<PAGE>
PRESIDENT'S MESSAGE
December 1996
Dear Shareholder:
We are very pleased to present you with the annual report for the Republic
New York Tax Free Money Market Fund for the period ending October 31, 1996. In
this report, we have provided you with a letter from the Investment Adviser,
Republic National Bank of New York.
We hope you find this letter and accompanying financial summaries
informative and as always we would be delighted to hear from you to answer any
questions you might have or provide you with additional information.
Audited financial statements and portfolio holdings for the Fund for the
period ending October 31, 1996 also follow. We look forward to servicing your
financial needs and appreciate your continued support.
Respectfully submitted,
/s/ George O. Martinez
George O. Martinez
President
<PAGE>
REPUBLIC NEW YORK TAX FREE MONEY MARKET FUND
ANNUAL REPORT -- OCTOBER 31, 1996
TABLE OF CONTENTS
PAGE
President's Message ........................................... 1
Letter to Shareholders from Investment Adviser ................ 3
Statement of Net Assets ....................................... 4
Statement of Operations ....................................... 9
Statements of Changes in Net Assets ........................... 10
Financial Highlights .......................................... 11
Notes to Financial Statements ................................. 13
Report of KPMG Peat Marwick LLP, Independent Auditors ......... 16
<PAGE>
LETTER TO SHAREHOLDERS FROM INVESTMENT ADVISER
December 1996
DEAR SHAREHOLDER:
We are pleased to present you with the annual report for the Republic New
York Tax-Free Money Market Fund for the fiscal year ended October 31, 1996.
The Republic New York Tax-Free Money Market Fund returned 3.04% (Class C
Shares) for the fiscal year ended October 31, 1996, compared to 2.94% for the
Lipper NY Money Market Fund Average. For the period since inception (November
17, 1994), the Fund virtually matched the average for comparable funds tracked
by Lipper Analytical Services, returning 3.24% for Class C Shares versus 3.25%
annualized.
Uncertainty regarding the direction of interest rates prevailed through much
of the fiscal year, which began with signs of a softening U.S. economy and
anticipation of further interest rate cuts by the Federal Reserve. By February,
the initial bullish view on interest rates changed as the picture of the U.S.
economy began to blur. Speculation arose that the economy was growing too
strongly and that an interest rate hike was imminent to stave off inflationary
pressures. Concerns began to subside near the fiscal year-end with the release
of economic data depicting an economy in a moderate and more sustainable growth
trend.
The Fund maintained a neutral average maturity structure near the fiscal
year-end, positioning itself to take advantage of an improved supply and demand
environment for higher yielding securities at the end of the calendar year. In
addition, the Fund recently decreased its Floating Rate Demand Note position in
favor of less volatile commercial paper. As of October 31, 1996, the Fund's
portfolio consisted of 41% Floating Rate Demand Notes, 24% Tax Exempt Commercial
Paper, 34% Fixed Rate Notes and 1% cash and cash equivalents. The Fund's average
maturity as of October 31, 1996, was 49 days. The Fund's annualized compounded
7-day yield through October 31 was 2.97% (Class C).
Audited financial statements and portfolio holdings as of October 31, 1996
follow. We appreciate your continued support.
Sincerely,
Republic National Bank of New York
Lipper NY Money Market Fund Average: an average of all the money market
funds in the Lipper New York universe.
The performance data quoted represents past performance and is not an
indication of future results.
An investment in the fund is neither insured nor guaranteed by the U.S.
Government. Yields will fluctuate, and there can be no assurance that the
fund will be able to maintain a stable NAV of $1.00 per share.
The performance set forth may reflect the waiver of a portion of the fund's
advisory or administrative fees for certain periods since the inception
date. In the absence of fee waivers the 7 day yield figures would have been
2.87%.
The composition of the portfolio is subject to change.
<PAGE>
REPUBLIC NEW-YORK TAX FREE MONEY MARKET FUND
STATEMENT OF NET ASSETS -- OCTOBER 31, 1996
<TABLE>
<CAPTION>
MOODY'S/
PRINCIPAL S&P(b) VALUE
AMOUNT DESCRIPTION RATE MATURITY (UNAUDITED) (NOTE 2)
------ ----------- ---- -------- ----------- --------
NEW YORK TAX FREE BONDS, NOTES AND COMMERCIAL PAPER -- 99.4%(A)
NEW YORK TAX FREE MUNICIPAL NOTES -- 33.5%(a)
<S> <C> <C> <C> <C> <C>
$1,000,000 Brentwood, New York, RANS, Union Free School
District .................................... 4.250% 12/20/96 NR/NR $ 1,000,656
1,500,000 Bryam Hills, New York Central School District,
TANS ........................................ 4.000% 2/28/97 NR/NR 1,501,667
1,000,000 Erie County, New York, RANS, LOC - Union Bank
of Switzerland .............................. 4.250% 14/17/97 MIGI/NR 1,002,867
1,000,000 Great Neck, New York Union Free School
District, TANS, General Obligation .......... 4.250% 6/30/97 MIGI/NR 1,002,244
826,000 Hempstead Town, New York, BANS ................ 4.000% 2/28/97 NR/NR 826,234
1,000,000 Hempstead Town, New York, BANS ................ 4.250% 10/30/97 NR/NR 1,004,318
800,000 Hicksville, New York Free School District,
TANS, General Obligations ................... 4.250% 6/26/97 NR/NR 801,444
2,000,000 Lansing, New York, BANS, General Obligation,
AMT ......................................... 3.900% 12/27/96 NR/NR 2,000,446
1,150,000 Monroe County, New York, General Obligation,
MBIA Insurance .............................. 6.000% 3/1/97 Aaa/AAA 1,158,743
500,000 Monroe County, New York, BANS ................. 4.500% 6/6/97 NR/NR 502,436
745,000 Municipal Assistance Corp., New York, Revenue,
Series D. AMBAC ............................. 4.000% 7/1/97 Aaa/AAA 745,930
1,000,000 Nassau County, New York, BANS, General
Obligation, Series C ........................ 4.000% 11/15/96 MIGI/Sp1 1,000,149
600,000 Nassau County, New York, RANS, General
Obligation, Series A ........................ 3.500% 3/5/97 NR/Sp1 599,154
1,000,000 Nassau County, New York, BANS, General
Obligation, Series C ........................ 4.500% 3/14/97 MIGI/Sp1 1,002,487
1,000,000 New Rochelle, New York, City School District,
BANS ........................................ 4.100% 1/15/97 NR/NR 1,000,803
2,000,000 New York, New York, TANS, General Obligation 4.500% 2/12/97 MIGI/Sp1+ 2,004,173
2,462,000 Niagara County, New York, BANS, General
Obligation .................................. 4.250% 12/6/96 NR/NR 2,463,246
1,500,000 North Hemstead, New York, BANS, General
Obligation .................................. 4.000% 1/30/97 NR/NR 1,502,142
2,000,000 North Hemstead, New York, BANS, General
Obligation .................................. 4.125% 11/1/96 NR/NR 2,000,000
1,000,000 Riverhead, New York, Central School District,
BANS ........................................ 4.000% 12/6/96 NR/NR 1,000,373
1,000,000 Roslyn, New York Free School District, BANS ... 4.250% 1/14/97 NR/NR 1,001,335
2,000,000 Suffolk County, New York, General Obligation,
BAN ......................................... 4.000% 1/2/97 MIGI/NR 2,000,705
420,000 Triborough Bridge & Tunnel Authority, New York
Convention Center Project, Revenue, Series E,
LOC - Morgan Guaranty Trust ................. 6.700% 7/1/97 Aa1/AAA 427,767
-----------
27,549,319
-----------
NEW YORK TAX FREE COMMERCIAL PAPER -- 24.0%(a)
2,000,000 Municipal Assistance Corp. .................... 3.500% 12/17/96 P1/A1+ 2,000,000
1,000,000 Municipal Assistance Corp. .................... 3.500% 12/19/96 P1/A1+ 1,000,000
3,500,000 New York City Water Authority ................. 3.600% 1/16/97 P1/A1+ 3,500,000
500,000 New York State Dormitory Authority, Revenue,
Memorial Sloan Kettering, Series A, LOC -
Chemical Manhattan .......................... 3.550% 2/24/97 VMIGI/A1 500,000
1,000,000 New York State Dormitory Authority, Revenue,
Memorial Sloan Kettering, Series D, LOC -
Chemical Manhattan .......................... 3.550% 12/12/96 VMIGI/A1 1,000,000
1,400,000 New York State Environmental Facilities Corp.,
Solid Waste Disposal, Revenue, General
Electric Co. project ........................ 3.450% 12/19/96 P1/A1+ 1,400,000
2,000,000 New York State Environmental Solid Waste
Disposal, Revenue, General Electric Co.
project, Series A, AMT ...................... 3.500% 12/19/96 P1/A1+ 2,000,000
500,000 New York State Power Authority ................ 3.450% 12/9/96 P1/A1 500,000
1,080,000 New York State Power Authority ................ 3.600% 12/5/96 P1/A1 1,080,000
2,500,000 Niagara County of New York Industrial
Development Agency, Solid Waste Disposal,
Revenue, American Refinery Fuel Company, AMT 3.750% 12/18/96 VMIGI/A1 2,500,000
1,005,000 Port Authority of New York & New Jersey, LOC -
Morgan Guaranty Trust, AMT .................. 3.500% 12/18/96 VMIGI/A1 1,005,000
1,000,000 Port Authority of New York & New Jersey, AMT 3.500% 12/19/96 P1/A1+ 1,000,000
2,300,000 Puerto Rico Government ........................ 3.350% 11/7/96 NR/A1+ 2,300,000
-----------
19,785,000
-----------
VARIABLE RATE DEMAND NOTES -- 41.1%(a)(c)
100,000 Duchess County, New York, Industrial
Development Agency, Laerdal Medical Corp.
project, Revenue, LOC - Bank of New York, AMT 3.750% 8/1/15 MIG1/NR 100,000
3,200,000 Metropolitan Transportation Authority, New
York, Commuter Facilities, Revenue, LOC -
Morgan Guaranty Trust & Bank of Tokyo -
Mitsubishi LTD. ............................. 3.500% 7/1/21 VMIGI/A1 3,200,000
500,000 New York City Housing Development, 5th Ave
project, Revenue, Series A, LOC - Bankers
Trust ....................................... 3.300% 1/1/16 VMIGI/NR 500,000
2,700,000 New York City Housing Development, East 17th
Street project, Revenue, LOC - Chemical Bank 3.600% 1/1/23 NR/A1+ 2,700,000
1,200,000 New York City Housing Development, Mortgage,
Revenue, East 96th Street Project, LOC - Bank
of Tokyo - Mitsubishi LTD. .................. 3.350% 8/1/15 VMIGI/NR 1,200,000
1,000,000 New York City Industrial Development Agency,
Revenue, LOC - FSA, AMT ..................... 3.850% 11/1/15 Aaa/AAA 1,000,000
100,000 New York City Municipal Water Finance
Authority, Water & Sewer System, Revenue,
Series C, LOC - FGIC Insurance .............. 3.550% 6/15/22 VMIGI/A1+ 100,000
900,000 New York City Municipal Water Finance
Authority, Water & Sewr System, Revenue,
Series A, LOC - FGIC Insurance .............. 3.650% 6/15/25 VMIGI/A1+ 900,000
1,100,000 New York City Municipal Water & Sewer System,
Revenue, Series C, LOC - FGIC Insurance ..... 3.550% 6/15/23 VMIGI/A1+ 1,100,000
2,400,000 New York State Dormitory Authority, Cornell
Univ., Revenue, Series B, LOC - Morgan
Guarantee Trust ............................. 3.450% 7/1/25 VMIGI/A1+ 2,400,000
1,200,000 New York State Dormitory Authority,
Metropolitan Museum of Art, Revenue, Series
B, LOC - MBIA Surety BD ..................... 3.450% 7/1/23 VMIGI/A1+ 1,200,000
1,800,000 New York State Dormitory Authority, Oxford
University Press Inc., Revenue, LOC -
Landesbank Hessen ........................... 3.550% 7/1/23 VMIGI/NR 1,800,000
2,100,000 New York State Energy Research and Development
Authority, Pollution Control, Revenue, LOC -
Canadian Imperial Bank ...................... 3.600% 12/1/25 P1/NR 2,100,000
300,000 New York State Energy Research & Development
Authority, Pollution Control, Revenue LOC -
Union Bank of Switzerland ................... 3.500% 10/1/29 VMIGI/A1+ 300,000
3,000,000 New York State Housing Finance Agency, Revenue,
Normandie Court Project, LOC - Landesbank
Hessen ...................................... 3.500% 5/1/15 VMIGI/A1+ 3,000,000
1,000,000 New York State Local Government Assistance
Corp., Revenue, Series C, LOC - Landesbank
Hessen ...................................... 3.450% 4/1/25 VMIGI/A1+ 1,000,000
1,000,000 New York State Local Government Assistance
Corp., Revenue, Series G, LOC - National
Westminster ................................. 3.400% 4/1/25 VMIGI/A1+ 1,000,000
2,100,000 New York, New York, Industrial Development
Agency, Civil Facilities, Revenue, LOC -
Swiss Bank, NY .............................. 3.450% 12/1/14 NR/A1+ 2,100,000
1,500,000 New York, New York, City TR Cultural Resources,
Revenue, LOC - Swiss Bank ................... 3.450% 12/1/15 VMIGI/A1+ 1,500,000
800,000 New York, New York, General Obligation, LOC -
Union Bank of Switzerland ................... 3.650% 8/15/23 VMIGI/A1+ 800,000
100,000 New York, New York, General Obligation, LOC -
Union Bank of Switzerland ................... 3.650% 8/15/22 VMIGI/A1+ 100,000
1,900,000 New York, New York, General Obligation, LOC -
State Street B&T of New York ................ 3.650% 8/1/22 VMIGI/A1+ 1,900,000
100,000 New York, New York, General Obligation, LOC -
Morgan Guaranty Trust ....................... 3.650% 8/15/19 VMIGI/A1+ 100,000
1,700,000 New York, New York, General Obligation, Series
B, LOC - MBIA Insurance ..................... 3.500% 8/15/05 VMIGI/A1+ 1,700,000
1,200,000 Niagara Falls, New York Bridge Commission,
Revenue, Series A, LOC - FGIC Insurance ..... 3.400% 10/1/19 VMIGI/A1 1,200,000
825,000 Westchester County, New York, Industrial
Development Agency, Elba Enterprise project,
Revenue, LOC - Chemical Bank ................ 3.350% 12/1/01 Aa3/NR 825,000
-----------
33,825,000
-----------
OTHER MUNICIPAL -- 0.8%(a)
MUTUAL FUNDS
651,000 Dreyfus NY Tax Free Money Market Fund (Cost $651,000) .................................. $ 651,000
TOTAL INVESTMENTS AT AMORTIZED COST(d) ............................................................. 81,810,319
CASH ............................................................................................... 27,371
INTEREST RECEIVABLE ................................................................................ 760,213
DEFERRED ORGANIZATION EXPENSES (NOTE 2) ............................................................ 19,248
DIVIDENDS PAYABLE .................................................................................. (204,270)
ADMINISTRATIVE SERVICE FEE PAYABLE (NOTE 3) ........................................................ (24,079)
DISTRIBUTION EXPENSES PAYABLE (NOTE 3) ............................................................. (36,119)
LIABILITIES LESS OTHER ASSETS ...................................................................... (44,979)
-----------
NET ASSETS ......................................................................................... $82,307,704
===========
Represented by:
Paid-in capital .................................................................................... $82,307,704
-----------
NET ASSETS:
Class C -- Applicable to 78,593,998 shares of beneficial interest outstanding
(unlimited number of shares authorized) ............................................... $78,593,998
Class Y -- Applicable to 3,713,706 shares of beneficial interest outstanding
(unlimited number of shares authorized) ............................................... 3,713,706
-----------
Net Assets ......................................................................................... $82,307,704
===========
Net Asset Value, Offering Price and Redemption Price Per Share ..................................... $1.00
=====
<FN>
(a) Percentages indicated are based on net assets of $82,307,704, which
correspond to a net asset value per common share of $1.00.
(b) The Moody's or Standard & Poor's ratings indicated are believed to be the
most recent ratings available at October 31, 1996 for the securities listed.
Ratings are generally ascribed to securities at the time of issuance. While
the agencies may from time to time revise such ratings, they undertake no
obligation to do so, and the ratings do not necessarily represent what the
agencies would ascribe to these securities at October 31, 1996. These
ratings are unaudited.
(c) Represents a variable rate demand note. Interest rate disclosed represents
current rate at 10/31/96.
(d) The aggregate identified cost on a tax basis is the same.
AMBAC -- American Municipal Bond Assurance Corporation
AMT -- Interest on security is subject to Federal Alternative Minimum Tax
BANs -- Bond Anticipation Notes
FGIC -- Federal Guaranty Insurance Corporation
FSA -- Financial Security Assurance Holding
LOC -- Letter of Credit
MBIA -- Municipal Bond Insurance Association
RANs -- Revenue Anticipation Notes
TANs -- Tax Anticipation Notes
</FN>
</TABLE>
See notes to financial statements
<PAGE>
REPUBLIC NEW YORK TAX-FREE MONEY MARKET FUND
STATEMENT OF OPERATIONS -- YEAR ENDED OCTOBER 31, 1996
INVESTMENT INCOME:
Investment income (Note 2) ............................. $2,436,782
EXPENSES:
Investment advisory fees (Note 3) ..... $104,179
Administrative services fees (Note 3) . 104,179
Distribution fees (Class C) (Note 3) .. 24,377
Transfer agent fees ................... 19,655
Fund accounting fees .................. 26,528
Audit fees ............................ 19,501
Legal Fees ............................ 19,794
Reports to shareholders ............... 26,493
Custodian fees and expenses ........... 45,906
Registration fees ..................... 1,798
Trustees' fees (Note 3) ............... 5,920
Insurance expense ..................... 12,054
Other expenses ........................ 26,550
--------
Total expenses before voluntary fee
waivers ......................... 436,934
Voluntary fee waivers (Note 3) ........ (66,922)
--------
Net expenses ......................................... 370,012
----------
NET INVESTMENT INCOME .................................. 2,066,770
----------
REALIZED LOSSES ON INVESTMENTS:
Net realized losses on investments ................... (5,393)
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ... $2,061,377
==========
See notes to financial statements
<PAGE>
REPUBLIC NEW YORK TAX-FREE MONEY MARKET FUND
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE PERIOD
NOVEMBER 17, 1994
(COMMENCEMENT
YEAR ENDED OF OPERATIONS)
OCTOBER 31, 1996 TO OCTOBER 31, 1995
----------------- -------------------
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS:
Net investment income ................ $ 2,066,770 $ 1,773,793
Net realized loss on investments ..... (5,393) (13,869)
----------- -----------
Net increase in net assets resulting
from operations .................... 2,061,377 1,759,924
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
Class C Shares ..................... (2,008,480) (1,759,924)
Class Y Shares ..................... (52,897) --
----------- -----------
Total Dividends to Shareholders (2,061,377) (1,759,924)
----------- -----------
Capital Transactions:
Capital share transactions at net asset
value of $1.00 per share:
Proceeds from sales of shares ...... 315,094,256 191,998,598
Net asset value of shares issued in
connection with reinvestment of
distributions .................... 1,757,502 1,046,922
Cost of shares redeemed ............ (287,196,531) (140,393,043)
----------- -----------
Net increase in net assets from
capital share transactions ........... 29,655,227 52,652,477
----------- -----------
TOTAL INCREASE IN NET ASSETS ......... 29,655,227 52,652,477
NET ASSETS:
Beginning of period ................ 52,652,477 0
----------- -----------
End of period (including
undistributed net investment
income of $0 and $13,869,
respectively) .................... $82,307,704 $52,652,477
=========== ===========
See notes to financial statements
<PAGE>
REPUBLIC NEW YORK TAX-FREE MONEY MARKET FUND
FINANCIAL HIGHLIGHTS -- CLASS C SHARES
PERIOD ENDED OCTOBER 31,
------------------------
1996 1995 (a)
---------- ------------
NET ASSET VALUE, BEGINNING OF PERIOD ............... $ 1.00 $ 1.00
------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ............................ 0.030 0.033
------- -------
Total from investment operations ................. 0.030 0.033
------- -------
LESS DIVIDENDS:
Investment income ................................ (0.030) (0.033)
------- -------
Total distributions .............................. (0.030) (0.033)
------- -------
Net asset value, end of period ................... $ 1.00 $ 1.00
======= =======
TOTAL RETURN ....................................... 3.04% 3.31%(a)
RATIOS/SUPPLEMENTAL DATA:
Net assets, at end of period (in 000's) .......... $78,594 $52,652
Ratio of expenses to average net assets .......... 0.54% 0.41%(b)
Ratio of net investment income to average net
assets ......................................... 2.97% 3.45%(b)
Ratio of expenses to average net assets* ......... 0.63% 0.65%(b)
Ratio of net investment income to average net
assets* ........................................ 2.88% 3.20%(b)
- ----------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) For the period from November 17, 1994 (commencement of operations) to
October 31, 1995.
(b) Annualized.
See notes to financial statements
<PAGE>
REPUBLIC NEW YORK TAX-FREE MONEY MARKET FUND
FINANCIAL HIGHLIGHTS -- CLASS Y SHARES
PERIOD ENDED
OCTOBER 31,
1996 (a)
------------
NET ASSET VALUE, BEGINNING OF PERIOD ........................... $ 1.00
-------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ........................................ 0.010
-------
Total from investment operations ............................. 0.010
-------
LESS DIVIDENDS:
Investment income ............................................ (0.010)
-------
Total distributions .......................................... (0.010)
-------
Net asset value, end of period ............................... $ 1.00
=======
TOTAL RETURN ................................................... 1.03%(a)
RATIOS/SUPPLEMENTAL DATA:
Net assets, at end of period (in 000's) ...................... $3,714
Ratio of expenses to average net assets ...................... 0.35%(b)
Ratio of net investment income to average net assets ......... 3.12%(b)
Ratio of expenses to average net assets* ..................... 0.45%(b)
Ratio of net investment income to average net assets* ........ 3.02%(b)
- ----------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) For the period from July 1, 1996 (date of initial offering) to October 31,
1996.
(b) Annualized.
See notes to financial statements
<PAGE>
REPUBLIC NEW YORK TAX-FREE MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS -- OCTOBER 31, 1996
1. ORGANIZATION: Republic New York Tax-Free Money Market Fund (the "Fund") is a
separate non-diversified series of Republic Funds (the "Trust"), a
Massachusetts business trust organized on April 22, 1987, which currently
consists of seven funds, each of which has different investment objectives
and policies. The financial statements for the other six funds are presented
separately. The Fund's investment objective is to provide shareholders of
the Fund with liquidity and as high a level of current income exempt from
federal, New York State and New York City personal income taxes as is
consistent with the preservation of capital. The Trust is registered under
the Investment Company Act of 1940, as amended (the "Act"), as an open-end,
diversified management investment company. The Declaration of Trust permits
the Trustees to create additional portfolios.
The Fund is authorized to issue two classes of no par shares, Class C
Shares, and as of July 1, 1996, Class Y Shares (Advisor Class). Each class
of shares in the Fund has identical rights and privileges except with
respect to fees paid under shareholder servicing or distribution plans,
expenses allocable exclusively to each class of shares, voting rights on
matters affecting a single class of shares, and the exchange privilege of
each class of shares.
The trust retained Republic National Bank of New York (formerly
Republic Asset Management Corporation) ("Republic") as Investment Adviser
("Adviser"). For the period November 1, 1995 through September 30, 1996,
the trust retained Signature Broker-Dealer Services, Inc. ("Signature") as
Administrator, Distributor and Sponsor ("Sponsor"). Effective October 1,
1996 BISYS Fund Services, Inc. became the Fund's Administrator,
Distributor and Sponsor.
2. SIGNIFICANT ACCOUNTING POLICIES: The following is a summary of significant
accounting policies followed by the Fund in the preparation of its financial
statements. The policies are in conformity with generally accepted
accounting principles. The preparation of financial statements requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial statements
and the reported amounts of income and expenses for the period.
Actual results could differ from those estimates.
SECURITIES VALUATION:
Investments of the Fund are valued at amortized cost, which approximates
market value. Under the amortized cost method, discount or premium is
amortized on a constant basis to the maturity of the security. In addition,
the Fund may not (a) purchase any instrument with a remaining maturity
greater than 397 days unless such investment is subject to a demand feature,
or (b) maintain a dollar-weighted average portfolio maturity which exceeds
90 days.
SECURITY TRANSACTIONS AND RELATED INCOME:
Security transactions are accounted for on the date the security is
purchased or sold (trade date). Interest income is recognized on the accrual
basis and includes, where applicable, the amortization of premium or
discount. Gains or losses realized on sales of securities are determined by
comparing the identified cost of the security lot sold with the net sales
proceeds.
EXPENSE ALLOCATION:
The Fund bears all costs of its operations other than expenses specifically
assumed by the Adviser or Sponsor. Expenses directly attributable to the
Fund are charged to the Fund. Expenses incurred by the Trust with respect to
any two or more of the Trust's seven portfolios are allocated in proportion
to the net asset levels of each portfolio, except where allocations of
direct expenses to each portfolio can otherwise be made fairly.
FEDERAL INCOME TAXES:
The Fund is treated as a separate taxable entity for federal tax purposes.
The Fund has qualified and intends to continue to qualify as a "regulated
investment company" under Subchapter M of the Internal Revenue Code, as
amended, and plans to distribute substantially all of its taxable income and
net realized gains, if any, to its shareholders. Accordingly, no provision
for federal income or excise tax is required.
DIVIDENDS TO SHAREHOLDERS:
Dividends from net investment income are declared daily and paid monthly and
distributable net realized capital gains, if any, are declared and
distributed at least annually.
Dividends from net investment income and net realized capital gains are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles.
REPURCHASE AGREEMENTS:
The Fund may acquire repurchase agreements with an entity which is a member
of the Federal Reserve System or which is a "primary dealer" (as designated
by the Federal Reserve Bank of New York) in U.S. Government obligations. The
repurchase price generally equals the price paid by the Fund plus interest
negotiated on the basis of current short-term rates, which may be more or
less than the rate on the underlying portfolio securities. The seller, under
a repurchase agreement, is required to maintain the value of collateral held
pursuant to the agreement at not less than the repurchase price (including
accrued interest). Securities subject to repurchase agreements are held by
the Fund's custodian, either physically or in book entry form.
Repurchase agreements are considered to be loans by the Fund under the Act.
3. RELATED PARTY TRANSACTIONS:
ADVISORY FEES:
The Fund retains Republic to act as Investment Adviser. Republic is
responsible for the investment management of the Fund's assets, including
the responsibility for making investment decisions and placing orders for
the purchase and sale of the Fund's investments directly with the issuers or
with brokers or dealers selected by it in its discretion. Republic also
furnishes to the board of Trustees, which has overall responsibility for the
business affairs of the Trust, periodic reports on the investment
performance of the Fund. For its services as investment adviser, Republic
receives from the Fund a fee, payable monthly, at the annual rate of 0.15%
of average daily net assets. During the year ended October 31, 1996, the
advisory fee was $104,179, of which $32,202 was voluntarily waived.
ADMINISTRATION:
The Fund retained Signature, then BISYS, to serve as Administrator,
Distributor, and Sponsor. Signature and BISYS provided management and
administrative services necessary for the operation of the Fund, furnished
office space and facilities required for conducting the business of the Fund
and paid the compensation of the Fund's officers. For these services,
Signature and BISYS received from the Fund a fee, payable monthly, at an
annual rate of 0.15% of the first $100 million of the Fund's average daily
net assets; 0.12% of the next $100 million of such assets; 0.09% of the next
$300 million of such assets; and 0.07% of such assets in excess of $500
million. During the year ended October 31, 1996, the administrative services
fee was $104,179, of which $34,720 was voluntarily waived.
RULE 12B-1 PLAN EXPENSES:
The Fund has adopted a noncompensatory Distribution Plan and Agreement (the
"Plan") pursuant to Rule 12b-1 of the Act. The Plan provides for a monthly
payment by the Fund to the Sponsor in amounts representing actual expenses
incurred by the Sponsor for marketing costs and services rendered in
distributing Fund shares at a rate not to exceed 0.25% of the average daily
net assets of the Class C Shares. During the year ended October 31, 1996,
the Fund reimbursed Signature and BISYS for distribution expenses of
$24,377.
SHAREHOLDER SERVICING EXPENSES:
The Fund has entered into a Shareholder Servicing Agreement with each
shareholder servicing agent pursuant to the Administrative Services Plan.
Each shareholder servicing agent receives a fee from the Fund, which may be
paid periodically, determined by a formula based upon the number of accounts
serviced, the level of activity in such accounts and the expenses incurred
by the shareholder servicing agent. It is currently intended that the
aggregate fees paid to the Distributor pursuant to the Plan and to
shareholder servicing agents pursuant to the Administrative Services Plan
will not exceed 0.20% per annum of the Fund's average daily net assets
attributable to Class C Shares. During the year ended October 31, 1996,
shareholder servicing fees were $19,655.
TRUSTEES' FEES:
The fees paid and the amount of out-of-pocket expenses reimbursed to the
Trustees amounted to $5,920 for the year ended October 31, 1996.
4. CAPITAL SHARE TRANSACTIONS:
Transactions in shares of beneficial interest for the Fund were as follows:
CLASS C SHARES CLASS Y SHARES
YEAR ENDED PERIOD ENDED
OCTOBER 31, 1996 OCTOBER 31, 1996(a)
---------------- -------------------
Shares issued ................. 292,716,687 22,377,569
Shares reinvested ............. 1,757,502 --
Redeemed ...................... (268,532,668) (18,663,863)
------------ -----------
Net increase .............. 25,941,521 3,713,706
============ ===========
(a) For the period from July 1, 1996 (date of initial offering) to October
31, 1996.
5. CONCENTRATION OF CREDIT. The Fund invests primarily in debt obligations
issued by the State of New York and its respective political subdivisions,
agencies and public authorities to obtain funds for various public purposes.
The Portfolio is more susceptible to economic and political factors
adversely affecting issuers of New York specific municipal securities than
are municipal bond funds that are not concentrated in these issuers to the
same extent.
6. FEDERAL TAX STATUS -- FISCAL YEAR 1996 DISTRIBUTION (UNAUDITED). All
dividends paid by the Fund were paid out as short-term capital gain
dividends or net investment income dividends. For federal income tax
purposes, dividends from short-term capital gains are classified as ordinary
income.
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Trustees
Republic Funds:
We have audited the accompanying statement of net assets of Republic New
York Tax-Free Money Market Fund (the "Fund"), a portfolio of Republic Funds, as
of October 31, 1996 and the related statements of operations, and changes in net
assets for the period then ended and the financial highlights for the year then
ended for the Class C shares and for the period from July 1, 1996 (date of
initial offering) to October 31, 1996 for Class Y shares. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audit. The statement of changes
in net assets and financial highlights for the period from November 17, 1994
(commencement of operations) to October 31, 1995 were audited by other auditors
whose report thereon, dated December 8, 1995, expressed an unqualified opinion
on that statement and those financial highlights.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1996 by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the 1996 financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Republic New York Tax-Free Money Market Fund at October 31, 1996,
the results of its operations and changes in its net assets for the year then
ended and financial highlights for the periods indicated in the first paragraph
above in conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
Boston, Massachusetts
December 6, 1996
<PAGE>
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REPUBLIC
NEW YORK TAX-FREE
MONEY MARKET
FUND
INVESTMENT MANAGER
Republic National Bank of New York
452 Fifth Avenue
New York, NY 10018
ADMINISTRATOR, DISTRIBUTOR AND SPONSOR
BISYS Fund Services, Inc.
3435 Stelzer Road
Columbus, OH 43219
CUSTODIAN AND TRANSFER AGENT
Investors Bank & Trust Company
89 South Street
Boston, MA 02111
INDEPENDENT AUDITORS
KPMG Peat Marwick LLP
99 High Street
Boston, MA 02110
LEGAL COUNSEL
Dechert Price & Rhoads
1500 K Street, N.W.
Washington, D.C. 20005
SHAREHOLDER SERVICING AGENTS:
Republic National Bank of New York
Republic Bank for Savings
452 Fifth Avenue
New York, NY 10018
(800) 782-8183
FOR NON-REPUBLIC CLIENTS:
Investors Bank & Trust Company
89 South Street
Boston, MA 02111
(800) 782-8183
[graphic omitted]
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REPUBLIC
NEW YORK TAX-FREE
MONEY MARKET
FUND
ANNUAL REPORT
OCTOBER 31, 1996
