The following is the Semi-Annual Report for the Tennessee Tax-Free Bond Fund,
covering the six-month period ended January 31, 1996. If you have any
TENNESSEE TAX-FREE BOND FUND
(A PORTFOLIO OF THE PLANTERS FUNDS)
PORTFOLIO OF INVESTMENTS
JANUARY 31, 1996 (UNAUDITED)
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
MUNICIPAL NOTES--99.7%
TENNESSEE--99.7%
$465,000 Chattanooga-Hamilton County,
TN Hospital Authority,
Refunding Revenue Bonds, 5.50%
(Erlanger Medical Center)/(FSA AAA $493,291
Insured)/(Original Issue
Yield: 5.60%), 10/1/2006
1,000,000 Chattanooga-Hamilton County,
TN Hospital Authority,
Refunding Revenue Bonds, 5.50%
(Erlanger Medical Center)/(FSA AAA 1,013,760
Insured)/(Original Issue
Yield: 5.85%), 10/1/2013
1,130,000 Clarksville, TN, Electric
System Refunding Revenue A 1,106,801
Tennessee Tax-Free Bond Fund
Bonds, 5.125%, 9/1/2011
500,000 Clarksville, TN, Water, Sewer
& Gas Refunding Revenue Bonds,
6.125% (MBIA AAA 545,955
Insured)/(Original Issue
Yield: 6.15%), 2/1/2007
500,000 Clarksville, TN, Water, Sewer
& Gas Refunding Revenue Bonds,
6.125% (MBIA AAA 534,510
Insured)/(Original Issue
Yield: 6.328%), 2/1/2012
250,000 Hamblen County, TN, GO UT
Hospital Revenue Bonds, 4.90% AAA 253,853
(AMBAC Insured), 5/1/2006
250,000 Jackson, TN Health Educational
& Housing Facilities Board,
Revenue Bonds, 5.90% (Jackson-
Madison County General AAA 266,615
Hospital)/(MBIA
Insured)/(Original Issue
Yield: 5.95%), 4/1/2000
400,000 Jackson, TN, Water & Sewer
Refunding Revenue Bonds,
5.125% (AMBAC AAA 402,256
Insured)/(Original Issue
2
Tennessee Tax-Free Bond Fund
Yield: 5.35%), 1/1/2010
440,000 Johnson City, TN, Health &
Education Refunding Revenue
Bonds, 6.75% (MBIA AAA 493,904
Insured)/(Original Issue
Yield: 6.912%), 7/1/2006
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
$250,000 Johnson City, TN, Health &
Education Refunding Revenue
Bonds, 6.75% (MBIA
Insured)/(Original Issue Yield: AAA $285,498
6.912%)(United States Treasury
PRF), 7/1/2001 (@102) (a)
$500,000 Knox County, TN Health
Education & Housing Facilities
Board, Hospital Facilities
Revenue Bonds (Series A), 4.90% AAA $507,050
(Fort Sanders Alliance)/(MBIA
Insured)/(Original Issue Yield:
5.099%), 1/1/2005
3
Tennessee Tax-Free Bond Fund
500,000 Knox County, TN Health
Education & Housing Facilities
Board, Hospital Facilities
Revenue Bonds (Series C), 7.00%
(Fort Sanders Alliance)/(MBIA AAA 562,035
Insured)/(United States
Treasury PRF), 1/1/2000 (@102)
(a)
750,000 Knoxville, TN Gas System,
Refunding Revenue Bonds, 5.05%
(Original Issue Yield: 5.10%), AA 752,108
3/1/2008
1,330,000 Knoxville, TN Water System,
Refunding Revenue Bonds (Series
M), 5.20% (Original Issue AA 1,353,155
Yield: 5.45%), 3/1/2010
1,500,000 Memphis-Shelby County, TN,
Airport Refunding Revenue
Bonds, 6.75% (Federal Express BBB 1,606,485
Corp.), 9/1/2012
1,500,000 Metropolitan Government
Nashville & Davidson County, TN
Health Education Facilities AA 1,471,710
Authority, Refunding Revenue
Bonds, 5.20% (Vanderbilt
University), (Original Issue
4
Tennessee Tax-Free Bond Fund
Yield: 5.55%), 7/1/2018
230,000 Metropolitan Government
Nashville & Davidson County,
TN, GO UT Refunding Bonds, AA 241,893
5.25% (Original Issue Yield:
5.45%), 5/15/2007
750,000 Metropolitan Government
Nashville & Davidson County,
TN, Revenue Bonds (Series A), AA 779,933
6.00% (Original Issue Yield:
6.282%), 5/15/2017
230,000 Metropolitan Government
Nashville & Davidson County,
TN, Water & Sewer Refunding
Revenue Bonds, 5.20% (FGIC AAA 232,185
Insured)/(Original Issue Yield:
5.53%), 1/1/2013
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
$170,000 Metropolitan Government
Nashville & Davidson County,
TN, Water & Sewer Refunding A $173,983
Revenue Bonds, 7.25%, 1/1/2006
270,000 Metropolitan Government
5
Tennessee Tax-Free Bond Fund
Nashville & Davidson County,
TN, Water & Sewer Refunding A 276,437
Revenue Bonds, 7.30%, 1/1/2008
250,000 Metropolitan Government
Nashville & Davidson County,
TN, Water & Sewer Revenue
Bonds, 5.75% (AMBAC AAA 260,383
Insured)/(Original Issue
Yield: 6.15%), 1/1/2012
1,375,000 Montgomery Co, TN Public
Building Authority, Pooled
Financing Government
Obligation Revenue Bonds,
7.50% (Tennessee County Loan AA- 1,392,201
Pool), (Prudential Insurance
Co. of America Insured),
12/15/2000
800,000 Mount Juliet, TN Public
Building Authority, Revenue AAA 901,280
Bonds (Series O), 7.00% (MBIA
Insured), 2/1/2006
1,500,000 Putnam County, TN, GO UT
Bonds, 5.125% (MBIA AAA 1,496,760
Insured)/(Original Issue
Yield: 5.35%), 4/1/2011
6
Tennessee Tax-Free Bond Fund
750,000 Shelby County, TN Health
Education & Housing Facilities
Board, Refunding Revenue Bonds
(Series A), 7.40% (Methodist AAA 815,925
Health System, Inc.)/(MBIA
Insured)/(Original Issue
Yield: 7.50%), 6/1/2003
1,000,000 Shelby County, TN Health
Education & Housing Facilities
Board, Revenue Bonds, 6.00%
(St. Joseph Hospital East, AAA 1,099,050
Inc.)/(Original Issue Yield:
6.37%), 3/1/2005 (Escrowed to
Maturity) (a)
500,000 Shelby County, TN, GO UT
Bonds, (Series A), 5.10% AA+ 502,685
(Original Issue Yield: 5.25%),
3/1/2011
250,000 Shelby County, TN, GO UT
Refunding Bonds (Series B), AA+ 267,503
5.875% (Original Issue Yield:
5.95%), 3/1/2007
750,000 Tennessee Housing Development
Agency, Refunding Revenue A+ 765,105
Bonds (Series A), 5.40%,
7
Tennessee Tax-Free Bond Fund
7/1/2004
1,250,000 Tennessee Housing Development
Agency, Refunding Revenue A+ 1,263,537
Bonds (Series A), 5.70%,
1/1/2008
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
$1,205,000 Tennessee Housing Development
Agency, Refunding Revenue
Bonds (Series A), 5.70%, A+ $1,218,050
7/1/2008
1,800,000 Tennessee Housing Development
Agency, Refunding Revenue
Bonds (Series A), 5.85%, A+ 1,823,292
7/1/2013
430,000 Tennessee Housing Development
Agency, Revenue Bonds,
(Homeownership Program- Issue A+ 458,827
U), 6.90%, 7/1/2005
500,000 Tennessee State Local
Development Authority,
8
Tennessee Tax-Free Bond Fund
Refunding Revenue Bonds AA- 548,380
(Series A), 5.65%, 3/1/2007
495,000 Tennessee State Local
Development Authority, Revenue
Bonds, 6.10% (Community A- 538,233
Provider Pooled Loan)/(State
Aid Withholding Guaranty),
10/1/2007
500,000 Tennessee State School Board
Authority, Refunding Revenue
Bonds (Series A), 6.25% AA 533,790
(Higher Education Facility)
(Original Issue Yield:
6.309%), 5/1/2017
195,000 Tennessee State School Board
Authority (GO of Authority),
Refunding Revenue Bonds , AA 196,610
5.75%, 5/1/2006
700,000 Tennessee State, GO UT Bonds
(Series A), 5.55%, 3/1/2010 AA+ 737,044
750,000 Tennessee State, GO UT Bonds
(Series B), 6.60% (Original
Issue Yield: 6.60%), (United AA+ 841,680
States Treasury PRF) 6/1/2001
(@ 101 1/2) (a)
9
Tennessee Tax-Free Bond Fund
250,000 Tennessee State, GO UT
Refunding Bonds (Series A), AAA 271,977
6.10%, 6/1/2000
1,035,000 Williamson County, TN GO UT
Refunding Bonds, 6.00% AA 1,155,391
(Original Issue Yield:
6.216%), 3/1/2008
TOTAL LONG TERM MUNICIPAL
SECURITIES (B) (IDENTIFIED $30,441,120
COST $29,680,580)
(a) The issuer of this security has placed U.S. government securities in
escrow with a trustee. The proceeds from the government securities will be
used to pay principal and interest on the security.
(b) The cost of investments for federal tax purposes amounts to $29,680,580.
The net unrealized appreciation of investments on a federal tax basis amounts
to $760,540, which is composed of $767,577 appreciation and $7,037
depreciation at January 31, 1996.
* Please refer to the Appendix of the Statement of Additional Information
for an explanation of the credit ratings. Current credit ratings are
unaudited.
10
Tennessee Tax-Free Bond Fund
Note: The categories of investments are shown as a percentage of net assets
($30,524,362) at January 31, 1996.
The following acronyms are used throughout this portfolio:
AMBAC --American Municipal Bond Assurance Corporation
FGIC --Financial Guaranty Insurance Company
FSA --Financial Security Assurance
GO --General Obligation
MBIA --Municipal Bond Investors Assurance
PRF --Prerefunded
UT --Unlimited Tax
(See Notes which are an integral part of the Financial Statements)
TENNESSEE TAX-FREE BOND FUND
(A PORTFOLIO OF THE PLANTERS FUNDS)
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 1996 (UNAUDITED)
Assets:
Investments in securities, at value
(identified cost and tax cost $29,680,580) $30,441,120
Income receivable 439,726
Deferred expenses 17,510
Total assets 30,898,356
Liabilities:
Payable to Bank $342,950
Accrued expenses 31,044
Total liabilities 373,994
NET ASSETS for 2,819,422 shares outstanding $30,524,362
Net Assets Consist of:
Paid in capital $29,872,975
Net unrealized appreciation of investments 760,540
Accumulated net realized loss on investments (205,581)
Undistributed net investment income 96,429
Total Net Assets $30,524,362
NET ASSET VALUE, and Redemption Proceeds Per Share:
($30,524,362 2,819,422 shares of beneficial interest outstanding)
$10.83
Offering Price Per Share: (100/98 of $10.83)* $11.05
* See "What Shares Cost" in the Prospectus.
TENNESSEE TAX-FREE BOND FUND
(A PORTFOLIO OF THE PLANTERS FUNDS)
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JANUARY 31, 1996 (UNAUDITED)
INVESTMENT INCOME:
Interest $897,832
EXPENSES:
Investment advisory fee $125,157
Administrative personnel and services fee 60,414
Custodian fees 8,710
Transfer and dividend disbursing agent fees 14,868
and expenses
Directors'/Trustees' fees 3,969
Auditing fees 7,093
Legal fees 2,701
Portfolio accounting fees 27,121
Share registration costs 9,711
Printing and postage 5,609
Insurance premiums 546
Miscellaneous 10,938
Total expenses 276,837
Deduct waiver of investment advisory fee 125,157
Net expenses 151,680
Net investment income 746,152
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments 59,601
Net change in unrealized appreciation of investments 1,099,259
Net realized and unrealized gain on investments 1,158,860
Change in net assets resulting from operations $1,905,012
(See Notes which are an integral part of the Financial
TENNESSEE TAX-FREE BOND FUND
(A PORTFOLIO OF THE PLANTERS FUNDS)
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
(unaudited) Year Ended
January 31, 1996 July 31, 1995
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS--
Net investment income $746,152 $1,872,063
Net realized gain (loss) on
investments ($59,601 and $(153,288) 59,601 (215,683)
net loss, respectively, as computed
for federal tax purposes)
Net change in unrealized appreciation 1,099,259 1,023,037
Change in net assets resulting from 1,905,012 2,679,417
operations
DISTRIBUTIONS TO SHAREHOLDERS--
Distributions from net investment (758,407) (1,887,110)
income
SHARE TRANSACTIONS--
Proceeds from sale of shares 508,035 3,372,891
Net asset value of shares issued to
shareholders in payment of 66,097 145,754
distributions declared
Cost of shares redeemed (7,083,895) (10,823,155)
Change in net assets resulting from (6,509,763) (7,304,510)
share transactions
Change in net assets (5,363,158) (6,512,203)
NET ASSETS:
Beginning of period 35,887,520 42,399,723
End of period (including undistributed
net investment income of $96,429 and $30,524,362 $35,887,520
$108,684, respectively)
(See Notes which are an integral part of
TENNESSEE TAX-FREE BOND FUND
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
SIX MONTHS
ENDED
(UNAUDITED)
JANUARY 31,
1996 YEAR ENDED
1996 1995 1994(A)
NET ASSET VALUE, BEGINNING OF $10.46 $10.22 $10.50
PERIOD
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.25 0.51 0.44
Net realized and unrealized gain 0.37 0.24 (0.31)
(loss) on investments
Total from investment operations 0.62 0.75 0.13
LESS DISTRIBUTIONS
Distributions from net (0.25) (0.51) (0.41)
investment income
NET ASSET VALUE, END OF PERIOD $10.83 $10.46 $10.22
TOTAL RETURN (B) 5.97% 7.60% 1.19%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.91% 0.61% 0.56%*
Net investment income 4.47% 4.93% 4.69%*
Expense waiver/reimbursement (c) 0.75% 0.95% 0.87%*
SUPPLEMENTAL DATA
Net assets, end of period (000 $30,524 $35,888 $42,400
omitted)
Portfolio turnover 0% 3% 30%
* Computed on an annualized basis.
(a) Reflects operations for the period from August 30, 1993 (date of initial
public investment) to July 31, 1994.
For the period from August 5, 1993 (start of business) to August 29,
1993, all income was distributed to the administrator.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
TENNESSEE TAX-FREE BOND FUND
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 1996 (UNAUDITED)
1. ORGANIZATION
The Planters Funds (the "Trust") is registered under the Investment Company
Act of 1940, as amended (the "Act"), as an open-end, management investment
company. The financial statements presented herein are those of Tennessee
Tax-Free Bond Fund (the "Fund"), a non-diversified portfolio. At January 31,
1996, the Trust did not offer any other portfolios.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS - 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. All other securities are valued at
prices provided by an independent pricing service.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS - 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"). Distributions to shareholders are recorded on the ex-dividend
date.
FEDERAL TAXES - It is the Fund's policy to comply with the provisions of
the Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
At July 31, 1995, the Fund, for federal tax purposes, had a capital loss
carryforward of $153,288, which will reduce the Fund's taxable income
arising from future net realized gain on investments, if any, to the extent
permitted by the Code, and thus will reduce the amount of the distributions
to shareholders which would otherwise be necessary to relieve the Fund of
any liability for federal tax. Pursuant to the Code, such capital loss
carryforward will expire in 2003.
Additionally, net capital losses of $111,894 attributable to security
transactions incurred after October 31, 1994 are treated as arising on the
first day of the Fund's next taxable year.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS - The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains 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.
DEFERRED EXPENSES - The costs incurred by the Fund with respect to
registration of its shares in its first fiscal year, excluding the initial
expense of registering its shares, have been deferred and are being
amortized using the straight-line method over a period of five years from
the Fund's commencement date.
10
OTHER - Investment transactions are accounted for on the trade date.
3. SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Board of Trustees ("Trustees") to issue
an unlimited number of full and fractional shares of beneficial interest
(without par value).
Transactions in shares were as follows:
SIX MONTHS ENDED
JANUARY 31, 1996 YEAR ENDED
(UNAUDITED) JULY 31, 1995
Shares sold 48,179 333,883
Shares issued to
shareholders in payment
of distributions declared 6,240 14,443
Shares redeemed (665,415) (1,066,291)
Net change resulting from
share transactions (610,996) (717,965)
4. INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE - Union Planters National Bank, the Fund's
investment adviser, (the "Adviser"), receives for its services an annual
investment advisory fee equal to .75 of 1% of the Fund's average daily net
assets.
The Adviser may voluntarily choose to waive any portion of its fee. The
Adviser can modify or terminate this voluntary waiver at any time at its
sole discretion.
As of January 31, 1996, Union Planters National Bank was the owner of
record of approximately 2,521,490 shares, which is 89.43% of the Fund.
ADMINISTRATIVE FEE - Federated Administrative Services ("FAS") provides the
Fund with certain administrative personnel and services for which it
receives a fee. This fee is based on the level of average aggregate net
assets of the Trust for the period. FAS may voluntarily choose to waive a
portion of its fee.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES - Federated Shareholder
Services Company ("FServ") serves as transfer and dividend disbursing agent
for the Fund for which it receives a fee. This fee is based on the size,
type, and number of accounts and transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES - FServ maintains the Trust's accounting records
for which it receives a fee. This fee is based on the level of the
Trust's average daily net assets for the period, plus out-of-pocket
expenses.
ORGANIZATIONAL EXPENSES - Organizational expenses of $35,622 were borne
initially by FAS.
The Fund has agreed to reimburse FAS for the organizational expenses during
the five year period following the Fund's effective date. For the period
ended January 31, 1996, the Fund paid $4,559 pursuant to this agreement.
11
GENERAL - Certain of the Officers and Trustees of the Trust are Officers
and Directors or Trustees of the above companies.
5.INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the
period ended January 31, 1996, were as follows:
PURCHASES $0
SALES $6,055,060
6. CONCENTRATION OF CREDIT RISK
Since the Fund invests a substantial portion of its assets in issuers
located in one state, it will be more susceptible to factors adversely
affecting issuers of that state than would be a comparable general tax-
exempt mutual fund that invests nationally. In order to reduce the credit
risk associated with such factors, at January 31, 1996, 41.40% of the
securities in the portfolio of investments are backed by letters of credit
or bond insurance of various financial institutions and financial guaranty
assurance agencies. The value of investments insured by or supported
(backed) by a letter of credit from any one institution or agency did not
