FIRST PACIFIC MUTUAL FUND INC /HI/, N-30D, 2000-11-29

Tax-free investing provides more than an opportunity to generate State of Hawaii and federal tax-free income. Tax-free investing offers Hawaii investors a unique means of supporting local projects designed to enrich our community. The money raised through municipal bonds is commonly used to build schools, hospitals, roads, airports, harbors, and water and electrical systems that serve to create jobs, boost the local economy and improve the quality of life here in our islands.

As we begin our 13th year of operations, we are pleased to provide you with our Funds’ 2000 Annual Report.

The primary investment strategy of the First Hawaii Municipal Bond Fund’s investment manager was to invest in long-term investment grade Hawaii municipal bonds. The primary investment strategy of the First Hawaii Intermediate Municipal Fund’s investment manager was to invest in three to ten year investment grade Hawaii municipal bonds. There were a few primary factors that produced the past year’s performance. In particular, an expanding U.S. economy coupled with a tight labor market prompted the Federal Reserve Board to raise the discount rate four times during the Funds’ fiscal year. This action by the Federal Reserve Board depressed prices for certain fixed income securities. In addition, the Funds positions in hospital bonds adversely affected performance as the health care sector came under pricing pressure. This was partially offset by a strengthening Hawaii economy in which visitor arrivals, new construction and the housing market all showed improvement.

If you have any questions about this Annual Report or would like us to provide the Funds’ prospectus to your family or friends, please call us at 988-8088.

Thank you for your business as well as the many referrals. As always, we look forward to providing you with the high level of service that you have come to expect.

On behalf of the staff and management of the Funds, I would like to extend to you and your family best wishes for a safe and happy holiday season.

Warmest Aloha,

Terrence K.H. Lee

President

First Pacific Securities, Inc./Member SIPC
Before investing, read the prospectus carefully for complete information including all fees and expenses. Call 988—8088 for a free prospectus. Funds’ yields, share prices and investment returns fluctuate so that you may receive more or less than your original investment upon redemption. Past performance is no guarantee of future results. Some income may be subject to the federal alternative minimum tax for certain investors. First Hawaii Municipal Bond Fund and First Hawaii Intermediate Municipal Fund are series of First Pacific Mutual Fund, Inc.

The graph above compares the increase in value of a $10,000 investment in the First Hawaii Municipal Bond Fund with the performance of the Lehman Muni Bond Index. The objective of the graph is to permit you to compare the performance of the Fund with the current market and to give perspective to market conditions and investment strategies and techniques pursued by the investment manager that materially affected the performance of the Fund. The Lehman Muni Bond Index reflects reinvestment of dividends but not the expenses of the Fund. The return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Past performance is not indicative of future results.

The graph above compares the increase in value of a $10,000 investment in the First Hawaii Intermediate Municipal Fund with the performance of the Lehman Muni Bond Index. The objective of the graph is to permit you to compare the performance of the Fund with the current market and to give perspective to market conditions and investment strategies and techniques pursued by the investment manager that materially affected the performance of the Fund. The Lehman Muni Bond Index reflects reinvestment of dividends but not the expenses of the Fund. The return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Past performance is not indicative of future results.

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors and Shareholders

First Pacific Mutual Fund, Inc.

Honolulu, Hawaii

We have audited the accompanying statements of assets and liabilities of First Hawaii Municipal Bond Fund and First Hawaii Intermediate Municipal Fund (each a series of shares of First Pacific Mutual Fund, Inc.) including the schedules of investments, as of September 30, 2000, and the related statements of operations for the year then ended, the statements of changes in net assets and the financial highlights for the periods indicated thereon. These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audits 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 September 30, 2000, by correspondence with the custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of First Hawaii Municipal Bond Fund and First Hawaii Intermediate Municipal Fund as of September 30, 2000, the results of their operations for the year then ended, the changes in their net assets and the financial highlights for the periods indicated thereon, in conformity with generally accepted accounting principles.

TAIT, WELLER & BAKER

Philadelphia, Pennsylvania

October 25, 2000

FIRST HAWAII MUNICIPAL BOND FUND

SCHEDULE OF INVESTMENTS

September 30, 2000


	Par Value						Value (Note 1)
HAWAII MUNICIPAL BONDS (96.21%)
		Hawaii County
			General Obligation Bonds (2.16%)
$	100,000			6.800%,	12/1/01	$	100,369
	300,000			5.600%,	5/1/11		313,125
	1,000,000			5.625%,	5/15/18		1,005,000
	1,000,000			5.625%,	5/15/19		1,001,250
							2,419,744

		Hawaii State
			General Obligation Bonds (0.41%)
	135,000			7.000%,	6/1/07		144,788
	300,000			6.250%,	1/1/14		318,750
							463,538

			Airport Systems Revenue Bonds (4.00%)
	150,000			5.800%,	7/1/01		151,554
	345,000			6.300%,	7/1/01		349,440
	385,000			6.900%,	7/1/12		438,419
	200,000			7.000%,	7/1/07		207,174
	175,000			7.000%,	7/1/10		181,316
	510,000			7.000%,	7/1/18		525,943
	1,460,000			7.000%,	7/1/20		1,507,170
	1,080,000			6.750%,	7/1/21		1,110,691
							4,471,707

		Department of Budget & Finance
			Special Purpose Revenue Bonds
			Hawaiian Electric Company, Inc. (13.56%)
	3,000,000			5.750%,	12/1/18		3,033,750
	620,000			7.600%,	7/1/20		635,630
	565,000			6.550%,	12/1/22		581,950
	625,000			6.200%,	5/1/26		640,625
	600,000			5.875%,	12/1/26		601,500
	10,000,000			5.650%,	10/1/27		9,675,000
							15,168,455

			Citizens Utilities Company (4.09%)
	4,500,000			6.600%,	7/1/22		4,572,951

			Kapiolani Health Care System (3.74%)
	400,000			6.300%,	7/1/08		408,000
	1,650,000			6.400%,	7/1/13		1,678,875
	600,000			6.200%,	7/1/16		602,250
	1,185,000			6.000%,	7/1/19		1,153,894
	340,000			6.250%,	7/1/21		338,300
							4,181,319

			Kaiser Permanente (4.24%)
	850,000			6.500%,	3/1/11		867,000
	3,875,000			6.250%,	3/1/21		3,879,844
							4,746,844

			The Queen’s Health Systems (4.48%)
	300,000			5.200%,	7/1/04		301,125
	250,000			6.125%,	7/1/11		261,563
	1,020,000			6.000%,	7/1/20		1,016,175
	600,000			6.200%,	7/1/22		628,500
	2,735,000			5.750%,	7/1/26		2,587,994
	250,000			5.000%,	7/1/28		218,750
							5,014,107

			Pali Momi Medical Center Project (3.40%)
	3,120,000			7.600%,	7/1/10		3,253,349
	525,000			7.650%,	7/1/19		547,628
							3,800,977

			St. Francis Medical Center (2.54%)
	2,765,000			6.500%,	7/1/22		2,837,581

			Wahiawa General Hospital (2.36%)
	2,730,000			7.500%,	7/1/12		2,634,450

			Wilcox Hospital (1.89%)
	250,000			4.800%,	7/1/04		235,938
	500,000			4.900%,	7/1/05		467,500
	700,000			5.250%,	7/1/13		609,875
	845,000			5.350%,	7/1/18		709,800
	115,000			5.500%,	7/1/28		93,150
							2,116,263
		Pali Momi Medical Center Project (3.40%)
	3,120,000			7.600%,	7/1/10		3,253,349
	525,000			7.650%,	7/1/19		547,628
							3,800,977

			St. Francis Medical Center (2.54%)
	2,765,000			6.500%,	7/1/22		2,837,581

			Wahiawa General Hospital (2.36%)
	2,730,000			7.500%,	7/1/12		2,634,450

			Wilcox Hospital (1.89%)
	250,000			4.800%,	7/1/04		235,938
	500,000			4.900%,	7/1/05		467,500
	700,000			5.250%,	7/1/13		609,875
	845,000			5.350%,	7/1/18		709,800
	115,000			5.500%,	7/1/28		93,150
							2,116,263
	5.600%,	7/1/14		1,016,250
	1,100,000			5.000%,	7/1/16		1,043,625
							2,410,375

		Housing Authority Single Family
			Mortgage Purpose Revenue Bonds (7.83%)
	400,000			7.000%,	7/1/11		412,768
	100,000			5.700%,	7/1/13		102,000
	510,000			6.900%,	7/1/16		525,881
	210,000			6.750%,	7/1/20		215,659
	540,000			7.100%,	7/1/24		555,147
	2,235,000			5.900%,	7/1/27		2,246,175
	2,250,000			5.900%,	7/1/27		2,261,250
	20,000			7.800%,	7/1/29		20,181
	2,500,000			5.750%,	7/1/30		2,415,625
							8,754,686

		Department of Hawaiian Homelands (2.32%)
	1,355,000			4.100%,	7/1/07		1,258,456
	1,465,000			4.250%,	7/1/09		1,340,475
							2,598,931

		Housing Authority Multi-Family
			Mortgage Revenue Bonds (3.75%)
	200,000			4.80%	1/1/01		200,108
	205,000			4.800%,	7/1/01		205,416
	210,000			4.900%,	1/1/02		210,263
	215,000			4.900%,	7/1/02		215,538
	1,000,000			5.700%,	7/1/18		982,500
	2,365,000			6.100%,	7/1/30		2,385,694
							4,199,519

		Kapolei State Office Building (1.30%)
	1,000,000			5.000%,	5/1/16		941,250
	555,000			5.000%,	5/1/18		514,762
							1,456,012

		Public Housing Authority Bonds (0.23%)
	250,000			5.750%,	8/1/04		253,092

		University Faculty Housing (2.74%)
	90,000			4.350%,	10/1/00		90,000
	330,000			4.450%,	10/1/01		330,125
	345,000			4.550%,	10/1/02		345,431
	800,000			5.650%,	10/1/16		808,000
	1,500,000			5.700%,	10/1/25		1,496,250
							3,069,806

		University of Hawaii - Revenue Bonds (0.54%)
	100,000			5.450%,	10/1/06		102,750
	500,000			5.700%,	10/1/17		503,125
							605,875

		Honolulu City & County
			Board of Water Supply (1.32%)
	200,000			5.000%,	7/1/04		203,000
	500,000			5.800%,	7/1/16		511,875
	750,000			5.800%,	7/1/21		758,438
							1,473,313

			Waste & Water System (3.27%)
	1,000,000			4.75%	7/1/18		892,500
	1,000,000			5.250%,	7/1/18		962,500
	2,000,000			5.000%,	7/1/23		1,797,500
							3,652,500

		General Obligation Bonds (4.57%)
	100,000			7.300%,	7/1/03		107,000
	375,000			6.700%,	8/1/05		385,654
	200,000			7.350%,	7/1/06		226,500
	300,000			6.900%,	12/1/06		304,134
	820,000			6.700%,	8/1/08		843,296
	985,000			6.700%,	8/1/09		1,012,984
	525,000			6.700%,	8/1/10		539,915
	725,000			6.700%,	8/1/11		745,597
	105,000			5.500%,	9/1/16		111,038
	930,000			5.000%,	4/1/24		834,675
							5,110,793
		Halawa Business Park (.83%)
	170,000			6.300%,	10/15/00		170,075
	370,000			6.500%,	10/15/02		381,100
	365,000			6.600%,	10/15/03		380,969
							932,144

		Housing Authority Multi-Family
			Mortgage Revenue Bonds
			Hale Pauahi (0.39%)
	415,000			6.800%,	7/1/28		439,900

			Waipahu Project (3.94%)
	4,200,000			6.900%,	6/20/35		4,410,000

		Kauai County
			General Obligation Bonds (3.82%)
	300,000			5.100%,	2/1/01		300,768
	410,000			5.850%,	8/1/07		436,137
	1,280,000			5.850%,	8/1/07		1,361,600
	250,000			5.900%,	2/1/10		260,938
	250,000			5.900%,	2/1/11		259,687
	295,000			5.900%,	2/1/12		305,325
	595,000			6.250%,	8/1/19		625,494
	695,000			6.250%,	8/1/22		726,275
							4,276,224

		Housing Authority Paanau Project (1.43%)
	1,725,000			7.250%,	4/1/12		1,604,250

		Maui County
			General Obligation Bonds (3.03%)
	740,000			8.000%,	1/1/01		746,209
	250,000			6.800%,	12/1/05		253,407
	175,000			6.800%,	12/1/08		177,385
	250,000			5.700%,	1/1/09		253,242
	735,000			5.750%,	1/1/12		744,621
	235,000			5.750%,	6/1/13		242,344
	500,000			5.300%,	9/1/14		498,125
	500,000			5.000%,	9/1/17		470,000
							3,385,333

			Water System Revenue (0.96%)
	355,000			5.850%,	12/1/00		355,788
	300,000			6.500%,	12/1/06		310,125
	400,000			6.600%,	12/1/07		413,500
							1,079,413
			Total Hawaii Municipal Bonds				107,628,252

PUERTO RICO MUNICIPAL BONDS (2.34%)
		Puerto Rico Commonwealth
			General Obligation Bonds (0.33%)
	250,000			6.250%,	7/1/10		260,000
	100,000			6.250%,	7/1/10		104,625
							364,625

			Housing Finance Corp.
				Multi-Family Mortgage Revenue Bonds (0.49%)
	165,000			7.500%,	10/1/15		167,878
	375,000			7.500%,	4/1/22		381,322
							549,200

				Single-Family Mortgage Revenue Bonds (0.23%)
	20,000			7.650%,	10/15/22		20,450
	235,000			6.250%,	4/1/29		241,756
							262,206

			Industrial, Medical & Environmental Pollution Control
				Abbott Laboratories (0.27%)
	300,000			6.500%,	7/1/09		301,527

				Hospital Auxilio Mutuo Obligation (0.42%)
	440,000			6.250%,	7/1/24		458,700

		Public Building Authority
			Health Facilities & Services (0.60%)
	665,000			5.750%,	7/1/15		676,637
		Total Puerto Rico Municipal Bonds					2,612,895


VIRGIN ISLANDS MUNICIPAL BONDS (.11%)
		Virgin Islands
			Public Finance Authority, Series A (0.11%)
	100,000			7.300%,	10/1/18		120,500
			Total Virgin Islands Municipal Bonds				120,500

	Total Investments (Cost $110,742,271) (a)			98.66%			110,361,647
	Other Assets Less Liabilities			1.34%			1,502,391
	Net Assets			100.00% —;—————		$	111,864,038 ————————

		(a)	Aggregate cost for federal income tax purposes is $110,742,271.

	At September 30, 2000, unrealized appreciation (depreciation) of
	securities for federal income tax purposes is as follows:
	Gross unrealized appreciation					$	1,497,361
	Gross unrealized depreciation						(1,877,985.00)
	Net unrealized depreciation					$	(380,624.00) —————————

See accompanying notes to financial statements.

FIRST HAWAII INTERMEDIATE MUNICIPAL FUND

SCHEDULE OF INVESTMENTS

September 30, 2000

HAWAII MUNICIPAL BONDS (92.20%)
		Hawaii County
			General Obligation Bonds (2.22%)
$	100,000			6.800%,	12/1/01	$	100,363

		Hawaii State
			General Obligation Bonds (5.76%)
	100,000			5.500%,	7/1/01		100,742
	150,000			5.900%,	10/1/06		159,375
							260,117

			Airport Systems Revenue Bonds (8.15%)
	105,000			6.400%,	7/1/02		108,150
	250,000			5.700%,	7/1/07		260,000
							368,150

		Department of Budget & Finance
			Special Purpose Revenue Bonds
			(Kapiolani Health Care Systems) (4.39%)
	200,000			5.500%,	7/1/05		198,250

			(The Queen’s Health Systems) (4.44%)
	200,000			5.200%,	7/1/04		200,750

			(St. Francis Medical Center) (4.53%)
	200,000			6.000%,	7/1/02		204,750

			(Wilcox Hospital) (5.22%)
	250,000			4.800%,	7/1/04		235,937

		Harbor Capital Improvements Revenue Bonds (4.52%)
	100,000			5.650%,	7/1/02		101,750
	100,000			5.850%,	7/1/02		102,375
							204,125

		Highway & Transportation Authority (6.18%)
	275,000			5.000%,	7/1/06		279,469

		Housing Authority
			Single Family Mortgage Revenue Bonds (6.64%)
	300,000			4.800%,	7/1/07		300,000

			University Faculty Housing (5.09%)
	230,000			4.350%,	10/1/00		230,000

		University of Hawaii (4.09%)
			University Revenue Bonds
	180,000			5.450%,	10/1/06		184,950

		Honolulu City & County
			Board of Water Supply (4.49%)
	200,000			5.000%,	7/1/04		203,000

			General Obligation Bonds (2.23%)
	100,000			5.000%,	10/1/02		101,000

			Halawa Business Park (4.43%)
	200,000			6.300%,	10/15/00		200,080

		Kauai County
			General Obligation Bonds (4.41%)
	100,000			4.400%,	8/1/03		99,625
	100,000			4.550%,	8/1/05		99,625
							199,250

		Maui County
			General Obligation Bonds (10.84%)
	190,000			8.000%,	1/1/01		191,575
	300,000			4.650%,	3/1/07		298,500
							490,075

			Water System Revenue (4.57%)
	100,000			6.600%,	12/1/07		103,375
	100,000			6.700%,	12/1/11		103,500
							206,875
			Total Hawaii Municipal Bonds				4,167,141

PUERTO RICO MUNICIPAL BONDS (1.61%)
		Housing Finance Corp.
			Single Family Mortgage Revenue Bonds (1.61%)
	70,000			6.150%,	8/1/03		72,538
			Total Puerto Rico Municipal Bonds				72,538

	Total Investments (Cost $4,248,666) (a)				93.81%		4,239,679
	Other Assets Less Liabilities				6.19%		279,707
	Net Assets				100.00% ——————	$	4,519,386 ————————

		(a)	Aggregate cost for federal income tax purposes is $4,248,666.

	At September 30, 2000, unrealized appreciation (depreciation) of
	securities for federal income tax purposes is as follows:
	Gross unrealized appreciation					$	29,556
	Gross unrealized depreciation						(38,543.00)
	Net unrealized depreciation					$	(8,987.00) ———————

See accompanying notes to financial statements.

FIRST HAWAII MUNICIPAL BOND FUND

FIRST HAWAII INTERMEDIATE MUNICIPAL FUND

STATEMENT OF ASSETS AND LIABILITIES

September 30, 2000

		Municipal		Intermediate
		Bond		Municipal
		Fund		Fund
ASSETS
Investments at market value
(Identified cost $110,742,271 and $4,248,666,
respectively) (Note 1 (A))	$	110,361,647	$	4,239,679
Cash		1,217,487		212,412
Receivable for investment securities sold		3,001,598		-
Interest receivable		1,897,473		66,514
Subscriptions receivable		256,685		417
Other assets		19,004		5,959
Total assets		116,753,894		4,524,981


LIABILITIES
Payable for investment securities purchased		4,649,895		-
Distributions payable		173,288		3,737
Redemptions payable		20,725		-
Advisory fee payable		45,948		1,858
Total liabilities		4,889,856		5,595

NET ASSETS
(Applicable to 10,602,216 and 902,460 shares outstanding,
$.01 par value, 20,000,000 shares authorized)	$	111,864,038 ———————	$	4,519,386 ——————


NET ASSET VALUE, OFFERING AND REPURCHASE
PRICE PER SHARE
($111,864,038 10,602,216 shares)		$10.55 ————
($4,519,386 902,460 shares)				$5.01 ————

NET ASSETS
At September 30, 2000, net assets consisted of:
Paid-in capital	$	112,594,056	$	4,524,825
Accumulated net realized gain (loss) on investments		(349,394)		3,548
Net unrealized depreciation		(380,624)		(8,987)
	$	111,864,038 ———————	$	4,519,386 ———————

See accompanying notes to financial statements.

FIRST HAWAII MUNICIPAL BOND FUND

FIRST HAWAII INTERMEDIATE MUNICIPAL FUND

STATEMENT OF OPERATIONS

For the year ended September 30, 2000


			Municipal		Intermediate
			Bond		Municipal
			Fund		Fund
INVESTMENT INCOME
	Interest income	$	6,470,919	$	243,238

Expenses
	Management fee (Note 2)		556,361		24,641
	Distribution costs (Notes 2 and 3)		166,908		2,220
	Transfer agent fees (Note 2)		70,255		3,121
	Shareholder services (Note 2)		111,272		-
	Administration fee (Note 2)		21,114		932
	Accounting fees		53,310		1,467
	Legal and audit fees		28,092		4,981
	Printing		10,642		-
	Miscellaneous		12,214		43
	Portfolio pricing fee		33,227		1,470
	Custodian fees		18,817		833
	Insurance		5,564		985
	Registration fees		5,384		1,213

	Total expenses		1,093,160		41,906
	Fee reductions (Note 4)		(86,228)		(3,813)

	Net expenses		1,006,932		38,093

	Net investment income		5,463,987		205,145

NET REALIZED AND UNREALIZED GAIN (LOSS)
	ON INVESTMENTS
	Net realized gain (loss) from security transactions		(144,412)		3,548
	Change in unrealized appreciation of investments		(1,325,003)		(39,066)

	Net loss on investments		(1,469,415)		(35,518)

NET INCREASE IN NET ASSETS
	RESULTING FROM OPERATIONS	$	3,994,572 ———————	$	169,627 ———————

See accompanying notes to financial statements.

FIRST HAWAII MUNICIPAL BOND FUND

STATEMENT OF CHANGES IN NET ASSETS

For the years ended September 30, 2000 and 1999


							2000		1999
INCREASE (DECREASE) IN NET ASSETS FROM
	Operations
		Net investment income				$	5,463,987	$	5,730,819
		Net realized gain (loss) on investments					(144,412)		26,191
		Decrease in unrealized appreciation of investments					(1,325,003)		(5,909,543)
			Net increase (decrease) in net assets
				resulting from operations			3,994,572		(152,533)

	Distributions to shareholders from:
		Net investment income
			($0.52 and $0.55 per share, respectively)				(5,463,987)		(5,730,819)

	Capital share transactions (a)
		Increase in net assets resulting from
			capital share transactions				(3,115,471)		9,986,554
		Total increase (decrease) in net assets					(4,584,886)		4,103,202

NET ASSETS
	Beginning of year						116,448,924		112,345,722
	End of year					$	111,864,038 ————————	$	116,448,924 ————————


(a) Summary of capital share activity follows:

					For the year ended				For the year ended
					September 30, 2000				September 30, 1999
					Shares		Value		Shares		Value
	Shares sold				1,087,029	$	11,358,822		1,881,327	$	20,588,320
	Shares issued on
		reinvestment of distributions			348,781		3,649,264		356,643		3,925,201
					1,435,810		15,008,086		2,237,970		24,513,521
	Shares redeemed				(1,738,899)		(18,123,557)		(1,339,933)		(14,526,967)
		Net increase (decrease)			(303,089) ———————	$	(3,115,471) ————————		898,037 ———————	$	9,986,554 ————————

See accompanying notes to financial statements.

FIRST HAWAII INTERMEDIATE MUNICIPAL FUND

STATEMENT OF CHANGES IN NET ASSETS

For the years ended September 30, 2000 and 1999


							2000		1999
INCREASE (DECREASE) IN NET ASSETS FROM
	Operations
		Net investment income				$	205,145	$	247,821
		Net realized gain on investments					3,548		5,108
		Decrease in unrealized appreciation of investments					(39,066)		(159,764)
			Net increase in net assets
				resulting from operations			169,627		93,165

	Distributions to shareholders from:
		Net investment income
			($0.21 and $0.22 per share, respectively)				(205,145)		(247,821)
		Capital Gains
			($0.004 and $0..01 per share, respectively)				(3,813)		(7,321)
		Net investment income				$	205,145	$	247,821
		Net realized gain on investments					3,548		5,108
		Decrease in unrealized appreciation of investments					(39,066)		(159,764)
			Net increase in net assets
				resulting from operations			169,627		93,165

	Distributions to shareholders from:
		Net investment income
			($0.21 and $0.22 per share, respectively)				(205,145)		(247,821)
		Capital Gains
			($0.004 and $0..01 per share, respectively)				(3,813)		(7,321)

	Capital share transactions (a)
		Increase in net assets resulting from					(934,315)		(256,438)
			capital share transactions
		Total decrease in net assets					(973,646)		(418,415)

NET ASSETS
	Beginning of year						5,493,032		5,911,447
	End of year					$	4,519,386 ————————	$	5,493,032 ————————


(a) Summary of capital share activity follows:

					For the year ended				For the year ended
					September 30, 2000				September 30, 1999
					Shares		Value		Shares		Value
	Shares sold				349,473	$	1,741,580		342,050	$	1,749,232
	Shares issued on
		reinvestment of distributions			35,119		175,105		43,853		224,588
					384,592		1,916,685		385,903		1,973,820
	Shares redeemed				(573,440)		(2,851,000)		(435,722)		(2,230,258)
		Net decrease			(188,848) ———————	$	(934,315) ————————		(49,819) ———————	$	(256,438) ————————

See accompanying notes to financial statements.

FIRST HAWAII MUNICIPAL BOND FUND

FINANCIAL HIGHLIGHTS

(For a share outstanding throughout each year)

			Years Ended September 30,
			2000	1999	1998	1997	1996
Net asset value
	Beginning of year		$10.68	$11.23	$11.10	$10.89	$10.84

Income from investment operations
	Net investment income		0.52	0.55	0.55	0.54	0.55
	Net gain (loss) on securities (both realized and unrealized)		(0.13)	(0.55)	0.13	0.21	0.05
		Total from investment operations	0.39	-	0.68	0.75	0.60

Less distributions
	Dividends from net investment income		(0.52)	(0.55)	(0.55)	(0.54)	(0.55)
	Distributions from capital gains		-	-	-	-	-
		Total distributions	(0.52)	(0.55)	(0.55)	(0.54)	(0.55)
End of year			$10.55 ———	$10.68 ———	$11.23 ———	$11.10 ———	$10.89 ———

Total return			3.79%	(0.07%)	6.28%	7.09%	5.62%

Ratios/Supplemental Data
	Net assets, end of year (in 000’s)		$111,864	$116,449	$112,346	$106,380	$54,165
	Ratio of expenses to average net assets (a)		0.98%	0.94%	0.89%	0.98%	0.98%

	Ratio of net investment income to average net assets		4.83%	4.88%	4.90%	4.99%	5.03%

Portfolio turnover			20.96%	10.83%	7.35%	3.21%	15.16%

(a) Ratios of expenses to average net assets after the reduction of custodian fees and
	other expenses under a custodian arrangement were .91%, .87%, .85%, .94% and .95% for the years ended
	September 30, 2000, 1999, 1998, 1997 and 1996, respectively.

See accompanying notes to financial statements.

FIRST HAWAII INTERMEDIATE MUNICIPAL FUND

FINANCIAL HIGHLIGHTS

(For a share outstanding throughout each year)

			Years Ended September 30,
			2000	1999	1998	1997	1996
Net asset value
	Beginning of year		$5.03	$5.18	$5.15	$5.12	$5.14

Income from investment operations
	Net investment income		0.21	0.22	0.22	0.22	0.22
	Net gain (loss) on securities (both realized and unrealized)		(0.02)	(0.14)	0.04	0.04	(0.02)
		Total from investment operations	0.19	0.08	0.26	0.26	0.20

Less distributions
	Dividends from net investment income		(0.21)	(0.22)	(0.22)	(0.22)	(0.22)
	Distributions from capital gains		-	(0.01)	(0.01)	(0.01)	-
		Total distributions	(0.21)	(0.23)	(0.23)	(0.23)	(0.22)
	End of year		$5.01 ———	$5.03 ———	$5.18 ———	$5.15 ———	$5.12 ———

Total return			3.97%	1.51%	5.08%	5.17%	3.95%

Ratios/Supplemental Data
	Net assets, end of year (in 000’s)		$4,519	$5,493	$5,911	$6,402	$6,624
	Ratio of expenses to average net assets
		Before expense reimbursements	0.85%	0.98%	1.49%	1.43%	1.50%
		After expense reimbursements	.85% (a)	.89% (a)	.85% (a)	.86% (a)	.84% (a)
	Ratio of net investment income to average net assets
		Before expense reimbursements	4.07%	4.07%	3.53%	3.67%	3.66%
		After expense reimbursements	4.07%	4.18%	4.17%	4.24%	4.32%

Portfolio turnover			4.22%	3.32%	14.57%	17.36%	17.76%

(a) Ratios of expenses to average net assets after the reduction of custodian fees and .
	other expenses under a custodian arrangement were .77%, .75%, .73%, .75%, and .75% for
	the years ended September 30, 2000, 1999, 1998, 1997, and 1996, respectively

See accompanying notes to financial statements.

FIRST HAWAII MUNICIPAL BOND FUND

FIRST HAWAII INTERMEDIATE MUNICIPAL FUND

NOTES TO FINANCIAL STATEMENTS

September 30, 2000

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

First Hawaii Municipal Bond Fund and First Hawaii Intermediate Municipal Fund ("Funds") are each a series of shares of First Pacific Mutual Fund, Inc. which is registered under the Investment Company Act of 1940, as a non-diversified open-end management company.

The investment objective of the Funds is to provide investors with the maximum level of income exempt from federal and Hawaii income taxes consistent with the preservation of capital. The Funds seek to achieve their objective by investing primarily in municipal securities which pay interest that is exempt from federal and Hawaii income taxes.

The Funds are subject to the risk of price fluctuation of the municipal securities held in their portfolios which is generally a function of the underlying credit rating of an issuer, the maturity length of the securities, the securities’ yield, and general economic and interest rate conditions.

Since the Funds invest primarily in obligations of issuers located in Hawaii, the marketability and market value of these obligations may be affected by certain Hawaiian constitutional provisions, legislative measures, executive orders, administrative regulations, voter initiatives, and other political and economic developments. If any such problems arise, they could adversely affect the ability of various Hawaiian issuers to meet their financial obligation.

In preparing financial statements in conformity with generally accepted accounting principles, management makes estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, as well as the reported amounts of income and expenses during the reported period. Actual results could differ from those estimates.

(A) SECURITY VALUATION

Portfolio securities, which are fixed income securities, are valued by an independent pricing service using market quotations, prices provided by market-makers, or estimates of market values obtained from yield data relating to instruments or securities with similar characteristics, in accordance with procedures established in good faith by the Board of Directors. Securities with remaining maturities of 60 days or less are valued on the amortized cost basis as reflecting fair value. All other securities are valued at their fair value as determined in good faith by the Board of Directors.

(B) FEDERAL INCOME TAXES

It is the Funds’ policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute their taxable income, if any, to their shareholders. Therefore, no federal income tax provision is required. At September 30, 2000, the First Hawaii Municipal Bond Fund had an unused capital loss carryforward of approximately $408,204 of which, $189,123 expires in 2004, $29,000 expires in 2005 and $190,181 expires in 2008.

Security transactions are recorded on the trade date. Interest income is recorded on the accrual basis. Bond discounts and premiums are amortized as required by the Internal Revenue Code. Distributions to shareholders are declared daily and reinvested or paid in cash monthly. Premiums and discounts are amortized in accordance with income tax regulations.

(2) INVESTMENT MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES

First Pacific Management Corporation ("FPMC") provides the Funds with management and administrative services pursuant to a management agreement and administrative services agreement. In accordance with the terms of the management agreement and the administrative services agreement, FPMC receives compensation at the annual rate of .50% and up to .05% of each Fund’s average daily net assets, respectively.

The Funds’ distributor, First Pacific Securities, Inc. ("FPS"), a wholly-owned subsidiary of FPMC, received $166,908 and $2,220 for costs incurred in connection with the sale of First Hawaii Municipal Bond Fund’s shares and First Hawaii Intermediate Bond Fund’s shares, respectively (See Note 3).

First Pacific Recordkeeping, Inc. ("FPR"), a wholly-owned subsidiary of FPMC, serves as the transfer agent for the Funds. FPR also provides the First Hawaii Municipal Bond Fund with certain clerical, bookkeeping and shareholder services pursuant to a service agreement approved by the Fund’s directors. As compensation for these services FPR receives a fee, computed daily and payable monthly, at an annualized rate of .10% of average daily net assets.

Certain officers and directors of the Funds are also officers of FPMC, FPS and FPR.

(3) DISTRIBUTION COSTS

The Funds’ Board of Directors, including a majority of the Directors who are not "interested persons" of the Funds, as defined in the Investment Company Act of 1940, adopted a distribution plan pursuant to Rule 12b-1 of the Act. The Plan regulates the manner in which a regulated investment company may assume costs of distributing and promoting the sales of its shares.

The Plan provides that the Funds may incur certain costs, which may not exceed .25% per annum of the Funds’ average daily net assets, for payment to the distributor for items such as advertising expenses, selling expenses, commissions or travel reasonably intended to result in sales of shares of the Funds.

(4) PURCHASES AND SALES OF SECURITIES

Purchases and sales of securities aggregated $22,790,471 and $24,319,917 respectively for the First Hawaii Municipal Bond Fund. Purchases and sales of securities for the First Hawaii Intermediate Municipal Fund aggregated $198,797 and $1,065,000, respectively.

(5) CUSTODY CREDITS

Under an agreement with the Custodian Bank, custodian fees are paid by credits for cash balances. Any remaining credits are used to offset expenses of other vendors and service providers. During the year ended September 30, 2000, such reductions amounted to $86,228 and $3,813 for the First Hawaii Municipal Bond Fund and the First Hawaii Intermediate Municipal Fund, respectively. Credits used to offset expenses were as followed:

		Municipal		Intermediate
		Bond		Municipal
		Fund		Fund
Custody	$	18,817	$	833
Accounting		33,207		1,467
Pricing		33,227		1,470
Miscellaneous		977		43
	$	86,228 —————	$	3,813 ——————