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RNC LIQUID ASSETS FUND, INC.
1996 Semi-Annual Report to Shareholders
(Unaudited)
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Dear Shareholder:
We are pleased to present the semi-annual report on the operations of
the RNC Liquid Assets Fund, Inc. for the six months period ended March 31, 1996.
Your Fund has continued to exhibit a strong performance record. We sincerely
appreciate the confidence you have placed in your Fund's management and extend a
special welcome to all new shareholders.
The average dollar-weighted portfolio maturity of your Fund on March
31, 1996 was 45 days. Purchases continue to be high quality, highly liquid
investments which allow adjustment to the portfolio's maturity in the event of a
change in the interest rate forecast. Each issue is monitored to assure that it
meets our demanding standards of creditworthiness.
The Fund's portfolio diversification and maturity range will continue
to be adjusted based upon the interest rate forecast under fluctuating market
conditions.
We assure you of our continuing dedication to achieve superior
investment results, and look forward to continued service to you. If you have
any questions concerning your investment, please feel free to contact us.
Sincerely,
/S/ Eric M. Banhazl /S/ Daniel J. Genter
ERIC M. BANHAZL DANIEL J. GENTER
President President
RNC Liquid Assets Fund, Inc. RNC Capital Management Co.
<PAGE>
RNC LIQUID ASSETS FUND, INC.
INVESTMENT PORTFOLIO
March 31, 1996
(Unaudited)
---------------------------
<TABLE>
<CAPTION>
Principal
Amount Value
----------- ---------
<S> <C> <C>
Commercial Paper - 72.98%
Alloman Funding Corp., 5.18%, 04/23/96 $1,000,000 $996,834
Associates Corp. North America, 5,10%, 05/15/96 1,000,000 1,000,000
AT&T Lucent Corp., 5.26%, 08/01/96 2,000,000 1,964,349
Avnet Inc., 5.10%, 05/22/96 1,000,000 992,775
Banca Crt Financial, 5.62%, 04/10/96 1,000,000 998,595
Colgate Palmolive, 5.36%, 04/04/96 1,000,000 999,553
Dupont de Nemours & Co., 5.43%, 04/29/96 1,000,000 995,777
Fleetwood Credit Corp., 5.30%, 04/03/96 1,100,000 1,099,676
GE Capital Corp., 5.20%, 09/06/96 1,000,000 1,000,000
GTE Northwest Inc., 5.33%, 04/08/96 1,500,000 1,498,451
General Motors Acceptance Corp., 5.05%, 06/11/96 1,000,000 1,000,000
Hanson Finance, 5.10%, 06/05/96 1,000,000 990,792
John Deere, 5.15%, 04/25/96 1,000,000 1,000,000
Merrill Lynch, 5.14%, 04/30/96 1,000,000 995,860
Northern Rock Building, 5.45%, 04/15/96 1,000,000 997,881
Providence de Quebec, 5.27%, 06/19/96 2,000,000 1,976,871
Receivables Capital Corp., 5.18%, 05/17/96 933,000 926,825
Southwest Gas Corp., 5.22%, 04/22/96 1,000,000 996,955
Sparc, 5.38%, 04/15/96 1,000,000 997,908
Sun Belt-Dix Inc., 5.11%, 5/21/96 1,000,000 992,903
Svenska Handelsbanken Inc., 5.20%, 05/10/96 1,262,000 1,254,891
Triple-A-One Funding Corp., 5.37%, 04/09/96 1,500,000 1,498,216
Twin Towers Inc., 5.38%, 04/12/96 1,756,000 1,753,112
West Pac Capital Corp., 5.45%, 05/13/96 1,000,000 993,641
-----------
27,921,865
-----------
Federal Agency Securitites - 15.87%
Student Loan Marketing Association, 5.190%, 8-8-96 3,000,000 3,000,000
Student Loan Marketing Association, 5.300%, 1-21-98 1,070,000 1,070,692
Student Loan Marketing Association, 5.289%, 2-17-98 2,000,000 2,000,000
-----------
6,070,692
-----------
Corporate Bonds - 5.19%
Dupont de Nemours & Co., 8.450%, 10/15/96 200,000 203,165
Security Pacific Corp., 7.750%, 12/1/96 1,250,000 1,270,039
Shawmut Corp., 8.125%, 02/01/97 500,000 510,773
-----------
1,983,977
-----------
Overnight Repurchase Agreement - 6.01%
Seattle Repo, 5.50%, 04-01-96
(Collaterized by $2,650,000 Tennessee Valley Authority,
due 4/15/98). 2,300,000 2,300,000
-----------
Total Investment Portfolio - 100.04% 38,276,534
Liabilities in Excess
of Other Assets - Net (0.04%) (14,576)
-----------
Net Assets - 100.0% $38,261,958
===========
</TABLE>
See "Notes to Financial Statements"
<PAGE>
RNC LIQUID ASSETS FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
March 31, 1996
(Unaudited)
---------------------------
<TABLE>
<CAPTION>
<S> <C>
Assets:
Investment portfolio
(Cost $38,276,534) $38,276,534
Cash 890
Interest receivable 115,250
Prepaid expenses 45,307
-----------
Total Assets 38,437,981
-----------
Liabilities:
Accrued expenses 24,634
Dividends payable 151,389
-----------
Total Liabilities 176,023
-----------
Net Assets - (equivalent to $1.00 per share based on
38,261,958 shares of capital stock outstanding) $38,261,958
===========
</TABLE>
See "Notes to Financial Statements"
<PAGE>
RNC LIQUID ASSETS FUND, INC.
STATEMENT OF OPERATIONS
For the Six Months Ended March 31, 1996
(Unaudited)
---------------------------
<TABLE>
<CAPTION>
Investment Income:
<S> <C> <C>
Interest 910,424
Expenses:
Management fees $ 45,262
Professional fees 41,838
Administration fees 24,063
Registration fees 12,221
Audit fees 7,019
Fund Accounting fees 6,657
Custodian fees 6,083
Transfer Agent fees 4,693
Printing & Other expenses 4,292
Directors fees 3,628
Insurance expense 2,063
---------
Total expenses 157,819
-----------
Net investment income 752,605
-----------
Net Increase in Net Assets Resulting
from Operations 752,605
===========
</TABLE>
See "Notes to Financial Statements"
<PAGE>
RNC LIQUID ASSETS FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
---------------------------
<TABLE>
<CAPTION>
For the
Six Months Ended Year Ended
March 31, 1996 September 30,
(Unaudited) 1995
---------------- -------------
<S> <C> <C>
Increase in Net Assets from Operations $ 752,605 $ 1,907,894
Distributions to Shareholder from Net
Investment Income (752,605) (1,907,894)
Capital Share Transactions (net) 7,195,916 12,619,918
-------------------- --------------------
Total Increase (Decrease) in Net Assets 7,195,916 (12,619,918)
Net Assets
Beginning of the period 31,066,042 43,685,960
-------------------- --------------------
End of the period $ 38,261,958 $ 31,066,042
==================== ====================
</TABLE>
See "Notes to Financial Statements"
<PAGE>
RNC LIQUID ASSETS FUNDS, INC.
CONDENSED FINANCIAL INFORMATION
FINANCIAL HIGHLIGHTS
(Unaudited)
---------------------------
<TABLE>
<CAPTION>
For the
Six Months Ended
March 31, For the Years Ended September 30,
--------- --------------------------------------------------------------------------
Per Share Operating
Performance 1996 1995 1994 1993 1992 1991
- ----------- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value
at beginning of year $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Income from investment
operations:
Net investment income 0.023 0.050 0.032 0.026 0.038 0.064
Less distributions:
Distributions from net
investment income (0.023) (0.050) (0.032) (0.026) (0.038) (0.064)
Net Asset Value
at end of year $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
========== =========== =========== =========== =========== ===========
Total Return 2.30% 5.10% 3.20% 2.65% 3.83% 6.34%
Ratios/Supplemental Data:
Net Assets,
end of period (000's) $ 38,262 $ 31,066 $ 43,686 $ 29,257 $ 46,563 $ 66,857
Ratio of expenses to
average net assets 0.8%* 0.8% 0.7% 0.7% 0.8% 0.9%
Ratio of net investment
income to average
net assets 4.0%* 5.0% 3.2% 2.6% 3.9% 6.4%
*Annualized
</TABLE>
See "Notes to Financial Statements"
<PAGE>
RNC LIQUID ASSETS FUND, INC.
Notes to Financial Statements
March 31, 1996
---------------------------
1. Significant Accounting Policies.
--------------------------------
RNC Liquid Assets Fund, Inc. ("the Fund") is registered under the Investment
Company Act of 1940 as a diversified, open-end management company. The following
is a summary of significant accounting policies followed by the Fund.
Portfolio Valuation. Portfolio securities are valued using the amortized cost
method which approximates market.
Federal Income Tax. It is the Fund's policy to continue to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute substantially all of its taxable income, including
any net realized gain on investments not offset by loss carryovers, to its
shareholders. Therefore, no Federal income tax provision is required.
Distributions to Shareholders. Distributions to shareholders are declared daily
from the total of net investment income and net realized gains on investments,
if any.
Other. As is customary in the mutual fund industry, securities transactions are
accounted for on the date the securities are purchased or sold. Realized gains
and losses from securities transactions are reported on an identified cost
basis. Interest income is recognized on the accrual basis.
2. Capital Share Transactions.
---------------------------
As of March 31, 1996 there were 500,000,000 shares of $0.01 par value capital
stock authorized. Transactions in capital stock were as follows:
<TABLE>
<CAPTION>
Shares and Dollar Amount
------------------------
For the
Six Months Ended For the
March 31, 1996 Year Ended
(Unaudited) September 30, 1995
----------- ------------------
<S> <C> <C>
Shares sold 59,244,345 107,322,974
Shares issued in reinvestment
of distributions 136,995 285,531
----------------- ---------------
59,381,340 107,608,505
Shares redeemed 52,185,424 120,228.423
----------------- ---------------
Net increase/(decrease) 7,195,916 (12,619,918)
================= ===============
Amount (Net Asset Value = $1.00) $ 7,195,916 $ (12,619,918)
================= ===============
</TABLE>
<PAGE>
RNC LIQUID ASSETS FUND, INC.
Notes to Financial Statements (Continued)
March 31, 1996
---------------------------
3. Investment Advisory Fees and Other Transactions with Affiliates.
----------------------------------------------------------------
The investment advisory fee of $45,262 was paid pursuant to an agreement with
RNC Capital Management Co. (RNC). Under the agreement RNC is responsible for the
management of the Fund's portfolio and also provides personnel, facilities,
equipment and other services necessary to the management of the Fund. The
Agreement provides for monthly fees computed at an annual rate of .41% of the
Fund's average daily net assets. For the six months ended March 31, 1996, RNC
voluntarily waived a portion of the fee which amounted to .13% of the Fund's
average daily net assets.
The agreement obligates RNC to reimburse the Fund to the extent that the Fund's
expenses (excluding interest, taxes, brokers fees and commissions, extraordinary
items and distribution expenses) exceed the expense limitations applicable to
the fund imposed by state securities laws or regulations. In addition, from time
to time, RNC may voluntarily reimburse a portion of the Fund's other expenses.
For the six months ended March 31, 1996, the Fund's expenses did not exceed such
expense limitations and required no reimbursement by RNC.
Certain officers of the Fund are also officers of the underwriter and
administrator. The Fund paid the administrator $24,063 for the six months ended
March 31, 1996.
Midvale Securities Corporation (MSC), an affiliate of RNC, waived all fees, in
its capacity as Shareholder Servicing Agent, for shareholder related servicing
undertaken pursuant to a shareholder- approved plan. The maximum amount of
payment to MSC under this plan is .25%.
