DREYFUS INSURED MUNICIPAL BOND FUND, INC.
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to provide you with this report on the Dreyfus Insured
Municipal Bond Fund for its fiscal year ended April 30, 1997. Your Fund
achieved a total return, including bond price changes and interest income, of
6.24%.* This is equivalent to a tax-free distribution rate per share of
5.04%.** This compares with a 6.63% total return for the Lehman Brothers
Municipal Bond Index during the same period.***
ECONOMIC REVIEW
The U.S. economy just kept rolling ahead over the reporting period.
Inflation remained subdued. The unemployment rate fell to its lowest level in
24 years, and a surge in tax revenues meant good news for the
Administration's budget reduction program. Overall, the economic news has
been stellar.
The economy grew at a robust 5.6% annual rate during the first quarter of
1997, the best quarter in nine years. Aided by falling energy prices, and
with no sign of shortages of raw materials, inflation remained in check. The
Commerce Department's Implicit Price Deflator, a broad measure of inflation,
rose for the same period at a 2.2% pace. On the consumer level, the Consumer
Price Index (CPI) increase remained below 3%. Excluding volatile food and
energy prices, the CPI is actually trending downward so far this year,
running at an annual rate of 2.5%. Inflation has been further restrained by
the strong dollar which has moderated the price of imports and eased
potential strains on domestic production capacity.
The strong economy has put increasing numbers of people to work. This
tightening of the labor market has been a key factor in the implementation of
monetary policy by the Federal Reserve Board's Open Market Committee (FOMC).
The unemployment rate has been less than 5.5% since June 1996, the lowest
sustained rate since the late 1980s. The rate fell to 4.9% in April of this
year, its lowest level in 24 years. So far, neither strong economic growth
nor wage increases have resulted in any price pressure at the consumer level.
Renewed confidence, spurred by increasing job security and low inflation,
has resulted in a surge in consumer spending. In the first quarter of the
year, spending rose 6.4%, almost double the rate of the previous year's
fourth quarter. The combined six-month performance was the largest increase
in consumer spending over the past ten years. Retail sales have spurted in
the early part of this year as well; first quarter results were sharply
higher than in the last quarter of 1996. Not surprisingly, industrial
production has been building momentum over the reporting period. The latest
report on capacity utilization indicated the highest level in two years. So
far, while the potential exists for production bottlenecks, prices for raw
materials and worker wage demands have remained modest.
Continued economic growth and the resulting rise in tax revenues have
slashed further the Federal budget deficit. Recent estimates by economists
suggest that the deficit is now about $75 billion, its lowest level in
twenty-three years. Such good news on the deficit could make it easier to
negotiate the Administration's bipartisan plan to balance the budget by 2002.
While we seem to be enjoying the best of all possible economic worlds,
the potential for future inflation is what concerns the Fed. Such concern
resulted in the March decision by the FOMC, the policy-making arm of the
Federal Reserve, to raise the Federal Funds rate one-quarter of a percentage
point to 5.50%. (The Federal Funds rate is the rate of interest banks charge
each other for overnight loans.) The traditional assumption that strong
economic growth and low unemployment will eventually result in rising
inflation still drives the Fed's monetary policy initiatives. Although there
was little reported evidence of incipient inflation, the Fed executed a
preemptive move of moderate monetary restraint in March, perhaps to avoid
being forced to act more harshly later. There is little reason to suspect
that the Fed will soon
change this policy, although with the economy seeming to enjoy strong growth
without surging inflation, the FOMC may be reluctant to raise rates again in
the immediate future.
MARKET ENVIRONMENT
For much of the past year the trading environment for fixed income
securities has been dominated by a measure of volatility one would expect to
find during periods of rapidly shifting perceptions as to the course of
economic growth and the ensuing level of inflationary pressures. Early on, as
attention focused on the tightening of the labor markets as the economy
continued to expand at a quickening pace, investors became convinced of an
imminent tightening of monetary policy by the FOMC. As such, interest rates
were driven to their highest levels in more than a year. Since subsequent
data showed slower economic growth and the absence of any clear signs of
inflationary pressures market perceptions quickly reversed, sending prices up
and interest rates back down to more comfortable levels. These rapid shifts
in investors' perceptions of the economy and the appropriate levels of long
term interest rates occurred frequently throughout the year, establishing a
broad trading range in prices. In November, as investors became convinced of
a significant slowing in the rate of growth of the economy, this range in
prices was redefined to higher levels. With the turn of the calendar into
1997, however, these higher levels proved unsustainable as evidence of the
resilience of the economy's current expansion continued to mount. The
resulting rise in long term interest rates foretold the move by the FOMC to
assume a more restrictive posture at its March meeting.
Throughout 1996 municipal securities were hard pressed to escape the
volatility witnessed by the fixed income markets in general. Ultimately, tax
exempt bonds were supported by a formidable technical dynamic of strong
demand and limited supply which enabled municipals to significantly
outperform their taxable counterparts. A comparison of the movement of
30-year U.S. Treasury yields and Municipal yields as represented by The
Revenue Bond Index clearly illustrates this point. While interest rates fluctu
ated significantly over the course of the year ended April 30, 1997, 30-year
Treasury yields closed the period 5 basis points higher (.05%) at 6.96%. Over
the same time the Revenue Index declined by 19 basis points (.19%) to close
the period at 6.13%.
PORTFOLIO OVERVIEW
In managing your Fund's assets during a period of such volatility, a
decidedly conservative posture was maintained. During those periods when
perceptions became more tentative, emphasis was placed on those securities
bearing more muted characteristics of principal volatility and higher levels
of tax-free income. At these times higher levels of cash reserves were
established in order to further buffer the portfolio from the consequences of
a rising interest rate environment. As perceptions became more constructive
and prices advanced, trading activity sought to extend portfolio duration in
order to capitalize on potential price appreciation inherent in such an
environment. Throughout this process further attention was directed toward
enhancing the liquidity and performance characteristics of the portfolio by
extending the optional redemption characteristics and improving the
underlying creditworthiness of its holdings.
As represented by the graph that follows, this Fund underperformed the
Lehman Brothers Municipal Bond Index during the reporting period. There are
essentially three reasons for this: First, until recently, management of the
portfolio tended to focus more intently on the generation of current tax
exempt income and less on capital appreciation. As such, during periods of
rapidly declining interest rates, assets in the portfolio did not experience
as large a gain as lower yielding, more aggressively structured securities in
the market. During the past year, management of the Fund has been shifted to
more adequately reflect a balanced approach. Second, unlike the insured
securities held in your Fund the Lehman
Brothers Municipal Bond Index represents a universe of uninsured securities
whose rerturns are significantly higher in order to offset the added credit
risk incurred by holders. Finally, the Lehman Municipal Bond Index does not
reflect the deduction of the fees and expenses associated with managing a
mutual fund.
We appreciate your investment in the Dreyfus Insured Municipal Bond Fund,
and we want to assure you that we are, at all times, working in the Fund's
best interest.
Very truly yours,
[Richard J. Moynihan signature logo]
Richard J. Moynihan
Director, Municipal Portfolio Management
The Dreyfus Corporation
May 16, 1997
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains
paid.
**Distribution rate per share is based upon dividends per share paid from net
investment income during the period, divided by the net asset value per share
at the end of the period, adjusted for any capital gain distributions.
*** SOURCE: LEHMAN BROTHERS _ Unlike the Fund, the Lehman Brothers
Municipal Bond Index is a widely accepted unmanaged total return performance
benchmark for the long-term, investment-grade tax exempt bond market.
However, the bonds in the Index generally are not insured.
The Revenue Bond Index, which is compiled by The Bond Buyer, consists of
25 various revenue bonds that mature in 30 years: there is no rating
equivalent for the Index.
DREYFUS INSURED MUNICIPAL BOND FUND, INC. APRIL 30, 1997
[Exhibit A]
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS INSURED
MUNICIPAL BOND FUND, INC. AND
THE LEHMAN BROTHERS MUNICIPAL BOND INDEX
$21,905
Lehman Brothers
Municipal Bond Index*
Dollars
$18,989
Dreyfus Insured
Municipal Bond Fund
[Exhibit A]
*Source: Lehman Brothers
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Average Annual Total Returns
One Year Ended Five Years Ended Ten Years Ended
April 30, 1997 April 30, 1997 April 30, 1997
______________ _________________ _________________
6.24% 5.46% 6.62%
</TABLE>
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in Dreyfus Insured
Municipal Bond Fund, Inc. on 4/30/87 to a $10,000 investment made in the
Lehman Brothers Municipal Bond Index on that date. All dividends and capital
gain distributions are reinvested.
The Fund invests primarily in municipal securities which are insured as to
the timely payment of principal and interest by recognized insurers of
municipal securities. The Fund's performance shown in the line graph takes
into account fees and expenses. Unlike the Fund, the Lehman Brothers
Municipal Bond Index is an unmanaged total return performance benchmark for
the long-term, investment-grade tax exempt bond market, calculated by using
municipal bonds selected to be representative of the municipal market
overall; however, the bonds in the Index generally are not insured. The Index
does not take into account charges, fees and other expenses which can
contribute to the Index potentially outperforming the Fund. Further
information relating to Fund performance, including expense reimbursements,
if applicable, is contained in the Financial Highlights section of the
Prospectus and elsewhere in this report. Neither Fund shares nor the market
value of its portfolio securities are insured.
<TABLE>
<CAPTION>
DREYFUS INSURED MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS APRIL 30, 1997
Principal
Long-Term Municipal Investments_95.6% Amount Value
_____________ _____________
<S> <C> <C>
Alabama_1.1%
Florence, GO 5.75%, 9/1/2015 (Insured; MBIA)................................ $ 2,000,000 $ 2,004,840
California_5.2%
San Francisco Building Authority, LR (San Francisco Civic Center Complex)
5.25%, 12/1/2021 (Insured; AMBAC)....................................... 1,400,000 1,312,766
San Francisco City and County Airports Commission, International Airport Revenue
6.10%, 5/1/2025 (Insured; FGIC)......................................... 8,240,000 8,388,567
Colorado_2.2%
Goldsmith Metropolitan District, Refunding 6.125%, 12/1/2012 (Insured; MBIA) 4,000,000 4,127,320
Connecticut_.5%
Connecticut Health and Educational Facilities Authority, Revenue (Nursing-Noble Home)
6%, 11/1/2022 (Insured; AMBAC).......................................... 1,000,000 1,009,600
Delaware_3.3%
Delaware Economic Development Authority, Revenue:
Gas Facilities (Delmarva Power & Light) 7.30%, 7/1/2021 (Insured; FGIC). 1,000,000 1,089,330
Water (United Water Delaware Inc., Project) 6.20%, 6/1/2025 (Insured; AMBAC) 5,000,000 5,118,200
District of Columbia_2.2%
District of Columbia, Revenue, Refunding (Howard University)
5.75%, 10/1/2013 (Insured; MBIA)........................................ 4,130,000 4,112,406
Florida_2.4%
Florida Housing Finance Agency, SFMR
6.65%, 7/1/2026 (Insured; MBIA)......................................... 920,000 950,470
Hillsboro County, Port District Special Revenue, Refunding (Tampa Port Authority)
6%, 6/1/2020 (Insured; FSA)............................................. 2,000,000 2,005,120
Lee County, Solid Waste System Revenue 7%, 10/1/2011 (Insured; MBIA)........ 1,420,000 1,544,378
Georgia_1.8%
Albany, Sewer System Revenue, Refunding 5.50%, 7/1/2016 (Insured; MBIA)..... 2,500,000 2,477,875
Atlanta and Fulton County Recreation Authority, Revenue, Refunding
(Downtown Arena Public Improvement Project) 5.375%, 12/1/2026 (Insured; MBIA) 1,000,000 950,320
Illinois_8.5%
Carbondale, HR, Refunding (Southern Illinois Hospital Services)
6.875%, 3/1/2015 (Insured; MBIA)........................................ 1,000,000 1,029,550
Chicago O'Hare International Airport, Special Facility Revenue (International Terminal)
6.50%, 1/1/2018 (Insured; FGIC)......................................... 1,750,000 1,794,257
Illinois, GO 5.75%, 5/1/2017 (Insured; MBIA)................................ 6,260,000 6,226,884
Metropolitan Pier and Exposition Authority, Dedicated State Tax Revenue
(McCormick Place Expansion Project) 6.50%, 6/15/2027 (Insured; FGIC).... 6,375,000 6,776,944
Louisiana_1.6%
Louisiana Public Facilities Authority, HR (Our Lady of the Lake Regional
Medical Center) 5.90%, 12/3/2021 (Insured; FSA)......................... 3,000,000 2,913,300
DREYFUS INSURED MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) APRIL 30, 1997
Principal
Long-Term Municipal Investments (continued) Amount Value
_______ _______
Maryland_1.5%
Baltimore, Revenue, Refunding (Water Project) 5.80%, 7/1/2015 (Insured; FGIC) $ 2,800,000 $ 2,837,184
Massachusetts_2.0%
Massachusetts Education Loan Authority, Education Loan Revenue:
7.60%, 1/1/2003 (Insured; MBIA)......................................... 740,000 790,720
7.65%, 1/1/2004 (Insured; MBIA)......................................... 850,000 906,848
Massachusetts Housing Finance Agency, Housing Revenue (Rental-Mortgage)
6.50%, 7/1/2025 (Insured; AMBAC)........................................ 1,000,000 1,024,540
Massachusetts Port Authority, Special Facilities Revenue (US Air Project)
5.75%, 9/1/2016 (Insured; MBIA)......................................... 1,000,000 987,850
Michigan_2.8%
Kalamazoo Hospital Finance Authority, Hospital Facilities Revenue (Borgess Medical Center)
5.625%, 6/1/2014 (Insured; AMBAC)....................................... 3,700,000 3,663,777
Michigan Housing Development Authority, LOR (Greenwood Villa Project)
6.50%, 9/15/2007 (Insured; FSA)......................................... 1,500,000 1,595,325
Missouri_4.8%
Kansas City:
Airport Revenue, Refunding 5.50%, 9/1/2014 (Insured; MBIA).............. 3,500,000 3,447,850
Municipal Assisstance Corp., Revenue, Refunding 5.125%, 4/15/2015 (Insured; MBIA) 1,000,000 946,180
Missouri Health and Educational Facilities Authority, Educational Facilities Revenue
(Saint Louis University) 5.20%, 10/1/2026 (Insured; AMBAC).............. 5,000,000 4,655,200
Montana_1.3%
Forsyth, PCR, Refunding (Puget Sound, Power & Light Co.)
7.25%, 8/1/2021 (Insured; AMBAC)........................................ 2,250,000 2,448,630
Nevada_1.9%
Reno, HR (Saint Mary's Hospital) 7.75%, 7/1/2015 (Insured; BIGI)
(Prerefunded 11/1/2000) (a)............................................. 1,385,000 1,500,606
Washoe County, Gas Facilities Revenue (Sierra Pacific Power Co. Project)
6.70%, 11/1/2032 (Insured; MBIA)........................................ 2,000,000 2,132,960
New Jersey_8.0%
Mercer County Improvement Authority, Solid Waste Revenue, Refunding
6.70%, 4/1/2013 (Insured; FGIC)......................................... 5,000,000 5,006,100
New Jersey Economic Development Authority, PCR (Public Service Electric & Gas Co.)
6.40%, 5/1/2032 (Insured; MBIA)......................................... 7,600,000 7,913,576
New Jersey Health Care Facilities Financing Authority, Revenue, Refunding
(Jersey Shore Medical Center) 6.25%, 7/1/2021 (Insured; AMBAC).......... 100,000 104,275
New Jersey Housing & Mortgage Finance Agency, Revenue:
Home Buyer 6.20%, 10/1/2025 (Insured; MBIA)............................. 2,000,000 2,010,740
Home Mortgage 9.125%, 4/1/2015 (Insured; MBIA).......................... 5,000 5,005
New York_10.9%
Albany Airport Authority, Airport Revenue 5.375%, 12/15/2017 (Insured; FSA). 1,250,000 1,171,500
DREYFUS INSURED MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) APRIL 30, 1997
Principal
Long-Term Municipal Investments (continued) Amount Value
_____________ ____________
New York (continued)
Metropolitan Transportation Authority, Dedicated Tax Fund
5.25%, 4/1/2026 (Insured; MBIA)......................................... $ 2,500,000 $ 2,336,325
New York State Dormitory Authority, Revenue (Beth Israel Medical Center)
6%, 11/1/2015 (Insured; MBIA)........................................... 8,395,000 8,598,663
New York State Energy & Research Development Authority, Facilities Revenue
(Con Edison Co.-New York, Inc.) 6.375%, 12/1/2027 (Insured; MBIA)....... 3,000,000 3,085,710
New York State Medical Care Facilities Finance Agency, Revenue (Long-Term Healthcare)
6.50%, 11/1/2015 (Insured; FSA)......................................... 5,000,000 5,293,000
North Carolina_1.0%
Asheville, Water System Revenue 5.625%, 8/1/2016 (Insured; FGIC)............ 1,800,000 1,789,362
North Dakota_2.0%
Mercer County, PCR, Refunding (Montana-Dakota Utilities Co. Project)
6.65%, 6/1/2022 (Insured; FGIC)......................................... 3,500,000 3,762,500
Oregon_2.1%
Oregon, Department of Administrative Services, COP 5.60%, 11/1/2016 (Insured; MBIA) 2,000,000 1,981,040
Washington County Unified Sewer Agency, Sewer Revenue
5.50%, 10/1/2016 (Insured; FGIC)........................................ 2,000,000 1,970,580
Pennsylvania_1.7%
Beaver County Industrial Development Authority, PCR, Refunding
(Ohio Edison Co./Mansfield) 7%, 6/1/2021 (Insured; FGIC)................ 3,000,000 3,244,380
Rhode Island_2.4%
Rhode Island Housing & Mortgage Finance Corp., SFMR
9.30%, 7/1/2004 (Insured; FGIC)......................................... 20,000 20,002
Rhode Island Port Authority & Economic Development Corp.,
Airport Revenue 6.625%, 7/1/2024 (Insured; FSA)......................... 4,250,000 4,479,203
South Carolina_.6%
Florence County, COP, Refunding (Law Enforcement Center Project)
6%, 3/1/2008 (Insured; AMBAC)........................................... 1,000,000 1,053,830
Texas_5.4%
Brazos River Authority, PCR, Refunding (Texas Utilities Electric Co. Project)
6.625%, 6/1/2022 (Insured; FGIC)........................................ 5,500,000 5,797,770
Brownsville Housing Finance Corp., SFMR (Mortgage-Multiple Originators & Services)
9.625%, 12/1/2011 (Insured; FGIC)....................................... 815,000 835,921
Houston, Water and Sewer System Revenue, Refunding 5.50%, 12/1/2016 (Insured; FGIC) 3,500,000 3,431,995
Virginia_4.8%
Loudon County Sanitation Authority, Water and Sewer Revenue, Refunding
5.125%, 1/1/2026 (Insured; FGIC)........................................ 2,000,000 1,834,400
Norfolk, Water Revenue 5.90%, 11/1/2025 (Insured; MBIA)..................... 4,865,000 4,912,385
Pamunkey Regional Jail Authority, Jail Facility Revenue 5.75%, 7/1/2018 (Insured; MBIA) 1,280,000 1,284,698
DREYFUS INSURED MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) APRIL 30, 1997
Principal
Long-Term Municipal Investments (continued) Amount Value
___________ ___________
Virginia (continued)
Virginia Beach Development Authority, Hospital Facility Revenue
(Virginia Beach General Hospital Project) 5.125%, 2/15/2018 (Insured; AMBAC) $ 1,000,000 $ 924,090
Washington_11.4%
King County, Sewer Revenue 6.125%, 1/1/2033 (Insured; MBIA)................. 5,000,000 5,087,150
Washington, MFMR 7.40%, 1/1/2030 (Insured; FSA)............................. 6,500,000 7,072,910
Washington, Public Power Supply System (Nuclear Project No. 1)
5.75%, 7/1/2010 (Insured; MBIA)......................................... 5,000,000 5,048,800
Yakima-Tieton Irrigation District Revenue, Refunding 6.20%, 6/1/2019 (Insured; FSA) 4,000,000 4,113,560
West Virginia_1.3%
West Virginia, GO 5.25%, 11/1/2023 (Insured; FGIC).......................... 2,500,000 2,335,825
Wisconsin_.9%
Southeast Wisconsin Professional Baseball Park, District Sales Tax Revenue
5.80%, 12/15/2026 (Insured; MBIA)....................................... 1,750,000 1,738,835
_____________
TOTAL LONG-TERM MUNICIPAL INVESTMENTS (cost $174,500,761)................... $179,013,927
==============
Short-Term Municipal Investments_4.4%
Massachusetts_1.8%
Massachusetts Health and Educational Facilities Authority, Revenue (Saint
Elizabeth's) VRDN
3.24% (Insured; FSA) (b)................................................ $ 3,400,000 $ 3,400,000
Texas_2.6%
Sabine River Authority, PCR (Utilities Electric Co. Project) VRDN 4.40% (Insured; AMBAC) (b) 4,900,000 4,900,000
_____________
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS (cost $8,300,000).................... $ 8,300,000
==============
TOTAL INVESTMENTS_100.0% (cost $182,800,761)................................ $187,313,927
==============
</TABLE>
<TABLE>
<CAPTION>
DREYFUS INSURED MUNICIPAL BOND FUND, INC.
Summary of Abbreviations
<S> <C> <S> <C>
AMBAC American Municipal Bond Assurance Corporation LR Lease Revenue
BIGI Bond Investors Guaranty Insurance MBIA Municipal Bond Investors Assurance
COP Certificate of Participation Insurance Corporation
FGIC Financial Guaranty Insurance Company MFMR Multi-Family Mortgage Revenue
FSA Financial Security Assurance PCR Pollution Control Revenue
GO General Obligation SFMR Single Family Mortgage Revenue
HR Hospital Revenue VRDN Variable Rate Demand Notes
LOR Limited Obligation Revenue
</TABLE>
<TABLE>
<CAPTION>
Summary of Combined Ratings (Unaudited)
Fitch (c) or Moody's or Standard & Poor's Percentage of Value
____ ________ _________________ ____________________
<S> <C> <C> <C>
AAA Aaa AAA 97.4%
F-1,F-1+ VMIG1,MIG1,P1 SP1,A1 2.6
________
100.0%
========
</TABLE>
Notes to Statement of Investments:
(a) Bonds which are prerefunded are collateralized by U.S. Government
securities which are held in escrow and are used to pay principal and
interest on the municipal issue and to retire the bonds in full at the
earliest refunding date.
(b) Securities payable on demand. The interest rate, which is subject to
change, is based upon bank prime rates or an index of market interest
rates.
(c) Fitch currently provides creditworthiness information for a limited
number of investments.
(d) At April 30, 1997, 39.8% of the Fund's net assets are insured by
MBIA and 26.5% are insured by FGIC.
SEE NOTES TO FINANCIAL STATEMENTS.
<TABLE>
<CAPTION>
DREYFUS INSURED MUNICIPAL BOND FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES APRIL 30, 1997
Cost Value
______________ ______________
<S> <C> <C> <C>
ASSETS: Investments in securities_See Statement of Investments $182,800,761 $187,313,927
Cash....................................... 1,443,437
Interest receivable........................ 3,831,756
Prepaid expenses........................... 33,901
_______________
192,623,021
_______________
LIABILITIES: Due to The Dreyfus Corporation and affiliates 100,953
Due to Distributor......................... 3,263
Accrued expenses........................... 47,196
_______________
151,412
_______________
NET ASSETS.................................................................. $192,471,609
===============
REPRESENTED BY: Paid-in capital............................ $193,048,356
Accumulated net realized gain (loss) on investments (5,089,913)
Accumulated net unrealized appreciation (depreciation)
........ on investments_Note 4 4,513,166
_______________
NET ASSETS.................................................................. $192,471,609
===============
SHARES OUTSTANDING
(300 million shares of $.01 par value Common Stock authorized).............. 11,118,593
NET ASSET VALUE, offering and redemption price per share_Note 3(d).......... $17.31
========
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS INSURED MUNICIPAL BOND FUND, INC.
STATEMENT OF OPERATIONS YEAR ENDED APRIL 30, 1997
INVESTMENT INCOME
INCOME Interest Income............................ $12,047,236
EXPENSES: Management fee_Note 3(a)................... $ 1,240,710
Shareholder servicing costs_Note 3(b)...... 546,727
Registration fees.......................... 70,459
Professional fees.......................... 53,707
Directors' fees and expenses_Note 3(c)..... 35,980
Custodian fees............................. 22,919
Prospectus and shareholders' reports_Note 3(b) 15,033
Loan commitment fees_Note 2................ 1,133
Miscellaneous.............................. 17,891
_____________
Total Expenses....................... 2,004,559
Less_reduction in management fee due to
undertaking_Note 3(a).................. (349,146)
_____________
Net Expenses......................... 1,655,413
_____________
INVESTMENT INCOME_NET....................................................... 10,391,823
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS_Note 4:
Net realized gain (loss) on investments.... $ (996,175)
Net unrealized appreciation (depreciation) on investments 3,904,784
_____________
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS...................... 2,908,609
_____________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $13,300,432
==============
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS INSURED MUNICIPAL BOND FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
April 30, 1997 April 30, 1996
___________________ _________________
OPERATIONS:
Investment income_net................................................... $ 10,391,823 $ 11,659,022
Net realized gain (loss) on investments................................. (996,175) 3,649,281
Net unrealized appreciation (depreciation) on investments............... 3,904,784 (3,943,459)
________________ _________________
Net Increase (Decrease) in Net Assets Resulting from Operations....... 13,300,432 11,364,844
________________ _________________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income_net................................................... (10,391,823) (11,724,725)
Net realized gain on investments........................................ (9,422) __
________________ _________________
Total Dividends....................................................... (10,401,245) (11,724,725)
________________ _________________
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold........................................... 200,295,864 347,829,321
Dividends reinvested................................................... 6,734,884 7,587,757
Cost of shares redeemed................................................. (225,846,509) (367,066,927)
________________ _________________
Increase (Decrease) in Net Assets from Capital Stock Transactions..... (18,815,761) (11,649,849)
________________ _________________
Total Increase (Decrease) in Net Assets........................... (15,916,574) (12,009,730)
NET ASSETS:
Beginning of Period..................................................... 208,388,183 220,397,913
________________ _________________
End of Period........................................................... $ 192,471,609 $ 208,388,183
================ =================
Shares Shares
________________ _________________
CAPITAL SHARE TRANSACTIONS:
Shares sold............................................................. 11,560,758 19,661,606
Shares issued for dividends reinvested.................................. 386,910 429,419
Shares redeemed......................................................... (12,993,384) (20,702,049)
________________ _________________
Net Increase (Decrease) in Shares Outstanding......................... (1,045,716) (611,024)
================ =================
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS INSURED MUNICIPAL BOND FUND, INC.
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of
Common Stock outstanding, total investment return, ratios to average net
assets and other supplemental data for each period indicated. This
information has been derived from the Fund's financial statements.
Year Ended April 30,
_____________________________________________________________________
PER SHARE DATA: 1997 1996 1995 1994 1993
_______ _______ _______ _______ _______
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period......... $17.13 $17.25 $17.46 $19.23 $18.16
_______ _______ _______ _______ _______
Investment Operations:
Investment income_net........................ .87 .91 .94 1.00 1.06
Net realized and unrealized gain (loss)
on investments............................. .18 (.11) (.21) (1.06) 1.28
_______ _______ _______ _______ _______
Total from Investment Operations............. 1.05 .80 .73 (.06) 2.34
_______ _______ _______ _______ _______
Distributions:
Dividends from investment income_net......... (.87) (.92) (.94) (1.00) (1.06)
Dividends from net realized gain on investments __ __ __ (.63) (.21)
Dividends in excess of net realized gain
on investments............................. __ __ __ (.08) __
_______ _______ _______ _______ _______
Total Distributions.......................... (.87) (.92) (.94) (1.71) (1.27)
_______ _______ _______ _______ _______
Net asset value, end of period............... $17.31 $17.13 $17.25 $17.46 $19.23
====== ======== ======== ======= ========
TOTAL INVESTMENT RETURN......................... 6.24% 4.58% 4.36% (.74%) 13.35%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets...... .80% .85% .94% .93% .94%
Ratio of net investment income
to average net assets...................... 5.03% 5.14% 5.49% 5.25% 5.69%
Decrease reflected in above expense ratios
due to undertakings by the Manager...... .17% .09% __ __ __
Portfolio Turnover Rate................. 93.39% 82.86% 41.19% 34.92% 80.72%
Net Assets, end of period (000's Omitted) $192,472 $208,388 $220,398 $249,513 $276,979
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
DREYFUS INSURED MUNICIPAL BOND FUND, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1_SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus Insured Municipal Bond Fund, Inc. (the "Fund") is registered
under the Investment Company Act of 1940 ("Act") as a diversified open-end
management investment company. The Fund's investment objective is to provide
investors with as high a level of current income exempt from Federal income
tax as is consistent with the preservation of capital. The Dreyfus
Corporation ("Manager") serves as the Fund's investment adviser. The Manager
is a direct subsidiary of Mellon Bank, N.A. Premier Mutual Fund Services,
Inc. (the "Distributor") is the distributor of the Fund's shares, which are
sold to the public without a sales load.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management
estimates and assumptions. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: Investments in securities are valued each
business day by an independent pricing service ("Service") approved by the
Board of Directors. Investments for which quoted bid prices are readily
available and are representative of the bid side of the market in the
judgment of the Service are valued at the mean between the quoted bid prices
(as obtained by the Service from dealers in such securities) and asked prices
(as calculated by the Service based upon its evaluation of the market for
such securities). Other investments (which constitute a majority of the
portfolio securities) are carried at fair value as determined by the Service,
based on methods which include consideration of: yields or prices of
municipal securities of comparable quality, coupon, maturity and type;
indications as to values from dealers; and general market conditions.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities
transactions are recorded on a trade date basis. Realized gain and loss from
securities transactions are recorded on the identified cost basis. Interest
income, adjusted for amortization of premiums and original issue discounts on
investments, is earned from settlement date and recognized on the accrual
basis. Securities purchased or sold on a when-issued or delayed-delivery
basis may be settled a month or more after the trade date.
(C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Fund to declare
dividends daily from investment income-net. Such dividends are paid monthly.
Dividends from net realized capital gain are normally declared and paid
annually, but the Fund may make distributions on a more frequent basis to
comply with the distribution requirements of the Internal Revenue Code. To
the extent that net realized capital gain can be offset by capital loss
carryovers, it is the policy of the Fund not to distribute such gain.
(D) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to
qualify as a regulated investment company, which can distribute tax exempt
dividends, by complying with the applicable provisions of the Internal
Revenue Code, and to make distributions of income and net realized capital
gain sufficient to relieve it from substantially all Federal income and
excise taxes.
The Fund has an unused capital loss carryover of approximately $4,917,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to April 30, 1997. The
carryover does not include net realized securities losses from November 1,
1996 through April 30, 1997 which are treated, for Federal income tax
purposes, as arising in fiscal 1998. If not applied, $2,972,000 of the
carryover expires in fiscal 2003, $1,117,000 expires in fiscal 2004 and
$828,000 expires in fiscal 2005.
NOTE 2_BANK LINE OF CREDIT:
The Fund participates with other Dreyfus-managed funds in a $600 million
redemption credit facility ("Facility") to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the Fund has agreed to pay commitment fees on its pro rata portion
of the Facility. Interest is charged to the Fund at rates
DREYFUS INSURED MUNICIPAL BOND FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
based on prevailing market rates in effect at the time of borrowings. For the
period ended April 30, 1997, the Fund did not borrow under the Facility.
NOTE 3_MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a management agreement ("Agreement") with the Manager,
the management fee is computed at the annual rate of .60 of 1% of the value
of the Fund's average daily net assets and is payable monthly. The Agreement
provides that if in any full year the aggregate expenses of the Fund,
exclusive of taxes, brokerage, interest on borrowings and extraordinary
expenses, exceed 11\2% of the value of the Fund's average net assets, the
Fund may deduct from the payments to be made to the Manager, or the Manager
will bear such excess. However, the Manager had undertaken from May 1, 1996
through April 30, 1997 to reduce the management fee paid by the Fund, to the
extent that the Fund's aggregate annual expenses (exclusive of certain
expenses as described above) exceed an annual rate of .80 of 1% of the value
of the Fund's average daily net assets, and thereafter, through May 6, 1997
to reduce the management fee paid by the Fund, to the extent that the Fund's
aggregate annual expenses (exclusive of certain expenses as described above)
exceeded specified annual percentages of the Fund's average daily net assets.
The Manager has currently undertaken from May 7, 1997 through October 31,
1997 to reduce the management fee paid by the Fund, to the extent that the
Fund's aggregate annual expenses (exclusive of certain expenses as described
above) exceed an annual rate of .85 of 1% of the value of the Fund's average
daily net assets. The reduction in management fee, pursuant to the
undertaking, amounted to $349,146 during the period ended April 30, 1997.
(B) Under the Service Plan (the "Plan") pursuant to Rule 12b-1 under the
Act, the Fund (a) reimburses the Distributor for payments to certain Service
Agents (a securities dealer, financial institution or other industry
professional) for distributing the Fund's shares and servicing shareholder
accounts ("Servicing") and (b) pays the Manager, Dreyfus Service Corporation,
a wholly-owned subsidiary of the Manager, and any affiliate of either of them
(collectively, "Dreyfus") for advertising and marketing relating to the Fund
and for servicing, at an aggregate annual rate of .20 of 1% of the value of
the Fund's average daily net assets. Both the Distributor and Dreyfus may pay
one or more Service Agents a fee in respect of the Fund's shares owned by
shareholders with whom the Service Agent has a Servicing relationship or for
whom the Service Agent is the dealer or holder of record. Both the
Distributor and Dreyfus determine the amounts, if any, to be paid to Service
Agents under the Plan and the basis on which such payments are made. The fees
payable under the Plan are payable without regard to actual expenses
incurred. The Plan also separately provides for the Fund to bear the costs of
preparing, printing and distributing certain of the Fund's prospectuses and
statements of additional information and costs associated with implementing
and operating the Plan, not to exceed the greater of $100,000 or .005 of 1%
of the value of the Fund's average daily net assets for any full fiscal year.
During the period ended April 30, 1997, $415,556 was charged to the Fund
pursuant to the Plan.
The Fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of
the Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the Fund. Such
compensation amounted to $89,816 during the period ended April 30, 1997.
(C) Each director who is not an "affiliated person" as defined in the Act
receives from the Fund an annual fee of $2,500 and an attendance fee of $250
per meeting. The Chairman of the Board receives an additional 25% of such
compensation and the Director Emeritus receives 50% less of such
compensation.
(D) Effective November 4, 1996, a .10% redemption fee is charged on
certain redemptions of Fund shares (including redemption through the use of
the Fund Exchanges service) where the shares being redeemed were issued
subsequent to a specified effective date and the redemption or exchange
occurs less than fifteen days following the date of issuance. During the
period ended April 30, 1997, redemption fees amounted to $8,879.
DREYFUS INSURED MUNICIPAL BOND FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 4_SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment securities,
excluding short-term securities, during the period ended April 30, 1997
amounted to $184,517,102 and $198,813,375, respectively.
At April 30, 1997, accumulated net unrealized appreciation on investments
was $4,513,166, consisting of $4,951,353 gross unrealized appreciation and
$438,187 gross unrealized depreciation.
At April 30, 1997, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see the Statement of Investments).
DREYFUS INSURED MUNICIPAL BOND FUND, INC.
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF DIRECTORS
DREYFUS INSURED MUNICIPAL BOND FUND, INC.
We have audited the accompanying statement of assets and liabilities of
Dreyfus Insured Municipal Bond Fund, Inc., including the statement of
investments, as of April 30, 1997, and the related statement of operations
for the year then ended, the statement of changes in net assets for each of
the two years in the period then ended and financial highlights for each of
the years indicated therein. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial
highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements and financial highlights. Our procedures included
confirmation of securities owned as of April 30, 1997 by correspondence with
the custodian. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Dreyfus Insured Municipal Bond Fund, Inc. at April 30, 1997, the
results of its operations for the year then ended, the changes in its net
assets for each of the two years in the period then ended, and the financial
highlights for each of the indicated years, in conformity with generally
accepted accounting principles.
[Ernst & Young LLP signature logo]
New York, New York
May 29, 1997
DREYFUS INSURED MUNICIPAL BOND FUND, INC.
IMPORTANT TAX INFORMATION (UNAUDITED)
In accordance with Federal tax law, the Fund hereby designates all the
dividends paid from investment income-net during its fiscal year ended April
30, 1997 as "exempt-interest dividends" (not generally subject to regular
Federal income tax).
As required by Federal tax law rules, shareholders will receive
notification of their portion of the Fund's taxable ordinary dividends (if
any) and capital gain distributions (if any) paid for the 1997 calendar year
on Form 1099-DIV which will be mailed by January 31, 1998.
[Dreyfus lion "d" logo]
Registration Mark
DREYFUS INSURED MUNICIPAL
BOND FUND, INC.
200 Park Avenue
New York, NY 10166
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
The Bank of New York
90 Washington Street
New York, NY 10286
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 306AR974
[Dreyfus logo]
Registration Mark
Insured
Municipal
Bond Fund, Inc.
Annual Report
April 30, 1997
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
IN DREYFUS INSURED MUNICIPAL BOND FUND, INC. AND
THE LEHMAN BROTHERS MUNICIPAL BOND INDEX
EXHIBIT A:
PERIOD LEHMAN BROTHERS DREYFUS
MUNICIPAL INSURED MUNICIPAL
BOND INDEX * BOND FUND
4/30/87 10,000 10,000
4/30/88 10,875 10,411
4/30/89 11,846 11,506
4/30/90 12,699 12,094
4/30/91 14,158 13,408
4/30/92 15,504 14,556
4/30/93 17,466 16,499
4/30/94 17,843 16,378
4/30/95 19,030 17,092
4/30/96 20,542 17,874
4/30/97 21,905 18,989
* Source: Lehman Brothers
