<PAGE> 1
THE FFB MONEY MARKET
FUNDS
SEMI-ANNUAL REPORT
AS OF AUGUST 31, 1995
- --------------------------------------------------------------------------------
U.S. Treasury Fund
U.S. Government Fund
Cash Management Fund
Tax-Free Money Market Fund
Pennsylvania Tax-Free Money Market Fund
INVESTMENT
- --------------------------------------------------------------------------------
STRATEGIES
- --------------------------------------------------------------------------------
FOR
- --------------------------------------------------------------------------------
THE '90S
- --------------------------------------------------------------------------------
<PAGE> 2
- --------------------------------------------------------------------------------
INVESTMENT ADVISER
First Fidelity Bank, National Association, New Jersey
765 Broad Street
Newark, New Jersey 07101
ADMINISTRATOR
Furman Selz Incorporated
237 Park Avenue
New York, New York 10017
CUSTODIAN, TRANSFER AGENT
AND DIVIDEND DISBURSING AGENT
First Fidelity Bank, National Association, New Jersey
765 Board Street
Newark, New Jersey 07101
DISTRIBUTOR
FFB Funds Distributor, Inc.
230 Park Avenue
New York, New York 10169
LEGAL COUNSEL
Baker & McKenzie
805 Third Avenue
New York, New York 10022
- --------------------------------------------------------------------------------
This report is for the information of the shareholders of The FFB Funds Trust.
Its use in connection with any offering of the Trust's shares is authorized only
in case of a concurrent or prior delivery of the Trust's current prospectus.
- --------------------------------------------------------------------------------
The FFB Funds are not deposits, guaranteed by or obligations of First
Fidelity Bank or its affiliates and are not insured by the FDIC, the
Federal Reserve Board or any other government agency. Shares of The FFB
Funds involve investment risks, including the possible loss of
principal. For information call 1-800-437-8790.
- --------------------------------------------------------------------------------
<PAGE> 3
THE FFB FUNDS
October 19, 1995
Dear Shareholder:
We are pleased to present the semi-annual report for the FFB Money Market Funds
for the six months ended August 31, 1995. The combined net assets of the U.S.
Treasury Fund, U.S. Government Fund, Cash Management Fund, Tax-Free Money Market
Fund and Pennsylvania Tax-Free Money Market Fund were $2,097,437,331.
The U.S. Treasury Fund's portfolio of investments is limited to U.S. Treasury
obligations and repurchase agreements collateralized by such obligations and/or
Government National Mortgage Association Bonds. The Fund's net assets were
$887,280,161 on August 31, 1995 with the weighted average maturity at 53 days.
Net assets of the U.S. Government Fund were $237,337,429 on August 31, 1995, and
the weighted average maturity was 42 days. The portfolio was composed entirely
of U.S. Treasury and Government Agency obligations, and repurchase agreements
collateralized by such securities.
Cash Management Fund's net assets were $769,485,417 at the close of the six
months, and the portfolio's weighted average maturity stood at 44 days.
Net assets of the Tax-Free Money Market Fund were $103,707,225 on August 31,
1995, and the weighted average maturity was 53 days.
The Pennsylvania Tax-Free Money Market Fund had net assets of $99,627,099 on
August 31, 1995, and the weighted average maturity was 38 days.
Unaudited financial statements and each Money Market Fund's portfolio of
investments as of August 31, 1995 follow. We appreciate your continued support.
Finally, contingent upon the merger of First Fidelity Bancorporation with and
into a wholly-owned subsidiary of First Union Corporation, the FFB family of
mutual funds will be combined (subject to various conditions, including
shareholder approval), with the Evergreen family of funds. We are excited about
the prospects of this fund merger and look forward to providing you access to
one of the most respected family of funds in existence over the past twenty
year.
/s/ EDMUND A. HAJIM
-------------------
Edmund A. Hajim
Chairman of the Board
and President
<PAGE> 4
FFB FUNDS TRUST
U.S. TREASURY FUND
PORTFOLIO OF INVESTMENTS -- (UNAUDITED)
AUGUST 31, 1995
<TABLE>
<CAPTION>
YIELD TO
MATURITY
ON DATE PRINCIPAL VALUE
OF PURCHASE AMOUNT (NOTE 1a)
----------- ----------- ------------
<S> <C> <C> <C>
U.S. TREASURY OBLIGATIONS -- 49.4%
U.S. TREASURY BILLS -- 28.5%
09/07/95++............................................... 5.61% $40,000,000 $ 39,963,542
09/14/95................................................. 5.62 20,000,000 19,960,530
09/21/95................................................. 5.63 35,000,000 34,893,584
10/12/95................................................. 5.64 10,000,000 9,937,817
10/19/95................................................. 5.60 20,000,000 19,854,667
10/26/95................................................. 5.61 25,000,000 24,791,649
11/02/95................................................. 5.57 20,000,000 19,814,517
11/09/95................................................. 5.59 10,000,000 9,895,925
11/24/95++............................................... 5.77 25,000,000 24,676,833
12/07/95................................................. 5.62 20,000,000 19,709,000
12/21/95................................................. 5.58 20,000,000 19,667,925
04/04/96................................................. 6.48 10,000,000 9,640,000
05/30/96................................................. 5.78 55,000 52,760
------------
252,858,749
------------
U.S. TREASURY NOTES -- 20.9%
3.875%, 09/30/95......................................... 5.96 25,000,000 24,959,145
4.25%, 11/30/95.......................................... 6.07 20,000,000 19,912,737
7.50%, 01/31/96.......................................... 5.60 30,000,000 30,224,694
8.875%, 02/15/96......................................... 5.69 25,000,000 25,346,674
4.625%, 02/29/96......................................... 5.69 25,000,000 24,873,009
5.50%, 04/30/96.......................................... 5.82 15,000,000 14,964,961
7.375%, 05/15/96......................................... 5.70 20,000,000 20,217,333
5.875%, 05/31/96......................................... 5.86 25,000,000 25,000,000
------------
185,498,553
------------
TOTAL INVESTMENTS -- (cost $438,357,302)................... 438,357,302
------------
REPURCHASE AGREEMENTS -- 50.8%
Aubrey G. Lanston & Co., Inc. ............................. 5.80 50,000,000 50,000,000
dated 08/31/95, 5.80%, 09/01/95 (Proceeds at maturity
$50,008,056) collateralized by: $34,260,000 U.S. Treasury
Bonds 11.25%, 02/15/15
Barclays de Zoete Wedd Securities, Inc. ................... 5.80 50,000,000 50,000,000
dated 08/31/95, 5.80%, 09/01/95 (Proceeds at maturity
$50,008,056) collateralized by: $37,042,000 U.S. Treasury
Bonds 11.75%, 02/15/10
Chemical Bank.............................................. 5.80 36,015,000 36,015,000
dated 08/31/95, 5.80%, 09/01/95 (Proceeds at maturity
$40,005,802) collateralized by: $35,000,000 U.S. Treasury
Bill 11/16/95, $2,105,000 U.S. Treasury Notes 6.50%,
05/31/97
Dean Witter, Inc. ......................................... 5.80 40,000,000 40,000,000
dated 08/31/95, 5.80%, 09/01/95 (Proceeds at maturity
$40,006,444) collateralized by: $2,334,000 U.S. Treasury
Notes 5.125% - 6.625%, 11/15/95 - 01/15/99, $144,418,391
U.S. Treasury Strips, 02/15/96 - 05/15/23
</TABLE>
See footnotes to portfolio of investments and accompanying notes to financial
statements.
2
<PAGE> 5
FFB FUNDS TRUST
U.S. TREASURY FUND
PORTFOLIO OF INVESTMENTS -- (UNAUDITED) (CONTINUED)
AUGUST 31, 1995
<TABLE>
<CAPTION>
YIELD TO
MATURITY
ON DATE PRINCIPAL VALUE
OF PURCHASE AMOUNT (NOTE 1a)
----------- ----------- ------------
<S> <C> <C> <C>
REPURCHASE AGREEMENTS -- (CONTINUED)
Donaldson Lufkin & Jenrette Securities, Inc. .............. 5.80% $40,000,000 $ 40,000,000
dated 08/31/95, 5.80%, 09/01/95 (Proceeds at maturity
$40,006,444) collateralized by: $28,481,000 U.S. Treasury
Bonds 12.00%, 05/15/05
First Boston Corp. ........................................ 5.72 50,000,000 50,000,000
dated 08/29/95, 5.72%, 09/05/95 (Proceeds at maturity
$50,055,611) collateralized by: $54,702,766 U.S. Treasury
Strips 08/15/96 - 08/15/98
Morgan Stanley & Co. ...................................... 5.73 50,000,000 50,000,000
dated 08/25/95, 5.73%, 09/01/95 (Proceeds at maturity
$50,055,708) collateralized by: $62,500,000 Government
National Mortgage Association Bonds 2 4.50% - 5.50%,
02/20/23 - 02/20/24
Prudential Securities, Inc. ............................... 5.72 50,000,000 50,000,000
dated 08/24/95, 5.72%, 09/07/95 (Proceeds at maturity
$50,111,222) collateralized by: $51,927,516 Government
National Mortgage Association Bonds 6.00% - 7.00%,
05/20/24 - 07/20/25
Smith Barney Incorporated.................................. 5.80 35,000,000 35,000,000
dated 08/31/95, 5.80%, 09/01/95 (Proceeds at maturity
$35,005,639) collateralized by: $6,850,000 U.S. Treasury
Bonds 9.875%, 11/15/15, $11,820,000 U.S. Treasury Strips
11/15/15 - 05/15/18, $30,165,272 Government National
Mortgage Association Bonds 2 5.50% - 7.375%,
06/20/17 - 08/15/25
UBS Securities, Inc. ...................................... 5.74 50,000,000 50,000,000
dated 08/30/95, 5.74%, 09/06/95 (Proceeds at maturity
$50,056,000) collateralized by: $50,638,515 Government
National Mortgage Association Bonds 2 6.50%,
03/20/24 - 06/20/25
------------
TOTAL REPURCHASE AGREEMENTS -- (cost $451,015,000)......... 451,015,000
------------
TOTAL INVESTMENTS AND REPURCHASE AGREEMENTS -- 100.2%
-- (cost $889,372,302)+.................................. 889,372,302
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.2%)............ (2,092,141)
------------
NET ASSETS -- 100.0%....................................... $887,280,161
============
</TABLE>
See footnotes to portfolio of investments and accompanying notes to financial
statements.
3
<PAGE> 6
FFB FUNDS TRUST
U.S. GOVERNMENT FUND
PORTFOLIO OF INVESTMENTS -- (UNAUDITED)
AUGUST 31, 1995
<TABLE>
<CAPTION>
YIELD TO
MATURITY
ON DATE PRINCIPAL VALUE
OF PURCHASE AMOUNT (NOTE 1a)
----------- ----------- ------------
<S> <C> <C> <C>
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 90.0%
FEDERAL FARM CREDIT BANK -- 14.3%
DEBENTURES:
5.98%, 09/01/95...................................................... 5.87% $10,000,000 $ 10,000,000
5.80%, 10/02/95...................................................... 5.66 10,000,000 10,000,000
5.70%, 01/02/96...................................................... 5.57 5,000,000 5,000,000
------------
25,000,000
------------
DISCOUNT NOTES:
09/12/95............................................................. 5.68 4,000,000 3,993,192
10/12/95............................................................. 5.65 5,000,000 4,968,624
------------
8,961,816
------------
TOTAL FEDERAL FARM CREDIT BANK......................................... 33,961,816
------------
FEDERAL HOME LOAN BANK DISCOUNT NOTES -- 10.4%
09/06/95............................................................. 5.84 5,000,000 4,996,056
11/02/95............................................................. 6.22 10,000,000 9,897,528
11/27/95............................................................. 5.74 10,000,000 9,865,150
------------
24,758,734
------------
FEDERAL HOME LOAN MORTGAGE CORPORATION DISCOUNT NOTES -- 13.8%
09/07/95............................................................. 6.01 5,000,000 4,995,250
09/15/95............................................................. 5.77 8,000,000 7,932,470
10/03/95............................................................. 5.69 10,000,000 9,950,756
02/09/96............................................................. 5.82 10,000,000 9,750,450
------------
32,628,926
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 47.3%
DISCOUNT NOTES:
09/01/95............................................................. 5.94 10,000,000 10,000,000
09/05/95............................................................. 5.91 5,000,000 4,996,805
09/07/95............................................................. 5.88 5,000,000 4,995,217
09/11/95............................................................. 5.71 5,000,000 4,992,264
09/14/95............................................................. 5.97 5,000,000 4,989,528
09/26/95............................................................. 6.28 5,000,000 4,979,166
10/05/95............................................................. 5.72 3,000,000 2,984,247
10/23/95............................................................. 5.73 10,000,000 9,919,544
11/01/95............................................................. 5.72 5,000,000 4,952,894
11/03/95............................................................. 5.73 5,000,000 4,951,262
11/07/95............................................................. 5.70 5,000,000 4,948,447
12/05/95............................................................. 5.71 5,000,000 4,927,167
01/03/96............................................................. 5.68 10,000,000 9,810,556
02/09/96............................................................. 5.76 10,000,000 9,753,133
02/16/96............................................................. 6.01 10,000,000 10,000,000
09/03/96............................................................. 5.98 10,000,000 9,999,011
------------
107,199,241
------------
BOND:
5.72%, 11/15/95...................................................... 5.80 5,000,000 5,000,000
------------
TOTAL FEDERAL NATIONAL MORTGAGE ASSOCIATION.......................... 112,199,241
------------
</TABLE>
See footnotes to portfolios of investments and accompanying notes to financial
statements.
4
<PAGE> 7
FFB FUNDS TRUST
U.S. GOVERNMENT FUND
PORTFOLIO OF INVESTMENTS -- (UNAUDITED) (CONTINUED)
AUGUST 31, 1995
<TABLE>
<CAPTION>
YIELD TO
MATURITY
ON DATE PRINCIPAL VALUE
OF PURCHASE AMOUNT (NOTE 1a)
----------- ----------- ------------
<S> <C> <C> <C>
STUDENT LOAN MARKETING ASSOCIATION -- 4.2%
11/09/95(a).......................................................... 5.63% $10,000,000 $ 10,000,000
------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS -- (cost $213,548,717)........ 213,548,717
------------
U.S. TREASURY BILL -- 0.0%
05/30/96++ -- (cost $67,149)......................................... 5.94 70,000 67,149
------------
TOTAL INVESTMENTS -- (cost $213,615,866)............................... 213,615,866
------------
REPURCHASE AGREEMENTS -- 14.5%
Citibank N.A........................................................... 5.93 20,000,000 20,000,000
dated 08/31/95, 5.85%, 09/01/95 (Proceeds at maturity $20,003,250)
collateralized by: $19,714,129 Federal National Mortgage Association
6.50%, 10/01/32 and $792,654 Federal National Mortgage Association
7.30%, 12/01/18
Smith Barney Securities, Inc........................................... 5.93 14,317,000 14,317,000
dated 08/31/95, 5.85%, 09/01/95 (Proceeds at maturity $14,319,327)
collateralized by: $14,603,341 Federal National Mortgage Association
5.875% - 9.15%, 10/12/95 - 07/01/25
------------
TOTAL REPURCHASE AGREEMENTS -- (cost $34,317,000)...................... 34,317,000
------------
TOTAL INVESTMENTS AND REPURCHASE AGREEMENTS -- 104.5%
(cost $247,932,866)+................................................. 247,932,866
LIABILITIES IN EXCESS OF OTHER ASSETS -- (4.5%)........................ (10,595,437)
------------
NET ASSETS -- 100.0%................................................... $237,337,429
============
</TABLE>
See footnotes to portfolios of investments and accompanying notes to financial
statements.
5
<PAGE> 8
FFB FUNDS TRUST
CASH MANAGEMENT FUND
PORTFOLIO OF INVESTMENTS -- (UNAUDITED)
AUGUST 31, 1995
<TABLE>
<CAPTION>
YIELD TO
MATURITY
CREDIT ON DATE PRINCIPAL VALUE
RATING* OF PURCHASE AMOUNT (NOTE 1a)
- ------------ ----------- ----------- ------------
<S> <C> <C> <C> <C>
CERTIFICATES OF DEPOSIT -- 27.7%
EURODOLLAR -- 7.5%
A1+/P1 Abbey National Bank 5.77%, 10/20/95........................ 5.83% $ 5,000,000 $ 5,000,133
A1+/P1 Banque Nationale de Paris 5.63%, 12/07/95.................. 5.84 5,000,000 4,998,222
A1+/P1 Commerz U.S. Finance Corp. 5.75%, 12/20/95................. 5.82 10,000,000 10,000,270
A1+/P1 JP Morgan, Inc. 5.77%, 01/22/96............................ 5.83 10,000,000 10,000,767
A1+/P1 Mitsubishi Bank, Ltd. 5.84%, 10/31/95...................... 5.92 10,000,000 10,000,310
A1+/P1 Rabobank Nederland 5.78%, 01/31/96......................... 5.83 8,000,000 8,001,066
A1+/P1 UBS Securities, Inc. 5.82%, 02/20/96....................... 5.88 10,000,000 10,000,926
------------
58,001,694
------------
YANKEE -- 20.2%
A1+/P1 Bank of Montreal 5.80%, 10/05/95........................... 5.98 10,000,000 9,999,065
A1+/P1 Banque Nationale de Paris 5.73%, 10/16/95.................. 5.80 10,000,000 10,000,123
A1+/P1 Canadian Imperial Bank of Commerce 5.81%, 09/06/95......... 5.89 10,000,000 10,000,000
A1+/P1 Canadian Imperial Bank of Commerce 5.78%, 09/25/95......... 5.86 5,000,000 5,000,000
A1+/P1 Canadian Imperial Bank of Commerce 5.77%, 10/05/95......... 5.85 10,000,000 10,000,000
A1+/P1 Credit Suisse 5.64%, 01/17/96.............................. 5.72 10,000,000 9,995,661
A1+/P1 National Westminster Bank 5.76%, 09/29/95.................. 5.84 20,000,000 20,000,005
A1+/P1 Nordeutsche Landesbank, 5.765%, 01/08/96................... 5.84 25,000,000 25,001,070
A1+/P1 Sanwa Bank, Ltd. 5.78%, 10/11/95........................... 5.84 10,000,000 10,000,219
A1+/P1 Sanwa Bank, Ltd. 6.03%, 11/30/95........................... 6.08 10,000,000 10,000,727
A1+/P1 Societe Generale 5.76%, 09/19/95........................... 5.88 10,000,000 9,999,783
A1+/P1 Societe Generale 5.78%, 10/26/95........................... 5.83 10,000,000 10,000,452
A1+/P1 Societe Generale 5.88%, 03/01/96........................... 5.95 10,000,000 10,000,491
A1+/P1 Westdeutche Landesbank 5.62%, 01/11/96..................... 5.81 5,000,000 4,997,943
------------
154,995,539
------------
TOTAL CERTIFICATES OF DEPOSIT -- (cost $212,997,223)....... 212,997,233
------------
COMMERCIAL PAPER -- 38.1%
ASSET-BACKED -- 5.2%
A1+/P1 Apreco Inc................................................. 6.01 10,000,000 9,965,991
Asset Securitization Cooperative Corp.:
A1+/P1 09/19/95................................................... 6.15 10,000,000 9,971,100
A1+/P1 10/06/95................................................... 5.84 10,000,000 9,944,292
A1+/P1 10/20/95................................................... 5.82 5,000,000 4,961,549
A1+/P1 10/31/95................................................... 5.84 5,000,000 4,952,667
------------
39,795,599
------------
BANKING -- 18.7%
Banco Espirito Santo North American Capital Corp.:
A1+/P1 10/04/95................................................... 5.99 5,000,000 4,973,325
A1+/P1 10/12/95................................................... 5.86 10,000,000 9,935,083
A1+/P1 11/09/95................................................... 5.78 10,000,000 9,892,858
Compagnie Bancaire U.S.A. Finance Corp.:
A1+/P1 09/26/95................................................... 6.00 5,000,000 4,979,757
A1+/P1 10/17/95................................................... 5.82 10,000,000 9,927,678
A1/P1 Creditanstalt Finance Inc. 09/11/95........................ 5.86 20,000,000 19,968,056
A1+/P1 Ford Motor Credit 10/16/95................................. 5.86 10,000,000 9,928,750
A1+/P1 Halifax Building Society 09/14/95.......................... 5.81 10,000,000 9,979,525
A1+/P1 NBD Bancorp, Inc. 11/28/95................................. 5.84 25,000,000 24,652,889
A1+/P1 Republic New York Corp. 10/13/95........................... 5.76 10,000,000 9,934,667
Svenska Handelbanken Inc.:
A1+/P1 09/01/95................................................... 6.05 5,000,000 5,000,000
A1+/P1 09/25/95................................................... 5.88 10,000,000 9,961,733
A1+/P1 10/23/95................................................... 5.86 10,000,000 9,917,667
A1/P1 Transamerica Finance Corp. 10/12/95........................ 5.76 5,000,000 4,968,111
------------
144,020,099
------------
</TABLE>
See footnotes to portfolios of investments and accompanying notes to financial
statements.
6
<PAGE> 9
FFB FUNDS TRUST
CASH MANAGEMENT FUND
PORTFOLIO OF INVESTMENTS -- (UNAUDITED) (CONTINUED)
AUGUST 31, 1995
<TABLE>
<CAPTION>
YIELD TO
MATURITY
CREDIT ON DATE PRINCIPAL VALUE
RATING* OF PURCHASE AMOUNT (NOTE 1a)
- ------------ ----------- ----------- ------------
<S> <C> <C> <C> <C>
COMMERCIAL PAPER -- (CONTINUED)
FINANCIAL SERVICES -- 5.8%
A1+/P1 Allianz America Finance Corp. 11/01/95..................... 5.73% $10,000,000 $ 9,905,958
A1+/P1 Goldman Sachs Co. 09/11/95................................. 6.04 10,000,000 9,983,667
A1+/P1 Mitsui Fudosan Inc. 09/12/95............................... 5.83 5,000,000 4,991,292
A1+/P1 Swedish Export Credit Corp. 12/20/95....................... 5.81 10,000,000 9,828,889
A1+/P1 Unilever Capital Corp. 09/22/95............................ 5.98 10,000,000 9,966,167
------------
44,675,973
------------
FOREIGN BANKING -- 7.1%
A1+/P1 ABN AMRO Bank, Canada 09/14/95............................. 5.97 20,000,000 19,958,039
A1+/P1 Canadian Imperial Bank of Commerce 09/01/95................ 6.05 10,000,000 10,000,000
A1+/P1 Commerzbank US Finance Corp. 09/01/95...................... 5.80 5,000,000 4,992,125
Toronto Dominion Bank:
A1+/P1 09/05/95................................................... 5.94 10,000,000 9,993,554
A1+/P1 10/13/95................................................... 5.78 10,000,000 9,934,433
------------
54,878,151
------------
FOREIGN GOVERNMENT -- 1.3%
A1+/P1 Hydro Quebec Inc. 10/16/95................................. 5.81 10,000,000 9,929,375
------------
TOTAL COMMERCIAL PAPER -- (cost $293,299,197).............. 293,299,197
------------
BANKERS ACCEPTANCE -- 1.3%
A1/P1 PNC Bank 6.14%, 11/16/95 -- (cost $10,002,662)............. 6.22 10,000,000 10,002,662
------------
CORPORATE MEDIUM TERM NOTE -- 1.3%
Society National Bank Cleveland 6.025%,
A1+/P1 09/01/95(a) -- (cost $9,998,649)........................... 6.29 10,000,000 9,998,649
------------
CORPORATE BOND -- 1.9%
AT&T Co. 4.50%, 02/15/96 -- (cost $14,910,107)............. 5.76 15,000,000 14,910,107
------------
U.S. TREASURY BILL -- 0.0%
06/01/95++ -- (cost $124,706).............................. 5.38 124,706
------------
TOTAL INVESTMENTS -- (cost $541,332,554)................... 541,332,554
------------
</TABLE>
See footnotes to portfolios of investments and accompanying notes to financial
statements.
7
<PAGE> 10
FFB FUNDS TRUST
CASH MANAGEMENT FUND
PORTFOLIO OF INVESTMENTS -- (UNAUDITED) (CONTINUED)
AUGUST 31, 1995
<TABLE>
<CAPTION>
YIELD TO
MATURITY
ON DATE PRINCIPAL VALUE
OF PURCHASE AMOUNT (NOTE 1a)
----------- ----------- ------------
<S> <C> <C> <C>
REPURCHASE AGREEMENTS -- 29.9%
Citibank N.A. ........................................................... 5.93% $45,000,000 $ 45,000,000
dated 08/31/95, 5.85%, 09/01/95 (Proceeds at maturity $45,007,313)
collateralized by: $30,479,996 Federal Home Loan Mortgage Corporation
6.103% - 6.314%, 09/01/23 - 12/01/33, and $15,738,113 Federal National
Mortgage Association 7.255%, 12/01/18
Morgan (J.P.) Securities, Inc. .......................................... 5.91 50,000,000 50,000,000
dated 08/31/95, 5.83%, 09/01/95 (Proceeds at maturity $50,008,097)
collateralized by: $51,000,000 Federal National Mortgage Association
6.50% - 8.50%, 11/01/07 - 09/01/25
Prudential Securities, Inc. ............................................. 5.89 38,000,000 38,000,000
dated 08/31/95, 5.81%, 09/01/95 (Proceeds at maturity $38,006,133)
collateralized by: $38,760,000 Federal National Mortgage Association
6.057%, 07/01/24
Smith Barney Securities, Inc. ........................................... 5.93 46,890,000 46,890,000
dated 08/31/95, 5.85%, 09/01/95 (Proceeds at maturity $46,897,620)
collateralized by: $47,832,537 Federal National Mortgage Association
6.133% - 11.25%, 04/10/95 - 07/20/25
UBS Securities, Inc. .................................................... 5.93 50,000,000 50,000,000
dated 08/31/95, 5.85%, 09/01/95 (Proceeds at maturity $50,008,125)
collateralized by: $51,384,889 Federal Home Loan Mortgage Corporation
6.175% - 7.175%, 06/01/20 - 07/01/20
------------
TOTAL REPURCHASE AGREEMENTS -- (cost $229,890,000)....................... 229,890,000
------------
TOTAL INVESTMENTS AND REPURCHASE AGREEMENTS -- 100.2%
(cost $771,222,554)+................................................... 771,222,554
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.2%).......................... (1,737,137)
------------
NET ASSETS -- 100.0%..................................................... $769,485,417
============
</TABLE>
See footnotes to portfolios of investments and accompanying notes to financial
statements.
8
<PAGE> 11
FFB FUNDS TRUST
TAX-FREE MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS -- (UNAUDITED)
AUGUST 31, 1995
<TABLE>
<CAPTION>
CREDIT PRINCIPAL VALUE
RATING* AMOUNT (NOTE 1a)
- ----------- ---------- ------------
<S> <C> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES -- 102.5%
ALABAMA -- 5.1%
NR/A1+ Birmingham Medical Clinic Board Revenue U.A.H.S.F. (Morgan Guaranty
Trust Co.) 3.50%, 09/01/95 (a)................................... $2,000,000 $ 2,000,000
Phenix City Industrial Development Board Environmental Improvement
Revenue:
P1/NR Georgia Kraft Project (Canadian Imperial Bank) 3.60%, 09/01/95
(a).............................................................. 2,200,000 2,200,000
NR/A1 Refunding Mead Coated Board Project B (Sumitomo Bank Ltd.)
3.40%, 09/01/95 (a).......................................... 1,100,000 1,100,000
------------
5,300,000
------------
CALIFORNIA -- 4.2%
MIG1/SP1+ Contra Costa County TRANS 4.50%, 07/03/96.......................... 800,000 805,102
NR/A1 Los Angeles Community Redevelopment Agency COPS Baldwin Hills
Public Park (Wells Fargo Bank) 3.70%, 09/06/95 (a)............... 2,500,000 2,500,000
MIG1/SP1+ San Diego TANS Series A 4.75%, 07/30/96............................ 1,000,000 1,006,495
------------
4,311,597
------------
COLORADO -- 2.5%
VMIG1/A1 Moffat County PCR Refunding Pacificorp Projects (Bank of New York)
3.45%, 09/06/95 (a).............................................. 2,600,000 2,600,000
------------
DELAWARE -- 0.2%
VMIG1/A-1+ Wilmington Hospital Revenue Franciscan Health Systems Series A
(Toronto Dominion Bank) 3.50%, 09/06/95 (a)...................... 200,000 200,000
------------
DISTRICT OF COLUMBIA -- 1.0%
MIG1/SP1 TRANS UTGO Subseries A-5 (First National Bank of Chicago) 6.25%,
09/30/95......................................................... 1,000,000 1,001,035
------------
FLORIDA -- 10.3%
Dade County Special Obligation (Banca Nazionale Del Lavoro) (a):
VMIG1/NR Series A 4.30%, 09/06/95........................................... 350,000 350,000
VMIG1/NR Fixed Equipment Project Series A 3.75%, 10/01/99................... 1,800,000 1,800,000
NR/AAA Hillsborough County Capital Improvement Program Revenue BMTF Mode A
Subseries 2 Water & Waste 8.30%, 02/01/96........................ 1,000,000 1,038,162
Jacksonville Health Facilities Authority Revenue (a):
NR/A1 River Garden Project (Banque Paribas) 3.60%, 09/01/95.............. 1,800,000 1,800,000
VMIG1/A1+ Baptist Medical Center Project (MBIA/Sun Bank of Orlando) 3.60%,
09/06/95......................................................... 2,300,000 2,300,000
MIG1/NR Monroe County School District TANS 4.00%, 06/05/96................. 500,000 500,000
Aaa/AAA Orlando Utilities Commission Water & Electric Revenue Refunding
8.50%, 10/01/95.................................................. 1,000,000 1,023,763
Putnam County Development Authority PCR:
Aa3/A1+ Seminole Electric Series D 4.30%, 09/15/95......................... 1,000,000 1,000,000
Aa3/A1+ Seminole Electric Series D 3.40%, 12/15/95......................... 1,000,000 1,000,000
------------
10,811,925
------------
GEORGIA -- 2.8%
VMIG1/A1+ Fulton County HDA Municipal Housing Revenue Series A (Sumitomo Bank
Ltd.) 3.85%, 09/06/95 (a)........................................ 1,950,000 1,950,000
VMIG1/NR Marietta HDA Multifamily Revenue Housing Falls at Bells Ferry
(Guardian Savings & Loan) 5.25%, 01/15/96........................ 1,000,000 1,000,000
------------
2,950,000
------------
IDAHO -- 3.2%
Aa1/A1+ Custer County PCR Amoco Project Standard Oil 4.20%, 10/01/95....... 1,000,000 1,000,000
</TABLE>
See footnotes to portfolios of investments and accompanying notes to financial
statements.
9
<PAGE> 12
FFB FUNDS TRUST
TAX-FREE MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS -- (UNAUDITED) (CONTINUED)
AUGUST 31, 1995
<TABLE>
<CAPTION>
CREDIT PRINCIPAL VALUE
RATING* AMOUNT (NOTE 1a)
- ----------- ---------- ------------
<S> <C> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES -- (CONTINUED)
IDAHO -- (CONTINUED)
VMIG1/NR Power County PCR FMC Corporation Project (Barclays Bank PLC) 3.45%,
09/01/95 (a)..................................................... $2,300,000 $ 2,300,000
------------
3,300,000
------------
ILLINOIS -- 7.8%
NR/A1+ Chicago Airport Special Facility Revenue CSX Beckett Aviation
(Barclays Bank PLC) 4.01%, 09/15/95(a)........................... 1,000,000 1,000,000
VMIG1/A1+ Chicago O'Hare International Airport Revenue General Airport Second
Lien Series C (Societe Generale) 3.55%, 09/06/95 (a)............. 1,000,000 1,000,000
Illinois Educational Facilities Authority Revenue (a):
VMIG1/A1+ Art Institute (Mitsubishi Bank Ltd.) 3.65%, 09/06/95............... 350,000 350,000
VMIG1/NR Newberry Library (Nothern Trust Co.) 3.60%, 09/06/95............... 300,000 300,000
VMIG1/A1 Revolving Fund Series D (First National Bank of Chicago) 3.70%,
09/06/95......................................................... 400,000 400,000
VMIG1/AAA Illinois Health Facilities Authority Revenue Highland Park Hospital
Series B (FGIC) 4.00%, 06/01/96.................................. 1,000,000 1,000,000
NR/A1+ Illinois HDA Housing Revenue Illinois Center Apartments Project
(Met Life Guaranty) 3.60%, 09/06/95 (a).......................... 1,700,000 1,700,000
VMIG1/A1+ Illinois State Toll Highway Authority Toll Highway Priority Revenue
Refunding Series B (MBIA/Societe Generale) 3.40%, 09/06/95 (a)... 1,000,000 1,000,000
NR/NR Orlando Hills Multi-Family Mortgage Revenue Housing 88th Avenue
Project -- 1985 Series A (Bank One Management and Consulting)
4.10%, 09/01/95 (a).............................................. 1,360,000 1,360,000
------------
8,110,000
------------
INDIANA -- 2.4%
Aaa/AAA Rockport PCR Adjustable Refunding AEP Generating Company Project B
(AMBAC/Bank of New York) 3.50%, 09/01/95 (a)..................... 2,500,000 2,500,000
------------
KANSAS -- 1.7%
NR/A1+ Praire Village Multifamily Housing Revenue J.C. Nichols Co. Project
(Bankers Life Co.) 3.95%, 09/01/95 (a)........................... 1,800,000 1,800,000
------------
KENTUCKY -- 1.9%
P1/A1+ Jefferson County Hospital Belknap Income Project (Chemical Bank)
3.85%, 09/01/95 (a).............................................. 952,000 952,000
VMIG1/NR Pendleton County Revenue Self Insurance Funding Kentucky
Association Counties Fund (PNC Bank) 4.00%, 07/01/96............. 1,000,000 1,000,000
------------
1,952,000
------------
LOUISIANA -- 4.7%
VMIG1/AAA Louisiana Public Facilities Authority Hospital Revenue 3.55%,
09/01/95 (a)..................................................... 500,000 500,000
P1/NR Louisiana Public Facilities Authority Revenue IDA Kenner Hotel Ltd.
Partnership (Swiss Bank) 3.50%, 09/06/95 (a)..................... 500,000 500,000
Aa3/AA- Louisiana State Offshore Deepwater Port Terminal Revenue Bond
3.85%, 10/12/95 (c).............................................. 1,700,000 1,700,000
VMIG1/A1+ Louisiana State Recovery District Sales Tax Revenue (SPA/Swiss
Bank) 3.50%, 09/01/95 (a)........................................ 700,000 700,000
Aaa/AAA New Orleans Refunded GO (CGIC -- Certificate Eligible) 8.00%,
09/01/95......................................................... 1,460,000 1,460,000
------------
4,860,000
------------
MARYLAND -- 1.9%
NR/NR Baltimore County Metropolitan District BAN (Westdeutsche
Landesbank) 4.15%, 09/08/95 (c).................................. 1,000,000 1,000,000
VMIG1/NR Howard County Multifamily Housing Sherwood Crossing Ltd. (Guardian
Savings & Loan) 4.25%, 06/01/96.................................. 1,000,000 1,000,000
------------
2,000,000
------------
</TABLE>
See footnotes to portfolios of investments and accompanying notes to financial
statements.
10
<PAGE> 13
FFB FUNDS TRUST
TAX-FREE MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS -- (UNAUDITED) (CONTINUED)
AUGUST 31, 1995
<TABLE>
<CAPTION>
CREDIT PRINCIPAL VALUE
RATING* AMOUNT (NOTE 1a)
- ----------- ---------- ------------
<S> <C> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES -- (CONTINUED)
MASSACHUSETTS -- 1.9%
VMIG1/A1 Massachusetts State Industrial Finance Agency PCR Refunding N.E.
Power Co. Project Series B 3.90%, 10/06/95 (c)................... $2,000,000 $ 2,000,000
------------
MICHIGAN -- 4.6%
P1/NR Delta County EDC Environmental Improvement Revenue Mead Escanaba
Paper Series C (Bank of Nova Scotia) 3.40%, 09/01/95 (a)......... 3,000,000 3,000,000
VMIG1/NR University of Michigan University Revenue Adjustable Refunding
Hospital Series A 3.45%, 09/01/95................................ 1,300,000 1,300,000
Aaa/AAA Western School District Refunding UTGO (MBIA) 3.70%, 05/01/95...... 500,000 500,000
------------
4,800,000
------------
MISSISSIPPI -- 1.9%
P1/NR Claiborne County PCR (NRUCFC) 3.55%, 10/11/95 (c).................. 2,000,000 2,000,000
------------
MISSOURI -- 0.5%
P1/A1+ Missouri State Environmental Improvement & Energy Resource
Authority PCR Union Electric Company Series B (Union Bank of
Switzerland) 4.00%, 06/01/96..................................... 500,000 500,000
------------
NEW HAMPSHIRE -- 1.4%
NR/A1+ New Hampshire State HFA Refunding Multifamily Housing Revenue
Oxford Project (CNA Insurance) 4.15%, 09/06/95 (a)............... 1,500,000 1,500,000
------------
NEW JERSEY -- 2.1%
MIG1/SP1+ Morris County BAN UTGO 4.70%, 12/15/95............................. 1,000,000 1,000,425
Aa1/AA+ State UTGO 6.25%, 09/15/95......................................... 1,190,000 1,190,700
------------
2,191,125
------------
NEW YORK -- 1.5%
VMIG1/A1+ New York Subseries A-8 UTGO (Morgan Guaranty Trust Co.) 3.40%,
09/01/95 (a)..................................................... 600,000 600,000
Aaa/AAA New York State Energy PCR 4.70%, 03/01/96.......................... 1,000,000 1,000,000
------------
1,600,000
------------
NORTH CAROLINA -- 1.7%
VMIG1/A1+ Greensboro Public Improvement Series B (Wachovia Bank) 3.40%,
09/06/95 (a)..................................................... 1,750,000 1,750,000
------------
OHIO -- 1.0%
VMIG1/A1+ Columbus Series 1 (Westdeutsche Landesbank) 3.30%, 09/07/95 (a).... 1,000,000 1,000,000
------------
OKLAHOMA -- 4.2%
VMIG1/A1+ Tulsa IDA Health Care Facility Revenue Medical Support Services,
Inc. Project (Fuji Bank, Ltd.) 3.60%, 09/07/95 (a)............... 3,000,000 3,000,000
P1/A1+ Tulsa IDA Revenue Refunding Hillcrest Partnership Project 3.60%,
09/06/95 (a)..................................................... 1,305,000 1,305,000
------------
4,305,000
------------
PENNSYLVANIA -- 3.9%
P1/NR Allegheny County IDA Revenue U.S. Steel Environmental Improvement
(Long Term Credit Bank of Japan, Ltd.) 3.80%, 10/06/95 (c)....... 1,500,000 1,500,000
NR/A-1 Chester County IDA Commercial Development Revenue Plaza Associates
Project Series A (Industrial Indemnity Surety Bond/First Federal
Savings & Loan of Pennsylvania) 3.95%, 09/01/95 (a).............. 1,500,000 1,500,000
NR/A1 Schuykill County IDA Resource Recovery Revenue Gilberton Power
Project (Mellon Bank of Pittsburgh) 3.45%, 09/01/95 (a).......... 1,000,000 1,000,000
------------
4,000,000
------------
</TABLE>
See footnotes to portfolios of investments and accompanying notes to financial
statements.
11
<PAGE> 14
FFB FUNDS TRUST
TAX-FREE MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS -- (UNAUDITED) (CONTINUED)
AUGUST 31, 1995
<TABLE>
<CAPTION>
CREDIT PRINCIPAL VALUE
RATING* AMOUNT (NOTE 1a)
- ----------- ---------- ------------
<S> <C> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES -- (CONTINUED)
RHODE ISLAND -- 0.6%
VMIG1/A1 Rhode Island State Health & Educational Adjustable Rate Optional
Put Bonds Bryant College (GO of Institution) 4.50%, 10/01/95..... $ 600,000 $ 600,000
------------
SOUTH CAROLINA -- 1.2%
NR/A1+ Florance County IDA Stone Container Corp. Project (Bankers Trust
Co.) 3.50%, 09/15/95 (a)......................................... 200,000 200,000
MIG1/A-1+ York County PCR North Carolina Electric Project NRU 84N Subseries 5
(CEC) 3.80%, 02/15/95............................................ 1,000,000 1,000,000
------------
1,200,000
------------
TENNESSEE -- 3.5%
VMIG1/A1+ Tennessee State BAN Series B 3.60%, 09/06/95 (a)................... 3,600,000 3,600,000
------------
TEXAS -- 7.8%
NR/A1+ Bexar County Housing Finance Corporation Revenue
Multifamily Guaranteed Mortgage Refunding Creightons Mill
Development Project Series A (N.E. Mutual Life Insurance Co.)
3.90%, 09/06/95 (a).............................................. 1,000,000 1,000,000
MIG1/NR Harris County Housing Financial Corporation Multi-Family Housing
Revenue Arbor II Limited Project (Guardian Savings & Loan) 4.20%,
10/01/95......................................................... 1,000,000 1,000,000
Hockley County IDA PCR:
P1/A1+ Amoco Project 4.15%, 11/01/95...................................... 1,000,000 1,000,000
Aa1/A-1+ Amoco Project Standard Oil Company 3.65%, 03/01/96................. 1,000,000 999,272
VMIG1/A1 North Central Health Facilities Development Corporation Hospital
Revenue Presbyterian Medical Center (SPA/Nationsbank of Texas)
Series C 3.50%, 09/01/95 (a)..................................... 1,100,000 1,100,000
MIG1/SP1 Texas State TRANS 4.75%, 08/30/96.................................. 2,000,000 2,013,106
MIG1/NR Tyler Health Facilities Development Corporation East Texas Medical
Center Regional Health Series C (Banque Paribas) 3.80%,
09/08/95 (c)..................................................... 1,000,000 1,000,000
------------
8,112,378
------------
UTAH -- 2.2%
Aaa/AA- Intermountain Power Agency Utah Power Supply Revenue Series A
7.75%, 07/01/96.................................................. 2,200,000 2,309,138
------------
VIRGINIA -- 8.9%
VMIG1/A1 Chesterfield County IDA PCR Virginia Electric & Power 3.75%,
10/13/95 (c)..................................................... 3,000,000 3,000,000
Aa/AA College Building Authority Virginia Refunding Equipment Leasing
Project 5.20%, 10/01/95.......................................... 1,000,000 1,000,265
VMIG1/NR Harrisonburg Redevelopment & Housing Authority Multifamily Housing
Revenue Rolling Brook Village Apartments Project (Guardian
Savings & Loan) 5.10%, 02/01/96.................................. 1,000,000 1,000,000
NR/A1 Loudoun County IDA Residential Care Facilities Revenue Falcons
Landing Project Series B (Banque Paribas) 3.55%, 11/01/95 (a).... 1,400,000 1,400,000
VMIG1/A1 Louisa IDA PCR Virginia Electric & Power 3.85%, 10/27/95 (c)....... 1,790,000 1,790,000
NR/NR Virginia Educational Loan Authority Guaranteed Refunding Series A
4.00%, 03/01/96.................................................. 1,000,000 1,000,000
------------
9,190,265
------------
WASHINGTON -- 1.5%
Aa/AA Washington State UTGO Series 1995C 5.50%, 07/01/96................. 1,500,000 1,519,735
------------
WEST VIRGINIA -- 1.0%
P1/A1+ Marshell County PCR 3.70%, 09/06/95 (a)............................ 1,000,000 1,000,000
------------
</TABLE>
See footnotes to portfolios of investments and accompanying notes to financial
statements.
12
<PAGE> 15
FFB FUNDS TRUST
TAX-FREE MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS -- (UNAUDITED) (CONTINUED)
AUGUST 31, 1995
<TABLE>
<CAPTION>
CREDIT PRINCIPAL VALUE
RATING* AMOUNT (NOTE 1a)
- ----------- ---------- ------------
<S> <C> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES -- (CONTINUED)
WISCONSIN -- 0.2%
MIG1/SP1+ Milwaukee Revenue TANS Series A 5.50%, 02/22/96.................... $ 200,000 $ 201,336
------------
WYOMING -- 1.2%
VMIG1/A-1 Converse County PCR Refunding Pacificorp Projects (AMBAC/Bank Of
New York) 3.40%, 09/01/95 (a).................................... 1,200,000 1,200,000
------------
TOTAL SHORT-TERM MUNICIPAL SECURITIES -- (cost $106,275,534)....... 106,275,534
------------
U.S. TREASURY BILL -- 0.0%
05/30/96++ (cost $43,168).......................................... 45,000 43,174
------------
TOTAL INVESTMENTS -- 102.5% (cost $106,318,708)+................... 106,318,708
LIABILITIES IN EXCESS OF OTHER ASSETS -- (2.5%).................... (2,611,483)
------------
NET ASSETS -- 100.0%............................................... $103,707,225
============
</TABLE>
See footnotes to portfolios of investments and accompanying notes to financial
statements.
13
<PAGE> 16
FFB FUNDS TRUST
PENNSYLVANIA TAX-FREE MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS -- (UNAUDITED)
AUGUST 31, 1995
<TABLE>
<CAPTION>
CREDIT PRINCIPAL VALUE
RATINGS* AMOUNT (NOTE 1a)
- ---------- ---------- -----------
<S> <C> <C> <C>
MUNICIPAL OBLIGATIONS -- 15.0%
MIG1/NR Allegheny County Port Authority GAN Series A (PNC Bank) 3.875%,
06/28/96........................................................... $2,000,000 $ 1,999,406
Aaa/AAA Bethlehem UTGO Series A (AMBAC) 3.75%, 05/01/96...................... 225,000 225,000
AAA/AAA Berks County Prerefunded UTGO (FGIC/U.S. Government Securities)
7.125%, 11/15/95................................................... 300,000 301,380
Aaa/AAA Bucks County Water & Sewer Authority Revenue Southwest Region Water
District Prerefunded Bond (FGIC/U.S. Government Securities) 9.10%,
12/01/95........................................................... 250,000 252,561
Aaa/AAA Erie Sewer Authority Sewer Revenue (AMBAC) 3.90%, 06/01/96........... 200,000 200,000
Aaa/AAA Ferrell UTGO (MBIA Municipal Government Guaranteed) 3.80%, 09/01/95.. 205,000 205,000
Aaa/AAA Harrisburg UTGO Series A (AMBAC) 3.70%, 04/15/96..................... 400,000 400,000
Aaa/AAA Middle Smithfield UTGO (FGIC) 3.60%, 11/15/95........................ 145,000 145,000
NR/AAA Monroeville Hospital Authority Revenue Hospital Revenue Forbes Health
Systems Prerefunded 1985 Series A (Industrial Indemnity/U.S.
Government Securities) 9.70%, 10/01/13............................. 400,000 409,712
A2/NR Montgomery County Redevelopment Authority Revenue Glenmore
Association Project Series B (Mellon Bank) 3.00%, 11/01/95......... 1,000,000 1,000,000
AAA/NR Montgomery County Higher Education & Health Authority Revenue United
Hospitals Project Series A Prerefunded (U.S. Government Securities)
10.00%, 11/01/95................................................... 400,000 411,286
AAA/NR Northeastern York County UTGO (FGIC) 3.70%, 02/15/96................. 250,000 250,000
NR/NR Pennsylvania HFA 5.00%, 04/01/96..................................... 585,000 585,000
VMIG1/A1+ Pennsylvania State Higher Education Facilities Authority Thomas
Jefferson University Series B (Credit Suisse) 3.90%, 02/26/96...... 1,000,000 1,000,000
MIG1/NR Pennsylvania State University University Project Note Series A 5.50%,
12/21/95........................................................... 500,000 500,577
Aaa/AAA Philadelphia Refunding UTGO (FGIC) 8.00%, 02/15/96................... 1,000,000 1,038,579
NR/AAA Philadelphia Hospitals Authority 3.85%, 07/01/96..................... 1,200,000 1,200,000
NR/AAA Philadelphia Hospital & Higher Education Facilities Authority
Hospital Revenue Franford Hospital (Connie Lee) 4.00%, 01/01/96.... 500,000 500,000
Aaa/AAA State Public School Building Authority College Revenue Refunding
Harrisburg Community College Series A (MBIA) 3.80%, 10/01/95....... 580,000 580,000
NR/SP1+ Temple University of the Commonwealth Systems of Higher Education
University Funding Obligations 5.00%, 05/22/96..................... 1,000,000 1,004,647
VMIG/SP1+ Upper Allegheny Sanitation Authority Allegheny Valley North Series A
4.50%, 01/15/96.................................................... 2,000,000 2,007,963
Aaa/AAA Warren County School District UTGO (FGIC) 4.50%, 09/01/95............ 270,000 270,000
Aaa/AAA Westmoreland County UTGO Series A (FGIC) 3.30%, 10/15/95............. 500,000 499,588
-----------
TOTAL MUNICIPAL OBLIGATIONS.......................................... 14,985,699
-----------
FLOATING RATE DEMAND NOTES (A) -- 66.8%
Allegheny County Hospital Development Authority Revenue:
VMIG1/A+ Allegheny General Hospital Series B (Morgan Guaranty Trust Co.)
3.60%, 09/07/95.................................................. 1,000,000 1,000,000
VMIG1/A+ Series A 3.60%, 09/07/95............................................. 500,000 500,000
VMIG1/A+ Series C 3.60%, 09/07/95............................................. 500,000 500,000
VMIG1/A+ Series D 3.60%, 09/07/95............................................. 1,600,000 1,600,000
VMIG1/A+ 3.60%, 09/06/95...................................................... 800,000 800,000
VMIG1/A+ 3.60%, 09/06/95...................................................... 700,000 700,000
VMIG/A+ Allegheny County UTGO Series C-41 (National Westminster Bank) 3.60%,
09/07/95........................................................... 600,000 600,000
P1/A1 Allegheny County Higher Education Building Authority Revenue
University of Pittsburgh Series D 3.60%, 09/07/95.................. 830,000 830,000
P1/NR Bedford County IDA IDR 3.70%, 09/05/95............................... 1,000,000 1,000,000
P1/NR Bucks County IDA Revenue, SHV Real Estate Incorporated 3.60%,
09/06/95........................................................... 100,000 100,000
A1/NR Chester County IDA 3.95%, 09/01/95................................... 1,033,000 1,033,000
NR/A1 Dauphin County General Authority Hospital Revenue Hapsco Group
Jameson Memorial Series B (PNC Bank Pittsburgh) 3.55%, 09/06/95.... 1,500,000 1,500,000
</TABLE>
See footnotes to portfolios of investments and accompanying notes to financial
statements.
14
<PAGE> 17
FFB FUNDS TRUST
PENNSYLVANIA TAX-FREE MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS -- (UNAUDITED) (CONTINUED)
AUGUST 31, 1995
<TABLE>
<CAPTION>
CREDIT PRINCIPAL VALUE
RATINGS* AMOUNT (NOTE 1a)
- ---------- ---------- -----------
<S> <C> <C> <C>
FLOATING RATE DEMAND NOTES (A) -- (CONTINUED)
Delaware County IDA:
Aaa/AAA UPS 3.40%, 09/01/95................................................ $4,600,000 $ 4,600,000
Aaa/AAA BP Oil 3.25%, 09/01/95............................................. 3,600,000 3,600,000
P1/A1+ Delaware County IDA PCR BP Exploration & Oil 3.25%, 09/01/95......... 1,300,000 1,300,000
Delaware County IDA Solid Waste Revenue Scott Paper
Company (Fuji Bank, Ltd.):
P1/A1+ Series A 3.65%, 09/06/95........................................... 500,000 500,000
P1/A1+ Series C 3.65%, 09/06/95........................................... 600,000 600,000
Delaware County IDA Solid Waste Revenue Scott Paper
Company (National Westminster Bank):
P1/A1+ Series D 3.60%, 09/06/95........................................... 300,000 300,000
P1/A1+ Series E 3.60%, 09/06/95........................................... 1,700,000 1,700,000
Delaware Valley Regional Finance Authority:
VMIG1/A+ Series A (Marine Midland Bank) 3.60%, 09/06/95..................... 1,000,000 1,000,000
VMIG1/A+ Local Government Revenue (Marine Midland Bank) 3.60%, 09/06/95..... 1,100,000 1,100,000
Emmaus General Authority Revenue:
NR/A1 Subseries C-8 (Marine Midland Bank) 3.60%, 09/06/95................ 2,000,000 2,000,000
NR/A1 Subseries D-11 3.60%, 09/06/95..................................... 1,400,000 1,400,000
NR/NR Subseries E-5 (Government Pool) 3.60%, 09/06/95.................... 400,000 400,000
NR/NR Subseries E-8 (Government Pool) 3.60%, 09/06/95.................... 2,000,000 2,000,000
NR/NR Subseries F-5 (Government Pool) 3.60%, 09/06/95.................... 400,000 400,000
NR/NR Subseries H (Government Pool) 3.60%, 09/06/95...................... 500,000 500,000
Aaa/A1+ Gettysburg Area IDA IDR 3.60%, 09/06/95.............................. 165,000 165,000
MIG1/NR Lancaster Higher Education Authority College Revenue Franklin &
Marshall Project 3.60%, 09/01/95................................... 500,000 500,000
Aaa/AAA Lehigh County Authority Water Revenue (Algemene Bank Netherlands)
3.40%, 09/06/95.................................................... 570,000 570,000
AAA/AAA Lehigh County IDA PCR 3.60%, 09/06/95................................ 200,000 200,000
VMIG1/A1+ Montgomery County Higher Education & Health Authority Hospital
Revenue (AMBAC Swiss Bank) 3.40%, 09/06/95......................... 1,700,000 1,700,000
Aaa/AAA Northeastern Pennsylvania Hospital And Education Authority Health
Care Revenue 3.60%, 09/06/95....................................... 1,000,000 1,000,000
Pennsylvania State Higher Educational Facilities Authority:
NR/A1+ College & Universities Revenue Carnegie Mellon Series A (Union Bank
of Switzerland) 3.45%, 09/06/95.................................. 1,100,000 1,100,000
VMIG1/NR College & Universities Revenues Temple University (Morgan Guaranty
Trust Co.) 3.25%, 09/01/95....................................... 1,000,000 1,000,000
VMIG1/A1+ Health Service Revenue University of Pennsylvania Series B 3.45%,
09/06/95......................................................... 400,000 400,000
VMIG1/A1+ Philadelphia Hospitals & Higher Educational Facilities Authority
Hospital Revenue Children's Hospital of Philadelphia Project
(Morgan Guaranty Trust Co.) 3.25%, 09/01/95........................ 3,000,000 3,000,000
NR/A1 Philadelphia IDA Multifamily Revenue 3.75%, 09/07/95................. 750,000 750,000
NR/AAA Philadelphia IDA IDR 3.25%, 09/01/95................................. 400,000 400,000
Aa/A1+ Quakertown General Authority Health Facility Revenue -- Lifequest &
Affiliates Project (National Westminster Bank) 3.60%, 09/07/95..... 400,000 400,000
Saint Mary Hospital Authority Langhorne Hospital Revenue Franciscan
Health Systems:
VMIG1/AA1 Series A 3.40%, 09/01/95......................................... 2,120,000 2,120,000
VMIG1/AA1 Series B 3.40%, 09/01/95......................................... 350,000 350,000
VMIG1/AA1 Series C 3.40%, 09/01/95......................................... 500,000 500,000
Sayre Health Care Facilities Authority Revenue (AMBAC):
Aaa/AAA Series A 3.50%, 09/07/95........................................... 400,000 400,000
Aaa/AAA Series M 3.50%, 09/06/95........................................... 400,000 400,000
Schuykill County IDA Recovery Revenue:
NR/A-1 Gilberton Power Project (Mellon Bank of Pittsburgh) 3.55%,
09/06/95......................................................... 4,200,000 4,200,000
P1/NR Northeastern Power Company 3.60%, 09/01/95......................... 5,400,000 5,400,000
NR/A-1 Westwood Energy Project 3.45%, 09/01/95............................ 4,400,000 4,400,000
VMIG1/AA Washington County Authority Lease Revenue -- Higher Education Pooled
Equipment A (Sanwa Bank, Ltd.) 3.65%, 09/06/95..................... 1,400,000 1,400,000
</TABLE>
See footnotes to portfolios of investments and accompanying notes to financial
statements.
15
<PAGE> 18
FFB FUNDS TRUST
PENNSYLVANIA TAX-FREE MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS -- (UNAUDITED) (CONTINUED)
AUGUST 31, 1995
<TABLE>
<CAPTION>
CREDIT PRINCIPAL VALUE
RATINGS* AMOUNT (NOTE 1a)
- ---------- ---------- -----------
<S> <C> <C> <C>
FLOATING RATE DEMAND NOTES (A) -- (CONTINUED)
NR/A York County IDA IDR (Preston Trucking Co.) 3.75%, 09/01/95........... $4,600,000 $ 4,600,000
-----------
TOTAL FLOATING RATE DEMAND NOTES -- (cost $66,518,000)............... 66,518,000
-----------
TAX-EXEMPT COMMERCIAL PAPER -- 16.5%
P1/A1 Allegheny County IDA US Steel Environmental Import 3.80%, 10/06/95... 2,000,000 2,000,000
Beaver County IDA PCR Refunding Toledo Edison Company (Toronto
Dominion Bank):
P1/A-1+ Series E 3.65%, 10/27/95......................................... 2,000,000 2,000,000
P1/A-1+ Series E 3.60%, 09/28/95......................................... 2,000,000 2,000,000
Delaware County IDA:
A1-NR 3.50%, 09/08/95.................................................. 1,000,000 1,000,000
A1-NR 3.25%, 10/06/95.................................................. 1,200,000 1,200,000
A1-NR 3.50%, 10/13/95.................................................. 1,000,000 1,000,000
NR/A1 Lehigh County General Purpose Authority Revenue 3.75%, 11/29/95...... 3,500,000 3,500,000
Montgomery County IDA:
NR/A1 3.75%, 10/19/95.................................................. 1,700,000 1,700,000
NR/A1 3.05%, 11/09/95.................................................. 2,000,000 2,000,000
-----------
TOTAL TAX-EXEMPT COMMERCIAL PAPER -- (cost $16,400,000).............. 16,400,000
-----------
PUERTO RICO OBLIGATIONS -- 2.0%
Baa/AAA Puerto Rico PCR Industrial Medical & Environmental Series C 7.25%,
12/01/95........................................................... 1,000,000 997,617
Baa/AAA Puerto Rico Government 3.60%, 11/09/95(c)............................ 1,000,000 1,000,000
-----------
TOTAL PUERTO RICO OBLIGATIONS -- (cost $1,997,617)................... 1,997,617
-----------
TOTAL INVESTMENTS -- 100.3% -- (cost $99,901,316).................... 99,901,316
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.3%)...................... (274,217)
-----------
NET ASSETS -- 100.0%................................................. $99,627,099
===========
</TABLE>
See footnotes to portfolios of investments and accompanying notes to financial
statements.
16
<PAGE> 19
FFB FUNDS TRUST
MONEY MARKET FUNDS
FOOTNOTES TO PORTFOLIOS OF INVESTMENTS -- (UNAUDITED)
AUGUST 31, 1995
* Credit Ratings given by Moody's Investor Service, Inc. and Standard & Poor's
Corporation.
<TABLE>
<CAPTION>
MOODY'S STANDARD & POOR'S
- ----------- ------------------
<C> <C> <S>
P-1 A-1 Short-term instruments of the highest quality.
Aaa AAA Instrument judged to be of the highest quality and carrying the smallest
amount of investment risk.
Aa AA Instrument judged to be of high quality by all standards.
A A Instrument judged to be adequate by all standards.
MIG1/VMIG1 SP1 Instrument judged to be the best quality with strong protection.
NR NR Not Rated. In the opinion of the Investment Adviser, instrument judged to
be of comparable investment quality to rated securities which may be
purchased by the Funds.
</TABLE>
Items which possess the strongest investment attributes of their category are
given that letter rating followed by a number. The Standard & Poor's ratings may
be modified by the addition of a plus or minus sign to show relative standing
within the major rating categories. Moody's applies numerical modifiers to
designate relative standings within the generic ratings categories. Government
issues have assumed ratings of AAA/Aaa.
ABBREVIATIONS USED IN THE PORTFOLIOS:
<TABLE>
<S> <C>
ACES........................ Adjusted Convertible Extendable Security
AMBAC....................... American Municipal Bond Assurance Corporation
BAN......................... Bond Anticipation Note
CGIC........................ Capital Guaranty Insurance Corp.
COPS........................ Certificates of Participation
FGIC........................ Financial Guaranty Insurance Corporation
FSA......................... Financial Security Assurance
GAN......................... Grant Anticipation Note
GO.......................... General Obligation
HDA......................... Housing Development Authority
HFA......................... Housing Finance Agency
IDA......................... Industrial Development Authority
IDR......................... Industrial Development Revenue
LTGO........................ Limited Tax General Obligation
MBIA........................ Municipal Bond Insurance Association
NRUCFC...................... National Rural Utilities Cooperative Finance Corporation
PCR......................... Pollution Control Revenue
RANS........................ Revenue Anticipation Notes
SPA......................... Standby Purchase Agreement
TANS........................ Tax Anticipation Notes
TRANS....................... Tax and Revenue Anticipation Notes
UTGO........................ Unlimited Tax General Obligation
+ The cost of securities for Federal income tax purposes is substantially the same.
++ This security is pledged as collateral for a Letter of Credit. The Funds have issued letters of credit
to ICI Insurance carriers for $5,000,000 and have pledged certain securities as collateral.
(a) Floating Rate Demand Notes. Maturity date shown is the interest reset date; rate shown is rate in effect
at August 31, 1995.
(b) Maturity date shown is the mandatory or optional put date.
(c) Tax Exempt Commercial Paper.
INVESTMENT PERCENTAGES SHOWN ARE CALCULATED AS A PERCENTAGE OF NET ASSETS.
INSTITUTIONS SHOWN IN PARENTHESES HAVE ENTERED INTO CREDIT SUPPORT AGREEMENTS WITH THE ISSUER.
</TABLE>
See accompanying notes to financial statements.
17
<PAGE> 20
FFB FUNDS TRUST
MONEY MARKET FUNDS
STATEMENT OF NET ASSETS -- (UNAUDITED)
AUGUST 31, 1995
<TABLE>
<CAPTION>
PENNSYLVANIA
TAX-FREE TAX-FREE
U.S. U.S. CASH MONEY MONEY
TREASURY GOVERNMENT MANAGEMENT MARKET MARKET
FUND FUND FUND FUND FUND
----------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments in securities, at value (amortized
cost $438,357,302, $213,615,866, $541,332,554,
$106,318,708, and $99,901,316, respectively)... $438,357,302 $213,615,866 $541,332,554 $106,318,708 $99,901,316
Repurchase Agreements, at value (cost
$451,015,000, $34,317,000, $229,890,000, $0,
and $0, respectively).......................... 451,015,000 34,317,000 229,890,000 -- --
Cash............................................. 401 -- 40,119 1,033 --
Interest receivable.............................. 2,212,421 448,013 1,793,045 744,099 529,814
Prepaid expenses................................. 118,108 236,675 181,793 45,573 741
Other assets..................................... 10,838 26,336 57,387 14,411 5,540
------------ ----------- ------------ ----------- -----------
Total Assets................................. 891,714,070 248,643,890 773,294,898 107,123,824 100,437,411
------------ ----------- ------------ ----------- -----------
LIABILITIES
Payable to Bank.................................. -- 11,223 -- -- 44,121
Income dividend payable.......................... 3,918,808 1,109,891 3,302,792 301,094 286,227
Advisory fee payable............................. 255,177 75,065 212,628 32,334 1,497
Administrative services fee payable.............. 108,854 32,171 91,126 13,858 9,799
Shareholder services fee payable................. 38,930 10,724 31,391 4,619 --
Custodian fee payable............................ 10,331 4,689 8,823 3,467 --
Transfer agent fee payable....................... 320 1,111 665 195 --
Payable for securities purchased................. -- 9,999,000 -- 3,012,366 400,740
Other accrued expenses........................... 101,489 62,587 162,056 48,666 67,928
------------ ----------- ------------ ----------- -----------
Total Liabilities............................ 4,433,909 11,306,461 3,809,481 3,416,599 810,312
------------ ----------- ------------ ----------- -----------
NET ASSETS....................................... $887,280,161 $237,337,429 $769,485,417 $103,707,225 $99,627,099
============ ============ ============ ============ ===========
NET ASSETS
Shares of beneficial interest outstanding (par
value $0.001 per share) 3,000,000,000,
2,000,000,000, 3,000,000,000, 2,000,000,000,
and 1,000,000,000 shares authorized,
respectively................................... 887,280 237,337 769,485 103,681 99,633
Additional paid-in capital....................... 886,392,881 237,100,092 768,715,932 103,577,251 99,533,505
Accumulated undistributed realized gain (loss) on
investments.................................... -- -- -- 26,293 (6,039)
------------ ------------ ------------ ----------- -----------
Net assets applicable to shares outstanding...... $887,280,161 $237,337,429 $769,485,417 $103,707,225 $99,627,099
============ ============ ============ ============ ===========
NET ASSETS
INSTITUTIONAL CLASS:
Shares of Beneficial Interest Outstanding...... 887,079,161 237,320,229 768,842,562 103,680,932 99,513,138
============ ============ ============ ============ ===========
Net Asset Value Per Share...................... $1.00 $1.00 $1.00 $1.00 $1.00
============ ============ ============ ============ ===========
SERVICE CLASS:
Shares of Beneficial Interest Outstanding...... 201,000 17,200 642,855 N/A 120,000
============ ============ ============ ============ ===========
Net Asset Value Per Share...................... $1.00 $1.00 $1.00 N/A $1.00
============ ============ ============ ============ ===========
</TABLE>
See accompanying notes to financial statements.
18
<PAGE> 21
FFB FUNDS TRUST
MONEY MARKET FUNDS
STATEMENT OF OPERATIONS -- (UNAUDITED)
FOR THE SIX MONTHS ENDED AUGUST 31, 1995
<TABLE>
<CAPTION>
TAX-FREE PENNSYLVANIA
U.S. U.S. CASH MONEY TAX-FREE
TREASURY GOVERNMENT MANAGEMENT MARKET MONEY MARKET
FUND FUND FUND FUND FUND
----------- ---------- ----------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Investment Income................................. $24,440,618 $6,676,584 $22,350,372 $2,155,218 $1,287,611
----------- ---------- ----------- ---------- ----------
Expenses:
Advisory........................................ 1,383,825 395,532 1,246,187 187,080 133,036
Administrative services......................... 575,890 157,189 501,028 74,695 49,888
Shareholder services............................ 176,938 47,429 381,100 19,943 794
Distribution.................................... 102,836 28,316 86,534 13,363 8,256
Custodian....................................... 83,644 49,543 73,745 27,669 8,464
Registration.................................... 21,485 18,052 48,100 6,995 16,916
Audit........................................... 21,234 6,265 22,226 6,208 5,329
Insurance....................................... 11,764 3,561 12,667 1,829 594
Legal........................................... 8,525 2,504 18,189 2,276 2,164
Reports to shareholders......................... 4,869 2,520 7,134 5,452 3,251
Trustees........................................ 3,524 3,524 3,524 3,524 3,524
Transfer agent.................................. 2,371 14,176 6,772 4,038 5,554
Fund accounting................................. -- -- -- -- 21,102
Miscellaneous................................... 15,709 15,606 20,516 4,718 4,897
----------- ---------- ----------- ---------- ----------
Total expenses before waivers................. 2,412,614 744,217 2,427,722 357,790 263,769
Less expenses waived by
Adviser/Administrator....................... (7,427) (7,596) (11,919) (1,959) (193,211)
----------- ---------- ----------- ---------- ----------
Net expenses.................................... 2,405,187 736,621 2,415,803 355,831 70,558
----------- ---------- ----------- ---------- ----------
Net investment income............................. 22,035,431 5,939,963 19,934,569 1,799,387 1,217,053
----------- ---------- ----------- ---------- ----------
Net realized loss on investments.................. -- -- -- -- (189)
----------- ---------- ----------- ---------- ----------
Net increase in net assets resulting from
operations...................................... $22,035,431 $5,939,963 $19,934,569 $1,799,387 $1,216,864
=========== ========== =========== ========== ==========
</TABLE>
See accompanying notes to financial statements.
19
<PAGE> 22
FFB FUNDS TRUST
MONEY MARKET FUNDS
STATEMENT OF CHANGES IN NET ASSETS -- (UNAUDITED)
<TABLE>
<CAPTION>
U.S. TREASURY FUND U.S. GOVERNMENT FUND CASH MANAGEMENT FUND
--------------------------------- ----------------------------- ---------------------------------
PERIOD ENDED YEAR ENDED PERIOD ENDED YEAR ENDED PERIOD ENDED YEAR ENDED
AUGUST 31, FEBRUARY 28, AUGUST 31, FEBRUARY 28, AUGUST 31, FEBRUARY 28,
1995 1995 1995 1995 1995 1995
--------------- --------------- ------------- ------------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Operations:
Net investment
income............... $ 22,035,431 $ 25,341,446 $ 5,939,963 $ 8,519,531 $ 19,934,569 $ 22,762,418
Net realized loss on
investments.......... -- -- -- -- -- (2,036)
--------------- --------------- ------------- ------------- --------------- ---------------
Net increase in net
assets resulting from
operations............. 22,035,431 25,341,446 5,939,963 8,519,531 19,934,569 22,760,382
--------------- --------------- ------------- ------------- --------------- ---------------
Distributions to
Shareholders
From Net Investment
Income:
Institutional
Class.............. (22,034,490) (25,341,446) (5,939,943) (8,519,531) (19,930,441) (22,760,382)
Service Class........ (941) -- (20) -- (4,128) --
--------------- --------------- ------------- ------------- --------------- ---------------
(22,035,431) (25,341,446) (5,939,963) (8,519,531) (19,934,569) (22,760,382)
--------------- --------------- ------------- ------------- --------------- ---------------
Capital Share
Transactions
(at $1.00 per share):
Proceeds from sales of
shares:
Institutional
Class.............. 1,584,441,049 2,278,464,898 346,165,669 955,839,659 1,183,683,270 2,272,124,455
Service Class........ 202,000 -- 17,200 -- 725,917 --
--------------- --------------- ------------- ------------- --------------- ---------------
1,584,643,049 2,278,464,898 346,182,869 955,839,659 1,184,409,187 2,272,124,455
--------------- --------------- ------------- ------------- --------------- ---------------
Net asset value of
shares issued in
reinvestment of
distributions:
Institutional
Class.............. 4,678,834 2,744,080 1,286,665 1,322,329 1,693,635 2,310,362
Service Class........ 46 -- -- -- 1,586 --
--------------- --------------- ------------- ------------- --------------- ---------------
4,678,880 2,744,080 1,286,665 1,322,329 1,695,221 2,310,362
--------------- --------------- ------------- ------------- --------------- ---------------
Cost of shares
redeemed:
Institutional
Class.............. (1,373,822,039) (2,282,509,968) (334,446,508) (965,059,364) (1,146,241,561) (2,148,775,607)
Service Class........ (1,000) -- -- -- (84,647) --
--------------- --------------- ------------- ------------- --------------- ---------------
(1,373,823,039) (2,282,509,968) (334,446,508) (965,059,364) (1,146,326,208) (2,148,775,607)
--------------- --------------- ------------- ------------- --------------- ---------------
Net increase (decrease)
in net assets from
capital share
transactions........... 215,498,890 (1,300,990) 13,023,026 (7,897,376) 39,778,200 125,659,210
--------------- --------------- ------------- ------------- --------------- ---------------
Net Increase (Decrease)
in Net Assets.......... 215,498,890 (1,300,990) 13,023,026 (7,897,376) 39,778,200 125,659,210
Net Assets:
Beginning of period.... 671,781,271 673,082,261 224,314,403 232,211,779 729,707,217 604,048,007
--------------- --------------- ------------- ------------- --------------- ---------------
End of period.......... $ 887,280,161 $ 671,781,271 $ 237,337,429 $ 224,314,403 $ 769,485,417 $ 729,707,217
=============== =============== ============= ============= =============== ===============
</TABLE>
See accompanying notes to financial statements.
20
<PAGE> 23
FFB FUNDS TRUST
MONEY MARKET FUNDS
STATEMENT OF CHANGES IN NET ASSETS -- (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
PENNSYLVANIA TAX-FREE MONEY
TAX-FREE MONEY MARKET FUND MARKET FUND
------------------------------ ----------------------------
PERIOD ENDED YEAR ENDED PERIOD ENDED YEAR ENDED
AUGUST 31, FEBRUARY 28, AUGUST 31, FEBRUARY 28,
1995 1995 1995 1995
------------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
Operations:
Net investment income........................... $ 1,799,387 $ 2,319,359 $ 1,217,053 $ 656,169
Net realized loss on investments................ -- (1,707) (189) (5,850)
------------- ------------- ------------ ------------
Net increase in net assets resulting from
operations...................................... 1,799,387 2,317,652 1,216,864 650,319
------------- ------------- ------------ ------------
Distributions to Shareholders from Net Investment
Income:
Institutional Class........................... (1,799,387) (2,319,359) (1,216,947) (656,169)
Service Class................................. -- -- (106) --
------------- ------------- ------------ ------------
(1,799,387) (2,319,359) (1,217,053) (656,169)
------------- ------------- ------------ ------------
Capital Share Transactions (at $1.00 per share):
Proceeds from sales of shares:
Institutional Class........................... 162,519,110 372,728,541 106,887,131 72,181,908
Service Class................................. -- -- 120,000 --
------------- ------------- ------------ ------------
162,519,110 372,728,541 107,007,131 72,181,908
------------- ------------- ------------ ------------
Net asset value of shares issued in reinvestment
of distributions:
Institutional Class........................... 193,720 250,655 591,352 437,609
Service Class................................. -- -- -- --
------------- ------------- ------------ ------------
193,720 250,655 591,352 437,609
------------- ------------- ------------ ------------
Cost of shares redeemed:
Institutional Class........................... (167,069,823) (379,401,874) (51,510,287) (43,458,037)
Service Class................................. -- -- -- --
------------- ------------- ------------ ------------
(167,069,823) (379,401,874) (51,510,287) (43,458,037)
------------- ------------- ------------ ------------
Net increase (decrease) in net assets from capital
share transactions.............................. (4,356,993) (6,422,678) 56,088,196 29,161,480
------------- ------------- ------------ ------------
Net Increase (Decrease) in Net Assets............. (4,356,993) (6,424,385) 56,088,007 29,155,630
Net Assets:
Beginning of period............................. 108,064,218 114,488,603 43,539,092 14,383,462
------------- ------------- ------------ ------------
End of period................................... $ 103,707,225 $ 108,064,218 $99,627,099 $43,539,092
============= ============= ============ ============
</TABLE>
See accompanying notes to financial statements.
21
<PAGE> 24
FFB FUNDS TRUST
MONEY MARKET FUNDS
NOTES TO FINANCIAL STATEMENTS -- (UNAUDITED)
AUGUST 31, 1995
1. Description and Organization. FFB Funds Trust (the "Trust") was organized
in Massachusetts as a business trust on March 25, 1987 and currently consists of
twelve separately managed portfolios. U.S. Treasury Fund, U.S. Government Fund,
Cash Management Fund, Tax-Free Money Market Fund and Pennsylvania Tax-Free Money
Market Fund (the "Funds") are described in this report.
These Funds are divided into two classes of shares, the Institutional Class
Shares and the Service Class Shares, respectively. The Service Class Shares
began operations on July 14, 1995, August 24, 1995, June 14, 1995 and August 22,
1995, respectively, for the U.S. Treasury Fund, U.S. Government Fund and
Pennsylvania Tax-Free Money Market Fund, respectively. The Service Class Shares
of the Tax-Free Money Market Fund have not been issued as of August 31, 1995.
(a) The Funds value their investment securities at amortized cost which
approximates market value in accordance with Rule 2a-7 under the Investment
Company Act of 1940 (the "Act") in order to maintain a constant net asset value
of $1.00 per share.
(b) It is the Funds' policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute to
their shareholders all of their net investment taxable and non-taxable income,
and any net taxable gains realized. Therefore, no Federal income tax provision
is required.
(c) Each of the Funds' dividends from taxable and non-taxable net investment
income, including realized gains or losses, if any, on portfolio transactions,
are declared each business day and paid within five business days after the end
of the month.
(d) Investment transactions are recorded on the trade date. Identified cost of
investments sold is used for both financial statement and Federal income tax
purposes. Interest income, including the amortization of discount or premium, is
recorded as earned.
(e) Each Fund bears all costs of its operations other than expenses specifically
assumed by the Administrator or Adviser. Expenses specifically identifiable to a
particular Fund are borne by that Fund. Other expenses are allocated to each
Fund based on its net assets in relation to the total net assets of the Trust or
on another reasonable basis. In calculating net asset value per share of each
class, investment income, realized and unrealized gains and losses, and expenses
other than class specific expenses, are allocated daily to each class of shares
based upon the proportion of net assets of each class at the beginning of each
day.
2. Adviser and Administrator. The Trust retains First Fidelity Bank, National
Association, New Jersey ("First Fidelity") to act as Adviser and Furman Selz
Incorporated ("Furman Selz") to act as Administrator for the Funds. First
Fidelity furnishes to the Trust investment guidance and policy direction in
connection with the management of the portfolios of the Funds', subject to
policy established by the Board of Trustees of the Trust, and administrative
assistance in connection with the operation of the Trust and the Funds. First
Fidelity is a wholly-owned subsidiary of First Fidelity Bancorporation.
Furman Selz provides management and administrative services necessary for the
operation of the Trust and the Funds. Furman Selz also furnishes office space
and certain facilities required for conducting the business of the Trust and
pays the compensation of the Trust's officers and Trustees affiliated with
Furman Selz.
As compensation for their advisory, administrative and management services,
First Fidelity and Furman Selz were each entitled to a monthly fee at the
following annual rates of average daily net assets.
<TABLE>
<CAPTION>
FEE RATE
-----------------
U.S. TREASURY FUND, U.S. GOVERNMENT FUND, FIRST FURMAN
CASH MANAGEMENT FUND AND TAX-FREE MONEY MARKET FUND FIDELITY SELZ
- -------------------------------------------------------------------------------- ------- -------
<S> <C> <C>
Not exceeding $500 million...................................................... 0.350% 0.150%
In excess of $500 million but not exceeding $1 billion.......................... 0.315% 0.135%
In excess of $1 billion but not exceeding $1.5 billion.......................... 0.280% 0.120%
In excess of $1.5 billion....................................................... 0.245% 0.105%
</TABLE>
22
<PAGE> 25
FFB FUNDS TRUST
MONEY MARKET FUNDS
NOTES TO FINANCIAL STATEMENTS -- (UNAUDITED) (CONTINUED)
AUGUST 31, 1995
<TABLE>
<CAPTION>
FEE RATE
-----------------
FIRST FURMAN
PENNSYLVANIA TAX-FREE MONEY MARKET FUND FIDELITY SELZ
- -------------------------------------------------------------------------------- ------- -------
<S> <C> <C>
Not exceeding $500 million...................................................... 0.400% 0.150%
In excess of $500 million but not exceeding $1 billion.......................... 0.360% 0.135%
In excess of $1 billion but not exceeding $1.5 billion.......................... 0.320% 0.120%
In excess of $1.5 billion....................................................... 0.280% 0.105%
</TABLE>
For the six months ended August 31, 1995, First Fidelity and Furman Selz were
entitled to and earned fees from each of the Funds as indicated below:
<TABLE>
<CAPTION>
FIRST FURMAN
FIDELITY SELZ
----------- ---------
<S> <C> <C>
U.S. Treasury Fund........................................................... $1,383,825 $575,890
U.S. Government Fund......................................................... 395,532 157,189
Cash Management Fund......................................................... 1,246,187 501,028
Tax-Free Money Market Fund................................................... 187,080 74,695
Pennsylvania Tax-Free Money Market Fund...................................... 133,036 49,888
</TABLE>
First Fidelity waived $131,811 of their advisory fee and Furman Selz waived
$38,003 of their administrative services fee for the six months ended August 31,
1995 from the Pennsylvania Tax-Free Money Market Fund.
In addition, Furman Selz voluntarily waived partial fees of $7,427, $7,596,
$11,919, and $1,959, respectively, from the U.S. Treasury Fund, U.S. Government
Fund, Cash Management Fund, and Tax-Free Money Market Fund.
3. Other Services with Affiliates. First Fidelity is the transfer agent and
dividend disbursing agent for the Funds. Furman Selz acts as Sub-Transfer Agent
and receives an annual per account fee plus reimbursement of out-of-pocket
expenses. For the Pennsylvania Tax-Free Money Market Fund, Furman Selz waived
sub-transfer agent fees of $1,745.
In addition, First Fidelity may enter into agreements (the "Subaccounting
Agreements") with certain banks, financial institutions and corporations (the
"Participating Organizations") so that each Participating Organization handles
recordkeeping and provides certain administrative services for its customers who
invest in the Funds through accounts maintained at the Participating
Organization. In such cases, the Participating Organization or one of its
nominees will be the shareholder of record as nominee for its customers and will
maintain subaccounts for its customers. Each Participating Organization will
receive monthly payments, which in some cases may be based upon expenses that
the Participating Organization has incurred in the performance of its services
under the Subaccounting Agreement. The payment from each of the Funds will not
exceed, on an annualized basis, an amount equal to 0.25% of the average daily
value of the Fund's Institutional Class Shares, and 0.35% of the Fund's Service
Class Shares, during the preceding month, in the subaccounts of which the
Participating Organization is record owner as nominee for its customers.
First Fidelity currently receives shareholder servicing fees of 0.05% from each
of the Fund's Service Class Shares, except Pennsylvania Tax-Free Money Market
Fund. For the six months ended August 31, 1995, First Fidelity received $176,938
from the U.S. Treasury Fund, $47,429 from the U.S. Government Fund, $147,916
from the Cash Management Fund, and $18,325 from the Tax-Free Money Market Fund.
First Fidelity also acts as custodian for the Funds. For furnishing custodian
services, First Fidelity is paid a monthly fee with respect to each Fund at an
annual rate based on a percentage of average daily net assets plus certain
transaction and out-of-pocket expenses. For the six months ended August 31,
1995, First Fidelity earned custodian fees of $83,644 from the U.S. Treasury
Fund, $37,002 from the U.S. Government Fund,
23
<PAGE> 26
FFB FUNDS TRUST
MONEY MARKET FUNDS
NOTES TO FINANCIAL STATEMENTS -- (UNAUDITED) (CONTINUED)
AUGUST 31, 1995
$73,571 from the Cash Management Fund, and $27,669 from the Tax-Free Money
Market Fund. For the Pennsylvania Tax-Free Money Market Fund, First Fidelity
waived custodian fees of $6,652.
Furman Selz performs fund accounting services and maintains the books and
records for the Funds. Furman Selz is not paid a fund accounting fee from any of
the Funds except Pennsylvania Tax-Free Money Market Fund. The Pennsylvania
Tax-Free Money Market Fund pays Furman Selz a fee of $2,500 per month for
performing fund accounting services. For the six months ended August 31, 1995,
Furman Selz waived this fee of $15,000.
FFB Funds Distributor, Inc., a wholly-owned subsidiary of Furman Selz, acts as
Distributor for the Trust. Each Fund has adopted a Master Distribution Plan (the
"Plan") pursuant to Rule 12b-1 of the Investment Company Act of 1940, after
having concluded that there is a reasonable likelihood that the Plan will
benefit each Fund and its shareholders. The Plan provides for a monthly payment
by each Fund to the Distributor in such amounts that the Distributor presents
for Board approval, provided that each such payment is based on the average
daily value of the Fund's net assets during the preceding month and is
calculated at an annual rate not to exceed 0.25% for both classes of the U.S.
Treasury Fund, U.S. Government Fund, Cash Management Fund and Tax-Free Money
Market Fund; and 0.35% for both classes of Pennsylvania Tax-Free Money Market
Fund. For the six months ended August 31, 1995, the Funds accrued distribution
expenses of $102,836, $28,316, $86,534, $13,363 and $8,256, respectively, from
the U.S. Treasury Fund, U.S. Government Fund, Cash Management Fund, Tax-Free
Money Market Fund, and Pennsylvania Tax-Free Money Market Fund.
For all of the Funds, certain of the states in which the Trust is qualified for
sale impose limitations on the expenses of the Trust. The Advisory Contract and
the Administrative Services Contract provide that if, in any fiscal year, the
total expenses of a Fund (excluding taxes, interest, distribution expenses,
brokerage commissions and other portfolio transaction expenses, other
expenditures which are capitalized in accordance with generally accepted
accounting principles and extraordinary expenses, but including the advisory and
administrative services fee) exceed the expense limitation applicable to that
Fund imposed by the securities regulations of any state, First Fidelity and
Furman Selz will pay or reimburse the Fund in amounts equal to 70% and 30% of
the excess, respectively. For the six months ended August 31, 1995, no payments
or reimbursements were required as a result of these expense limitations.
4. Repurchase Agreements. The Funds may enter into repurchase agreements with
government securities dealers recognized by the Federal Reserve Board, with
member banks of the Federal Reserve System or with such other brokers or dealers
that meet the credit guidelines established by the Board of Trustees. The Funds
maintain securities as collateral whose market value, including accrued
interest, will be at least equal to 102% of the dollar amount invested by that
Fund in each agreement, including accrued interest, and that Fund will make
payment for such securities only upon physical delivery or upon evidence of book
entry transfer to the account of the custodian. To the extent that any
repurchase transaction exceeds one business day, the value of the collateral is
marked-to-market on a daily basis to ensure the adequacy of the collateral. If
the seller defaults and the value of the collateral declines or if bankruptcy
proceedings are commenced with respect to the seller of the security,
realization of the collateral by the Fund may be delayed or limited.
5. Concentration of Credit Risk. The Pennsylvania Tax-Free Money Market Fund
invests substantially all of its assets in debt obligations issued by the
Commonwealth of Pennsylvania and its authorities and agencies. The issuers'
ability to meet their obligations may be affected by economic or political
developments in the Commonwealth of Pennsylvania.
24
<PAGE> 27
FFB FUNDS TRUST
MONEY MARKET FUNDS
FINANCIAL HIGHLIGHTS -- (UNAUDITED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
PERIOD ENDED AUGUST 31,
1995 YEAR YEAR YEAR YEAR
----------------------- ENDED ENDED ENDED ENDED
INSTITUTIONAL SERVICE FEBRUARY 28, FEBRUARY 28, FEBRUARY 29, FEBRUARY 28,
CLASS CLASS** 1995 1994 1993 1992
------------- -------- ------------ ------------ ------------ ------------
U.S. TREASURY FUND
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period....... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
------------- -------- ------------ ------------ ------------ ------------
Income from Investment Operations:
Net investment income.................... 0.027 0.027 0.040 0.026 0.031 0.050
------------- -------- ------------ ------------ ------------ ------------
Less Distributions:
Dividends from net investment income..... (0.027) (0.027) (0.040) (0.026) (0.031) (0.050)
------------- -------- ------------ ------------ ------------ ------------
Net Asset Value, End of Period............. $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
============= ======== ============ ============ ============ ============
Total Return............................... 2.73% 2.73% 4.07% 2.63% 3.16% 5.15%
Ratios/Supplemental Data:
Net Assets, End of Period (in
thousands)............................. $ 887,079 $ 201 $671,781 $673,082 $503,637 $453,363
Ratios of Net Expenses to Average Net
Assets................................. 0.59%* 0.59%* 0.58% 0.56% 0.57% 0.56%
Ratios of Net Investment Income to
Average Net Assets..................... 5.38%* 5.38%* 4.04% 2.60% 3.11% 5.02%
<CAPTION>
U.S. GOVERNMENT FUND
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period....... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
------------- -------- ------------ ------------ ------------ ------------
Income from Investment Operations:
Net investment income.................... 0.027 0.027 0.041 0.026 0.031 0.051
------------- -------- ------------ ------------ ------------ ------------
Less Distributions:
Dividends from net investment income..... (0.027) (0.027) (0.041) (0.026) (0.031) (0.051)
------------- -------- ------------ ------------ ------------ ------------
Net Asset Value, End of Period............. $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
============= ======== ============ ============ ============ ============
Total Return............................... 2.69% 2.69% 4.11% 2.63% 3.20% 5.19%
Ratios/Supplemental Data:
Net Assets, End of Period (in
thousands)............................. $ 237,320 $ 17 $224,314 $232,212 $201,235 $205,969
Ratios of Net Expenses to Average Net
Assets................................. 0.65%* 0.65%* 0.62% 0.59% 0.58% 0.54%
Ratios of Net Investment Income to
Average Net Assets..................... 5.27%* 5.27%* 4.08% 2.60% 3.15% 5.06%
</TABLE>
* Annualized
** The Service Class of U.S. Treasury Fund commenced operations on July 14,
1995. The Service Class of U.S. Government Fund commenced operations on
August 24, 1995.
25
<PAGE> 28
FFB FUNDS TRUST
MONEY MARKET FUNDS
FINANCIAL HIGHLIGHTS -- (UNAUDITED) (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
PERIOD ENDED AUGUST 31,
1995 YEAR YEAR YEAR YEAR
----------------------- ENDED ENDED ENDED ENDED
INSTITUTIONAL SERVICE FEBRUARY 28, FEBRUARY 28, FEBRUARY 29, FEBRUARY 28,
CLASS CLASS** 1995 1994 1993 1992
------------- -------- ------------ ------------ ------------ ------------
CASH MANAGEMENT FUND
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period....... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
------------- -------- ------------ ------------ ------------ ------------
Income from Investment Operations:
Net investment income.................... 0.028 0.028 0.041 0.027 0.032 0.055
------------- -------- ------------ ------------ ------------ ------------
Less Distributions:
Dividends from net investment income..... (0.028) (0.028) (0.041) (0.027) (0.032) (0.055)
------------- -------- ------------ ------------ ------------ ------------
Net Asset Value, End of Period............. $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
============= ======== ============ ============ ============ ============
Total Return............................... 2.78% 2.78% 4.15% 2.72% 3.24% 5.67%
Ratios/Supplemental Data:
Net Assets, End of Period (in
thousands)............................. $ 768,843 $ 643 $729,707 $604,048 $460,256 $401,129
Ratios of Net Expenses to Average Net
Assets................................. 0.66%* 0.66%* 0.66% 0.56% 0.60% 0.55%
Ratios of Net Investment Income to
Average Net Assets..................... 5.45%* 5.45%* 4.06% 2.69% 3.19% 5.52%
<CAPTION>
TAX-FREE MONEY MARKET FUND
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period....... $ 1.000 N/A $ 1.000 $ 1.000 $ 1.000 $ 1.000
------------- -------- ------------ ------------ ------------ ------------
Income from Investment Operations:
Net investment income.................... 0.017 N/A 0.025 0.019 0.024 0.039
------------- -------- ------------ ------------ ------------ ------------
Less Distributions:
Dividends from net investment income..... (0.017) N/A (0.025) (0.019) (0.024) (0.039)
------------- -------- ------------ ------------ ------------ ------------
Net Asset Value, End of Period............. $ 1.000 N/A $ 1.000 $ 1.000 $ 1.000 $ 1.000
============= ========= ============ ============ ============ ============
Total Return............................... 1.72% N/A 2.52% 1.91% 2.41% 4.00%
Ratios/Supplemental Data:
Net Assets, End of Period (in
thousands)............................. $ 103,707 N/A $108,064 $114,489 $ 82,395 $ 98,999
Ratios of Net Expenses to Average Net
Assets................................. 0.66%* N/A 0.68% 0.67% 0.69% 0.62%
Ratios of Net Investment Income to
Average Net Assets..................... 3.37%* N/A 2.49% 1.88% 2.38% 3.92%
</TABLE>
* Annualized
** The Service Class of Cash Management Fund commenced operations on June 14,
1995. The Service Class of Tax-Free Money Market Fund did not have operations
as of August 31, 1995.
26
<PAGE> 29
FFB FUNDS TRUST
MONEY MARKET FUNDS
FINANCIAL HIGHLIGHTS -- (UNAUDITED) (CONTINUED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
PERIOD ENDED AUGUST 31,
1995 YEAR YEAR YEAR YEAR
----------------------- ENDED ENDED ENDED ENDED
INSTITUTIONAL SERVICE FEBRUARY 28, FEBRUARY 28, FEBRUARY 29, FEBRUARY 28,
CLASS CLASS** 1995 1994 1993 1992++
------------- -------- ------------ ------------ ------------ ------------
PENNSYLVANIA TAX-FREE MONEY MARKET FUND
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period....... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
------------- -------- ------------ ------------ ------------ ------------
Income from Investment Operations:
Net investment income.................... 0.019 0.019 0.031 0.021 0.026 0.022
------------- -------- ------------ ------------ ------------ ------------
Less Distributions:
Dividends from net investment income..... (0.019) (0.019) (0.031) (0.021) (0.026) (0.022)
------------- -------- ------------ ------------ ------------ ------------
Net Asset Value, End of Period............. $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
============= ======== ============ ============ ============ ============
Total Return............................... 1.90% 1.90% 2.81% 2.09% 2.65% 3.98%
Ratios/Supplemental Data:
Net Assets, End of Period (in
thousands)............................. $99,513 $ 120 $ 43,539 $ 14,383 $ 15,999 $ 20,699
Ratios of Net Expenses to Average Net
Assets+................................ 0.21%* 0.21%* 0.33% 0.47% 0.35% 0.19%*
Ratios of Net Investment Income to
Average Net Assets..................... 3.66%* 3.66%* 3.09% 2.10% 2.62% 3.90%*
</TABLE>
* Annualized
** Service Class Commenced Operations on August 22, 1995.
+ Ratios before effect of waivers/reimbursements were 0.79%*, 1.05%, 1.26%,
1.07%, and 0.77%*, respectively.
++ From August 15, 1991 (Commencement of Operations).
27
<PAGE> 30
BOARD OF TRUSTEES
<TABLE>
<S> <C>
EDMUND A. HAJIM * CHAIRMAN OF THE BOARD AND PRESIDENT;
Chairman of the Board, Furman Selz Incorporated
ROBERT H. DUNKER +* (Retired) Former Executive Vice President, First Fidelity
Bank, N.A., N. J.
ROBERT F. KANE ++ (Retired) Former Vice Chairman, Monroe Systems for Business,
Inc.
BENJAMIN A. LOBEL + Presently Private Investor
WALTER J. NEPPL +* (Retired) Management Consultant
T. BROCK SAXE ++ President and Director, Tombrock Corporation
+ Member of Audit Committee
++ Member of Nominating Committee
* Interested person of the Trust as that term is defined in
the Investment Company Act of 1940
- ---------------------------------------------------------------------------------------------
OFFICERS
EDMUND A. HAJIM Chairman of the Board and President
STEVEN D. BLECHER Executive Vice President
MICHAEL C. PETRYCKI Executive Vice President
JOHN J. PILEGGI Vice President and Treasurer
JOAN V. FIORE Vice President and Secretary
ROBERT A. HERING Vice President
DONALD E. BROSTROM Assistant Treasurer
SHERYL HIRSCHFELD Assistant Secretary
</TABLE>
<PAGE> 31
FBMM0895
<PAGE> 32
- ----------------------------------------------------
THE FFB EQUITY FUND
- ----------------------------------------------------
SEMI-ANNUAL REPORT
AS OF AUGUST 31, 1995
- --------------------------------------------------------------------------------
INVESTMENT
- --------------------------------------------------------------------------------
STRATEGIES
- --------------------------------------------------------------------------------
FOR
- --------------------------------------------------------------------------------
THE '90S
- --------------------------------------------------------------------------------
<PAGE> 33
- --------------------------------------------------------------------------------
INVESTMENT ADVISER
First Fidelity Bank, National Association, New Jersey
765 Broad Street
Newark, New Jersey 07101
ADMINISTRATOR
Furman Selz Incorporated
237 Park Avenue
New York, New York 10017
CUSTODIAN, TRANSFER AGENT
AND DIVIDEND DISBURSING AGENT
First Fidelity Bank, National Association, New Jersey
765 Board Street
Newark, New Jersey 07101
DISTRIBUTOR
FFB Funds Distributor, Inc.
230 Park Avenue
New York, New York 10169
LEGAL COUNSEL
Baker & McKenzie
805 Third Avenue
New York, New York 10022
- --------------------------------------------------------------------------------
This report is for the information of the shareholders of The FFB Funds Trust.
Its use in connection with any offering of the Trust's shares is authorized only
in case of a concurrent or prior delivery of the Trust's current prospectus.
- --------------------------------------------------------------------------------
The FFB Funds are not deposits, guaranteed by or obligations of First
Fidelity Bank or its affiliates and are not insured by the FDIC, the
Federal Reserve Board or any other government agency. Shares of The FFB
Funds involve investment risks, including the possible loss of
principal. For information call 1-800-437-8790.
- --------------------------------------------------------------------------------
<PAGE> 34
THE FFB FUNDS
October 19, 1995
Dear Shareholder:
We are pleased to present the semi-annual report for The FFB Equity Fund for the
six months ended August 31, 1995. Net assets were $13,504,920 and the net asset
value was $13.64.
The strength of our performance during these six months can be attributed to the
overweighting of the technology stocks in our portfolio. Most of the increase in
technology came from appreciation. However, we continue to seek attractive
opportunities in other technology stocks and some of the forgotten consumer
staples.
With low inflation, moderate economic growth and sustained corporate
profitability, we are encouraged that the equity markets will continue to offer
attractive opportunities over the longer term.
Unaudited financial statements and portfolio of investments at August 31, 1995
follow. We appreciate your support.
Finally, contingent upon the merger of First Fidelity Bancorporation with and
into a wholly-owned subsidiary of First Union Corporation, the FFB family of
mutual funds will be combined (subject to various conditions, including
shareholder approval) with the Evergreen family of funds. We are excited about
the prospects of this fund merger and look forward to providing you access to
one of the most respected family of funds in existence over the past twenty
years.
Edmund A. Hajim
Chairman of the Board
and President
<PAGE> 35
FFB EQUITY FUND
PORTFOLIO MANAGER'S DISCUSSION OF FUND PERFORMANCE
The objective of the FFB Equity Fund is to seek long-term capital appreciation
by investing primarily in equity securities of U.S. corporations. As a secondary
objective, the Fund seeks current income for distribution to shareholders.
For the first six months of our fiscal year ending August 31, 1995, the FFB
Equity Fund produced a total return of 25.37%, which was significantly higher
than the S&P 500 Index return of 16.82%. With the exception of August, the FFB
Equity Fund surpassed the S&P 500 Index each month.
This strong performance is the result of our successful stock selection and our
overweighting of the technology sector. This sector comprised 25.6% of our
portfolio of investments, compared to the 11.4% of the S&P 500. Most of the
increase in technology came from appreciation. For year-to-date, the FFB Equity
Fund's technology sector was up 99.48% versus the S&P 500's technology sector
performance of 45.73%. We have been taking profits in Micron, US Robotics,
Adaptec, and Thermo Electron. However, we continued to see attractive
opportunities in other technology stocks and in some of the forgotten consumer
staples. We added LSI Logic Corp. and Dell Computer Corp. to the portfolio as
well as Kellogg and Disney.
The market has shown some rotation from March to August, but technology has been
the strong sector throughout. The laggers of the early half of the six month
period, financial and utility sectors, started to show improving relative
strength. The U.S. equity market slowed for the first time all year in August.
Mixed economic data appeared to console investors regarding a strengthening
economy as bond prices gained ground lost in July. The S&P 500 Index gained only
0.2% in total return against a 2.2% gain in the long (30 year) Treasury Bonds.
In summary, our overweighting of technology and excellent stock selection helped
us to significantly out perform our benchmark during the first six months. In
addition, mergers and acquisitions added to the excitement and our results which
we believe will continue as industrial and financial down-sizing proceeds. With
low inflation, moderate economic growth and sustained corporate profitability,
we are encouraged that the equity markets will continue to offer attractive
opportunities over the longer term.
2
<PAGE> 36
FFB FUNDS TRUST
EQUITY FUND
PORTFOLIO OF INVESTMENTS -- (UNAUDITED)
AUGUST 31, 1995
<TABLE>
<CAPTION>
VALUE
SHARES COST (NOTE 1a)
- ---------- ------------- ----------
<C> <S> <C> <C>
COMMON STOCKS -- 96.1%
BASIC MATERIALS -- 6.2%
2,000 Caterpillar Inc. ....................................... $ 121,450 $ 134,250
1,500 Deere & Co. ............................................ 130,368 128,250
5,000 duPont (EI) deNemours................................... 311,684 326,875
5,000 Nucor Corp.............................................. 251,175 245,000
------------- ----------
814,677 834,375
------------- ----------
CAPITAL GOODS -- 7.5%
5,000 General Electric Co. ................................... 239,377 294,375
3,000 McDonnell Douglas....................................... 156,352 240,750
3,500 Northrop Grumman Corporation............................ 198,258 213,063
3,000 Philips Electronics NV.................................. 119,745 135,000
1,700 Texas Instruments....................................... 78,536 127,288
------------- ----------
792,268 1,010,476
------------- ----------
CONSUMER CYCLICAL -- 8.7%
10,000 Lowe's Companies........................................ 310,648 332,500
10,000 Mattel, Inc. ........................................... 232,380 290,000
11,000 Wal-Mart Stores, Inc. .................................. 275,820 270,875
5,000 Walt Disney Co. ........................................ 249,208 280,625
------------- ----------
1,068,056 1,174,000
------------- ----------
CONSUMER STAPLES -- 13.7%
3,000 Campbell Soup Co. ...................................... 130,767 137,250
5,500 Coca-Cola Co. .......................................... 305,106 353,375
5,000 Colgate-Palmolive Co. .................................. 340,673 340,000
6,500 Gillette Company........................................ 243,434 271,375
2,500 Kellogg Co. ............................................ 165,600 168,750
7,750 Philip Morris Cos., Inc. ............................... 506,283 578,344
------------- ----------
1,691,863 1,849,094
------------- ----------
ENERGY -- OIL/GAS -- 10.1%
2,000 Amoco Corp. ............................................ 130,845 127,500
2,250 British Petroleum PLC -- ADR............................ 192,397 202,781
2,000 Exxon Corp. ............................................ 131,629 137,500
2,500 Mobil Corp. ............................................ 222,327 238,125
2,250 Royal Dutch Petroleum -- NY............................. 258,969 268,312
22,500 YPF Sociedad Anonima ADR Class D........................ 420,049 396,563
------------- ----------
1,356,216 1,370,781
------------- ----------
</TABLE>
See accompanying notes to financial statements.
3
<PAGE> 37
FFB FUNDS TRUST
EQUITY FUND
PORTFOLIO OF INVESTMENTS -- (UNAUDITED) (CONTINUED)
AUGUST 31, 1995
<TABLE>
<CAPTION>
VALUE
SHARES COST (NOTE 1a)
- ---------- ------------- ----------
<C> <S> <C> <C>
COMMON STOCKS -- (CONTINUED)
FINANCE -- 9.2%
5,000 Aflac Inc. ............................................. $ 184,347 $ 204,375
2,250 Chemical Banking Corp. ................................. 115,774 131,062
5,000 Citicorp................................................ 218,940 331,875
4,000 Equifax Inc. ........................................... 143,320 155,500
11,000 Reliastar Financial Corp. .............................. 345,549 418,000
------------- ----------
1,007,930 1,240,812
------------- ----------
HEALTHCARE -- 7.8%
3,500 Amgen Inc.* ............................................ 97,269 167,562
3,000 Medtronic Inc. ......................................... 229,345 283,125
7,000 Merck & Co. ............................................ 268,447 349,125
8,000 U.S. Healthcare Inc. ................................... 248,437 256,000
------------- ----------
843,498 1,055,812
------------- ----------
MISCELLANEOUS -- 1.8%
2,000 ITT Corp. .............................................. 188,170 239,250
------------- ----------
TECHNOLOGY -- 24.6%
2,500 Applied Materials*...................................... 147,000 260,000
4,000 Cisco Systems Inc.* .................................... 123,500 262,500
3,000 Dell Computer Corp.* ................................... 190,062 231,000
3,250 DSC Communications Corp.* .............................. 139,969 170,625
33,000 EMC Corp.* ............................................. 626,391 676,500
5,000 Intel Corp. ............................................ 194,600 306,875
5,000 LSI Logic Corp.* ....................................... 208,562 246,250
5,000 Micron Technology Inc. ................................. 101,875 384,375
6,500 Oracle Systems*......................................... 216,992 260,813
7,000 Three Com Corp.* ....................................... 225,513 273,000
1,800 U.S. Robotics........................................... 80,100 252,450
------------- ----------
2,254,564 3,324,388
------------- ----------
TRANSPORTATION -- 1.5%
8,000 Atlantic Southeast Airlines............................. 159,000 200,000
------------- ----------
</TABLE>
See accompanying notes to financial statements.
4
<PAGE> 38
FFB FUNDS TRUST
EQUITY FUND
PORTFOLIO OF INVESTMENTS -- (UNAUDITED) (CONTINUED)
AUGUST 31, 1995
<TABLE>
<CAPTION>
SHARES/ MARKET
PRINCIPAL VALUE
AMOUNT COST (NOTE 1a)
- ---------- ------------- ----------
<C> <S> <C> <C>
COMMON STOCKS -- (CONTINUED)
UTILITIES -- 5.0%
3,700 FPL Group Inc. ......................................... $ 140,433 $ 143,837
3,250 Houston Industries...................................... 140,010 137,719
2,500 Reuters Holdings PLC -- ADR............................. 111,906 130,938
8,000 Telefonos de Mexico Class L -- ADR...................... 238,954 262,000
------------- ----------
631,303 674,494
------------- ----------
TOTAL COMMON STOCKS..................................... 10,807,545 12,973,482
------------- ----------
U.S. TREASURY BILLS -- 3.5%
$470,000 09/14/95................................................ 469,090 469,090
5,000 05/30/98................................................ 4,796 4,798
------------- ----------
TOTAL U.S. TREASURY BILLS............................... 473,886 473,888
------------- ----------
TOTAL INVESTMENTS -- 99.6%.............................. $11,281,431+ 13,447,370
=============
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.4%........... 57,550
----------
NET ASSETS -- 100%...................................... $13,504,920
==========
</TABLE>
* Non-income producing security.
ADR -- American Depository Receipts.
+ Cost for Federal income tax purposes is substantially the same.
See accompanying notes to financial statements.
5
<PAGE> 39
FFB FUNDS TRUST
EQUITY FUND
STATEMENT OF NET ASSETS -- (UNAUDITED)
AUGUST 31, 1995
<TABLE>
<S> <C>
ASSETS
Investments in securities, at value (cost $11,281,431)............................... $13,447,370
Cash................................................................................. 139,848
Dividends receivable................................................................. 25,598
Receivable for securities sold....................................................... 14,743
Prepaid insurance.................................................................... 78
----------
Total Assets.................................................................... 13,627,637
----------
LIABILITIES
Payable for securities purchased..................................................... 103,945
Custodian fee payable................................................................ 758
Transfer agent fee payable........................................................... 248
Accrued expenses..................................................................... 17,766
----------
Total Liabilities............................................................... 122,717
----------
NET ASSETS........................................................................... $13,504,920
==========
NET ASSETS
Shares of beneficial interest outstanding (par value $0.001 per share); 1,000,000,000
shares authorized.................................................................. $ 990
Additional paid-in capital........................................................... 11,059,354
Accumulated net undistributed realized gain on investments........................... 213,880
Undistributed net investment income.................................................. 64,757
Net unrealized appreciation of investments........................................... 2,165,939
----------
Net Assets Applicable to Shares...................................................... $13,504,920
==========
Shares of Beneficial Interest Outstanding............................................ 990,401
==========
Net Asset Value Per Share............................................................ $13.64
==========
Maximum Offering Price Per Share ($13.64/$0.955)..................................... $14.28
==========
</TABLE>
See accompanying notes to financial statements.
6
<PAGE> 40
FFB FUNDS TRUST
EQUITY FUND
STATEMENT OF OPERATIONS -- (UNAUDITED)
FOR THE SIX MONTHS ENDED AUGUST 31, 1995
<TABLE>
<S> <C> <C>
Investment Income:
Dividends.................................................................. $ 95,992
Interest................................................................... 14,106
----------
$ 110,098
Expenses:
Advisory................................................................... 25,772
Administrative services.................................................... 12,886
Reports to shareholders.................................................... 8,823
Custodian.................................................................. 8,790
Audit...................................................................... 4,537
Transfer agent............................................................. 4,386
Trustees................................................................... 3,529
Registration............................................................... 1,493
Insurance.................................................................. 181
Legal...................................................................... 157
Miscellaneous.............................................................. 977
----------
Total expenses before waivers........................................... 71,531
Less: Expenses waived by Adviser/Administrator.......................... (38,658)
----------
Net expenses............................................................ 32,873
----------
Net investment income........................................................ 77,225
----------
Net realized gain on investments............................................. 446,174
Change in unrealized appreciation of investments............................. 1,649,296
----------
Net realized and unrealized gain on investments.............................. 2,095,470
----------
Net increase in net assets resulting from operations......................... $2,172,695
==========
</TABLE>
See accompanying notes to financial statements.
7
<PAGE> 41
FFB FUNDS TRUST
EQUITY FUND
STATEMENTS OF CHANGES IN NET ASSETS -- (UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
AUGUST 31, FEBRUARY 28,
1995 1995
----------- ------------
<S> <C> <C>
Net Increase In Net Assets:
Operations:
Net investment income................................................. $ 77,225 $ 73,948
Net realized gain (loss) on investments............................... 446,174 (207,946)
Change in unrealized appreciation on investments...................... 1,649,296 369,973
----------- ------------
Net increase in net assets resulting from operations.................... 2,172,695 235,975
----------- ------------
Distributions to Shareholders from
Net investment income................................................. -- (75,940)
----------- ------------
Net decrease in undistributed net investment income included in price of
shares sold and repurchased........................................... (43,867) (10,598)
----------- ------------
Capital Share Transactions:
Proceeds from sales of shares......................................... 4,992,890 1,163,196
Net asset value of shares issued in reinvestment of distributions..... -- 74,399
----------- ------------
4,992,890 1,237,595
Cost of shares redeemed............................................... (281,934) (401,333)
----------- ------------
Net increase in net assets from capital share transactions.............. 4,710,956 836,262
----------- ------------
Net increase in net assets.............................................. 6,839,784 985,699
Net Assets:
Beginning of period................................................... 6,665,136 5,679,437
----------- ------------
End of period......................................................... $13,504,920 $6,665,136
=========== ===========
</TABLE>
See accompanying notes to financial statements.
8
<PAGE> 42
FFB FUNDS TRUST
EQUITY FUND
NOTES TO FINANCIAL STATEMENTS -- (UNAUDITED)
AUGUST 31, 1995
1. Description and Organization. FFB Funds Trust (the "Trust") was
organized in Massachusetts as a business trust on March 25, 1987 and currently
consists of twelve separately managed portfolios. The FFB Equity Fund (the
"Fund") began operations May 6, 1986.
(a) The Fund values its investments in securities at the last sales price
on the securities exchange on which such securities are primarily traded or at
the last sales price on the national securities market. Securities not listed on
an exchange or the national securities market, or securities for which there
were no transactions, are valued at the average of the most recent bid and asked
prices. The bid price is used when no asked price is available. In the absence
of market quotations, investments are valued at fair value in the opinion of the
Board of Trustees. Short-term investments which mature in 60 days or less are
valued at amortized cost, if their term to maturity at purchase was 60 days or
less, or by amortizing their value on the 61st day prior to maturity, if their
original term to maturity at purchase exceeded 60 days.
(b) It is the Fund's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute to
its shareholders all of its net investment taxable and non-taxable income and
any net taxable gains realized. Therefore, no Federal income tax provision is
required.
(c) The Fund's dividends from net investment income are declared and paid
semi-annually. Distributions from short-term and long-term capital gains, if
any, are declared and paid annually.
(d) Security transactions are accounted for on the trade date. Interest
income, including the amortization of discount or premium, is recorded as
earned. Dividend income is recorded on the ex-dividend date. Gains or losses on
the sale of securities are calculated on the identified cost basis.
(e) The Fund follows the accounting policy known as equalization whereby a
portion of the proceeds from sales and the cost of redemptions of capital
shares, equivalent on a per share basis to the amount of distributable
investment income on the transaction, is credited or charged to undistributed
investment income. As a result, distributable investment income per share is
unaffected by sales or redemptions of Fund shares.
(f) Each Fund bears all costs of its operations other than expenses
specifically assumed by the Administrator or Adviser. Expenses specifically
identifiable to a particular Fund are borne by that Fund. Other expenses are
allocated to each Fund based on its net assets in relation to the total net
assets of the Trust or on another reasonable basis.
2. Adviser and Administrator. The Trust retains First Fidelity Bank,
National Association, New Jersey ("First Fidelity") to act as Adviser and Furman
Selz Incorporated ("Furman Selz") to act as Administrator for the Funds. First
Fidelity furnishes to the Trust investment guidance and policy direction in
connection with the management of the Fund's portfolio, subject to policy
established by the Board of Trustees of the Trust. First Fidelity is a
wholly-owned subsidiary of First Fidelity Bancorporation.
Furman Selz provides management and administrative services necessary for
the operation of the Trust and the Fund. Furman Selz also furnishes office space
and certain facilities required for conducting the business of the Trust and
pays the compensation of the Trust's officers and Trustees affiliated with
Furman Selz.
As compensation for their advisory, administrative and management services
to the Fund, First Fidelity is paid a monthly fee at the annual rate of 0.50% of
average daily net assets; and Furman Selz is paid a monthly fee at the annual
rate of 0.25% of average daily net assets.
For the six months ended August 31, 1995, First Fidelity and Furman Selz
each voluntarily waived its entire fee, totalling $25,772 and $12,886,
respectively.
9
<PAGE> 43
FFB FUNDS TRUST
EQUITY FUND
NOTES TO FINANCIAL STATEMENTS -- (UNAUDITED) (CONTINUED)
AUGUST 31, 1995
3. Other Services with Affiliates. First Fidelity is transfer agent and
dividend disbursing agent for the Trust. Furman Selz acts as the Trust's
Sub-Transfer Agent and receives an annual per account fee, plus reimbursement of
out-of-pocket expenses.
In addition, First Fidelity may enter into agreements (the "Subaccounting
Agreements") with certain banks, financial institutions and corporations (the
"Participating Organizations") so that each Participating Organization handles
recordkeeping and provides certain administrative services for its customers who
invest in the Fund through accounts maintained at the Participating
Organization. In such cases, the Participating Organization or one of its
nominees will be the shareholder of record as nominee for its customers and will
maintain subaccounts for its customers. Each Participating Organization will
receive monthly payments, which in some cases may be based upon expenses that
the Participating Organization has incurred in the performance of its services
under the Subaccounting Agreement. The payment from the Fund will not exceed, on
an annualized basis, an amount equal to 0.25% of the average daily value of the
Fund's shares, during the preceding month, in the subaccounts of which the
Participating Organization is record owner as nominee for its customers. For the
six months ended August 31, 1995, no payments were made by the Fund to
Participating Organizations.
First Fidelity also acts as custodian for the Fund. For furnishing
custodian services, First Fidelity is paid a monthly fee with respect to the
Fund at an annual rate based on a percentage of average daily net assets plus
certain transaction and out-of-pocket expenses. For the six months ended August
31, 1995, First Fidelity received custodian fees of $8,790.
Furman Selz performs fund accounting services and maintains the books and
records for the Fund. Furman Selz is not paid a fund accounting fee from the
Fund.
FFB Funds Distributor, Inc., a wholly-owned subsidiary of Furman Selz, acts
as Distributor for the Trust. The Trust has adopted a Master Distribution Plan
(the "Plan") pursuant to Rule 12b-1 of the Investment Company Act of 1940, after
having concluded that there is a reasonable likelihood that the Plan will
benefit each Fund and its shareholders. The Plan provides for a monthly payment
by the Fund to the Distributor in such amounts that the Distributor presents for
Board of Trustees approval, provided that each such payment is based on the
average daily value of the Fund's net assets during the preceding month and is
calculated at an annual rate not to exceed 0.50% for the Fund. For the six
months ended August 31, 1995, the Fund made no distribution payments under the
Plan.
Certain states in which the Fund is qualified for sale impose limitations
on the expenses of the Fund. The Advisory Contract and the Administrative
Services Contract provide that if, in any fiscal year, the total expenses of a
Fund (excluding taxes, interest, distribution expenses, brokerage commissions
and other portfolio transaction expenses, other expenditures which are
capitalized in accordance with generally accepted accounting principles and
extraordinary expenses, but including the advisory and administrative services
fee) exceed the expense limitation applicable to that Fund imposed by the
securities regulations of any state, First Fidelity and Furman Selz will pay or
reimburse the Fund in amounts equal to 70% and 30% of the excess. During the six
months ended August 31, 1995, there were no payments or reimbursements required
as a result of these expense limitations.
4. Repurchase Agreements. The Fund may enter into repurchase agreements
with government securities dealers recognized by the Federal Reserve Board, with
member banks of the Federal Reserve System or with such other brokers or dealers
that meet the credit guidelines established by the Board of Trustees. The Fund
maintains securities as collateral whose market value, including accrued
interest, will be at least equal to 102% of the dollar amount invested by that
Fund in each agreement, including accrued interest, and that Fund will make
payment for such securities only upon physical delivery or upon evidence of book
entry transfer to the account of the custodian. To the extent that any
repurchase transaction exceeds one business day, the value of
10
<PAGE> 44
FFB FUNDS TRUST
EQUITY FUND
NOTES TO FINANCIAL STATEMENTS -- (UNAUDITED) (CONTINUED)
AUGUST 31, 1995
the collateral is marked-to-market on a daily basis to ensure the adequacy of
the collateral. If the seller defaults and the value of the collateral declines
or if bankruptcy proceedings are commenced with respect to the seller of the
security, realization of the collateral by the Fund may be delayed or limited.
5. Capital Share Transactions. The Fund is authorized to issue
1,000,000,000 shares of beneficial interest each with a par value of $0.001. For
the six months ended August 31, 1995 and the year ended February 28, 1995,
transactions in shares of beneficial interest of the Fund were as follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
AUGUST 31, FEBRUARY 28,
1995 1995
---------- ------------
<S> <C> <C>
Shares sold............................................................ 404,654 110,794
Shares issued in reinvestment of distributions......................... -- 7,215
---------- ------------
404,654 118,009
Shares redeemed........................................................ (25,931) (38,523)
---------- ------------
Net increase in shares................................................. 378,723 79,486
========== ============
</TABLE>
6. Security Transactions. The Fund's cost of securities purchased and
proceeds from securities sold (other than short-term securities) for the six
months ended August 31, 1995 aggregated $9,556,708 and $4,993,827, respectively.
7. Federal Income Tax Status. At August 31, 1995, the Fund had gross
unrealized appreciation of $2,208,972, and gross unrealized depreciation of
$43,033.
11
<PAGE> 45
FFB FUNDS TRUST
EQUITY FUND
FINANCIAL HIGHLIGHTS -- (UNAUDITED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
SIX MONTHS YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
AUGUST 31, FEBRUARY 28, FEBRUARY 28, FEBRUARY 29, FEBRUARY 28,
1995 1995 1994 1993 1992
---------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period............. $10.90 $10.67 $12.20 $12.73 $12.52
---------- ------------ ------------ ------------ ------------
Income from Investment Operations:
Net investment income.......................... 0.10 0.13 0.12 0.16 0.12
Net realized and unrealized gain on
securities................................... 2.64 0.23 0.32 0.36 1.74
---------- ------------ ------------ ------------ ------------
Total from Investment Operations............... 2.74 0.36 0.44 0.52 1.86
---------- ------------ ------------ ------------ ------------
Less Distributions:
Dividends from net investment income........... -- (0.13) (0.24) (0.24) (0.12)
Distributions from capital gains............... -- -- (0.99) (0.81) (1.53)
Tax return of capital.......................... -- -- (0.74) -- --
---------- ------------ ------------ ------------ ------------
Total Distributions............................ -- (0.13) (1.97) (1.05) (1.65)
---------- ------------ ------------ ------------ ------------
Net Asset Value, End of Period................... $13.64 $10.90 $10.67 $12.20 $12.73
========== ============ ============ ============ ============
Total Return (not reflecting sales load)......... 25.37% 3.42% 3.58% 4.34% 14.90%
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands)....... $13,505 $6,665 $5,679 $4,818 $4,380
Ratios of Net Expenses to Average Net
Assets+...................................... 0.64%* 1.12% 2.00% 1.23% 1.50%
Ratios of Net Investment Income to Average Net
Assets....................................... 1.50%* 1.27% 0.96% 1.26% 0.93%
Portfolio Turnover Rate........................ 50% 124% 265% 452% 496%
</TABLE>
- ---------------
+ Effect of waivers/reimbursements were 0.74%, 0.75%, 1.25%, 0.75%, and 0.75%,
respectively.
* Annualized.
12
<PAGE> 46
BOARD OF TRUSTEES
<TABLE>
<S> <C>
EDMUND A. HAJIM * CHAIRMAN OF THE BOARD AND PRESIDENT;
Chairman of the Board, Furman Selz Incorporated
ROBERT H. DUNKER +* (Retired) Former Executive Vice President, First Fidelity Bank,
N.A., N. J.
ROBERT F. KANE ++ (Retired) Former Vice Chairman, Monroe Systems for Business, Inc.
BENJAMIN A. LOBEL + Presently a private investor
WALTER J. NEPPL +* (Retired) Management Consultant
T. BROCK SAXE ++ President and Director, Tombrock Corporation
+ Member of Audit Committee
++ Member of Nominating Committee
* Interested person of the Trust as that term is defined in the
Investment Company Act of 1940
- ---------------------------------------------------------------------------------------------------
OFFICERS
EDMUND A. HAJIM Chairman of the Board and President
STEVEN D. BLECHER Executive Vice President
MICHAEL C. PETRYCKI Executive Vice President
JOHN J. PILEGGI Vice President and Treasurer
JOAN V. FIORE Vice President and Secretary
ROBERT A. HERING Vice President
DONALD E. BROSTROM Assistant Treasurer
SHERYL HIRSCHFELD Assistant Secretary
</TABLE>
<PAGE> 47
FBEQ0895
<PAGE> 48
THE FFB NEW JERSEY
TAX-FREE
INCOME FUND
SEMI-ANNUAL REPORT
AS OF AUGUST 31, 1995
- --------------------------------------------------------------------------------
INVESTMENT
- --------------------------------------------------------------------------------
STRATEGIES
- --------------------------------------------------------------------------------
FOR
- --------------------------------------------------------------------------------
THE '90S
- --------------------------------------------------------------------------------
<PAGE> 49
- --------------------------------------------------------------------------------
INVESTMENT ADVISER
First Fidelity Bank, National Association, New Jersey
765 Broad Street
Newark, New Jersey 07101
ADMINISTRATOR
Furman Selz Incorporated
237 Park Avenue
New York, New York 10017
CUSTODIAN, TRANSFER AGENT
AND DIVIDEND DISBURSING AGENT
First Fidelity Bank, National Association, New Jersey
765 Board Street
Newark, New Jersey 07101
DISTRIBUTOR
FFB Funds Distributor, Inc.
230 Park Avenue
New York, New York 10169
LEGAL COUNSEL
Baker & McKenzie
805 Third Avenue
New York, New York 10022
- --------------------------------------------------------------------------------
This report is for the information of the shareholders of The FFB Funds Trust.
Its use in connection with any offering of the Trust's shares is authorized only
in case of a concurrent or prior delivery of the Trust's current prospectus.
- --------------------------------------------------------------------------------
Investments in mutual funds involve risk, including possible loss of
principal. The FFB Funds are not deposits, guaranteed by or obligations
of First Fidelity Bank or its affiliates and are not insured by the
FDIC, the Federal Reserve Board or any other government agency. Shares
of The FFB Funds involve investment risks, including the possible loss
of principal. For information call 1-800-437-8790.
- --------------------------------------------------------------------------------
<PAGE> 50
THE FFB FUNDS
October 19, 1995
Dear Shareholder:
We are pleased to present the semi-annual report for the FFB New Jersey Tax-Free
Income Fund for the six months ended August 31, 1995. Net assets on that date
were $35,469,127 and the net asset value per share was $10.75.
The drop in interest rates continued during the second half of 1995. Municipals
underperformed the Treasury market as concerns regarding tax reform continued to
overshadow the market. Many market participants have restructured their
portfolios and bought municipals with short maturities in response to proposed
changes in the tax code. This has resulted in the yield curve steepening
considerably. Lack of new issues and refunding volume has resulted in an
expensive secondary municipal market especially for securities with maturities
of five years or less. Long intermediate and long-term maturities remain
attractive.
The Fund will continue to be conservatively managed with all bonds rated in the
highest investment grade categories by Moody's Investors Service Inc. or by
Standard & Poor's and with strong attention still paid to call protection. We
will extend portfolio duration as long as economic conditions permit and
inflation remains under control.
Unaudited financial statements and the Fund's portfolio of investments at August
31, 1995 follow. We look forward to your continued support.
Finally, contingent upon the merger of First Fidelity Bancorporation with and
into a wholly-owned subsidiary of First Union Corporation, the FFB family of
mutual funds will be combined (subject to various conditions, including
shareholder approval) with the Evergreen family of funds. We are excited about
the prospects of this fund merger and look forward to providing you access to
one of the most respected family of funds in existence over the past twenty
years.
Edmund A. Hajim
Chairman of the Board
and President
<PAGE> 51
FFB NEW JERSEY TAX-FREE INCOME FUND
PORTFOLIO MANAGER'S DISCUSSION OF FUND PERFORMANCE
The investment objective of the FFB New Jersey Tax-Free Income Fund is to
provide current income exempt from Federal and New Jersey personal incomes
taxes. The Fund invests primarily in high quality tax-exempt obligations of the
State of New Jersey.
The continued fall in interest rates through June 1995 was a result of both a
succession of much weaker than expected economic indicators and more public
commentary on the current state of the economy from various Federal Reserve
officials.
The Federal Reserve lowered interest rates in July and August in response to
broad-based economic news and the lessened threat of inflationary pressures.
This decision was significant for two reasons. One, it ended the Fed's
tightening biases which began February 1994 with the Fed Funds rate at 3% and
ended with the last increase to 6% in February 1995. Second, once the Fed begins
a trend of change in interest rates (which is now down), it is kept in place for
a while.
During the six months, we were able to stay close to the returns on the bench
market index. However, municipals underperformed the Treasury market as concerns
regarding tax code changes caused panic in the municipal market. Many market
participants have restructured their portfolios with short maturities (five
years or under). This resulted in the municipal yield curve steepening
considerably with the spread between two and thirty years widening to
approximately 210 basis points (100 basis points equate to 1%) for triple A
securities. In contrast, the Treasury yield curve flattened to 109 basis points
at September 30, 1995.
Looking ahead, we feel it unlikely that a tax reform package will pass in its
present form. Future debates concerning this issue will continue to present a
challenge to the municipal bond market. In addition, the deficit reduction
process will have a significant influence on the direction of interest rates as
good news on the budget will result in yields resuming their downward bias. We
will continue to extend the duration of the Fund as market conditions warrant.
2
<PAGE> 52
FFB FUNDS TRUST
NEW JERSEY TAX-FREE INCOME FUND
PORTFOLIO OF INVESTMENTS -- (UNAUDITED)
AUGUST 31, 1995
<TABLE>
<CAPTION>
CREDIT PRINCIPAL VALUE
RATING* AMOUNT COST (NOTE 1a)
- --------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
NEW JERSEY MUNICIPAL OBLIGATIONS -- 90.1%
AAA/Aaa Bergen County Utilities Authority Water PCR
Series B (FGIC) 5.75%, 12/15/05............ $1,000,000 $ 1,054,855 $ 1,058,750
AA/Aa Burlington County Bridge Commission Bridge
System Revenue (County Guaranteed) 5.30%,
10/1/13.................................... 500,000 504,148 476,250
AA/Aa Burlington County Refunding UTGO Series A
4.40%, 3/15/01............................. 750,000 753,525 743,438
AA/Aa Burlington County UTGO (FGIC) 6.95%,
9/15/97.................................... 1,000,000 1,043,576 1,060,000
NR/A1 Camden County Improvement Authority Lease
Revenue (County Guaranteed) 6.00%,
12/1/12.................................... 500,000 500,000 508,750
AAA/Aaa Cape May County Municipal Utilities Authority
Sewer Revenue Refunding Series A (MBIA)
5.75%, 1/1/16.............................. 500,000 496,185 498,125
AAA/Aaa Delaware River & Bay Authority Delaware
Authority Revenue (MBIA) 5.00%, 1/1/17..... 1,000,000 987,534 892,500
AAA/Aaa Delaware River Joint Toll Bridge Commission
Pennsylvania Bridge Revenue Refunding
6.25%, 7/1/12.............................. 475,000 485,836 495,781
AA/A-1 Edison Township School Improvement UTGO
6.50%, 6/1/09.............................. 200,000 197,898 220,500
AAA/A-1 Gloucester County UTGO (MBIA) 6.30%,
2/1/12..................................... 600,000 591,006 617,250
AA-/A-1 Gloucester County Utilities Authority Sewer
Revenue 6.50%, 1/1/21...................... 500,000 496,032 518,125
AAA/Aaa Hoboken UTGO (FSA State Aid Withholding)
6.65%, 8/1/11.............................. 200,000 202,514 212,000
AAA/Aaa Lakewood Township School District UTGO
(AMBAC) 6.25%, 2/15/12..................... 400,000 392,280 422,500
AAA/Aaa Landis Sewer Authority Sewer Revenue Bond
(FGIC) 7.25%, 10/1/95...................... 1,000,000 1,023,247 1,032,500
AA/A-1 Manalapan-Englishtown Regional Board of
Education (School Board of Resource Fund)
5.00%, 5/1/05.............................. 500,000 494,310 500,625
AA-/Aa Mercer County Improvement Authority Customer
Receipt Complex Revenue 6.05%, 1/1/11...... 305,000 280,979 305,381
AA+/Aaa Middlesex County UTGO 5.80%, 10/1/10......... 500,000 487,030 510,625
AA+/Aaa Millburn Township UTGO 6.00%, 7/15/99........ 150,000 149,813 160,313
AA/Aa1 Monmouth County Improvement Authority Revenue
Correctional Facilities Monmouth Project
6.40%, 8/1/08.............................. 800,000 815,078 855,000
New Jersey Building Authority State Building
Revenue:
NR/NR 6.25%, 6/15/13.......................... 300,000 232,106 244,406
AA-/Aa 7.20%, 6/15/13.......................... 225,000 294,768 325,125
New Jersey Economic Development Authority
Revenue:
AAA/Aa1 Public Schools Small Project Loan
Program (School Board Resource Fund)
5.40%, 8/15/13........................ 1,000,000 996,638 965,000
</TABLE>
See footnotes to portfolio of investments and accompanying notes to financial
statements.
3
<PAGE> 53
FFB FUNDS TRUST
NEW JERSEY TAX-FREE INCOME FUND
PORTFOLIO OF INVESTMENTS -- (UNAUDITED) (CONTINUED)
AUGUST 31, 1995
<TABLE>
<CAPTION>
CREDIT PRINCIPAL VALUE
RATING* AMOUNT COST (NOTE 1a)
- --------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
NEW JERSEY MUNICIPAL
OBLIGATIONS -- (CONTINUED)
New Jersey Economic Development Authority
Revenue (continued)
AAA/Aaa Water Facilities Refunding New Jersey
American Water Co. Project Series A
(FGIC) 5.35%, 6/1/23.................. $ 400,000 $ 404,778 $ 368,000
A/A3 Water Facilities Series A 6.60%,
8/1/21................................ 300,000 294,228 312,000
New Jersey Health Care Facilities Financing
Authority Revenue:
AAA/Aaa Hackensack Medical Center (FGIC) 6.625%,
7/1/17................................ 750,000 757,268 785,625
AAA/Aaa Mercer Medical Center (MBIA) 6.45%,
7/1/05................................ 300,000 300,000 324,750
AAA/Aaa Overlook Hospital Association Series E
(FGIC) 6.70%, 7/1/13.................. 500,000 498,750 523,125
A-/A Refunding Atlantic City Medical Center
Series C 6.80%, 7/1/05................ 750,000 749,250 805,312
AAA/Aaa Refunding Burdett Tomlin Memorial
Hospital Series D (FGIC) 6.50%,
7/1/12................................ 400,000 397,200 420,000
AAA/Aaa Robert Wood Johnson University Hospital
Series B (MBIA) 6.625%, 7/1/16........ 200,000 199,250 210,500
AAA/Aaa Shore Memorial Hospital Health Care
System (MBIA) 5.00%, 7/1/12........... 500,000 490,626 456,875
A+/Aa New Jersey Sports & Exposition Series A
6.00%, 3/1/21.............................. 1,000,000 958,700 1,000,000
New Jersey State Educational Facilities
Authority Revenue:
AA+/Aa1 Higher Educational Princeton Series C
6.375%, 7/1/22........................ 500,000 498,325 518,750
AAA/Aaa Kean College Series B (MBIA) 6.50%,
7/1/11................................ 250,000 248,135 263,750
AAA/Aaa Princeton University Series A (GO of
Institution) 5.70%, 7/1/97............ 325,000 324,594 333,531
AAA/Aaa Refunding Seton Hall University Project
Series A (FGIC) 6.25%, 7/1/10......... 600,000 589,790 624,000
AAA/Aaa Rider College Series D (AMBAC) 6.20%,
7/1/17................................ 500,000 503,750 517,500
AAA/Aaa Union County College Series C (MBIA)
6.50%, 7/1/11......................... 300,000 298,125 316,500
AAA/Aaa William Patterson College Series F
(MBIA) 6.375%, 7/1/11................. 400,000 398,892 417,000
New Jersey State Highway Authority Garden
State Parkway General Revenue Senior
Parkway:
AA-/A1 6.25%, 1/1/14........................... 500,000 490,295 513,125
AA-/Aaa Pre-refunded (GO of Authority) 7.125%,
1/1/14................................ 250,000 255,802 257,500
AAA/Aaa New Jersey State Transit Corporation COPS
(FSA) 6.50%, 10/1/16....................... 300,000 296,349 323,625
New Jersey State Turnpike Revenue Refunding:
A/A Series A 6.40%, 1/1/02..................... 300,000 297,357 327,375
NR/Aaa 6.75%, 1/1/09.............................. 190,000 189,763 204,963
</TABLE>
See footnotes to portfolio of investments and accompanying notes to financial
statements.
4
<PAGE> 54
FFB FUNDS TRUST
NEW JERSEY TAX-FREE INCOME FUND
PORTFOLIO OF INVESTMENTS -- (UNAUDITED) (CONTINUED)
AUGUST 31, 1995
<TABLE>
<CAPTION>
CREDIT PRINCIPAL VALUE
RATING* AMOUNT COST (NOTE 1a)
- --------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
NEW JERSEY MUNICIPAL
OBLIGATIONS -- (CONTINUED)
New Jersey State UTGO:
AA+/Aa1 Series D Refunding 5.25%, 2/15/01.......... $ 500,000 $ 509,138 $ 519,375
AA+/NR 6.80%, 9/15/10............................. 200,000 203,860 226,250
North Jersey District Water Supply:
AAA/Aaa Refunding Wanaque North Project Series B
(MBIA) 6.25%, 11/15/17.................. 350,000 369,555 364,875
AAA/Aaa Wanaque South Project (MBIA) 6.00%,
7/1/12.................................. 500,000 518,604 512,500
AAA/Aaa Wanaque South Project (MBIA) 6.50%,
7/1/21.................................. 400,000 400,000 461,000
NR/Aa Ocean County UTGO 5.80%, 9/1/10.............. 500,000 483,745 508,750
AA-/Aa Ocean County Utilities Authority Waste Water
Revenue Refunding Series A (County
Guaranteed) 5.75%, 1/1/18.................. 500,000 474,630 491,250
AAA/Aaa Old Bridge Township Municipal Utilities
Authority Revenue Refunding (FGIC) 6.25%,
11/1/16.................................... 500,000 486,750 523,125
AAA/Aaa Old Bridge Township UTGO (FGIC) 6.55%,
7/15/09.................................... 200,000 198,442 214,250
AAA/Aaa Passaic Valley Sewage Commissioners Sewer
System Series D (AMBAC) 5.75%, 12/1/13..... 500,000 509,785 501,875
AAA/Aaa Pennsauken Township School District UTGO (FSA
School Board Resource Fund) 5.00%,
3/1/10..................................... 500,000 484,820 471,875
AA-/A1 Port Authority New York & New Jersey
Consolidated 74th Project 6.75%, 8/1/26.... 900,000 896,000 955,125
AA/A1 Rutgers State University Refunding Series T
(GO of Institution) 5.25%, 5/1/12.......... 500,000 484,120 475,000
AAA/Aaa South Plainfield UTGO (AMBAC) 6.625%,
8/1/12..................................... 100,000 99,034 105,000
AAA/Aaa Stafford Municipal Utilities Authority Water
& Sewer Revenue (MBIA) 6.25%, 6/1/14....... 500,000 491,100 523,125
AA-/Aa Stony Brook Regional Sewage Authority Revenue
Refunding Series B (GO of Authority) 5.45%,
12/1/12.................................... 500,000 495,825 491,250
AAA/Aaa Trenton UTGO (MBIA) 6.55%, 8/15/09........... 500,000 499,375 534,375
University Medicine & Dentistry Revenue
Series E (GO of Institution):
AA/A 6.50%, 12/1/18.......................... 500,000 490,000 521,250
AA/A 5.75%, 12/1/21.......................... 400,000 386,236 387,500
AAA/Aaa Washington Township Municipal Utilities
Authority Utility System Revenue Refunding
Subordinated Series A (AMBAC) 6.70%,
2/1/11..................................... 200,000 200,000 224,500
AAA/Aaa Winslow Township UTGO Refunding (FGIC) 6.50%,
10/1/18.................................... 500,000 499,500 523,750
----------- -----------
TOTAL NEW JERSEY MUNICIPAL OBLIGATIONS....... 31,101,104 31,982,750
----------- -----------
COMMONWEALTH OF PUERTO RICO -- 6.5%
A-/Baa1 Electric Power Authority Power Revenue Series
P 7.00%, 7/1/21............................ 500,000 490,894 552,500
A/Baa1 Public Buildings Authority Guaranteed Public
Education & Health Facilities Series J
(Commonwealth Guaranteed) 7.00%, 7/1/19.... 400,000 396,394 436,500
A/NR Public Improvement UTGO 6.80%, 7/1/21........ 300,000 298,500 343,500
</TABLE>
See footnotes to portfolio of investments and accompanying notes to financial
statements.
5
<PAGE> 55
FFB FUNDS TRUST
NEW JERSEY TAX-FREE INCOME FUND
PORTFOLIO OF INVESTMENTS -- (UNAUDITED) (CONTINUED)
AUGUST 31, 1995
<TABLE>
<CAPTION>
CREDIT PRINCIPAL VALUE
RATING* AMOUNT COST (NOTE 1a)
- --------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
COMMONWEALTH OF PUERTO RICO -- (CONTINUED)
Refunding UTGO:
A/Baa1 Series A 6.00%, 7/1/14..................... $ 500,000 $ 480,000 $ 500,000
A/Baa1 Series B 5.50%, 7/1/13..................... 500,000 491,075 475,625
----------- -----------
TOTAL COMMONWEALTH OF PUERTO RICO............ 2,156,863 2,308,125
----------- -----------
NEW JERSEY TAX-FREE MONEY MARKET
FUNDS -- 2.6%
Dreyfus New Jersey Municipal
Money Market Fund.......................... 523,474 523,474 523,474
Federated New Jersey Municipal Cash Trust.... 384,490 384,490 384,490
----------- -----------
TOTAL NEW JERSEY TAX-FREE MONEY MARKET
FUNDS...................................... 907,964 907,964
----------- -----------
TOTAL INVESTMENTS -- 99.2%................... $34,165,931+ 35,198,839
===========
OTHER ASSETS IN EXCESS OF LIABILITIES --
0.8%....................................... 270,288
-----------
NET ASSETS -- 100.0%......................... $35,469,127
===========
</TABLE>
+ The cost for Federal income tax purposes is substantially the same.
See footnotes to portfolio of investments and accompanying notes to financial
statements.
6
<PAGE> 56
FFB FUNDS TRUST
NEW JERSEY TAX-FREE INCOME FUND
FOOTNOTES TO PORTFOLIO OF INVESTMENTS -- (UNAUDITED)
AUGUST 31, 1995
* Credit Ratings given by Standard & Poor's Corporation and Moody's Investors
Service Inc.
<TABLE>
<CAPTION>
STANDARD & POOR'S MOODY'S
- ------------------ --------
<C> <C> <S>
AAA Aaa Instrument judged to be of the highest quality and carrying the
smallest amount of investment risk.
AA Aa Instrument judged to be of high quality by all standards.
A A Instrument judged to be adequate by all standards.
BBB Baa Instrument judged to be of moderate quality by all standards.
NR NR Not Rated. In the opinion of the Investment Adviser, instrument
judged to be of comparable investment quality to rated
securities which may be purchased by the Fund.
</TABLE>
Items which possess the strongest investment attributes of their category are
given that letter rating followed by a number. The Standards & Poor's ratings
may be modified by the addition of a plus or minus sign to show relative
standing within the major rating categories. Moody's applies numerical modifiers
to designate relative standing within the generic ratings categories.
ABBREVIATIONS USED IN THIS PORTFOLIO:
<TABLE>
<S> <C>
AMBAC American Municipal Bond Assurance Corporation
COPS Certificates of Participation
FGIC Financial Guaranty Insurance Corporation
FSA Financial Security Assurance
GO General Obligation
MBIA Municipal Bond Insurance Association
PCR Pollution Control Revenue
UTGO Unlimited Tax General Obligation
</TABLE>
INVESTMENT PERCENTAGES SHOWN ARE CALCULATED AS A PERCENTAGE OF NET ASSETS.
INSTITUTIONS SHOWN IN PARENTHESES HAVE ENTERED INTO CREDIT SUPPORT AGREEMENT
WITH THE ISSUER.
See accompanying notes to financial statements.
7
<PAGE> 57
FFB FUNDS TRUST
NEW JERSEY TAX-FREE INCOME FUND
STATEMENT OF NET ASSETS -- (UNAUDITED)
AUGUST 31, 1995
<TABLE>
<S> <C>
ASSETS
Investments in securities, at value (cost $34,165,931)................................ $35,198,839
Cash.................................................................................. 9,833
Interest receivable................................................................... 470,348
Unamortized organizational cost....................................................... 9,891
Prepaid insurance..................................................................... 723
Receivable for Fund shares sold....................................................... 199
-----------
Total Assets..................................................................... 35,689,833
-----------
LIABILITIES
Income dividend payable............................................................... 154,536
Fund accounting fee payable........................................................... 2,500
Custodian fee payable................................................................. 600
Other accrued expenses................................................................ 63,070
-----------
Total Liabilities................................................................ 220,706
-----------
NET ASSETS............................................................................ $35,469,127
===========
NET ASSETS
Shares of beneficial interest outstanding (par value $0.001 per share)
1,000,000,000 shares authorized..................................................... $ 3,297
Additional paid-in capital............................................................ 34,828,613
Net unrealized appreciation on investments............................................ 1,032,908
Accumulated realized loss on investments.............................................. (395,691)
-----------
Net Assets Applicable to Shares Outstanding........................................... $35,469,127
===========
Shares of Beneficial Interest Outstanding............................................. 3,297,981
===========
Net Asset Value Per Share............................................................. $10.75
===========
Maximum Offering Price Per Share ($10.75/$0.955)...................................... $11.26
===========
</TABLE>
See accompanying notes to financial statements.
8
<PAGE> 58
FFB FUNDS TRUST
NEW JERSEY TAX-FREE INCOME FUND
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED AUGUST 31, 1995 -- (UNAUDITED)
<TABLE>
<S> <C> <C>
Interest income........................................................... $1,004,982
Expenses:
Advisory................................................................ $ 90,044
Administrative services................................................. 27,013
Fund accounting......................................................... 22,782
Transfer agent.......................................................... 17,752
Reports to shareholders................................................. 9,065
Custodian............................................................... 5,096
Amortization of organization expenses................................... 4,899
Registration............................................................ 4,532
Audit................................................................... 3,836
Trustees................................................................ 3,525
Insurance............................................................... 667
Legal................................................................... 504
Miscellaneous........................................................... 1,900
----------
Total expenses before waivers........................................ 191,615
Less: Expenses waived by Adviser/Administrator....................... (122,953)
-----------
Net expenses......................................................... 68,662
-----------
Net investment income..................................................... 936,320
-----------
Change in unrealized appreciation on investments.......................... 736,497
-----------
Net increase in net assets resulting from operations...................... $1,672,817
===========
</TABLE>
See accompanying notes to financial statements.
9
<PAGE> 59
FFB FUNDS TRUST
NEW JERSEY TAX-FREE INCOME FUND
STATEMENTS OF CHANGES IN NET ASSETS -- (UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
AUGUST 31, FEBRUARY 28,
1995 1995
------------ ------------
<S> <C> <C>
Increase (Decrease) in Net Assets:
Operations:
Net investment income................................................ $ 936,320 $2,109,665
Net realized loss on investments..................................... -- (411,239)
Change in unrealized appreciation
(depreciation) of investments..................................... 736,497 (1,552,745)
------------ ------------
Net increase in net assets resulting from operations................... 1,672,817 145,681
------------ ------------
Distributions to shareholders from net investment income............... (936,320) (2,109,665)
------------ ------------
Capital Share Transactions:
Proceeds from sales of shares........................................ 3,523,115 5,289,013
Net asset value of shares issued in reinvestment of
distributions..................................................... 439,824 1,313,998
------------ ------------
3,962,939 6,603,011
Cost of shares redeemed.............................................. (4,082,271) (12,569,571)
------------ ------------
Net decrease in net assets from capital share transactions............. (119,332) (5,966,560)
------------ ------------
Net increase (decrease) in net assets.................................. 617,165 (7,930,544)
Net Assets:
Beginning of period.................................................. 34,851,962 42,782,506
------------ ------------
End of period........................................................ $35,469,127 $34,851,962
============ ============
</TABLE>
See accompanying notes to financial statements.
10
<PAGE> 60
FFB FUNDS TRUST
NEW JERSEY TAX-FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- (UNAUDITED)
AUGUST 31, 1995
1. Description and Organization. FFB Funds Trust (the "Trust") was
organized in Massachusetts as a business trust on March 25, 1987 and currently
consists of twelve separately managed portfolios. The New Jersey Tax-Free Income
Fund (the "Fund") began operations July 16, 1991. The following summarizes
significant accounting policies followed in the preparation of the Fund's
financial statements:
(a) Municipal securities (other than short-term obligations) are valued on
the basis of valuations furnished by a pricing service which utilizes both
dealer-supplied valuations and electronic data processing techniques which take
into account appropriate factors such as institutional-size trading in similar
groups of securities, yield, quality, coupon rate, maturity, type of issue,
trading characteristics and other market data, without exclusive reliance on a
security exchange or over-the-counter prices, since such valuations are believed
to reflect more accurately the market value of such securities. Short-term
securities which mature in 60 days or less are valued at amortized cost, if
their term to maturity at purchase was 60 days or less, or by amortizing their
value on the 61st day prior to maturity, if their original term to maturity at
purchase exceeded 60 days. Portfolio securities, if any, for which there are no
such valuations are valued at fair value as determined in good faith by or at
the direction of the Board of Trustees.
(b) It is the Fund's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute to
its shareholders all of its net investment taxable and non-taxable income and
any net taxable gains realized. Therefore, no Federal income tax provision is
required.
(c) Dividends from taxable and non-taxable net investment income are
declared each business day and paid within five business days after the end of
the month. Distributions from short-term and long-term capital gains, if any,
are declared and paid annually.
(d) Costs incurred in connection with the Fund's organization and
registration were advanced by Furman Selz Incorporated ("Furman Selz"), the
Fund's Administrator and have been deferred and are being amortized on a
straight line basis, over the period of benefit, not to exceed 60 months from
the date the Fund commenced operations.
(e) Investment transactions are recorded on the trade date. Identified cost
of investments sold is used for both financial statement and Federal income tax
purposes. Interest income, including the amortization of discount or premium, is
recorded as earned.
(f) The Trust bears all costs of its operations other than expenses
specifically assumed by the Administrator or Adviser. Expenses specifically
identifiable to a particular Fund are borne by that Fund. Other expenses are
allocated to each Fund based on its net assets in relation to the total net
assets of the Trust or on another reasonable basis.
2. Adviser and Administrator. The Trust retains First Fidelity Bank,
National Association, New Jersey ("First Fidelity") to act as Adviser and Furman
Selz to act as Administrator for the Fund. First Fidelity furnishes to the Trust
investment guidance and policy direction in connection with the management of
the portfolio of the Fund, subject to policy direction established by the Board
of Trustees. First Fidelity is a wholly-owned subsidiary of First Fidelity
Bancorporation.
Furman Selz provides management and administrative services necessary for
the operation of the Trust and the Fund. Furman Selz also furnishes office space
and certain facilities required for conducting the business of the Trust and
pays the compensation of the Trust's officers and Trustees affiliated with
Furman Selz.
11
<PAGE> 61
FFB FUNDS TRUST
NEW JERSEY TAX-FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- (UNAUDITED) (CONTINUED)
AUGUST 31, 1995
As compensation for their advisory, administrative and management services
to the Fund, First Fidelity and Furman Selz are each entitled to a monthly fee
at the following annual rates:
<TABLE>
<CAPTION>
FEE RATE
-------------------
FIRST FURMAN
PORTION OF AVERAGE DAILY VALUE OF NET ASSETS FIDELITY SELZ
- ------------------------------------------------------------------------------- -------- --------
<S> <C> <C>
Not exceeding $500 million..................................................... 0.500% 0.150%
In excess of $500 million but not exceeding $1 billion......................... 0.450% 0.135%
In excess of $1 billion but not exceeding $1.5 billion......................... 0.400% 0.120%
In excess of $1.5 billion...................................................... 0.350% 0.105%
</TABLE>
For the six months ended August 31, 1995, First Fidelity and Furman Selz
each waived fees totalling $90,044 and $27,013, respectively.
3. Other Services with Affiliates. First Fidelity is transfer agent and
dividend disbursing agent for the Trust. Furman Selz acted as the Fund's
Sub-Transfer Agent and received an annual per account fee plus reimbursement of
out-of-pocket expenses. Furman Selz waived its per account fee which amounted to
$5,896 for the six months ended August 31, 1995.
First Fidelity also acts as custodian for the Fund. For furnishing
custodian services, First Fidelity is paid a monthly fee with respect to the
Fund at an annual rate based on a percentage of average daily net assets plus
certain transaction and out-of-pocket expenses. For the six months ended August
31, 1995, First Fidelity received custodian fees of $3,602.
Furman Selz performs fund accounting and maintains the books for the Fund.
For these services, Furman Selz is entitled to an annual fee of $30,000. Other
expenses related to pricing of securities are also borne by the Fund. For the
six months ended August 31, 1995, Furman Selz received fund accounting fees of
$15,000.
FFB Funds Distributor, Inc. (the "Distributor"), a wholly-owned subsidiary
of Furman Selz, acts as Distributor for the Trust.
The Trust has adopted a Master Distribution Plan (the "Plan") pursuant to
Rule 12b-1 of the Investment Company Act of 1940, after having concluded that
there is a reasonable likelihood that the Plan will benefit it and its
shareholders. The Plan provides for a monthly payment by the Fund to the
Distributor in amounts that the Distributor presents for periodic Board
approval, provided that each such payment is based on the average daily value of
the Fund's net assets during the preceding month and is calculated at an annual
rate not to exceed 0.35%. For the six months ended August 31, 1995, there were
no distribution payments made under the Plan.
Certain states in which the Fund is qualified for sale impose limitations
on the expenses of the Trust. The Advisory Contract and the Administrative
Services Contract provide that if, in any year, the total expenses of a Fund
(excluding taxes, interest, distribution expenses, brokerage commissions and
other portfolio transaction expenses, other expenditures which are capitalized
in accordance with generally accepted accounting principles and extraordinary
expenses, but including the advisory and administrative services fee) exceed the
expense limitation applicable to that Fund imposed by the securities regulations
of any state, First Fidelity and Furman Selz will pay or reimburse the Fund in
amounts equal to 70% and 30% of the excess, respectively. For the six months
ended August 31, 1995, no reimbursement was required to meet these limitations.
4. Repurchase Agreements. The Fund may enter into repurchase agreements
with government securities dealers recognized by the Federal Reserve Board, with
member banks of the Federal Reserve System or with such other brokers or dealers
that meet the credit guidelines established by the Board of Trustees. The Fund
will always receive and maintain securities as collateral whose market value,
including accrued interest, will be at least equal to 102% of the dollar amount
invested by the Fund, including accrued interest, and the Fund will make payment
for such securities only upon physical delivery or upon evidence of book entry
transfer to the account of the custodian. To the extent that any repurchase
transaction exceeds one business day, the value of the collateral is
marked-to-market on a daily basis to ensure the adequacy of the collateral. If
the
12
<PAGE> 62
FFB FUNDS TRUST
NEW JERSEY TAX-FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- (UNAUDITED) (CONTINUED)
AUGUST 31, 1995
seller defaults and the value of the collateral declines or if bankruptcy
proceedings are commenced with respect to the seller of the security,
realization of the collateral by the Fund may be delayed or limited.
5. Capital Share Transactions. The Fund is authorized to issue
1,000,000,000 shares of beneficial interest each with a par value of $0.001. For
the six months ended August 31, 1995, and the fiscal year ended February 28,
1995, transactions in shares of beneficial interest of the Fund were as follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
AUGUST 31, FEBRUARY 28,
1995 1995
---------- ------------
<S> <C> <C>
Shares Sold............................................................... 328,261 511,886
Shares Issued in Reinvestment of Distributions............................ 41,253 126,354
---------- ------------
369,514 638,240
Shares Redeemed........................................................... (382,318) (1,220,022)
---------- ------------
Net Decrease in Shares.................................................... (12,804) (581,782)
========= ==========
</TABLE>
6. Security Transactions. At August 31, 1995, the Fund had gross
unrealized appreciation and depreciation of $1,328,878 and $295,970,
respectively, based on cost for Federal income tax purposes.
13
<PAGE> 63
FFB FUNDS TRUST
NEW JERSEY TAX-FREE INCOME FUND
FINANCIAL HIGHLIGHTS -- (UNAUDITED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
PERIOD
JULY 16, 1991
YEAR YEAR YEAR (COMMENCEMENT
SIX MONTHS ENDED ENDED ENDED OF OPERATIONS)
ENDED FEBRUARY FEBRUARY FEBRUARY THROUGH
AUGUST 31, 28, 28, 28, FEBRUARY 29,
1995 1995 1994 1993 1992
----------- ----------- ----------- ----------- --------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period........ $ 10.53 $ 10.99 $ 11.01 $ 10.22 $ 10.00
----------- ----------- ----------- ----------- --------------
Income from Investment Operations:
Net investment income..................... 0.28 0.57 0.60 0.63 0.38
Net realized and unrealized gain (loss) on
securities.............................. 0.22 (0.46) (0.02) 0.79 0.22
----------- ----------- ----------- ----------- --------------
Total from Investment Operations.......... 0.50 0.11 0.58 1.42 0.60
----------- ----------- ----------- ----------- --------------
Less Distributions:
Dividends from net investment income...... (0.28) (0.57) (0.60) (0.63) (0.38)
----------- ----------- ----------- ----------- --------------
Net Asset Value, End of Period.............. $ 10.75 $ 10.53 $ 10.99 $ 11.01 $ 10.22
=========== =========== =========== =========== ==============
Total Return (not reflecting sales load).... 4.80% 1.41% 5.28% 14.47% 9.67%*
=========== =========== =========== =========== ==============
Ratios/Supplemental Data:
Net Assets, End of Period (in
thousands).............................. $35,469 $34,852 $42,783 $30,863 $ 13,129
Ratios of Expenses to Average Net
Assets+................................. 0.38%* 0.25% 0.14% 0.00% 0.01%*
Ratios of Net Investment Income to Average
Net Assets.............................. 5.20%* 5.52% 5.31% 5.97% 5.89%*
Portfolio Turnover Rate................... 0% 8.01% 1.67% 5.48% 4.95%
</TABLE>
- ---------------
* Annualized.
+ Ratios before effect of waivers/reimbursements were 1.08%, 1.04%, 1.05%,
1.16% and 1.20%*, respectively.
14
<PAGE> 64
BOARD OF TRUSTEES
<TABLE>
<S> <C>
EDMUND A. HAJIM * CHAIRMAN OF THE BOARD AND PRESIDENT;
Chairman of the Board, Furman Selz Incorporated
ROBERT H. DUNKER +* (Retired) Former Executive Vice President, First Fidelity
Bank, N.A., N. J.
ROBERT F. KANE ++ (Retired) Former Vice Chairman, Monroe Systems for Business,
Inc.
BENJAMIN A. LOBEL + Presently Private Investor
WALTER J. NEPPL +* (Retired) Management Consultant
T. BROCK SAXE ++ President and Director, Tombrock Corporation
+ Member of Audit Committee
++ Member of Nominating Committee
* Interested person of the Trust as that term is defined in
the Investment Company Act of 1940
- ---------------------------------------------------------------------------------------------
OFFICERS
EDMUND A. HAJIM Chairman of the Board and President
STEVEN D. BLECHER Executive Vice President
MICHAEL C. PETRYCKI Executive Vice President
JOHN J. PILEGGI Vice President and Treasurer
JOAN V. FIORE Vice President and Secretary
ROBERT A. HERING Vice President
DONALD E. BROSTROM Assistant Treasurer
SHERYL HIRSCHFELD Assistant Secretary
</TABLE>
<PAGE> 65
FBNJ0895
<PAGE> 66
FFB FUNDS TRUST
237 Park Avenue
New York, New York 10017
TELEPHONES
(800) 437-8790
(212) 808-3900
INVESTMENT ADVISER
First Fidelity Bank, National Association, New Jersey
765 Broad Street
Newark, New Jersey 07101
ADMINISTRATOR
Furman Selz Incorporated
237 Park Avenue
New York, New York 10017
CUSTODIAN, TRANSFER AGENT
AND DIVIDEND DISBURSING AGENT
First Fidelity Bank, National Association, New Jersey
765 Broad Street
Newark, New Jersey 07101
DISTRIBUTOR
FFB Funds Distributor, Inc.
230 Park Avenue
New York, New York 10169
LEGAL COUNSEL
Baker & McKenzie
805 Third Avenue
New York, New York 10022
This report is for the information of the shareholders of FFB Funds Trust.
Its use in connection with any offering of the Trust's shares is authorized
only in case of a concurrent or prior delivery of the Trust's current
prospectus.
Investments in mutual funds involve risk, including possible loss of
principal. FFB Funds are not deposits, guaranteed by or obligations of First
Fidelity Bank or its affiliates and are not insured by the FDIC, the Federal
Reserve Board or any other government agency.
FBGOVT0295
(LOGO) U.S.
Government
Income
Fund
----------------------------------------------------------
SEMI-ANNUAL REPORT
AUGUST 31, 1995
Managed by:
First Fidelity Bank, N.A.,
New Jersey
Distributed by:
FFB Funds Distributor, Inc.
<PAGE> 67
[LOGO]
October 20, 1995
Dear Shareholder:
We are pleased to present the semi-annual report for the FFB U.S.
Government Income Fund for the six months ended August 31, 1995. Net assets were
$2,057,444 and the net asset value per share of the Fund was $9.55.
The Fund's objective is to maximize current yield consistent with the
preservation of capital from a portfolio of U.S. Government and Agency
securities. The Fund's 30 day yield was 5.34%, while the weighted average
maturity was 1.9 years.
Unaudited financial statements, including the portfolio of investments at
August 31, 1995 follow. We appreciate your support.
Finally, contingent upon the merger of First Fidelity Bancorporation with
and into a wholly-owned subsidiary of First Union Corporation, the FFB family of
mutual funds will be combined (subject to various conditions, including
shareholder approval) with the Evergreen family of funds. We are excited about
the prospects of this fund merger and look forward to providing you access to
one of the most respected family of funds in existence over the past twenty
years.
/s/ EDMUND A. HAJIM
Edmund A. Hajim
Chairman of the Board
& President
<PAGE> 68
FFB U.S. GOVERNMENT INCOME FUND
PORTFOLIO MANAGER'S DISCUSSION OF PERFORMANCE REVIEW
The investment objective of the FFB U.S. Government Income Fund is to
provide maximum current income, consistent with preservation of shareholder's
principal. The Fund invests primarily in U.S. Government guaranteed securities
(Shares of the Fund, however, are not U.S. Government guaranteed).
Interest rates continued to drop in early 1995. By the end of June, at
least a 50 basis point cut in the Fed funds rate was already priced into the
U.S. Treasury yield curve with maturities five years and shorter trading at
yields lower than the 6% Fed funds rate.
During this period, we worked to increase the duration of the portfolio up
to the market level, the maximum allowed under our current policy. Given this
drop in interest rates, we were unable to fully participate, so our quarterly
investment performance lagged the market.
The fixed income markets entered the third quarter with high expectations
for the Federal Reserve to lower interest rates. Market participants were not
disappointed as the Fed, citing receding inflationary pressures, lowered the Fed
funds rate 25 basis points to 5.75%. Banks immediately followed with a similar
drop in the prime rate.
Despite this official drop in interest rates, yields along the U.S.
Treasury yield curve changed very little during July and August. Mixed news, on
both the domestic and international front, worked to maintain an unchanged
interest rate environment. This is not to say interest rates were not volatile.
They were up 40 basis points from June 1995 levels, then pushed back down by
mixed economic news and a stronger dollar.
Looking forward, news on the deficit reduction process will be a
significant determinant of the direction of interest rates. Goods news will
result in yields resuming their downward trend. Any other news will keep yields
at today's levels or higher as the markets have already discounted good economic
news.
In this environment, we will continue to keep the Fund's duration close to
the market pending the outcome of the budget process.
<PAGE> 69
FFB FUNDS TRUST
U.S. GOVERNMENT INCOME FUND
PORTFOLIO OF INVESTMENTS -- (UNAUDITED)
AUGUST 31, 1995
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT COST (NOTE 1a)
---------- ---------- ----------
<S> <C> <C> <C>
U.S. GOVERNMENT AGENCY OBLIGATION -- 50.0%
Federal National Mortgage Association 8.01%,
01/24/97................................... $1,000,000 $1,000,890 $1,029,020
---------- ----------
U.S. TREASURY NOTES -- 39.5%
4.625%, 02/29/96.............................. 550,000 546,648 547,547
7.25%, 05/15/04............................... 250,000 247,949 265,350
---------- ----------
TOTAL U.S. TREASURY NOTES....................... 794,597 812,897
---------- ----------
MONEY MARKET FUND -- 8.8%
Vista U.S. Government Money Market Fund....... 180,867 180,867 180,867
---------- ----------
TOTAL INVESTMENTS -- 98.3%...................... $1,976,354* 2,022,784
==========
OTHER ASSETS IN EXCESS OF LIABILITIES -- 1.7%... 34,660
----------
NET ASSETS -- 100.0%............................ $2,057,444
==========
</TABLE>
* Cost for Federal income tax purposes is substantially the same.
Investment percentages shown are a percentage of net assets.
See accompanying notes to financial statements.
3
<PAGE> 70
FFB FUNDS TRUST
U.S. GOVERNMENT INCOME FUND
STATEMENT OF NET ASSETS -- (UNAUDITED)
AUGUST 31, 1995
<TABLE>
<S> <C>
ASSETS
Investments in securities, at value (cost $1,976,354).................... $2,022,784
Unamortized organizational costs......................................... 29,512
Interest receivable...................................................... 26,923
Receivable from Adviser.................................................. 15,201
Prepaid expenses......................................................... 181
----------
Total Assets....................................................... 2,094,601
LIABILITIES
Income dividend payable.................................................. 8,778
Other accrued expenses................................................... 28,379
----------
Total Liabilities.................................................. 37,157
----------
NET ASSETS............................................................... $2,057,444
==========
NET ASSETS
Shares of beneficial interest outstanding (par value $0.001 per share);
1,000,000,000 shares authorized........................................ 215
Additional paid-in capital............................................... 2,386,304
Net unrealized appreciation on investments............................... 46,430
Accumulated net realized loss on investments............................. (375,505)
----------
Net assets applicable to shares outstanding.............................. $2,057,444
==========
Class B Shares of beneficial interest outstanding........................ 215,463
==========
Net Asset Value.......................................................... $ 9.55
==========
Maximum Offering Price Per Share ($9.55/$0.955).......................... $10.00
==========
</TABLE>
See accompanying notes to financial statements.
4
<PAGE> 71
FFB FUNDS TRUST
U.S. GOVERNMENT INCOME FUND
STATEMENT OF OPERATIONS -- (UNAUDITED)
FOR THE SIX MONTHS ENDED AUGUST 31, 1995
<TABLE>
<S> <C> <C>
Interest income.............................................. $ 91,990
Expenses:
Fund accounting............................................ 15,756
Reports to shareholders.................................... 7,645
Advisory................................................... 6,963
Amortization of organization expenses...................... 6,008
Audit...................................................... 4,537
Transfer Agent............................................. 4,102
Trustees................................................... 3,529
Administrative services.................................... 2,089
Registration............................................... 815
Custodian.................................................. 685
Legal...................................................... 504
Insurance.................................................. 63
Miscellaneous.............................................. 770
---------
Total expenses before waivers/reimbursements............ 53,466
Less: Expenses waived/reimbursed by
Adviser/Administrator................................. (40,349)
------------
Net expenses................................................. 13,117
------------
Net investment income........................................ 78,873
------------
Net realized loss on investments............................. (191,006)
Change in unrealized appreciation on investments............. 229,409
---------
Net realized and unrealized gain on investments.............. 38,403
------------
Net increase in net assets resulting from operations......... $117,276
============
</TABLE>
See accompanying notes to financial statements.
5
<PAGE> 72
FFB FUNDS TRUST
U.S. GOVERNMENT INCOME FUND
STATEMENTS OF CHANGES IN NET ASSETS -- (UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
AUGUST 31, FEBRUARY 28,
1995 1995
--------------- -------------
<S> <C> <C>
Operations:
Net investment income............................ $ 78,873 $ 325,109
Net realized loss on investments................. (191,006) (178,021)
Change in unrealized appreciation (depreciation)
on investments................................ 229,409 (181,969)
--------------- -------------
Net increase (decrease) in net assets resulting
from operations.................................. 117,276 (34,881)
--------------- -------------
Distributions to Shareholders from net investment
income........................................... (78,873) (325,109)
--------------- -------------
Capital Share Transactions:
Proceeds from sales of shares.................... 375,594 1,448,230
Net asset value of shares issued in reinvestment
of distributions.............................. 54,122 285,341
--------------- -------------
429,716 1,733,571
Cost of shares redeemed.......................... (4,000,357) (1,191,554)
--------------- -------------
Net increase (decrease) in net assets from capital
share transactions............................... (3,570,641) 542,017
--------------- -------------
Net Increase (Decrease) in Net Assets.............. (3,532,238) 182,027
Net Assets:
Beginning of period.............................. 5,589,682 5,407,655
--------------- -------------
End of period.................................... $2,057,444 $5,589,682
=============== =============
</TABLE>
See accompanying notes to financial statements.
6
<PAGE> 73
FFB FUNDS TRUST
U.S. GOVERNMENT INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- (UNAUDITED)
AUGUST 31, 1995
1. Description and Organization. FFB Funds Trust (the "Trust") was
organized in Massachusetts as a business trust on March 25, 1987 and currently
consists of twelve separately managed portfolios. The U.S. Government Income
Fund (the "Fund") began operations on March 22, 1993.
The Fund has three classes of shares. Class A shares are offered only to
certain institutional investors. Class B shares are offered exclusively to
investors who have purchased their shares through participating organizations
("service investors"). Class C shares are currently not offered for sale.
Class A shares are sold at net asset value, without any sales charge. Class
B shares are sold with a maximum front-end sales charge of 4.50%, and Class C
shares will be sold with a contingent deferred sales charge ranging from 3.00%
to 1.00% on redemptions made during the first six years following purchase. No
Class A or Class C shares have been issued by the Fund as of August 31, 1995.
The following summarizes significant accounting policies followed in the
preparation of the Fund's financial statements:
(a) The Fund's investments which are marketable (other than debt securities
maturing in 60 days or less) are valued by using market quotations or prices
provided by widely recognized pricing services. Securities for which market
quotations are not readily available are valued at their fair value as
determined by the Adviser using methods authorized by the Trust's Board of
Trustees. Portfolio securities maturing in 60 days or less are normally valued
at amortized cost. The net asset value of shares in the Fund will fluctuate as
the market value of their portfolio securities changes in response to changing
market rates of interest and other factors.
(b) It is the Fund's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute to
its shareholders all of its net investment income and any net taxable gains
realized. Therefore, no Federal income tax provision is required.
(c) The Fund's dividends from net investment income are declared each
business day and paid within five business days after the end of the month. The
Fund's distributions from short-term and long-term capital gains, if any, are
declared and paid annually.
(d) Costs incurred in connection with the organization and initial
registration of the Fund are being amortized over a sixty-month period beginning
with the Fund's commencement of operations.
In the event any of the initial shares of the Fund are redeemed during the
amortization period, the redemption proceeds will be reduced by a pro rata
portion of any unamortized deferred organization expenses in the same portion as
the number of initial shares outstanding being redeemed bears to the number of
initial shares outstanding at the time of redemption.
(e) Investment transactions are recorded on the trade date. Identified cost
of investments sold is used for both financial statement and Federal income tax
purposes. Interest income, including the amortization of discount or premium, is
recorded as earned.
(f) The Trust bears all costs of its operations other than those
specifically assumed by the Administrator or Adviser. Expenses specifically
identifiable to a particular Fund are borne by that Fund. Other expenses are
allocated to each Fund based on its net assets in relation to the total net
assets of the Trust or on another reasonable basis.
2. Adviser and Administrator. The Trust retains First Fidelity Bank,
National Association, New Jersey ("First Fidelity") to act as Adviser for the
Fund. First Fidelity furnishes to the Trust investment guidance and policy
direction in connection with the management of the portfolio of the Fund,
subject to policy established by the Board of Trustees. First Fidelity is a
wholly-owned subsidiary of First Fidelity Bancorporation.
7
<PAGE> 74
FFB FUNDS TRUST
U.S. GOVERNMENT INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- (UNAUDITED)(CONTINUED)
AUGUST 31, 1995
The Trust retains Furman Selz Incorporated ("Furman Selz") to act as
Administrator for the Fund. Furman Selz provides management and administrative
services necessary for the operation of the Trust and the Fund. Furman Selz also
furnishes office space and certain facilities required for conducting the
business of the Trust and pays the compensation of the Trust's officers and
Trustees affiliated with Furman Selz.
As compensation for its Advisory and Administrative Services to the Fund,
First Fidelity and Furman Selz are each entitled to a monthly fee at the
following rates:
<TABLE>
<CAPTION>
FIRST FURMAN
PERCENTAGE OF AVERAGE DAILY NET ASSETS FIDELITY SELZ
- ---------------------------------------------------------------------------- ------ ------
<S> <C> <C>
Not exceeding $500 million.................................................. 0.500% 0.150%
In excess of $500 million but not exceeding $1 billion...................... 0.450% 0.135%
In excess of $1 billion but not exceeding $1.5 billion...................... 0.400% 0.120%
In excess of $1.5 billion................................................... 0.350% 0.105%
</TABLE>
For the six months ended August 31, 1995, First Fidelity and Furman Selz
were entitled to and waived fees of $6,963, and $2,089, respectively.
For all of the Funds, certain of the states in which the Trust is qualified
for sale impose limitations on the expenses of the Trust. The Advisory Contract
and the Administrative Services Contract provide that if, in any year, the total
expenses of a Fund (excluding taxes, interest, distribution expenses, brokerage
commissions and other portfolio transaction expenses, other expenditures which
are capitalized in accordance with generally accepted accounting principles and
extraordinary expenses, but including the advisory and administrative services
fee) exceed the expense limitation applicable to that Fund imposed by the
securities regulations of any state, First Fidelity and Furman Selz will pay or
reimburse the Fund in amounts equal to 70% and 30% of the excess, respectively.
During the six months ended August 31, 1995, there were no payments or
reimbursements required as a result of these expense limitations. However, First
Fidelity voluntarily reimbursed expenses of $15,201.
3. Other Services with Affiliates. First Fidelity is transfer agent and
dividend disbursing agent for the Trust. Furman Selz acts as the Trust's
Sub-Transfer Agent, and receives an annual per account fee, plus reimbursement
of out-of-pocket expenses. Furman Selz waived its per account fee which amounted
to $816 for the six months ended August 31, 1995.
First Fidelity may enter into agreements with certain banks, financial
institutions and corporations (the "Participating Organizations") to perform
certain administrative and subaccounting services for its customers who invest
in the Fund through accounts maintained by such organizations. The Participating
Organizations will receive monthly payments from the Fund not exceeding, on an
annualized basis, 0.35% of average daily value of the shares of each such class
owned by investors in subaccounts of the Participating Organization. For the six
months ended August 31, 1995, no servicing payments were made.
First Fidelity also acts as custodian for the Fund. For furnishing custodian
services, First Fidelity is paid a monthly fee with respect to the Fund at an
annual rate based on a percentage of average daily net assets plus certain
transaction and out-of-pocket expenses. For the six months ended August 31,
1995, First Fidelity waived custodian fees of $280.
Furman Selz performs fund accounting and maintains the books for the Fund.
For these services, Furman Selz is entitled to an annual fee of $30,000. For the
six months ended August 31, 1995, Furman Selz waived fund accounting fees of
$15,000.
FFB Funds Distributor, Inc. (the "Distributor"), a wholly-owned subsidiary
of Furman Selz, acts as Distributor for the Trust. The Distributor is
responsible for the distribution of Fund shares and receives no compensation
other than the portion of any sales charge imposed on purchases of Class B
shares that is not reallowed to a selling dealer.
8
<PAGE> 75
FFB FUNDS TRUST
U.S. GOVERNMENT INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- (UNAUDITED)(CONTINUED)
AUGUST 31, 1995
The Trust has adopted a Master Distribution Plan (the "Plan") pursuant to
Rule 12b-1 of the Act with respect to Class B and Class C shares. The Plan
provides for a monthly payment by those Classes to the Distributor as requested
for direct and indirect distribution expenses. All payments are subject to
periodic Board of Trustees approval and overall expense limitations. These
expenses include the printing and distribution of prospectuses sent to
prospective investors of those Classes, the preparation, printing and
distribution of sales literature and expenses associated with media
advertisements, telephone services, payments to financial intermediaries for
introducing assets to and retaining assets in those Classes and, with respect to
Class C shares, reimbursement to the Distributor for financing the sale of such
shares. The Distributor may also make payments to itself and other
broker-dealers or financial intermediaries for assistance in distributing Class
B and Class C shares and otherwise promoting the sale of such shares. Each
payment is based on the average daily value of the net assets of each Class
during the preceding month and is calculated at an annual rate not to exceed
0.35% per annum for Class B shares and 0.75% per annum for Class C shares. For
the six months ended August 31, 1995, no distribution payments were made on
behalf of the Class B shares.
4. Repurchase Agreements. The Fund may enter into repurchase agreements
with government securities dealers recognized by the Federal Reserve Board, with
member banks of the Federal Reserve System or with such other brokers or dealers
that meet the credit guidelines established by the Board of Trustees. The Fund
will always receive and maintain securities as collateral whose market value,
including accrued interest, will be at least equal to 102% of the dollar amount
invested by the Fund, including accrued interest, and the Fund will make payment
for such securities only upon physical delivery or upon evidence of book entry
transfer to the account of the custodian. To the extent that any repurchase
transaction exceeds one business day, the value of the collateral is
marked-to-market on a daily basis to ensure the adequacy of the collateral. If
the seller defaults and the value of the collateral declines or if bankruptcy
proceedings are commenced with respect to the seller of the security,
realization of the collateral by the Fund may be delayed or limited.
5. Capital Share Transactions. The Fund is authorized to issue
1,000,000,000 shares of beneficial interest each with a par value of $0.001. For
the six months ended August 31, 1995 and the year ended February 28, 1995,
transactions in Class B shares of beneficial interest in the Fund were as
follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
AUGUST 31, FEBRUARY 28,
1995 1995
---------- ------------
<S> <C> <C>
Shares Sold........................................................ 39,358 161,314
Shares Issued in Reinvestment of Distributions..................... 5,712 23,174
---------- ------------
45,070 184,488
Shares Redeemed.................................................... (424,117) (127,650)
---------- ------------
Net Increase (Decrease) in Shares.................................. (379,047) 56,838
========== ============
</TABLE>
6. Security Transactions. The Fund's cost of securities purchased and
proceeds from securities sold (other than short-term securities) for the six
months ended August 31, 1995 aggregated $2,833,681 and $6,659,707, respectively.
At August 31, 1995, the Fund had gross unrealized appreciation for Federal
income tax purposes amounting to $46,430.
9
<PAGE> 76
FFB FUNDS TRUST
U.S. GOVERNMENT INCOME FUND
FINANCIAL HIGHLIGHTS -- (UNAUDITED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED PERIOD ENDED
AUGUST 31, FEBRUARY 28, FEBRUARY 28,
1995 1995 1994++
---------- ------------ ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period......... $ 9.40 $10.06 $10.00
---------- ------------ ------------
Income from Investment Operations:
Net investment income...................... 0.26 0.58 0.70
Net realized and unrealized loss on
securities.............................. 0.15 (0.66) (0.02)
---------- ------------ ------------
Total from Investment Operations........... 0.41 (0.08) 0.68
---------- ------------ ------------
Less Distributions:
Dividends from net investment income....... (0.26) (0.58) (0.62)
---------- ------------ ------------
Net Asset Value, End of Period............... $ 9.55 $9.40 $10.06
========== ============ ============
Total Return (not reflecting sales load)**... 4.37% (0.70)% 6.94%
========== ============ ============
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands)... $2,057 $5,590 $5,408
Ratios of Net Expenses to Average Net
Assets+................................. 0.94%* 0.40% 0.04%*
Ratios of Net Investment Income to Average
Net Assets.............................. 5.66%* 6.22% 6.62%*
Portfolio Turnover Rate.................... 93.94% 19.82% 40.19%
</TABLE>
* Annualized.
** Total return computed since inception and is not annualized.
+ Ratios before effect of waivers/reimbursements were 3.84%, 2.48% and 2.94%,
respectively.
++ From March 22, 1993 (Commencement of Operations).
10
<PAGE> 77
BOARD OF TRUSTEES
<TABLE>
<S> <C>
EDMUND A. HAJIM * CHAIRMAN OF THE BOARD AND PRESIDENT;
Chairman of the Board, Furman Selz Incorporated
ROBERT H. DUNKER +* (Retired) Former Executive Vice President, First
Fidelity Bank, N.A., N.J.
ROBERT F. KANE ++ (Retired) Former Vice Chairman, Monroe Systems for
Business, Inc.
BENJAMIN A. LOBEL + Presently private investor
WALTER J. NEPPL +* (Retired) Management Consultant
T. BROCK SAXE ++ President and Director, Tombrock Corporation
+ Member of Audit Committee
++ Member of Nominating Committee
* Interested person of the Trust as that term is
defined in the Investment Company Act of 1940
- --------------------------------------------------------------------------------------
OFFICERS
EDMUND A. HAJIM Chairman of the Board and President
STEVEN D. BLECHER Executive Vice President
MICHAEL C. PETRYCKI Executive Vice President
JOHN J. PILEGGI Vice President and Treasurer
JOAN V. FIORE Vice President and Secretary
ROBERT A. HERING Vice President
DONALD E. BROSTROM Assistant Treasurer
SHERYL HIRSCHFELD Assistant Secretary
</TABLE>
