premiums
1,076
Miscellaneous
7,847
- ---------
Total
expenses
1,582,354
Waivers--
Waiver of investment adviser
fee (19,910)
- ---------
Net
expenses
1,562,444
- -----------
Net investment
income
169,196
- -----------
Realized and Unrealized Gain on Investments:
Net realized gain on
investments
38,142,956
Net change in unrealized appreciation of
investments 5,108,617
- -----------
Net realized and unrealized gain on
investments
43,251,573
- -----------
Change in net assets resulting from
operations
$43,420,769
- -----------
</TABLE>
(See Notes which are an integral part of the Financial Statements) WesMark
Growth Fund Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended January 31,
<S>
<C> <C>
2000 1999
Increase (Decrease) in Net Assets:
Operations --
Net investment
income $
169,196 $ 611,299
Net realized gain on investments ($38,142,956 and $9,639,367,
respectively, as computed for federal tax
purposes) 38,142,956 9,639,367
Net change in unrealized appreciation of
investments 5,108,617 15,319,589
- ----------- -----------
Change in net assets resulting from
operations 43,420,769
25,570,255
- ----------- -----------
Distributions to Shareholders --
Distributions from net investment
income (89,403)
(663,101)
Distributions from net realized
gains (18,287,743)
(8,229,788)
- ----------- -----------
Change in net assets resulting from distributions to
shareholders (18,377,146) (8,892,889)
- ----------- -----------
Share Transactions --
Proceeds from sale of
shares
25,917,293 15,967,706
Net asset value of shares issued to shareholders in payment of
distributions
declared
7,551,961 4,442,945
Cost of shares
redeemed
(10,286,075) (16,152,476)
- ----------- -----------
Change in net assets resulting from share
transactions 23,183,179 4,258,175
- ----------- -----------
Change in net
assets
48,226,802 20,935,541
Net Assets:
Beginning of
period
135,077,675 114,142,134
- ----------- -----------
End of period (including undistributed net investment income of
$94,982 and $15,189,
respectively)
$183,304,477 $135,077,675
- ----------- -----------
</TABLE>
(See Notes which are an integral part of the Financial Statements) WesMark
Growth Fund Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year
Ended Period Ended
January 31, January 31,
<S>
<C> <C> <C>
2000 1999 1998(a)
Net asset value, beginning of period $
12.74 $ 11.15 $ 10.00
Income from investment operations
Net investment income
0.01 0.06 0.09
Net realized and unrealized gain on investments
3.95 2.38 1.71
- -------- -------- --------
Total from investment operations
3.96 2.44 1.80
- -------- -------- --------
Less distributions
Distributions from net investment income
(0.01) (0.06) (0.08)
Distributions from net realized gain on investments
(1.60) (0.79) (0.57)
- -------- -------- --------
Total distributions
(1.61) (0.85) (0.65)
- -------- -------- --------
Net asset value, end of period $
15.09 $ 12.74 $ 11.15
- -------- -------- --------
Total return (b)
31.22% 22.58% 18.24%
Ratios to average net assets
Expenses
0.95% 1.04% 1.14%*
Net investment income
0.10% 0.50% 0.99%*
Expense waiver/reimbursement (c)
0.01% 0.01% 0.00%*(d)
Supplemental data
Net assets, end of period (000 omitted) $
183,304 $ 135,078 $ 114,142
Portfolio turnover
71% 58% 58%
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from April 14, 1997 (date of initial
public investment) to January 31, 1998. (b) Based on net asset value, which does
not reflect the sales charge or contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and the net
investment income ratios shown above. (d) Amount represents less than 0.01%.
(See Notes which are an integral part of the Financial Statements) WesMark
Growth Fund Notes to Financial Statements
January 31, 2000
1. Organization
WesMark Funds (the "Trust") is registered under the Investment Company Act of
1940, as amended (the "Act") as an open-end, management investment company. The
Trust consists of four portfolios. The financial statements included herein are
only those of WesMark Growth Fund (the "Fund"), a diversified portfolio. The
financial statements of the other portfolios are presented separately. The
assets of each portfolio are segregated and a shareholder's interest is limited
to the portfolio in which shares are held. The investment objective of the Fund
is appreciation of capital. The Fund invests primarily in equity securities of
companies with prospects for above-average growth in earnings and dividends.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
Investment Valuation -- Listed equity securities are valued at the last sale
price reported on a national securities exchange. Short-term securities are
valued at the prices provided by an independent pricing service. However,
short-term securities with remaining maturities of sixty days or less at the
time of purchase may be valued at amortized cost, which approximates fair
market value. Investments in other open-end regulated investment companies
are valued at net asset value.
Investment Income, Expenses and Distributions -- Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized as
required by the Internal Revenue Code, as amended (the "Code"). Dividend
income and distributions to shareholders are recorded on the ex-dividend
date. Non-cash dividends included in dividend income, if any, are recorded at
fair value.
Federal Taxes -- It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provision for federal tax is necessary.
When-Issued and Delayed Delivery Transactions -- The Fund may engage in when-
issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the securities
purchased. Securities purchased on a when-issued or delayed delivery basis
are marked to market daily and begin earning interest on the settlement date.
Losses may occur on these transactions due to changes in market conditions or
the failure of counterparties to perform under the contract.
Use of Estimates -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts of assets, liabilities,
expenses and revenues reported in the financial statements. Actual results
could differ from those estimated.
Other -- Investment transactions are accounted for on a trade date basis.
3. Shares of Beneficial Interest
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value).
Transactions in shares were as follows:
<TABLE>
<CAPTION>
Year Ended January 31,
<S>
<C> <C>
2000 1999
Shares
sold
1,762,726 1,351,801
Shares issued to shareholders in payment of distributions
declared 495,984 373,063
Shares
redeemed
(717,443) (1,356,413)
- --------- ----------
Net change resulting from share
transactions 1,541,267
368,451
- --------- ----------
</TABLE>
4. Investment Adviser Fee and Other Transactions with Affiliates
Investment Adviser Fee -- WesBanco Trust and Investment Services, the Fund's
investment adviser (the "Adviser" or "WesBanco"), receives for its services
an annual investment adviser fee equal to 0.75% of the Fund's average daily
net assets. The Adviser may voluntarily choose to waive any portion of its
fee. The Adviser can modify or terminate this voluntary waiver at any time at
its sole discretion.
Administrative Fee -- Federated Services Company ("FServ") provides the Fund
with certain administrative personnel and services. The fee paid to FServ is
based on a scale that ranges from 0.15% to 0.075% of the average aggregate
net assets of the Trust for the period. Distribution (12b-1) Fee -- The Fund
has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the
Act. Under the terms of the Plan, the Fund will compensate Edgewood Services,
Inc., the principal distributor, from the net assets of the Fund to finance
activities intended to result in the sale of the Fund's shares. The Plan
provides that the Fund may incur distribution expenses up to 0.25% of the
average daily net assets of the Fund's shares, annually, to compensate
Edgewood Services, Inc. For the year ended January 31, 2000, the Fund did not
incur fees under the Plan.
Shareholder Services Fee -- Under the terms of a Shareholder Services
Agreement with WesBanco, the Fund will pay WesBanco up to 0.25% of average
daily net assets of the Fund's shares for the period. The fee paid to
WesBanco is used to finance certain services for shareholders and to maintain
shareholder accounts. For the year ended January 31, 2000, the Fund did not
incur a shareholder services fee.
Transfer and Dividend Disbursing Agent Fees and Expenses -- FServ, through
its subsidiary, Federated Shareholder Services Company ("FSSC") serves as
transfer and dividend disbursing agent for the Fund. The fee paid to FSSC is
based on the size, type, and number of accounts and transactions made by
shareholders.
Portfolio Accounting Fees -- FServ maintains the Fund's accounting records
for which it receives a fee. The fee is based on the level of the Fund's
average daily net assets for the period, plus out-of-pocket expenses.
Custodian Fees -- WesBanco is the Fund's custodian. The fee is based on the
level of the Fund's average daily net assets for the period, plus out-of-
pocket expenses.
Organizational Expenses -- Organizational expenses of $5,607 were borne
initially by the Administrator. The Fund has reimbursed the Administrator for
these expenses. These expenses have been deferred and are being amortized
over the five-year period following the Fund's effective date.
Interfund Transactions -- During the year ended January 31, 2000, the Fund
engaged in purchase and sale transactions with funds that have a common
investment adviser (or affiliated investment advisers), common
Directors/Trustees, and/or common Officers. These purchase and sale
transactions complied with Rule 17a-7 under the Act and amounted to
$115,126,884 and $118,629,825, respectively.
Other Affiliated Parties and Transactions -- Pursuant to an exemptive order
issued by the SEC, the Fund may invest in certain affiliated money market
funds. As of January 31, 2000, the Fund owned 0.04% of outstanding shares of
Federated U.S. Treasury Cash Reserves Fund, which is distributed by an
affiliate of the Fund's distributor.
General -- Certain of the Officers and Trustees of the Trust are Officers and
Directors or Trustees of the above companies.
5. Investment Transactions
Purchases and sales of investments, excluding short-term securities, for the
year ended January 31, 2000, were as follows:
<TABLE>
<S> <C>
Purchases $108,219,461
Sales $115,299,550
</TABLE>
Independent Auditors' Report
To the Board of Trustees of WESMARK FUNDS and Shareholders of WESMARK GROWTH
FUND:
We have audited the accompanying statement of assets and liabilities of WesMark
Growth Fund (a portfolio of WesMark Funds), including the portfolio of
investments, as of January 31, 2000, and the related statement of operations for
the year then ended, the statements of changes in net assets for the years ended
January 31, 2000 and 1999, and the financial highlights for the periods
presented. These financial statements and financial highlights are the
responsibility of WesMark Growth Fund's management. Our responsibility is to
express an opinion on these financial statements and financial highlights based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of the securities owned as of
January 31, 2000, by correspondence with the custodian and brokers; where
replies were not received from brokers, we performed other auditing procedures.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
WesMark Growth Fund as of January 31, 2000, the results of its operations for
the year then ended, the changes in its net assets for the years ended January
31, 2000 and 1999, and its financial highlights for the respective stated
periods, in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP Boston, Massachusetts March 22, 2000
Trustees
John F. Donahue
Thomas G. Bigley
John T. Conroy, Jr.
Nicholas P. Constantakis
John F. Cunningham
J. Christopher Donahue
Lawrence D. Ellis, M.D.
Peter E. Madden
Charles F. Mansfield, Jr.
John E. Murray, Jr., J.D.,S.J.D.
Marjorie P. Smuts
John S. Walsh
Officers
John F. Donahue
Chairman
Edward C. Gonzales
President and Treasurer
J. Christopher Donahue
Executive Vice President
John W. McGonigle
Executive Vice President and Secretary
Richard B. Fisher
Vice President
Beth S. Broderick
Vice President and Assistant Treasurer
C. Todd Gibson
Assistant Secretary
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves investment risk,
including the possible loss of principal.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the fund's prospectus which contains facts concerning
its objective and policies, management fees, expenses, and other information.
[WESMARK GROWTH FUND LOGO APPEARS HERE]
Annual Report
Dated January 31, 2000
[WESBANCO LOGO APPEARS HERE]
Edgewood Services, Inc. Distributor
Cusip 951025204
G02160-(3/00)
[WESMARK MUNICIPAL BOND FUND LOGO APPEARS HERE]
Annual Report
January 31, 2000
[WESMARK FUNDS LOGO APPEARS HERE]
President's Message
Dear Shareholder:
I am extremely pleased to present the Annual Report to Shareholders for WesMark
West Virginia Municipal Bond Fund. This report covers the 12-month period from
February 1, 1999 through January 31, 2000. It gives you a complete picture of
the fund's operations, beginning with an overview of the municipal bond market
and fund strategy by the fund's manager, followed by a complete list of fund
holdings and the financial statements.
WesMark West Virginia Municipal Bond Fund is managed to help your money earn
income free from federal income tax and West Virginia state income tax.1 To
pursue that objective, it invests in a portfolio primarily of high-quality bonds
issued by West Virginia municipalities.
During the fiscal year, the fund produced and paid tax-free income totaling
$0.44 per share and paid capital gains totaling $0.03 per share. Due to a rising
interest rate environment that caused the prices of bonds to decline, the fund's
net asset value declined by $0.75 per share, which resulted in a negative total
return of (2.77%).2 The fund's net assets totaled $64 million at the end of the
reporting period.
Thank you for selecting WesMark West Virginia Municipal Bond Fund to help you
keep more of your investment income where it belongs--in your pocket.
Sincerely,
/s/Edward C. Gonzales
Edward C. Gonzales
President
March 15, 2000
1Performance quoted is based on net asset value. Income may be subject to the
federal alternative minimum tax and some state and local taxes.
2Past performance is no guarantee of future results. Investment return and
principal value will fluctuate, so that an investor's shares, when redeemed,
may be worth more or less than their original cost. Total return for the one-
year period ended January 31, 2000 based on offering price (i.e., less any
applicable sales charge) was (6.45%).
Investment Review
The fund provided a total return of (2.77%)1 for the fiscal year ended January
31, 2000. The income return for the year was 4.15% and 100% of the income
distributed was exempt from federal and state income tax for West Virginia
residents. The 30-day taxable equivalent yield for West Virginia Residents in
the 28% tax bracket was 6.33%. As of January 31, 2000, the 30-day SEC yield2 was
4.56%. As of year-end 1999, we continued to maintain our focus on high quality
bonds with 57.2% of the fund invested in bonds rated AAA.3
The U.S. economy continues to expand and create jobs at a level that has
historically fueled inflationary pressures. Thus far prices have remained
relatively stable due to global competition and productivity gains. However
economic growth around the world has begun to accelerate which may cause an up
tick in prices over the next year. In an effort to maintain price stability the
Federal Reserve Board (the "Fed") has increased interest rates four times over
the past year. This change in monetary policy has caused the yields on short-
term bonds to rise faster than that on long-term bonds causing an inverted yield
curve.
Our focus for the past year was to increase the income generated by the fund
through the purchase of longer-term securities. The average duration was
extended throughout the year and is now within the targeted range of 8.5 to 9
years.4 An emphasis was also placed on reducing the risk associated with bonds
issued by healthcare providers. Because of changes implemented by the federal
government limiting the level of payment for services provided under Medicare,
many hospitals reported significant declines in profitability during 1999. As
with all securities held by the fund, we are continuing to monitor the ability
of each issuer to meet their respective obligations and will eliminate
securities when appropriate.
Due to a strong economy and fiscal restraint, general obligation bonds issued by
the state of West Virginia were upgraded by Moody's Investors Service and
Standard & Poor's and now stand at Aa3 and AA-respectively. The change in
sentiment allowed these bonds to outperform other issues during the course of
the year. The rise in interest rates caused a slowdown in the issuance of new
bonds throughout the past year. This shortage of new supply along with the
increase in credit quality allowed municipal bonds to decline in price less than
taxable bonds.
Looking forward we believe interest rates will remain in a relatively narrow
range for the balance of the year. We believe that the Fed will remain diligent
in its efforts for price stability and will likely continue to push short-term
interest rates higher over the next several months. This combined with energy
prices should cause a slowing of the domestic economy allowing long and
intermediate term bond yields to decline. We believe that municipal bonds are
attractively valued relative to taxable securities and will benefit from better
credit quality.
1Performance quoted is based on net asset value. Past performance is no
guarantee of future results. Investment return and principal value will
fluctuate, so that an investor's shares, when redeemed, may be worth more or
less than their original cost. Total return for the one-year period ended
January 31, 2000 based on offering price (i.e., less any applicable sales
charge) was (6.45%).
2The 30-day SEC yield is calculated by dividing the net investment income per
share for the 30 days ended on the date of calculation by the maximum offering
price per share on that date. The figure is then compounded and annualized.
3These ratings pertain only to the securities in the portfolio and do not
protect fund shares against market risk.
4Duration is the measure of a security's price sensitivity to changes in
interest rates. Securities with longer durations are more sensitive to changes
in interest rates than securities of shorter duration.
Last Meeting of Shareholders
A Special Meeting of Trust shareholders was held on December 17, 1999. As of
October 27, 1999, the record date for shareholder voting at the meeting, there
were 6,595,847 total outstanding Shares. The following items were considered by
shareholders and the results of their voting were as follows:
Agenda Item 1. To elect five Trustees*
<TABLE>
<CAPTION>
For Withheld Authority To Vote
------------------------------------------
<S> <C> <C>
Nicholas P. Constantakis 6,163,149 1,095
John F. Cunningham 6,163,149 1,095
J. Christopher Donahue 6,163,149 1,095
Charles F. Mansfield, Jr. 6,163,149 1,095
John S. Walsh 6,163,149 1,095
</TABLE>
* The following Trustees continued their terms as Trustees of the Trust: John F.
Donahue, Thomas G. Bigley, John T. Conroy, Jr., Lawrence D. Ellis, M.D., Peter
E. Madden, John E. Murray, Jr., Marjorie P. Smuts.
Agenda Item 2. To make changes to the fund's fundamental investment policies:
a. To amend the fund's fundamental investment policies regarding borrowing money
and issuing senior securities.
<TABLE>
<CAPTION>
For Against Abstentions
- -------------------------------------------------
<S> <C> <C>
6,164,245 0 0
</TABLE>
b. To amend the fund's fundamental investment policies regarding investments in
real estate.
<TABLE>
<CAPTION>
For Against Abstentions
- -------------------------------------------------
<S> <C> <C>
6,159,885 4,360 0
</TABLE>
c. To amend the fund's fundamental investment policies regarding investments in
commodities.
<TABLE>
<CAPTION>
For Against Abstentions
- ------------------------------------------------
<S> <C> <C>
6,159,885 4,360 0
</TABLE>
d. To amend the fund's fundamental investment policy regarding underwriting
securities.
<TABLE>
<CAPTION>
For Against Abstentions
- -------------------------------------------------
<S> <C> <C>
6,164,245 0 0
</TABLE>
e. To amend the fund's fundamental investment policy regarding lending by the
fund.
<TABLE>
<CAPTION>
For Against Abstentions
- -------------------------------------------------
<S> <C> <C>
6,161,638 1,095 1,512
</TABLE>
Last Meeting of Shareholders
f. To amend the fund's fundamental investment policy regarding concentration of
the Fund's investments in the securities of companies in the same industry.
<TABLE>
<CAPTION>
For Against Abstentions
- --------------------------------------------------
<S> <C> <C>
6,163,150 1,095 0
</TABLE>
g. To amend, and to make non-fundamental, the fund's fundamental investment
policy regarding buying securities on margin.
<TABLE>
<CAPTION>
For Against Abstentions
- --------------------------------------------------
<S> <C> <C>
6,158,789 1,095 4,361
</TABLE>
Agenda Item 3. To eliminate the fund's fundamental investment policy on selling
securities short.
<TABLE>
<CAPTION>
For Against Abstentions
- -------------------------------------------------
<S> <C> <C>
6,158,789 1,095 4,361
</TABLE>
WesMark West Virginia Municipal Bond Fund
Growth of $10,000 invested in WesMark West Virginia Municipal Bond Fund
The graph below illustrates the hypothetical investment of $10,000* in the
WesMark West Virginia Municipal Bond Fund (the "Fund")++ from December 31, 1990
(start of performance) to January 31, 2000, compared to the Lehman Brothers 5
Year G.O. Bond Index ("LB5GO")** and Lipper Intermediate Municipal Debt Funds
Average ("LIMDFA")+.
The graphic presentation displayed here consists of a line graph. The
corresponding components of the line graph are listed in the upper left hand
corner. The WesMark West Virginia Municipal Bond Fund (the "Fund") is
represented by a solid line. The Lehman Brothers 5 Year G.O. Bond Index
("LB5GO") is represented by a dotted line and the Lipper Intermediate Municipal
Debt Funds Average ("LIMDFA") is represented by a dashed line. The line graph is
a visual representation of a comparison of change in value of a $10,000
hypothetical investment in the Fund, the LB5GO and the LIMDFA. The "x" axis
reflects computation periods from 12/31/90 to1/31/00. The "y" axis reflects the
cost of the investment, beginning with$10,000 and going up to $18,000, in
increments of $2,000. The right margin reflects the ending value of the
hypothetical investment in the Fund as compared to the LB5GO and the LIMDFA. The
ending values were $15,096, $16,954, and $16,566, respectively.
AVERAGE ANNUAL TOTAL RETURN FOR THE YEAR ENDED JANUARY 31, 2000+++
1 Year (6.45%)
5 Years 3.48%
Start of Performance (12/31/90 4.19%
Past performance is no guarantee of future results. Your investment return and
principal value will fluctuate so when shares are redeemed, they may be worth
more or less than original cost. Mutual funds are not obligations of or
guaranteed by any bank and are not federally insured.
* Represents a hypothetical investment of $10,000 in the Fund after deducting
the maximum sales charge of 3.75% ($10,000 minus $375 sales charge =
$9,625), which became effective October 1, 1999. The Fund's performance
assumes the reinvestment of all dividends and distributions. The LB5GO and
the LIMDFA have been adjusted to reflect reinvestment of dividends on
securities in the index and average.
** The LB5GO is not adjusted to reflect sales charges, expenses, or other fees
that the Securities and Exchange Commission requires to be reflected in the
Fund's performance. The index is unmanaged.
+ Lipper figures represent the average of the total returns reported by all of
the mutual funds designated by Lipper Analytical Services, Inc. as falling
into the respective categories indicated. These figures do not reflect sales
charges.
++ WesMark West Virginia Municipal Bond Fund is the successor to a common trust
fund. The quoted performance data includes performance of the common trust
fund for the period from 12/31/90 to 4/14/1997, when the Fund first
commenced operation, as adjusted to reflect the Fund's anticipated expenses.
The common trust fund was not registered under the Investment Company Act of
1940 ("1940 Act") and therefore was not subject to certain investment
restrictions imposed by the 1940 Act. If the common trust fund had been
registered under the 1940 Act, the performance may have been adversely
affected.
+++ Total returns reflect all applicable sales charges.
WesMark West Virginia Municipal Bond Fund Portfolio of Investments
January 31, 2000
<TABLE>
<CAPTION>
Principal
Credit
Amount
Rating* Value
Long-Term Municipals--97.4%
<S><C> <C>
<C> <C>
West Virginia -- 97.4%
$ 500,000 Berkeley County, WV, Board of Education, GO UT, 4.50%
(FGIC INS)/(Original Issue Yield: 5.30%), 6/1/2009
AAA $ 465,575
1,030,000 Berkeley County, WV, Board of Education, GO UT, 5.75%
(FGIC INS), 6/1/2003
AAA 1,061,973
100,000 Brooke County, WV, Board of Education, GO UT, Refunding Bonds,
8.75% (AMBAC INS), 8/1/2001
AAA 105,979
1,350,000 Cabell County, WV, Board of Education, GO UT, 6.50%
(MBIAINS), 5/1/2003
AAA 1,421,080
500,000 Cabell County, WV, Board of Education, GO UT, 4.60%
(Original Issue Yield: 4.70%), 5/1/2003
A+ 496,545
500,000 Cabell County, WV, Board of Education, GO UT, 6.00%
(MBIAINS), 5/1/2006
AAA 522,691
100,000 Cable, Putnam & Wayne County's, WV, Single Family
Residence Mortgage Revenue Bonds, 7.375% (FGIC INS),
4/1/2010
AAA 107,776
160,000 Charles Town, WV, Residential Mortgage Revenue Bonds,
6.20%, 3/1/2011
A1 159,356
355,000 Charles Town, WV, Waterworks and Sewer System, Revenue
Refunding Bonds, 5.00% (Original Issue Yield: 5.15%), 10/1/2013
AA 325,906
340,000 Charles Town, WV, Waterworks and Sewer System, Revenue
Refunding Bonds, 5.00%, 10/1/2012
AA 316,385
125,000 Charleston, WV, Building Commission, Revenue Bonds, 5.60%
(Original Issue Yield: 5.60%), 6/1/2019
NR 113,599
235,000 Charleston, WV, Building Commission, Revenue Bonds, 5.85%,
(Center for Arts & Sciences Project), (Original Issue Yield:
5.85%),
6/1/2019
NR 219,032
865,000 Charleston, WV, Building Commission, Subordinate Bonds,
6.00% (Charleston Town Center Parking), 12/1/2010
NR 862,192
500,000 Charleston, WV, Civic Center Revenue, Improvements,
6.25%, 12/1/2015
NR 495,983
$ 1,000,000 Charleston, WV, Urban Renewal Authority, Public
Improvement Revenue Bonds, 5.25% (FSALOC), 12/15/2018
AAA 902,304
355,000 Charleston, WV, GO UT, 7.20%, 10/1/2003
A1 382,807
500,000 Fairmont, WV, Waterworks, Series 1999, 5.25%
(AMBAC LOC)/(Original Issue Yield: 4.95%), 7/1/2017
Aaa 457,774
1,295,000 Fairmont, WV, Waterworks, Series 1999, 5.25%
(AMBAC LOC)/(Original Issue Yield: 4.848%), 7/1/2015
Aaa 1,217,966
2,235,000 Fairmont, WV, Waterworks, Water Utility Improvement
Revenue Bonds, 5.00% (AMBAC LOC), 7/1/2019
Aaa 1,936,757
500,000 Harrison County, WV, Board of Education, GO UT, 6.40%
(FGIC INS)/(Original Issue Yield: 6.45%), 5/1/2006
AAA 533,264
680,000 Harrison County, WV, Building Commission, Healthcare,
Maplewood Retirement Revenue Bonds, 5.15%
(AMBAC INS)/(Original Issue Yield: 5.32%), 4/1/2018
Aaa 604,798
410,000 Harrison County, WV, County Commission, Special
Obligation Refunding Bonds, Series A, 6.35%
(Original Issue Yield: 6.45%), 5/15/2004
AAA 433,358
420,000 Jackson County, WV, Revenue Bonds, 7.375%
(FGIC INS), 6/1/2010
AAA 479,101
250,000 Jefferson County, WV, Board of Education, School
Improvement Bonds, 6.85% (FGIC INS), 7/1/2001
AAA 257,686
750,000 Kanawha County, WV, Commercial Development,
Revenue Refunding Bonds, 6.50% (May Department
Stores Co.), 6/1/2003
A 781,282
2,025,000 Kanawha County, WV, PCR Bonds, 7.35% (Union
Carbide Corp.), 8/1/2004
Baa2 2,142,847
285,000 Logan County, WV, Revenue Bonds, 8.00% (Logan County
Health Care Center Limited Partnership Project), 12/1/2009
NR 325,930
100,000 Marion County, WV, SFM, Revenue Bonds, 7.20%
(FGIC INS), 8/1/2001
AAA 104,096
110,000 Marshall County, WV, Special Obligation Bonds, 6.50%
(Original Issue Yield: 6.65%), 5/15/2010
AAA 112,051
$ 355,000 Mason County, WV, PCR Bonds, 5.45% (Ohio Power Co.)/
(AMBAC INS)/(Original Issue Yield: 5.47%), 12/1/2016
AAA 331,251
785,000 Ohio County, WV, Board of Education, GO UT
Refunding Bonds, 5.125% (MBIAINS)/(Original Issue
Yield: 5.375%), 6/1/2018
AAA 699,935
1,035,000 Ohio County, WV, Board of Education, GO UT Refunding
Bonds, 5.125% (Original Issue Yield: 5.375%), 6/1/2018
A+ 923,893
1,000,000 Ohio County, WV, Board of Education, GO UT, 5.00%
(Original Issue Yield: 5.25%), 6/1/2013
A+ 925,469
300,000 Ohio County, WV, Board of Education, GO UT, 5.25%
(MBIALOC)/(Original Issue Yield: 5.65%), 6/1/2016
AAA 281,503
1,000,000 Ohio County, WV, County Community Health System Refunding
Revenue Bonds, 4.85% (Ohio Valley Medical Center)/
(American Capital Access INS), 1/1/2008
A 955,596
155,000 Parkersburg, WV, Waterworks & Sewer Systems, Refunding
Revenue Bonds, 5.80% (FSALOC)/(Original Issue Yield:
5.929%), 9/1/2019
AAA 150,061
500,000 Parkersburg, WV, Waterworks & Sewer Systems, Refunding
Revenue Bonds, 4.75% (FSAINS)/(Original Issue Yield:
4.80%), 3/1/2002
AAA 500,471
400,000 Parkersburg, WV, Waterworks & Sewer Systems, Refunding
Revenue Bonds, 4.85% (FSAINS)/(Original Issue Yield:
4.90%), 3/1/2003
AAA 400,551
1,160,000 Pleasants County, WV, PCR, Series C, 6.15%
(AMBAC LOC), 5/1/2015
AAA 1,178,827
830,000 Pleasants County, WV, PCR, Refunding Bonds, 6.15% (West Penn Power
Co.)/(AMBAC INS), 5/1/2015
AAA 845,922
475,000 Pleasants County, WV PCR, Refunding Bonds,
6.15% (Potomac Edison Co.)/(MBIAINS), 5/1/2015
AAA 484,956
475,000 Raleigh County, WV, Community Development,
Refunding Revenue Bonds, 5.50%, 6/1/2006
NR 473,707
865,000 Raleigh County, WV, Building Commission, Public
Improvements, 5.00%, 10/1/2012
NR 803,451
$ 795,000 Raleigh, Fayette & Nicholas Counties, WV, Refunding Bonds,
6.25% (Original Issue Yield: 6.60%), 8/1/2011
Aaa 850,924
1,285,000 Randolph County, WV, Refunding Revenue Bonds, 5.20%
(Davis Health Systems, Inc.)/(FSAINS), 11/1/2015
Aaa 1,170,084
480,000 South Charleston, WV, Hospital Refunding Revenue Bonds,
4.70% (MBIAINS), 10/1/2001
AAA 481,573
1,000,000 South Charleston, WV, Refunding Revenue Bonds, 7.625%
(Union Carbide Corp.), 8/1/2005
BBB 1,091,535
500,000 South Charleston, WV, Revenue Bonds, 5.50%,
(Herbert J. Thomas Hospital)/(MBIAINS), 10/1/2009
AAA 500,081
1,000,000 South Charleston, WV, Refunding Revenue Bonds, 5.10%
(Union Carbide Corp.), 1/1/2012
BBB 907,447
415,000 Taylor County, WV, GO UT, 8.40% (Original Issue Yield:
8.45%), 5/1/2001
NR 434,102
175,000 Weirton, WV, Municipal Hospital Building, Refunding
Revenue Bonds, 5.75% (Weirton Medical Center, Inc.)/
(AMBAC INS)/(Original Issue Yield: 6.00%), 12/1/2003
AAA 177,902
800,000 West Virgina State College, Revenue Bonds, 5.50%
(AMBAC INS)/(Original Issue Yield: 5.60%), 4/1/2001
AAA 808,305
1,000,000 West Virgina State College, Revenue Bonds, 5.75%
(AMBAC INS)/(Original Issue Yield: 5.85%), 4/1/2003
AAA 1,027,823
200,000 West Virgina State College, Revenue Bonds, 5.75%
(AMBAC INS)/(Original Issue Yield: 5.95%), 4/1/2004
AAA 206,550
275,000 West Virginia Housing Development Fund, Refunding
Revenue Bonds, 6.70%, 5/1/2009
AAA 280,801
735,000 West Virginia Housing Development Fund, Revenue
Bonds, 5.35%, 11/1/2010
AAA 713,890
250,000 West Virginia School Building Authority, Refunding
Revenue Bonds, 5.25%, 7/1/2021
AAA 226,430
3,720,000 West Virginia School Building Authority, Revenue Bonds,
5.625% (MBIAINS)/(Original Issue Yield: 5.90%), 7/1/2003
AAA 3,820,801
$ 180,000 West Virginia School Building Authority, Revenue Bonds,
5.70% (MBIAINS)/(Original Issue Yield: 5.75%), 7/1/2000
AAA 181,098
150,000 West Virginia School Building Authority, Revenue Bonds,
5.80% (MBIAINS)/(Original Issue Yield: 5.90%), 7/1/2001
AAA 152,394
855,000 West Virginia School Building Authority, Revenue Bonds,
6.25% (MBIAINS)/(Original Issue Yield: 5.70%), 7/1/2001
AAA 873,976
100,000 West Virginia School Building Authority, Revenue Bonds,
6.75% (MBIAINS)/(Original Issue Yield: 7.00%), 7/1/2004
AAA 107,221
300,000 West Virginia School Building Authority, Revenue Bonds,
6.80% (MBIAINS)/(Original Issue Yield: 6.85%), 7/1/2001
AAA 308,895
240,000 West Virginia State Building Commission Lease, Series B,
4.60% (West Virginia Regional Jail and Correctional Facility)/
(AMBAC LOC)/(Original Issue Yield: 4.65%), 7/1/2010
AAA 224,845
150,000 West Virginia State Building Commission Lease, Series C,
4.50% (West Virginia Regional Jail and Correctional Facility)/
(AMBAC LOC)/(Original Issue Yield: 4.50%), 7/1/2007
AAA 144,943
150,000 West Virginia State Building Commission Lease, Series C,
4.50% (West Virginia Regional Jail and Correctional Facility)/
(AMBAC LOC)/(Original Issue Yield: 4.50%), 7/1/2008
AAA 143,403
2,000,000 West Virginia State Building Commission Lease, Refunding
Revenue Bonds, 5.375% (AMBAC LOC)/(Original Issue Yield:
5.04%), 7/1/2021
AAA 1,858,188
100,000 West Virginia State Building Commission Lease, Revenue Bonds,
Series A, 6.50% (West Virginia Regional Jail & Correctional
Facility)/(MBIAINS)/(Original Issue Yield:
6.60%), 7/1/2000
AAA 100,958
190,000 West Virginia State Building Commission Lease, Revenue Bonds,
4.50% (West Virginia Regional Jail and Correctional
Facility)/(AMBAC INS)/(Original Issue Yield:
4.55%), 7/1/2008
AAA 181,643
870,000 West Virginia State Hospital Finance Authority, Refunding
Revenue Bonds, 5.00% (FSAINS), 8/1/2009
Aaa 835,658
$ 1,000,000 West Virginia State Hospital Finance Authority, Refunding
Revenue Bonds, 5.00% (West Virginia University Hospital,
Inc.)/(MBIAINS)/(Original Issue Yield: 5.55%), 6/1/2016
AAA 878,698
200,000 West Virginia State Hospital Finance Authority, Revenue
Bonds, Series A, 5.60% (Cabell Huntington Hospital)/
(AMBAC INS)/(Original Issue Yield: 5.75%), 1/1/2005
AAA 204,378
300,000 West Virginia State Hospital Finance Authority, Revenue
Bonds, 4.70% (FSALOC), 8/1/2006
Aaa 288,775
700,000 West Virginia State Hospital Finance Authority, Revenue
Bonds, 4.90% (West Virginia University Hospital, Inc.)/
(MBIAINS)/(Original Issue Yield: 5.00%), 6/1/2004
AAA 697,525
1,000,000 West Virginia State Hospital Finance Authority, Revenue
Bonds, 5.00% (Fairmont General Hospital, Inc.), 11/1/2004
BBB- 956,717
220,000 West Virginia State Hospital Finance Authority, Revenue
Bonds, 5.00% (West Virginia University Hospital, Inc.)/
(MBIAINS)/(Original Issue Yield: 5.10%), 6/1/2005
AAA 219,070
1,750,000 West Virginia State Hospital Finance Authority, Revenue
Bonds, 5.75% (Charleston Area Medical Center)/(MBIAINS)/
(Original Issue Yield: 5.98%), 9/1/2013
AAA 1,751,536
180,000 West Virginia State Hospital Finance Authority, Revenue
Bonds, 6.75% (Original Issue Yield: 6.85%), 3/1/2014
BBB- 178,216
1,500,000 West Virginia State Hospital Finance Authority, Refunding
Revenue Bonds, 4.75% (Department of Health & Human
Resources)/(FSAINS)/(Original Issue Yield: 4.80%), 8/1/2008
Aaa 1,445,121
1,000,000 West Virginia State Housing Development Fund, Series A,
5.05%, 11/1/2014
AAA 923,438
1,400,000 West Virginia State Housing Development Fund, Series C,
5.80% (Original Issue Yield: 5.80%), 5/1/2017
AAA 1,378,875
1,000,000 West Virginia State Housing Development Fund, Refunding
Revenue Bonds, Series A, 5.10%, 11/1/2015
AAA 910,924
100,000 West Virginia State, GO UT Bonds, 6.00% (Original Issue
Yield: 6.05%), 6/1/2002
AA- 100,591
$ 1,000,000 West Virginia State, GO UT Highway Improvement Bonds,
5.25%, 6/1/2010
AAA 999,135
900,000 West Virginia State, GO UT Highway Improvements, 5.10%
(Original Issue Yield: 5.17%), 6/1/2012
AA- 855,619
2,000,000 West Virginia State, GO UT Water Utility & Sewer
Improvements 0.00%, (Original Issue Yield: 4.90%), 11/1/2010
AAA 1,088,484
550,000 West Virginia State, Water Development Authority, Revenue
Refunding Bonds, 5.80% (FSAINS)/(Original Issue Yield:
5.85%), 11/1/2012
AAA 551,623
235,000 West Virginia University Board of Regents, Refunding
Revenue Bonds, 6.00% (MBIAINS)/(Original Issue Yield:
6.037%), 4/1/2004
AAA 244,977
70,000 West Virginia University Board of Regents, Revenue Bonds,
5.90% (MBIAINS), 4/1/2004
AAA 71,782
635,000 West Virginia University Board of Regents, Revenue Bonds,
5.90%, 4/1/2004
A+ 658,137
400,000 West Virginia University, Refunding Revenue Bonds, Series A,
4.85% (Dormitory Project)/(AMBAC INS)/(Original Issue Yield:
4.95%), 5/1/2010
AAA 379,802
1,000,000 West Virginia University, Revenue Bonds, Series B, 5.00%,
(Student Union Project)/(AMBAC INS)/(Original Issue
Yield: 5.19%), 5/1/2015
AAA 891,705
100,000 West Virginia University, Revenue Bonds, 5.50%, (Marshall
University Library)/(AMBAC INS)/(Original Issue
Yield: 5.55%), 4/1/2009
AAA 101,112
135,000 West Virginia Water Development Authority, Refunding
Revenue Bonds, 5.00% (Original Issue Yield:
6.02%), 11/1/2018
AAA 117,444
765,000 West Virginia Water Development Authority, Water Development
Revenue Bonds, (Loan Program II), 7.70% (United States Treasury
PRF)/(Original Issue Yield:
7.822%), 11/1/2000 (@102)
A- 800,255
425,000 Wetzel County, WV, Board of Education, GO UT, 7.00%
(MBIAINS)/(Original Issue Yield: 7.15%), 5/1/2004
AAA 460,349
$ 500,000 Wheeling, WV, Waterworks & Sewer Systems, Revenue Refunding
Bonds, 4.90% (FGIC INS)/(Original Issue Yield: 5.00%), 6/1/2006
Aaa 491,959
300,000 Wheeling, WV, Waterworks & Sewer Systems, Revenue
Bonds, Series C, 6.60% (FGIC INS)/(United States Treasury
PRF)/(Original Issue Yield: 6.691%), 6/1/2002 (@100)
AAA 312,770
155,000 Wheeling, WV, GO UT, 7.50%, 6/1/2003
Baa1 167,587
165,000 Wood County, WV, Building Commission, Revenue
Refunding Bonds, 6.625% (St. Joseph Hospital, Parkersburg)/
(AMBAC INS), 1/1/2006
AAA 168,459
- ------------
Total Long-Term Municipals (identified cost
$64,797,889) 62,408,219
- ------------
Mutual Fund--1.6%
1,026,533 Federated Tax-Free Obligations Fund (at net asset
value) 1,026,533
- ------------
Total Investments (identified cost
$65,824,422)(a) $ 63,434,752
- ------------
</TABLE>
* Please refer to the Appendix of the Statement of Additional Information for an
explanation of the credit ratings. Current credit ratings are unaudited.
(a) The cost of investments for federal tax purposes amounts to $65,825,000. The
net unrealized depreciation of investments on a federal tax basis amounts to
$2,390,248 which comprised $219,569 appreciation and $2,609,817 depreciation at
January 31, 2000.
Note: The categories of investments are shown as a percentage of net assets
($64,056,783) at January 31, 2000. The following acronyms are used throughout
this portfolio: AMBAC -- American Municipal Bond Assurance Corporation FGIC --
Financial Guaranty Insurance Company FSA -- Financial Security Assurance GO --
General Obligation INS -- Insured LOC -- Letter of Credit MBIA -- Municipal Bond
Investors Assurance PCR -- Pollution Control Revenue PRF -- Prerefunded SFM --
Single Family Mortgage UT -- Unlimited Tax (See Notes which are an integral part
of the Financial Statements)
WesMark West Virginia Municipal Bond Fund
Statement of Assets and Liabilities
<TABLE>
<CAPTION>
January 31, 2000
<S>
<C> <C>
Assets:
Total investments in securities, at value (identified cost $65,824,422 and tax
cost $65,825,000) $63,434,752 Income receivable 853,312 Receivable for
investments sold 149,175 Deferred organizational costs 2,607
- -----------
Total
assets
64,439,846
Liabilities:
Income distribution
payable $229,669
Payable to
Bank
149,175
Accrued
expenses
4,219
- --------
Total
liabilities
383,063
- -----------
Net Assets for 6,634,503 shares
outstanding
$64,056,783
- -----------
Net Assets Consist of:
Paid in
capital
$66,426,862
Net unrealized depreciation of
investments
(2,389,670)
Accumulated net realized gain on
investments
19,591
- -----------
Total Net
Assets
$64,056,783
- -----------
Net Asset Value, Offering Price and Redemption Proceeds Per Share:
Net Asset Value Per Share ($64,056,783 / 6,634,503 shares
outstanding) $ 9.66
- -----------
Offering Price Per Share (100/96.25 of $9.66)
(a) $ 10.04
- -----------
Redemption Proceeds Per
Share
$ 9.66
- -----------
</TABLE>
(a) See "What Do Shares Cost?" in the Prospectus.
(See Notes which are an integral part of the Financial Statements)
WesMark West Virginia Municipal Bond Fund
Statement of Operations
Year Ended January 31, 2000
<TABLE>
<CAPTION>
<S>
<C> <C>
Investment Income:
Interest
$ 3,319,703
Expenses:
Investment adviser fee
$ 396,498
Administrative personnel and services
fee 92,443
Custodian
fees 13,684
Transfer and dividend disbursing agent fees and
expenses 13,214
Directors'/Trustees'
fees 4,000
Auditing
fees 15,222
Legal
fees
2,008
Portfolio accounting
fees 58,353
Share registration
costs 14,389
Printing and
postage 11,998
Insurance
premiums 903
Miscellaneous
4,736
- --------
Total
expenses
627,448
Waivers --
Waiver of investment adviser fee
(198,249)
- --------
Net
expenses
429,199
- -----------
Net investment
income
2,890,504
- -----------
Realized and Unrealized Gain on Investments:
Net realized gain on
investments
203,160
Net change in unrealized appreciation of
investments (4,996,680)
- -----------
Net realized and unrealized loss on
investments (4,793,520)
- -----------
Change in net assets resulting from
operations $(1,903,016)
- -----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
WesMark West Virginia Municipal Bond Fund Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended January 31,
<S>
<C> <C>
2000 1999
Increase (Decrease) in Net Assets:
Operations--
Net investment income
$ 2,890,504 $ 2,762,997
Net realized gain on investments ($203,738 and $57,103,
respectively, as computed for federal tax
purposes) 203,160 57,103
Net change in unrealized appreciation of
investments (4,996,680) 715,928
- ----------- -----------
Change in net assets resulting from
operations (1,903,016)
3,536,028
- ----------- -----------
Distributions to Shareholders--
Distributions from net investment
income (2,890,681)
(2,762,997)
Distributions from net realized
gains (188,017)
(57,098)
- ----------- -----------
Change in net assets resulting from distributions to
shareholders (3,078,698) (2,820,095)
- ----------- -----------
Share Transactions--
Proceeds from sale of
shares
10,177,556 8,667,474
Net asset value of shares issued to shareholders in payment
of distributions
declared
221,710 212,751
Cost of shares
redeemed
(8,794,434) (8,543,249)
- ----------- -----------
Change in net assets resulting from share
transactions 1,604,832 336,976
- ----------- -----------
Change in net
assets
(3,376,882) 1,052,909
Net Assets:
Beginning of
period
67,433,665 66,380,756
- ----------- -----------
End of period (including undistributed net investment income of
$177 for the year ended January 31, 1999)
$64,056,783 $67,433,665
- ----------- -----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
WesMark West Virginia Municipal Bond Fund Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Period
Year Ended Ended
January 31, January 31,
<S>
<C> <C> <C>
2000 1999 1998(a)
Net asset value, beginning of period $
10.41 $ 10.30 $ 10.00
Income from investment operations
Net investment income
0.44 0.43 0.35
Net realized and unrealized gain (loss) on investments
(0.72) 0.12 0.31
- ------ ------ -------
Total from investment operations
(0.28) 0.55 0.66
- ------ ------ -------
Less distributions
Distributions from net investment income
(0.44) (0.43) (0.35)
Distributions from net realized gain on investments
(0.03) (0.01) (0.01)
- ------ ------ -------
Total distributions
(0.47) (0.44) (0.36)
- ------ ------ -------
Net asset value, end of period $
9.66 $ 10.41 $ 10.30
- ------ ------ -------
Total return (b)
(2.77)% 5.46% 6.64%
Ratios to average net assets
Expenses
0.65% 0.74% 0.74%*
Net investment income
4.37% 4.20% 4.26%*
Expense waiver/reimbursement (c)
0.30% 0.29% 0.30%*
Supplemental data
Net assets, end of period (000 omitted)
$64,057 $67,434 $66,381
Portfolio turnover
30% 17% 6%
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from April 14, 1997 (date of initial
public investment) to January 31, 1998. (b) Based on net asset value, which does
not reflect the sales charge or contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and the net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
WesMark West Virginia Municipal Bond Fund Notes to Financial Statements
January 31, 2000
1. Organization
WesMark Funds (the "Trust") is registered under the Investment Company Act of
1940, as amended (the "Act") as an open-end, management investment company. The
Trust consists of four portfolios. The financial statements included herein are
only those of WesMark West Virginia Municipal Bond Fund (the "Fund"), a non-
diversified portfolio. The financial statements of the other portfolios are
presented separately. The assets of each portfolio are segregated and a
shareholder's interest is limited to the portfolio in which shares are held. The
investment objective of the Fund is to provide current income which is exempt
from federal income tax and income taxes by the State of West Virginia.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
Investment Valuation -- Municipal bonds are valued by an independent pricing
service, taking into consideration yield, liquidity, risk, credit quality,
coupon, maturity, type of issue, and any other factors or market data the
pricing service deems relevant. Short-term securities are valued at the
prices provided by an independent pricing service. However, short-term
securities with remaining maturities of sixty days or less at the time of
purchase may be valued at amortized cost, which approximates fair market
value. Investments in other open-end regulated investment companies are
valued at net asset value.
Investment Income, Expenses and Distributions -- Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized as
required by the Internal Revenue Code, as amended (the "Code"). Distributions
to shareholders are recorded on the ex-dividend date. Non-cash dividends
included in dividend income, if any, are recorded at fair value.
Federal Taxes -- It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provision for federal tax is necessary.
When-Issued and Delayed Delivery Transactions -- The Fund may engage in when-
issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the securities
purchased. Securities purchased on a when-issued or delayed delivery basis
are marked to market daily and begin earning interest on the settlement date.
Losses may occur on these transactions due to changes in market conditions or
the failure of counterparties to perform under the contract.
Use of Estimates -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts of assets, liabilities,
expenses and revenues reported in the financial statements. Actual results
could differ from those estimated.
Other -- Investment transactions are accounted for on a trade date basis.
3. Shares of Beneficial Interest
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value).
Transactions in shares were as follows:
<TABLE>
<CAPTION>
Year Ended
January 31,
<S>
<C> <C>
2000 1999
Shares
sold
1,015,142 840,868
Shares issued to shareholders in payment of distributions
declared 22,197 20,618
Shares
redeemed
(879,799) (828,516)
- --------- --------
Net change resulting from share
transactions 157,540 32,970
- --------- --------
</TABLE>
4. Investment Adviser Fee and Other Transactions with Affiliates
Investment Adviser Fee -- WesBanco Trust and Investment Services, the Fund's
investment adviser (the "Adviser" or "WesBanco") receives for its services an
annual investment adviser fee equal to 0.60% of the Fund's average daily net
assets. The Adviser may voluntarily choose to waive any portion of its fee.
The Adviser can modify or terminate this voluntary waiver at any time at its
sole discretion.
Administrative Fee -- Federated Services Company ("FServ") provides the Fund
with certain administrative personnel and services. The fee paid to FServ is
based on a scale that ranges from 0.15% to 0.075% of the average aggregate
net assets of the Trust for the period.
Distribution (12b-1) Fee -- The Fund has adopted a Distribution Plan (the
"Plan") pursuant to Rule 12b-1 under the Act. Under the terms of the Plan,
the Fund will compensate Edgewood Services, Inc., the principal distributor,
from the net assets of the Fund to finance activities intended to result in
the sale of the Fund's shares. The Plan provides that the Fund may incur
distribution expenses up to 0.25% of the average daily net assets of the
Fund's shares, annually, to compensate Edgewood Services, Inc. For the year
ended January 31, 2000, the Fund did not incur fees under the Plan.
WesMark West Virginia Municipal Bond Fund
Shareholder Services Fee -- Under the terms of a Shareholder Services
Agreement with WesBanco, the Fund will pay WesBanco up to 0.25% of average
daily net assets of the Fund for the period. The fee paid to WesBanco is used
to finance certain services for shareholders and to maintain shareholder
accounts. For the year ended January 31, 2000, the Fund did not incur a
shareholder services fee.
Transfer and Dividend Disbursing Agent Fees and Expenses -- FServ, through
its subsidiary, Federated Shareholder Services Company ("FSSC") serves as
transfer and dividend disbursing agent for the Fund. The fee paid to FSSC is
based on the size, type, and number of accounts and transactions made by
shareholders.
Portfolio Accounting Fees -- FServ maintains the Fund's accounting records
for which it receives a fee. The fee is based on the level of the Fund's
average daily net assets for the period, plus out-of-pocket expenses.
Custodian Fees -- WesBanco is the Fund's custodian. The fee is based on the
level of the Fund's average daily net assets for the period, plus out-of-
pocket expenses.
Organizational Expenses -- Organizational expenses of $6,169 were borne
initially by the Adviser. The Fund has reimbursed the Adviser for the
expenses. These expenses have been deferred and are being amortized over the
five-year period following the Fund's effective date.
Interfund Transactions -- During the year ended January 31, 2000, the Fund
engaged in purchase and sale transactions with funds that have a common
investment adviser (or affiliated investment advisers), common
Directors/Trustees, and/or common Officers. These purchase and sale
transactions complied with Rule 17a-7 under the Act and amounted to
$25,579,722 and $27,716,712, respectively.
Other Affiliated Parties and Transactions -- Pursuant to an exemptive order
issued by the SEC, the Fund may invest in certain affiliated money market
funds. As of January 31, 2000, the Fund owned 0.03% of outstanding shares of
Federated Tax-Free Obligations Fund, which is distributed by an affiliate of
the Fund's distributor.
General -- Certain of the Officers and Trustees of the Trust are Officers and
Directors or Trustees of the above companies.
5. Investment Transactions
Purchases and sales of investments, excluding short-term securities, for the
year ended January 31, 2000, were as follows:
<TABLE>
<S> <C>
Purchases $20,662,016
Sales $19,380,308
</TABLE>
WesMark West Virginia Municipal Bond Fund
6. Concentration of Credit Risk
Since the Fund invests a substantial portion of its assets in issuers located in
one state, it will be more susceptible to factors adversely affecting issuers of
that state than would be a comparable tax-exempt mutual fund that invests
nationally. In order to reduce the credit risk associated with such factors, at
January 31, 2000, 61% of the securities in the portfolio of investments are
backed by letters of credit or bond insurance of various financial institutions
and financial guaranty assurance agencies. The percentage of investments insured
by or supported (backed) by a letter of credit from any one institution or
agency did not exceed 22% of total investments.
Independent Auditors' Report
To the Board of Trustees of WESMARK FUNDS and Shareholders of WESMARK WEST
VIRGINA MUNICIPAL BOND FUND:
We have audited the accompanying statement of assets and liabilities of WesMark
West Virginia Municipal Bond Fund (a portfolio of WesMark Funds), including the
portfolio of investments, as of January 31, 2000, and the related statement of
operations for the year then ended, the statements of changes in net assets for
the years ended January 31, 2000 and 1999, and the financial highlights for the
periods presented. These financial statements and financial highlights are the
responsibility of WesMark West Virginia Municipal Bond Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of the securities owned as of
January 31, 2000, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
WesMark West Virginia Municipal Bond Fund as of January 31, 2000, the results of
its operations for the year then ended, the changes in its net assets for the
years ended January 31, 2000 and 1999, and its financial highlights for the
respective stated periods, in conformity with generally accepted accounting
principles.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
March 22, 2000
Trustees
John F. Donahue
Thomas G. Bigley
John T. Conroy, Jr.
Nicholas P. Constantakis
John F. Cunningham
J. Christopher Donahue
Lawrence D. Ellis, M.D.
Peter E. Madden
Charles F. Mansfield, Jr.
John E. Murray, Jr., J.D., S.J.D.
Marjorie P. Smuts
John S. Walsh
Officers
John F. Donahue
Chairman
Edward C. Gonzales
President and Treasurer
J. Christopher Donahue
Executive Vice President
John W. McGonigle
Executive Vice President and Secretary
Richard B. Fisher
Vice President
Beth S. Broderick
Vice President and Assistant Treasurer
C. Todd Gibson
Assistant Secretary
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves investment risk,
including possible loss of principal.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the fund's prospectus which contains facts concerning
its objective and policies, management fees, and other information.
[WESMARK BOND FUND LOGO APPEARS HERE]
Annual Report
Dated January 31, 2000
[WESBANCO LOGO APPEARS HERE]
Edgewood Services, Inc., Distributor
Cusip 951025105
G02160-05 (3/00)
