PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the Semi-Annual Shareholder's Report of the First
Priority Funds for the six-month period ended May 31, 1995. This report provides
you with financial information for each of the funds, including investment
reviews by the portfolio managers, a list of investments for each fund, and the
financial statements.
Over the six-month reporting period, assets in the First Priority Funds grew to
more than $496 million. Of special note is an increase in assets of $20 million
in the First Priority Treasury Money Market Fund, and $13 million of new assets
in the First Priority Limited Maturity Government Fund.
Thank you for your confidence in the First Priority Funds as a way to take
advantage of the various financial markets. We will continue to keep you
informed on your investment, and will remain committed to delivering the highest
level of personal service.
Sincerely,
Edward C. Gonzales
President
July 15, 1995
FIRST PRIORITY TREASURY MONEY MARKET FUND
FINANCIAL HIGHLIGHTS--TRUST SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED NOVEMBER 30,
MAY 31, 1995 ------------------------------
(UNAUDITED) 1994 1993 1992(A)
---------------- ----- ----- --------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $1.00 $1.00 $ 1.00
- -----------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- -----------------------------------------
Net investment income 0.03 0.04 0.03 0.02
- ----------------------------------------- ---------- ----- ----- ------
LESS DISTRIBUTIONS
- -----------------------------------------
Distributions from net investment
income (0.03) (0.04) (0.03) (0.02)
- ----------------------------------------- ---------- ----- ----- ------
NET ASSET VALUE, END OF PERIOD $ 1.00 $1.00 $1.00 $ 1.00
- ----------------------------------------- ---------- ----- ----- ------
TOTAL RETURN (B) 2.73% 3.59% 2.75% 2.06%
- -----------------------------------------
RATIOS TO AVERAGE NET ASSETS
- -----------------------------------------
Expenses 0.34%(c) 0.32% 0.38% 0.29%(c)
- -----------------------------------------
Net investment income 5.41%(c) 3.49% 2.72% 3.20%(c)
- -----------------------------------------
Expense waiver/reimbursement (d) 0.50%(c) 0.50% 0.46% 0.53%(c)
- -----------------------------------------
SUPPLEMENTAL DATA
- -----------------------------------------
Net assets, end of period (000 omitted) $104,726 $91,008 $88,510 $86,616
- -----------------------------------------
</TABLE>
(a) Reflects operations for the period from April 14, 1992 (date of initial
public investment) to November 30, 1992.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
FIRST PRIORITY TREASURY MONEY MARKET FUND
FINANCIAL HIGHLIGHTS--INVESTMENT SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED NOVEMBER 30,
MAY 31, 1995 ------------------------------
(UNAUDITED) 1994 1993 1992(A)
---------------- ----- ----- --------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $1.00 $1.00 $ 1.00
- -----------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- -----------------------------------------
Net investment income 0.03 0.03 0.02 0.01
- ----------------------------------------- ---------- ----- ----- ------
LESS DISTRIBUTIONS
- -----------------------------------------
Distributions from net investment
income (0.03) (0.03) (0.02) (0.01)
- ----------------------------------------- ---------- ----- ----- ------
NET ASSET VALUE, END OF PERIOD $ 1.00 $1.00 $1.00 $ 1.00
- ----------------------------------------- ---------- ----- ----- ------
TOTAL RETURN (B) 2.52% 3.18% 2.34% 1.83%
- -----------------------------------------
RATIOS TO AVERAGE NET ASSETS
- -----------------------------------------
Expenses 0.74%(c) 0.72% 0.78% 0.74%(c)
- -----------------------------------------
Net investment income 5.01%(c) 3.09% 2.33% 2.58%(c)
- -----------------------------------------
Expense waiver/reimbursement (d) 0.50%(c) 0.50% 0.46% 0.53%(c)
- -----------------------------------------
SUPPLEMENTAL DATA
- -----------------------------------------
Net assets, end of period (000 omitted) $22,701 $16,571 $23,795 $23,578
- -----------------------------------------
</TABLE>
(a) Reflects operations for the period from April 14, 1992 (date of initial
public investment) to November 30, 1992.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
FIRST PRIORITY LIMITED MATURITY GOVERNMENT FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
MAY 31, 1995 NOVEMBER 30,
(UNAUDITED) 1994(A)
---------------- ------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.60 $10.00
- ----------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ----------------------------------------------------
Net investment income 0.25 0.42
- ----------------------------------------------------
Net realized and unrealized gain(loss) on
investments 0.33 (0.40)
- ---------------------------------------------------- ---------- --------
Total from investment operations 0.58 0.02
- ----------------------------------------------------
LESS DISTRIBUTIONS
- ----------------------------------------------------
Distributions from net investment income (0.25) (0.42)
- ---------------------------------------------------- ---------- --------
NET ASSET VALUE, END OF PERIOD $ 9.93 $ 9.60
- ---------------------------------------------------- ---------- ---------
TOTAL RETURN (B) 6.09% 0.19%
- ----------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ----------------------------------------------------
Expenses 0.62%(c) 0.38%(c)
- ----------------------------------------------------
Net investment income 5.12%(c) 4.45%(c)
- ----------------------------------------------------
Expense waiver/reimbursement (d) 0.53%(c) 0.70%(c)
- ----------------------------------------------------
SUPPLEMENTAL DATA
- ----------------------------------------------------
Net assets, end of period (000 omitted) $61,505 $48,526
- ----------------------------------------------------
Portfolio turnover 12% 3%
- ----------------------------------------------------
</TABLE>
(a) Reflects operations for the period from December 13, 1993 (date of initial
public investment) to November 30, 1994.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
FIRST PRIORITY FIXED INCOME FUND
FINANCIAL HIGHLIGHTS*
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED NOVEMBER 30,
MAY 31, 1995 -----------------------------
(UNAUDITED) 1994 1993 1992(A)
------------- ------ ------ -------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.46 $10.67 $10.27 $ 9.90
- ---------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ---------------------------------------------------
Net investment income 0.27 0.51 0.48 0.37
- ---------------------------------------------------
Net realized and unrealized gain (loss) on
investments 0.67 (1.01) 0.50 0.37
- --------------------------------------------------- --------- ------ ------ -------
Total from investment operations 0.94 (0.50) 0.98 0.74
- ---------------------------------------------------
LESS DISTRIBUTIONS
- ---------------------------------------------------
Distributions from net investment income (0.27) (0.50) (0.48) (0.37 )
- ---------------------------------------------------
Distributions from net realized gain on
investment transactions -- (0.20) (0.10) --
- ---------------------------------------------------
Distributions in excess of net realized gain on
investments -- (0.01)(b) -- --
- --------------------------------------------------- --------- ------ ------ -------
Total distributions (0.27) (0.71) (0.58) (0.37 )
- --------------------------------------------------- --------- ------ ------ -------
NET ASSET VALUE, END OF PERIOD $ 10.13 $ 9.46 $10.67 $10.27
- --------------------------------------------------- --------- ------ ------ -------
TOTAL RETURN (C) 10.11% (4.83%) 9.81% 7.48 %
- ---------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ---------------------------------------------------
Expenses 1.09%(d) 1.09% 1.14% 1.07 %(d)
- ---------------------------------------------------
Net investment income 5.91%(d) 5.14% 4.40% 5.33 %(d)
- ---------------------------------------------------
Expense waiver/reimbursement(e) 0.01%(d) 0.25% 0.25% 0.29 %(d)
- ---------------------------------------------------
SUPPLEMENTAL DATA
- ---------------------------------------------------
Net assets, end of period (000 omitted) $163,846 $9,645 $12,519 $5,457
- ---------------------------------------------------
Portfolio turnover 17% 24% 83% 44 %
- ---------------------------------------------------
</TABLE>
* Prior to February 1, 1995 the Fund offered two classes of shares: Investment
Shares and Trust Shares. Beginning February 1, 1995, the Fund no longer offers
Trust Shares.
(a) Reflects operations for the period from April 20, 1992 (date of initial
public investment) to November 30, 1992.
(b) Distributions are determined in accordance with income tax regulations which
may differ from generally accepted accounting principles. These
distributions do not represent a return of capital for federal income tax
purposes.
(c) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(d) Computed on an annualized basis.
(e) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
FIRST PRIORITY EQUITY FUND
FINANCIAL HIGHLIGHTS*
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
MAY 31, YEAR ENDED NOVEMBER 30,
1995 -----------------------------
(UNAUDITED) 1994 1993 1992(A)
----------- ------ ------ -------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.36 $10.51 $10.66 $ 9.86
- ------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ------------------------------------------------------
Net investment income 0.54 0.21 0.16 0.10
- ------------------------------------------------------
Net realized and unrealized gain (loss) on
investments 0.50 (0.09) (0.04) 0.79
- ------------------------------------------------------ -------- ------ ------ -------
Total from investment operations 1.04 0.12 0.12 0.89
- ------------------------------------------------------
LESS DISTRIBUTIONS
- ------------------------------------------------------
Distributions from net investment income (0.13) (0.20) (0.15) (0.09 )
- ------------------------------------------------------
Distributions from net realized gain on investment
transactions (0.33) (0.07) (0.12) 0.00
- ------------------------------------------------------ -------- ------ ------ -------
Total distributions (0.46) (0.27) (0.27) (0.09 )
- ------------------------------------------------------ -------- ------ ------ -------
NET ASSET VALUE, END OF PERIOD $ 10.94 $10.36 $10.51 $10.66
- ------------------------------------------------------ -------- ------ ------ -------
TOTAL RETURN (B) 10.51% 1.11% 1.13% 9.14 %
- ------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ------------------------------------------------------
Expenses 1.05%(c) 1.09% 1.14% 1.07 %(c)
- ------------------------------------------------------
Net investment income 2.09%(c) 2.02% 1.59% 1.85 %(c)
- ------------------------------------------------------
Expense waiver/reimbursement (d) 0.06%(c) 0.30% 0.30% 0.35 %(c)
- ------------------------------------------------------
SUPPLEMENTAL DATA
- ------------------------------------------------------
Net assets, end of period (000 omitted) $145,006 $6,131 $7,004 $3,132
- ------------------------------------------------------
Portfolio turnover 47% 66% 74% 30 %
- ------------------------------------------------------
</TABLE>
* Prior to February 1, 1995 the Fund offered two classes of shares: Investment
Shares and Trust Shares. Beginning February 1, 1995, the Fund no longer offers
Trust Shares.
(a) Reflects operations for the period from April 20, 1992 (date of initial
public investment) to November 30, 1992.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
FIRST PRIORITY TREASURY MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
MAY 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
OR SHARES VALUE
- ------------ ---------------------------------------------------------------- ------------
<C> <C> <S> <C>
U.S. TREASURY OBLIGATIONS--93.2%
- -------------------------------------------------------------------------------------
U.S. TREASURY NOTES--4.7%
----------------------------------------------------------------
$ 6,000,000 4.25%-8.625%, 7/31/1995-10/15/1995 $ 6,023,667
----------------------------------------------------------------
U.S. TREASURY BILLS--88.5%
----------------------------------------------------------------
114,000,000 6/8/1995-10/26/1995 112,792,167
---------------------------------------------------------------- ------------
TOTAL U.S. TREASURY OBLIGATIONS, AT AMORTIZED COST 118,815,834
---------------------------------------------------------------- ------------
MUTUAL FUND SHARES--7.0%
- -------------------------------------------------------------------------------------
4,252,434 Dreyfus Treasury Cash Management Portfolio 4,252,434
----------------------------------------------------------------
472,699 Franklin Funds Institutional Portfolio 472,699
----------------------------------------------------------------
4,239,442 Goldman Sachs I.L.A. Treasury Portfolio 4,239,442
---------------------------------------------------------------- ------------
TOTAL MUTUAL FUND SHARES (AT NET ASSET VALUE) 8,964,575
---------------------------------------------------------------- ------------
TOTAL INVESTMENTS, AT AMORTIZED COST AND VALUE $127,780,409+
---------------------------------------------------------------- ------------
</TABLE>
+ Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($127,427,052) at May 31, 1995.
(See Notes which are an integral part of the Financial Statements)
FIRST PRIORITY LIMITED MATURITY GOVERNMENT FUND
PORTFOLIO OF INVESTMENTS
MAY 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- ---------------------------------------------------------------- -----------
<C> <C> <S> <C>
CORPORATE BONDS--16.4%
- -----------------------------------------------------------------------------------
BASIC INDUSTRY--0.8%
----------------------------------------------------------------
$ 500,000 WMX Technologies, 4.875%, 6/15/1996 $ 493,840
---------------------------------------------------------------- -----------
BANKING--0.8%
----------------------------------------------------------------
500,000 BankAmerica Corporation, 7.375%, 5/12/2005 502,345
---------------------------------------------------------------- -----------
BEVERAGES--1.7%
----------------------------------------------------------------
500,000 Pepsico, Inc., 6.8%, 5/15/2000 508,715
----------------------------------------------------------------
500,000 Pepsico, Inc., 7.48%, 4/27/2002 518,435
---------------------------------------------------------------- -----------
Total 1,027,150
---------------------------------------------------------------- -----------
FINANCE-AUTOMOTIVE--1.6%
----------------------------------------------------------------
500,000 Ford Motor Credit Corporation, 5.15%, 3/15/1996 497,085
----------------------------------------------------------------
500,000 Ford Motor Credit Corporation, 5.625%, 1/15/1999 485,980
---------------------------------------------------------------- -----------
Total 983,065
---------------------------------------------------------------- -----------
FINANCE-COMMERCIAL--2.5%
----------------------------------------------------------------
500,000 American Express Credit Corporation, 6.75, 6/1/2001 503,365
----------------------------------------------------------------
500,000 Associates Corp. of North America, 4.50%, 2/15/1996 494,520
----------------------------------------------------------------
500,000 Norwest Corporation, 7.68, 5/10/2002 516,570
---------------------------------------------------------------- -----------
Total 1,514,455
---------------------------------------------------------------- -----------
NATURAL GAS--0.8%
----------------------------------------------------------------
500,000 Consolidated Natural Gas Co., 7.375, 4/1/2005 524,810
---------------------------------------------------------------- -----------
PHARMACEUTICAL--1.7%
----------------------------------------------------------------
500,000 SmithKline Beecham PLC, 5.25%, 1/26/1996 496,850
----------------------------------------------------------------
500,000 SmithKline Beecham Corp., 7.125%, 5/1/2002 520,445
---------------------------------------------------------------- -----------
Total 1,017,295
---------------------------------------------------------------- -----------
</TABLE>
FIRST PRIORITY LIMITED MATURITY GOVERNMENT FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- ---------------------------------------------------------------- -----------
<C> <C> <S> <C>
CORPORATE BONDS--CONTINUED
- -----------------------------------------------------------------------------------
RETAIL--1.6%
----------------------------------------------------------------
$ 500,000 Dayton Hudson Corp., 4.65%, 3/11/1996 $ 494,885
----------------------------------------------------------------
500,000 Wal Mart Stores, 6.75%, 5/15/2002 503,270
---------------------------------------------------------------- -----------
Total 998,155
---------------------------------------------------------------- -----------
SECURITIES--0.8%
----------------------------------------------------------------
500,000 Lehman Brothers Holdings, Inc., 4.94%, 6/23/1995 500,865
---------------------------------------------------------------- -----------
TELECOMMUNICATIONS--4.1%
----------------------------------------------------------------
500,000 AT&T Corp., 4.50%, 2/15/1996 494,585
----------------------------------------------------------------
1,000,000 AT&T Corp., 8.20%, 2/15/2005 1,066,830
----------------------------------------------------------------
1,000,000 Illinois Bell Telephone Co., 5.80%, 2/1/2004 941,580
---------------------------------------------------------------- -----------
Total 2,502,995
---------------------------------------------------------------- -----------
TOTAL CORPORATE BONDS (IDENTIFIED COST $9,995,262) 10,064,975
---------------------------------------------------------------- -----------
U.S. GOVERNMENT AGENCIES--16.9%
- -----------------------------------------------------------------------------------
500,000 Federal Farm Credit Bank, 6.25%, 7/15/1997 498,830
----------------------------------------------------------------
1,000,000 Federal Home Loan Bank, 6.16%, 1/21/2004 955,200
----------------------------------------------------------------
500,000 Federal Home Loan Bank, 6.83%, 6/08/1998 503,855
----------------------------------------------------------------
500,000 Federal Home Loan Bank, 7.87%, 2/24/1998 501,945
----------------------------------------------------------------
500,000 Federal Home Loan Bank, 8.31%, 2/24/2000 502,610
----------------------------------------------------------------
500,000 Federal Home Loan Bank, 8.42%, 3/01/2002 507,507
----------------------------------------------------------------
1,000,000 Federal Home Loan Mortgage Corp., 4.75%, 2/2/1999 960,770
----------------------------------------------------------------
1,000,000 Federal Home Loan Mortgage Corp., 6.27%, 1/27/2004 961,040
----------------------------------------------------------------
500,000 Federal Home Loan Mortgage Corp., 7.60%, 5/12/2005 507,740
----------------------------------------------------------------
1,000,000 Federal Home Loan Mortgage Corp., 8.28%, 3/15/2005 1,044,780
----------------------------------------------------------------
500,000 Federal National Mortgage Association, 5.12%, 1/22/1999 480,435
----------------------------------------------------------------
1,000,000 Federal National Mortgage Association, 6.28%, 2/3/2004 962,780
----------------------------------------------------------------
500,000 Federal National Mortgage Association, 6.40%, 1/13/2004 483,820
----------------------------------------------------------------
</TABLE>
FIRST PRIORITY LIMITED MATURITY GOVERNMENT FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- ---------------------------------------------------------------- -----------
<C> <C> <S> <C>
U.S. GOVERNMENT AGENCIES--CONTINUED
- -----------------------------------------------------------------------------------
$ 500,000 Federal National Mortgage Association, 7.30%, 4/17/2000 $ 511,625
----------------------------------------------------------------
500,000 Federal National Mortgage Association, 8.32%, 3/20/2005 521,150
----------------------------------------------------------------
500,000 Student Loan Marketing Association, 7.67%, 3/8/2000 510,580
---------------------------------------------------------------- -----------
TOTAL U.S. GOVERNMENT SECURITIES (IDENTIFIED COST $10,481,953) 10,414,667
---------------------------------------------------------------- -----------
U.S. TREASURY NOTES--52%
- -----------------------------------------------------------------------------------
1,000,000 4.125%, 6/30/1995 999,190
----------------------------------------------------------------
500,000 4.25%, 7/31/1995 498,865
----------------------------------------------------------------
1,500,000 4.625%, 8/15/1995 1,496,820
----------------------------------------------------------------
500,000 3.875%, 8/31/1995 497,705
----------------------------------------------------------------
500,000 3.875%, 9/30/1995 496,845
----------------------------------------------------------------
1,000,000 3.875%, 10/31/1995 992,300
----------------------------------------------------------------
500,000 5.125%, 11/15/1995 498,610
----------------------------------------------------------------
500,000 4.625%, 2/15/1996 496,050
----------------------------------------------------------------
1,000,000 5.125%, 3/31/1996 994,480
----------------------------------------------------------------
2,500,000 5.50%, 4/30/1996 2,492,750
----------------------------------------------------------------
1,000,000 4.25%, 5/15/1996 985,630
----------------------------------------------------------------
1,000,000 5.875%, 5/31/1996 1,000,420
----------------------------------------------------------------
1,000,000 6.00%, 6/30/1996 1,001,680
----------------------------------------------------------------
1,500,000 6.125%, 7/31/1996 1,504,515
----------------------------------------------------------------
1,000,000 4.375%, 8/15/1996 983,130
----------------------------------------------------------------
1,000,000 6.25%, 8/31/1996 1,004,510
----------------------------------------------------------------
1,500,000 6.50%, 9/30/1996 1,512,735
----------------------------------------------------------------
1,500,000 6.875%, 10/31/1996 1,520,955
----------------------------------------------------------------
1,500,000 4.375%, 11/15/1996 1,469,715
----------------------------------------------------------------
500,000 7.25%, 11/30/1996 509,835
----------------------------------------------------------------
500,000 7.50%, 12/31/1996 512,495
----------------------------------------------------------------
500,000 7.50%, 1/31/1997 512,930
----------------------------------------------------------------
1,000,000 6.50%, 8/15/1997 1,012,620
----------------------------------------------------------------
</TABLE>
FIRST PRIORITY LIMITED MATURITY GOVERNMENT FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
OR SHARES VALUE
- ----------- ---------------------------------------------------------------- -----------
<C> <C> <S> <C>
U.S. TREASURY NOTES--CONTINUED
- -----------------------------------------------------------------------------------
$ 2,000,000 7.375%, 11/15/1997 $ 2,066,120
----------------------------------------------------------------
500,000 7.25%, 2/15/1998 516,450
----------------------------------------------------------------
1,000,000 5.125%, 11/30/1998 972,630
----------------------------------------------------------------
1,500,000 5.125%, 12/31/1998 1,457,970
----------------------------------------------------------------
1,000,000 5.00%, 1/31/1999 967,150
----------------------------------------------------------------
1,000,000 6.87%, 3/31/2000 1,033,130
----------------------------------------------------------------
500,000 5.50%, 4/15/2000 488,950
----------------------------------------------------------------
500,000 6.75%, 4/30/2000 514,205
----------------------------------------------------------------
1,000,000 5.75%, 8/15/2003 965,860
---------------------------------------------------------------- -----------
TOTAL U.S. TREASURY NOTES (IDENTIFIED COST $31,957,187) 31,977,250
---------------------------------------------------------------- -----------
MUTUAL FUND SHARES--2.2%
- -----------------------------------------------------------------------------------
477,623 Franklin U.S. Treasury Money Market Portfolio 477,623
----------------------------------------------------------------
879,654 Goldman Sachs I.L.A. Treasury Portfolio 879,653
---------------------------------------------------------------- -----------
TOTAL MUTUAL FUND SHARES (AT NET ASSET VALUE) 1,357,276
---------------------------------------------------------------- -----------
*REPURCHASE AGREEMENT--13.4%
- -----------------------------------------------------------------------------------
$ 8,250,592 HSBC Securities, Inc., 6.05%, dated 5/31/95, due 6/1/95
(AT AMORTIZED COST) 8,250,592
---------------------------------------------------------------- -----------
TOTAL INVESTMENTS (IDENTIFIED COST $62,042,270) $62,064,760+
---------------------------------------------------------------- -----------
</TABLE>
* The repurchase agreement is fully collateralized by U.S. government and/or
agency obligations based on market prices at the date of the portfolio.
+ The cost of investments for federal tax purposes amounts to $62,042,270. The
unrealized appreciation of investments on a federal tax basis amounts to
$22,490 which is comprised of $553,745 appreciation and $531,255 depreciation
at May 31, 1995.
Note: The categories of investments are shown as a percentage of net assets
($61,505,178) at May 31, 1995.
(See Notes which are an integral part of the Financial Statements)
FIRST PRIORITY FIXED INCOME FUND
PORTFOLIO OF INVESTMENTS
MAY 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- --------------------------------------------------------------- ------------
<C> <C> <S> <C>
CORPORATE BONDS--13.5%
- ----------------------------------------------------------------------------------
CAPITAL GOODS-TECHNOLOGY--0.6%
---------------------------------------------------------------
$ 880,000 United Technologies Corp., 9.625%, 5/15/1999 $ 905,538
--------------------------------------------------------------- ------------
CONSUMER CYCLICAL--1.2%
---------------------------------------------------------------
AUTOMOTIVE
---------------------------------------------------------------
880,000 Ford Motor Co., Delaware, 8.875%, 4/1/2006 1,002,056
--------------------------------------------------------------- ------------
RETAIL--SPECIALTY
---------------------------------------------------------------
880,000 Limited, Inc., 9.125%, 2/1/2001 975,322
--------------------------------------------------------------- ------------
Total Consumer Cyclical 1,977,378
--------------------------------------------------------------- ------------
CONSUMER STAPLE--0.6%
---------------------------------------------------------------
TOBACCO
---------------------------------------------------------------
880,000 Philip Morris Cos., Inc., 9.00%, 1/1/2001 968,590
--------------------------------------------------------------- ------------
FINANCIAL--9.9%
---------------------------------------------------------------
FINANCE--AUTOMOTIVE
---------------------------------------------------------------
675,000 Ford Motor Credit Corporation, 6.35%, 2/11/1998 674,257
---------------------------------------------------------------
1,000,000 General Motors Acceptance Corporation, 7.75%, 1/15/1999 1,036,320
---------------------------------------------------------------
2,000,000 General Motors Acceptance Corporation, 8.00%, 10/1/1999 2,099,680
--------------------------------------------------------------- ------------
Total 3,810,257
--------------------------------------------------------------- ------------
FINANCE--EQUIPMENT
---------------------------------------------------------------
1,750,000 General Electric Capital Corp., 5.50%, 11/1/2001 1,650,425
--------------------------------------------------------------- ------------
INSURANCE
---------------------------------------------------------------
1,760,000 U.S. Life Corp., 6.75%, 1/15/1998 1,768,765
--------------------------------------------------------------- ------------
LEASING
---------------------------------------------------------------
3,500,000 International Lease Finance Corp., 4.75%, 7/15/1996 3,444,665
--------------------------------------------------------------- ------------
</TABLE>
FIRST PRIORITY FIXED INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- --------------------------------------------------------------- ------------
<C> <C> <S> <C>
CORPORATE BONDS--CONTINUED
- ----------------------------------------------------------------------------------
FINANCIAL--CONTINUED
---------------------------------------------------------------
SECURITIES
---------------------------------------------------------------
$ 2,000,000 Merrill Lynch & Co., Inc., 6.14% to 1/26/1996, 8.50%, 1/26/2000 $ 1,998,900
---------------------------------------------------------------
3,500,000 (a) Goldman, Sachs & Co., 7.80%, 7/15/2002 3,606,715
--------------------------------------------------------------- ------------
Total 5,605,615
--------------------------------------------------------------- ------------
Total Financial 16,279,727
--------------------------------------------------------------- ------------
UTILITIES--1.2%
---------------------------------------------------------------
880,000 Orange & Rockland Utilities, 9.375%, 3/15/2000 973,113
---------------------------------------------------------------
880,000 Virginia Electric & Power Co., 8.875%, 6/1/1999 951,157
--------------------------------------------------------------- ------------
Total 1,924,270
--------------------------------------------------------------- ------------
TOTAL CORPORATE BONDS (IDENTIFIED COST $21,770,926) 22,055,503
--------------------------------------------------------------- ------------
U.S. GOVERNMENT AGENCIES--41.8%
- ----------------------------------------------------------------------------------
FEDERAL HOME LOAN BANK--5.9%
---------------------------------------------------------------
3,000,000 5.00%, 12/28/1998 2,952,750
---------------------------------------------------------------
5,850,000 6.563%, 11/5/2003 5,707,435
---------------------------------------------------------------
1,000,000 *+ 6.50%, 6/7/1995 998,500
--------------------------------------------------------------- ------------
Total 9,658,685
--------------------------------------------------------------- ------------
FEDERAL HOME LOAN MORTGAGE CORP.--15.1%
---------------------------------------------------------------
3,000,000 7.00%, 11/19/1997 3,011,670
---------------------------------------------------------------
2,640,000 4.75%, 2/2/1999 2,536,433
---------------------------------------------------------------
1,695,000 8.335%, 3/14/2005 1,771,071
---------------------------------------------------------------
2,040,833 * PC, 1386C, 7.24% Floating Rate Note, 10/15/2007 2,054,180
---------------------------------------------------------------
314,131 * PC, 1414F, 7.29% Floating Rate Note, 11/15/2007 315,787
---------------------------------------------------------------
1,075,000 7.55%, 11/27/2007 1,085,782
---------------------------------------------------------------
6,189,728 * PC, 1544L, 7.28% Floating Rate Note, 7/15/2008 5,909,953
---------------------------------------------------------------
4,400,000 * PC, 1604FC, 6.51% Floating Rate Note, 11/15/2008 4,069,824
---------------------------------------------------------------
4,250,000 PC, 1403M, 6.50%, 12/15/2021 3,987,860
--------------------------------------------------------------- ------------
Total 24,742,560
--------------------------------------------------------------- ------------
</TABLE>
FIRST PRIORITY FIXED INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- --------------------------------------------------------------- ------------
<C> <C> <S> <C>
U.S. GOVERNMENT AGENCIES--CONTINUED
- ----------------------------------------------------------------------------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION--18.2%
---------------------------------------------------------------
$ 2,000,000 7.30%, 3/25/1998 $ 2,016,800
---------------------------------------------------------------
2,200,000 REMIC, 1993-G06/J, 7.00%, 12/25/1999 2,234,298
---------------------------------------------------------------
4,400,000 0%, 12/20/2001 3,971,440
---------------------------------------------------------------
1,750,000 0%, 3/9/2002 1,565,795
---------------------------------------------------------------
1,750,000 REMIC, 1992-G40/K, 7.00%, 6/25/2002 1,770,020
---------------------------------------------------------------
3,500,000 5.82%, 11/4/2003 3,293,605
---------------------------------------------------------------
1,250,000 REMIC, 1992-G34/EC, 8.25%, 7/25/2005 1,318,400
---------------------------------------------------------------
1,250,000 * REMIC, 1992-209/F, 7.51% Floating Rate Note, 11/25/2007 1,278,162
---------------------------------------------------------------
3,716,165 REMIC, 1993-G32/J, 6.75%, 5/25/2009 3,609,288
---------------------------------------------------------------
3,541,125 REMIC, 1994-10/KC, 6.50%, 10/25/2010 3,362,086
---------------------------------------------------------------
5,601,615 REMIC, 1993-202/PH, 6.50%, 2/25/2022 5,433,006
--------------------------------------------------------------- ------------
Total 29,852,900
--------------------------------------------------------------- ------------
TENNESSEE VALLEY AUTHORITY--2.6%
---------------------------------------------------------------
4,400,000 6.125%, 7/15/2003 4,243,536
--------------------------------------------------------------- ------------
TOTAL U.S. GOVERNMENT AGENCIES (IDENTIFIED COST $70,410,659) 68,497,681
--------------------------------------------------------------- ------------
U.S. TREASURY NOTES--43.4%
- ----------------------------------------------------------------------------------
6,800,000 STRIP, 11/15/1996 6,256,272
---------------------------------------------------------------
7,000,000 6.50%, 4/30/1997 7,081,340
---------------------------------------------------------------
2,250,000 5.125%, 3/31/1998 2,202,840
---------------------------------------------------------------
3,500,000 6.375%, 7/15/1999 3,543,120
---------------------------------------------------------------
7,000,000 5.50%, 4/15/2000 6,845,300
---------------------------------------------------------------
7,000,000 7.50%, 11/15/2001 7,496,650
---------------------------------------------------------------
7,000,000 7.50%, 5/15/2002 7,523,950
---------------------------------------------------------------
7,000,000 6.25%, 2/15/2003 6,995,730
---------------------------------------------------------------
</TABLE>
FIRST PRIORITY FIXED INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
OR SHARES VALUE
- ------------ -------------------------------------------------------------- ------------
<C> <C> <S> <C>
U.S. TREASURY NOTES--CONTINUED
- ----------------------------------------------------------------------------------
$ 7,000,000 5.75%, 8/15/2003 $ 6,761,020
--------------------------------------------------------------
7,000,000 6.50%, 5/15/2005 7,107,450
--------------------------------------------------------------
18,500,000 STRIP, 2/15/2006 9,286,630
-------------------------------------------------------------- ------------
TOTAL U.S. TREASURY NOTES (IDENTIFIED COST $71,548,964) 71,100,302
-------------------------------------------------------------- ------------
MUTUAL FUND SHARES--0.0%
- ----------------------------------------------------------------------------------
13,625 Fidelity U.S. Treasury Income Portfolio 13,625
--------------------------------------------------------------
16,407 Goldman Sachs I.L.A. Treasury Portfolio 16,407
-------------------------------------------------------------- ------------
TOTAL MUTUAL FUND SHARES (AT NET ASSET VALUE) 30,032
-------------------------------------------------------------- ------------
**REPURCHASE AGREEMENT--1.0%
- ----------------------------------------------------------------------------------
1,607,426 HSBC Securities, Inc., 6.05%, dated 5/31/1995, due 6/1/1995
(AT AMORTIZED COST) 1,607,426
-------------------------------------------------------------- ------------
TOTAL INVESTMENTS (IDENTIFIED COST $165,368,007) $163,290,944++
-------------------------------------------------------------- ------------
</TABLE>
(a) Restricted security--Investments in securities not registered under the
Securities Act of 1933. At the end of the period, this security amounted to
2.2% of net assets.
* Current rate shown.
** The repurchase agreement is fully collateralized by U.S. government and/or
agency obligations, based on market prices at the date of the portfolio.
+ Next reset date shown.
++ The cost of investments for federal tax purposes amounts to $165,368,007. The
net unrealized depreciation on a federal tax basis amounts to $2,077,063,
which is comprised of $1,562,222 appreciation and $3,639,285 depreciation at
May 31, 1995.
Note: The categories of investments are shown as a percentage of net assets
($163,846,418) at May 31, 1995.
The following abbreviations are used in this portfolio:
<TABLE>
<S> <C>
PC -- Participation Certificate
REMIC -- Real Estate Mortgage Investment Conduit
STRIP -- Separate Trading of Registered Interest and Principal
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FIRST PRIORITY EQUITY FUND
PORTFOLIO OF INVESTMENTS
MAY 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--88.3%
- -------------------------------------------------------------------------------------
BASIC INDUSTRIES--11.2%
------------------------------------------------------------------
AIR TRANSPORTATION
------------------------------------------------------------------
100,000 Atlantic Southeast Airlines, Inc. $ 2,412,500
------------------------------------------------------------------
100,000 Pittston Services Group 2,412,500
------------------------------------------------------------------ ------------
Total 4,825,000
------------------------------------------------------------------ ------------
CHEMICALS/PAPER
------------------------------------------------------------------
40,000 Dow Chemical Co. 2,935,000
------------------------------------------------------------------
40,000 International Paper Co. 3,145,000
------------------------------------------------------------------
60,000 Union Camp Corp. 3,112,500
------------------------------------------------------------------ ------------
Total 9,192,500
------------------------------------------------------------------ ------------
METALS & MINING
------------------------------------------------------------------
88,000 Barrick Gold Corp. 2,222,000
------------------------------------------------------------------ ------------
Total Basic Industries 16,239,500
------------------------------------------------------------------ ------------
CAPITAL GOODS--25.7%
------------------------------------------------------------------
ELECTRICAL
------------------------------------------------------------------
106,000 General Electric Co. 6,148,000
------------------------------------------------------------------ ------------
MACHINE/INDUSTRIAL
------------------------------------------------------------------
124,000 GATX Corp. 5,254,500
------------------------------------------------------------------ ------------
PHOTOGRAPHY
------------------------------------------------------------------
40,000 Eastman Kodak Co. 2,415,000
------------------------------------------------------------------ ------------
TECHNOLOGY
------------------------------------------------------------------
100,000 AMP, Inc. 4,262,500
------------------------------------------------------------------
30,000 BMC Software, Inc. 1,927,500
------------------------------------------------------------------
60,000 Boeing Co. 3,532,500
------------------------------------------------------------------
50,000 International Business Machines Corp. 4,662,500
------------------------------------------------------------------
100,000 Measurex Corp. 2,625,000
------------------------------------------------------------------
</TABLE>
FIRST PRIORITY EQUITY FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- -------------------------------------------------------------------------------------
CAPITAL GOODS--CONTINUED
------------------------------------------------------------------
TECHNOLOGY--CONTINUED
------------------------------------------------------------------
40,000 Microsoft Corp. $ 3,387,500
------------------------------------------------------------------
50,000 Minnesota Mining & Manufacturing Co. 2,993,750
------------------------------------------------------------------ ------------
Total 23,391,250
------------------------------------------------------------------ ------------
Total Capital Goods 37,208,750
------------------------------------------------------------------ ------------
CONSUMER CYCLICAL--6.4%
------------------------------------------------------------------
APPAREL
------------------------------------------------------------------
28,000 AnnTaylor Stores Corp. 584,500
------------------------------------------------------------------
100,000 Liz Claiborne 1,775,000
------------------------------------------------------------------
220,000 Stride Rite Corp. 2,475,000
------------------------------------------------------------------ ------------
Total 4,834,500
------------------------------------------------------------------ ------------
AUTOMOTIVE
------------------------------------------------------------------
30,000 General Motors Corp. 1,440,000
------------------------------------------------------------------ ------------
RETAIL-SPECIALTY
------------------------------------------------------------------
100,000 Family Dollar Stores, Inc. 1,187,500
------------------------------------------------------------------
160,000 Sports & Recreation, Inc. 1,840,000
------------------------------------------------------------------ ------------
Total 3,027,500
------------------------------------------------------------------ ------------
Total Consumer Cyclical 9,302,000
------------------------------------------------------------------ ------------
CONSUMER SERVICES--7.8%
------------------------------------------------------------------
BROADCASTING/ENTERTAINMENT
------------------------------------------------------------------
40,000 Capital Cities ABC 3,860,000
------------------------------------------------------------------ ------------
HOSPITAL MANAGEMENT
------------------------------------------------------------------
60,000 Bard (C.R.), Inc. 1,770,000
------------------------------------------------------------------ ------------
</TABLE>
FIRST PRIORITY EQUITY FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- -------------------------------------------------------------------------------------
CONSUMER SERVICES--CONTINUED
------------------------------------------------------------------
RETAIL-RESTAURANTS
------------------------------------------------------------------
194,000 International Dairy Queen, Class A $ 3,734,500
------------------------------------------------------------------
52,000 McDonald's Corp. 1,969,500
------------------------------------------------------------------ ------------
Total 5,704,000
------------------------------------------------------------------ ------------
Total Consumer Services 11,334,000
------------------------------------------------------------------ ------------
CONSUMER STAPLE--22.8%
------------------------------------------------------------------
FOOD & BEVERAGE
------------------------------------------------------------------
40,000 PepsiCo, Inc. 1,960,000
------------------------------------------------------------------
160,000 UST, Inc. 4,780,000
------------------------------------------------------------------ ------------
Total 6,740,000
------------------------------------------------------------------ ------------
HEALTH CARE
------------------------------------------------------------------
52,000 Bristol Myers Squibb Co. 3,451,500
------------------------------------------------------------------
140,000 Merck & Co., Inc. 6,597,500
------------------------------------------------------------------
60,000 Pfizer Corp. 5,287,500
------------------------------------------------------------------
36,000 Schering-Plough Corp. 2,835,000
------------------------------------------------------------------ ------------
Total 18,171,500
------------------------------------------------------------------ ------------
HOUSEHOLD PRODUCTS
------------------------------------------------------------------
30,000 Colgate-Palmolive Co. 2,310,000
------------------------------------------------------------------ ------------
TOBACCO
------------------------------------------------------------------
80,000 Philip Morris Cos., Inc. 5,830,000
------------------------------------------------------------------ ------------
Total Consumer Staple 33,051,500
------------------------------------------------------------------ ------------
ENERGY-OIL--3.4%
------------------------------------------------------------------
100,000 Chevron Corp. 4,912,500
------------------------------------------------------------------ ------------
</TABLE>
FIRST PRIORITY EQUITY FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- -------------------------------------------------------------------------------------
FINANCIAL--11.0%
------------------------------------------------------------------
BANKING
------------------------------------------------------------------
80,000 Keycorp $ 2,451,400
------------------------------------------------------------------
20,000 Wells Fargo & Co. 3,680,000
------------------------------------------------------------------ ------------
Total 6,131,400
------------------------------------------------------------------ ------------
INSURANCE
------------------------------------------------------------------
20,000 American International Group, Inc. 2,275,000
------------------------------------------------------------------
140,000 Liberty Corp. 3,622,500
------------------------------------------------------------------
15,700 Protective Life Corp. 780,176
------------------------------------------------------------------
80,000 Torchmark, Inc. 3,190,000
------------------------------------------------------------------ ------------
Total 9,867,676
------------------------------------------------------------------ ------------
Total Financial 15,999,076
------------------------------------------------------------------ ------------
TOTAL COMMON STOCKS (IDENTIFIED COST $116,263,888) 128,047,326
------------------------------------------------------------------ ------------
PREFERRED STOCKS--5.8%
- -------------------------------------------------------------------------------------
BASIC INDUSTRIES-METALS & MINING--1.1%
------------------------------------------------------------------
80,000 Freeport McMoran Copper & Gold, Series D 1,570,000
------------------------------------------------------------------ ------------
CAPITAL GOODS-MACHINE/INDUSTRIAL--1.8%
------------------------------------------------------------------
60,000 WHX Corp. 2,662,500
------------------------------------------------------------------ ------------
CONSUMER CYCLICAL-AUTOMOTIVE--2.9%
------------------------------------------------------------------
44,000 Ford Motor Co. 4,202,000
------------------------------------------------------------------ ------------
TOTAL PREFERRED STOCKS (IDENTIFIED COST $8,479,235) 8,434,500
------------------------------------------------------------------ ------------
</TABLE>
FIRST PRIORITY EQUITY FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT VALUE
- ---------- ---------------------------------------------------------------- ------------
<C> <C> <S> <C>
CORPORATE BONDS--3.2%
- ----------------------------------------------------------------------------------
CAPITAL GOODS-TECHNOLOGY--3.2%
----------------------------------------------------------------
$2,000,000 Seagate Technology, 5.00%, 11/1/2003 $ 2,897,000
----------------------------------------------------------------
1,500,000 Unisys Corp., 8.25%, 8/1/2000 1,698,750
---------------------------------------------------------------- ------------
TOTAL CORPORATE BONDS (IDENTIFIED COST $4,606,817) 4,595,750
---------------------------------------------------------------- ------------
MUTUAL FUND SHARES--2.4%
- ----------------------------------------------------------------------------------
910,670 Fidelity U.S. Treasury Income Portfolio 910,670
----------------------------------------------------------------
2,639,825 Goldman Sachs I.L.A. Treasury Portfolio 2,639,825
---------------------------------------------------------------- ------------
TOTAL MUTUAL FUND SHARES (AT NET ASSET VALUE) 3,550,495
---------------------------------------------------------------- ------------
*REPURCHASE AGREEMENT--0.4%
- ----------------------------------------------------------------------------------
634,000 HSBC Securities, Inc., 6.05%, dated 5/31/1995, due 6/1/1995
(AT AMORTIZED COST) 634,000
---------------------------------------------------------------- ------------
TOTAL INVESTMENTS (IDENTIFIED COST $133,534,435) $145,262,071+
---------------------------------------------------------------- ------------
</TABLE>
* The repurchase agreement is fully collateralized by U.S. government and/or
agency obligations based on market prices at the date of the portfolio.
+ The cost of investments for federal tax purposes amounts to $133,534,435. The
net unrealized appreciation of investments on a federal tax basis amounts to
$11,727,636, which is comprised of $16,065,000 appreciation and $4,337,364
depreciation at May 31, 1995.
Note: The categories of investments are shown as a percentage of net assets
($145,005,966) at May 31, 1995.
(See Notes which are an integral part of the Financial Statements)
FIRST PRIORITY FUNDS
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LIMITED
TREASURY MATURITY
MONEY GOVERNMENT FIXED INCOME
MARKET FUND FUND FUND EQUITY FUND
------------ ----------- ------------ ------------
<S> <C> <C> <C> <C>
ASSETS:
- -----------------------------------------------------
Investments in securities $127,780,409 $53,814,168 $163,290,944 $145,262,071
- -----------------------------------------------------
Investments in repurchase agreements -- 8,250,592 -- --
- ----------------------------------------------------- ------------ ----------- ------------ ------------
Total investments in securities, at value 127,780,409 62,064,760 163,290,944 145,262,071
- -----------------------------------------------------
Income receivable 147,460 675,451 1,474,783 460,511
- -----------------------------------------------------
Receivable for investments sold -- -- -- 3,415,698
- -----------------------------------------------------
Receivable for shares sold -- 53,006 2,244 56,571
- -----------------------------------------------------
Deferred expenses 13,213 23,325 12,232 12,266
- ----------------------------------------------------- ------------ ----------- ------------ ------------
Total assets 127,941,082 62,816,542 164,780,203 149,207,117
- ----------------------------------------------------- ------------ ----------- ------------ ------------
LIABILITIES:
- -----------------------------------------------------
Payable for investments purchased -- 999,390 -- 4,145,249
- -----------------------------------------------------
Payable for shares redeemed -- -- 50,000 35,440
- -----------------------------------------------------
Income distribution payable 505,011 268,921 860,966 --
- -----------------------------------------------------
Accrued expenses 9,019 43,053 22,819 20,462
- ----------------------------------------------------- ------------ ----------- ------------ ------------
Total liabilities 514,030 1,311,364 933,785 4,201,151
- ----------------------------------------------------- ------------ ----------- ------------ ------------
NET ASSETS CONSIST OF:
- -----------------------------------------------------
Paid in capital $127,427,052 $61,581,850 $169,425,786 $133,596,717
- -----------------------------------------------------
Net unrealized appreciation (depreciation) of
investments -- 22,490 (2,077,063 ) 11,727,636
- -----------------------------------------------------
Accumulated net realized loss on investments -- (99,162 ) (3,502,305 ) (752,404 )
- -----------------------------------------------------
Undistributed net investment income -- -- -- 434,017
- ----------------------------------------------------- ------------ ----------- ------------ ------------
Total Net Assets $127,427,052 $61,505,178 $163,846,418 $145,005,966
- ----------------------------------------------------- ------------ ----------- ------------ ------------
NET ASSET VALUE, and Redemption Proceeds Per Share:
(net assets / shares outstanding)
- -----------------------------------------------------
Trust Shares $1.00 -- -- --
- ----------------------------------------------------- ------------ ----------- ------------ ------------
Investment Shares $1.00 $9.93 $10.13 $10.94
- ----------------------------------------------------- ------------ ----------- ------------ ------------
Offering Price Per Share+
- -----------------------------------------------------
Investment Shares -- $10.13 * $10.34 * $11.16 *
- ----------------------------------------------------- ------------ ----------- ------------ ------------
Shares Outstanding
- -----------------------------------------------------
Trust Shares 104,726,336 -- -- --
- -----------------------------------------------------
Investment Shares 22,700,716 6,195,976 16,166,735 13,257,335
- ----------------------------------------------------- ------------ ----------- ------------ ------------
TOTAL SHARES OUTSTANDING 127,427,052 6,195,976 16,166,735 13,257,335
- ----------------------------------------------------- ------------ ----------- ------------ ------------
Investments at identified cost $127,780,409 $62,042,270 $165,368,007 $133,534,435
- ----------------------------------------------------- ------------ ----------- ------------ ------------
</TABLE>
+ See 'What Shares Cost' in the Prospectus.
* Computation of offering price: 100/98 of net asset value.
(See Notes which are an integral part of the Financial Statements)
FIRST PRIORITY FUNDS
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LIMITED
TREASURY MATURITY FIXED
MONEY GOVERNMENT INCOME EQUITY
MARKET FUND FUND FUND FUND
----------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
- ------------------------------------------------------
Interest $3,569,445 $1,538,186 $ 5,063,026 $ 499,535
- ------------------------------------------------------
Dividends -- -- -- 1,736,534
- ------------------------------------------------------ ---------- ---------- --------- ---------
Total income 3,569,445 1,538,186 5,063,026 2,236,069
- ------------------------------------------------------
EXPENSES:
- ------------------------------------------------------
Investment advisory fee $ 309,734 $ 187,586 $ 564,225 $ 544,699
- ------------------------------------------------------
Administrative personnel and services fee 83,826 36,253 101,847 92,188
- ------------------------------------------------------
Custodian fees 13,636 6,600 16,293 14,864
- ------------------------------------------------------
Transfer and dividend disbursing agent fees and
expenses 34,200 15,690 24,967 25,841
- ------------------------------------------------------
Directors'/Trustees' fees 2,390 1,094 2,441 2,679
- ------------------------------------------------------
Auditing fees 8,651 7,527 8,500 8,876
- ------------------------------------------------------
Legal fees 2,933 968 2,560 2,695
- ------------------------------------------------------
Portfolio accounting fees 26,006 27,770 30,580 25,866
- ------------------------------------------------------
Distribution services fee 43,484 -- 4,961 3,094
- ------------------------------------------------------
Share registration costs 15,332 9,707 12,890 13,125
- ------------------------------------------------------
Printing and postage 10,226 9,646 11,142 10,553
- ------------------------------------------------------
Insurance premiums 3,877 2,354 3,868 3,723
- ------------------------------------------------------
Miscellaneous 11,186 2,601 10,311 10,560
- ------------------------------------------------------ ---------- ---------- ---------- ----------
Total expenses 565,481 307,796 794,585 758,763
- ------------------------------------------------------
Deduct--Waiver of investment advisory fee 309,734 141,568 63,017 91,521
- ------------------------------------------------------ ---------- ---------- ---------- ----------
Net expenses 255,747 166,228 731,568 667,242
- ------------------------------------------------------ ---------- ---------- ---------- ----------
Net investment income 3,313,698 1,371,958 4,331,458 1,568,827
- ------------------------------------------------------ ---------- ---------- ---------- ----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
- ------------------------------------------------------
Net realized loss on investments -- (36,447 ) (2,413,709) (751,224)
- ------------------------------------------------------
Net change in unrealized appreciation of investments -- 1,924,305 13,127,305 12,912,621
- ------------------------------------------------------ ---------- ---------- ---------- ----------
Net realized and unrealized gain on investments -- 1,887,858 10,713,596 12,161,397
- ------------------------------------------------------ ---------- ---------- ---------- ----------
Change in net assets resulting from operations $3,313,698 $3,259,816 $15,045,054 $13,730,224
- ------------------------------------------------------ ---------- ---------- ---------- ----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FIRST PRIORITY FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TREASURY MONEY LIMITED MATURITY
MARKET FUND GOVERNMENT FUND
----------------------------- ---------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
MAY 31, 1995 NOVEMBER 30, MAY 31, 1995 NOVEMBER 30,
(UNAUDITED) 1994 (UNAUDITED) 1994*
------------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- -----------------------------------------------------
OPERATIONS--
- -----------------------------------------------------
Net investment income $ 3,313,698 $ 3,909,874 $ 1,371,958 $ 1,998,052
- -----------------------------------------------------
Net realized loss on investments -- -- (36,447 ) (62,715 )
- -----------------------------------------------------
Net change in unrealized appreciation (depreciation)
of investments -- -- 1,924,305 (1,901,815 )
- ----------------------------------------------------- ------------- ------------- ----------- -----------
Change in net assets resulting from operations 3,313,698 3,909,874 3,259,816 33,522
- ----------------------------------------------------- ------------- ------------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS--
- -----------------------------------------------------
Distributions from net investment income:
- -----------------------------------------------------
Trust Shares (2,762,827 ) (3,231,014 )
- -----------------------------------------------------
Investment Shares (550,871 ) (678,860 ) (1,371,958 ) (1,998,052 )
- ----------------------------------------------------- ------------- ------------- ----------- -----------
Change in net assets resulting from distributions
to shareholders (3,313,698 ) (3,909,874 ) (1,371,958 ) (1,998,052 )
- ----------------------------------------------------- ------------- ------------- ----------- -----------
SHARE TRANSACTIONS--
- -----------------------------------------------------
Proceeds from sale of shares 213,882,399 367,941,378 16,455,796 60,428,059
- -----------------------------------------------------
Net asset value of shares issued to shareholders in
payment of distributions declared 532,338 664,858 10,202 14,569
- -----------------------------------------------------
Cost of shares redeemed (194,566,225 ) (373,332,760 ) (5,374,739 ) (9,952,037 )
- ----------------------------------------------------- ------------- ------------- ----------- -----------
Change in net assets resulting from share
transactions 19,848,512 (4,726,524 ) 11,091,259 50,490,591
- ----------------------------------------------------- ------------- ------------- ----------- -----------
Change in net assets 19,848,512 (4,726,524 ) 12,979,117 48,526,061
- -----------------------------------------------------
NET ASSETS:
- -----------------------------------------------------
Beginning of period 107,578,540 112,305,064 48,526,061 --
- ----------------------------------------------------- ------------- ------------- ----------- -----------
End of period $127,427,052 $107,578,540 $61,505,178 $48,526,061
- ----------------------------------------------------- ------------- ------------- ----------- -----------
</TABLE>
* For the period from December 19, 1993 (date of initial public investment) to
November 30, 1994.
(See Notes which are an integral part of the Financial Statements)
FIRST PRIORITY FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FIXED INCOME FUND EQUITY FUND
--------------------------- ---------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
MAY 31, 1995 NOVEMBER 30, MAY 31, 1995 NOVEMBER 30,
(UNAUDITED) 1994 (UNAUDITED) 1994
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- -----------------------------------------------------
OPERATIONS--
- -----------------------------------------------------
Net investment income $ 4,331,458 $ 9,651,915 $ 1,568,827 $ 3,728,433
- -----------------------------------------------------
Net realized gain (loss) on investments (2,413,709 ) (1,006,586 ) (751,224 ) 4,353,314
- -----------------------------------------------------
Net realized loss on options -- -- -- (161,204 )
- -----------------------------------------------------
Net change in unrealized appreciation (depreciation)
of investments 13,127,305 (17,286,245 ) 12,912,621 (5,561,915 )
- ----------------------------------------------------- ------------ ------------ ----------- -----------
Change in net assets resulting from operations 15,045,054 (8,640,916 ) 13,730,224 2,358,628
- ----------------------------------------------------- ------------ ------------ ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS--
- -----------------------------------------------------
Distributions from net investment income:
- -----------------------------------------------------
Trust Shares (1,365,306 ) (8,976,750 ) (899,259 ) (3,448,803 )
- -----------------------------------------------------
Investment Shares (3,078,867 ) (562,450 ) (882,369 ) (127,353 )
- -----------------------------------------------------
Distributions from net realized gain on investment
transactions:
- -----------------------------------------------------
Trust Shares -- (3,299,410 ) (3,996,308 ) (991,326 )
- -----------------------------------------------------
Investment Shares -- (248,677 ) (195,892 ) (45,275 )
- -----------------------------------------------------
Distributions in excess of net realized gain on
investment transactions:
- -----------------------------------------------------
Trust Shares -- (76,597 ) -- --
- -----------------------------------------------------
Investment Shares -- (5,413 ) -- --
- ----------------------------------------------------- ------------ ------------ ----------- -----------
Change in net assets resulting from distributions
to shareholders (4,444,173 ) (13,169,297 ) (5,973,828 ) (4,612,757 )
- ----------------------------------------------------- ------------ ------------ ----------- -----------
SHARE TRANSACTIONS--
- -----------------------------------------------------
Proceeds from sale of shares 25,784,235 42,878,052 17,494,807 34,077,964
- -----------------------------------------------------
Net asset value of shares issued to shareholders in
payment of distributions declared 218,627 688,186 267,608 167,441
- -----------------------------------------------------
Cost of shares redeemed (35,691,586 ) (41,222,480 ) (30,520,052 ) (43,173,519 )
- ----------------------------------------------------- ------------ ------------ ----------- -----------
Change in net assets resulting from share
transactions (9,688,724 ) 2,343,758 (12,757,637 ) (8,928,114 )
- ----------------------------------------------------- ------------ ------------ ----------- -----------
Change in net assets 912,157 (19,466,455 ) (5,001,241 ) (11,182,243 )
- -----------------------------------------------------
NET ASSETS:
- -----------------------------------------------------
Beginning of period 162,934,261 182,400,716 150,007,207 161,189,450
- ----------------------------------------------------- ------------ ------------ ----------- -----------
End of period $163,846,418 $162,934,261 $145,005,966 $150,007,207
- ----------------------------------------------------- ------------ ------------ ----------- -----------
Undistributed net investment income included in net
assets at end of period $ -- $ 112,715 $ 434,017 $ 646,818
- ----------------------------------------------------- ------------ ------------ ----------- -----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FIRST PRIORITY FIXED INCOME FUND
FINANCIAL HIGHLIGHTS--TRUST SHARES*
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
TWO MONTHS ENDED
JANUARY 31, 1995
(UNAUDITED) YEAR ENDED NOVEMBER 30,
---------------- --------------------------------
1995 1994 1993 1992(A)
---------------- ------ ------ --------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.46 $10.67 $10.27 $ 9.90
- -----------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- -----------------------------------------------
Net investment income 0.09 0.54 0.51 0.38
- -----------------------------------------------
Net realized and unrealized gain(loss) on
investments 0.11 (1.01) 0.50 0.37
- ----------------------------------------------- ---------- ------ ------ -------
Total from investment operations 0.20 (0.47) 1.01 0.75
- -----------------------------------------------
LESS DISTRIBUTIONS
- -----------------------------------------------
Distributions from net investment income (0.09) (0.53) (0.51) (0.38)
- -----------------------------------------------
Distributions from net realized gain on
investment transactions -- (0.20) (0.10) --
- -----------------------------------------------
Distributions in excess of net realized gain
on investments -- (0.01)(b) -- --
- ----------------------------------------------- ---------- ------ ------ -------
Total distributions (0.09) (0.74) (0.61) (0.38)
- ----------------------------------------------- ---------- ------ ------ -------
NET ASSET VALUE, END OF PERIOD $ 9.57 $ 9.46 $10.67 $10.27
- ----------------------------------------------- ---------- ------ ------ -------
TOTAL RETURN (C) 2.11% (4.55%) 10.14% 7.66%
- -----------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- -----------------------------------------------
Expenses 0.82%(d) 0.79% 0.84% 0.77%(d)
- -----------------------------------------------
Net investment income 5.79%(d) 5.44% 4.80% 6.02%(d)
- -----------------------------------------------
Expense waiver/reimbursement (e) 0.25%(d) 0.25% 0.25% 0.29%(d)
- -----------------------------------------------
SUPPLEMENTAL DATA
- -----------------------------------------------
Net assets, end of period (000 omitted) $0 $153,289 $169,881 $96,354
- -----------------------------------------------
Portfolio turnover 5% 24% 83% 44%
- -----------------------------------------------
</TABLE>
* Prior to February 1, 1995 the Fund offered two classes of shares: Investment
Shares and Trust Shares. Beginning February 1, 1995, the Fund no longer offers
Trust Shares.
(a) Reflects operations for the period from April 20, 1992 (date of initial
public investment) to November 30, 1992.
(b) Distributions are determined in accordance with income tax regulations which
may differ from generally accepted accounting principles. These
distributions do not represent a return of capital for federal income tax
purposes.
(c) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(d) Computed on an annualized basis.
(e) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
FIRST PRIORITY EQUITY FUND
FINANCIAL HIGHLIGHTS--TRUST SHARES*
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
TWO MONTHS
ENDED YEAR ENDED NOVEMBER 30,
JANUARY 31, 1995 -----------------------------
(UNAUDITED) 1994 1993 1992(A)
---------------- ------ ------ -------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $10.36 $10.51 $10.66 $ 9.86
- --------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- --------------------------------------------------
Net investment income 0.08 0.25 0.18 0.14
- --------------------------------------------------
Net realized and unrealized gain (loss) on
investments 0.02 (0.10) (0.03) 0.77
- -------------------------------------------------- ----------- ------ ------ ------
Total from investment operations 0.10 0.15 0.15 0.91
- --------------------------------------------------
LESS DISTRIBUTIONS
- --------------------------------------------------
Distributions from net investment income (0.08) (0.23) (0.18) (0.11 )
- --------------------------------------------------
Distributions from net realized gain on
investment transactions (0.33) (0.07) (0.12) --
- -------------------------------------------------- ----------- ------ ------ -------
Total distributions (0.41) (0.30) (0.30) (0.11 )
- -------------------------------------------------- ----------- ------ ------ ------
NET ASSET VALUE, END OF PERIOD $10.05 $10.36 $10.51 $10.66
- -------------------------------------------------- ----------- ------ ------ -------
TOTAL RETURN (B) 1.00% 1.42% 1.43% 9.28 %
- --------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- --------------------------------------------------
Expenses 0.83%(c) 0.79% 0.84% 0.76 %(c)
- --------------------------------------------------
Net investment income 2.76%(c) 2.32% 1.85% 2.28 %(c)
- --------------------------------------------------
Expense waiver/reimbursement (d) 0.30%(c) 0.30% 0.30% 0.35 %(c)
- --------------------------------------------------
SUPPLEMENTAL DATA
- --------------------------------------------------
Net assets, end of period (000 omitted) $0 $143,876 $154,185 $102,822
- --------------------------------------------------
Portfolio turnover 47% 66% 74% 30 %
- --------------------------------------------------
</TABLE>
* Prior to February 1, 1995 the Fund offered two classes of shares: Investment
Shares and Trust Shares. Beginning February 1, 1995, the Fund no longer offers
Trust Shares.
(a) Reflects operations for the period from April 20, 1992 (date of initial
public investment), to November 30, 1992.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
FIRST PRIORITY FUNDS
COMBINED NOTES TO FINANCIAL STATEMENTS
MAY 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
(1) ORGANIZATION
First Priority Funds (the "Trust") is registered under the Investment Company
Act of 1940, as amended (the "Act") as an open-end, management investment
company. The Trust consists of six diversified portfolios at May 31, 1995.
The following portfolios comprise the Trust:
<TABLE>
<S> <C>
First Priority Treasury Money Market Fund ("Treasury Money Market Fund")
First Priority Limited Maturity Government Fund ("Limited Maturity Government Fund")
First Priority Fixed Income Fund ("Fixed Income Fund")
First Priority Equity Fund ("Equity Fund")
First Priority Equity Income Fund ("Equity Income Fund")
First Priority Balanced Fund ("Balanced Fund")
</TABLE>
The financial statements included herein are only those of Treasury Money Market
Fund, Limited Maturity Government Fund, Fixed Income Fund and Equity Fund
(individually referred to as the "Fund", or collectively as the "Funds"). Prior
to February 1, 1995, Fixed Income Fund and Equity Fund each offered two classes
of shares: Trust Shares and Investment Shares. Beginning February 1, 1995, Fixed
Income Fund and Equity Fund no longer offer Trust Shares. Treasury Money Market
Fund is offered in two classes of shares: Trust Shares and Investment Shares.
Investment Shares are identical in all respects to Trust Shares, except the
Investment Shares are sold pursuant to a distribution plan adopted in accordance
with the Act's Rule 12b-1. The assets of each Fund of the Trust are segregated
and a shareholder's interest is limited to the Fund in which shares are held.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their financial statements. These
policies are in conformity with generally accepted accounting principles.
<TABLE>
<S> <C>
A. INVESTMENT VALUATIONS--U.S. government securities are generally valued at the mean
between the over-the-counter bid and asked prices as furnished by an independent pricing
service. Corporate bonds and other fixed-income and asset backed securities are valued
at the last sale price reported on national securities exchanges on that day, if
available. Otherwise, corporate bonds and other fixed-income and asset backed securities
are valued at the prices provided by an independent pricing service. Listed equity
securities are valued at the last sale price reported on national securities exchanges.
Unlisted and short-term securities (and private placement securities) are generally
valued at the prices provided by an independent pricing service. Short-term securities
with remaining maturities of sixty days or less at the time of purchase may be valued at
amortized cost, which approximates fair market value. Treasury Money Market Fund's use
of the amortized cost method to value its portfolio securities is in accordance with
Rule 2a-7 under the Act. Investments in other open-end investment companies are valued
at net asset value.
</TABLE>
FIRST PRIORITY FUNDS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
B. REPURCHASE AGREEMENTS--It is the policy of the Funds to require the custodian bank to
take possession, to have legally segregated in the Federal Reserve Book Entry System or
to have segregated within the custodian bank's vault, all securities held as collateral
in support of repurchase agreement investments. Additionally, procedures have been
established by the Funds to monitor, on a daily basis, the market value of each
repurchase agreement's underlying collateral to ensure that the value of collateral at
least equals the principal amount of the repurchase transaction, including accrued
interest.
The Funds will only enter into repurchase agreements with banks and other recognized
financial institutions, such as broker/dealers, which are deemed by the Funds' adviser
to be creditworthy pursuant to guidelines established by the Board of Trustees (the
"Trustees").
C. INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Dividend income and distributions to
shareholders are recorded on the ex-dividend date. Interest income and expenses are
accrued daily. Bond premium and discount, if applicable, are amortized as required by
the Internal Revenue Code, as amended (the "Code").
D. FEDERAL TAXES--It is the Funds' policy to comply with the provisions of the Code
applicable to regulated investment companies and to distribute to shareholders each year
substantially all of their income. Accordingly, no provisions for federal tax are
necessary.
E. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Funds may engage in when-issued or
delayed delivery transactions. The Funds record when-issued securities on the trade date
and maintain security positions such that sufficient liquid assets will be available to
make payment for the securities purchased. Securities purchased on a when-issued or
delayed delivery basis are marked to market daily and begin earning interest on the
settlement date.
F. DEFERRED EXPENSES--The costs incurred by the Funds with respect to registration of their
shares in their first fiscal year, excluding the initial expense of registering their
shares, have been deferred and are being amortized using the straight-line method not to
exceed a period of five years from the Funds' commencement dates.
G. RESTRICTED SECURITIES--Restricted securities are securities that may only be resold upon
registration under the federal securities laws or in transactions exempt from such
registration. In some cases, the issuer of restricted securities has agreed to register
such securities for resale, at the issuer's expense, either upon demand by the Fund or
in connection with another registered offering of the securities. Many restricted
securities may be resold in the secondary market in transactions exempt from
registration. Such restricted securities may be determined to be liquid under criteria
established by the Trustees. The Funds will not incur any registration costs upon such
resales. The Funds' restricted securities are valued at the prices provided by an
independent pricing service or, if no market prices are available, at the fair value as
determined by the Funds' pricing committee. Restricted securities are valued at
amortized cost in accordance with Rule 2a-7 under the Act. Additional information on
each restricted security held at May 31, 1995, is as follows:
</TABLE>
FIRST PRIORITY FUNDS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ACQUISITION ACQUISITION
SECURITY DATE COST
--------------------------------------------------------- ----------- -----------
<S> <C> <C>
Goldman Sachs & Co., 7.80%, 7/15/2002 2/23/93 $4,213,880
--------------------------------------------------------- ----------- ----------
</TABLE>
H. OTHER--Investment transactions are accounted for on the trade date.
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value) for each
class of shares. Transactions in fund shares were as follows:
FOR THE SIX MONTHS ENDED MAY 31, 1995:
<TABLE>
<CAPTION>
TREASURY
MONEY
MARKET LIMITED MATURITY
FUND GOVERNMENT FUND FIXED INCOME FUND EQUITY FUND
------------- ------------------------ ------------------------ -------------------------
TRUST SHARES SHARES SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
- ------------------------------ ------------- ---------- ----------- ---------- ----------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Shares sold 121,159,210 -- $ -- 230,703 $ 2,182,191 559,276 $ 5,624,181
- ------------------------------
Shares issued to shareholders
in payment of dividends
declared 129 -- -- -- -- -- --
- ------------------------------
Shares redeemed (107,440,593) -- -- (2,725,175) (25,830,804) (2,153,028) (22,271,579)
- ------------------------------ ------------ --------- ---------- --------- ---------- --------- -----------
Net change resulting from
Trust share transactions 13,718,746 -- -- (2,494,472) (23,648,613) (1,593,752) (16,647,398)
- ------------------------------ ------------ --------- ---------- --------- ---------- --------- -----------
INVESTMENT SHARES
- ------------------------------
Shares sold 92,723,189 1,691,733 16,455,796 2,419,864 23,602,044 1,135,597 11,870,626
- ------------------------------
Shares issued to shareholders
in payment of dividends
declared 532,209 1,048 10,202 22,461 218,627 26,684 267,608
- ------------------------------
Shares redeemed (87,125,632) (552,850) (5,374,739) (1,008,225) (9,860,782) (789,336) (8,248,473)
- ------------------------------ ------------ --------- ---------- --------- ---------- --------- -----------
Net change resulting from
Investment share transactions 6,129,766 1,139,931 11,091,259 1,434,100 13,959,889 372,945 3,889,761
- ------------------------------ ------------ --------- ---------- --------- ---------- --------- -----------
Total net change resulting
from Fund share transactions 19,848,512 1,139,931 $11,091,259 (1,060,372) ($9,688,724) (1,220,807) ($12,757,637)
- ------------------------------ ------------ --------- ---------- --------- ---------- --------- -----------
</TABLE>
FIRST PRIORITY FUNDS
- --------------------------------------------------------------------------------
FOR THE YEAR ENDED NOVEMBER 30, 1994:
<TABLE>
<CAPTION>
TREASURY
MONEY
MARKET LIMITED MATURITY
FUND GOVERNMENT FUND FIXED INCOME FUND EQUITY FUND
------------ ------------------------ ------------------------ -------------------------
TRUST SHARES SHARES SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
- ------------------------------- ------------ ---------- ----------- ---------- ----------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Shares sold 195,487,497 -- $ -- 4,076,432 $41,030,876 3,147,381 $ 32,959,822
- -------------------------------
Shares issued to shareholders
in payment of dividends
declared 237 -- -- -- -- -- --
- -------------------------------
Shares redeemed (192,990,048) -- -- (3,797,716) (37,226,571) (3,925,388) (41,106,803)
- ------------------------------- ----------- --------- ---------- --------- ---------- --------- -----------
Net change resulting from Trust
share transactions 2,497,686 -- -- 278,716 3,804,305 (778,007) (8,146,981)
- ------------------------------- ----------- --------- ---------- --------- ---------- --------- -----------
INVESTMENT SHARES
- -------------------------------
Shares sold 172,453,881 6,075,557 60,428,059 183,230 1,847,176 105,833 1,118,142
- -------------------------------
Shares issued to shareholders
in payment of dividends
declared 664,621 1,502 14,569 68,161 688,186 15,959 167,441
- -------------------------------
Shares redeemed (180,342,712) (1,021,013) (9,952,037) (401,362) (3,995,909) (196,018) (2,066,716)
- ------------------------------- ----------- --------- ---------- --------- ---------- --------- -----------
Net change resulting from
Investment share transactions (7,224,210) 5,056,046 50,490,591 (149,971) (1,460,547) (74,226) (781,133)
- ------------------------------- ----------- --------- ---------- --------- ---------- --------- -----------
Total net change resulting from
Fund share transactions (4,726,524) 5,056,046 $50,490,591 128,745 $ 2,343,758 (852,233) ($8,928,114)
- ------------------------------- ----------- --------- ---------- --------- ---------- --------- -----------
</TABLE>
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--First Alabama Bank, the Trust's investment adviser (the
"Adviser"), receives for its services an annual investment advisory fee based
upon a percentage of each Fund's average daily net assets (see below). The
Adviser may voluntarily choose to waive all or a portion of its fee and
reimburse certain operating expenses of the Funds. The Adviser can modify or
terminate this voluntary waiver and reimbursement at any time at its sole
discretion.
<TABLE>
<CAPTION>
ANNUAL
FUND RATE
- --------------------------------------------------------------------------------- ------
<S> <C>
Treasury Money Market Fund 0.50%
- ---------------------------------------------------------------------------------
Limited Maturity Government Fund 0.70%
- ---------------------------------------------------------------------------------
Fixed Income Fund 0.75%
- ---------------------------------------------------------------------------------
Equity Fund 0.80%
- --------------------------------------------------------------------------------- -----
</TABLE>
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the Trust
with certain administrative personnel and services. The fee is based on the
level of average aggregate daily net assets of the Trust for the period. FAS may
voluntarily choose to waive a portion of its fee.
FIRST PRIORITY FUNDS
- --------------------------------------------------------------------------------
DISTRIBUTION PLAN--The Funds have adopted a Distribution Plan (the "Plan")
pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Funds
will compensate Federated Securities Corp. ("FSC"), the principal distributor,
from the net assets of the Funds to finance activities intended to result in the
sale of shares of the Funds that are subject to the Plan. The Plan provides that
the Funds may incur distribution expenses up to 0.40 of 1% of the average daily
net assets of the Investment Shares of Treasury Money Market Fund, 0.25 of 1% of
the average daily net assets of Limited Maturity Government Fund and 0.30 of 1%
of the average daily net assets of Fixed Income Fund and Equity Fund annually,
to compensate FSC.
TRANSFER AND DIVIDEND DISBURSING AGENT, PORTFOLIO ACCOUNTING AND CUSTODY
FEES--Federated Services Company ("FServ") serves as transfer and dividend
disbursing agent for the Funds. The fee is based on the size, type, and number
of accounts and transactions made by shareholders.
FServ also maintains the Funds' accounting records. The fee is based on the
level of each Fund's average daily net assets for the period, plus out-of-pocket
expenses.
First Alabama Bank is the Funds' custodian. The fee is based on the level of
each Fund's average daily net assets for the period.
ORGANIZATIONAL EXPENSES--Organizational expenses were borne initially by FAS.
The Funds have agreed to reimburse FAS for the organizational expenses during
the five year period following the Funds' commencement dates. For the six months
ended May 31, 1995, the Funds paid FAS as follows:
<TABLE>
<CAPTION>
INITIAL ORGANIZATIONAL
ORGANIZATIONAL EXPENSES
FUND EXPENSES REIMBURSED
- -------------------------------------------------------- --------------- ---------------
<S> <C> <C>
Treasury Money Market Fund $50,822 $ 6,212
- --------------------------------------------------------
Limited Maturity Government Fund $26,082 $ 1,767
- --------------------------------------------------------
Fixed Income Fund $49,934 $ 6,112
- --------------------------------------------------------
Equity Fund $50,007 $ 6,103
- -------------------------------------------------------- ------------ ----------
</TABLE>
INTERFUND TRANSACTIONS--During the period ended May 31, 1995, the following
funds engaged in sale transactions with funds that have a common investment
advisor, common Directors/Trustees, and/or common Officers. These transactions
were made at current market value pursuant to Rule 17a-7 under the Act. The
Fixed Income and Equity Funds converted assets to the Balanced Fund in the
amounts of $18,310,145 and $14,302,375, respectively.
Certain of the Officers and Trustees of the Funds are Officers and Directors or
Trustees of the above companies.
FIRST PRIORITY FUNDS
- --------------------------------------------------------------------------------
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the six
months ended May 31, 1995, were as follows:
<TABLE>
<CAPTION>
FUND PURCHASES SALES
- ---------------------------------------------------------------- ----------- -----------
<S> <C> <C>
Limited Maturity Government Fund $13,970,595 $ 5,499,570
- ----------------------------------------------------------------
Fixed Income Fund $23,999,571 $35,308,760
- ----------------------------------------------------------------
Equity Fund $72,454,648 $65,068,240
- ---------------------------------------------------------------- ----------- -----------
</TABLE>
TRUSTEES OFFICERS
- --------------------------------------------------------------------------------
John F. Donahue
John F. Donahue
Chairman
Thomas G. Bigley
Edward C. Gonzales
John T. Conroy, Jr.
President and Treasurer
William J. Copeland
J. Christopher Donahue
James E. Dowd
Vice President
Lawrence D. Ellis, M.D.
Richard B. Fisher
Vice President
Edward L. Flaherty, Jr.
John W. McGonigle
Edward C. Gonzales
Vice President and Secretary
Peter E. Madden
Ronald M. Petnuch
Gregor F. Meyer
Vice President and Asst. Treasurer
John E. Murray, Jr.
David M. Taylor
Assistant Treasurer
Wesley W. Posvar
Jay S. Neuman
Marjorie P. Smuts
Assistant Secretary
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves investment risk,
including possible loss of principal. Although money market funds seek to
maintain a stable net asset value of $1.00 per share, there is no assurance that
they will be able to do so.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the funds' prospectus which contains facts concerning
their objective and policies, management fees, expenses and other information.
