<PAGE>
=================
MAIRS AND POWER
GROWTH FUND, INC.
=================
3RD QUARTER REPORT
September 30, 2000
To Our Shareholders: November 9, 2000
For the nine month period ended September 30, Mairs and Power Growth Fund
produced a return of 10.9% which compares very favorably with negative returns
of -1.4% for the Standard & Poor's 500 and -6.3% for the Dow Jones Industrial
Average. The rotation in the stock market, which began in April, has continued
through the Fall and has greatly benefitted our portfolio. As of November 8, the
Fund measured a year-to-date return of 18.2% compared with -3.1% for the S&P
500. Contributing to our strong performance this year was the buyout for cash of
ReliaStar, National Computer Systems and TSI and those three transactions
produced a realized capital gain for the Fund of approximately $40,000,000 or
$8.00 per share. We currently estimate that the capital gain distribution to be
paid on December 28 may approximate $9.00 per share or 8% of the current net
asset value. While this distribution is higher than the very low level
experienced in recent years, it is still low relative to industry standards. The
low portfolio turnover, that has been a distinguishing feature of the Fund since
its inception, has resulted in the Fund ranking highly in terms of tax
efficiency and we intend to maintain that distinction. We are pleased to
announce that shareholders can now use the internet to access our web site
(www.mairsandpower.com) to obtain various kinds of information such as the
previous day's NAV, investment style, certain data and statistics, forms,
reports, and applications.
The U.S. economy experienced moderating growth in the third quarter with
Gross Domestic Product rising at an annual rate of 2.7%, less than half of its
5.6% pace in the second quarter. Domestic demand rose at 2.7%, the slowest pace
in three years. Prior to the third quarter, domestic demand had been growing
more rapidly than supply, leading to tight labor markets and upward pressure on
wages. This has been the chief concern of the Federal Reserve and the reason for
the six interest rate increases that have occurred over the past eighteen
months. Based on the most recent data, it now appears that the Fed has been
successful in engineering the desired soft-landing, that is a period of growth
slow enough to assure that inflation remains contained. During the past six
years, Congress and the President have represented opposing political parties,
which resulted in some degree of gridlock in terms of major policy initiatives.
Absent such initiatives, neither new spending programs nor tax cuts took place,
resulting in federal budget surpluses over the past three years totaling some
$400 billion. In our view, this was exactly the correct fiscal policy for a
period characterized by strong economic growth, record low unemployment, and
very modest inflation. The November 7th national elections failed to produce a
mandate for either party, which may well result in further gridlock due to
continuing divided control of government. While this may produce frustration for
the electorate, it may also result in further substantial federal surpluses that
should benefit both the economy and the financial markets. For the present, this
is a sound fiscal policy and complements the wise monetary policy which
Greenspan's Federal Reserve has maintained over the past decade. Therefore, we
are optimistic that 2001 will be the nation's eleventh consecutive year of
economic growth, marked by continuing strength in corporate earnings,
accompanied by rising stock valuations. We believe that the Fund is well
positioned to capitalize on these trends.
George A. Mairs
President
<PAGE>
SCHEDULE OF INVESTMENTS SEPTEMBER 30, 2000
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES COMMON STOCKS VALUE
--------- ------------------------- -----------
<S> <C> <C>
BASIC INDUSTRIES 12.4%
953,900 BMC Industries, Inc. $ 6,558,063
384,000 Bemis Company, Inc. 12,336,000
520,000 Ecolab, Inc. 18,752,500
324,500 H. B. Fuller 9,329,375
502,700 The Valspar Corporation 11,557,073
140,000 Weyerhaeuser Company 5,652,500
-------------
64,185,511
-------------
CAPITAL GOODS 8.0%
593,600 Donaldson Company, Inc. 13,059,200
609,850 Graco Inc. 19,667,662
1,248,100 MTS Systems Corporation 8,736,700
-------------
41,463,562
-------------
CONSUMER CYCLICAL 8.2%
520,000 Deluxe Corp. 10,562,500
786,000 Target Corporation 20,141,250
365,800 The Toro Company 11,522,700
-------------
42,226,450
-------------
CONSUMER STAPLE 9.1%
524,000 General Mills, Inc. 18,602,000
980,000 Hormel Foods Corporation 16,353,750
818,000 SUPERVALU Inc. 12,321,125
-------------
47,276,875
-------------
FINANCIAL 16.5%
436,000 St. Paul Companies, Inc. 21,500,250
660,000 TCF Financial Corporation 24,832,500
490,000 US Bancorp 11,147,500
600,000 Wells Fargo & Company 27,562,500
-------------
85,042,750
-------------
HEALTH CARE 21.7%
282,000 Baxter International, Inc. 22,507,125
56,400 Edwards Lifesciences Corp. * 1,230,225
215,000 Johnson & Johnson 20,196,563
472,000 Medtronic, Incorporated 24,455,500
498,000 Pfizer Inc. 22,378,875
415,000 St. Jude Medical, Inc. * 21,165,000
-------------
111,933,288
-------------
TECHNOLOGY 15.1%
896,000 ADC Telecommunications Inc. * 24,094,000
570,000 Ceridian * 15,995,625
348,050 Emerson Electric Co. 23,319,350
408,750 Honeywell International Inc.. 14,561,719
-------------
77,970,694
-------------
DIVERSIFIED 3.8%
213,000 Minnesota Mining & Manufacturing Company 19,409,625
-------------
TOTAL COMMON STOCKS 94.8% 489,508,755
SHORT TERM INVESTMENTS 5.1%
11,363,428 Firstar Institutional Money Market Fund 11,363,428
15,000,000 Merrill Lynch Institutional Money Market Fund 15,000,000
-------------
26,363,428
-------------
TOTAL INVESTMENTS 99.9% 515,872,183
OTHER ASSETS IN EXCESS OF LIABILITIES 0.1% 399,485
--------------
NET ASSETS 100% $ 516,271,668
==============
</TABLE>
*Non-income producing
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF NET ASSETS AT SEPTEMBER 30, 2000
------------------------------------------------------------------------------------------------------------------
ASSETS
<S> <C> <C>
Investments at market value (cost $347,120,147).................................................. $ 489,508,755
Cash............................................................................................. 26,363,428
Dividends and interest receivable................................................................ 500,055
Receivables for securities sold, not yet delivered............................................... 2,086,740
Prepaid expense.................................................................................. (9,952)
--------------
518,449,026
LIABILITIES
Accrued management fee................................................. $ 255,310
Accrued custodian and transfer agent fee............................... 66,600
Payable for securities purchased, not yet received..................... 1,855,448 2,177,358
----------- --------------
NET ASSETS
Equivalent to $102.67 per share on 5,028,464 shares outstanding.................................. $ 516,271,668
==============
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000
------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
NET ASSETS, December 31, 1999.................................................................... $ 546,836,085
Net investment income, per statement below............................. $ 3,649,636
Distribution to shareholders........................................... (1,756,555) 1,893,081
-------------
Fund shares issued and repurchased:
Received for 359,451 shares issued.................................. 34,569,244
Paid for 1,216,884 shares repurchased............................... (110,873,350) (76,304,106)
-------------
Increase in unrealized net appreciation (depreciation) of investments............................ (15,534,892)
Net gain (or loss) realized from sales of securities............................................. 59,381,500
--------------
NET ASSETS, September 30, 2000................................................................... $ 516,271,668
==============
<CAPTION>
STATEMENT OF NET INVESTMENT INCOME FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000
------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Dividends........................................................................................ $ 6,296,782
Interest......................................................................................... 316,885
--------------
6,613,667
EXPENSES
Management fee (Note A)................................................ $ 2,241,485
Fees and expenses of custodian, transfer agent and
dividend disbursing agent (Note A)................................. 364,364
Legal and auditing fees and expenses................................... 21,693
Insurance.............................................................. 9,471
Other Fees and Expenses................................................ 327,018 2,964,031
------------- -------------
NET INVESTMENT INCOME $ 3,649,636
==============
</TABLE>
NOTE A: THE INVESTMENT ADVISORY FEE WAS PAID TO MAIRS AND POWER, INC., WHICH IS
OWNED BY INDIVIDUALS WHO ARE DIRECTORS AND OFFICERS OF THE FUND, FOR ITS
SERVICES AS INVESTMENT ADVISER. INVESTMENT ADVISORY FEES ARE PAID TO THE ADVISER
PURSUANT TO AN ADVISORY AGREEMENT APPROVED BY THE DIRECTORS OF THE FUND. THE
ADVISORY FEE IS COMPUTED EACH MONTH AND IS 1/20TH OF ONE PERCENT OF THE NET
ASSET VALUE OF THE FUND ON THE LAST VALUATION DAY OF THE MONTH. THE TRANSFER
AGENT FEE WAS PAID TO FIRSTAR MUTUAL FUND SERVICES, LLC WHICH SERVES AS TRANSFER
AGENT.
SUPPLEMENTARY INFORMATION: 1) THE DIRECTORS OF THE FUND NOT AFFILIATED
WITH MAIRS AND POWER, INC. RECEIVED A TOTAL OF $60,300.00 COMPENSATION FOR
MEETINGS ATTENDED DURING THIS NINE MONTH PERIOD. NO COMPENSATION WAS PAID TO ANY
OTHER DIRECTOR OR OFFICER OF THE FUND. 2) NO PROVISION HAS BEEN MADE FOR FEDERAL
INCOME TAXES AS IT IS THE INTENTION OF THE FUND TO COMPLY WITH THE PROVISIONS OF
THE INTERNAL REVENUE CODE AVAILABLE TO INVESTMENT COMPANIES AND TO MAKE
DISTRIBUTIONS OF INCOME AND SECURITY PROFITS WHICH WILL BE SUFFICIENT TO RELIEVE
IT FROM ALL OR SUBSTANTIALLY ALL INCOME TAXES. 3) PURCHASES AND SALES OF
INVESTMENT SECURITIES DURING THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AGGREGATED
$35,883,028 AND $123,918,722 RESPECTIVELY.
<PAGE>
=================
MAIRS AND POWER
GROWTH FUND, INC.
=================
A NO-LOAD FUND
W-1420 First National Bank Building,
332 Minnesota Street, St. Paul, Minnesota 55101-1363
Investment Adviser: 651-222-8478 Shareholder Information: 800-304-7404
www.mairsandpower.com
SUMMARY OF FINANCIAL INFORMATION
------------------------------------------------------------------------------
This table covers a period of generally rising common stock prices. The results
shown should not be considered as a representation of the dividend income and
capital gain or loss which may result from an investment made in the Fund today.
<TABLE>
<CAPTION>
PER SHARE
----------------------------------------------
DISTRIBUTIONS DIVIDENDS
OF REALIZED FROM NET
SHARES TOTAL NET NET ASSET SECURITIES INVESTMENT
DATES OUTSTANDING ASSETS VALUE GAINS INCOME
------------- ------------ ------------- ---------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Dec. 31, 1980 840,882 $ 14,540,014 $ 17.29 - $ 0.55
Dec. 31, 1981 861,678 13,148,158 15.26 $ 0.74 0.60
Dec. 31, 1982 850,942 16,784,217 19.72 0.58 0.50
Dec. 31, 1983 881,592 18,972,177 21.52 0.70 0.48
Dec. 31, 1984 872,069 17,304,204 19.84 0.76 0.46
Dec. 31, 1985 856,738 21,553,457 25.16 0.86 0.46
Dec. 31, 1986 893,850 22,235,453 24.88 2.74 0.40
Dec. 31, 1987 914,139 19,816,097 21.68 2.29 0.48
Dec. 31, 1988 929,039 20,630,251 22.21 1.21 0.41
Dec. 31, 1989 866,584 22,630,081 26.11 1.83 0.43
Dec. 31, 1990 867,432 22,501,587 25.94 0.70 0.42
Dec. 31, 1991 904,023 31,440,529 34.78 1.58 0.39
Dec. 31, 1992 956,814 34,363,306 35.91 1.16 0.40
Dec. 31, 1993 1,006,285 39,081,010 38.84 1.22 0.43
Dec. 31, 1994 1,064,019 41,889,850 39.37 0.98 0.65
Dec. 31, 1995 1,245,325 70,536,880 56.64 1.51 0.56
Dec. 31, 1996 2,161,246 150,161,759 69.48 1.39 0.71
Dec. 31, 1997 4,760,515 412,590,619 86.67 1.69 1.00
Dec. 31, 1998 6,262,832 580,460,523 92.68 1.36 0.72
Dec. 31, 1999 5,885,897 546,836,085 92.91 5.48 0.93
Sep. 30, 2000 5,028,464 516,271,668 102.67 - 0.35
</TABLE>
No adjustment has been made for any income tax payable by shareholders on
capital gain distributions accepted in shares.
This report is not to be used in connection with the offering of shares of the
Fund unless accompanied or preceded by an effective Prospectus. Please call or
write if you desire further information.
-------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
----------------------------
The average annual total returns for the Fund (period ended September 30, 2000)
are as follows:
1 Year: +12.9% 5 Years: +17.0% 10 Years: +21.0%
Past investment results should not be taken as necessarily representative of
future performance.
The investment return and principal value of an investment will fluctuate so
that an investor's shares, when redeemed, may be worth more or less than their
original cost.
-------------------------------------------------------------------------------
OFFICERS AND DIRECTORS
-------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
George A. Mairs, III William B. Frels Peter G. Robb Lisa J. Hartzell
President and Director Secretary and Director Vice-President and Director Treasurer
Norbert J. Conzemius Charlton Dietz Donald E. Garretson J. Thomas Simonet
Director Director Director Director
</TABLE>
