[GRAPHIC OMITTED]
FMB(LOGO)
FMB Funds, Inc.
[GRAPHIC OMITTED]
SEMI-ANNUAL REPORT
FMB MONEY MARKET FUND
FMB INTERMEDIATE
GOVERNMENT INCOME FUND
FMB MICHIGAN
TAX-FREE BOND FUND
FMB DIVERSIFIED
EQUITY FUND
MAY 31, 1996
<PAGE>
- --------------------------------------------------------------------------------
THE FMB FUNDS, INC.:
(BULLET) ARE NOT DEPOSITS, OTHER OBLIGATIONS OF, OR GUARANTEED BY FIRST MICHIGAN
BANK CORPORATION OR ANY OF ITS AFFILIATES;
(BULLET) ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC) OR
ANY OTHER AGENCY;
(BULLET) INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF THE PRINCIPAL
AMOUNT INVESTED.
SEI FINANCIAL SERVICES COMPANY, THE DISTRIBUTOR OF THE FMB FUNDS, INC. IS NOT
AFFILIATED WITH FIRST MICHIGAN BANK CORPORATION. FMB TRUST, A SUBSIDIARY OF
FIRST MICHIGAN BANK CORPORATION, SERVES AS INVESTMENT ADVISER FOR THE FMB
FUNDS, INC.
- --------------------------------------------------------------------------------
<PAGE>
[GRAPHIC OMITTED]
TABLE OF CONTENTS
FMB MONEY MARKET FUND ....................2
FMB INTERMEDIATE GOVERNMENT
INCOME FUND ..............................4
FMB MICHIGAN TAX-FREE
BOND FUND ................................7
FMB DIVERSIFIED EQUITY
FUND ....................................12
STATEMENT OF OPERATIONS ..................15
STATEMENT OF CHANGES IN NET ASSETS .......16
FINANCIAL HIGHLIGHTS .....................18
NOTES TO FINANCIAL STATEMENTS ............22
FMB (LOGO)
FMB Funds, Inc.
[GRAPHIC OMITTED]
<PAGE>
MAY 31, 1996
STATEMENT OF NET ASSETS (UNAUDITED)
- --------------------------------------------------------------------------------
FMB MONEY MARKET FUND
[GRAPHIC OMITTED]
Commercial Paper 61%
Cash Equivalents 17%
U.S.Treasury Obligations 8%
U.S. Government Agency Obligations 10%
Certificates of Deposit 4%
% of Total Portfolio Investments
- ------------------------------------------------------
Par Value
(000) (000)
- ------------------------------------------------------
- ------------------------------------------------------
COMMERCIAL PAPER -- 61.2%
- ------------------------------------------------------
AT&T
5.430%, 06/21/96 $ 5,000 $ 4,985
Ciesco
5.400%, 06/11/96 5,700 5,692
Coca Cola
5.394%, 06/03/96 5,700 5,698
Commercial Credit
5.290%, 06/19/96 5,700 5,685
CXC
5.400%, 06/28/96 5,400 5,379
E.I. du Pont de Nemours
5.220%, 08/23/96 5,500 5,434
Ford Motor Credit
5.440%, 06/12/96 5,700 5,691
General Electric Capital
5.270%, 09/20/96 5,500 5,410
John Deere Capital
5.430%, 07/11/96 5,800 5,766
- ------------------------------------------------------
Par Value
(000) (000)
- ------------------------------------------------------
Merrill Lynch
5.410%, 07/01/96 $ 5,700 $ 5,675
Norwest
5.270%, 08/16/96 5,300 5,241
Philip Morris
5.380%, 06/18/96 5,700 5,686
State Street Boston
5.410%, 08/01/96 5,700 5,649
-------
Total Commercial Paper
(Cost $71,991) 71,991
-------
- ------------------------------------------------------
U.S. TREASURY OBLIGATIONS -- 8.1%
- ------------------------------------------------------
U.S. Treasury Bills (B)
5.090%, 03/06/97 5,000 4,803
5.220%, 04/03/97 5,000 4,778
-------
Total U.S. Treasury Obligations
(Cost $9,581) 9,581
-------
- ------------------------------------------------------
U.S. GOVERNMENT AGENCY
OBLIGATIONS -- 9.4%
- ------------------------------------------------------
FNMA (A)
5.090%, 06/07/96 5,000 5,000
SLMA (A)
5.200%, 06/04/96 6,000 6,000
-------
Total U.S. Government
Agency Obligations
(Cost $11,000) 11,000
-------
- ------------------------------------------------------
CERTIFICATE OF DEPOSIT -- 4.3%
- ------------------------------------------------------
First Tennessee Bank
5.330%, 06/04/96 5,000 5,000
------
Total Certificate of Deposit
(Cost $5,000) 5,000
------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- -------------------------------------------------------------------------------
2
<PAGE>
FMB (LOGO)
FMB Funds, Inc.
[GRAPHIC OMITTED]
- --------------------------------------------------------------------------------
FMB MONEY MARKET FUND (CONCLUDED)
- ------------------------------------------------------
Par Value
(000) (000)
- ------------------------------------------------------
- ------------------------------------------------------
REPURCHASE AGREEMENT -- 17.2%
- ------------------------------------------------------
First Union
5.300%, dated 05/31/96,
matures 06/03/96, repurchase
price $20,269,949 (collateralized
by U.S. Treasury Bill, par value
$21,008,000, matures 09/19/96:
market value $20,680,888) $20,261 $ 20,261
--------
Total Repurchase Agreement
(Cost $20,261) 20,261
--------
Total Investments -- 100.2%
(Cost $117,833) 117,833
--------
- ------------------------------------------------------
OTHER ASSETS AND LIABILITIES -- (0.2%)
- ------------------------------------------------------
Total Other Assets and Liabilities, Net (207)
--------
- ------------------------------------------------------
NET ASSETS -- 100%
- ------------------------------------------------------
Portfolio Shares of Institutional Class
($0.001 par value -- 10 billion
authorized for the Company)
based on 95,272,546
outstanding shares 95,273
Portfolio Shares of
Consumer Service Class
($0.001 par value -- 10 billion
authorized for the Company) based
on 22,351,473 outstanding shares 22,351
Undistributed Net Investment Income 90
- ------------------------------------------------------
Value
(000)
- ------------------------------------------------------
Accumulated Net Realized Loss on
Investments $ (88)
--------
Total Net Assets-- 100.0% $117,626
========
Net Asset Value, Offering & Redemption
Price Per Share-- Institutional Class $1.00
========
Net Asset Value, Offering & Redemption
Price Per Share -- Consumer
Service Class $1.00
========
(A) FLOATING RATE INSTRUMENT WITH DEMAND FEATURES. THE RATE REFLECTED ON THE
STATEMENT OF NET ASSETS IS THE RATE IN EFFECT ON MAY 31, 1996. THE DATE
SHOWN IS THE LONGER OF THE RESET OR DEMAND DATE.
(B) THE RATE REFLECTED ON THE STATEMENT OF NET ASSETS REPRESENTS THE SECURITY'S
EFFECTIVE YIELD.
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
SLMA -- STUDENT LOAN MARKETING ASSOCIATION
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
3
<PAGE>
MAY 31, 1996
STATEMENT OF NET ASSETS (UNAUDITED)
- --------------------------------------------------------------------------------
FMB INTERMEDIATE
GOVERNMENT INCOME FUND
[GRAPHIC OMITTED]
U.S. Government Agency Obligations 46%
U.S. Agency Mortgage-Backed Obligations 20%
Cash Equivalents 3%
U.S. Treasury Obligations 31%
% of Total Portfolio Investments
- ------------------------------------------------------
Market
Par Value
(000) (000)
- ------------------------------------------------------
- ------------------------------------------------------
U.S. AGENCY MORTGAGE-BACKED
OBLIGATIONS -- 20.7%
- ------------------------------------------------------
FHLB
8.000%, 01/01/13 $1,370 $ 1,393
FHLMC
9.000%, 10/01/97 130 133
9.000%, 12/01/01 162 168
7.000%, 11/15/05 743 741
7.500%, 08/15/16 191 191
7.500%, 11/15/17 1,000 1,005
7.150%, 07/18/18 2,000 1,992
6.250%, 01/15/19 4,060 3,843
FHLMC REMIC
8.250%, 11/15/20 526 532
FNMA
9.500%, 10/01/97 160 164
9.500%, 11/01/97 141 145
9.000%, 11/01/97 43 44
- ------------------------------------------------------
Market
Par Value
(000) (000)
- ------------------------------------------------------
8.000%, 07/01/98 $ 165 $ 169
8.500%, 10/01/98 42 43
8.500%, 11/01/98 98 100
7.338%, 01/15/99 1,000 1,012
7.750%, 10/25/00 1,000 1,015
7.500%, 07/25/02 1,232 1,247
7.000%, 01/25/04 43 43
8.250%, 01/25/05 297 298
7.500%, 03/25/05 259 260
7.500%, 12/25/05 1,500 1,508
7.500%, 05/01/07 2,038 2,043
5.500%, 08/25/16 1,000 958
6.950%, 05/25/17 830 831
8.500%, 11/25/17 370 373
6.350%, 07/25/18 1,000 963
6.750%, 09/25/18 1,000 998
7.000%, 10/25/18 2,000 1,991
------
Total U.S. Agency Mortgage-Backed Obligations
(Cost $24,549) 24,203
-------
- ------------------------------------------------------
U.S. GOVERNMENT AGENCY
OBLIGATIONS -- 45.8%
- ------------------------------------------------------
FHLB
8.250%, 09/25/96 1,000 1,009
6.460%, 02/01/00 1,000 985
6.125%, 09/20/00 2,000 1,951
5.750%, 03/30/01 1,000 1,000
6.020%, 09/06/01 2,000 1,904
FHLMC
8.125%, 09/30/96 1,000 1,009
6.600%, 11/12/99 1,000 1,001
6.550%, 01/04/00 1,000 992
6.780%, 03/28/01 2,000 1,990
7.140%, 07/31/02 1,500 1,506
6.800%, 09/18/02 1,000 1,000
6.120%, 01/21/03 2,500 2,369
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
4
<PAGE>
FMB (LOGO)
FMB Funds, Inc.
[GRAPHIC OMITTED]
- --------------------------------------------------------------------------------
FMB INTERMEDIATE
GOVERNMENT INCOME FUND (CONTINUED)
- ------------------------------------------------------
Market
Par Value
(000) (000)
- ------------------------------------------------------
6.550%, 04/02/03 $1,000 $ 959
8.335%, 03/14/05 2,000 2,045
6.830%, 06/15/05 2,000 1,916
7.000%, 07/06/05 2,000 1,932
FNMA
7.600%, 01/10/97 1,000 1,011
6.810%, 04/23/99 2,000 1,993
7.240%, 09/02/99 2,000 2,018
6.330%, 11/03/00 3,000 2,933
7.000%, 05/10/01 2,000 1,991
6.630%, 06/05/01 1,000 1,000
7.550%, 04/22/02 2,000 2,055
7.000%, 08/12/02 1,000 1,002
6.950%, 09/10/02 3,000 2,950
6.720%, 02/25/03 2,400 2,319
7.090%, 10/13/05 2,000 1,922
FNMA MTN
7.360%, 09/29/99 2,000 2,020
7.650%, 10/20/99 2,000 2,028
5.790%, 01/22/01 2,000 1,913
Tennessee Valley Authority
8.250%, 11/15/96 1,800 1,820
6.000%, 01/15/97 1,000 999
-------
Total U.S. Government
Agency Obligations
(Cost $54,296) 53,542
-------
- ------------------------------------------------------
U.S. TREASURY OBLIGATIONS -- 31.7%
- ------------------------------------------------------
U.S. Treasury Notes
6.875%, 03/31/97 3,000 3,027
8.500%, 05/15/97 2,000 2,049
8.500%, 07/15/97 1,000 1,027
----------------------------------------------------
Market
Par Value
(000) (000)
----------------------------------------------------
7.375%, 11/15/97 $5,000 $ 5,088
7.875%, 01/15/98 3,000 3,079
7.875%, 04/15/98 1,000 1,029
9.000%, 05/15/98 5,000 5,250
8.250%, 07/15/98 4,000 4,154
6.375%, 01/15/99 2,000 2,000
6.875%, 08/31/99 2,000 2,021
7.875%, 11/15/99 1,000 1,041
6.250%, 05/31/00 2,000 1,976
8.000%, 05/15/01 2,000 2,113
7.875%, 08/15/01 2,000 2,105
7.500%, 11/15/01 1,000 1,036
-------
Total U.S. Treasury Obligations
(Cost $36,397) 36,995
-------
- ------------------------------------------------------
REPURCHASE AGREEMENT -- 3.0%
- ------------------------------------------------------
First Union
5.300%, dated 05/31/96,
matures 06/03/96,
repurchase price $3,537,562
(collateralized by U.S. Treasury
Note, par value $3,403,000,
8.500%, matures 07/15/97:
market value $3,607,046) 3,536 3,536
--------
Total Repurchase Agreement
(Cost $3,536) 3,536
--------
Total Investments -- 101.2%
(Cost $118,778) $118,276
--------
- ------------------------------------------------------
OTHER ASSETS AND LIABILITIES -- (1.2%)
- ------------------------------------------------------
Total Other Assets and Liabilities, Net (1,480)
--------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
5
<PAGE>
MAY 31, 1996
STATEMENT OF NET ASSETS (UNAUDITED)
- --------------------------------------------------------------------------------
FMB INTERMEDIATE
GOVERNMENT INCOME FUND (CONCLUDED)
- ------------------------------------------------------
Market
Value
(000)
- ------------------------------------------------------
- ------------------------------------------------------
NET ASSETS -- 100%
- ------------------------------------------------------
Portfolio Shares of Institutional Class
($0.001 par value -- 10 billion
authorized for the Company) based
on 11,132,666 outstanding shares $113,052
Portfolio Shares of Consumer Service
Class ($0.001 par value -- 10 billion
authorized for the Company) based
on 580,134 outstanding shares 6,048
Distributions in Excess of Net
Investment Income (1)
Accumulated Net Realized Loss on
Investments (1,801)
Net Unrealized Depreciation on
Investments (502)
--------
Total Net Assets-- 100.0% $116,796
========
Net Asset Value, Offering & Redemption
Price Per Share-- Institutional Class $ 9.97
--------
Net Asset Value & Redemption
Price Per Share -- Consumer
Service Class $ 9.97
========
Maximum Public Offering Price Per Share --
Consumer Service Class ($9.97/97.00%) $10.28
========
FHLB -- FEDERAL HOME LOAN BANK
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
MTN -- MEDIUM TERM NOTE
REMIC -- REAL ESTATE MORTGAGE INVESTMENT CONDUIT
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
6
<PAGE>
MAY 31, 1996
FMB (LOGO)
FMB Funds, Inc.
[GRAPHIC OMITTED]
- --------------------------------------------------------------------------------
FMB MICHIGAN TAX-FREE BOND FUND
[GRAPHIC OMITTED]
General Obligation Bonds 40%
Cash Equivalents 4%
Education Bonds 8%
Utility Bonds 15%
Transportation Bonds 1%
Industrial Revenue Bonds 5%
Housing Bonds 4%
Health Care Bonds 23%
% of Total Portfolio Investments
- ------------------------------------------------------
Market
Par Value
(000) (000)
- ------------------------------------------------------
- ------------------------------------------------------
MUNICIPAL BONDS -- 98.2%
- ------------------------------------------------------
MICHIGAN -- 98.2%
Ann Arbor, Sewer Disposal
Project, Series 12, RB
6.950%, 07/01/03 $ 335 $ 370
Ann Arbor, Water Supply System,
Series T, MBIA, RB
7.375%, 02/01/03 710 801
Bay County, West Side Regional
Sewer Disposal System, GO
6.400%, 05/01/01 150 154
Chelsea, School District Authority,
FGIC, GO
5.500%, 05/01/08 500 499
Clio, School District Authority, RB
7.200%, 05/01/01 200 208
Dearborn, Economic Development
Authority, Oakwood Group Project,
- ------------------------------------------------------
Market
Par Value
(000) (000)
- ------------------------------------------------------
Series A, MBIA, RB, Pre-refunded
at 102 (B)
6.550%, 08/15/01 $ 250 $ 274
Dearborn, School District
Authority, GO
5.250%, 05/01/06 500 497
Detroit, School District Authority,
AMBAC, GO, Pre-refunded at
102 (B)
7.100%, 05/01/01 250 279
Detroit, Sewer Disposal Project,
FGIC, RB, Escrowed to Maturity
5.500%, 07/01/96 200 200
Detroit, Sewer Disposal Project,
MBIA, RB, Pre-refunded at
101.5 (B)
7.125%, 07/01/99 500 544
Farmington Hills, Economic
Development Authority,
Brookfield Building Association,
RB (A) (C)
3.900%, 06/06/96 90 90
Farmington Hills, Hospital Finance
Authority, Botsford General Hospital
Project, Series A, MBIA, RB
6.700%, 02/15/01 225 241
Forest Hills, Public School
Authority, GO
5.000%, 05/01/06 500 481
Gaylord, Community School
Project, GO, Pre-refunded at
102 (B)
6.600%, 05/01/02 500 551
Grand Rapids and Kent County,
Building Authority, RB
7.100%, 10/01/04 240 254
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
7
<PAGE>
MAY 31, 1996
STATEMENT OF NET ASSETS (UNAUDITED)
- --------------------------------------------------------------------------------
FMB MICHIGAN TAX-FREE BOND FUND (CONTINUED)
- ------------------------------------------------------
Market
Par Value
(000) (000)
- ------------------------------------------------------
MICHIGAN (CONTINUED)
Grand Rapids, Downtown
Development Authority, MBIA, TA
6.600%, 06/01/08 $ 545 $ 584
Grand Rapids, Sanitation and
Sewer Authority, Improvement
Project, RB
6.875%, 01/01/10 500 535
Grand Rapids, Water Supply
Authority, FGIC, RB
6.625%, 01/01/08 500 531
Grandville, Public School District
Authority, FGIC, GO
6.000%, 05/01/05 310 326
Greenville, Public School Authority,
MBIA, GO
6.500%, 05/01/03 315 344
Harrison, Community School
Project, AMBAC, GO
5.800%, 05/01/05 500 517
Holland, Electric Authority, RB,
Pre-refunded at 100 (B)
6.500%, 07/01/99 400 422
Hudsonville, Public School Authority,
FGIC, GO
5.000%, 05/01/02 500 502
Jenison, Michigan Public School
Authority FGIC, GO
5.400%, 05/01/08 500 489
Kalamazoo, Hospital Finance
Authority, Borgess Medical Center
Project, Series A, FGIC, RB
6.250%, 07/01/04 500 516
Kent County, Building Authority, GO
6.000%, 12/01/09 500 510
- ------------------------------------------------------
Market
Par Value
(000) (000)
- ------------------------------------------------------
Kent County, Hospital Finance
Authority, Pine Rest Christian
Hospital Project, FGIC, RB
6.500%, 11/01/10 $ 500 $ 520
Kent, Hospital Finance Authority,
Blodgett Memorial Hospital Project,
MBIA, RB
5.750%, 07/01/09 500 489
Kent, Hospital Finance Authority,
Blodgett Memorial Medical Center
Project, Series A, RB
6.875%, 07/01/99 165 173
Kent, Hospital Finance Authority,
Mary Free Hospital Project,
Series A, RB
6.500%, 04/01/05 200 206
Lansing, Building Authority, GO,
Escrowed to Maturity
7.150%, 06/01/03 525 579
Lansing, Finance Tax Increment,
GO, Escrowed to Maturity
5.200%, 10/01/98 200 204
Lenawee County, Building
Authority, Human Services Project,
AMBAC, GO
6.000%, 05/01/09 350 349
Macomb County, Waste Water
Disposal Project, GO
6.500%, 11/01/99 200 206
Mattawan, School District
Authority, GO
6.400%, 05/01/09 500 522
Michigan State Building
Authority, AMBAC, RB
6.750%, 10/01/07 500 540
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
8
<PAGE>
MAY 31, 1996
FMB (LOGO)
FMB Funds, Inc.
[GRAPHIC OMITTED]
- --------------------------------------------------------------------------------
FMB MICHIGAN TAX-FREE BOND FUND (CONTINUED)
- ------------------------------------------------------
Market
Par Value
(000) (000)
- ------------------------------------------------------
MICHIGAN (CONTINUED)
Michigan State Building Authority,
Technological University Project,
GO, Pre-refunded at 101.5 (B)
6.750%, 10/01/00 $ 500 $ 547
Michigan State Building Authority,
University of Michigan General
Hospital, AMBAC, RB,
Pre-refunded at 102 (B)
7.375%, 12/01/96 250 259
Michigan State Environmental
Protection Program, GO,
Pre-refunded at 102 (B)
6.250%, 11/01/02 1,000 1,085
Michigan State Higher Education
Authority Hope College Project,
Series B, RB
5.900%, 04/01/09 350 346
Michigan State Higher Education
Authority, Student Loan,
Series 13, AMBAC, RB
5.700%, 04/01/02 500 514
Michigan State Hospital Finance
Authority, Central Michigan
Community Hospital, Series A, RB
5.750%, 10/01/02 300 302
Michigan State Hospital Finance
Authority, Daughters Charity
Project, RB
5.500%, 11/01/05 500 504
Michigan State Hospital Finance
Authority, Detroit Medical Center
Project, Series A, RB
6.375%, 08/15/09 500 504
- ------------------------------------------------------
Market
Par Value
(000) (000)
- ------------------------------------------------------
Michigan State Hospital Finance
Authority, Holland Community
Hospital Project, RB
4.500%, 01/01/00 $ 555 $ 547
Michigan State Hospital Finance
Authority, Metropolitan Hospital
Project, Series A, RB
4.750%, 07/01/98 200 198
Michigan State Hospital Finance
Authority, Otsego Memorial
Hospital Project, RB (C)
6.000%, 01/01/09 660 653
Michigan State Hospital Finance
Authority, Saint John Hospital
Project, Series A, AMBAC, RB
5.750%, 05/15/04 200 208
Michigan State Hospital Finance
Authority, Sparrow Obligated
Group Project, MBIA, RB
6.300%, 11/15/03 615 660
Michigan State Housing
Development Authority, Rental
Housing Project, RB
5.800%, 04/01/00 150 156
Michigan State Housing
Development Authority, Walled
Lake Villa Project, FSA, RB
5.850%, 04/15/07 420 433
Michigan State Public Power
Agency, Campbell Project,
AMBAC, RB
6.400%, 01/01/04 235 241
Michigan State South Central
Power Agency, Power Supply
System, AMBAC, RB, Pre-refunded
at 102 (B)
7.250%, 11/01/96 200 207
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
9
<PAGE>
MAY 31, 1996
STATEMENT OF NET ASSETS (UNAUDITED)
- --------------------------------------------------------------------------------
FMB MICHIGAN TAX-FREE BOND FUND (CONTINUED)
- ------------------------------------------------------
Market
Par Value
(000) (000)
- ------------------------------------------------------
MICHIGAN (CONTINUED)
Michigan State Strategic Fund,
Lutheran Social Services Project,
RB (C)
5.200%, 09/01/04 $ 400 $ 394
Northern Michigan University,
AMBAC, RB
5.500%, 12/01/09 435 416
Novi, School District Authority, GO
5.350%, 05/01/02 275 278
Oakland County, Economic
Development Authority, Cranbrook
Elderly Community Project, RB
6.375%, 11/01/14 500 539
Oakland County, GO
6.250%, 11/01/06 500 519
Otttawa County, Holland Township
Extension, GO
6.800%, 08/01/05 500 529
Paw Paw, Public School District,
FGIC, GO
6.500%, 05/01/09 500 543
Rochester Hills, Series B, GO,
Pre-refunded at 102 (B)
6.600%, 11/01/98 465 498
Rochester Hills, Transportation
Fund, GO
6.250%, 08/01/05 200 208
Rochester, School District
Authority, GO, Pre-refunded at
100 (B)
6.500%, 05/01/02 150 162
- ------------------------------------------------------
Market
Par Value
(000) (000)
- ------------------------------------------------------
Rockford, Public School
Authority, GO
5.600%, 05/01/05 $ 500 $ 511
Saginaw County, GO
6.500%, 07/01/97 145 147
Saginaw, Water Authority, RB
6.000%, 07/01/07 865 889
Saranac, School District
Authority, GO
5.700%, 05/01/07 230 229
Troy, Downtown Development
Authority, Series A, TA, RB
6.100%, 11/01/10 400 409
University of Michigan, Hospital
Revenue, Series A, RB
5.700%, 12/01/04 250 259
University of Michigan, Major
Capital Projects, RB
5.800%, 04/01/10 500 508
Utica, Community Schools
Project, GO
5.700%, 05/01/06 500 514
Walled Lake, School District
Authority, GO
6.500%, 05/01/02 200 211
Warren, School District Authority,
GO, Pre-refunded at 102 (B)
6.700%, 05/01/01 500 549
Warren, Transportation Fund, GO
5.000%, 06/01/07 405 386
-------
Total Municipal Bonds
(Cost $30,051) 30,569
-------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
10
<PAGE>
MAY 31, 1996
FMB (LOGO)
FMB Funds, Inc.
[GRAPHIC OMITTED]
- --------------------------------------------------------------------------------
FMB MICHIGAN TAX-FREE BOND FUND (CONCLUDED)
- ------------------------------------------------------
Market
Par Value
(000) (000)
- ------------------------------------------------------
- ------------------------------------------------------
CASH EQUIVALENT -- 4.0%
- ------------------------------------------------------
Dreyfus Michigan Tax Free
Money Market Fund $1,231 $ 1,231
-------
Total Cash Equivalent
(Cost $1,231) 1,231
=======
Total Investments -- 102.2%
(Cost $31,282) 31,800
-------
- ------------------------------------------------------
OTHER ASSETS AND LIABILITIES -- (2.2%)
- ------------------------------------------------------
Total Other Assets and Liabilities, Net (681)
-------
- ------------------------------------------------------
NET ASSETS -- 100%
- ------------------------------------------------------
Portfolio Shares of Institutional Class
($0.001 par value -- 10 billion
authorized for the Company)
based on 1,989,785
outstanding shares 20,662
Portfolio Shares of Consumer
Service Class ($0.001 par value --
10 billion authorized for the
Company) based on 968,138
outstanding shares 10,045
Accumulated Net Realized Loss on
Investments (106)
Net Unrealized Appreciation on
Investments 518
-------
Total Net Assets-- 100.0% $31,119
=======
- ------------------------------------------------------
Market
Value
(000)
- ------------------------------------------------------
Net Asset Value, Offering & Redemption
Price Per Share-- Institutional Class $10.52
=======
Net Asset Value, Offering & Redemption
Price Per Share -- Consumer
Service Class $10.52
=======
Maximum Public Offering Price Per
Share -- Consumer Service Class
($10.52/97.00%) $10.85
=======
(A) FLOATING RATE INSTRUMENT WITH DEMAND FEATURES. THE RATE REFLECTED ON THE
STATEMENT OF NET ASSETS IS THE RATE IN EFFECT ON MAY 31, 1996. THE DATE
SHOWN IS THE LONGER OF THE RESET OR DEMAND DATE.
(B) PRE-REFUNDED SECURITY - THE MATURITY DATE SHOWN IS THE PREREFUNDED DATE.
(C) SECURITY IS BACKED BY A LETTER OF CREDIT.
AMBAC -- AMERICAN MUNICIPAL BOND ASSURANCE COMPANY
FGIC -- FEDERAL GUARANTY INSURANCE CORPORATION
FSA -- FINANCIAL SECURITY ASSURANCE
GO -- GENERAL OBLIGATION
MBIA -- MUNICIPAL BOND INVESTORS ASSURANCE
RB -- REVENUE BOND
TA -- TAX ALLOCATION
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
11
<PAGE>
MAY 31, 1996
STATEMENT OF NET ASSETS (UNAUDITED)
- --------------------------------------------------------------------------------
FMB DIVERSIFIED EQUITY FUND
[GRAPHIC OMITTED]
Financial 8%
Oil and Energy 8%
Retail 7%
Utilities 7%
Miscellaneous 7%
Cash Equivalents 9%
Building and Construction 2%
Chemicals and Drugs 10%
Consumer Products 21%
Durable Goods 21%
% of Total Portfolio Investments
- ------------------------------------------------------
Market
Value
Shares (000)
- ------------------------------------------------------
- ------------------------------------------------------
COMMON STOCKS -- 90.4%
- ------------------------------------------------------
AEROSPACE & DEFENSE -- 2.2%
Lockheed Martin 5,000 $ 419
Raytheon 18,000 959
------
1,378
------
AUTOMOTIVE -- 3.5%
Ford Motor 10,000 365
Genuine Parts 15,000 683
TRW 12,500 1,178
------
2,226
------
BANKS -- 4.7%
Banc One 18,000 666
Citicorp 15,000 1,260
Norwest 30,000 1,046
------
2,972
------
- ------------------------------------------------------
Market
Value
Shares (000)
- ------------------------------------------------------
BEAUTY PRODUCTS -- 2.6%
Gillette 15,000 $ 887
International Flavors &
Fragrances 15,600 758
------
1,645
------
BROADCASTING, NEWSPAPERS &
ADVERTISING -- 1.2%
Interpublic Group 8,000 371
U.S. West Media Group* 21,000 396
------
767
------
CHEMICALS -- 1.5%
Morton International 25,000 950
------
COMPUTER SOFTWARE/
SERVICES -- 5.3%
Microsoft* 14,000 1,663
Oracle* 31,500 1,043
Solectron* 15,000 651
------
3,357
------
DRUGS -- 8.6%
Abbott Laboratories 25,000 1,078
Johnson & Johnson 10,000 974
Merck 9,000 582
Pfizer 22,000 1,556
Schering Plough 22,000 1,290
------
5,480
------
ELECTRICAL EQUIPMENT -- 6.9%
AMP 26,000 1,095
Duracell International 15,000 699
General Electric 20,000 1,655
Molex 30,037 957
------
4,406
------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
12
<PAGE>
MAY 31, 1996
FMB (LOGO)
FMB Funds, Inc.
[GRAPHIC OMITTED]
- --------------------------------------------------------------------------------
FMB DIVERSIFIED EQUITY FUND (CONTINUED)
- ------------------------------------------------------
Market
Value
Shares (000)
- ------------------------------------------------------
ENTERTAINMENT -- 2.8%
Carnival 18,000 $ 536
Walt Disney 20,000 1,215
-------
1,751
-------
ENVIRONMENTAL SERVICES -- 1.4%
WMX Technologies 26,000 917
-------
FINANCIAL SERVICES -- 1.2%
FNMA 24,000 741
-------
FOOD, BEVERAGE &
TOBACCO -- 8.9%
CPC International 19,000 1,313
H.J. Heinz 12,000 399
Hershey Foods 13,000 946
PepsiCo 40,000 1,330
Sara Lee 29,000 968
Sysco 20,000 683
-------
5,639
-------
GAS/NATURAL GAS -- 1.3%
Enron 21,000 840
-------
HOUSEHOLD PRODUCTS -- 2.7%
Procter & Gamble 16,500 1,450
Rubbermaid 10,000 280
-------
1,730
-------
INSURANCE -- 2.5%
AMBAC 12,000 622
American International Group 10,000 943
-------
1,565
-------
LEISURE -- 1.9%
McDonald's 25,000 1,203
-------
MACHINERY -- 1.3%
Caterpillar 13,000 853
-------
- ------------------------------------------------------
Market
Value
Shares (000)
- ------------------------------------------------------
MISCELLANEOUS BUSINESS
SERVICES -- 3.7%
Automatic Data Processing 37,200 $1,427
Olsten 29,000 892
------
2,319
------
PETROLEUM REFINING -- 7.1%
Chevron 14,000 837
Exxon 10,000 847
Mobil 12,000 1,355
Royal Dutch Petroleum, ADR 10,000 1,500
------
4,539
------
PHOTOGRAPHIC EQUIPMENT &
SUPPLIES -- 1.1%
Eastman Kodak 9,000 669
------
PRINTING & PUBLISHING -- 1.4%
R.R. Donnelley & Sons 24,500 900
------
RETAIL -- 7.0%
Albertson's 17,000 678
Autozone * 19,000 667
Home Depot 13,000 665
Kohl's* 15,000 497
Mattel 32,500 885
Walgreen 32,400 1,033
------
4,425
------
SEMI-CONDUCTORS/
INSTRUMENTS -- 2.1%
Motorola 19,800 1,322
------
TELEPHONES &
TELECOMMUNICATION -- 7.5%
Alltel 29,000 $ 913
Ameritech 8,000 452
AT&T 20,200 1,260
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
13
<PAGE>
MAY 31, 1996
STATEMENT OF NET ASSETS (UNAUDITED)
- --------------------------------------------------------------------------------
FMB DIVERSIFIED EQUITY FUND (CONCLUDED)
- ------------------------------------------------------
Shares/ Market
Par Value
(000) (000)
- ------------------------------------------------------
TELEPHONES &
TELECOMMUNICATION (CONTINUED)
MCI Communications 31,300 912
SBC Communications 15,000 740
U.S. West 14,000 457
-------
4,734
-------
Total Common Stocks
(Cost $38,971) 57,328
-------
- ------------------------------------------------------
REPURCHASE AGREEMENT -- 9.5%
- ------------------------------------------------------
First Union
5.300%, dated 05/31/96,
matures 06/03/96,
repurchase price $6,072,681
(collateralized by U.S. Treasury
Note, par value $5,841,000,
8.500%, matures 07/15/97:
market value $6,191,229) $6,070 6,070
-------
Total Repurchase Agreement
(Cost $6,070) 6,070
=======
Total Investments -- 99.9%
(Cost $45,041) 63,398
-------
- ------------------------------------------------------
OTHER ASSETS AND LIABILITIES -- 0.1%
- ------------------------------------------------------
Total Other Assets and Liabilities, Net 35
-------
- ------------------------------------------------------
Market
Value
(000)
- ------------------------------------------------------
- ------------------------------------------------------
NET ASSETS -- 100%
- ------------------------------------------------------
Portfolio Shares of Institutional Class
($0.001 par value -- 10 billion
authorized for the Company) based
on 3,550,077 outstanding shares $38,548
Portfolio Shares of Consumer Service
Class ($0.001 par value -- 10 billion
authorized for the Company) based
on 416,673 outstanding shares 4,583
Undistributed Net Investment Income 96
Accumulated Net Realized Gain on
Investments 1,849
Net Unrealized Appreciation on
Investments 18,357
-------
Total Net Assets-- 100.0% $63,433
=======
Net Asset Value, Offering & Redemption
Price Per Share-- Institutional Class $15.99
=======
Net Asset Value & Redemption
Price Per Share -- Consumer
Service Class $15.99
=======
Maximum Public Offering Price Per
Share -- Consumer Service Class
($15.99/96.00%) $16.65
=======
* NON-INCOME PRODUCING SECURITY
ADR -- AMERICAN DEPOSITORY RECEIPT
AMBAC -- AMERICAN MUNICIPAL BOND ASSURANCE COMPANY
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
14
<PAGE>
FOR THE SIX-MONTH PERIOD ENDED MAY 31, 1996 (UNAUDITED)
FMB (LOGO)
FMB Funds, Inc.
[GRAPHIC OMITTED]
STATEMENT OF OPERATIONS (000)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FMB
FMB INTERMEDIATE FMB FMB
MONEY GOVERNMENT MICHIGAN DIVERSIFIED
MARKET INCOME TAX-FREE EQUITY
FUND FUND FUND FUND
------------ ------------ ---------- ----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest Income ....................... $ 3,133 $ 4,048 $ 878 $ 294
Dividend Income ....................... -- -- -- 357
------- ------- ------- -------
Total Income ........................ 3,133 4,048 878 651
------- ------- ------- -------
EXPENSES:
Investment Advisory Fees .............. 202 272 80 310
Waiver of Investment Advisory Fees .... -- -- (56) --
Administrator Fees .................... 107 116 44 64
Professional Fees ..................... 34 27 9 15
Transfer Agent Fees ................... 23 17 16 21
Distribution Fees ..................... 9 11 20 11
Waiver of Distribution Fees ........... -- (8) (15) (8)
Printing Expenses ..................... 8 9 4 7
Custodian Fees ........................ 7 5 7 7
Registration Fees ..................... 7 8 5 8
Amortization of Deferred Organizational
Costs ............................... 3 3 3 3
Trustee Fees .......................... 2 2 1 1
Miscellaneous ......................... 6 9 4 9
------- ------- ------- -------
Total Expenses ...................... 408 471 122 448
------- ------- ------- -------
Net Investment Income .................... 2,725 3,577 756 203
------- ------- ------- -------
Net Realized Gain on Securities Sold .. -- -- 9 2,079
Net Change in Unrealized Appreciation
(Depreciation) on Investments ....... -- (3,126) (815) 3,607
------- ------- ------- -------
Net Realized and Unrealized Gain (Loss)
on Investments ........................ -- (3,126) (806) 5,686
------- ------- ------- -------
Net Increase (Decrease) in Net Assets
Resulting From Operations ............. 2,725 451 (50) 5,889
------- ------- ------- -------
<FN>
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
</FN>
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
15
<PAGE>
FOR THE SIX-MONTH PERIOD ENDED MAY 31, 1996 (UNAUDITED) AND FOR THE YEAR ENDED
NOVEMBER 30, 1995
STATEMENT OF CHANGES IN NET ASSETS (000)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FMB MONEY
MARKET FUND
------------------------------
12/1/95 12/1/94
TO 5/31/96 TO 11/30/95
------------- --------------
<S> <C> <C>
INVESTMENT ACTIVITIES:
Net Investment Income ...................................................... $ 2,725 $ 5,938
Net Realized Gain (Loss) on Securities Sold ................................ -- (88)
Net Unrealized Appreciation (Depreciation) of Investment Securities ........ -- --
--------- ---------
Net Increase (Decrease) in Net Assets Resulting From Operations ............ 2,725 5,850
--------- ---------
DISTRIBUTIONS TO SHAREHOLDERS:
Net Investment Income
Institutional Class ...................................................... (2,252) (5,293)
Consumer Service Class ................................................... (473) (555)
--------- ---------
Total Distributions ................................................... (2,725) (5,848)
--------- ---------
CAPITAL SHARE TRANSACTIONS:
Institutional Class
Proceeds from Shares Issued .............................................. 119,632 269,856
Reinvestment of Cash Distributions ....................................... -- 144
Cost of Shares Redeemed .................................................. (111,555) (286,105)
--------- ---------
Increase (Decrease) in Net Assets from Institutional Class Transactions .. 8,077 (16,105)
--------- ---------
Consumer Service Class
Proceeds from Shares Issued .............................................. 29,383 32,067
Reinvestment of Cash Distributions ....................................... 444 544
Cost of Shares Redeemed .................................................. (25,005) (22,236)
--------- ---------
Increase (Decrease) in Net Assets from Consumer Service Class Transactions 4,822 10,375
--------- ---------
Increase (Decrease) in Net Assets Derived from Capital Share Transactions ..... 12,899 (5,730)
--------- ---------
Net Increase (Decrease) in Net Assets .................................... 12,899 (5,728)
--------- ---------
NET ASSETS:
Beginning of Period ........................................................ 104,727 110,455
--------- ---------
End of Period .............................................................. $ 117,626 $ 104,727
========= =========
SHARES ISSUED AND REDEEMED:
Institutional Class Shares:
Shares Issued ............................................................ 119,632 269,856
Shares Issued in Lieu of Cash Distributions .............................. -- 144
Shares Redeemed .......................................................... (111,555) (286,105)
--------- ---------
Net Increase (Decrease) Institutional Class Share Transactions ........... 8,077 (16,105)
--------- ---------
Consumer Service Class Shares:
Shares Issued ............................................................ 29,383 32,067
Shares Issued in Lieu of Cash Distributions .............................. 444 544
Shares Redeemed .......................................................... (25,005) (22,236)
--------- ---------
Net Increase (Decrease) Consumer Service Class Share Transactions ........ 4,822 10,375
--------- ---------
Net Increase (Decrease) in Share Transactions .............................. 12,899 (5,730)
========= =========
<FN>
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
</FN>
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
16
<PAGE>
FMB (LOGO)
FMB Funds, Inc.
[GRAPHIC OMITTED]
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FMB INTERMEDIATE FMB MICHIGAN FMB DIVERSIFIED
GOVERNMENT INCOME FUND TAX-FREE BOND FUND EQUITY FUND
------------------------ ------------------------- ------------------------
12/1/95 12/1/94 12/1/95 12/1/94 12/1/95 12/1/94
TO 5/31/96 TO 11/30/95 TO 5/31/96 TO 11/30/95 TO 5/31/96 TO 11/30/95
---------- ----------- ---------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT ACTIVITIES:
Net Investment Income ....................... $ 3,577 $ 7,442 $ 756 $ 1,414 $ 203 $ 487
Net Realized Gain (Loss) on
Securities Sold ........................... -- (1,372) 9 (12) 2,079 539
Net Unrealized Appreciation
(Depreciation) of Investment
Securities ................................ (3,126) 8,393 (815) 2,368 3,607 12,413
--------- --------- --------- --------- --------- ---------
Net Increase (Decrease) in Net
Assets Resulting From Operations .......... 451 14,463 (50) 3,770 5,889 13,439
--------- --------- --------- --------- --------- ---------
DISTRIBUTIONS TO SHAREHOLDERS:
Net Investment Income
Institutional Class ....................... (3,382) (6,917) (487) (814) (185) (406)
Consumer Service Class .................... (196) (525) (269) (600) (21) (44)
--------- --------- --------- --------- --------- ---------
Total Distributions .................... (3,578) (7,442) (756) (1,414) (206) (450)
--------- --------- --------- --------- --------- ---------
CAPITAL SHARE TRANSACTIONS:
Institutional Class
Proceeds from Shares Issued ............... 13,333 35,702 1,976 7,804 5,745 11,272
Reinvestment of Cash Distributions ........ -- 1 -- 2 -- --
Cost of Shares Redeemed ................... (14,009) (43,010) (1,222) (3,942) (7,401) (11,896)
--------- --------- --------- --------- --------- ---------
Increase (Decrease) in Net Assets
from Institutional Class Transactions ... (676) (7,307) 754 3,864 (1,656) (624)
--------- --------- --------- --------- --------- ---------
Consumer Service Class
Proceeds from Shares Issued ............... 166 337 901 1,787 978 811
Reinvestment of Cash Distributions ........ 151 431 226 508 9 43
Cost of Shares Redeemed ................... (1,974) (3,393) (3,275) (2,940) (740) (1,274)
--------- --------- --------- --------- --------- ---------
Increase (Decrease) in Net Assets
from Consumer Service Class
Transactions ............................ (1,657) (2,625) (2,148) (645) 247 (420)
--------- --------- --------- --------- --------- ---------
Increase (Decrease) in Net Assets Derived
from Capital Share Transactions ........... (2,333) (9,932) (1,394) 3,219 (1,409) (1,044)
--------- --------- --------- --------- --------- ---------
Net Increase (Decrease) in Net Assets ..... (5,460) (2,911) (2,200) 5,575 4,274 11,945
--------- --------- --------- --------- --------- ---------
NET ASSETS:
Beginning of Period ......................... 122,256 125,167 33,319 27,744 59,159 47,214
--------- --------- --------- --------- --------- ---------
End of Period ............................... $ 116,796 $ 122,256 $ 31,119 $ 33,319 $ 63,433 $ 59,159
========= ========= ========= ========= ========= =========
SHARES ISSUED AND REDEEMED:
Institutional Class Shares:
Shares Issued
Shares Issued in Lieu of Cash
Distributions ........................... 1,313 3,547 184 742 373 879
Shares Redeemed ........................... -- -- -- -- -- --
(1,378) (4,297) (114) (377) (480) (914)
--------- --------- --------- -------- --------- ---------
Net Increase (Decrease) Institutional
Class Share Transactions ................ (65) (750) 70 365 (107) (35)
--------- --------- --------- -------- --------- ---------
Consumer Service Class Shares:
Shares Issued ............................. 18 34 84 174 64 62
Shares Issued in Lieu of Cash Distributions 14 43 21 48 1 4
Shares Redeemed ........................... (195) (339) (307) (281) (48) (102)
--------- --------- --------- -------- --------- ---------
Net Increase (Decrease) Consumer
Service Class Share Transactions ........ (163) (262) (202) (59) 17 (36)
--------- --------- --------- -------- --------- ---------
Net Increase (Decrease) in Share Transactions (228) (1,012) (132) 306 (90) (71)
========= ========= ========= ========= ========= =========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
17
<PAGE>
FOR THE SIX-MONTH PERIOD ENDED MAY 31, 1996 (UNAUDITED) AND THE PERIODS ENDED
NOVEMBER 30,
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
<TABLE>
<CAPTION>
NET REALIZED AND
ASSET UNREALIZED DIVIDENDS DISTRIBUTIONS NET
VALUE NET GAINS FROM NET FROM ASSET VALUE
BEGINNING INVESTMENT (LOSSES) INVESTMENT CAPITAL END TOTAL
OF PERIOD INCOME ON SECURITIES INCOME GAINS OF PERIOD RETURN(2)
--------- ---------- ------------- ---------- ------------- ----------- ---------
- ---------------------
FMB MONEY MARKET FUND
- ---------------------
<S> <C> <C> <C> <C> <C> <C> <C>
INSTITUTIONAL CLASS
1996** $ 1.00 $0.02 -- $(0.02) -- $ 1.00 2.41%*
1995 $ 1.00 0.05 -- (0.05) -- $ 1.00 5.28%
1994 $ 1.00 0.04 -- (0.04) -- $ 1.00 3.51%
1993 $ 1.00 0.03 -- (0.03) -- $ 1.00 2.97%
1992 (1) $ 1.00 0.04 -- (0.04) -- $ 1.00 3.78%
CONSUMER SERVICE CLASS
1996** $ 1.00 $0.02 -- $(0.02) -- $ 1.00 2.36%*
1995 $ 1.00 0.05 -- (0.05) -- $ 1.00 5.28%
1994 $ 1.00 0.04 -- (0.04) -- $ 1.00 3.51%
1993 $ 1.00 0.03 -- (0.03) -- $ 1.00 2.97%
1992 (1) $ 1.00 0.04 -- (0.04) -- $ 1.00 3.67%
- ---------------------------------------
FMB INTERMEDIATE GOVERNMENT INCOME FUND
- ---------------------------------------
INSTITUTIONAL CLASS
1996** $10.24 $0.30 $(0.27) $(0.30) -- $ 9.97 0.30%*
1995 $ 9.66 0.61 0.58 (0.61) -- $10.24 12.64%
1994 $10.46 0.57 (0.80) (0.57) -- $ 9.66 (2.23%)
1993 $10.10 0.59 0.36 (0.59) -- $10.46 9.60%
1992 (1) $10.00 0.60 0.10 (0.60) -- $10.10 7.10%
CONSUMER SERVICE CLASS
1996** $10.24 $0.30 $(0.27) $(0.30) -- $ 9.97 0.26%*
1995 $ 9.66 0.61 0.58 (0.61) -- $10.24 12.64%
1994 $10.46 0.57 (0.80) (0.57) -- $ 9.66 (2.23%)
1993 $10.10 0.59 0.36 (0.59) -- $10.46 9.60%
1992 (1) $10.00 0.58 0.10 (0.58) -- $10.10 6.95%
<FN>
* RETURNS ARE FOR THE PERIOD INDICATED AND HAVE NOT BEEN ANNUALIZED.
** RATIOS FOR THE SIX-MONTH PERIOD ENDED MAY 31, 1996 HAVE BEEN ANNUALIZED.
(DAGGER)AVERAGE COMMISSION RATE PAID PER SHARE OF SECURITY PURCHASES AND SALES
DURING THE PERIOD. PRESENTATION OF THE RATE IS ONLY REQUIRED FOR FISCAL
YEARS BEGINNING AFTER SEPTEMBER 1, 1995.
(1) THE FMB MONEY MARKET, FMB INTERMEDIATE GOVERNMENT INCOME, FMB MICHIGAN
TAX-FREE AND FMB DIVERSIFIED EQUITY FUNDS COMMENCED OPERATIONS
DECEMBER 2, 1991. RATIOS FOR THIS PERIOD HAVE BEEN ANNUALIZED.
(2) TOTAL RETURN DOES NOT REFLECT APPLICABLE SALES CHARGE.
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
</FN>
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
18
<PAGE>
FMB (LOGO)
FMB Funds, Inc.
[GRAPHIC OMITTED]
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATIO RATIO OF
NET RATIO OF EXPENSES NET INCOME
ASSETS RATIO OF NET TO AVERAGE TO AVERAGE
END OF EXPENSES INCOME NET ASSETS NET ASSETS AVERAGE
OF PERIOD TO AVERAGE TO AVERAGE (EXCLUDING (EXCLUDING PORTFOLIO COMISSIONS
(000) NET ASSETS NET ASSETS WAIVERS) WAIVERS) TURNOVER RATE(DAGGER)
--------- ----------- ---------- ---------- ---------- --------- ------------
- ---------------------
FMB MONEY MARKET FUND
- ---------------------
<S> <C> <C> <C> <C> <C> <C> <C>
INSTITUTIONAL CLASS
1996** $ 95,273 0.70% 4.81% 0.70% 4.81% n/a n/a
1995 $ 87,238 0.65% 5.16% 0.65% 5.16% n/a n/a
1994 $103,301 0.68% 3.46% 0.70% 3.44% n/a n/a
1993 $ 65,448 0.32% 2.91% 0.68% 2.55% n/a n/a
1992 (1) $ 58,596 0.27% 3.59% 0.91% 2.95% n/a n/a
CONSUMER SERVICE CLASS
1996** $ 22,353 0.79% 4.72% 0.94% 4.57% n/a n/a
1995 $ 17,489 0.65% 5.16% 0.65% 5.16% n/a n/a
1994 $ 7,154 0.68% 3.46% 0.70% 3.44% n/a n/a
1993 $ 1,485 0.32% 2.91% 0.68% 2.55% n/a n/a
1992 (1) $ 208 0.39% 3.46% 1.03% 2.82% n/a n/a
- ---------------------------------------
FMB INTERMEDIATE GOVERNMENT INCOME FUND
- ---------------------------------------
INSTITUTIONAL CLASS
1996** $111,012 0.79% 6.04% 0.79% 6.04% 8% n/a
1995 $114,646 0.78% 6.09% 0.78% 6.09% 27% n/a
1994 $115,449 0.83% 6.45% 0.85% 6.43% 20% n/a
1993 $105,820 0.50% 5.66% 0.78% 5.38% 17% n/a
1992 (1) $ 81,371 0.43% 5.85% 0.90% 5.38% 29% n/a
CONSUMER SERVICE CLASS
1996** $ 5,784 0.87% 5.96% 1.12% 5.71% 8% n/a
1995 $ 7,610 0.78% 6.09% 0.78% 6.09% 27% n/a
1994 $ 9,718 0.83% 6.45% 0.85% 6.43% 20% n/a
1993 $ 10,872 0.50% 5.66% 0.78% 5.38% 17% n/a
1992 (1) $ 5,440 0.61% 5.67% 1.08% 5.20% 29% n/a
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
19
<PAGE>
FOR THE SIX-MONTH PERIOD ENDED MAY 31, 1996 (UNAUDITED) AND THE PERIODS ENDED
NOVEMBER 30,
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
<TABLE>
<CAPTION>
NET REALIZED AND
ASSET UNREALIZED DIVIDENDS DISTRIBUTIONS NET
VALUE NET GAINS FROM NET FROM ASSET VALUE
BEGINNING INVESTMENT (LOSSES) INVESTMENT CAPITAL END TOTAL
OF PERIOD INCOME ON SECURITIES INCOME GAINS OF PERIOD RETURN(2)
--------- ---------- ------------- ---------- ------------- ----------- ---------
- -------------------------------
FMB MICHIGAN TAX-FREE BOND FUND
- -------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
INSTITUTIONAL CLASS
1996** $10.79 $0.21 $(0.27) $(0.21) -- $10.52 (0.23%)*
1995 $ 9.97 0.49 0.82 (0.49) -- $10.79 13.21%
1994 $10.61 0.47 (0.63) (0.47) $(0.01) $ 9.97 (1.49%)
1993 $10.24 0.49 0.37 (0.49) -- $10.61 8.53%
1992 (1) $10.00 0.48 0.24 (0.48) -- $10.24 7.29%
CONSUMER SERVICE CLASS
1996** $10.79 $0.20 $(0.27) $(0.20) -- $10.52 (0.28%)*
1995 $ 9.97 0.49 0.82 (0.49) -- $10.79 13.21%
1994 $10.61 0.47 (0.63) (0.47) $(0.01) $ 9.97 (1.49%)
1993 $10.24 0.49 0.37 (0.49) -- $10.61 8.53%
1992 (1) $10.00 0.46 0.24 (0.46) -- $10.24 7.17%
- ---------------------------
FMB DIVERSIFIED EQUITY FUND
- ---------------------------
INSTITUTIONAL CLASS
1996** $11.44 $0.05 $4.55 $(0.05) -- $15.99 10.05%*
1995 $11.44 0.12 3.13 (0.11) -- $14.58 28.54%
1994 $11.37 0.07 0.08 (0.08) -- $11.44 1.34%
1993 $11.61 0.09 (0.25) (0.08) -- $11.37 (1.40%)
1992 (1) $10.00 0.12 1.60 (0.11) -- $11.61 17.31%
CONSUMER SERVICE CLASS
1996** $11.44 $0.05 $4.55 $(0.05) -- $15.99 9.98%*
1995 $11.44 0.12 3.13 (0.11) -- $14.58 28.54%
1994 $11.37 0.07 0.08 (0.08) -- $11.44 1.34%
1993 $11.61 0.09 (0.25) (0.08) -- $11.37 (1.40%)
1992 (1) $10.00 0.10 1.60 (0.09) -- $11.61 17.16%
<FN>
* RETURNS ARE FOR THE PERIOD INDICATED AND HAVE NOT BEEN ANNUALIZED.
** RATIOS FOR THE SIX-MONTH PERIOD ENDED MAY 31, 1996 HAVE BEEN ANNUALIZED.
(DAGGER)AVERAGE COMMISSION RATE PAID PER SHARE OF SECURITY PURCHASES AND SALES
DURING THE PERIOD. PRESENTATION OF THE RATE IS ONLY REQUIRED FOR FISCAL
YEARS BEGINNING AFTER SEPTEMBER 1, 1995.
(1) THE FMB MONEY MARKET, FMB INTERMEDIATE GOVERNMENT INCOME, FMB MICHIGAN
TAX-FREE AND FMB DIVERSIFIED EQUITY FUNDS COMMENCED OPERATIONS
DECEMBER 2, 1991. RATIOS FOR THIS PERIOD HAVE BEEN ANNUALIZED.
(2) TOTAL RETURN DOES NOT REFLECT APPLICABLE SALES CHARGE.
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
</FN>
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
20
<PAGE>
FMB (LOGO)
FMB Funds, Inc.
[GRAPHIC OMITTED]
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATIO RATIO OF
NET RATIO OF EXPENSES NET INCOME
ASSETS RATIO OF NET TO AVERAGE TO AVERAGE
END OF EXPENSES INCOME NET ASSETS NET ASSETS AVERAGE
OF PERIOD TO AVERAGE TO AVERAGE (EXCLUDING (EXCLUDING PORTFOLIO COMISSIONS
(000) NET ASSETS NET ASSETS WAIVERS) WAIVERS) TURNOVER RATE(DAGGER)
--------- ----------- ---------- ---------- ---------- --------- ------------
- -------------------------------
FMB MICHIGAN TAX-FREE BOND FUND
- -------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
INSTITUTIONAL CLASS
1996** $20,934 0.72% 4.64% 1.06% 4.30% 5% n/a
1995 $20,700 0.70% 4.62% 1.18% 4.14% 35% n/a
1994 $15,495 0.51% 4.50% 1.19% 3.82% 22% n/a
1993 $11,779 0.35% 4.59% 1.38% 3.56% 13% n/a
1992 (1) $ 6,043 0.29% 4.68% 2.55% 2.42% 30% n/a
CONSUMER SERVICE CLASS
1996** $10,185 0.80% 4.56% 1.39% 3.97% 5% n/a
1995 $12,619 0.70% 4.62% 1.18% 4.14% 35% n/a
1994 $12,249 0.51% 4.50% 1.19% 3.82% 22% n/a
1993 $14,771 0.35% 4.59% 1.38% 3.56% 13% n/a
1992 (1) $ 4,572 0.46% 4.50% 2.72% 2.24% 30% n/a
- ---------------------------
FMB DIVERSIFIED EQUITY FUND
- ---------------------------
INSTITUTIONAL CLASS
1996** $56,773 1.45% 0.67% 1.45% 0.67% 7% 0.0800
1995 $53,325 1.50% 0.92% 1.50% 0.92% 20% n/a
1994 $42,229 1.61% 0.69% 1.61% 0.69% 49% n/a
1993 $38,979 1.50% 0.82% 1.53% 0.79% 22% n/a
1992 (1) $29,596 1.42% 1.12% 2.05% 0.49% 5% n/a
CONSUMER SERVICE CLASS
1996** $ 6,660 1.53% 0.59% 1.78% 0.34% 7% 0.0800
1995 $ 5,833 1.50% 0.92% 1.50% 0.92% 20% n/a
1994 $ 4,985 1.61% 0.69% 1.61% 0.69% 49% n/a
1993 $ 5,634 1.50% 0.82% 1.53% 0.79% 22% n/a
1992 (1) $ 3,377 1.64% 0.97% 2.29% 0.32% 5% n/a
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
21
<PAGE>
MAY 31, 1996
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
1. ORGANIZATION
FMB Funds, Inc. (the "Company"), established as a Maryland corporation on
September 20, 1991, is registered under the Investment Company Act of 1940, as
an open-ended management company. The Company currently consists of four
separate investment portfolios: FMB Money Market Fund, FMB Intermediate
Government Income Fund, FMB Michigan Tax-Free Bond Fund and FMB Diversified
Equity Fund (collectively, the "Funds"), each with two classes of shares known
as the Institutional Class and the Consumer Service Class. The assets of each
portfolio are segregated, and a shareholder's interest is limited to the
portfolio in which shares are held. The Fund's prospectus provides a description
of each Fund's investment objectives, policies and strategies.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the significant accounting policies followed by
the Funds:
SECURITY VALUATION -- Investment securities held by the FMB Money Market Fund
are stated at amortized cost which approximates market value. Under this
valuation method, purchase discounts and premiums are accreted and amortized
ratably to maturity and are included in interest income. Investment securities
of the FMB Intermediate Government Income Fund, FMB Michigan Tax-Free Bond Fund
and FMB Diversified Equity Fund which are listed on a securities exchange for
which market quotations are readily available, are valued at the last quoted
sales price on each business day. If there is no such reported sale, these
securities and unlisted securities for which market quotations are readily
available are valued at the most recently quoted mean price. Debt obligations
with sixty days or less remaining until maturity may be valued at their
amortized costs. Securities for which current market quotations are not readily
available are valued at fair value as determined in good faith by the Company's
Board of Directors and in accordance with procedures adopted by the Board of
Directors.
SECURITY TRANSACTIONS AND INVESTMENT INCOME -- Security transactions are
accounted for on the trade date of the security purchase or sale. Costs used in
determining net realized capital gains and losses on the sale of securities are
those of the specific securities sold, adjusted for the accretion and
amortization of purchase discounts or premiums during the respective holding
period, which is calculated using the effective interest method. Interest income
is recorded on the accrual basis. Dividend income is recorded on the ex-dividend
date.
FEDERAL INCOME TAXES -- It is each Fund's intention to qualify as a regulated
investment company and distribute all of its taxable income. Accordingly, no
provisions for Federal income taxes are required.
DIVIDENDS TO SHAREHOLDERS -- The FMB Money Market Fund, FMB Intermediate
Government Income Fund, and FMB Michigan Tax-Free Bond Fund each declares
dividends of substantially all of their net investment income daily and pays
those dividends monthly. The FMB Diversified Equity Fund declares and pays as a
dividend substantially all of its net investment income
- --------------------------------------------------------------------------------
22
<PAGE>
FMB (LOGO)
FMB Funds, Inc.
[GRAPHIC OMITTED]
- --------------------------------------------------------------------------------
quarterly. Each Fund will distribute, at least annually, substantially all net
capital gains, if any, earned by such Fund.
ORGANIZATIONAL COSTS -- Organizational costs have been capitalized by the Funds
and are being amortized over sixty months commencing with operations. In the
event any of the initial shares of the Funds are redeemed by any holder thereof
during the period that the Funds are amortizing organizational costs, the
redemption proceeds payable to the holder thereof by the Funds will be reduced
by the unamortized organizational costs in the same ratio as the number of
initial shares being redeemed bears to the number of initial shares outstanding
at the time of redemption.
NET ASSET VALUE PER SHARE -- The net asset value per share is calculated on each
business day separately for each fund. In general, it is computed by dividing
the assets of each fund, less its liabilities, by the number of outstanding
shares of the fund.
REPURCHASE AGREEMENTS -- Securities pledged as collateral for Repurchase
Agreements are held by each fund's custodian bank until maturity of the
Repurchase Agreements. Provisions of the Agreements and procedures adopted by
the Adviser ensure that the market value of the collateral, including accrued
interest thereon, is sufficient in the event of default by the counterparty. If
the counterparty defaults and the value of the collateral declines or if the
counterparty enters into insolvency proceedings, realization of collateral by
the fund may be delayed or limited.
EXPENSES -- Expenses that are directly related to one of the Funds are charged
directly to that Fund. Other operating expenses of the Company are prorated to
the Funds on the basis of relative net assets. Class specific expenses, such as
12b-1 fees, are borne by that class. Income, other expenses and accumulated
realized and unrealized gains and losses of a Fund are allocated to the
respective class on the basis of relative net asset value each day.
3. INVESTMENT ADVISORY AND CUSTODIAN AGREEMENTS
FMB-Trust, a wholly-owned subsidiary of First Michigan Bank Corporation, is the
Funds' Adviser. First Michigan Bank Corporation is the Funds' Sub-Adviser.
The sub-adviser is paid by the Adviser.
Pursuant to the Investment Advisory Agreement, the Adviser manages the
investments of the Funds and continuously reviews, supervises and administers
each Fund's investments. The Adviser is responsible for placing orders for the
purchase and sale of investment securities directly with brokers and dealers
selected at its discretion. The terms of the Investment Advisory Agreement
provide for annual fees at the following percentages of average daily net
assets.
For the FMB Money Market Fund:
0.35% of first $500 million in average net assets;
0.30% of next $500 million in average net assets; and 0.25% of average net
assets over $1 billion.
- --------------------------------------------------------------------------------
23
<PAGE>
MAY 31, 1996
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
For the FMB Intermediate Government Income Fund, FMB Michigan Tax-Free Bond
Fund, and FMB Diversified Equity Fund, 0.45%, 0.55%, and 1.00% of average daily
net assets, respectively.
The First National Bank of Chicago serves as custodian (the "Custodian") for the
Funds. Fees of the Custodian are paid on the basis of the net assets of the
Funds. The Custodian plays no role in determining the investment policies of the
Company or which securities are to be purchased or sold in the Funds.
4. ADMINISTRATION AND DISTRIBUTION AGREEMENTS
The Company and SEI Financial Management Corporation (the "Administrator" ) are
parties to an administration agreement (the "Administrative Agreement") dated
March 23, 1996. Under the terms of the Administrative Agreement the
Administrator is entitled to receive an annual fee of 0.20% on the daily average
net assets of the Funds. Such fee is computed daily and paid monthly.
Prior to March 22, 1996, Furman Selz LLP ("Furman Selz") acted as the Company's
Administrator for which it received an annual fee of 0.15% of average daily net
assets of each Fund. Furman Selz also provided fund accounting services to the
Funds. Each Fund paid $2,500 per month to Furman Selz for performing fund
accounting services.
The Company and SEI Financial Services Company (the "Distributor") are parties
to a Distribution Agreement dated March 23, 1996. The Company has adopted a
Distribution Plan (the "Plan") for those Funds offering Consumer Service shares.
The Plan provides for the payment by the Company to the Distributor of up to
0.25% for the FMB Money Market and up to 0.35% for the FMB Intermediate
Government Income, FMB Michigan Tax-Free Bond and FMB Diversified Equity Funds
per annum of each Fund's Consumer Service Class average daily net assets for
costs and expenses of the Distributor in connection with the distribution of
Fund shares of the Consumer Service Classes. Prior to March 23, 1996, Macatawa
Distributor, Inc., a wholly-owned subsidiary of Furman Selz, served as the Funds
Distributor. The Fund's paid approximately $14,000 to affiliated brokers for
commissions earned on the sales of the Funds.
Certain officers of the Company are also officers of the Administrator and/or
the Distributor. Such officers are paid no fees by the Funds.
5. OTHER TRANSACTIONS WITH AFFILIATES
The Company and SEI Financial Management Corporation ("SFM") are parties to a
transfer agency and service agreement dated March 23, 1996 under which SFM
provides transfer agency services to the Company. Prior to March 22, 1996,
Furman Selz acted as the Transfer Agent of the Company.
- --------------------------------------------------------------------------------
24
<PAGE>
FMB (LOGO)
FMB Funds, Inc.
[GRAPHIC OMITTED]
- --------------------------------------------------------------------------------
6. CONCENTRATION OF CREDIT RISK
The FMB Michigan Tax-Free Bond Fund invests substantially all of its assets in a
portfolio of debt obligations issued by the State of Michigan and its
authorities and agencies. The issuers' abilities to meet their obligations may
be affected by economic or political developments in the State of Michigan.
The rating of long-term debt as a percentage
of total value of investments for the FMB Intermediate Government Bond and FMB
Michigan Tax-Free Bond Funds at May 31, 1996, were as follows:
FMB FMB
INTERMEDIATE MICHIGAN
GOVERNMENT TAX-FREE
INCOME BOND
FUND FUND
-------------- -------------
STANDARD & POORS RATINGS
AAA 100% 42%
AA+ -- 2%
AA -- 25%
AA- -- 7%
A -- 5%
A- -- 2%
Not Rated -- 17%
---- ----
100% 100%
7. FEDERAL INCOME TAX STATUS
At November 30, 1995, the FMB Money Market Fund had capital loss carryforwards
of $88,000 available through the year 2003 to offset future realized capital
gains.
At November 30, 1995, FMB Intermediate Government Income Fund had capital loss
carryforwards of $1,796,589 available through the year 2003 to offset future
realized capital gains. To reflect reclassifications arising from permanent
book/tax differences for the year ended November 30, 1995, distributions in
excess of net investment income were credited $100,533 and additional
paid-in-capital was charged $100,533.
Capital losses incurred after October 31, 1995, within the fiscal year ended
November 30, 1995, are deemed to arise on the first business day of the
following fiscal year. The FMB Intermediate Government Income Fund incurred and
elected to defer post October capital losses of $4,836.
At November 30, 1995, FMB Michigan Tax-Free Bond Fund had capital loss
carryforwards of $114,710 available through the year 2003 to offset realized
capital gains.
During the fiscal year ended November 30, 1995, the FMB Diversified Equity Fund
utilized $538,807 of capital loss carryforwards. The Fund has remaining capital
loss carryforwards of $230,696 available through the year 2003 to offset future
realized capital gains.
- --------------------------------------------------------------------------------
25
<PAGE>
MAY 31, 1996
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
8. INVESTMENT TRANSACTIONS
During the six-month period ended May 31, 1996, the cost of
security purchases and proceeds from sales of securities, other than temporary
investments in short-term securities, were as follows:
PURCHASES
U.S.
GOVERNMENT OTHER TOTAL
---------- ---------- ----------
FMB Intermediate
Government Income Fund ..... $7,204 $-- $7,204
FMB Michigan Tax-Free
Bond Fund .................. -- 2,425 2,425
FMB Diversified Equity Fund... -- 6,100 6,100
SALES
U.S.
GOVERNMENT OTHER TOTAL
---------- ---------- ----------
FMB Intermediate
Government Income Fund ..... $17,159 $-- $17,159
FMB Michigan Tax-Free
Bond Fund .................. -- 1,361 1,361
FMB Diversified Equity Fund... -- 3,512 3,512
At May 31, 1996, the total cost of securities and the net realized gains or
losses on securities sold for Federal income tax purposes was not materially
different from amounts reported for financial purposes. The aggregate gross
unrealized appreciation and depreciation for securities held at May 31, 1996,
for each Fund were as follows:
AGGREGATE AGGREGATE
GROSS GROSS
APPRECIATION DEPRECIATION NET
------------ ------------ ----------
AGGREGATE GROSS UNREALIZED
GAIN (LOSS) (000)
FMB Intermediate
Government Income Fund ..... $ 845 $ (1,347) $ (502)
FMB Michigan Tax-Free
Bond Fund .................. 610 (92) 518
FMB Diversified Equity Fund... 18,464 (107) 18,357
- --------------------------------------------------------------------------------
26
<PAGE>
NOTES
<PAGE>
NOTES
<PAGE>
FMB (LOGO)
FMB Funds, Inc.
[GRAPHIC OMITTED]
- --------------------------------------------------------------------------------
BOARD OF DIRECTORS
Michael R. Mucciolo*
Chairman of the Board
Senior Vice President and Chief Financial Officer,
Brooks Beverage Management, Inc.
Valerie T. Ambrose
Corporate Director of Community Out Reach
Holland Community Hospital
William K. Anderson*
Vice President for Business & Finance
and Treasurer, Hope College
Timothy C. Morawski
General Manager, Board of Public Works,
City of Holland, MI
*Member of Audit Committee
OFFICERS
David G. Lee
President & Chief Executive Officer
Stephen G. Meyer
Controller, Treasurer & Chief Financial Officer
Todd Cipperman
Vice President & Assistant Secretary
Kathryn L. Stanton
Vice President & Assistant Secretary
Kevin P. Robbins
Vice President & Assistant Secretary
Sandra K. Orlow
Vice President & Assistant Secretary
Joseph M. Lydon
Vice President & Assistant Secretary
Amy Reese
Assistant Secretary
<PAGE>
FMB (LOGO)
FMB Funds, Inc.
[GRAPHIC OMITTED]
- --------------------------------------------------------------------------------
SEMI-ANNUAL REPORT (Unaudited)
MAY 31, 1996
FMB FUNDS, INC.
P.O. Box 8526
Boston, MA 02266-8526
(800) 453-4234
INVESTMENT ADVISER
FMB--Trust
One Financial Plaza
Holland, MI 49423
INVESTMENT SUB-ADVISER
First Michigan Bank Corporation
One Financial Plaza
Holland, MI 49423
DISTRIBUTOR
SEI Financial Services Corporation
680 East Swedesford Road
Wayne, PA 19087-1658
ADMINISTRATOR
SEI Financial Management Corporation
680 East Swedesford Road
Wayne, PA 19087-1658
CUSTODIAN
First National Bank of Chicago
One First National Plaza
Chicago, IL 60670
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
30 South Seventeenth Street
Philadelphia, PA 19103
LEGAL COUNSEL
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, NY 10017
This report is for the information of the shareholders of the FMB Funds, Inc.
Its use in connection with any offering of the Funds' shares is authorized only
in case of a concurrent or prior delivery of the Funds' current prospectus.
- --------------------------------------------------------------------------------
