John Hancock Funds
REGIONAL
BANK FUND
APRIL 30, 1998
SEMIANNUAL REPORT
TRUSTEES
Edward J. Boudreau, Jr.
Dennis S. Aronowitz
Richard P. Chapman, Jr.*
William J. Cosgrove
Douglas M. Costle
Leland O. Erdahl
Richard A. Farrell
Gail D. Fosler
William F. Glavin
Anne C. Hodsdon
Dr. John A. Moore
Patti McGill Peterson
John W. Pratt*
Richard S. Scipione
Edward J. Spellman*
*Members of the Audit Committee
OFFICERS
Edward J. Boudreau, Jr.
Chairman and Chief Executive Officer
Robert G. Freedman
Vice Chairman and
Chief Investment Officer
Anne C. Hodsdon
President and Chief Operating Officer
James B. Little
Senior Vice President and
Chief Financial Officer
Susan S. Newton
Vice President and Secretary
James J. Stokowski
Vice President and Treasurer
Thomas H. Connors
Second Vice President and Compliance Officer
CUSTODIAN
Investors Bank & Trust Company
200 Clarendon Street
Boston, Massachusetts 02116
TRANSFER AGENT
John Hancock Signature Services, Inc.
1 John Hancock Way, Suite 1000
Boston, Massachusetts 02217-1000
INVESTMENT ADVISER
John Hancock Advisers, Inc.
101 Huntington Avenue
Boston, Massachusetts 02199-7603
PRINCIPAL DISTRIBUTOR
John Hancock Funds, Inc.
101 Huntington Avenue
Boston, Massachusetts 02199-7603
LEGAL COUNSEL
Hale and Dorr LLP
60 State Street
Boston, Massachusetts 02109-1803
[A 1 1/4" x 1" photo of Edward J. Boudreau, Jr., Chairman and Chief Executive
Officer, flush right next to third paragraph.]
CHAIRMAN'S MESSAGE
DEAR FELLOW SHAREHOLDERS:
During the last decade, investors have become used to seeing stock
market returns averaging 15% or so each year. In the past three years,
the stock market has treated us to a record run, producing annual
returns in excess of 20%.
After such a long and remarkable performance, many began this year
wondering what the market would do for an encore in 1998. The answer so
far has been more of the same. This achievement continues to bolster
many investors' convictions that the market will produce these results
forever, or, in the worst case, that market declines will always be
short-lived. While the economy remains solid and the environment
favorable, history and reason tell us it's a highly unlikely scenario.
This doesn't mean we know what the market will do next, or that it's
riding for a fall. But after such a run, even in this "new era" of
strong economic growth with low inflation, we believe it would be wise
for investors to set more realistic expectations. As we've said before,
markets do indeed move in two directions, even though we've seen "up"
much more than "down" recently. Over the long term, the market's
historical results have been more in the 10% per year range, which is
still a solid result, considering it has been produced despite wars,
depressions and other social upheavals along the way.
In addition to adjusting, or at least re-examining, expectations, now
could also be a good time to review with your investment professional
how your assets are diversified, perhaps with an eye toward a more
conservative approach. Stocks, especially with their outsized gains of
the last three years, might have grown to represent a larger piece of
your portfolio than you had originally intended, given your objectives,
time horizon and risk level.
At John Hancock Funds, our goal is to help you reach your financial
objectives and maintain wealth. One way we can do that is by helping
you keep your feet on the ground as you pursue your dreams.
Sincerely,
/S/ EDWARD J. BOUDEAU
EDWARD J. BOUDREAU, JR., CHAIRMAN AND CHIEF EXECUTIVE OFFICER
[A 2 1/4" x 3 1/2" photo at bottom right of page of the fund portfolio
management team. Caption reads "Fund management team members. Standing (l -
r): Jay McKelvey, Tom Goggins and Tom Finucane. Sitting (l - r): Lisa Welch,
Jim Schmidt and Patricia Ouimet."]
BY JAMES K. SCHMIDT, CFA, PORTFOLIO MANAGEMENT TEAM LEADER AND THOMAS
FINUCANE AND THOMAS GOGGINS, PORTFOLIO MANAGERS
John Hancock
Regional Bank Fund
Bank stocks heat up with consolidation fever;
industry fundamentals are stellar
After some Asia-related weakness in late 1997, U.S. financial markets
continued their exuberant ascent in 1998, fueled by the powerful
combination of strong economic growth and low inflation. For the six
months ended April 30, 1998, the Standard & Poor's 500 Stock Index, a
commonly used gauge of the broader stock market, returned 22.49%,
including reinvested dividends. As they have for the last several years,
large-company stocks led the market's charge.
"The past six
months have
marked a
period of
frenzied
merger
activity..."
Banks and other financial stocks also performed well. Mirroring the
broad market, the large superregional and money center bank stocks
outperformed their smaller counterparts. For the six months ended April
30, 1998, John Hancock Regional Bank Fund's Class A and Class B shares
posted very strong absolute total returns of 20.37% and 19.96%,
respectively, at net asset value. That result was equal to the market's
performance for all of 1997. Keep in mind that your net asset value
return will be different from this performance if you were not invested
in the Fund for the entire period and did not reinvest all
distributions.
Because the Fund's emphasis is on regional and community banks, rather
than on the larger banks that outperformed, our results were just behind
the average financial services fund's return of 22.51%, according to
Lipper Analytical Services, Inc.1 Longer-term performance information
can be found on pages seven and eight.
[Chart at the top of left hand column with the heading "Top Five Common Stock
Holdings". The chart lists five holdings: 1.) First Union Corp. 3.8%; 2.)
NationsBank Corp 2.9%; 3.) Summit Bancorp 2.6%; 4.) National City Corp. 2.4%
and 5.) U.S. Bancorp 2.3%. A note below the chart reads "As a percentage of
net assets at April 30, 1998".]
Performance review
The single most important factor contributing to the financial sector's
success is the ideal macroeconomic environment. A string of mergers
involving banks of all size levels, and healthy earnings reports also
helped our cause. But these two positives were made even more robust by
the moderate, sustainable growth, low inflation and stable interest
rates this country has experienced over the last few years. As long as
these economic conditions exist, we believe the bank and thrift sector
will continue to deliver the bottom line results and the consolidation
wave will roll on.
"...earnings
in 1998
have generally
equaled or
surpassed
expectations."
Consolidation results in mega-banks
The past six months have marked a period of frenzied merger activity in
the bank world. The highlight of late 1997 was the First Union-
CoreStates blockbuster, a $17 billion transaction. However, 1998's
merger activity has already overshadowed that. April 13 became the most
dramatic date in the annals of bank consolidation as two mega-deals were
announced. The proposed merger of NationsBank and BankAmerica would
create by far the largest bank in the United States. Despite having
coast-to-coast span and a multiple of any other bank's market share, the
"new" BankAmerica still falls short of being a national banking
institution. It will still fail to cover 28 states and will have no
presence at all in populous states such as New York, Ohio and Michigan.
The "other" merger of April 13, which would have dominated banking news
on any other day, was between Banc One and First Chicago. This deal will
create a banking company with approximately $240 billion in assets that
will rank as the nation's sixth largest.
[Table at bottom of left hand column entitled "Scorecard". The header for
the left column is "Investment" and the header for the right column is
"Recent Performance...and What's Behind the Numbers". The first listing is
Zions Bancorp. followed by an up arrow with the phrase "Rocky Mountain
powerhouse quietly building up in California". The second listing is First
Virginia Banks followed by an arrow pointing to the left and right and the
phrase "Two quarters of sluggish revenues disappoint market". The third
listing is Union Planters Corp. followed by a down arrow and the phrase
"Market votes against aggressive acquisition strategy". A note below the
table reads "See "Schedule of Investments." Investment holdings are subject
to change."]
These deals, coupled with the merger of Citicorp and Travelers into
Citigroup that was announced a week earlier, substantially increase the
pressure for industry consolidation. The U.S. banking system is on a
path to more closely resemble those of other developed economies, where
a handful of institutions control most of the assets.
The asset size needed to join the surviving class of mega-banks keeps
being raised, and in this sense the pressure is increased on remaining
large banks to gain scale. Banks in the $30 billion to $80 billion range
are no longer too big to be acquisition targets. We think that the
"mortality rate" through mergers will be highest among banks in this
size category. Importantly, the April mega-mergers resulted in no
earnings dilution to any of the banks involved and had neutral or
positive impacts on their stocks. Thus, we think the market will not
discourage similar transactions.
[Bar chart at top of left hand column with the heading "Fund Performance".
Under the heading is a note that reads "For the six months ended April 30,
1998". The chart is scaled in increments of 5% with 25% at the top and 0% at
the bottom. The first bar represents the 20.37% total return for John
Hancock Regional Bank Fund Class A. The second bar represents the 19.96%
total return for John Hancock Regional Bank Fund Class B and the third bar
represents the 22.51% total return for the average financial services fund.
A note below the chart reads "Total returns for John Hancock Regional Bank
Fund are at net asset value with all distributions reinvested. The average
financial services fund is tracked by Lipper Analytical Services, Inc. (1).
See pages seven and eight for historical performance information."]
At the same time, there will also continue to be several thousand
community banks, many of which will continue to thrive and find their
opportunities are actually enhanced by the large bank mergers.
A byproduct of the Citigroup merger, in our view, is increased
likelihood that Congress will enact financial services reform
legislation. The bill under consideration will create financial services
holding companies that could own commercial banks, securities brokers
and insurance underwriters. We think that this change will prove to be
more beneficial to other financial companies than to banks, which is why
the banking industry has not supported the legislation.
Fund mergers
In 1997, the Fund witnessed a record 42 of its holdings announce
mergers; in 1998 the merger tally stands at 14. These deals were
dispersed across banks of all sizes. We expect numerous additional
transactions in the coming months. We have observed often in the past
that mergers beget mergers and a few landmark deals give other
managements the incentive to negotiate like transactions. The timing of
such mergers is likely to be affected by the need to revamp computer
systems to be capable of properly recognizing and processing dates when
the new century arrives on January 1, 2000 (the "Y2K" problem). For the
next six months, activity could increase as institutions scrambling to
meet their Y2K deadlines will be induced to strike deals now and avoid
the problem totally. Subsequently, in early 1999, we could witness a
brief hiatus in mergers because systems would have to be combined
perilously close to the magic date.
"...regional
banks
continue to
represent
atractive
values..."
Earnings on track; valuations good
Following an enormously fruitful 1997, earnings in 1998 have generally
equaled or surpassed expectations. The ideal economic conditions have
enabled our companies to report 12% year-over-year earnings growth in
the first quarter of 1998. Across the gamut of banks and thrifts, loan
quality is very good, margins generally remain stable, expense controls
have been excellent and stock repurchases continue to counter capital
build-up. Decreasing levels of write-offs and delinquent loans have
lessened earlier worries about consumer credit quality. In addition, the
Asian economic swoon and gyrating U.S. long-term interest rates have had
little effect on the broad underlying strength of the domestic economy.
Thus, both loan demand and credit trends continue to maintain a positive
balance between quantity and quality. Given our outlook for continued
cooperation on the macro-economic front, we believe the average bank
firm can show 10% plus earnings increases over 1997.
In retrospect, merger speculation caused some of our favorite regional
bank stocks, such as Fund holdings Union Planters Corp., Mercantile
Bancorp. and Summit Bancorp., to become overvalued at the end of 1997.
These stock prices have since declined from their year-end level and are
once again reasonably priced. Indeed, bank stocks have become less
expensive than they were compared to the overall market. As a group,
their price-earnings multiple relative to the overall market declined
from 80% at the end of 1997 to the current level of 73%. That means bank
stocks are 27% percent cheaper than the market as a whole. We believe
that regional banks continue to represent attractive values, offering
predictable, consistent earnings streams and ongoing consolidation
potential for less than the price of the market's average stock.
"...the seven-
year-old U.S.
economic
expansion
still has
legs..."
Fund activity and outlook
Overall, the Fund's investment focus has not wavered in 13 years. We
seek capital appreciation by holding a portfolio of regional bank and
thrift stocks that have healthy fundamentals and may stand in the path
of consolidation. Currently, we see no need to overweight any specific
geographic regions, because, with the exception of Hawaii, every state
is enjoying steady growth. In picking stocks, we have focused lately on
what we term the "big uglies," such as Fleet Financial Group, KeyCorp.
and PNC Bank. Although slightly larger in market capitalization than our
traditional favorites, these banks were attractive values in the last
six months due to either market mistrust of their acquisition strategies
or fundamental company challenges on the revenue front, or to a
combination of the two. These banks are also in the "high-mortality"
size category that we mentioned earlier.
Our outlook for bank stocks and the economy in general remains upbeat.
As long as the current backdrop of solid economic growth, low interest
rates and tame inflation remains, we believe the seven-year-old U.S.
economic expansion still has legs and can go well into 1998 without
producing inflationary side effects. This positive macro-economic
picture, combined with continued bank mergers and a favorable regulatory
environment, keeps us encouraged about the prospects for bank and thrift
stocks.
This commentary reflects the views of the portfolio managers through the
end of the Fund's period discussed in this report. Of course, the
managers' views are subject to change as market and other conditions
warrant.
Sector investing is subject to different, and sometimes greater, risks
than the market as a whole.
1 Figures from Lipper Analytical Services, Inc. include
reinvested dividends and do not take into account sales
charges. Actual load-adjusted performance is lower.
A LOOK AT PERFORMANCE
The tables on the right show the cumulative total returns and the
average annual total returns for the John Hancock Regional Bank Fund.
Total return measures the change in value of an investment from the
beginning to the end of a period, assuming all distributions were
reinvested.
For Class A shares, total return figures include a maximum applicable
sales charge of 5%. Prior to August 1992, different sales charges were
in effect for Class A shares and are not reflected in the performance
data. Class B performance reflects a maximum contingent deferred sales
charge (maximum 5% and declining to 0% over six years).
All figures represent past performance and are no guarantee of future
results. Keep in mind that the total return and share price of the
Fund's investments will fluctuate. As a result, your Fund's shares may
be worth more or less than their original cost, depending on when you
sell them. Please read your prospectus for risks associated with
industry segment investing before you invest or send money.
CLASS A
For the period ended March 31, 1998
SINCE
ONE FIVE INCEPTION
YEAR YEARS (1/3/92)
--------- --------- ---------
Cumulative Total Returns 48.46% 220.28% 437.59%
Average Annual Total Returns 48.46% 26.21% 30.93%
CLASS B
For the period ended March 31, 1998
SINCE
ONE FIVE INCEPTION
YEAR YEARS (1/3/92)
--------- --------- ---------
Cumulative Total Returns 50.19% 223.81% 821.60%
Average Annual Total Returns 50.19% 26.49% 24.87%
WHAT HAPPENED TO A $10,000 INVESTMENT...
The charts on the right show how much a $10,000 investment in the John
Hancock Regional Bank Fund would be worth, assuming all distributions
were reinvested for the period indicated. For comparison, we've shown
the same $10,000 investment in the Standard & Poor's 500 Stock Index --
an unmanaged index that includes 500 widely traded common stocks and is
a commonly used measure of stock market performance. Past performance is
not indicative of future results.
[Line chart with the heading Regional Bank Fund Class A, representing the
growth of a hypothetical $10,000 investment over the life of the fund. Within
the chart are three lines. The first line represents the value of the
Regional Bank Fund, before sales charge, and is equal to $57,241 as of April
30, 1998. The second line represents the value of the hypothetical $10,000
investment made in the Regional Bank Fund on January 3, 1992, after sales
charge, and is equal to $54,379 as of April 30, 1998. The third line
represents the Standard & Poor's 500 Stock Index and is equal to $31,732
as of April 30, 1998. ]
[Line chart with the heading Regional Bank Fund: Class B, representing the
growth of a hypothetical $10,000 investment over the life of the fund. Within
the chart are two lines. The first line represents the value of the Regional
Bank Fund, before sales charge, and is equal to $112,792 as of April 30, 1998.
The second line represents the value of the hypothetical $10,000
investment made in the Standard & Poor's 500 Stock Index and is equal to
$59,608 as of April 30, 1998. The footnote reads "* No contingent deferred
sales charge applicable."]
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
The Statement of Assets and Liabilities is the Fund's balance sheet
and shows the value of what the Fund owns, is due and owes on April
30, 1998. You'll also find the net asset value and the maximum
offering price per share as of that date.
Statement of Assets and Liabilities
April 30, 1998 (Unaudited)
- ------------------------------------------------------------------------------------------
<S> <C>
Assets:
Investments at value - Note C:
Common stocks, warrants, preferred stocks and other
Unaffiliated issuers (cost - $2,971,739,313) $6,618,936,201
Affiliated issuers - Note D (cost - $143,880,644) 289,997,376
Bonds (cost - $8,486,199) 9,211,279
Joint repurchase agreement (cost - $519,610,000) 519,610,000
Short-term notes (cost - $330,146,191) 329,928,395
Corporate savings account 1,529,728
--------------
7,769,212,979
Receivable for investments sold 3,015,857
Receivable for shares sold 4,129,212
Dividends receivable 10,985,840
Interest receivable 5,207,707
Foreign tax receivable 2,430
Other assets 58,978
--------------
Total Assets 7,792,613,003
- ------------------------------------------------------------------------------------------
Liabilities:
Payable for investments purchased 33,155,132
Payable for shares repurchased 6,487,872
Payable to John Hancock Advisers, Inc.
and affiliates - Note B 6,466,291
Accounts payable and accrued expenses 238,051
--------------
Total Liabilities 46,347,346
- ------------------------------------------------------------------------------------------
Net Assets:
Capital paid-in 3,858,204,551
Accumulated net realized gain on investments and
foreign currency transactions 86,275,232
Net unrealized appreciation of investments and
foreign currency transactions 3,793,826,980
Undistributed net investment income 7,958,894
--------------
Net Assets $7,746,265,657
==========================================================================================
Net Asset Value Per Share:
(Based on net assets and shares of beneficial
interest outstanding - unlimited number of shares
authorized with no par value, respectively)
Class A - $1,927,955,423 / 33,290,301 $57.91
==========================================================================================
Class B - $5,818,310,234 / 101,006,233 $57.60
==========================================================================================
Maximum Offering Price Per Share*
Class A - ($57.91 x 105.26%) $60.96
==========================================================================================
* On single retail sales of less than $50,000. On sales of $50,000 or
more and on group sales the offering price is reduced.
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
The Statement of Operations summarizes the Fund's investment income earned and expenses incurred in operating the Fund. It also
shows net gains (losses) for the period stated.
Statement of Operations
Six months ended April 30, 1998 (Unaudited)
- ------------------------------------------------------------------------------------------
<S> <C>
Investment Income:
Dividends (including $2,418,707 received from
affiliated issuers and net of foreign withholding
taxes of $17,749 ) $64,001,439
Interest 24,397,455
-------------
88,398,894
-------------
Expenses:
Investment management fee - Note B 26,847,095
Distribution and service fee - Note B
Class A 2,670,981
Class B 25,765,232
Transfer agent fee - Note B 5,226,570
Financial services fee - Note B 629,597
Custodian fee 417,668
Trustees' fees 198,315
Registration and filing fees 164,650
Printing 121,434
Miscellaneous 95,488
Legal fees 34,423
Auditing fee 17,852
-------------
Total Expenses 62,189,305
- ------------------------------------------------------------------------------------------
Net Investment Income 26,209,589
- ------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) on Investments
and Foreign Currency Transactions:
Net realized gain on investments sold
(including $915,647 gain on sales of
investments in affiliated issuers) 86,819,563
Net realized loss on foreign currency transactions (124)
Change in net unrealized appreciation/depreciation
of investments 1,184,048,311
Change in net unrealized appreciation/depreciation
of foreign currency transactions (45)
-------------
Net Realized and Unrealized
Gain on Investments and
Foreign Currency Transactions 1,270,867,705
- ------------------------------------------------------------------------------------------
Net Increase in Net Assets
Resulting from Operations $1,297,077,294
==========================================================================================
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
- ---------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED
YEAR ENDED APRIL 30, 1998
OCTOBER 31, 1997 (UNAUDITED)
---------------- ----------------
<S> <C> <C> <C> <C>
Increase (Decrease) in Net Assets:
From Operations:
Net investment income $52,301,693 $26,209,589
Net realized gain on investments sold and foreign currency transactions 59,106,829 86,819,439
Change in net unrealized appreciation/depreciation of
investments and foreign currency transactions 1,780,828,190 1,184,048,266
--------------- --------------
Net Increase in Net Assets Resulting from Operations 1,892,236,712 1,297,077,294
--------------- --------------
Distributions to Shareholders:
Dividends from net investment income
Class A - ($0.6125 and $0.3063 per share, respectively) (19,020,629) (10,240,853)
Class B - ($0.3392 and $0.1285 per share, respectively) (31,890,024) (12,953,021)
Distributions from net realized gain on investments sold
Class A - ($0.3143 and $0.3926 per share, respectively) (8,142,308) (13,035,642)
Class B - ($0.3143 and $0.3926 per share, respectively) (24,538,932) (39,463,958)
--------------- --------------
Total Distributions to Shareholders (83,591,893) (75,693,474)
--------------- --------------
From Fund Share Transactions -- Net:* 1,366,590,293 80,290,071
--------------- --------------
Net Assets:
Beginning of period 3,269,356,654 6,444,591,766
--------------- --------------
End of period (including undistributed net investment income
of $4,943,179 and $7,958,894, respectively) $6,444,591,766 $7,746,265,657
=============== ===============
* Analysis of Fund Share Transactions:
SIX MONTHS ENDED
YEAR ENDED APRIL 30, 1998
OCTOBER 31, 1997 (UNAUDITED)
------------------------------- -------------------------------
SHARES AMOUNT SHARES AMOUNT
------------ --------------- ------------ -------------
CLASS A
Shares sold 38,788,657 $1,491,103,323 6,208,548 $329,885,126
Shares issued to shareholders
in reinvestment of distributions 559,414 22,095,071 350,742 19,080,396
------------ --------------- ------------ -------------
39,348,071 1,513,198,394 6,559,290 348,965,522
Less shares repurchased (31,907,187) (1,238,344,932) (6,036,326) (323,529,514)
------------ --------------- ------------ -------------
Net increase 7,440,884 $274,853,462 522,964 $25,436,008
============ =============== ============ =============
CLASS B
Shares sold 40,654,404 $1,573,447,820 6,813,669 $363,390,998
Shares issued to shareholders
in reinvestment of distributions 929,268 35,725,726 627,771 33,784,533
------------ --------------- ------------ -------------
41,583,672 1,609,173,546 7,441,440 397,175,531
Less shares repurchased (12,781,798) (517,436,715) (6,432,427) (342,321,468)
------------ --------------- ------------ -------------
Net increase 28,801,874 $1,091,736,831 1,009,013 $54,854,063
============ =============== ============ =============
The Statement of Changes in Net Assets shows how the value of the Fund's net assets has changed since the end of
the previous period. The difference reflects earnings less expenses, any investment and foreign currency gains,
distributions paid to shareholders, and any increase or decrease in money shareholders invested in the Fund. The
footnote illustrates the number of Fund shares sold, reinvested and repurchased during the last two periods,
along with the corresponding dollar value.
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
Financial Highlights
Selected data for a share of beneficial interest outstanding throughout each period indicated, investment returns, key ratios
and supplemental data are listed as follows:
YEAR ENDED OCTOBER 31, SIX MONTHS ENDED
--------------------------------------------------------------------- APRIL 30, 1998
1993 1994 1995 1996 1997 (UNAUDITED)
--------- --------- --------- --------- --------- --------------
<S> <C> <C> <C> <C> <C> <C>
CLASS A
Per Share Operating Performance
Net Asset Value, Beginning of Period $17.47 $21.62 $21.52 $27.14 $33.99 $48.73
--------- --------- --------- --------- --------- ---------
Net Investment Income(1) 0.26 0.39 0.52 0.63 0.64 0.33
Net Realized and Unrealized
Gain on Investments 5.84 0.91 5.92 7.04 15.02 9.55
--------- --------- --------- --------- --------- ---------
Total from Investment Operations 6.10 1.30 6.44 7.67 15.66 9.88
--------- --------- --------- --------- --------- ---------
Less Distributions:
Dividends from Net Investment Income (0.26) (0.34) (0.48) (0.60) (0.61) (0.31)
Distributions from Net Realized
Gain on Investments Sold (1.69) (1.06) (0.34) (0.22) (0.31) (0.39)
--------- --------- --------- --------- --------- ---------
Total Distributions (1.95) (1.40) (0.82) (0.82) (0.92) (0.70)
--------- --------- --------- --------- --------- ---------
Net Asset Value, End of Period $21.62 $21.52 $27.14 $33.99 $48.73 $57.91
========= ========= ========= ========= ========= =========
Total Investment Return at
Net Asset Value(2) 37.45% 6.44% 31.00% 28.78% 46.79% 20.37%(3)
Ratios and Supplemental Data
Net Assets, End of Period
(000s omitted) $94,158 $216,978 $486,631 $860,843 $1,596,836 $1,927,955
Ratio of Expenses to
Average Net Assets 1.35% 1.34% 1.39% 1.36% 1.30% 1.25%(4)
Ratio of Net Investment Income to
Average Net Assets 1.29% 1.78% 2.23% 2.13% 1.55% 1.23%(4)
Portfolio Turnover Rate 35% 13% 14% 8% 5% 6%
The Financial Highlights summarizes the impact of the following factors on a single share for each period indicated: net
investment income, gains, dividends and total investment return of the Fund. It shows how the Fund's net asset value for a
share has changed since the end of the previous period. Additionally, important relationships between some items presented
in the financial statements are expressed in ratio form.
</TABLE>
<TABLE>
<CAPTION>
Financial Highlights (continued)
- ------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31, SIX MONTHS ENDED
--------------------------------------------------------------------- APRIL 30, 1998
1993 1994 1995 1996 1997 (UNAUDITED)
--------- --------- --------- --------- --------- --------------
<S> <C> <C> <C> <C> <C> <C>
CLASS B
Per Share Operating Performance
Net Asset Value, Beginning of Period $17.44 $21.56 $21.43 $27.02 $33.83 $48.48
--------- --------- --------- --------- --------- ---------
Net Investment Income(1) 0.15 0.23 0.36 0.42 0.35 0.15
Net Realized and Unrealized
Gain on Investments 5.83 0.91 5.89 7.01 14.95 9.49
--------- --------- --------- --------- --------- ---------
Total from Investment Operations 5.98 1.14 6.25 7.43 15.30 9.64
--------- --------- --------- --------- --------- ---------
Less Distributions:
Dividends from Net Investment Income (0.17) (0.21) (0.32) (0.40) (0.34) (0.13)
Distributions from Net
Realized Gain on Investments Sold (1.69) (1.06) (0.34) (0.22) (0.31) (0.39)
--------- --------- --------- --------- --------- ---------
Total Distributions (1.86) (1.27) (0.66) (0.62) (0.65) (0.52)
--------- --------- --------- --------- --------- ---------
Net Asset Value, End of Period $21.56 $21.43 $27.02 $33.83 $48.48 $57.60
========= ========= ========= ========= ========= =========
Total Investment Return
at Net Asset Value(2) 36.71% 5.69% 30.11% 27.89% 45.78% 19.96%(3)
Ratios and Supplemental Data
Net Assets, End of Period
(000s omitted) $171,808 $522,207 $1,236,447 $2,408,514 $4,847,755 $5,818,310
Ratio of Expenses to
Average Net Assets 1.88% 2.06% 2.09% 2.07% 2.00% 1.91%(4)
Ratio of Net Investment Income to
Average Net Assets 0.76% 1.07% 1.53% 1.42% 0.84% 0.57%(4)
Portfolio Turnover Rate 35% 13% 14% 8% 5% 6%
(1) Based on the average of the shares outstanding at the end of each month.
(2) Assumes dividend reinvestment and does not reflect the effect of sales charges.
(3) Not annualized.
(4) Annualized.
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
Schedule of Investments
April 30, 1998 (Unaudited)
- ----------------------------------------------------------------------------------------------------
The Schedule of Investments is a complete list of all securities owned by the Regional Bank Fund on April 30, 1998. It's divided
into four main categories: common stocks, warrants and other; preferred stocks; bonds; and short-term investments. Common stocks
are further broken down by industry group. Short-term investments, which represent the Fund's "cash" position, are listed last.
MARKET
ISSUER, DESCRIPTION, STATE NUMBER OF SHARES VALUE
- -------------------------- ---------------- -----
<S> <C> <C> <C>
COMMON STOCKS, WARRANTS AND OTHER
Money Center Banks (3.05%)
Bankers Trust New York Corp. (NY) 459,695 $59,358,117
Chase Manhattan Corp. (NY) 1,000,155 138,583,977
Morgan (J.P.) & Co., Inc. (NY) 291,000 38,193,750
-----------------
236,135,844
-----------------
Superregional Banks (20.02%)
Banc One Corp. (OH) 1,531,004 90,042,173
BankAmerica Corp. (CA) 1,435,374 122,006,790
BankBoston Corp. (MA) 1,348,250 145,526,734
Bank of New York Co., Inc. (NY) 2,089,449 123,408,082
First Chicago NBD Corp. (IL) 1,228,213 114,070,282
First Union Corp. (NC) 4,918,244 296,938,982
Fleet Financial Group, Inc. (MA) 911,148 78,700,409
KeyCorp. (OH) 1,406,010 55,801,022
Mellon Bank Corp. (PA) 598,902 43,120,944
NationsBank Corp. (NC) 2,927,613 221,766,685
Norwest Corp. (MN) 2,457,432 97,529,333
PNC Bank Corp. (PA) 1,912,400 115,580,675
Wachovia Corp. (NC) 545,225 46,310,048
-----------------
1,550,802,159
-----------------
Banks - United States (45.14%)
ABC Bancorp. (GA) 173,000 3,005,875
AMCORE Financial, Inc. (IL) 17,610 455,659
American Bancorp. (WV) 148,000 3,829,500
American Bancshares, Inc.* (FL) 77,000 1,001,000
AmSouth Bancorp. (AL) 703,439 43,877,008
ANB Corp. (IN) 137,500 3,918,750
Associated Banc-Corp. (WI) 443,445 23,280,863
Atlantic Bank & Trust Co.* (MA) 84,500 1,943,500
BancFirst Corp. (OK) 345,600 15,552,000
BancFirst Ohio Corp. (OH) 75,000 3,881,250
BancorpSouth, Inc. (MS) 165,000 7,352,812
Banknorth Group, Inc. (VT) 810,000 29,362,500
BB&T Corp. (NC) 1,881,892 126,557,237
Brenton Banks, Inc. (IA) 385,372 8,381,841
Bryn Mawr Bank Corp. (PA) 90,200 4,549,462
BT Financial Corp. (PA) 103,863 6,024,054
California State Bank (CA) 150,600 7,793,550
Carnegie Bancorp. (NJ) 85,659 3,121,200
CB Bancshares, Inc. (HI) 145,100 5,876,550
CCB Financial Corp. (NC) 516,432 56,161,980
Centura Banks, Inc. (NC) 470,525 33,877,800
Century South Banks, Inc. (GA) 12,500 346,875
Chittenden Corp. (VT) 152,750 5,728,125
Citizens Banking Corp. (MI) 122,600 4,352,300
City National Corp. (CA) 505,800 18,809,437
CNB Bancshares, Inc. (IN) 340,668 16,692,732
CoBancorp., Inc. (OH) 5,000 221,250
Colonial BancGroup, Inc. (AL) 578,800 20,764,450
Comerica, Inc. (MI) 1,241,397 83,096,012
Commerce Bancshares, Inc. (MO) 735,186 36,024,114
Commercial Bankshares, Inc. (FL) 180,547 4,389,549
Community Bank System, Inc. (NY) 150,000 5,334,375
Community First Bankshares, Inc. (ND) 393,875 19,841,453
Compass Bancshares, Inc. (AL) 1,623,250 78,727,625
Crestar Financial Corp. (VA) 1,691,339 101,163,214
Cullen / Frost Bankers, Inc. (TX) 901,200 52,720,200
Deposit Guaranty Corp. (MS) 838,400 47,736,400
Evergreen Bancorp., Inc. (NY) 292,600 8,558,550
F & M National Corp. (VA) 151,150 4,874,587
First American Corp. (TN) 2,505,600 123,557,400
First Citizens BancShares, Inc.
(Class A) (NC) 73,344 8,306,208
First Colonial Group, Inc. (PA) 30,357 1,109,928
First Commerce Corp. (LA) 1,186,387 96,542,242
First Hawaiian, Inc. (HI) 857,500 33,656,875
First Merchants Corp. (IN) 110,100 4,569,150
First Midwest Bancorp., Inc. (IL) 40,000 2,075,000
First Oak Brook Bancshares, Inc.
(Class A) (IL) 18,500 906,500
First Republic Bank* (CA) 274,162 9,424,319
First Security Corp. (UT) 1,568,000 38,416,000
First Source Corp. (IN) 117,626 4,624,172
First State Bancorp. (NM) 107,500 2,593,437
First Tennessee National Corp. (TN) 3,046,800 104,924,175
First Virginia Banks, Inc. (VA) 134,249 7,501,163
First Western Bancorp., Inc. (PA) 238,750 7,102,812
Firstar Corp. (WI) 1,197,400 44,677,987
Firstbank Corp. (MI) 104,652 3,558,168
FirstMerit Corp. (OH) 115,000 3,263,125
Firstbank of Illinois Co. (IL) 267,912 12,256,974
F.N.B. Corp. (PA) 218,162 8,126,535
FNB Rochester Corp. (NY) 225,337 4,563,074
Franklin Bank, NA (MI) 77,628 1,271,158
Fulton Financial Corp. (PA) 243,727 8,865,570
GBC Bancorp. (CA) 80,000 5,100,000
Grand Premier Financial, Inc. (IL) 194,118 3,494,124
Greater Bay Bancorp. (CA) 33,959 2,207,335
Hancock Holding Co. (MS) 333,700 20,814,538
Harleysville National Corp. (PA) 43,575 1,835,597
Hibernia Corp. (Class A) (LA) 1,540,600 31,486,012
HUBCO, Inc. (NJ) 787,865 28,954,039
Huntington Bancshares, Inc. (OH) 383,172 13,626,554
Imperial Bancorp. * (CA) 338,000 9,907,625
Independent Bank Corp. (MA) 974,000 18,749,500
Interchange Financial Services Corp. (NJ) 323,625 6,755,672
Keystone Financial, Inc. (PA) 133,745 5,216,055
LSB Bancshares, Inc. (NC) 23,010 483,210
Magna Group, Inc. (MO) 659,500 38,992,937
MainStreet BankGroup, Inc. (VA) 237,700 7,606,400
Marshall & Ilsley Corp. (WI) 581,480 34,016,580
Mercantile Bancorp., Inc. (MO) 1,836,762 101,710,696
Mercantile Bankshares Corp. (MD) 693,750 26,622,656
Merchants Bancorp., Inc. (IL) 141,600 4,902,900
MetroBanCorp. (IN) 78,750 861,328
Michigan Financial Corp. (MI) 64,629 2,391,273
Mississippi Valley Bancshares, Inc. (MO) 233,900 9,494,866
National City Bancshares, Inc. (IN) 81,743 3,331,027
National City Corp. (OH) 2,715,914 188,077,044
North Fork Bancorp., Inc. (NY) 2,960,418 109,905,518
North Valley Bancorp. (CA) 84,100 3,027,600
Old Kent Financial Corp. (MI) 1,060,154 41,213,487
One Valley Bancorp., Inc. (WV) 337,606 13,124,433
Pacific Bank, N.A. (CA) 66,923 4,015,380
Pacific Century Financial Corp. (HI) 1,595,766 39,395,473
Peoples Bank Corp. of Indianapolis (IN) 71,100 2,648,475
Premier Financial Bancorp., Inc. (KY) 35,000 778,750
Prime Bancshares, Inc. (TX) 47,900 1,281,325
Princeton National Bancorp., Inc. (IL) 49,500 1,441,687
Provident Bankshares Corp. (MD) 656,040 21,321,300
Provident Financial Group, Inc. (OH) 237,375 12,566,039
Regions Financial Corp. (AL) 1,253,000 54,662,125
Republic Bancorp., Inc. (MI) 106,360 2,074,020
Republic New York Corp. (NY) 639,600 85,546,500
Riggs National Corp. (DC) 385,000 11,092,812
Seacoast Banking Corp. (Class A) (FL) 174,300 6,492,675
SierraWest Bancorp. (CA) 137,214 5,094,070
Silicon Valley Bancshares * (CA) 175,000 11,418,750
Simmons First National Corp.
(Class A) (AR) 303,500 14,416,250
Southtrust Corp. (AL) 1,669,650 71,273,184
Southwest Bancorp., Inc. (OK) 98,500 3,102,750
State Financial Services Corp.
(Class A) (WI) 218,664 5,548,599
State Street Corp. (MA) 455,000 32,532,500
Sterling Bancshares, Inc. (TX) 352,880 6,175,400
Summit Bancorp. (NJ) 4,073,725 204,195,466
Surety Capital Corp. * (TX) 95,000 510,625
Susquehanna Bancshares, Inc. (PA) 713,262 25,499,117
Synovus Financial Corp. (GA) 271,200 9,542,850
TCF Financial Corp. (MN) 1,483,666 48,311,874
Texas Regional Bancshares, Inc.
(Class A) (TX) 411,500 13,579,500
Trans Financial, Inc. (KY) 162,000 8,991,000
TriCo Bancshares (CA) 225,550 6,935,663
Trustmark Corp. (MS) 286,000 6,595,875
UnionBanCal Corp. (CA) 766,800 78,980,400
Union Planters Corp. (TN) 1,789,739 110,068,949
U.S. Bancorp (OR) 1,401,777 178,025,679
U.S. Trust Corp. (NY) 87,500 6,212,500
USBANCORP., Inc. (PA) 75,500 6,191,000
UST Corp. (MA) 355,000 10,006,563
Vermont Financial Services Corp. (VT) 779,672 22,805,406
Wells Fargo & Co. (CA) 241,966 89,164,471
Westamerica Bancorp. (CA) 820,600 27,079,800
West Coast Bancorp. (OR) 160,155 4,184,049
Western Bancorp. (CA) 163,626 7,025,691
Whitney Holding Corp. (LA) 450,800 27,442,450
Zions Bancorp. (UT) 922,196 47,147,271
-----------------
3,496,360,880
-----------------
Thrifts (15.48%)
Acadiana BancShares, Inc. (LA) 25,000 575,000
Afsala Bancorp., Inc. (NY) 40,000 755,000
Ahmanson (H.F.) & Co. (CA) 1,439,308 109,747,235
ALBANK Financial Corp. (NY) 97,500 5,118,750
Ambanc Holding Co., Inc. (NY) 175,000 3,106,250
Andover Bancorp., Inc. (MA) 76,500 3,308,625
Astoria Financial Corp. (NY) 645,197 37,824,674
Bank Plus Corp.* (CA) 635,144 8,931,713
Bank United Corp. (Class A) (TX) 281,100 14,546,925
BankUnited Financial Corp.
(Class A) * (FL) 128,760 2,092,350
Bayonne Bancshares, Inc. (NJ) 40,000 660,000
Bay View Capital Corp. (CA) 747,400 24,383,925
Bedford Bancshares, Inc. (VA) 20,000 580,000
BostonFed Bancorp., Inc. (MA) 325,700 7,938,937
Calumet Bancorp., Inc.* (IL) 207,000 7,555,500
Camco Financial Corp. (OH) 21,259 632,455
Cameron Financial Corp. (MO) 115,000 2,429,375
Capital Savings Bancorp., Inc. (MO) 51,502 1,184,546
Catskill Financial Corp. (NY) 210,000 3,727,500
CCF Holding Co. (GA) 49,170 1,100,179
Charter Financial, Inc. (IL) 77,500 2,693,125
Charter One Financial, Inc. (OH) 1,648,885 111,608,904
Coastal Bancorp., Inc. (TX) 70,000 2,520,000
Commercial Federal Corp. (NE) 2,013,839 73,001,664
Commonwealth Bancorp., Inc. (PA) 241,873 5,714,250
CSB Financial Group, Inc.* (IL) 40,000 550,000
Dime Bancorp., Inc. (NY) 1,417,500 43,499,531
Dime Community Bancorp., Inc. (NY) 295,000 8,333,750
Eagle Bancshares, Inc. (GA) 167,500 4,103,750
East Texas Financial Services, Inc. (TX) 66,000 1,014,750
Elmira Savings Bank (NY) 36,697 1,087,149
Falmouth Bancorp., Inc. (MA) 55,000 1,175,625
Fed One Bancorp., Inc. (WV) 15,000 575,625
Fidelity Financial of Ohio, Inc. (OH) 55,000 1,010,625
Financial Bancorp., Inc. (NY) 45,000 1,192,500
First Bell Bancorp., Inc. (PA) 120,000 2,505,000
First Colorado Bancorp., Inc. (CO) 645,000 18,866,250
First Defiance Financial Corp. (OH) 270,700 4,060,500
FirstFederal Financial Services Corp. (OH) 30,157 1,245,861
First Federal Bancorp. * (MN) 84,000 1,648,500
First Federal Bancshares of Arkansas,
Inc. (AR) 67,000 1,901,125
First Federal Capital Corp. (WI) 159,917 5,677,054
First Financial Holdings, Inc. (SC) 172,000 4,128,000
First Independence Corp. (KS) 46,500 668,438
First Indiana Corp. (IN) 68,097 1,710,937
First Keystone Financial, Inc. (PA) 36,000 742,500
First Mutual Bancorp., Inc. (IL) 233,000 4,368,750
First Savings Bank of Washington
Bancorp., Inc. (WA) 110,000 2,921,875
First Source Bancorp Inc. (NJ) 10,000 106,250
First Southern Bancshares (AL) 35,000 612,500
Flagstar Bancorp., Inc. (MI) 295,000 8,278,437
Flushing Financial Corp. (NY) 90,000 2,396,250
FMS Financial Corp. (NJ) 24,000 1,176,000
Fort Bend Holding Corp. (TX) 78,000 2,125,500
Fort Thomas Financial Corp. (KY) 60,000 900,000
Frankfort First Bancorp., Inc. (KY) 72,500 1,232,500
GA Financial, Inc. (PA) 412,500 8,146,875
Golden State Bancorp., Inc. * (CA) 1,076,480 41,982,720
Golden West Financial Corp. (CA) 100,000 10,531,250
Granite State Bankshares, Inc. (NH) 126,600 3,639,750
GreenPoint Financial Corp. (NY) 3,349,000 132,913,437
Harbor Federal Bancorp., Inc. (MD) 115,000 2,875,000
HF Financial Corp. (SD) 150,000 5,259,375
Highland Bancorp., Inc. (CA) 90,500 3,710,500
HMN Financial, Inc. (MN) 110,000 2,942,500
Home Bancorp of Elgin, Inc. (IL) 60,000 1,050,000
Home Federal Bancorp. (IN) 345,700 10,543,850
IBS Financial Corp. (NJ) 18,250 349,031
Industrial Bancorp., Inc. (OH) 150,000 3,300,000
InterWest Bancorp., Inc. (WA) 131,500 5,843,531
ISB Financial Corp. (LA) 350,000 9,975,000
Kankakee Bancorp., Inc. (IL) 31,020 1,108,965
Kentucky First Bancorp., Inc. (KY) 60,000 903,750
Klamath First Bancorp., Inc. (OR) 415,000 8,870,625
Landmark Bancshares, Inc. (KS) 65,000 1,779,375
Little Falls Bancorp., Inc. (NJ) 120,000 2,550,000
Logansport Financial Corp. (IN) 117,500 2,100,312
Long Island Bancorp., Inc. (NY) 688,300 45,427,800
MAF Bancorp., Inc. (IL) 452,829 18,254,669
Marion Capital Holdings, Inc. (IN) 32,500 924,219
MASSBANK Corp. (MA) 76,399 4,049,147
Medford Bancorp., Inc. (MA) 102,500 4,484,375
MFB Corp. (IN) 90,000 2,430,000
Mississippi View Holding Co. (MN) 70,000 1,382,500
Monterey Bay Bancorp., Inc. (CA) 65,000 1,470,625
Mystic Financial, Inc. (MA) 60,000 1,020,000
New Hampshire Thrift Bancshares,
Inc. (NH) 40,000 825,000
North Central Bancshares, Inc. (IA) 115,000 2,774,375
Northeast Indiana Bancorp., Inc. (IN) 53,000 1,139,500
NS & L Bancorp. (MO) 35,000 630,000
Ocean Financial Corp. (NJ) 50,000 1,975,000
Pamrapo Bancorp., Inc. (NJ) 120,000 3,360,000
Park Bancorp., Inc. * (IL) 25,000 487,500
Patriot Bank Corp. (PA) 158,000 2,804,500
Peekskill Financial Corp. (NY) 127,000 2,206,625
PennFirst Bancorp., Inc. (PA) 156,299 3,282,279
Peoples Heritage Financial
Group, Inc. (ME) 1,008,044 48,638,123
Permanent Bancorp., Inc. (IN) 110,000 1,897,500
PFF Bancorp., Inc. * (CA) 280,000 5,670,000
Piedmont Bancorp., Inc. (NC) 20,000 210,000
Pittsburgh Home Financial Corp. (PA) 90,000 1,620,000
Prestige Bancorp., Inc. (PA) 82,000 2,060,250
Progress Financial Corp. (PA) 34,125 716,625
QCF Bancorp., Inc. * (MN) 70,000 2,152,500
Quaker City Bancorp., Inc. * (CA) 93,750 2,121,094
RedFed Bancorp., Inc. (CA) 20,000 403,750
Richmond County Financial Corp. (NY) 20,000 392,500
River Bank America * (NY) 145,000 806,563
River Valley Bancorp. (IN) 15,000 294,375
St. Paul Bancorp., Inc. (IL) 323,625 8,090,625
SFS Bancorp., Inc. (NY) 74,000 1,887,000
SIS Bancorp., Inc. (MA) 118,000 5,044,500
Sistersville Bancorp., Inc. (WV) 10,000 155,000
Skaneateles Bancorp., Inc. (NY) 69,150 1,287,919
Sobieski Bancorp., Inc. (IN) 40,000 775,000
South Street Financial Corp. (NC) 55,000 577,500
Southern Banc Co., Inc. (AL) 55,500 922,688
Southern Financial Bancorp., Inc. (VA) 64,098 1,762,695
Southern Missouri Bancorp., Inc. (MO) 51,300 1,077,300
Southwest Bancshares, Inc. (IL) 20,500 666,250
Sovereign Bancorp., Inc. (PA) 854,558 16,129,782
Staten Island Bancorp., Inc. (NY) 25,000 568,750
Statewide Financial Corp. (NJ) 205,000 5,470,938
Sterling Financial Corp. * (WA) 261,877 6,874,271
Tappan Zee Financial, Inc. (NY) 87,500 1,793,750
Teche Holding Co. (LA) 81,000 1,701,000
TeleBanc Financial Corp. * (VA) 100,000 2,025,000
Texarkana First Financial Corp. (AR) 124,800 3,517,800
TF Financial Corp. (PA) 50,000 1,375,000
TR Financial Corp. (NY) 60,000 2,156,250
Washington Bancorp. (IA) 25,000 465,625
Washington Federal, Inc. (WA) 1,139,968 32,061,600
Washington Mutual, Inc. (WA) 1,334,958 93,530,495
Webster Financial Corp. (CT) 206,800 7,005,350
WesterFed Financial Corp. (MT) 287,426 7,544,933
WSFS Financial Corp. (DE) 249,400 5,330,925
York Financial Corp. (PA) 68,750 1,692,969
-----------------
1,199,330,569
-----------------
Other - Financial (4.11%)
Apartment Investment & Management Co.
(Class A) 155,000 5,793,125
Associates First Capital Corp. (Class A) 232,000 17,342,000
Capital One Financial Corp. 613,100 58,895,919
CB Commercial Real Estate Services
Group, Inc. * 150,000 5,503,125
Dain Rauscher Corp. 47,200 2,840,850
Delta Financial Corp.* 62,200 1,096,275
Donaldson, Lufkin & Jenrette, Inc. 40,000 3,792,500
Edwards (A.G.), Inc. 186,750 8,403,750
Equity Office Properties Trust 284,260 8,083,644
Enhance Financial Services Group, Inc. 115,000 7,891,875
EVEREN Capital Corp. 40,000 2,127,500
Fannie Mae 587,425 35,172,072
Financial Security Assurance
Holdings Ltd. 85,000 5,089,375
Highwood Properties, Inc. 110,000 3,740,000
Innkeepers USA Trust 40,000 605,000
Interstate/Johnson Lane, Inc. 35,300 1,109,744
Investors Financial Services Corp. 70,000 3,771,250
ITLA Capital Corp.* 245,600 5,618,100
Legg Mason, Inc. 57,600 3,398,400
Lehman Brothers Holdings, Inc. 132,500 9,415,781
Mack-Cali Realty Corp. 132,000 4,958,250
MBIA, Inc. 17,531 1,308,251
McDonald & Co., Investments 141,400 4,065,250
Morgan Keegan, Inc. 95,700 2,195,119
Nationwide Financial Services, Inc.
(Class A) 43,000 1,865,125
Penncorp Financial Group, Inc. 121,000 3,146,000
Prentiss Properties Trust 249,500 6,331,062
Prime Retail, Inc. 390,431 5,539,240
Raymond James Financial, Inc. 172,575 5,619,473
Sirrom Capital Corp. 377,200 11,268,850
SLM Holding Corp. 879,500 37,543,656
Temple-Inland, Inc. 71,206 4,597,237
Travelers Group, Inc. 356,460 21,810,896
Travelers Property Casualty Corp.
(Class A) 243,000 10,206,000
Trenwick Group, Inc. 209,500 8,065,750
-----------------
318,210,444
-----------------
Banks - Foreign (0.84%)
Allied Irish Banks PLC, American
Depositary Receipt (ADR) (Ireland) 72,000 5,976,000
Popular, Inc. (Puerto Rico) 702,000 49,315,500
Royal Bank of Canada (Canada) 125,000 7,476,563
Toronto Dominion Bank (Canada) 55,000 2,512,813
-----------------
65,280,876
-----------------
WARRANTS (0.11%)
Golden State Bancorp, Inc.* (CA) 310,000 8,428,125
-----------------
OTHER (0.00%)
California Federal Bank, Inc. * (CA)
Contingent Litigation Participation Int. 10,833 230,201
-----------------
TOTAL COMMON STOCKS,
WARRANTS AND OTHER
(Cost $3,090,267,776) (88.75%) 6,874,779,098
---------- -----------------
PREFERRED STOCKS
California Federal Bank, Ser B,
10.625% (CA) 13,333 1,452,046
California Federal Bank, 11.50% (CA) 30,000 3,420,000
Chevy Chase Pref. Capital Corp. Ser A,
10.375% (MD) 18,000 985,500
Chevy Chase Savings, 13.00% (MD) 50,000 1,550,000
Community Bank, Ser B, 13.00% (CA) 40,000 1,110,000
CRIIMI MAE, Inc. Ser B, 10.875% (MD) 15,000 532,500
First Preferred Capital I, 9.25% (MO) 100,000 2,675,000
First Source Capital Trust I, 9.00% (IN) 40,000 1,080,000
First Source Capital Trust II,
7.70% ** (IN) 40,000 1,025,000
First Washington Realty Trust, Ser A,
9.75% (MD) 113,498 3,802,183
Golden State Bancorp, Inc. Ser A,
8.75% (CA) 88,000 8,294,000
IFC Capital Trust I, 9.25% (IN) 160,000 4,340,000
Riggs National Corp., Ser B,
10.75% (DC) 64,300 1,768,250
Southwest Bancorp., Inc. Ser A,
9.20% (OK) 20,000 515,000
Sterling Bancshares Capital Trust I,
9.28% (TX) 60,000 1,605,000
-----------------
TOTAL PREFERRED STOCKS
(Cost $25,352,181) (0.44%) 34,154,479
---------- -----------------
</TABLE>
<TABLE>
<CAPTION>
INTEREST PAR VALUE MARKET
ISSUER, DESCRIPTION RATE (000s OMITTED) VALUE
- -------------------- ---------- -------------- ----------
<S> <C> <C> <C>
BONDS
BFC Capital Trust I,
Capital Securities Ser A
01-15-27 9.650% $1,000 $1,097,500
BankUnited Capital Trust,
Pref Sec. Ser A 12-31-26 10.250 2,000 2,140,000
Hydro Quebec,
Deb 10-28-98 9.300 1,000 1,016,429
IBM Credit Corp.,
Note 08-17-98 5.820 1,000 999,880
Imperial Capital Trust I,
Capital Securities 12-31-26 9.980 1,500 1,721,250
Susquehanna Bancshares, Inc.,
Conv Sub Deb 02-01-05 9.000 2,000 2,236,220
-----------------
TOTAL BONDS
(Cost $8,486,199) (0.12%) 9,211,279
---------- -----------------
Joint Repurchase Agreement (6.71%)
Investment in a joint repurchase
agreement transaction with
Toronto Dominion Securities
USA, Inc. - Dated 04-30-98,
due 05-01-98 (Secured by
U.S. Treasury Bills, 4.86%
and 5.27%, due 06-18-98
and 12-10-98, U.S. Treasury
Bonds, 6.00% thru 13.25%,
due 05-15-14 thru 02-15-27
and U.S. Treasury Notes,
4.75% thru 9.25%, due
07-31-98 thru 05-15-06)
- - Note A 5.500 519,610 519,610,000
-----------------
Short-Term Notes (4.26%)
Associates Corp. of North America,
due 07-01-98 5.950 5,000 5,000,850
Associates Corp. of North America,
due 12-22-98 8.350 1,000 1,014,490
Beneficial Corp.,
due 11-17-98 8.090 8,000 8,086,640
Beneficial Corp.,
due 11-30-98 8.230 1,080 1,093,284
Chrysler Financial Corp.,
due 06-29-98 6.250 1,000 1,000,490
Chrysler Financial Corp.,
due 10-15-98 5.375 9,050 9,033,348
CIT Group Holdings, Inc.,
due 11-09-98 5.875 7,785 7,790,294
CIT Group Holdings, Inc.,
due 05-21-99 6.375 5,150 5,173,020
Cooper Industries, Inc.,
due 11-16-98 7.890 2,000 2,019,520
E.I. DuPont de Nemours and Co.,
due 06-25-98 8.500 3,300 3,320,516
Federal Home Loan Bank,
due 06-12-98 5.615 20,000 20,000,000
Federal Home Loan Bank,
due 06-30-98 5.650 40,000 39,993,600
Federal Home Loan Bank,
due 07-08-98 5.750 13,000 13,002,080
Federal Home Loan Bank,
due 07-10-98 6.190 4,000 4,006,240
Federal Home Loan Bank,
due 07-30-98 5.735 8,200 8,201,279
Federal Home Loan Bank,
due 09-18-98 5.800 530 530,912
Federal Home Loan Bank,
due 03-02-99 5.610 23,700 23,688,861
Federal Home Loan Bank,
due 05-18-99 + 5.830 20,000 19,984,710
Federal National Mortgage
Association, due 05-11-98 8.150 30,375 30,490,327
Federal National Mortgage
Association, due 05-28-98 5.400 30,808 30,807,137
Federal National Mortgage
Association, due 12-10-98 5.300 550 549,054
Ford Motor Credit Co.,
due 05-08-98 9.050 1,000 1,020,050
Ford Motor Credit Co.,
due 06-10-98 9.700 3,000 3,054,990
General Electric Capital Corp.,
due 01-26-99 8.100 3,000 3,045,990
General Motors Acceptance Corp.,
due 05-18-98 7.500 2,000 2,020,120
General Motors Acceptance Corp.,
due 06-04-98 6.500 1,055 1,058,165
General Motors Acceptance Corp.,
due 06-10-98 6.300 1,500 1,500,795
General Motors Acceptance Corp.,
due 07-08-98 6.250 1,723 1,724,206
Household International, Inc.,
due 10-15-98 5.250 5,766 5,753,545
Hydro Quebec,
due 01-25-99 7.670 7,900 7,989,112
International Lease Finance Corp.,
due 07-01-98 5.980 1,000 1,000,110
International Lease Finance Corp.,
due 11-02-98 7.740 1,000 1,008,090
International Lease Finance Corp.,
due 12-01-98 8.290 1,000 1,012,520
John Deere Capital Corp.,
due 02-01-99 6.000 4,000 4,002,160
John Deere Capital Corp.,
due 04-19-99 6.680 1,000 1,005,020
Norwest Corp.,
due 10-13-98 6.000 2,000 2,003,460
Philip Morris Cos., Inc.,
due 05-15-98 9.000 1,000 1,017,150
Sears Roebuck Acceptance Corp.,
due 11-01-98 8.450 2,500 2,530,125
Sears Roebuck Acceptance Corp.,
due 12-07-98 5.820 3,440 3,435,769
Societe Generale N.A., Inc.,
due 12-17-98 5.850 1,000 1,000,366
Societe Generale N.A., Inc.,
due 04-16-99 5.760 50,000 49,960,000
-----------------
TOTAL SHORT-TERM NOTES
(Cost $330,146,191) (4.26%) 329,928,395
---------- -----------------
Corporate Savings Account (0.02%)
Investors Bank & Trust Company
Daily Interest Savings Account
Current Rate 4.95% 1,529,728
-----------------
TOTAL SHORT-TERM INVESTMENTS (10.99%) 851,068,123
---------- -----------------
TOTAL INVESTMENTS (100.30%) 7,769,212,979
---------- -----------------
OTHER ASSETS AND LIABILITIES, NET (0.30%) (22,947,322)
---------- -----------------
TOTAL NET ASSETS (100.00%) $7,746,265,657
========== =================
NOTES TO SCHEDULE OF INVESTMENTS
*Non-income producing security.
**Variable rate as of April 30, 1998.
+This security, having a value of $19,984,710 or 0.26% of the Fund's net assets, has been
purchased as a forward commitment. The Fund has agreed on the trade date to take delivery of
and make payment on a delayed basis subsequent to the date of this schedule. The purchase price
and interest rate of the security are fixed at the trade date. The Fund does not earn any
interest on this security until its settlement date. The Fund has instructed its Custodian Bank
to segregate assets with the current value at least equal to the amount of its forward
commitment. Accordingly, $20,000,000 of the value of the Fund's investment in Toronto Dominion
Securities USA, Inc., 5.50% due 05-01-98, has been segregated to cover the forward commitment.
See Note A of the Notes to Financial Statements for valuation policy.
The percentage shown for each investment category is the total value of that category as a
percentage of the net assets of the Fund.
See notes to financial statements.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
NOTE A --
ACCOUNTING POLICIES
John Hancock Investment Trust II (the "Trust") is an open-end management
investment company, registered under the Investment Company Act of 1940.
The Trust consists of two series portfolios: John Hancock Regional Bank
Fund (the "Fund") and John Hancock Financial Industries Fund. The other
series of the Trust is reported in separate financial statements. The
investment objective of the Fund is to achieve long-term capital
appreciation by investing primarily in the stocks of regional banks and
financial lending institutions. The Board of Trustees voted to
temporarily suspend accepting new investors in the Fund at the close of
business on March 12, 1997.
The Trustees have authorized the issuance of multiple classes of shares
of the Fund, designated as Class A and Class B shares. The shares of
each class represent an interest in the same portfolio of investments of
the Fund and have equal rights to voting, redemptions, dividends and
liquidation, except that certain expenses, subject to the approval of
the Trustees, may be applied differently to each class of shares in
accordance with current regulations of the Securities and Exchange
Commission and the Internal Revenue Service. Shareholders of a class
which bears distribution and service expenses under terms of a
distribution plan have exclusive voting rights to that distribution
plan.
Significant policies of the Fund are as follows:
VALUATION OF INVESTMENTS Securities in the Fund's portfolio are valued
on the basis of market quotations, valuations provided by independent
pricing services or at fair value as determined in good faith in
accordance with procedures approved by the Trustees. Short-term debt
instruments maturing within 60 days are valued at amortized cost which
approximates market value. All portfolio transactions initially
expressed in terms of foreign currencies have been translated into U.S.
dollars as described in "Foreign Currency Translation" below.
JOINT REPURCHASE AGREEMENT Pursuant to an exemptive order issued by the
Securities and Exchange Commission, the Fund, along with other
registered investment companies having a management contract with John
Hancock Advisers, Inc. (the "Adviser"), a wholly owned subsidiary of The
Berkeley Financial Group, Inc., may participate in a joint repurchase
agreement transaction. Aggregate cash balances are invested in one or
more repurchase agreements, whose underlying securities are obligations
of the U.S. government and/or its agencies. The Fund's custodian bank
receives delivery of the underlying securities for the joint account on
the Fund's behalf. The Adviser is responsible for ensuring that the
agreement is fully collateralized at all times.
INVESTMENT TRANSACTIONS Investment transactions are recorded as of the
date of purchase, sale or maturity. Net realized gains and losses on
sales of investments are determined on the identified cost basis.
FEDERAL INCOME TAXES The Fund's policy is to comply with the
requirements of the Internal Revenue Code that are applicable to
regulated investment companies and to distribute all its taxable income,
including any net realized gain on investments, to its shareholders.
Therefore, no federal income tax provision is required.
DIVIDENDS, INTEREST AND DISTRIBUTIONS Dividend income on investment
securities is recorded on the ex-dividend date or, in the case of some
foreign securities, on the date thereafter when the Fund is made aware
of the dividend. Interest income on investment securities is recorded on
the accrual basis. Foreign income may be subject to foreign withholding
taxes which are accrued as applicable.
The Fund records all distributions to shareholders from net investment
income and realized gains on the ex-dividend date. Such distributions
are determined in conformity with income tax regulations, which may
differ from generally accepted accounting principles. Dividends paid by
the Fund with respect to each class of shares will be calculated in the
same manner, at the same time and will be in the same amount, except for
the effect of expenses that may be applied differently to each class.
USE OF ESTIMATES The preparation of these financial statements in
accordance with generally accepted accounting principles incorporates
estimates made by management in determining the reported amounts of
assets, liabilities, revenues and expenses of the Fund. Actual results
could differ from these estimates.
EXPENSES The majority of the expenses of the Trust are directly
identifiable to an individual fund. Expenses which are not readily
identifiable to a specific fund are allocated in such a manner as deemed
equitable, taking into consideration, among other things, the nature and
type of expense and the relative sizes of the funds.
CLASS ALLOCATIONS Income, common expenses and realized and unrealized
gains (losses) are determined at the Fund level and allocated daily to
each class of shares based on the appropriate net assets of the
respective classes. Distribution and service fees, if any, are
calculated daily at the class level based on the appropriate net assets
of each class and the specific expense rate(s) applicable to each class.
DISCOUNT ON SECURITIES The Fund accretes discount from par value on
securities purchased from either the date of issue or the date of
purchase over the life of the security, as required by the Internal
Revenue Code.
BANK BORROWINGS The Fund is permitted to have bank borrowings for
temporary or emergency purposes, including the meeting of redemption
requests that otherwise might require the untimely disposition of
securities. These agreements enable the Fund to participate with other
funds managed by the Adviser in unsecured lines of credit with banks
which permit borrowings up to $800 million, collectively. Interest is
charged to each fund, based on its borrowings, at a rate equal to 0.50%
over the Fed Funds Rate. In addition, a commitment fee, at rates ranging
from 0.070% to 0.075% per annum based on the average daily unused
portion of the line of credit, is allocated among the participating
funds. The Fund had no borrowing activity for the period ended April 30,
1998.
FOREIGN CURRENCY TRANSLATION All assets or liabilities initially
expressed in terms of foreign currencies are translated into U.S.
dollars based on London currency exchange quotations as of 5:00 P.M.,
London time, on the date of any determination of the net asset value of
the Fund. Transactions affecting statement of operations accounts and
net realized gain/(loss) on investments are translated at the rates
prevailing at the dates of the transactions.
The Fund does not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from the
fluctuations arising from changes in market prices of securities held.
Such fluctuations are included with the net realized and unrealized gain
or loss from investments.
Reported net realized foreign exchange gains or losses arise from sales
of foreign currency, currency gains or losses realized between the trade
and settlement dates on securities transactions and the difference
between the amounts of dividends, interest, and foreign withholding
taxes recorded on the Fund's books and the U.S. dollar equivalent of the
amounts actually received or paid. Net unrealized foreign exchange gains
and losses arise from changes in the value of assets and liabilities
other than investments in securities at fiscal year end, resulting from
changes in the exchange rate.
NOTE B --
MANAGEMENT FEE AND TRANSACTIONS
WITH AFFILIATES AND OTHERS
Under the present investment management contract, the Fund pays a
monthly management fee to the Adviser, for a continuous investment
program equivalent, on an annual basis, to the sum of (a) 0.80% of the
first $500,000,000 of the Fund's average daily net asset value and
(b) 0.75% of the Fund's average daily net asset value in excess of
$500,000,000.
John Hancock Funds, Inc. ("JH Funds"), a wholly owned subsidiary of the
Adviser, acts as a Distributor for shares of the Fund. For the period
ended April 30, 1998, JH Funds received net sales of $3,042,439 with
regard to sales of Class A shares. Out of this amount, $480,578 was
retained and used for printing prospectuses, advertising, sales
literature and other purposes, $2,287,222 was paid as sales commissions
to unrelated broker-dealers, and $274,639 was paid as sales commissions
to sales personnel of John Hancock Distributors, Inc. ("Distributors"),
a related broker-dealer. The Adviser's indirect parent, John Hancock
Mutual Life Insurance Company ("JHMLICo"), is the indirect sole
shareholder of Distributors.
Class B shares which are redeemed within six years of purchase are
subject to a contingent deferred sales charge ("CDSC") at declining
rates beginning at 5.00% of the lesser of the current market value at
the time of redemption or the original purchase cost of the shares being
redeemed. Proceeds from the CDSC are paid to JH Funds and are used in
whole or in part to defray its expenses related to providing
distribution related services to the Fund in connection with the sale of
Class B shares. For the period ended April 30, 1998, the contingent
deferred sales charges received by JH Funds amounted to $4,574,473.
In addition, to reimburse JH Funds for the services it provides as
distributors of shares of the Fund, the Fund has adopted Distribution
Plans with respect to Class A and Class B pursuant to Rule 12b-1 under
the Investment Company Act of 1940. Accordingly, the Fund will make
payments to JH Funds for distribution and service expenses, at an annual
rate not to exceed 0.30% of Class A average daily net assets and 1.00%
of Class B average daily net assets to reimburse JH Funds for its
distribution and service costs. Up to a maximum of 0.25% of such
payments may be service fees as defined by the amended Rules of Fair
Practice of the National Association of Securities Dealers. Under the
amended Rules of Fair Practice, curtailment of a portion of the Fund's
12b-1 payments could occur under certain circumstances.
The Fund has a transfer agent agreement with John Hancock Signature
Services, Inc. ("Signature Services"), an indirect subsidiary of
JHMLICo. The Fund pays transfer agent fees based on the number of
shareholder accounts and certain out-of-pocket expenses.
The Fund has an agreement with the Adviser to perform necessary tax and
financial management services for the Fund. The compensation for the
period was at an annual rate of less than 0.02% of the average net
assets of the Fund.
Mr. Edward J. Boudreau, Jr. , Ms. Anne C. Hodsdon and Mr. Richard S.
Scipione are trustees and officers of the Adviser, and its affiliates,
as well as Trustees of the Fund. The compensation of unaffiliated
Trustees is borne by the Fund. The unaffiliated Trustees may elect to
defer for tax purposes their receipt of this compensation under the John
Hancock Group of Funds Deferred Compensation Plan. The Fund makes
investments into other John Hancock funds, as applicable, to cover its
liability for the deferred compensation. Investments to cover the Fund's
deferred compensation liability are recorded on the Fund's books as an
other asset. The deferred compensation liability and the related other
asset are always equal and are marked to market on a periodic basis to
reflect any income earned by the investment as well as any unrealized
gains or losses. At April 30, 1998, the Fund's investments to cover the
defined compensation liability had unrealized appreciation of $6,122.
NOTE C --
INVESTMENT TRANSACTIONS
Purchases and proceeds from sales of securities, other then obligations
of the U.S. government and its agencies and short-term securities,
during the period ended April 30, 1998, aggregated $367,621,446 and
$538,698,024, respectively. There were no purchases or sales of
obligations of the U.S. government and its agencies during the period
ended April 30, 1998.
The cost of investments owned at April 30, 1998 (including the short-
term investments) for federal income tax purposes was $3,974,246,179.
Gross unrealized appreciation and depreciation of investments aggregated
$3,796,529,158 and $3,092,086, respectively, resulting in net unrealized
appreciation of $3,793,437,072.
NOTE D --
TRANSACTIONS IN SECURITIES OF AFFILIATED ISSUERS
Affiliated issuers, as defined by the Investment Company Act of 1940,
are those in which the Fund's holdings of an issuer represent 5% or more
of the outstanding voting securities of the issuer. A summary of the
Fund's transactions in the securities of these issuers during the period
ended April 30, 1998 is set forth below.
<TABLE>
<CAPTION>
Acquisitions Dispositions
Beginning ------------------------------------- Ending
Share Share Share Share Realized Dividend Ending
Affiliate Amount Amount Cost Amount Cost Amount Gain (Loss) Income Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BancFirst Corp. (OK) 345,600 -- $-- -- $-- 345,600 $-- $82,994 $15,552,000
Banknorth Group, Inc. (VT) 416,500 -- -- 16,500 470,750 810,000(1) 353,160 254,065 29,362,500
Bay View Capital Corp. (CA) 757,400 -- -- 10,000 242,650 747,400(13) 74,214 150,480 --
BostonFed Bancorp., Inc. (MA) 325,700 -- -- -- -- 325,700 -- 78,168 7,938,938
CCF Holding Co. (GA) 44,700 -- -- -- -- 49,170(2) -- 21,277 1,100,179
California Community
Bancshares (CA) 60,020 -- -- -- -- --(3) -- -- --
Calumet Bancorp, Inc. (IL) 138,000 -- -- -- -- 207,000(4) -- -- 7,555,500
Commercial Bankshares, Inc. (FL) 171,950 -- -- -- -- 180,547(5) -- 34,304 4,389,549
Commercial Federal Corp. (NE) 1,297,200 55,000 1,877,245 -- -- 2,013,839(6) -- 217,780 73,001,664
Community Bank, Ser B,
13.00% (CA) 40,000 -- -- -- -- 40,000 -- 65,000 1,110,000
Elmira Savings Bank (NY) 34,950 -- -- -- -- 36,697(5) -- 11,464 1,087,149
First Federal Bancorp. (MN) 56,000 -- -- -- -- 84,000(7) -- -- 1,648,500
First Independence Corp. (KS) 71,000 -- -- 24,500 145,469 46,500(13) 215,894 7,925 --
First Mutual Bancorp., Inc. (IL) 238,000 -- -- 5,000 78,750 233,000 48,746 37,280 4,368,750
First Source Capital Trust II,
7.24% (IN) 40,000 -- -- -- -- 40,000 -- 37,348 1,025,000
FNB Rochester Corp. (NY) 225,337 -- -- -- -- 225,337 -- 40,561 4,563,074
GA Financial, Inc. (PA) 420,000 -- -- 7,500 86,275 412,500 53,820 99,900 8,146,875
Harbor Federal
Bancorp., Inc. (MD) 115,000 -- -- -- -- 115,000 -- 28,750 2,875,000
HF Financial Corp. (SD) 150,000 -- -- -- -- 150,000 -- 31,500 5,259,375
Home Federal Bancorp. (IN) 223,800 20,000 625,000 10,000 203,333 345,700(8) 106,656 62,944 10,543,850
IFC Capital Trust I, 9.25% (IN) 160,000 -- -- -- -- 160,000 -- 184,996 4,340,000
Independent Bank Corp. (MA) 974,000 -- -- -- -- 974,000 -- 185,060 18,749,500
Interchange Financial
Services Corp. (NJ) 210,750 5,000 117,850 -- -- 323,625(9) -- 61,489 6,755,672
ISB Financial Corp. (LA) 350,000 -- -- -- -- 350,000 -- 92,750 9,975,000
Landmark Bancshares, Inc. (KS) 100,000 -- -- 35,000 372,500 65,000(13) -- -- --
Logansport Financial Corp. (IN) 117,500 -- -- -- -- 117,500 -- 23,500 2,100,313
MFB Corp. (IN) 90,000 -- -- -- -- 90,000 -- 7,650 2,430,000
Mississippi View Holding Co. (MN) 70,000 -- -- -- -- 70,000 -- 5,600 1,382,500
Northeast Indiana
Bancorp., Inc. (IN) 94,500 -- -- 41,500 562,438 53,000(13) -- -- --
NS & L Bancorp. (MO) 35,000 -- -- -- -- 35,000 -- 13,125 630,000
Prestige Bancorp, Inc. (PA) 82,000 -- -- -- -- 82,000 -- 6,560 2,060,250
Primary Bank (NH) 110,250 -- -- -- -- --(10,13) -- -- -
QCF Bancorp, Inc. (MN) 70,000 -- -- -- -- 70,000 -- -- 2,152,500
SFS Bancorp., Inc. (NY) 74,000 -- -- -- -- 74,000 -- 11,840 1,887,000
Simmons First
National Corp. (Class A) (AR) 303,500 -- -- -- -- 303,500 -- 91,050 14,416,250
Sobieski Bancorp., Inc. (IN) 40,000 -- -- -- -- 40,000 -- 6,400 775,000
State Financial Services Corp.
(Class A) (WI) 187,220 -- -- 5,000 105,588 218,664(11) 63,157 48,706 5,548,599
Sterling Bancshares
Capital Trust I, 9.28% (TX) 60,000 -- -- -- -- 60,000 -- 69,600 1,605,000
Tappan Zee Financial, Inc. (NY) 87,500 -- -- -- -- 87,500 -- 12,250 1,793,750
Texarkana First
Financial Corp. (AR) 124,800 -- -- -- -- 124,800 -- 34,944 3,517,800
Vectra Banking Corporation (CO) 292,150 -- -- -- -- --(12,13) -- -- --
Vermont Financial
Services Corp. (VT) 779,672 -- -- -- -- 779,672 -- 233,902 22,805,406
WesterFed Financial Corp. (MT) 287,426 -- -- -- -- 287,426 -- 67,545 7,544,933
---------- ---------- -------- ---------- -----------
$2,620,095 $2,267,753 $915,647 $2,418,707 $289,997,376
========== ========== ======== ========== ===========
(1) Reflects two-for-one stock split as of April 7, 1998.
(2) Shares increased by 10.00% stock dividend.
(3) Acquired by SierraWest Bancorp effective April 16, 1998.
(4) Reflects three-for-two stock split as of November 18, 1997.
(5) Shares increased by 5.00% stock dividend.
(6) Reflects three-for-two stock split as of December 16, 1997
and additional shares from merger of Mid Continent Bancshares, Inc.
effective March 2, 1998.
(7) Reflects three-for-two stock split as of December 19, 1997.
(8) Reflects three-for-two stock split as of November 25, 1997.
(9) Reflects three-for-two stock split as of April 20, 1998.
(10) Acquired by Granite State Bankshares effective November 3, 1997.
(11) Reflects six-for-five stock split as of February 11, 1998.
(12) Acquired by Zions Bancorp. effective January 7, 1998.
(13) As of April 30, 1998, no longer an affiliated issuer.
</TABLE>
NOTES
John Hancock Funds - Regional Bank Fund
[THIS PAGE INTENTIONALLY LEFT BLANK]
NOTES
John Hancock Funds - Regional Bank Fund
[THIS PAGE INTENTIONALLY LEFT BLANK]
NOTES
John Hancock Funds - Regional Bank Fund
[THIS PAGE INTENTIONALLY LEFT BLANK]
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010SA 4/98
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