John Hancock Funds
Bank and
Thrift
Opportunity
Fund
SEMI-ANNUAL REPORT
April 30, 1997
TRUSTEES
Edward J. Boudreau, Jr.
James F. Carlin*
William H. Cunningham*
Charles F. Fretz*
Harold R. Hiser, Jr.*
Anne C. Hodsdon
Charles L. Ladner*
Leo E. Linbeck, Jr.*
Patricia P. McCarter*
Steven R. Pruchansky*
Richard S. Scipione
Lt. Gen. Norman H. Smith, USMC (Ret.)*
John P. Toolan*
*Members of the Audit Committee
OFFICERS
Edward J. Boudreau, Jr.
Chairman and Chief Executive Officer
Robert G. Freedman
Vice Chairman and
Chief Investment Officer
Anne C. Hodsdon
President
James B. Little
Senior Vice President and
Chief Financial Officer
Susan S. Newton
Vice President and Secretary
James J. Stokowski
Vice President and Treasurer
Thomas H. Connors
Second Vice President and Compliance Officer
INVESTMENT ADVISER
John Hancock Advisers, Inc.
101 Huntington Avenue
Boston, Massachusetts 02199-7603
CUSTODIAN, TRANSFER AGENT AND
DIVIDEND DISBURSER
State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110
LEGAL COUNSEL
Hale and Dorr LLP
60 State Street
Boston, Massachusetts 02109
Listed New York Stock Exchange Symbol: BTO
John Hancock Closed-End Funds:
1-800-843-0090
CHAIRMAN'S MESSAGE
DEAR FELLOW SHAREHOLDERS:
After two years of spectacular performance, the stock market in 1997 has
given investors its starkest reminder in a while of one of investing's
basic tenets: markets move down as well as up. It's understandable if
investors had lost sight of that fact. The bull market that began six
years ago has given investors annual double-digit returns and more
modest price declines than usual. And in the two years encompassing 1995
and 1996, the S&P 500 Index gained more than 50%. This Pollyanna
environment has tracked along with a sustained economic recovery, now in
its seventh year, that has been marked by moderate growth, low interest
rates and tame inflation.
A 1 1/4" x 1" photo of Edward J. Boudreau Jr., Chairman and Chief
Executive Officer, flush right, next to second paragraph.
But recently, many have begun to wonder about this bull market. Since
reaching new highs in early March, the Dow Jones Industrial Average
tumbled by more than 7% at the end of March and wiped out nearly all it
had gained since the start of the year. It was the worst decline that
the market had seen since 1990. In early April, the Dow was down by
9.8%, within shouting distance of a 10% correction. By the end of the
month, it had bounced back into record territory again.
As the market continues to fret over interest rates and inflation,
investors should be prepared for more volatility. It also makes sense to
do something we've always advocated: set realistic expectations. Keep in
mind that the stock market's historic yearly average has been about 10%,
not the 20%-plus annual average of the last two years or even the 16%
annual average over the last 10 years. Remember that the kind of market
volatility we've seen lately is more like the way the market really
works. Fluctuations go with the territory. And market corrections can be
healthy, serving to bring inflated stock prices down to more reasonable
levels, thereby reducing some of the market's risk.
Use this time of heightened volatility as an opportunity to review your
portfolio's asset allocations with your investment professional. Make
sure that your investment strategies reflect your individual time
horizons, objectives and risk tolerance, and that they are based upon
your needs. Despite turbulence, one thing remains constant. A well-
constructed plan and a cool head can be the best tools for reaching your
financial goals.
Sincerely,
/S/EDWARD J. BOUDREAU, JR.
EDWARD J. BOUDREAU, JR., CHAIRMAN AND CHIEF EXECUTIVE OFFICER
BY JAMES K. SCHMIDT, CFA, PORTFOLIO MANAGER
John Hancock
Bank and Thrift
Opportunity Fund
Bank stocks soften in jittery market
On the heels of a strong 1996, the markets continued their upward march
for the first two months of 1997, only to meet a stiff headwind of
inflationary concern and rising interest rates in mid-March. Early in
1997, the engine of economic growth began to overheat and thus the
Federal Reserve moved toward a more restrictive monetary policy. The
stock market reacted with a series of gyrations, first giving back most
of its gains for the year and then moving to new highs. The advances
were restricted, however, mostly to a narrow range of large-company
stocks. For the six months ended April 30, the broader market,
as measured by the Standard & Poor's 500 Stock Index returned 14.71%.
Although bank stocks were not immune to the market's volatility and
rising interest rates, especially in the latter part of the period, the
Fund still turned in a strong performance. For the six months ended
April 30, 1997, John Hancock Bank and Thrift Opportunity Fund returned
19.01% at net asset value. That compared favorably with the 14.35%
return for the average open-end financial services fund and the 15.74%
return for the average closed-end financial services fund, according to
Lipper Analytical Services, Inc.
"...early in
1997, the
engine of
economic
growth
began to
overheat..."
A 2 1/4" x 3 1/4" photo of the portfolio management team. Caption reads:
"James K. Schmidt (seated) and Fund management team members: (l-r) James
Boyd, Patricia Ouimet and Gerard Cronin."
Interest rates vs. bank earnings
Looking forward, we believe it is likely that the Fed will need to
increase rates one more time in the near future to curb inflation. As
rates move up, investors invariably sell bank stocks on the assumption
that higher rates have a negative impact on bank earnings. We find this
behavior mistaken, since in recent years banks have been able to adjust
both loan and deposit pricing in step and keep earnings on track.
Consider the last time interest rates moved upward sharply, a 15-month
period in 1994-95. Short-term interest rates rose by 300 basis points
(3.0%), much more than we are forecasting for 1997. The impact on bank
margins was slight. According to FDIC data, net interest margins -- the
difference between what banks receive on their loans and what they pay
out to depositors -- in the commercial banking industry declined only
modestly, from 4.36% to 4.29%, and net interest income actually
increased due to growth in earning assets.
"Bank stocks
were not
immune to
the market's
volatility..."
A line chart with the heading "Key banking rates: Short term rate
comparison" at the top of the left hand column. The chart is scaled in
increments of 2% with 10% at the top and 0% at the bottom on the
vertical left side, The bottom is scaled in increments of one year with
Jan-91 at the left and Jan-97 at the right. Within the chart are four
horizontal lines running from the top to the bottom of the chart, each
tracking yearly percentage rate changes for each of the four types of
key interest rate bench marks. The first one on the top represents the
Prime rate percentage. The next one below represents the percent for the
90 day CD. The next represents the percent for Money market accounts.
The bottom line represents percent for NOW savings accounts. The code
for each line is shown centered under the graph with the first two codes
on one row, and the second two underneath. Below is a footnote that says
"Source: Bank Rate Monitor - Barron's; Bloomberg Financial Markets."
Table entitled "Scorecard" at bottom of left hand column. The header for
the left column is "Investments"; the header for the right column is
"Recent performance ... and what's behind the numbers. The first listing
is American Federal Bank followed by an up arrow and the phrase "Premium
price in takeover by CCB Financial." The second listing is Summit
Bancshares followed by an up arrow and the phrase "Competitive advantage
promotes growing earnings." The third listing is Southwest Bancorp
followed by a horizontal arrow and the phrase "Market suspect of a fast-
growing loan book." Footnote below reads: "See "Schedule of Investments."
Investment holdings are subject to change."
The chart on this page shows key interest rates during the last five
years. Note that while the cost of funds, as indicated by the yield on
90-day certificates of deposits, has increased, the impact has been
passed on to borrowers, since the prime rate -- a key peg for setting
lending rates -- has also risen. As a result, the yield spread on
commercial loans has not narrowed. In fact, the spread between the prime
rate and money market accounts has increased by 100 basis points (1.0%)
since mid-1994. We believe that any further increases in the cost of
funds will translate into a corresponding increase in the prime rate and
result in little impact on margins.
Earnings trend upward
In 1996, bank earnings once again shattered prior records, as net income
for the nation's 9,500 commercial banks exceeded $50 billion for the
first time. The macroeconomic triple play of moderate growth, low
inflation and stable interest rates drove bank earnings-per-share above
consensus estimates. Banks reported wide interest margins, stable
overhead levels and lower share counts due to stock repurchases. Credit
costs, mostly due to elevated levels of problem loans in consumer
portfolios, rose moderately off of an unsustainably low base and had
little impact on bottom line profitability. In 1997, our model forecasts
12% earnings growth over 1996. Recently released first quarter reports
corroborate this thesis, as the 1996 trends continue: wide spreads
(despite rising rates), controlled expenses and share repurchases all
are driving earnings per share.
Chart with heading "Top Five Common Stock Holdings" at top of left hand
column. The chart lists five holdings: 1) U.S. Bancorp 4.9% 2) Union Planters
Corp. 4.6% 3) PNC Bank Corp. 3.3% 4) Barnett Banks, Inc. 2.8% 5) Collective
Bancorp. 2.7%. A footnote below reads: "As a percentage of net assets on April
30, 1997."
The decline in the value of bank and thrift shares since early March has
also restored their inexpensive status. Although the prices of many
individual stocks are down more than 15% since their peaks in March, we
have, in aggregate, not changed our earnings forecast for the year.
Consequently, the relative price-earnings ratio multiple of the banking
group has declined to 68% of the average market multiple, from its March
high of 72%.
The consolidation process keeps going
In 1996, fourteen of the Fund's holdings announced mergers. In the first
four months of 1997, seven more deals hit the tape. The largest
transaction was First Bank Systems' pending acquisition of US Bancorp.
This was a watershed event, similar to the NationsBank purchase of
Boatmen's in 1996. Both transactions were enabled by the national
interstate banking legislation that took effect in 1995. Like
NationsBank, First Bank is paying a high premium for one of the Fund's
larger, regional "trophy franchises." Although Boatmen's and US Bancorp
both had leading positions in attractive markets, as stand-alones they
lacked the critical mass to invest in new technology, develop products
and squeeze the maximum returns from their franchises. The Fund focuses
specifically on banks of this size and ilk mainly because as the
competitive bar is raised these institutions are more likely to sell
out. Regional banks in this $20 billion-$40 billion asset range are too
big to compete as locals and too small to take on the behemoth
superregionals; their mortality rate is and will be very high.
"In 1997,
our model
forecasts
12% earnings
growth over
1996."
In our view, the ongoing consolidation and homogenization of the
financial services industry will continue. Newly relaxed regulations
governing securities and insurance activities allow banks more freedom
to offer these products. While larger-scale brokerage activities will
remain the bailiwick of only the money center and superregional giants,
insurance activities may be a boon for the Fund's smaller regional
banks. By simply selling and not underwriting these products, banks
insulate themselves from much of the attendant risks yet are able to
sell additional fee-based products to their existing customer base.
An interesting takeover battle has recently been resolved in California,
as Washington Mutual will merge with Great Western Financial, creating
what will be the largest thrift institution in the U.S. We believe the
earnings of Washington Mutual will be enhanced because of the enormous
expense savings and revenue enhancement opportunities in the merger,
coupled with Washington Mutual's history of smooth integration of
acquisitions. We consider this merger to be a very positive development
because it produces a new powerhouse institution with the capability of
making further acquisitions, and because it demonstrates that industry
consolidation can produce benefits for all parties to a transaction.
What is clear, though, is that the California economy has recovered and
that this state will be a focal point of consolidation in the future.
Several of the Fund's smaller capitalization California banks have
already been party to this activity and we expect this trend to
continue. As a result, we continue to be active in accumulating banks
and thrifts in California.
Bar chart with heading "Fund Performance" at top of left hand column.
Under the heading is the footnote: "For the six months ended April 30,
1997." The chart is scaled in increments of 5% from bottom to top, with
20% at the top and 0% at the bottom. Within the chart, there are three
solid bars. The first represents the 19.01% total return for John
Hancock Bank and Thrift Opportunity Fund. The second represents the
14.35% total return for the average closed-end financial services fund.
The third represents the 15.74% total return for the average closed-end
financial services fund. Footnote below reads: "The total return for
John Hancock Bank and Thrift Opportunity Fund is at net asset value with
all distributions reinvested. The average closed-end financial services
fund is tracked by Lipper Analytical Services, Inc."
"The Fund
remains
geographically
diverse..."
Portfolio, tactics and outlook
The basic investment concept of the Fund has remained the same since its
inception in August, 1994. We invest in undervalued regional banks and
thrifts with healthy earnings fundamentals and that are in the path of
consolidation. The Fund remains geographically diverse because the
nation's economic expansion has now reached every region and there are
no longer any localized economic crises to beware of.
Historically, banks that were perceived as potential acquisition targets
traded at a significant price-earnings multiple premium to those that
were considered to be buyer institutions. Since the beginning of 1996,
however, the shares of the largest banks have risen dramatically to the
point where there is no longer a valuation disparity between potential
buyers and potential sellers. We think this has caused many of the mid-
sized banks, with between $20 billion and $40 billion in assets, to
trade at prices that are reasonable, even if there were no possibility
of a takeover bid. Among smaller stocks, we have built many positions in
previously mutual savings and loans that have converted to public
ownership. These are the least expensive of all depository institutions,
as many still trade below their book value. While we encourage these
companies to buy back their stock aggressively, on some occasions we
have concluded that the buybacks have forced the stocks to too high a
level and we have cut back or eliminated our holdings.
Due in part to a share buyback initiated in May 1996 and to the
financial sector's robust performance since mid-1996, the discount
between the Fund's share price and its net asset value narrowed from 20%
to 10% in December 1996. In the financial sector's weakness of recent
weeks, the discount has widened back out to 15%, despite the continuing
strong performance of the underlying assets.
We remain confident about the prospects for bank and thrift stocks. Even
though any further rise in interest rates might temporarily put the
sector under pressure, we believe, as we stated earlier, that the
conventional wisdom no longer holds true that rising rates affect bank
earnings. Bank and thrift fundamentals remain as strong as ever, and we
expect industry consolidation to continue for many years. We will
continue to direct our energies toward making sound investments that
cause the net asset value of the Fund to continue to grow.
This commentary reflects the views of the portfolio manager through the
end of the Fund's period discussed in this report. Of course, the
manager's views are subject to change as market and other conditions
warrant.
Sector investing is subject to different, and sometimes greater, risks
than the market as a whole.
<TABLE>
<CAPTION>
Financial Statements
The Statement of Assets and Liabilities is the Fund's balance sheet
and shows the value of what the Fund owns, is due and owes on April
30, 1997. You'll also find the net asset value for each common share
as of that date.
Statement of Assets and Liabilities
April 30, 1997 (Unaudited)
- -----------------------------------------------------------------
<S> <C>
Assets:
Investments at value -- Note C:
Common stocks and Warrant
Unaffiliated Issuers (cost -- $365,875,362) $711,274,625
Affiliated Issuers -- Note E
(cost -- $14,442,775) 23,302,456
Preferred stocks (cost -- $11,087,500) 12,361,375
Bonds (cost -- $22,094,855) 22,843,900
Short-term investments (cost -- $46,478,533) 46,478,533
-------------
816,260,889
Cash 967
Interest receivable 551,395
Dividends receivable 1,297,595
Deferred organization expenses -- Note A 37,067
Other assets 39,794
-------------
Total Assets 818,187,707
- -----------------------------------------------------------------
Liabilities:
Payable to John Hancock Advisers, Inc.
and affiliates -- Note B 874,915
Accounts payable and accrued expenses 97,790
-------------
Total Liabilities 972,705
- -----------------------------------------------------------------
Net Assets:
Capital paid-in 435,273,407
Accumulated net realized gain on investments 21,272,102
Net unrealized appreciation of investments 356,284,565
Undistributed net investment income 4,384,928
-------------
Net Assets $817,215,002
=================================================================
Net Asset Value Per Share:
(Based on 22,100,000 shares of beneficial
interest outstanding -- unlimited number of
shares authorized with no par value) $ 36.98
=================================================================
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
The Statement of Operations summarizes the Fund's investment income
earned and expenses incurred in operating the Fund. It also shows
net gains for the period stated.
Statement of Operations
Six months ended April 30, 1997 (Unaudited)
- --------------------------------------------------------------------
<S> <C>
Investment Income:
Dividends (including $159,884 received from
affiliated issuers and net of foreign withholding
taxes of $12,229) $ 9,374,058
Interest 1,964,821
--------------
11,338,879
--------------
Expenses:
Investment management fee - Note B 4,369,496
Administration fee - Note B 949,890
Custodian fee 79,376
Printing 62,292
Trustees' fees 46,419
Auditing fee 20,557
Transfer agent fee 20,358
New York Stock Exchange fee 19,845
Miscellaneous 15,578
Legal fees 10,140
Organization expense - Note A 7,912
--------------
Total Expenses 5,601,863
- --------------------------------------------------------------------
Net Investment Income 5,737,016
- --------------------------------------------------------------------
Unrealized Gain on Investments:
Net realized gain on investments sold (including
$754,937 on sales of investments in affiliated issuers) 21,270,278
Change in net unrealized appreciation/depreciation
of investments 102,779,897
--------------
Net Increase in Net Assets
Resulting from Operations $129,787,191
====================================================================
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
- ---------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED
YEAR ENDED APRIL 30, 1997
OCTOBER 31, 1996 (UNAUDITED)
----------------- ---------------
<S> <C> <C> <C> <C>
Increase (Decrease) in Net Assets:
From Operations:
Net investment income $ 12,807,440 $ 5,737,016
Net realized gain on investments sold 29,138,919 21,270,278
Change in net unrealized appreciation/depreciation of investments 120,230,953 102,779,897
------------- -------------
Net Increase in Net Assets Resulting from Operations 162,177,312 129,787,191
------------- -------------
Distributions to Shareholders:
Dividends from net investment income ($0.9075 and $0.1186 per share,
respectively) ( 20,616,437) ( 2,629,876)
Distributions from net realized gain on investments sold ($1.495 and
$0.1329 per share, respectively) ( 33,683,439) ( 2,946,969)
------------- -------------
Total Distributions to Shareholders ( 54,299,876) ( 5,576,845)
------------- -------------
From Fund Share Transactions - Net:* ( 14,925,947) ( 8,670,646)
------------- -------------
Net Assets:
Beginning of period 608,723,813 701,675,302
------------- -------------
End of period (including undistributed net investment income of
$1,277,788 and $4,384,928, respectively) $701,675,302 $817,215,002
============= =============
*Analysis of Common Share Transactions:
SIX MONTHS ENDED
YEAR ENDED APRIL 30, 1997
OCTOBER 31, 1996 (UNAUDITED)
--------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ---------- --------- ------------
Shares outstanding, beginning
of period 23,005,000 $458,870,000 22,397,100 $443,944,053
Less shares repurchased ( 607,900) ($ 14,999,129) ( 297,100) ($ 8,670,646)
----------- ------------- ------------ -------------
22,397,100 $443,870,871 22,100,000 $435,273,407
Adjustment to capital paid-in - Note D -- 73,182 -- --
----------- ------------- ------------ -------------
Shares outstanding, end of period 22,397,100 $443,944,053 22,100,000 $435,273,407
=========== ============= ============ =============
The Statement of Changes in Net Assets shows how the value of the Fund's net assets has changed since the
end of the previous period. The difference reflects earnings less expenses, any investment and foreign
currency gains and losses, distributions paid to shareholders, and any increase or decrease in money
shareholders invested in the Fund. The footnote illustrates the number of Fund shares sold during the
period, along with the corresponding dollar value.
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
Financial Highlights
Selected data for a share of beneficial interest outstanding throughout each period indicated, investment returns,
key ratios and supplemental data are listed as follows:
- ------------------------------------------------------------------------------------------------------------------------
FOR THE PERIOD AUGUST 23, 1994 YEAR ENDED OCTOBER 31, SIX MONTHS ENDED
(COMMENCEMENT OF OPERATIONS) ----------------------- APRIL 30, 1997
TO OCTOBER 31, 1994 1995 1996 (UNAUDITED)
------------------------------ -------- -------- -----------------
<S> <C> <C> <C> <C>
Per Share Operating Performance
Net Asset Value, Beginning of Period $ 20.00 $ 19.81 $ 26.46 $ 31.33
---------- ---------- ---------- ----------
Net Investment Income 0.12 0.50 0.56 0.26(d)
Net Realized and Unrealized Gain (Loss) on
Investments ( 0.26) 6.38 6.57 5.58
---------- ---------- ---------- ----------
Total from Investment Operations ( 0.14) 6.88 7.13 5.84
---------- ---------- ---------- ----------
Less Distributions:
Dividends from Net Investment Income -- ( 0.23) ( 0.91) ( 0.12)
Distributions from Net Realized Gain on
Investments Sold -- -- ( 1.50) ( 0.13)
---------- ---------- ---------- ----------
Total Distributions -- ( 0.23) ( 2.41) ( 0.25)
---------- ---------- ---------- ----------
Common Shares Offering Costs ( 0.05) -- -- --
Increase due to purchase of Bank and Thrift
Opportunity Fund stock
at less than net asset value -- -- 0.15 0.06
---------- ---------- ---------- ----------
Net Asset Value, End of Period $ 19.81 $ 26.46 $ 31.33 $ 36.98
========== ========== ========== ==========
Per Share Market Value, End of Period $ 18.00 $ 22.75 $ 27.00 $ 31.50
========== ========== ========== ==========
Total Investment Return at Market Value ( 10.00%)(a) 27.91% 29.78% 17.64%(a)
Ratios and Supplemental Data
Net Assets, End of Period (000s omitted) $455,656 $608,724 $701,675 $817,215
Ratio of Expenses to Average Net Assets 1.51%(c) 1.49% 1.50% 1.46%(c)
Ratio of Net Investment Income to Average
Net Assets 3.22%(c) 2.22% 1.96% 1.51%(c)
Portfolio Turnover Rate 0% 8% 13% 4%
Average Broker Commission Rate (per share
of security) (b) N/A N/A $ 0.0727 $ 0.0700
(a) Not annualized.
(b) Average broker commission rate (per share of security) as required by amended disclosure requirements effective
September 1, 1995.
(c) Annualized.
(d) Based on the average of month end shares outstanding.
The Financial Highlights summarizes the impact of the following factors on a single share for each period indicated:
the net investment income, gains (losses), distributions and total investment return of the Fund. It shows how the
Fund's net asset value for a share has changed since the end of the previous period. Additionally, important
relationships between some items presented in the financial statements are expressed in ratio form.
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
Schedule of Investments
April 30, 1997 (Unaudited)
The Schedule of Investments is a complete list of all securities owned by the Bank and Thrift Opportunity Fund on
April 30, 1997. It's divided into four main categories: common stocks and warrant, preferred stocks, bonds and
short-term investments. The common stocks and warrant, preferred stocks and bonds are further broken down by
industry groups. Short-term investments, which represent the Fund's "cash" position, are listed last.
MARKET
DESCRIPTION, ISSUER, STATE NUMBER OF SHARES VALUE
- -------------------------- ---------------- ------
<S> <C> <C>
COMMON STOCKS AND WARRANT
Money Center Banks (0.21%)
Chase Manhattan Corp. (NY) 18,387 $ 1,703,096
------------
Super Regionals (10.35%)
Barnett Banks, Inc. (FL) 460,000 22,482,500
First Union Corp. (NC) 11,285 947,940
Fleet Financial Group, Inc. (MA) 205,206 12,517,566
NationsBank Corp. (NC) 146,160 8,824,410
Norwest Corp. (MN) 264,051 13,169,544
PNC Bank Corp. (PA) 647,000 26,607,875
------------
84,549,835
------------
Regionals (58.53%)
ABC Bancorp. (GA) 40,000 790,000
Alabama National Bancorp. (AL) 130,000 2,575,625
American Bancorp. (WV) 17,500 525,000
American Bancshares, Inc.* (FL) 60,000 502,500
Atlantic Bancorp.* (ME) (R) 150,000 2,301,000
BancFirst Corp. (OK) 70,000 1,995,000
BancFirst Ohio Corp. (OH) 35,000 1,163,750
BancorpSouth, Inc. (MS) 55,000 1,498,750
Bank Yorba Linda (CA) + 67,500 1,147,500
Banknorth Group, Inc. (VT) 66,500 2,826,250
BanPonce Corp. (PR) 290,000 9,896,250
Beverly National Corp. (MA) 25,000 662,500
BNCCorp., Inc.* (ND) 45,000 483,750
Broad National Bancorp. (NJ) 95,657 1,410,941
BT Financial Corp. (PA) 12,000 489,000
California State Bank (CA) 89,200 1,945,675
Cape Cod Bank & Trust Co. (MA) 43,500 1,179,937
Carolina First Corp. (SC) 33,890 542,240
CCB Financial Corp. (NC) 35,600 2,416,350
Centura Banks, Inc. (NC) 80,000 3,130,000
Century Financial Corp. (PA) 20,000 382,500
Chittenden Corp. (VT) 59,062 1,675,884
Citizens Bancshares, Inc. (OH) 25,000 943,750
City National Corp. (CA) 40,977 937,349
Colonial BancGroup, Inc. (AL) 770,000 17,325,000
Columbia Bancorp. (MD) 24,000 534,000
Comerica, Inc. (MI) 165,000 9,652,500
Commercial Bankshares, Inc. (FL) 35,700 589,050
Commonwealth Bankshares, Inc.* (VA) 26,966 269,660
Community Banks, Inc. (PA) 34,650 1,048,162
Compass Bancshares, Inc. (AL) 534,405 16,165,751
CoreStates Financial Corp. (PA) 225,875 11,434,922
County Bank of Chesterfield (VA) 30,000 517,500
Crestar Financial Corp. (VA) 534,000 19,758,000
Dauphin Deposit Corp. (PA) 80,000 3,400,000
Desert Community Bank (CA) 42,000 787,500
DNB Financial Corp. (PA) 22,609 712,184
Empire Banc Corp. (MI) 14,306 590,122
Evergreen Bancorp., Inc. (NY) 50,000 725,000
F & M National Corp. (VA) 10,000 213,750
Financial Trust Corp. (PA) 99,000 4,158,000
First American Corp. (TN) 322,100 21,097,550
First of America Bank Corp. (MI) 308,300 20,501,950
First Commerce Corp. (LA) 375,000 15,328,125
First Financial Corp (RI) + 94,000 1,108,906
First Hawaiian, Inc. (HI) 25,000 768,750
First Security Corp. (UT) 165,000 5,878,125
First State Bancorp. (NM) 82,625 1,146,422
First Tennessee National Corp. (TN) 121,200 5,257,050
First Victoria National Bank (TX) 48,100 1,238,575
Firstar Corp. (WI) 270,352 7,941,590
FNB Bankshares (ME) 20,780 581,840
FNB Rochester Corp. (NY) 19,500 240,094
F.N.B. Corp. (PA) 40,516 972,384
Harleysville National Corp. (PA) 43,810 1,204,775
Imperial Bancorp. * (CA) 153,105 3,597,968
Independent Bankshares, Inc. (TX) 18,000 279,000
Magna Group, Inc. (MO) 105,000 3,241,875
Mahaska Investment Co. (IA) + 149,500 3,475,875
Mahoning National Bancorp. (OH) 57,600 1,281,600
Marathon Financial Corp. (VA) 15,000 80,625
Mercantile Bancorp., Inc. (MO) 240,247 13,934,326
MetroBanCorp. (IN) 49,000 343,000
Mississippi Valley Bancshares, Inc.
(MO) 40,500 1,721,250
National City Corp. (OH) 441,400 21,518,250
New England Community Bancorp.
(Class A) (CT) + 185,000 2,821,250
North Fork Bancorp., Inc. (NY) 80,800 3,201,700
Old Kent Financial Corp. (MI) 195,693 9,931,420
One Valley Bancorp., Inc. (WV) 59,272 2,274,563
Oriental Financial Group (PR) 58,500 1,345,500
Pacific Century Financial Corp.
(HI) 300,000 12,825,000
Provident Bankshares Corp. (MD) 163,616 5,767,464
Regions Financial Corp. (AL) 82,956 4,707,753
Riggs National Corp. (DC) 55,000 1,017,500
Salem Bank & Trust (VA) 43,260 616,455
Santa Barbara Bancorp. (CA) 17,500 577,500
Security Bank Corp.* (VA) 27,000 263,250
Security Shares, Inc. (TX) (r) 200,000 1,874,000
Signet Banking Corp. (VA) 350,000 10,806,250
Southern National Corp. (NC) 533,880 20,954,790
Southtrust Corp. (AL) 480,000 17,940,000
Southwest Bancorp. of Texas,
Inc.* (TX) 85,000 1,763,750
Southwest Bancorp., Inc. (OK) 23,500 528,750
Summit Bancorp. (NJ) 417,420 19,410,030
Summit Bancshares, Inc. (TX) 38,000 969,000
Sun Bancorp., Inc. * (NJ) 52,500 1,141,875
Surety Capital Corp.* (TX) + 303,700 1,594,425
Tehama County Bank* (CA) 51,052 612,624
Texas Regional Bancshares, Inc.
(Class A) (TX) 20,000 680,000
TriCo Bancshares (CA) 11,000 246,125
Union Planters Corp. (TN) 844,975 37,707,009
United Security Bancorp.* (WA) 139,755 1,816,815
Univest Corp. (PA) 25,000 975,000
US Bancorp. (OR) 701,760 40,088,040
U.S. Trust Corp. (NY) 52,000 2,288,000
Vectra Banking Corp.* (CO) 49,100 939,038
Vermont Financial Services Corp.
(VT) 41,500 1,649,625
West Coast Bancorp. (OR) 61,187 1,376,708
Whitney Holding Corp. (LA) 138,500 5,020,625
Yardville National Bank (NJ) 25,500 529,125
-----------
478,303,466
-----------
Thrifts (19.00%)
American Federal Bank, FSB (SC) 165,000 4,785,000
American National Bancorp., Inc.
(MD) 76,470 1,099,256
Bank Plus Corp. * (CA) 202,858 2,003,223
Bank West Financial Corp. (MI) + 162,000 1,923,750
Bank United Corp. (Class A) (TX) 5,000 152,500
BostonFed Bancorp., Inc. (MA) 121,300 1,849,825
Cameron Financial Corp. (MO) 90,000 1,485,000
CB Bancorp., Inc.* (IN) 40,000 1,310,000
CENFED Financial Corp. (CA) 27,500 783,750
Collective Bancorp., Inc. (NJ) 546,500 22,338,187
Community Financial Corp.* (IL) 25,000 356,250
CSB Financial Group, Inc.* (IL) 40,000 465,000
Dime Bancorp., Inc. (NY) 54,500 878,812
FFVA Financial Corp. (VA) 50,000 1,062,500
Financial Bancorp., Inc. (NY) 85,000 1,391,875
First Colorado Bancorp., Inc. (CO) 91,000 1,456,000
First Defiance Financial Corp. (OH) 146,885 1,872,784
First Federal Capital Corp. (WI) 20,000 530,000
First Financial Corp. (WI) 68,022 1,794,080
First Keystone Financial, Inc. (PA) 20,000 430,000
GA Financial, Inc. (PA) 90,000 1,417,500
GreenPoint Financial Corp. (NY) 340,000 18,827,500
Guaranty Financial Corp. (VA) 30,000 300,000
Highland Federal Bank* (CA) 104,167 2,187,507
Hingham Institute For Savings (MA) 60,000 1,080,000
HMN Financial, Inc.* (MN) 86,500 1,665,125
InterWest Bancorp, Inc. (WA) 15,000 427,500
ISB Financial Corp. (LA) 120,000 2,700,000
Jefferson Savings Bancorp., Inc.
(MO) 42,265 1,215,119
Lawrence Savings Bank* (MA) 75,000 721,875
Little Falls Bancorp., Inc. (NJ) 110,000 1,430,000
Long Island Bancorp., Inc. (NY) 216,700 7,367,800
Mid Continent Bancshares, Inc. (KS) 55,000 1,416,250
New Hampshire Thrift
Bancshares, Inc. (NH) 25,000 368,750
North Central Bancshares, Inc. (IA) 55,000 862,812
Northwest Equity Corp. (WI) + 61,000 892,125
Pamrapo Bancorp., Inc. (NJ) 86,000 1,612,500
Patriot Bank Corp. (PA) 43,000 671,875
PennFed Financial Services,
Inc.* (NJ) + 305,500 7,255,625
People's Bancshares, Inc. (MA) 60,000 765,000
Peoples Heritage Financial Group,
Inc.
(ME) 29,800 934,975
Pittsburgh Home Financial Corp.
(PA) 100,000 1,475,000
Portsmouth Bank Shares, Inc. (NH) 48,378 713,575
Quaker City Bancorp., Inc. * (CA) 75,000 1,350,000
Roosevelt Financial Group, Inc. (MO) 479,324 11,144,283
St. Landry Financial Corp.* (LA) + 25,000 375,000
Scotland Bancorp., Inc. (NC) 22,500 348,750
SGV Bancorp., Inc.* (CA) 20,000 245,000
SIS Bancorp Inc. (MA) 87,500 2,275,000
Southern Missouri Bancorp., Inc.
(MO) 57,000 904,875
Sovereign Bancorp., Inc (PA) 27,562 337,635
Standard Federal Bancorp. (MI) 195,000 11,480,625
Standard Financial, Inc. (IL) 85,000 1,944,375
Sturgis Federal Savings Bank (MI) 27,000 668,250
Teche Holding Co. (LA) 80,000 1,290,000
Warren Bancorp Inc. (MA) 19,000 294,500
Washington Mutual, Inc. (WA) 257,300 12,704,187
Wells Financial Corp.* (MN) + 122,000 1,708,000
WesterFed Financial Corp. (MT) 209,161 3,895,624
-----------
155,242,309
-----------
Leasing Companies (0.06%)
Resource America, Inc.
(Class A) (PA) 24,500 477,750
-----------
Other (1.30%)
Capital One Financial Corp. (VA) 295,000 10,656,875
-----------
WARRANT (0.44%)
Glendale Federal Savings Bank* (CA) 265,000 3,643,750
-----------
TOTAL COMMON STOCKS
AND WARRANT
(Cost $380,318,137) ( 89.89%) 734,577,081
----------- -----------
PREFERRED STOCKS
Banks & Thrifts ( 1.51%)
Chevy Chase Savings, 13.00% (MD) 55,000 1,622,500
Community Bank,
Ser B, 13% (CA) 21,000 567,000
Fidelity Federal Bank
Ser A, 12.00% (CA) 15,000 412,500
First Preferred Cap I, 9.25% (MO) 50,000 1,293,750
Greater New York Savings Bank,
Ser B, 12.00% (NY) 50,000 1,575,000
IFC Capital Trust I, 9.25% (IN) 40,000 1,040,000
Matewan BancShares, Inc.,
Ser A, 7.50% (WV) 25,000 625,000
MVBI Capital Trust, 7.45% (MO) ** + 40,000 1,000,000
Riggs National Corp.,
Ser B, 10.75% (DC) 93,000 2,615,625
Sovereign Bancorp.,
Ser B, 6.25% (PA) 15,000 1,110,000
VBC Capital I, 9.50% (CO) 20,000 500,000
-----------
TOTAL PREFERRED STOCKS
(Cost $11,087,500) ( 1.51%) 12,361,375
----------- -----------
INTEREST PAR VALUE MARKET
RATE (000'S OMITTED) VALUE
--------- --------------- ------
BONDS
BFC Capital Trust I, (R)
Capital Securities,
Ser A, 01-15-27 9.650% $ 250 $ 246,250
Beal Financial Corp.,
Sr Note 08-15-00 12.750 2,000 2,120,000
CENFED Financial Corp., (R)
Sr Note 12-15-01 11.170 3,500 3,694,950
Coastal Bancorp., Inc.,
Sr Note 06-30-02 10.000 3,000 3,030,000
Dime Bancorp.,
Sr Note 11-15-05 10.500 3,690 3,985,200
Fidelity Federal Bancorp.,
Sub Note 06-01-05 10.000 1,000 980,000
First Federal Financial Corp.,
Note 10-01-04 11.750 2,000 2,040,000
MAF Bancorp., Inc.,
Sub Note 09-30-05 8.320 1,500 1,485,000
ML Capital Trust I, (R)
Capital Securities 03-01-27 9.875 1,000 1,000,000
Ocwen Federal Bank,
Sub Deb 06-15-05 12.000 1,000 1,082,500
WSFS Financial Corp.,
Sr Note 12-31-05 11.000 3,000 3,180,000
-----------
TOTAL BONDS
(Cost $22,094,855) ( 2.80%) 22,843,900
-----------
SHORT-TERM INVESTMENTS
Certificates of Deposit (0.00%)
Deposits in Mutual Banks $ 55,533
-----------
Joint Repurchase Agreement (5.68%)
Investment in a joint
repurchase transaction with
Aubrey G. Lanston & Co.
- - Dated 4-30-97,
Due 5-01-97 (Secured by US
Treasury Notes, 5.500% thru
6.625%, Due 5-15-98 thru
9-30-01 Note A 5.375% 46,423 46,423,000
---------- ------------
TOTAL SHORT TERM INVESTMENTS ( 5.68%) 46,478,533
---------- ------------
TOTAL INVESTMENTS ( 99.88%) $816,260,889
========== ============
NOTES TO SCHEDULE OF INVESTMENTS
* Non-income producing security.
(R) These Securities are exempt from registration under Rule 144A of the Securities Act of 1933. Such
securities may be resold, normally to qualified institutional buyers, in transactions exempt from
registration. Rule 144A securities amounted to $7,242,200 as of April 30, 1997.
(r) The securities listed below are direct placement securities and are restricted as to resale. The Fund
has limited rights to registration under the Securities Act of 1933 with respect to restricted
securities (not including Rule 144A securities). In certain circumstances the Fund may bear a portion
of the cost of such registrations; otherwise, such costs would be borne by the issuer. Additional
information on these restricted securities is as follows:
<CAPTION>
MARKET MARKET
VALUE AS A VALUE
PERCENTAGE AS OF
ACQUISITION ACQUISITION OF FUND'S APRIL 30,
DATE COST NET ASSETS 1997
----------- ----------- ---------- ----------
<S> <C> <C> <C> <C>
Security Shares, Inc. 9-29-94 $1,150,000 0.23% $1,874,000
+ Denotes an affiliated company in which the Fund has ownership of at least 5% of the voting securities.
(See Note E of the Notes to Financial Statements).
** Floating Rate Note, rate effective April 30, 1997.
The percentage shown for each investment category is the total value of that category as a percentage of
the net assets of the Fund.
See notes to financial statements.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
NOTE A --
ACCOUNTING POLICIES
The John Hancock Bank and Thrift Opportunity Fund (the "Fund") is a
diversified closed-end management investment company registered under
the Investment Company Act of 1940. To provide the initial capital of
the Fund, John Hancock Advisers, Inc. (the "Adviser"), a wholly owned
subsidiary of The Berkeley Financial Group, purchased a total of 5,000
common shares for an aggregate purchase price of $100,000 on August 8,
1994. The Adviser was the sole holder of common shares until the public
offering was completed and the operations of the Fund commenced on
August 23, 1994. The Fund's primary investment objective is long-term
capital appreciation.
Significant accounting policies of the Fund are as follows:
VALUATION OF INVESTMENTS Securities in the Fund's portfolio are valued
on the basis of market quotations, valuations provided by independent
pricing services or at fair value as determined in good faith in
accordance with procedures approved by the Trustees. Short-term debt
investments maturing within 60 days are valued at amortized cost, which
approximates market value.
JOINT REPURCHASE AGREEMENT Pursuant to an exemptive order issued by the
Securities and Exchange Commission, the Fund, along with other
registered investment companies having a management contract with the
Adviser, may participate in a joint repurchase agreement transaction.
Aggregate cash balances are invested in one or more repurchase
agreements, whose underlying securities are obligations of the U.S.
government and/or its agencies. The Fund's custodian bank receives
delivery of the underlying securities for the joint account on the
Fund's behalf. The Adviser is responsible for ensuring that the
agreement is fully collateralized at all times.
INVESTMENT TRANSACTIONS Investment transactions are recorded as of the
date of purchase, sale or maturity. Net realized gains and losses on
sales of investments are determined on the identified cost basis.
FEDERAL INCOME TAXES The Fund's policy is to comply with the
requirements of the Internal Revenue Code that are applicable to
regulated investment companies and to distribute all its taxable income,
including any net realized gain on investments, to its shareholders.
Therefore, no federal income tax provision is required.
DIVIDENDS, INTEREST AND DISTRIBUTIONS Dividend income on investment
securities is recorded on the ex-dividend date. Interest income on
investment securities is recorded on the accrual basis.
The Fund records all distributions to shareholders from net investment
income and realized gains on the ex-dividend date. Such distributions
are determined in conformity with income tax regulations, which may
differ from generally accepted accounting principles.
DISCOUNT ON SECURITIES The Fund accretes discount from par value on
securities purchased from either the date of issue or the date of
purchase over the life of the security, as required by the Internal
Revenue Code.
ORGANIZATION EXPENSES Expenses incurred in connection with the
organization of the Fund have been capitalized and are being charged to
the Fund's operations ratably over a five-year period that began with
the commencement of investment operations of the Fund.
USE OF ESTIMATES The preparation of these financial statements in
accordance with generally accepted accounting principles incorporates
estimates made by management in determining the reported amounts of
assets, liabilities, revenues and expenses of the Fund. Actual results
could differ from these estimates.
OPTIONS Listed options will be valued at the last quoted sales price on
the exchange on which they are primarily traded. Purchased put or call
over-the-counter options will be valued at the average of the "bid"
prices obtained from two independent brokers. Written put or call over-
the-counter options will be valued at the average of the "asked" prices
obtained from two independent brokers. Upon the writing of a call or put
option, an amount equal to the premium received by the Fund will be
included in the Statement of Assets and Liabilities as an asset and
corresponding liability. The amount of the liability will be
subsequently marked to market to reflect the current market value of the
written option.
The Fund may use option contracts to manage its exposure to the stock
market. Writing puts and buying calls will tend to increase the Fund's
exposure to the underlying instrument and buying puts and writing calls
will tend to decrease the Fund's exposure to the underlying instrument,
or hedge other Fund investments.
The maximum exposure to loss for any purchased options will be limited
to the premium initially paid for the option. In all other cases, the
face (or "notional") amount of each contract at value will reflect the
maximum exposure of the Fund in these contracts, but the actual exposure
will be limited to the change in value of the contract over the period
the contract remains open.
Risks may also arise if counterparties do not perform under the
contracts' terms, or if the Fund is unable to offset a contract with a
counterparty on a timely basis ("liquidity risk"). Exchange-traded
options have minimal credit risk as the exchanges act as counterparties
to each transaction, and only present liquidity risk in highly unusual
market conditions. To minimize credit and liquidity risks in over-the-
counter option contracts, the Fund will continuously monitor the
creditworthiness of all its counterparties.
At any particular time, except for purchased options, market or credit
risk may involve amounts in excess of those reflected in the Fund's
period-end Statement of Assets and Liabilities.
There were no written option transactions for the period ended April 30,
1997.
NOTE B --
MANAGEMENT FEE AND
TRANSACTIONS WITH AFFILIATES AND OTHERS
Under the present investment management contract, the Fund pays a
monthly management fee to the Adviser for a continuous investment
program equivalent on an annual basis to 1.15% of the Fund's average
weekly net asset value.
The Fund has also entered into an administrative agreement with the
Adviser pursuant to which the Adviser provides certain administrative
services on behalf of the Fund. In return, the Fund has agreed to pay a
monthly administration fee at an annual rate of 0.25% of the Fund's
average weekly net asset value.
Mr. Edward J. Boudreau, Jr., Ms. Anne C. Hodsdon, and Mr. Richard S.
Scipione are trustees and/or officers of the Adviser, and/or its
affiliates, as well as Trustees of the Fund. The compensation of
unaffiliated Trustees is borne by the Fund. The Adviser owns 5,000
shares of beneficial interest of the Fund. Effective with the fees paid
for 1996, the unaffiliated Trustees may elect to defer for tax purposes
their receipt of this compensation under the John Hancock Group of Funds
Deferred Compensation Plan. The Fund makes investments into other John
Hancock Funds, as applicable, to cover its liability for the deferred
compensation. Investments to cover the Fund's deferred compensation
liability are recorded on the Fund's books as an other asset. The
deferred compensation liability and the related asset are always equal
and are marked to market on a periodic basis to reflect any income
earned by the investment as well as any unrealized gains or losses. At
April 30, 1997, the Fund's investments to cover the deferred
compensation liability had unrealized appreciation of $2,701.
NOTE C --
INVESTMENT TRANSACTIONS
Purchases and proceeds from sales of securities, other than short-term
obligations, during the period ended April 30, 1997, aggregated
$27,013,952 and $65,863,716, respectively.
The cost of investments owned at April 30, 1997 for federal income tax
purposes was $459,979,025.
Gross unrealized appreciation and depreciation of investments aggregated
$356,823,238 and $541,374, respectively, resulting in net unrealized
appreciation of $356,281,864.
NOTE D --
CAPITAL
In connection with the Fund's initial public offering in August 1994,
the Fund recorded proceeds of $458,770,000, net of estimated offering
costs of $1,230,000, through the issuance of 23,000,000 common shares at
$20.00 per share. As of October 31, 1996, the Fund had incurred
$1,156,818 of public offering expenses and has adjusted capital paid-in
for $73,182 which represents the balance of estimated offering costs
which the Fund does not expect to incur. During the year ended October
31, 1996, 607,900 shares of the Fund's stock were purchased from
stockholders at an average discount of 18.0% from net asset value. For
the period ended April 30, 1997, 297,100 shares of the Fund's stock were
purchased from stockholders at an average discount rate of 12.4% from
net asset value. These shares were retired and restored to the status of
authorized but unissued shares.
<TABLE>
<CAPTION>
NOTE E --
TRANSACTIONS IN SECURITIES OF AFFILIATED ISSUERS
Affiliated issuers, as defined by the Investment Company Act of 1940,
are those in which the Fund's holdings of an issuer represent 5% or more
of the outstanding voting securities of the issuer. A summary of the
Fund's transactions in the securities of these issuers during the period
ended April 30, 1997 is set forth below.
ACQUISITIONS DISPOSITIONS
--------------------- -------------------
BEGINNING ENDING
SHARE SHARE SHARE SHARE REALIZED DIVIDEND ENDING
AFFILIATE AMOUNT AMOUNT COST AMOUNT COST AMOUNT GAIN INCOME VALUE
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Bank West Financial
Corp. (MI) 130,000 32,000 $ 362,000 -- $ -- 162,000 $ -- $ 10,500 $ 1,923,750
Bank Yorba Linda (CA) 20,000 47,500 790,938 -- -- 67,500 -- 1,875 1,147,500
First Financial Corp. 94,000 -- -- -- -- 94,000 -- 7,520 1,108,906
Mahaska Investment Co. (IA) 149,500 -- -- -- -- 149,500 -- 57,184 3,475,875
MVBI Capital Trust, 7.45% 40,000 40,000 1,000,000 -- -- 40,000 -- -- 1,000,000
New England Community
Bancorp (CT) 185,000 -- -- -- -- 185,000 -- 29,600 2,821,250
Northwest Equity Corp. (WI) 61,000 -- -- -- -- 61,000 -- 7,320 892,125
Penn Fed Financial
Services, Inc. (NJ) 350,000 15,500 319,687 60,000 737,500 305,500 523,708 45,885 7,255,625
St. Landry Financial
Corp. (LA) 25,000 -- -- -- -- 25,000 -- -- 375,000
Surety Capital Corp. (TX) 303,700 -- -- -- -- 303,700 -- -- 1,594,425
Wells Financial Corp. (MN) 167,000 -- -- 45,000 410,625 122,000 231,229 -- 1,708,000
---------- ---------- ---------------------------------
$2,472,625 $1,148,125 $754,937 $159,884 $23,302,456
========== ========== =================================
</TABLE>
INVESTMENT OBJECTIVE AND POLICY
John Hancock Bank and Thrift Opportunity fund is a closed-end
diversified management investment company, shares of which were
initially offered to the public on August 23, 1994 and are publicly
traded on the New York Stock Exchange. Its investment objective is long-
term capital appreciation.
DIVIDEND REINVESTMENT PLAN
The Fund provides shareholders with a Dividend Reinvestment Plan, (the
"Plan"), which offers the opportunity to earn compound yields. Each
holder of Common Shares will automatically have all distributions of
dividends and capital gains reinvested by State Street Bank and Trust
Company, 225 Franklin Street, Boston, Massachusetts 02110, as agent for
holders of Common Shares pursuant to the Plan (the "Plan Agent") unless
an election is made to receive cash. Each registered shareholder will
receive from the Plan Agent an authorization card to be signed and
returned if the shareholder elects to receive distributions from net
investment income in cash or elects not to receive capital gains distri-
butions in the form of a shares dividend. The Plan Agent will effect
purchases of Common Shares under the Plan in the open market. The Fund
will not issue any new shares in connection with the Plan. Holders of
Common Shares who elect not to participate in the Plan will receive all
distributions in cash paid by check mailed directly to the shareholder
of record (or if the Common Shares are held in street or other nominee
name, then to the nominee) by the Plan Agent, as dividend disbursing
agent. Shareholders whose shares are held in the name of a broker or
nominee or shareholders transferring such an account to a new broker or
nominee should contact the broker or nominee to determine whether and
how they may participate in the Plan.
The Plan Agent serves as agent for the holders of Common Shares in
administering the Plan. After the Fund declares a dividend or makes a
capital gains distribution, the Plan Agent will, as agent for the
participants, receive the cash payment and use it to buy Common Shares
in the open market, on the New York Stock Exchange or elsewhere, for the
participants' accounts. The price of the shares will be the average
market price at which such shares were purchased by the Plan Agent.
Participants in the Plan may withdraw from the Plan upon written notice
to the Plan Agent. Such withdrawal will be effective immediately if
received not less than ten days prior to a dividend record date;
otherwise, it will be effective for all subsequent dividend record
dates. When a participant withdraws from the Plan or upon termination of
the Plan as provided below, either a cash payment will be made to the
participant for the full value of the Common Shares credited to the
account upon instruction by the participant or certificates for whole
Common Shares credited to his or her account under the Plan will be
issued and a cash payment will be made for any fraction of a Common
Share credited to such account.
The Plan Agent maintains each shareholder's account in the Plan and
furnishes monthly written confirmations of all transactions in the
accounts, including information needed by the shareholders for personal
and tax records. Common Shares in the account of each Plan participant
will be held by the Plan Agent in non-certified form in the name of the
participant. Proxy material relating to shareholders' meetings of the
Fund will include those shares purchased as well as shares held pursuant
to the Plan.
In the case of shareholders, such as banks, brokers or nominees, which
hold Common Shares for others who are the beneficial owners, the Plan
Agent will administer the Plan on the basis of the number of Common
Shares certified from time to time by the record shareholders as
representing the total amount registered in the record shareholder's
name and held for the account of beneficial owners who are participants
in the Plan. Shares may be purchased through broker dealers.
The Plan Agent's fees for the handling of reinvestment of dividends and
other distributions will be paid by the Fund. Each participant will pay
a pro rata share of brokerage commissions incurred with respect to the
Plan Agent's open market purchases in connection with the reinvestment
of distributions. There are no other charges to participants for
reinvesting dividends or capital gain distributions.
Dividends and capital gains distributions are taxable whether received
in cash or reinvested in additional Common Shares, and the automatic
reinvestment of dividends and capital gain distributions will not
relieve participants of any U.S. income tax that may be payable or
required to be withheld on such dividends or distributions.
Experience under the Plan may indicate that changes are desirable.
Accordingly, the Fund reserves the right to amend or terminate the Plan
as applied to any distribution paid subsequent to written notice of the
change sent to all shareholders of the Fund at least 90 days before the
record date for the dividend or distribution. The Plan also may be
amended or terminated by the Plan Agent by at least 90 days' written
notice to all shareholders of the Fund. All correspondence concerning
the Plan should be directed to the Plan Agent at P.O. Box 8209, Boston,
Massachusetts 02266-8209 (telephone 1-800-426-5523).
SHAREHOLDERS MEETING
On March 6, 1997, the Annual Meeting of John Hancock Bank and Thrift
Opportunity Fund (the "Fund") was held to elect four Trustees and to
ratify the action of the Trustees in selecting independent auditors for
the Fund.
The shareholders elected the following Trustees to serve until their
respective successors are duly elected and qualified, with the votes
tabulated as follows:
FOR AUTHORITY WITHHELD
------------------ ----------------------
Charles L. Ladner 21,021,991 265,054
Leo E. Linbeck, Jr. 20,996,038 291,007
Patricia P. McCarter 21,003,413 283,632
Richard S. Scipione 21,023,850 263,195
The shareholders also ratified the Trustees' selection of Deloitte and
Touche, LLP, as the Fund's independent auditors for the Fund for the
fiscal year ending October 31, 1997, with the votes tabulated as
follows: 21,032,611 FOR, 93,109 AGAINST and 161,324 ABSTAINING.
NOTES
[This page intentionally left blank.]
A 1/2" by 1/2" John Hancock Funds logo in upper left hand corner of the page.
A box sectioned in quadrants with a triangle in upper left, a circle in upper
right, a cube in lower left and a diamond in lower right. A tag line below
reads: "A Global Investment Management Firm."
Bulk Rate
U.S. Postage
PAID
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A recycled logo in lower left hand corner with the caption "Printed on
Recycled Paper."
P90SA 4/97
6/97
