January 9, 1998
Securities and Exchange Commission
Attn: Filing Desk, Stop 1-4
450 Fifth Street, N.W.
Washington, DC 20549
Re: Professionally Managed Portfolios
File No. 811-5037
CIK No. 811030
Dear Sir or Madam:
On behalf of the above Registrant and pursuant to Rule 30b-2 under
the Investment Company Act of 1940, I enclose for filing via EDGAR,
a copy of the Semi-annual Report to shareholders of the Titan
Financial Services Fund series of the Registrant for the six month
period ended October 31, 1997.
If you have any questions, please contact me at (602) 952-1100.
Sincerely yours,
Robert H. Wadsworth
<PAGE>
Titan Financial Services Fund
Semi-Annual Report
October 31, 1997
<PAGE>
TITAN INVESTMENT ADVISORS, LLC
Titan Financial Services Fund
9672 Pennsylvania Avenue o Upper Marlboro, Maryland 20772
Telephone: 301 o 599-7528
Gilbert R. Giordano, President
November 30, 1997
Dear Fellow Shareholder,
The Titan Investment Advisors, LLC, are pleased with the Fund's results
thus far. On October 22, 1997, we reached a record-high of $17.43 and have since
pulled back slightly due to weakness in the stock market. A correction was
anticipated and, by the end of October, a very sharp drop of all the major
indexes occurred, with the Dow and the NASDAQ decreasing over 7.0%. We had a
strong recovery on the final day of October and closed at $16.73. Since that
time, we have improved substantially.
From the time of our opening, on May 22, 1996 net asset value has
increased from $10.00 to a level of $17.12 as of November 28, 1997. This
represents an appreciation of 71.20%. The cumulative total return from inception
through November 28, 1997, including reinvested distributions, was 72.12%.(1)
We are very proud of our performance, which has been particularly good in
a challenging market. We outperfomed all the major indexes including the Dow,
S&P, and the NASDAQ. We think this period supports our view that the small cap
bank stocks are a relatively safe haven during a down market, while appreciating
significantly in resurgent markets. We have assiduously kept to our commitment
to be at least 65% invested in bank stocks and financial institutions such as
brokerage firms and insurance companies. Indeed, we are presently over 95%
invested in banks and other financial service companies.
We were able to use the period of downward movement in late October as an
opportunity to buy depressed stocks which presently represent some of our most
successful choices. During the past quarter, we added to our positions in the
broker stocks; particularly Bear Stearns, Raymond James Financial, and
Donaldson, Lufkin & Jenrette. We are pleased to announce that we had five recent
mergers relative to our bank holdings: Peoples Bancshares, Branford Savings,
Norwich Savings Bank, First United Bank of Florida, and Somerset Savings Bank.
From time to time, we also purchase non-financial institutions when we see
an opportunity, such as when we believe a stock of high quality is unfairly
driven down or is not performing on the financial markets consistent with its
merits. This has permitted us to pick up such stocks as Outback Steakhouse and
Boeing, which have performed well in our portfolio so far.
<PAGE>
Titan Financial Services Fund
We anticipate that the appreciation of bank stocks and particularly
small-sized bank stocks will outperform the market in the foreseeable future (at
least for the next several years). We are very enthusiastic about our
performance thus far. One feature of our Fund that we think makes it unique is
that we are heavily invested in it ourselves. We participate in the Fund's gains
or losses along with our fellow investors.
We are looking forward to the next six months with the confidence that
comes from weathering a particularly difficult market and outperforming all the
major indexes during that time. We also look forward to justifying your
confidence in us, which we will try to deserve.
Very truly yours,
/s/
Gilbert R. Giordano
President
Titan Investment Advisors, LLC
(1) The average annual total return for the year ended September 30, 1997,
and from inception through September 30, 1997, was 57.11% and 47.19%,
respectively.
<PAGE>
Titan Financial Services Fund
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS at October 31, 1997 (Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
Shares COMMON STOCKS: 99.6% Market Value
- ------------------------------------------------------------------------------------------------------------------------------------
Aerospace/Defense: 0.6%
<S> <C> <C>
2,000 The Boeing Company...................................................... $ 95,750
--------
Banks: 36.2%
4,000 Arrow Financial Corp.................................................... 136,000
2,000 Atlantic Bank and Trust Company*........................................ 30,500
1,000 Bancorp Connecticut, Inc................................................ 37,750
2,000 Bank of Amador*......................................................... 21,250
24,250 Bank of Los Angeles*.................................................... 321,313
1,700 Bank of Montreal, ADR................................................... 73,312
3,160 Bankers Trust New York Corp.**.......................................... 372,880
1,000 Beverly Bancorporation, Inc............................................. 22,750
1,000 Cape Cod Bank & Trust Company........................................... 36,500
1,000 Capital City Bank Group, Inc............................................ 35,000
4,000 Cathay Bancorp Inc...................................................... 132,000
3,885 Civic BanCorp California*............................................... 64,103
3,000 Community First Bankshares, Inc......................................... 143,250
12,000 Comstock Bank, Carson City, Nevada*..................................... 105,000
2,000 Corporacion Bancaria de Espana S.A., ADR................................ 54,625
3,000 Corus Bankshares, Inc................................................... 105,000
3,000 Fidelity National Corp.................................................. 27,750
1,000 First Commerce Bancshares, Inc., Class A................................ 23,000
1,200 First Commercial Bancorp, Inc........................................... 17,100
1,000 First Oak Brook Bancshares, Inc., Class A............................... 37,000
11,000 First Regional Bancorp*................................................. 92,125
6,066 First Security Corp..................................................... 175,914
2,700 First Southern Bancshares, Inc.......................................... 39,150
4,500 Firstbank Puerto Rico................................................... 151,313
6,050 FNB Corp................................................................ 201,163
3,000 FNB Rochester Corp...................................................... 54,375
9,300 Hibernia Corp., Class A................................................. 165,656
3,000 Imperial Bancorp*....................................................... 130,875
6,400 Magna Group, Inc........................................................ 252,800
4,000 Mahaska Investment Company.............................................. 120,000
2,000 National Bank of Canada, ADR............................................ 28,601
6,100 National City Bancorporation*........................................... 176,900
See accompanying Notes to Financial Statements.
<PAGE>
Titan Financial Services Fund
SCHEDULE OF INVESTMENTS at October 31, 1997 (Unaudited), Continued
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Market Value
- ------------------------------------------------------------------------------------------------------------------------------------
Banks, continued
3,000 New England Community Bancorp, Inc., Class A............................ $ 69,000
5,600 New Milford Bank and Trust Company...................................... 91,000
1,000 Orange National Bancorp................................................. 24,000
2,000 Pacific Bank N.A........................................................ 79,500
200 Park National Corp...................................................... 17,175
11,000 Patriot National Bank*.................................................. 75,625
1,000 PNC Bank Corp........................................................... 47,500
1,000 Premier Bancshares, Inc................................................. 19,625
6,100 Professional Bancorp, Inc.*............................................. 91,500
26,000 Ramapo Financial Corp................................................... 243,750
5,500 Redwood Empire Bancorp*................................................. 89,375
7,000 Republic Security Financial Corp........................................ 66,937
2,000 Royal Bancshares of Pennsylvania, Inc., Class A......................... 34,000
3,000 Royal Bank Canada Montreal, ADR......................................... 161,063
1,000 SJNB Financial Corp..................................................... 40,000
1,000 Seacoast Banking Corp., Class A......................................... 33,000
3,200 Sterling Bancorp........................................................ 70,600
1,000 Sterling Bancshares, Inc................................................ 19,500
1,000 Summit Bancshares, Inc.................................................. 37,000
27,400 Surety Capital Corp.*................................................... 188,375
3,870 Susquehanna Bancshares, Inc............................................. 117,551
3,000 Texas Regional Bancshares, Class A...................................... 85,500
2,500 Trans Financial, Inc.................................................... 80,000
1,510 U.S. Bancorp............................................................ 153,548
6,000 USBancorp, Inc.......................................................... 390,000
8,400 Union Bankshares, Ltd.*................................................. 208,950
5,000 Vectra Banking Corp.*................................................... 130,625
2,000 Wainwright Bank & Trust Co.............................................. 21,000
3,300 Westernbank Puerto Rico................................................. 56,925
------
6,127,579
---------
Brokerage Services: 15.0%
9,200 A.G. Edwards, Inc....................................................... 301,875
14,050 Bear Stearns Companies, Inc............................................. 557,609
5,400 Donaldson, Lufkin & Jenrette, Inc.**.................................... 379,350
3,000 Fahnestock Viner Holdings, Inc., Class A................................ 57,187
See accompanying Notes to Financial Statements.
<PAGE>
Titan Financial Services Fund
SCHEDULE OF INVESTMENTS at October 31, 1997 (Unaudited), Continued
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Market Value
- ------------------------------------------------------------------------------------------------------------------------------------
Brokerage Services, continued
1,333 Legg Mason, Inc......................................................... $ 65,400
7,200 Lehman Brothers Holdings, Inc.**........................................ 338,850
9,700 Paine Webber Group, Inc................................................. 428,619
9,450 Raymond James Financial, Inc............................................ 283,500
5,400 Southwest Securities Group, Inc......................................... 120,150
-------
2,532,540
---------
Computers: 0.3%
14,000 Dense-Pac Microsystems, Inc............................................. 50,750
------
Financial Services: 3.5%
1,000 Amresco, Inc.*.......................................................... 31,375
5,800 John Hancock Bank and Thrift Opportunity................................ 246,863
1,000 PacificAmerica Money Center, Inc.*...................................... 26,500
11,000 Pilgrim American Bank and Thrift Fund................................... 269,060
1,000 Southern Pacific Funding Corp........................................... 13,125
------
586,923
-------
Gaming: 0.5%
6,000 Grand Casinos, Inc...................................................... 80,625
------
Insurance: 4.3%
5,000 EMC Insurance Group, Inc................................................ 70,000
5,300 Harleysville Group, Inc................................................. 135,150
2,400 Mid Ocean Ltd., ADR..................................................... 155,700
2,000 Reliance Group Holdings, Inc............................................ 25,250
1,700 Selective Insurance Group, Inc.......................................... 92,012
3,600 Travelers Group, Inc.................................................... 252,000
-------
730,112
-------
Manufacturing - Household Furniture: 0.1%
1,000 Furniture Brands International, Inc.*................................... 16,750
------
Medical - Hospitals: 0.1%
1,000 Horizon Health Corp..................................................... 23,375
------
See accompanying Notes to Financial Statements.
<PAGE>
Titan Financial Services Fund
SCHEDULE OF INVESTMENTS at October 31, 1997 (Unaudited), Continued
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Market Value
- ------------------------------------------------------------------------------------------------------------------------------------
Office Supplies: 0.4%
2,000 US Office Products Company*............................................. $ 62,500
--------
Oil: 0.2%
2,000 Edge Petroleum Corp.*................................................... 29,250
------
Restaurants: 1.9%
4,000 Apple South, Inc........................................................ 74,500
5,000 Lone Star Steakhouse and Saloon, Inc.*.................................. 115,625
5,000 Outback Steakhouse, Inc.*............................................... 135,312
-------
325,437
-------
Shipping Containers: 0.5%5
3,000 Sea Containers Ltd., Class A............................................ 85,313
------
Thrift and Savings / Savings Banks: 35.6%
700 Abington Bancorp, Inc................................................... 24,850
19,400 Access Anytime Bancorp, Inc.*........................................... 169,750
3,000 Alabama National Bancorporation......................................... 71,062
3,400 Alliance Bancorp of New England, Inc.................................... 58,225
3,800 American Bank of Connecticut-Waterbury.................................. 169,100
4,200 Andover Bancorp, Inc.................................................... 154,350
375 Astoria Financial Corp.................................................. 19,594
8,735 Bank Plus Corp.*........................................................ 104,820
1,000 Bank United Corp........................................................ 42,000
5,125 Bankatlantic Bancorp, Inc., Class A..................................... 70,469
16,000 Bankatlantic Bancorp, Inc., Class B..................................... 222,000
6,000 Bankunited Financial Corp., Class A*.................................... 78,750
5,000 Bayonne Bancshares, Inc................................................. 63,750
3,000 Bostonfed Bancorp, Inc.................................................. 61,500
1,100 Cal Fed Bancorp, Inc.*.................................................. 24,475
2,000 Carver Bancorp, Inc..................................................... 25,500
1,000 Cenfed Financial Corp................................................... 40,375
1,000 Classic Bancshares, Inc................................................. 15,000
2,000 Coastal Bancorp, Inc.................................................... 56,250
1,000 Commerce Bancorp, Inc................................................... 39,375
See accompanying Notes to Financial Statements.
<PAGE>
Titan Financial Services Fund
SCHEDULE OF INVESTMENTS at October 31, 1997 (Unaudited), Continued
- -----------------------------------------------------------------------------------------------------------------------------------
Shares Market Value
- -----------------------------------------------------------------------------------------------------------------------------------
Thrift and Savings / Savings Banks, continued
2,000 Community Savings Bancshares, Inc....................................... $ 73,000
5,000 D & N Financial Corp.*.................................................. 125,625
6,700 Dime Bancorp, Inc....................................................... 160,800
6,700 Dime Financial Corp..................................................... 204,350
2,000 Eagle Financial Corp.................................................... 100,500
1,000 Fed One Bancorp, Inc.................................................... 24,625
1,000 Fidelity Bancshares, Inc................................................ 28,250
3,000 Fidelity Federal Bancorp................................................ 30,000
1,000 First Bell Bancorp, Inc................................................. 17,500
3,000 First Colorado Bancorp, Inc............................................. 61,125
6,000 First Essex Bancorp, Inc................................................ 120,000
1,200 First Georgia Holding, Inc.............................................. 9,750
2,700 First Palm Beach Bancorp, Inc........................................... 103,950
3,000 First State Bancorporation.............................................. 55,875
7,000 First United Bancorp.................................................... 154,000
1,900 FirstFed America Bancorp, Inc.*......................................... 38,950
1,000 FirstFed Financial Bancshares*.......................................... 35,000
2,000 Golden State Bancorp, Inc............................................... 66,500
2,000 Hawthorne Financial Corp................................................ 37,000
4,000 Horizon Financial Corp.................................................. 65,500
2,000 Ipswich Savings Bank.................................................... 23,500
24,000 Lawrence Savings Bank*.................................................. 333,000
1,000 Long Island Bancorp, Inc................................................ 44,500
27,000 MetroWest Bank.......................................................... 219,375
3,000 Norwich Financial Corp.................................................. 85,688
1,100 Ottawa Financial Corp., ADR............................................. 29,838
2,750 Pacific Crest Capital, Inc.*............................................ 45,375
3,000 Pennfed Financial Services, Inc......................................... 90,000
7,500 People's Bank, Bridgeport, Connecticut.................................. 245,625
4,645 Peoples Bancshares, Inc................................................. 89,416
1,000 Peoples Heritage Financial Group, Inc................................... 39,375
18,000 Poughkeepsie Financial Corp............................................. 178,875
1,000 Pulaski Savings Bank.................................................... 18,500
1,000 RedFed Bancorp, Inc.*................................................... 19,375
1,000 Reliance Bancorp, Inc................................................... 32,250
1,000 Reliance Bancshares, Inc.*.............................................. 8,250
See accompanying Notes to Financial Statements.
<PAGE>
Titan Financial Services Fund
SCHEDULE OF INVESTMENTS at October 31, 1997 (Unaudited), Continued
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Market Value
- ------------------------------------------------------------------------------------------------------------------------------------
Thrift and Savings / Savings Banks, continued
24,000 Somerset Bank*.......................................................... $ 120,000
5,000 Sovereign Bancorp, Inc.................................................. 88,750
1,000 Statewide Financial Corp................................................ 21,500
6,400 T.R. Financial Corp..................................................... 209,600
500 USABancShares, Inc.*.................................................... 4,187
11,500 WSFS Financial Corp.*................................................... 207,000
6,000 Warren Bancorp, Inc..................................................... 121,500
6,340 Washington Federal, Inc................................................. 187,030
3,500 Webster City Federal Savings Bank....................................... 73,937
5,850 Webster Financial Corp., Waterbury, Connecticut......................... 360,506
5,500 Westcorp................................................................ 102,094
-------
6,022,541
---------
Transportation - Marine: 0.4%
2,000 Hvide Marine, Inc., Class A*............................................ 66,000
------
Total Common Stocks (cost $13,739,924).................................. 16,835,445
----------- ----------
Principal Amount REPURCHASE AGREEMENT: 3.2%
- ------------------------------------------------------------------------------------------------------------------------------------
$537,000 Star Bank Repurchase Agreement, 5.00%, dated 10/31/1997, due
11/3/1997, collateralized by $535,000 GNMA, 6.50%, due 2/20/2024
(value of collateral $548,375) (cost $537,000).......................... 537,000
-------
Total Investments in Securities (cost $14,276,924+): 102.8% ............ 17,372,445
CALL OPTIONS WRITTEN: 0.1%
- ------------------------------------------------------------------------------------------------------------------------------------
Contracts Common Stock / Expiration Date / Exercise Price
- ------------------------------------------------------------------------------------------------------------------------------------
20 Bankers Trust New York Corp. / January / 125.00......................... (9,625)
20 Donaldson, Lufkin & Jenrette, Inc. / January / 75.00.................... (9,125)
20 Lehman Brothers Holdings, Inc. / January / 50.00........................ (5,125)
------
Total Call Options Written (proceeds $29,640)........................... (23,875)
-------
Liabilities in excess of Other Assets: (2.7%)........................... (455,278)
--------
Total Net Assets: 100.0% ............................................... $16,893,292
===========
See accompanying Notes to Financial Statements.
<PAGE>
Titan Financial Services Fund
SCHEDULE OF INVESTMENTS at October 31, 1997 (Unaudited), Continued
- ------------------------------------------------------------------------------------------------------------------------------------
Market Value
- ------------------------------------------------------------------------------------------------------------------------------------
<FN>
* Non-income producing security.
**Security subject to call option.
+ At October 31, 1997, the cost of investments for Federal income tax purposes
was the same as the basis for financial reporting. Unrealized appreciation and
depreciation of securities and options were as follows:
Gross unrealized appreciation........................................... $ 3,154,428
Gross unrealized depreciation........................................... (53,142)
-------
Net unrealized appreciation................................... $ 3,101,286
===========
</FN>
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
Titan Financial Services Fund
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES at October 31, 1997 (Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
ASSETS
<S> <C>
Investments in securities, at value (cost $14,276,924) ................................ $17,372,445
Cash................................................................................... 510
Receivables:
Securities sold.................................................................. 308,836
Dividends and interest .......................................................... 11,942
Fund shares sold................................................................. 50,661
Prepaid expenses....................................................................... 603
---
Total assets .............................................................. 17,744,997
----------
LIABILITIES
Options written, at value (proceeds $29,640)........................................... 23,875
Payables:
Administration fee............................................................... 1,439
Advisory fee..................................................................... 24,288
Distribution fees................................................................ 3,483
Securities purchased............................................................. 798,201
Accrued expenses....................................................................... 419
---
Total liabilities.......................................................... 851,705
-------
NET ASSETS $16,893,292
===========
Net asset value, offering and redemption price per share
($16,893,292/1,009,638 shares outstanding;
unlimited number of shares authorized without par value) ........................ $16.73
======
COMPONENTS OF NET ASSETS
Paid-in capital ....................................................................... $12,795,639
Accumulated net investment loss........................................................ (42,268)
Undistributed net realized gain on investments......................................... 1,038,635
Net unrealized appreciation on investments............................................. 3,101,286
---------
Net assets ...................................................................... $16,893,292
===========
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
Titan Financial Services Fund
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS - For the Six Months Ended October 31, 1997 (Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
Income
<S> <C>
Interest......................................................................... $ 5,665
Dividends........................................................................ 97,819
------
Total income............................................................... 103,484
-------
Expenses
Advisory fees.................................................................... 58,297
Custodian and accounting fees.................................................... 15,124
Distribution costs............................................................... 14,574
Administration fee............................................................... 14,156
Registration fees................................................................ 8,317
Audit fees....................................................................... 6,302
Transfer agent fees.............................................................. 5,294
Reports to shareholders.......................................................... 1,513
Trustee fees..................................................................... 1,513
Legal fees....................................................................... 1,512
Miscellaneous.................................................................... 1,512
-----
Total expenses............................................................. 128,114
Add: reimbursement to Advisor.............................................. 17,638
------
Net expenses............................................................... 145,752
-------
Net investment loss ................................................. (42,268)
-------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain (loss) from:
Security transactions...................................................... 797,880
Option transactions........................................................ (210,837)
--------
Net realized gain.................................................... 587,713
Net change in unrealized appreciation on investments............................. 2,450,837
---------
Net realized and unrealized gain on investments............................ 3,038,550
---------
Net increase in net assets resulting from operations ................ $ 2,996,282
===========
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
Titan Financial Services Fund
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------------------
Six Months May 22, 1996*
Ended through
October 31, 1997# April 30, 1997
- ------------------------------------------------------------------------------------------------------------------------------------
INCREASE IN NET ASSETS FROM:
OPERATIONS
<S> <C> <C>
Net investment (loss) income............................................ $ (42,268) $ 15,609
Net realized gain from security transactions............................ 587,713 462,927
Net change in unrealized appreciation on investments.................... 2,450,837 650,449
--------- -------
Net increase in net assets resulting from operations ............. 2,996,282 1,128,985
--------- ---------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Net investment income................................................... -0- (27,614)
- -------
CAPITAL SHARE TRANSACTIONS
Net increase in net assets derived from net change in
outstanding shares (a)............................................... 6,316,759 6,478,880
--------- ---------
Total increase in net assets ..................................... 9,313,041 7,580,251
NET ASSETS
Beginning of period..................................................... 7,580,251 -0-
--------- -
End of period .......................................................... $16,893,292 $7,580,251
=========== ==========
<FN>
(a) A summary of capital shares transactions is as follows:
Six Months May 22, 1996*
Ended through
October 31, 1997# April 30, 1997
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Value Shares Value
- ------------------------------------------------------------------------------------------------------------------------------------
Shares sold................................ 409,966 $6,345,652 599,647 $6,455,398
Shares issued in reinvestment
of distribution......................... -0- -0- 2,330 27,614
Shares redeemed............................ (1,963) (28,893) (342) (4,132)
------ ------- ---- ------
Net increase............................... 408,003 $6,316,759 601,635 $6,478,880
======= ========== ======= ==========
*Commencement of operations.
#Unaudited.
</FN>
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
Titan Financial Services Fund
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
For a capital share outstanding throughout each period
- ------------------------------------------------------------------------------------------------------------------------------------
Six Months May 22, 1996*
Ended through
October 31, 1997# April 30, 1997
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period................................... $12.60 $10.00
Income from investment operations:
Net investment (loss) income..................................... (.04) .04
Net realized and unrealized gain on investments.................. 4.17 2.62
---- ----
Total from investment operations....................................... 4.13 2.66
---- ----
Less distributions:
From net investment income....................................... 0.00 (.06)
---- ----
Net asset value, end of period......................................... $16.73 $12.60
====== ======
Total return........................................................... 32.78% 26.67%
Ratios/supplemental data:
Net assets, end of period (millions)................................... $ 16.9 $ 7.6
Ratio of expenses to average net assets:
Before expense reimbursement..................................... 2.19%+ 3.14%+
After expense reimbursement...................................... 2.49%+ 2.49%+
Ratio of net investment (loss) income to average net assets:
Before expense reimbursement..................................... (0.42%)+ (0.33%)+
After expense reimbursement...................................... (0.72%)+ 0.33%+
Portfolio turnover rate................................................ 58.86% 97.84%
Average commission rate paid per share................................. $.0476 $.0464
<FN>
*Commencement of operations.
+Annualized.
#Unaudited.
</FN>
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
Titan Financial Services Fund
NOTES TO FINANCIAL STATEMENTS at October 31, 1997 (Unaudited)
- --------------------------------------------------------------------------------
NOTE 1 - ORGANIZATION
The Titan Financial Services Fund (the "Fund") is a diversified series of
shares of beneficial interest of Professionally Managed Portfolios (the
"Trust"), which is registered under the Investment Company Act of 1940 (the
"1940 Act") as an open-end investment management company. The Fund began
operations on May 22, 1996. The primary investment objective of the Fund is
capital appreciation. The secondary objective is moderate income.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund. These policies are in conformity with generally accepted
accounting principles.
A. Security Valuation. Investments in securities traded on a national
securities exchange or included in the NASDAQ National Market System
are valued at the last reported sales price at the close of regular
trading on the last business day of the period; securities traded on
an exchange or NASDAQ for which there have been no sales and other
over-the-counter securities are valued at the last reported bid
price. Securities for which quotations are not readily available are
valued at their respective fair values as determined in good faith
by the Board of Trustees. Short-term investments are stated at cost,
which when combined with accrued interest, approximates market
value.
B. Federal Income Taxes. The Fund intends to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute all of its taxable income to
its shareholders. Therefore, no federal income tax provision is
required.
C. Security Transactions, Investment Income and Distributions. As is
common in the industry, security transactions are accounted for on
the trade date. The cost of securities owned on realized
transactions are relieved on a first-in, first-out basis. Dividend
income and distributions to shareholders are recorded on the
ex-dividend date.
D. Use of Estimates. The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the
financial statements. Actual results could differ from those
estimates.
NOTE 3 - COMMITMENTS AND OTHER RELATED PARTY TRANSACTIONS
For the six months ended October 31, 1997, Titan Investment Advisors, LLC
(the "Advisor") provided the Fund with investment management services under an
Investment Advisory Agreement. The Advisor furnished all investment advice,
office space, facilities, and most of the personnel needed by the Fund. As
compensation for its services, the Advisor was entitled to a monthly fee at the
annual rate of 1.00% based upon the average daily net assets of the Fund. For
the six months ended October 31, 1997, the Fund incurred $58,297 in Advisory
fees.
The Fund is responsible for its own operating expenses. The Advisor has
agreed to reduce fees payable to it by the Fund to the extent necessary to limit
the Fund's aggregate annual operating expenses to 2.50% of average
<PAGE>
Titan Financial Services Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited), Continued
- --------------------------------------------------------------------------------
net assets. Any such reductions made by the Advisor in its fees or payments or
reimbursement of expenses which are the Fund's obligation are subject to
reimbursement by the Fund provided the Fund is able to effect such reimbursement
and remain in compliance with applicable limitations. For the six months ended
October 31, 1997, the Advisor recouped $21,060 of such expenses it had
previously reimbursed to the Fund.
Investment Company Administration Corporation (the "Administrator") acts
as the Fund's Administrator under an Administration Agreement. The Administrator
prepares various federal and state regulatory filings, reports and returns for
the Fund; prepares reports and materials to be supplied to the trustees;
monitors the activities of the Fund's custodian, transfer agent and accountants;
coordinates the preparation and payment of Fund expenses and reviews the Fund's
expense accruals. For its services, the Administrator receives an annual fee at
the following rate:
Under $15 million - $30,000
$15 to $50 million - 0.20% of average net assets
$50 to $100 million - 0.15% of average net assets
$100 to $150 million - 0.10% of average net assets
Over $150 million - 0.05% of average net assets
First Fund Distributors, Inc. (the "Distributor") acts as the Fund's
principal underwriter in a continuous public offering of the Fund's shares. The
Distributor is an affiliate of the Administrator.
Certain officers and trustees of the Trust are also officers and/or
directors of the Administrator and the Distributor.
NOTE 4 - DISTRIBUTION COSTS
The Fund has adopted a Distribution Plan (the "Plan") in accordance with
Rule 12b-1 under the 1940 Act. The Plan provides that the Fund will pay a fee to
the Advisor as Distribution Coordinator at an annual rate of up to 0.25% of the
average daily net assets of the Fund. The fee is paid to the Advisor as
reimbursement for, or in anticipation of, expenses incurred for
distribution-related activity. During the six months ended October 31, 1997, the
Fund paid fees of $14,574 to the Advisor.
<PAGE>
Titan Financial Services Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited), Continued
- --------------------------------------------------------------------------------
NOTE 5 - PURCHASES AND SALES OF SECURITES
The cost of purchases and the proceeds from sales of securities, other
than short-term investments, for the six months ended October 31, 1997, were
$13,450,654 and $6,459,832, respectively.
Call option transactions during the six months ended October 31, 1997 are
summarized as follows:
<TABLE>
<CAPTION>
Contracts Amount
--------- ------
<S> <C> <C>
448 Options outstanding, beginning of period................................ $ (108,408)
557 Options written......................................................... 245,960
(848) Options closed ................................................... (187,327)
(89) Options exercised....................................................... 18,134
(8) Purchased options expired............................................... 2,001
--- -----
60 Options outstanding at October 31, 1997................................. (29,640)
====
Unrealized appreciation at October 31, 1997............................. 5,765
-----
Market value of options at October 31, 1997............................. $ (23,875)
=========
</TABLE>
<PAGE>
Advisor
Titan Investment Advisors, LLC
9672 Pennsylvania Avenue
Upper Marlboro, MD 20772
888-44-TITAN
Account Inquiries 1-800-282-2340
Distributor
First Fund Distributors, Inc.
4455 E. Camelback Rd., Suite 261E
Phoenix, AZ 85018
Custodian
Star Bank, N.A.
425 Walnut St.
Cincinnati, OH 45202
Shareholder Service and Transfer Agent
American Data Services, Inc.
P.O. Box 5536
Hauppauge, NY 11788-0132
(800) 282-2340
Independent Auditors
Tait, Weller & Baker
8 Penn Center Plaza, Suite 800
Philadelphia, PA 19103
Counsel to the Trust
Paul, Hastings, Janofsky & Walker, LLP
345 California Street, 29th Floor
San Francisco, CA 94104
This report is intended for shareholders of the Fund and may not be used
as sales literature unless preceded or accompanied by a current
prospectus.
Past performance results shown in this report should not be considered a
representation of future performance. Share price and returns will
fluctuate so that shares, when redeemed, may be worth more or less than
their original cost. Statements and other information herein are dated and
are subject to change.
