<PAGE> 1
THE BANC STOCK GROUP FUND
April 23, 1998
Dear Shareholder:
I am pleased to report to you the fiscal year-end results of your
investment in The Banc Stock Group Fund. The funds total assets at
year-end were $13,701,976. The fund had investments in 114 bank
stocks in 37 states. An initial investment of $10.00 on the fund's start
date, August 1, 1997, appreciated to a Net Asset Value of $12.75 as of
February 28, 1998, our official year-end. As of the date of this letter,
the Net Asset Value was $14.17. Its performance has been superb.
FUND HIGHLIGHTS
* In February, the fund was assigned the trading symbol of,
BANCX. We feel it's perfect.
* You may find the current Net Asset Value (NAV) in mutual fund
listings in the Wall Street Journal, USA Today, and by
accessing the Net at nasdaq.com and typing in the symbol BANCX.
* The fund generally concentrates its investment in the stocks of
community banks with assets of $50 million to $10 billion. We feel
this asset range provides liquidity necessary for the fund's overall
buy and sell needs. These institutions are located in rural, urban,
and suburban communities. Each investment is reviewed for consistency
of return on equity and assets; low loan-loss experience; significant
insider ownership; focused market niche or speciality; experienced
management; demographic dynamics; management's plan for growth with a
strategy for implementation and a price/earnings ratio 10 - 25% under
its peer average. We believe these institutions--there are more than
900 publicly traded in this asset range--offer the best opportunity
to find value for the long-term.
* The fund acknowledges the dynamics of mergers and acquisitions
in the market. We believe the compression in the industry may
cause the following: keen competition, availability of seasoned
and skilled management and employees, special focus on niche
products or services offered by the bank, and access to
technology and programming software for expense reduction and
customer service and additional attention to delivering
shareholder value.
* The fund invests in nearly all the states in the Union. This
investment strategy allows us to diversify the portfolio on the basis
of regional economic cycles and geographic population demographics.
On behalf of everyone at The Banc Stock Group Fund, we appreciate
your investment and look forward
to serving you for many years.
Sincerely,
/S/ Michael B. Guirlinger
Michael E. Guirlinger
President
<PAGE> 2
COMPARISON OF A $10,000<DDAG> INVESTMENT
IN THE BANC STOCK GROUP FUND
(SINCE INCEPTION OF 08/01/97, AFTER SALES CHARGE)
TO THE S&P 500 INDEX AND THE NASDAQ COMBINED BANK INDEX
INCLUDING REINVESTMENT OF DIVIDENDS
[GRAPH]
<TABLE>
<CAPTION>
8/31/97 9/30/97 10/31/97 11/30/97 12/31/97 1/31/98 2/28/98
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Banc Stock Fund 9,600 9,559 10,441 10,701 10,950 11,900 11,756 12,236
NASDAQ 10,000 9,952 11,013 11,204 11,341 12,168 11,720 12,388
S&P 10,000 9,510 10,031 9,696 10,145 10,319 10,433 11,186
</TABLE>
The maximum initial sales charge payable on an investment in the Fund was 4.00%
on February 28, 1998. At public offering price of $10,000, the net investment in
the Fund would be $9,600 assuming no waiver or reduction of sales charges. The
performance information shown represents past performance and should not be
interpreted as indicative of the Fund's future performance. Return and share
price will fluctuate so that shares, when redeemed, may be worth more or less
than their original cost. The Fund's return is net of all fees. The Index does
not include fees.
[FN]
<DDAG>Not covered by Report of Independent Accountants.
2
<PAGE> 3
<TABLE>
THE BANC STOCK GROUP FUND
SCHEDULE OF INVESTMENTS
February 28, 1998
- --------------------------------------------------------------------------
<CAPTION>
Market
Shares Value
- ------ -----
COMMON STOCKS -- 100.26%
Commercial Banks -- Central U.S. -- 8.33%
<S> <C> <C>
7,000 + BNCCORP Inc.................................. $ 126,000
2,500 BancFirst Corp............................... 95,000
1,500 Cass Commercial Corp......................... 52,406
3,500 Community Financial Corp..................... 70,875
3,000 DCB Financial Corp........................... 63,000
850 First Commerce Bancshares, Inc............... 24,119
4,500 First Oak Brook Bancshares, Inc.............. 211,500
4,725 Franklin Bank NA............................. 86,231
5,333 Mahaska Investment Co........................ 108,660
1,700 MetroBanCorp................................. 17,000
3,000 + National City Bancorp........................ 96,000
2,000 Peoples Bank Corporation of
Indianapolis............................... 76,000
3,000 Southside Bancshares Corp.................... 108,000
300 UnionBancorp, Inc............................ 6,038
----------
1,140,829
----------
<CAPTION>
Commercial Banks -- Eastern U.S. -- 23.46%
<S> <C> <C>
41,800 Atlantic Bank & Trust Co..................... 658,350
250 Banknorth Group, Inc......................... 16,031
3,400 Bar Harbor Bancshares........................ 187,000
1,300 CNB Financial Corp........................... 40,625
1,500 Camden National Corp......................... 89,250
4,000 Columbia Bancorp............................. 129,000
12,100 Commercial Bank of New York.................. 299,475
3,500 Community Bank System, Inc................... 120,094
1,050 DNB Financial Corp........................... 33,075
3,200 F.N.B. Corp.................................. 118,400
4,000 FNB Rochester Corp........................... 77,000
4,000 First Financial Corp......................... 64,500
5,000 Long Island Commercial Bank.................. 81,250
3,000 Mercantile Bankshares Corp................... 105,094
1,800 Second National Financial Corp............... 60,300
16,525 Skylands Community Bank...................... 231,350
4,000 Suffolk Bancorp.............................. 128,000
2,900 Tompkins County Trustco Inc.................. 131,950
5,000 UST Corp..................................... 136,875
<CAPTION>
Market
Shares Value
- ------ -----
<S> <C> <C>
9,765 Vermont Financial Services Corp.............. $ 267,927
2,700 Webster Financial Corp....................... 173,475
----------
3,149,021
----------
<CAPTION>
Commercial Banks -- Southern U.S. -- 11.02%
<S> <C> <C>
492 + C&F Financial Corp........................... 19,680
4,100 Capital City Bank Group, Inc................. 179,887
1,500 Cenit Bancorp, Inc........................... 106,875
3,500 Century South Banks, Inc..................... 86,187
5,400 Community Bankshares Inc..................... 138,375
11,000 Community Financial Group, Inc............... 158,125
1,250 Crestar Financial Corp....................... 69,062
200 First Citizens Bancorp....................... 70,000
9,850 First Community Banking
Services................................... 231,475
2,000 First National Corp.......................... 47,500
1,500 First Virginia Banks, Inc.................... 75,938
3,500 Southern Financial Bancorp, Inc.............. 98,438
7,500 Summit Bank Corp............................. 166,875
1,000 Union Planters Corp.......................... 61,813
----------
1,510,230
----------
<CAPTION>
Commercial Banks -- Western U.S. -- 25.90%
<S> <C> <C>
4,000 BYL Bancorp.................................. 82,000
31,200 Bank of Commerce............................. 450,450
8,000 Bay Area Bancshares.......................... 240,000
5,700 California Community
Bancshares................................. 164,587
5,306 California Independent Bancorp............... 132,650
3,000 + Capital Corp of the West..................... 43,125
3,500 Cathay Bancorp, Inc.......................... 125,562
6,050 Coast Bancorp................................ 229,900
3,000 + Columbia Banking System, Inc................. 94,125
21,000 + Comstock Bancorp............................. 183,750
6,000 First State Bancorp.......................... 133,500
2,500 GBC Bancorp.................................. 146,250
6,800 + Hanmi Bank................................... 125,800
2,850 Heritage Oaks Bancorp........................ 38,475
The accompanying notes are an integral part of these financial statements
3
<PAGE> 4
<CAPTION>
THE BANC STOCK GROUP FUND
SCHEDULE OF INVESTMENTS (continued)
February 28, 1998
- --------------------------------------------------------------------------
Market
Shares Value
- ------ -----
<S> <C> <C>
1,000 + Nara Bank National Assoc..................... $ 11,000
14,114 + Northern Empire Bancshares................... 425,184
9,450 Northrim Bank................................ 131,119
6,600 Orange National Bancorp...................... 164,175
4,000 + PNB Financial Group.......................... 82,500
3,200 Pacific Bank, N.A............................ 140,800
2,325 Saratoga Bancorp............................. 48,825
3,000 SierraWest Bancorp........................... 110,250
6,500 + Union Bankshares Ltd......................... 177,125
4,400 + United Security Bancorp...................... 94,600
8,489 + Wilshire State Bank.......................... 106,113
----------
3,681,865
----------
<CAPTION>
Savings & Loan/Thrift -- Central U.S. -- 5.45%
<S> <C> <C>
3,000 + Calumet Bancorp, Inc......................... 112,500
4,500 Coastal Bancorp, Inc......................... 140,906
4,400 D&N Financial Corp........................... 115,500
6,100 + Hallmark Capital Corp........................ 97,600
2,250 Home Federal Bancorp......................... 70,875
3,000 MFB Corp..................................... 81,000
300 Mid Continent Bancshares, Inc................ 13,688
5,000 + PVF Capital Corp............................. 115,000
----------
747,069
----------
<CAPTION>
Savings & Loan/Thrift -- Eastern U.S. -- 8.88%
<S> <C> <C>
4,200 Albion Banc Corp............................. 45,150
7,800 Alliance Bancorp of New
England, Inc................................ 155,025
2,000 Andover Bancorp, Inc......................... 79,750
5,000 BostonFed Bancorp, Inc....................... 110,625
4,100 Financial Bancorp, Inc....................... 106,600
4,500 + First Coastal Corp........................... 65,812
6,000 GA Financial, Inc............................ 117,750
3,000 Hingham Institution for Savings.............. 99,000
2,000 Home Port Bancorp, Inc....................... 53,000
<CAPTION>
Market
Shares Value
- ------ -----
<S> <C> <C>
4,000 IBS Financial Corp........................... $ 71,000
2,000 Iroquois Bancorp, Inc........................ 50,500
3,000 + MECH Financial, Inc.......................... 79,875
4,000 Prestige Bancorp, Inc........................ 76,500
5,000 Roslyn Bancorp, Inc.......................... 114,063
3,000 Skaneateles Bancorp, Inc..................... 57,375
----------
1,282,025
----------
<CAPTION>
Savings & Loan/Thrift -- Southern U.S. -- 4.82%
<S> <C> <C>
5,000 + BankUnited Financial Corp.................... 73,437
800 Century Bancorp, Inc......................... 75,000
3,000 Community Financial Corp..................... 92,250
6,000 Eagle Bancshares, Inc........................ 123,000
3,000 First Liberty Financial Corp................. 90,375
4,700 First Savings Bancorp, Inc................... 111,038
4,200 Piedmont Bancorp, Inc........................ 44,625
5,000 Scotland Bancorp, Inc........................ 50,625
----------
660,350
----------
<CAPTION>
Savings & Loan/Thrift -- Western U.S. -- 12.40%
<S> <C> <C>
8,660 + Access Anytime Bancorp....................... 94,177
4,000 + First Republic Bank.......................... 149,500
3,000 + Golden State Bancorp, Inc.................... 106,875
31,000 + ITLA Capital Corp............................ 625,813
2,000 Klamath First Bancorp, Inc................... 45,000
17,333 + MCB Financial Corp........................... 247,000
6,500 + Pacific Crest Capital, Inc................... 119,031
5,000 + Quaker City Bancorp, Inc..................... 100,000
3,000 WesterFed Financial Corp..................... 78,000
----------
1,565,396
----------
<S> <C>
TOTAL COMMON STOCK
(Cost $12,321,579)........................................... 13,736,785
----------
The accompanying notes are an integral part of these financial statements
4
<PAGE> 5
<CAPTION>
THE BANC STOCK GROUP FUND
SCHEDULE OF INVESTMENTS (continued)
February 28, 1998
- --------------------------------------------------------------------------
SHORT-TERM INVESTMENTS -- 1.04%
<S> <C> <C>
143,022 Star Bank Treasury Fund
(Cost $143,022)............................ $ 143,022
----------
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $12,464,601)................................. 101.30% 13,879,807
LIABILITIES LESS OTHER
INVESTMENTS........................................ (1.30%) (177,831)
------- -----------
TOTAL NET ASSETS..................................... 100.00% $13,701,976
======= ===========
<FN>
<F1> Federal Tax Information: At February 28, 1998 the net unrealized
appreciation based on cost for Federal Income tax purposes of $12,464,601
was as follows:
<S> <C>
Aggregate gross unrealized appreciation
for all investments for which there was
an excess of value over cost.............................. $1,441,523
Aggregate gross unrealized depreciation
for all investments for which there was
an excess of cost over value.............................. (26,317)
----------
Net unrealized appreciation............................... $1,415,206
==========
<F+> Non-income producing security
</TABLE>
<TABLE>
THE BANC STOCK GROUP FUND
STATEMENT OF ASSETS AND LIABILITIES
February 28, 1998
- ------------------------------------------------------------------
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $12,464,601) (Note 2)...................... $13,879,807
Receivable for fund shares sold.................... 159,937
Receivable from interest and
dividends........................................ 7,301
Other assets....................................... 2,077
-----------
Total Assets................................... 14,049,122
-----------
LIABILITIES:
Payables:
Fund shares redeemed.................. $ 15,000
Investment securities purchased....... 221,493
Advisory fees (Note 4)................ 110,653
--------
Total Liabilities................... 347,146
-----------
Net Assets.............................. $13,701,976
===========
NET ASSETS CONSIST OF:
Additional paid in capital....................... $11,904,887
Accumulated net realized gain
from investment transactions
(Note 6)....................................... 381,883
Net unrealized appreciation
on investments................................. 1,415,206
-----------
Net Assets......................................... $13,701,976
===========
NET ASSET VALUE AND REDEMPTION PRICE
PER SHARE
($13,701,976/1,075,009
shares of capital stock
outstanding) (Note 6)............................ $ 12.75
===========
MAXIMUM OFFERING PRICE PER SHARE
(Net asset value plus sales
charge of 4.00%)............................... $ 13.28
===========
The accompanying notes are an integral part of these financial statements
</TABLE>
5
<PAGE> 6
<TABLE>
THE BANC STOCK GROUP FUND
STATEMENT OF OPERATIONS
For the period August 1, 1997
(commencement of operations)
through February 28, 1998
- -----------------------------------------------------
<S> <C>
INVESTMENT INCOME:
Dividend................................ $ 53,810
Interest................................ 9,594
----------
63,404
Expenses:
Operating expenses.................... $ 110,653
----------
Total expenses........................ 110,653
----------
Net investment loss................... (47,249)
----------
NET REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS
(Note 2)
Net realized gain from investment
transactions.......................... 429,132
Net change in unrealized appreciation of
investments........................... 1,415,206
----------
Net realized and unrealized gain on
investments........................... 1,844,338
----------
Net increase in net assets resulting
from operations....................... $1,797,089
==========
</TABLE>
<TABLE>
THE BANC STOCK GROUP FUND
STATEMENT OF CHANGES IN NET ASSETS
For the period August 1, 1997
(commencement of operations)
through February 28,1998
- ------------------------------------------------------
<S> <C>
Net investment loss..................... $ (47,249)
Net realized gain from investment
transactions.......................... 429,132
Net change in unrealized appreciation of
investments........................... 1,415,206
-----------
Net increase in net assets resulting
from operations....................... 1,797,089
Net capital share transactions (Note 5). 11,804,887
-----------
Net increase in net assets.............. 13,601,976
NET ASSETS:
Beginning of period..................... 100,000
-----------
End of period........................... $13,701,976
===========
The accompanying notes are an integral part of these financial statements
</TABLE>
6
<PAGE> 7
<TABLE>
THE BANC STOCK GROUP FUND
FINANCIAL HIGHLIGHTS
(For a fund share outstanding throughout the period)
For the period August 1, 1997
(commencement of operations)
through February 28, 1998
- --------------------------------------------------
<S> <C>
Net asset value, beginning of period.... $ 10.00
-------
Income (loss) from investment operations
Net investment loss..................... (0.07)
Net realized and unrealized gain on
investments........................... 2.82
-------
Total from investment operations........ 2.75
-------
Less distributions
Dividends from net investment income.... 0.00
Distribution from realized gains from
security transactions................. 0.00
-------
Total distributions..................... 0.00
-------
Net asset value, end of period.......... $ 12.75
=======
Total return<F**>....................... 52.24%<F*>
Ratios/supplemental data
Net assets end of period (in 000's)..... 13,702
Ratio of expenses to average net
assets................................ 2.50%<F*>
Ratio of net investment income (loss) to
average net assets.................... (1.07%)<F*>
Portfolio turnover rate................. 26.65%
Average commission rate paid............ 0.2865
<FN>
<F*> Annualized
<F**> Based on net asset value per share
The accompanying notes are an integral part
of these financial statements
</TABLE>
THE BANC STOCK GROUP FUND
NOTES TO FINANCIAL STATEMENTS
February 28, 1998
- --------------------------------------------------------------------------------
NOTE 1. ORGANIZATION
The Banc Stock Group Fund (the "Fund") was organized as a
series of the BSG Funds, an Ohio business trust (the "Trust") on
January 14, 1997 and commenced operations on August 1, 1997. The Fund
is an open-end, diversified management investment company under the
Investment Company Act of 1940, authorized to issue an unlimited
number of shares of capital stock in separate series, with each
series representing interests in a separate portfolio of securities
and other assets, each with its own investment objectives and
policies. The Fund's investment objective is to provide shareholders
with long term capital appreciation. The Fund seeks to achieve its
objective by investing primarily in equity securities of community
banks, lending institutions, and financial services companies
believed by the Adviser to offer superior prospects for long term
growth. The Fund is the only current series of the BSG Funds.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the significant accounting
policies followed by the Fund in the preparation of its financial
statements. These policies are in conformity with generally accepted
accounting principles for investment companies. The preparation of
financial statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions that
effect the reported amounts of assets and liabilities at the date of
the financial statements and the reported amounts of revenue and
expenses during the period. Actual results could differ from these
estimates.
Security Valuation--Securities which are traded on any exchange
or on the NASDAQ over-the-counter market are valued at the last
quoted sale price. Lacking a last sale price, a security is valued at
its last bid price on such exchanges, or at the last bid price in the
over-the-counter market except when, in the Adviser's opinion, the
last bid price does not accurately reflect the current
7
<PAGE> 8
THE BANC STOCK GROUP FUND
NOTES TO FINANCIAL STATEMENTS (continued)
February 28, 1998
- --------------------------------------------------------------------------------
value of the security. Securities for which market quotations are not
readily available, or when the Adviser determines the last bid price does
not accurately reflect the current value, or when restricted securities
are being valued, are valued as determined in good faith by the Adviser,
subject to review by the Board of Trustees of the Trust.
Fixed income securities generally are valued by using market
quotations, but may be valued on the basis of prices furnished by an
independent pricing service which uses prices based upon yields or
prices of comparable securities, indications as to values from
dealers, and general market conditions, when the Adviser believes
such prices accurately reflect the fair market value of the security.
Short term investments in fixed income securities with
maturities of less than 60 days when acquired, or which subsequently
are within 60 days of maturity, are valued by using the amortized
cost method of valuation, which the Board has determined will
represent fair value.
Federal Income Taxes--For the period August 1, 1997
(commencement of operations) through February 28, 1998, the Fund
qualified as a regulated investment company. The Fund intends to
comply with the requirements of the Internal Revenue Code applicable
to regulated investment companies and to distribute substantially all
of its net investment
income and any realized capital gain. Therefore, no federal income
tax provision is required.
Dividends and Distributions--The Fund intends to distribute
substantially all of its net investment income as dividends to its
shareholders on an annual basis. The Fund intends to distribute its
net long term capital gains and its net short term capital gains at
least once a year. Income and capital gain distributions to
shareholders are determined in accordance with income tax regulations
which may differ from generally accepted accounting principles. Those
differences are primarily due to differing treatments for net
operating losses and deferral of wash sale losses.
Organization Expenses--During its organization and initial
registration with the Securities and Exchange Commission (the
"SEC"), the Fund incurred organization expenses. The Adviser was
obligated to incur these expenses.
Security Transactions--The Fund follows industry practice and
records security transactions on the trade date. The specific
identification method is used for determining gains or losses for
financial statements and income tax purposes. Dividend income is
recorded on the ex-dividend date and interest income is recorded on
an accrual basis. Discount and premium on securities purchased are
amortized over the life of the respective securities.
NOTE 3. PURCHASES AND SALES OF SECURITIES
The cost of purchases and sales of investment securities (other
than short term investments) for the period August 1, 1997
(commencement of operations) through February 28, 1998 aggregated
$14,132,207 and $2,239,760 respectively.
NOTE 4. INVESTMENT ADVISORY AGREEMENT AND OTHER RELATED PARTY
TRANSACTIONS
The Trust has an agreement with Heartland Advisory Group, Inc.
(the "Adviser"), with whom certain officers and trustees of the
Trust are affiliated, to serve as investment adviser to the Fund.
Under the terms of the agreement, a monthly fee is paid to the
Adviser at an annual rate of 2.50% of the average daily net assets of
the Fund. The Adviser pays all of the operating expenses of the Fund
except brokerage, taxes, interest, fees and expenses of
non-interested person trustees and extraordinary expenses. After the
initial two years, this advisory agreement is subject to an annual
approval by the Trustees of the Trust.
For the period August 1, 1997 (commencement of operations)
through February 28, 1998, the Adviser earned advisory fees of
$110,653. For this same time period, the Adviser paid all fees and
expenses relating to non-interested person trustees, and will not
seek reimbursement from the Fund.
The Trust has agreements with American Data Services, Inc. (the
"Administrator") to provide shareholder servicing, fund accounting
and administrative services to the Fund. The services to be provided
under the agreements include day-to-day administration of matters re-
8
<PAGE> 9
THE BANC STOCK GROUP FUND
NOTES TO FINANCIAL STATEMENTS (continued)
February 28, 1998
- --------------------------------------------------------------------------------
lated to the corporate existence of the Fund (other than rendering
investment advice), maintenance of its records, preparation of
reports, supervision of the Fund's arrangement with its custodian and
assistance in the preparation of the Fund's registration statement
under federal and state laws. The Administrator receives a monthly
fee from the Adviser equal to an annual average rate of 0.25% of the
Fund's average daily net assets.
The Trust has an agreement with Banc Stock Financial Services,
Inc. (the "Distributor"), with whom certain officers and trustees
of the Trust are affiliated, to act as the principal underwriter of
the Fund's shares. The Distributor also receives brokerage
commissions from the Fund for executing portfolio purchase and sale
transactions. Both the Adviser and the Distributor are wholly owned
by The Banc Stock Group, Inc. For the period August 1, 1997
(commencement of operations) through February 28, 1998, the
Distributor earned underwriter fees and brokerage commissions in the
amount of $3,457 and $49,158, respectively. In addition, Banc Stock
Financial Services, Inc. received brokerage commissions for the
execution of portfolio purchase and sale transactions in the amount
of $196,987.
NOTE 5. FUND SHARE TRANSACTIONS
At February 28, 1998 there were an unlimited number of shares of
capital stock authorized. Transactions in capital stock for the
period August 1, 1997 (commencement of operations) <F1> through
February 28, 1998 were as follows:
<TABLE>
<CAPTION>
For the period
August 1, 1997
(commencement of operations)
through February 28, 1998
----------------------------
Shares Amount
------ ------
<S> <C> <C>
Shares sold............. 1,105,271 $12,287,553
Shares issued for
reinvestment dividends
and distribution from
realized gains........ 0 0
Shares redeemed......... (40,262) (482,666)
--------- -----------
Net increase............ 1,065,009 $11,804,887
========= ===========
<FN>
- ---------------
<F1> The only transaction prior to August 1, 1997 occurred on April 22, 1997
when the Adviser pur chased 10,000 shares of the Fund at $10.00 per share
to establish the Trust.
</TABLE>
NOTE 6. RECLASSIFICATION OF CAPITAL ACCOUNTS
The Fund has adopted Statement of Position 93-2, Determination,
Disclosure and Financial Statement Presentation of Income, Capital
Gain and Return of Capital Distributions by Investment Companies. As
a result of this statement, the Fund changed the classification of
distributions to shareholders to better disclose the differences
between financial statement amounts and distributions determined in
accordance with income tax regulations. Accordingly, undistributed
net investment loss has been adjusted to Accumulated Undistributed
Net Realized Gain as of February 28, 1998 in the following amounts.
These restatements did not affect net investment income, net realized
gain (loss) or net assets for the period August 1, 1997 (commencement
of operations) through February 28, 1998.
<TABLE>
<CAPTION>
Undistributed Net Undistributed Net
Realized Gain Investment Loss
- ------------------ ------------------
<S> <C>
($47,249) $47,249
</TABLE>
9
<PAGE> 10
THE BANC STOCK
GROUP FUND
1105 Schrock Road
Suite 437
Columbus, Ohio 43229
LOGO
THE BANC STOCK
GROUP FUND
Investing in America through
America's community banks
ANNUAL REPORT
February 28, 1998
1105 Schrock Road
Suite 437
Columbus, Ohio 43229
<PAGE> 11
APPENDIX
Page 2 of the printed copy contains a Comparison graph. The information
contained within the graph has been presented in a tabular format that may be
processed by the EDGAR system.
