---------------------------
The latest report from your
Fund's management team
---------------------------
ANNUAL REPORT
--------------------------------------------------------------------------------
[GRAPHIC OMITTED]
Bank and Thrift
Opportunity
Fund
OCTOBER 31, 2000
[LOGO] John Hancock
-------------------
JOHN HANCOCK FUNDS
<PAGE>
--------------------------------------
TRUSTEES
Stephen L. Brown
James F. Carlin*
William H. Cunningham
Ronald R. Dion*
Maureen R. Ford
Charles L. Ladner
Steven R. Pruchansky*
Lt. Gen. Norman H. Smith, USMC (Ret.)
John P. Toolan
*Members of the Audit Committee
OFFICERS
Stephen L. Brown
Chairman
Maureen R. Ford
Vice Chairman, President and
Chief Executive Officer
William L. Braman
Executive Vice President and
Chief Investment Officer
Susan S. Newton
Vice President and Secretary
James J. Stokowski
Vice President and Treasurer
Thomas H. Connors
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 02109-1803
INDEPENDENT AUDITORS
Deloitte & Touche LLP
200 Berkeley Street
Boston, Massachusetts 02116
Listed New York Stock Exchange Symbol: BTO
For Shareholder Assistance
Refer to Page 17
---------------------------------------------
=================================CEO CORNER=====================================
DEAR FELLOW SHAREHOLDERS:
After providing investors with sky-high returns for the last five years, the
financial markets have brought investors back down to earth in 2000. Rising
interest rates and oil prices, the prospects of a slowing economy and earnings
fears all caught up with pricey growth stocks - technology in particular. A
dramatic plunge in the spring and again in the fall caused the major indexes to
end October in negative territory for the year to date. The tech-heavy NASDAQ
Composite Index was hardest hit, returning -17.19% year to date through October.
But there is a silver lining. Investors have finally turned their attention to
broader swaths of the market, including old economy stocks in sectors like
financials, health care and energy, that combined both strong fundamentals and
more attractive valuation levels. Since April, less expensive value stocks have
outperformed growth stocks.
--------------------------------------------------------------------------------
[A 1 " x 1" photo of Maureen R. Ford, Vice Chairman, President and Chief
Executive Officer, flush right next to second paragraph.]
--------------------------------------------------------------------------------
Bonds also began to make a comeback as the year progressed and investors grew
more confident that the series of Fed rate hikes might be coming to an end.
Pockets of strength have emerged there, including municipal bonds and
longer-maturity Treasury bonds. The 30-year bond, for instance, returned 13.53%
year to date through October.
The market's shifts in leadership so far this year highlight one of the key
investment tenets that we can't emphasize enough: investing should be a
marathon, not a sprint. If your portfolio is diversified and you have an
up-to-date financial plan crafted with an investment professional to meet your
goals, it becomes easier to ride out the market's short-term ups and downs. It
could also provide you with a greater chance of success over time.
Sincerely,
/s/Maureen R. Ford
------------------
MAUREEN R. FORD, VICE CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER
2
<PAGE>
================================================================================
By James K. Schmidt, CFA, Portfolio Management Team Leader, and
Thomas Finucane and Thomas Goggins, Portfolio Managers
John Hancock Bank and
Thrift Opportunity Fund
Environment turns favorable for financial stocks;
-------------------------------------------------
regional banks still lag
------------------------
The last 12 months broke down into two distinct periods for financial stocks.
From the start of the fiscal year last November into the spring, financial
stocks were decidedly out of favor, hurt by rising interest rates and investors'
tunnel-vision focus on richly valued, red-hot technology stocks. The picture
changed dramatically in early March when technology stocks began a swoon that
has lasted through October. Reverting to a more rational mode, investors sought
out stocks with valuations that at least bore some connection to earnings
prospects. Financial stocks were beneficiaries of this important market shift.
The interest-rate-sensitive group was further bolstered in May by the perception
that the Federal Reserve was nearing the end of its tightening cycle. Another
boost came in a summer wave of merger activity. As these positive trends
continued, the S&P Financial Index rose 16.30% for the year ending October 31,
2000, far surpassing the broader stock market.
Bank stocks, however, were the weakest link in the financial sector
over the last 12 months. Their rebound was curtailed both in June and again in
October by news of earnings shortfalls and increases in non-performing loans. In
contrast to the S&P Financial Index's 2000 results, the S&P Regional Bank Index
lost ground, returning -1.43%.
Fund performance
Although the Fund ended on a high note, rebounding sharply - by 18% - in the
second half of the fiscal year, the upswing was not enough to overcome the
losses in the first half, when bank stocks fell to historically low levels. As a
result, John Hancock Bank and Thrift Opportunity Fund posted a total return of
--------------------------------------------------------------------------------
[A 3" x 3" photo at bottom right side of page of John Hancock Bank and Thrift
Opportunity Fund. Caption below reads "Fund management team members. Standing
(l-r): Jay McKelvey, Lisa Welch and Tom Finucane. Seated (l-r): Jim Schmidt and
Tom Goggins."]
--------------------------------------------------------------------------------
"Because the Fund's primary focus is on regional banks, our results lagged the
group..."
3
<PAGE>
================================================================================
John Hancock Funds - Bank and Thrift Opportunity Fund
"...we still anticipate average 2001 bank earnings growth to be about 8% higher
than this year's."
--------------------------------------------------------------------------------
[Table at top left-hand column entitled "Top Five Stock Holdings." The first
listing is BB&T 3.5%, the second is National Commerce Bancorp. 3.5%, the third
Wells Fargo 3.2%, the fourth Summit Bancorp. 3.2% and the fifth PNC Bank 3.0%. A
note below the table reads "As a percentage of net assets on October 31, 2000."]
--------------------------------------------------------------------------------
-8.38% at net asset value for the year ended October 31, 2000. In the same
period the average open-end financial services fund returned 12.33%, according
to Lipper, Inc.
Regional bank focus hurts Fund
Because the Fund's primary focus is on regional banks, our results lagged the
group of Lipper open-end financial services funds, many of which invested in the
better-performing securities brokers, asset managers and larger diversified
financial firms. Although the majority of our holdings posted earnings results
in line with our expectations, we did experience earnings shortfalls in some
instances. The problems either stemmed from an increase in bad loans - at such
banks as SunTrust Banks, Inc., First Union Corp. and Pacific Century Financial
Inc. - or from merger integration issues, which bedeviled Bank One Corp., First
Union Corp., U.S. Bancorp., AmSouth Bancorp. and Centura Banks. Finally, since
we typically invest in the more
--------------------------------------------------------------------------------
[Table at bottom of left-hand column entitled "Scorecard". The header for the
left column is "Investment" and the header for the right column is "Recent
Performance...and What's Behind the Numbers". The first listing is Financial
Institutions followed by an up arrow with the phrase "Community bank is rewarded
for stalwart performance." The second listing is First Charter followed by a
down arrow with the phrase "North Carolina regional encounters merger-related
setbacks." The third listing is Wilmington Trust followed by a down arrow with
the phrase "Earnings disappointments mar stock." A note below the table reads
"See `Schedule of Investments.' Investment holdings are subject to change."]
--------------------------------------------------------------------------------
"traditional" banks, we were underweight in those that generate mostly fee
revenue from investment and processing activities.
A word about asset quality
Since the early 1990s, banks operating in the United States have benefited from
an expanding economy and a favorable lending environment that have kept the
level of non-performing assets extremely low by historical standards. Therefore,
it's not surprising that a slowing economy - the result of the Fed's
interest-rate hikes - has caused a pickup in problem loans recently. Even with
the increase, however, the level of problem loans still remains low at 0.83% of
total assets, as measured by the Keefe Bank Composite. The area experiencing
much of the deteriorating credit quality is syndicated loans - large loans,
shared among a consortium of banks, made to companies that are typically rated
below investment grade. In particular, loans booked in 1997 and early 1998 -
when lending terms were more flexible and the market was more receptive than it
is today to considering marginal credits - are vulnerable. While the non-
performing loan rate could rise some more, we anticipate that it should remain
at a low level (below 1% of total assets) and that the banking industry is
establishing adequate loan loss reserves. On an ongoing basis, our team
carefully scrutinizes the credit risks and prospects of our banks.
Fundamentals better than market thinks
Even with an increase in non-performing assets, a slowdown in loan growth and
some compression of net interest margins, we still anticipate average 2001 bank
earnings growth to be about 8% higher than this year's. Although this rate is
slower than the unsustainable level of the past
4
<PAGE>
================================================================================
John Hancock Funds - Bank and Thrift Opportunity Fund
--------------------------------------------------------------------------------
[Bar chart at top of left hand column with heading "Fund Performance". Under the
heading is a note that reads "For the year ended October 31, 2000." The chart is
scaled in increments of 5% with -10% at the bottom and 15% at the top. The first
bar represents the -8.38% total return for John Hancock Bank and Thrift
Opportunity Fund . The second bar represents the 12.33% total return for Average
open-end financial services fund. A note below the chart reads "Total returns
for John Hancock Bank and Thrift Opportunity Fund are at net asset value with
all distributions reinvested. The average open-end financial services fund is
tracked by Lipper, Inc."]
--------------------------------------------------------------------------------
five years, it is better than the performance of the stocks would indicate. We
are particularly encouraged that interest rates appear to have stabilized.
Mergers still a trend
The trend of industry consolidation is still alive and well, although, as we
have discussed in past reports, the level of activity will always depend on
market conditions. For much of 2000, merger activity has been slow because banks
have resisted being sold at price levels lower than they were two years ago.
What's more, investors still remember several of the headline mergers of 1997
and 1998 that have not lived up to expectations, primarily because of the high
acquisition costs. Recently, there has been a resurgence, with FleetBoston
Financial's announced purchase of Summit Bank and Firstar's acquisition of U.S.
Bancorp. Both of these transactions were priced at more realistic levels, thus
boosting the chances of success. We could see more consolidation as banks,
struggling to increase revenues, may use mergers as a means of improving profits
through gained operating efficiencies.
Basic strategy intact
Throughout the year, we maintained our long-term strategy of owning regional
banks that can produce reliable earnings growth and also have the potential to
benefit from industry consolidation. We cut back on the larger, more liquid and
higher-priced regionals such as Wells Fargo and Firstar in favor of Zions
Bancorp, Cascade Bancorp. and Independent Bank Corp. We also sold some of the
smaller thrifts in which we had minimal stakes, since their impact on the
portfolio was minor and we wanted less exposure to these very rate-sensitive
businesses.
Bank stocks remain compelling
We are encouraged by the recent turn of events for bank stocks. Even though
further asset- quality announcements could roil the group, there are several
factors working in our favor. Interest rates have stabilized, and could even
begin to come down as the economy slows, and the prospects for further merger
activity are good. It appears that the Federal Reserve may have achieved the
sought-after "soft landing" - slowing the economy enough to prevent inflation
but not cause a recession. This not-too-fast, not-too-slow environment is ideal
for bank results. Furthermore, while bank earnings have indeed slowed, the
situation is not as negative as the market has reflected to date. That means
bank stock valuations remain compelling, with room to keep moving up.
--------------------------------------------------------------------------------
This commentary reflects the views of the portfolio managers through the end of
the Fund's period discussed in this report. Of course, the managers' views are
subject to change as market and other conditions warrant.
Sector investing is subject to greater risks than the market as a whole.
"We are encouraged by the recent turn of events for bank stocks."
5
<PAGE>
=============================FINANCIAL STATEMENTS===============================
John Hancock Funds - Bank and Thrift Opportunity Fund
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 October 31, 2000. You'll
also find the net asset value for each common share as of that date.
Statement of Assets and Liabilities
October 31, 2000
--------------------------------------------------------------------------------
Assets:
Investments at value - Note C:
Common stocks and warrants
(cost - $382,634,150)...................................... $729,892,413
Preferred stocks (cost - $8,691,000) ....................... 8,014,125
Bonds (cost - $12,118,420) ................................. 11,179,600
Short-term investments (cost - $85,864,522) ................ 85,864,522
--------------
834,950,660
Cash ........................................................ 889
Receivable for investments sold ............................. 2,142,353
Interest receivable ......................................... 285,059
Dividends receivable ........................................ 1,506,413
Other assets ................................................ 150,842
--------------
Total Assets ................... 839,036,216
------------------------------------------------
Liabilities:
Payable for securities on loan - Note A ..................... 33,839,210
Payable to John Hancock Advisers, Inc.
and affiliates - Note B .................................... 638,927
Accounts payable and accrued expenses ....................... 292,023
--------------
Total Liabilities .............. 34,770,160
------------------------------------------------
Net Assets:
Capital paid-in ............................................. 396,954,066
Accumulated net realized gain on investments ................ 47,447,140
Net unrealized appreciation of investments .................. 345,642,568
Undistributed net investment income ......................... 14,222,282
--------------
Net Assets ..................... $804,266,056
================================================
Net Asset Value Per Share:
(Based on 84,400,000 shares of beneficial interest
outstanding - unlimited number of shares authorized
with no par value) ......................................... $9.53
============================================================================
The Statement of Operations summarizes the Fund's investment income earned and
expenses incurred in operating the Fund. It also shows net gains (losses) for
the period stated.
Statement of Operations
Year ended October 31, 2000
--------------------------------------------------------------------------------
Investment Income:
Dividends (including $381,841 received from
affiliated issuers and net of foreign withholding
taxes of $22,792) .......................................... $24,220,743
Interest (including income on securities loaned of $47,993) . 2,920,051
--------------
27,140,794
--------------
Expenses:
Investment management fee - Note B ......................... 8,552,893
Administration fee - Note B ................................ 1,859,325
Printing ................................................... 177,649
Custodian fee .............................................. 135,228
New York Stock Exchange fee ................................ 71,692
Transfer agent fee ......................................... 41,292
Miscellaneous .............................................. 39,819
Trustees' fees ............................................. 38,587
Auditing fee ............................................... 36,450
Legal fees ................................................. 9,457
--------------
Total Expenses ................. 10,962,392
------------------------------------------------
Net Investment Income .......... 16,178,402
------------------------------------------------
Realized and Unrealized Gain (Loss) on Investments:
Net realized gain on investments sold
(including net realized gain of $1,092,534
on sales of investments in affiliated issuers) ............. 47,465,751
Change in net unrealized appreciation (depreciation)
of investments ............................................. (155,138,023)
--------------
Net Realized and Unrealized
Loss on Investments ............ (107,672,272)
------------------------------------------------
Net Decrease in Net Assets
Resulting from Operations ...... ($91,493,870)
================================================
SEE NOTES TO FINANCIAL STATEMENTS.
6
<PAGE>
=============================FINANCIAL STATEMENTS===============================
John Hancock Funds - Bank and Thrift Opportunity Fund
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
--------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
---------------------------------------------
1999 2000
------------------- -------------------
<S> <C> <C>
Increase (Decrease) in Net Assets:
From Operations:
Net investment income ............................................................... $12,461,676 $16,178,402
Net realized gain on investments sold ............................................... 46,611,110 47,465,751
Change in net unrealized appreciation (depreciation) of investments ................. (17,505,982) (155,138,023)
-------------- -------------
Net Increase (Decrease) in Net Assets Resulting from Operations .................... 41,566,804 (91,493,870)
-------------- -------------
Distributions to Shareholders:
Dividends from net investment income ($0.1425 and $0.1475 per share, respectively) .. (12,581,633) (12,448,352)
Distributions from net realized gain on investments sold ($0.1691 and $0.5526 per
share, respectively) ............................................................... (14,929,632) (46,637,752)
-------------- -------------
Total Distributions to Shareholders ................................................ (27,511,265) (59,086,104)
-------------- -------------
From Fund Share Transactions - Net: * ................................................ (37,853,304) -
-------------- -------------
Net Assets:
Beginning of period ................................................................. 978,643,795 954,846,030
-------------- -------------
End of period (including undistributed net investment income
of $10,489,688 and $14,222,282, respectively) ....................................... $954,846,030 $804,266,056
============== =============
* Analysis of Common Shareholder Transactions:
YEAR ENDED OCTOBER 31,
--------------------------------------------------------------
1999 2000
--------------------------- -----------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
Shares outstanding, beginning of period ........................... 88,359,000 $434,820,311 84,400,000 $396,962,340
Less shares repurchased ........................................... (3,959,000) (37,853,304) - -
Reclassification of capital accounts .............................. - (4,667) - (8,274)
------------ -------------- ------------ --------------
Shares outstanding, end of period .................................. 84,400,000 $396,962,340 84,400,000 $396,954,066
============ ============== ============ ==============
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 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 repurchased during the
last two periods, along with the corresponding dollar value.
SEE NOTES TO FINANCIAL STATEMENTS.
7
<PAGE>
=============================FINANCIAL STATEMENTS===============================
John Hancock Funds - Bank and Thrift Opportunity Fund
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:
--------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
----------------------------------------------------------------------
1996(1) 1997(1) 1998(1) 1999 2000
---------- ----------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance
Net Asset Value, Beginning of Period ........................ $6.62 $7.83 $12.01 $11.08 $11.31
-------- -------- -------- -------- --------
Net Investment Income(2) .................................... 0.14 0.14 0.14 0.14 0.19
Net Realized and Unrealized Gain (Loss) on Investments ...... 1.64 4.08 0.67 0.40 (1.27)
-------- -------- -------- -------- --------
Total from Investment Operations ........................... 1.78 4.22 0.81 0.54 (1.08)
-------- -------- -------- -------- --------
Less Distributions:
Dividends from Net Investment Income ........................ (0.23) (0.03) (0.14) (0.14) (0.15)
Distributions from Net Realized Gain on Investments Sold .... (0.38) (0.03) (1.60) (0.17) (0.55)
-------- -------- -------- -------- --------
Total Distributions ........................................ (0.61) (0.06) (1.74) (0.31) (0.70)
-------- -------- -------- -------- --------
Increase due to Purchase of Bank and Thrift Opportunity
Fund Stock at less than Net Asset Value .................... 0.04 0.02 - - -
-------- -------- -------- -------- --------
Net Asset Value, End of Period .............................. $7.83 $12.01 $11.08 $11.31 $9.53
======== ======== ======== ======== ========
Per Share Market Value, End of Period ....................... $6.75 $10.64 $11.69 $9.50 $7.81
======== ======== ======== ======== ========
Total Investment Return at Market Value ..................... 29.78% 58.95% 25.35% (16.44%) (10.58%)
Ratios and Supplemental Data
Net Assets, End of Period (000s omitted) ....................$701,675 $1,061,398 $978,644 $954,846 $804,266
Ratio of Expenses to Average Net Assets ..................... 1.50% 1.45% 1.47% 1.48% 1.47%
Ratio of Net Investment Income to Average Net Assets ........ 1.96% 1.42% 1.07% 1.29% 2.18%
Portfolio Turnover Rate ..................................... 13% 9% 6% 5% 13%
(1) All per share amounts and net asset values have been restated to reflect the
four-for-one stock split effective December 2, 1997.
(2) Based on the average of the shares outstanding at the end of each month.
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.
8
<PAGE>
=============================FINANCIAL STATEMENTS===============================
John Hancock Funds - Bank and Thrift Opportunity Fund
Schedule of Investments
October 31, 2000
--------------------------------------------------------------------------------
The Schedule of Investments is a complete list of all securities owned by the
Bank and Thrift Opportunity Fund on October 31, 2000. It's divided into four
main categories: common stocks and warrants, preferred stocks, bonds and
short-term investments. Common and preferred stocks are further broken down by
industry group. Short-term investments, which represent the Fund's "cash"
position, are listed last.
MARKET
ISSUER, DESCRIPTION, STATE NUMBER OF SHARES VALUE
-------------------------- ---------------- ------
COMMON STOCKS AND WARRANTS
Banks - Foreign (1.12%)
Popular, Inc. (Puerto Rico) .................... 323,500 $8,997,344
----------
Superregional Banks (19.44%)
Bank of America Corp. (NC) ..................... 414,510 19,922,387
Bank One Corp. (OH) ............................ 355,380 12,971,370
First Union Corp. (NC) ......................... 509,625 15,448,008
FleetBoston Financial Corp. (MA) ............... 368,912 14,018,656
PNC Bank Corp. (PA) ............................ 365,500 24,442,812
SunTrust Banks, Inc. (GA) ...................... 430,652 21,021,201
U.S. Bancorp. (MN) ............................. 928,484 22,457,707
Wells Fargo & Co. (CA) ......................... 563,361 26,090,656
-----------
156,372,797
-----------
Regional Banks (60.25%)
ABC Bancorp. (GA) .............................. 76,900 720,938
Alabama National Bancorp. (AL) ................. 177,500 3,450,156
AmSouth Bancorp. (AL) .......................... 915,879 12,765,064
Associated Banc-Corp. (WI) ..................... 77,366 1,861,619
BancFirst Corp. (OK) ........................... 56,641 2,053,236
BancorpSouth, Inc. (MS) ........................ 131,250 1,714,453
BancWest Corp. (HI) ............................ 316,400 6,466,425
Bank of the Ozarks, Inc. (AR) .................. 95,250 1,107,281
Banknorth Group, Inc. (ME) ..................... 577,539 10,467,894
BB&T Corp. (NC) ................................ 892,864 28,460,040
Beverly National Corp. (MA) .................... 50,000 737,500
BT Financial Corp. (PA) ........................ 55,645 1,088,555
Camden National Corp. (ME) ..................... 150,000 2,118,750
Cascade Bancorp. (OR) .......................... 77,250 994,594
CCBT Financial Cos., Inc. (MA) ................. 187,700 3,366,869
Centura Banks, Inc. (NC) ....................... 99,000 3,805,312
Chittenden Corp. (VT) .......................... 200,157 5,316,670
MARKET
ISSUER, DESCRIPTION, STATE NUMBER OF SHARES VALUE
-------------------------- ---------------- ------
Regional Banks (continued)
City National Corp. (CA) ....................... 112,477 $3,866,397
Colonial BancGroup, Inc. (AL) .................. 1,464,200 12,903,263
Columbia Bancorp. (MD) ......................... 110,000 1,251,250
Columbia Bancorp. (OR) ......................... 81,500 489,000
Comerica, Inc. (MI) ............................ 344,900 20,801,781
Commercial Bankshares, Inc. (FL) ............... 45,770 789,533
Commonwealth Bankshares, Inc. (VA) ............. 52,534 328,338
Community Banks, Inc. (PA) ..................... 72,026 1,593,575
Community Bankshares, Inc. (VA) ................ 38,662 715,247
Community First Bankshares, Inc. (ND) .......... 286,000 4,433,000
Compass Bancshares, Inc. (AL) .................. 703,857 12,801,399
Desert Community Bank (CA) ..................... 62,500 1,523,438
DNB Financial Corp. (PA) ....................... 58,696 909,788
East-West Bancorp, Inc. (CA) ................... 840,000 15,855,000
F & M National Corp. (VA) ...................... 32,437 839,307
Fifth Third Bancorp. (OH) ...................... 229,854 11,808,749
Financial Institutions, Inc. (NY) ............. 84,750 1,207,688
First Charter Corp. (NC) ....................... 81,500 1,258,156
First Financial Corp. (RI) ..................... 109,000 1,239,875
First State Bancorp. (NM) ...................... 130,437 1,500,026
First Tennessee National Corp. (TN) ............ 273,400 6,288,200
Firstar Corp. (WI) ............................. 965,972 19,017,574
FirstMerit Corp. (OH) .......................... 154,100 3,515,406
F.N.B. Corp. (PA) ............................. 59,648 1,282,432
FNB Bankshares (ME) ............................ 20,780 529,890
FNB Financial Service Corp. (NC) ............... 78,000 809,250
FVNB Corp. (TX) ................................ 57,500 2,034,063
Harleysville National Corp. (PA) ............... 59,511 1,829,963
IBERIABANK Corp. (LA) .......................... 97,000 1,933,938
Imperial Bancorp.* (CA) ........................ 241,217 5,864,588
Independence Community Bank Corp.
(NY) .......................................... 200,466 2,944,344
Independent Bank Corp. (MI) .................... 232,837 4,111,028
Local Financial Corp. (OK) (R) ................. 310,000 3,293,750
M&T Bank Corp. (NY) ............................ 232,407 11,666,831
Main Street Bancorp., Inc. (PA) ................ 84,307 600,687
Marathon Financial Corp. (VA) .................. 16,000 80,000
Merrill Merchants Bankshares, Inc. (ME) ........ 65,000 650,000
Midwest Banc Holdings, Inc. (IL) ............... 34,000 501,500
Mississippi Valley Bancshares, Inc. (MO) ....... 125,100 3,291,694
National City Corp. (OH) ....................... 885,224 18,921,663
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE>
=============================FINANCIAL STATEMENTS===============================
John Hancock Funds - Bank and Thrift Opportunity Fund
MARKET
ISSUER, DESCRIPTION, STATE NUMBER OF SHARES VALUE
-------------------------- ---------------- ------
Regional Banks (continued)
National Commerce Bancorp. (TN) ................ 1,334,392 $28,355,830
North Fork Bancorp., Inc. (NY) ................. 342,800 6,920,275
North Valley Bancorp. (CA) ..................... 41,400 476,100
Northrim Bank (AK) ............................. 66,990 569,415
Old Kent Financial Corp. (MI) .................. 396,905 10,989,307
Pacific Capital Bancorp. (CA) .................. 210,125 5,620,844
Pacific Century Financial Corp. (HI) ........... 310,000 3,933,125
Provident Bankshares Corp. (MD) ................ 333,151 6,309,047
Regions Financial Corp. (AL) ................... 139,412 3,284,895
Riggs National Corp. (DC) ...................... 38,000 427,500
Salem Community Bankshares, Inc. (VA) .......... 64,990 942,355
S&T Bancorp., Inc. (PA) ........................ 174,700 3,297,463
Shore Financial Corp. (VA) ..................... 27,500 178,750
Silicon Valley Bancshares* (CA) ................ 235,000 10,868,750
Sky Financial Group, Inc. (OH) ................. 233,687 3,885,046
SouthTrust Corp. (AL) .......................... 673,425 21,802,134
Southwest Bancorp. of Texas, Inc.* (TX) ........ 295,230 10,775,895
Summit Bancorp. (NJ) ........................... 693,305 25,998,938
Summit Bancshares, Inc. (TX) ................... 248,900 4,417,975
TCF Financial Corp. (MN) ....................... 89,008 3,599,261
Tehama Bancorp. (CA) ........................... 63,307 1,099,959
Texas Regional Bancshares, Inc. (Class A)
(TX) .......................................... 59,600 1,780,550
TriCo Bancshares (CA) .......................... 36,500 565,750
UCBH Holdings, Inc. (CA) ....................... 100,000 3,625,000
Union Planters Corp. (TN) ...................... 378,927 12,812,469
United Security Bancorp.* (WA) ................. 252,730 2,811,621
Univest Corp. (PA) ............................. 119,450 2,583,106
Vail Banks, Inc. (CO) .......................... 69,400 670,144
Valley National Bancorp. (NJ) .................. 219,100 6,066,331
VRB Bancorp. (OR) .............................. 122,804 725,311
West Coast Bancorp. (OR) ....................... 107,583 1,028,762
Whitney Holding Corp. (LA) ..................... 151,000 5,577,563
Wilmington Trust Corp. (DE) .................... 135,000 7,104,375
Yardville National Bancorp. (NJ) ............... 162,400 1,887,900
Zions Bancorp. (UT) ............................ 205,075 11,778,995
----------
484,547,708
-----------
Thrifts (9.53%)
Astoria Financial Corp. (NY) ................... 160,955 6,035,813
Bank West Financial Corp. (MI) ................. 103,000 656,625
BostonFed Bancorp., Inc. (MA) .................. 106,000 1,934,500
Commercial Federal Corp. (NE) .................. 128,842 2,254,735
Dime Bancorp., Inc. (NY) ..................... 17,500 427,656
Dime Community Bancshares., Inc. (NY) .......... 87,754 1,947,042
First Keystone Financial, Inc. (PA) ............ 66,000 672,375
MARKET
ISSUER, DESCRIPTION, STATE NUMBER OF SHARES VALUE
-------------------------- ---------------- ------
Thrifts (continued)
GA Financial, Inc. (PA) ........................ 65,500 $917,000
Golden State Bancorp., Inc.* (CA) .............. 255,000 6,661,875
GreenPoint Financial Corp. (NY) ................ 514,000 15,291,500
Guaranty Financial Corp. (VA) .................. 42,500 276,250
Hingham Institute for Savings (MA) ............. 90,000 1,316,250
Lawrence Savings Bank (MA) ..................... 70,000 603,750
New Hampshire Thrift Bancshares, Inc.
(NH) .......................................... 28,000 364,000
Pamrapo Bancorp., Inc. (NJ) .................... 86,000 1,752,250
PennFed Financial Services, Inc. (NJ) .......... 611,000 8,974,062
People's Bancshares, Inc. (MA) ................. 42,000 598,500
Pittsburgh Financial Corp. (PA) ................ 79,000 666,563
Quaker City Bancorp., Inc.* (CA) ............... 92,187 1,745,791
Southern Missouri Bancorp., Inc. (MO) .......... 16,000 200,000
Sturgis Federal Savings Bank (MI) .............. 106,000 549,875
Superior Financial Corp.* (AR) ................. 196,250 2,158,750
Warren Bancorp., Inc. (MA) ..................... 162,500 1,198,438
Washington Mutual, Inc. (WA) ................... 291,875 12,842,500
Webster Financial Corp. (CT) ................... 180,110 4,390,181
WesterFed Financial Corp. (MT) ................. 101,162 2,244,532
----------
76,680,813
----------
Other (0.37%)
Capital One Financial Corp. (VA) ............... 47,500 2,998,438
----------
WARRANTS (0.04%)
Golden State Bancorp., Inc.* (CA) .............. 225,000 295,313
----------
TOTAL COMMON STOCKS
AND WARRANTS
(Cost $382,634,150) (90.75%) 729,892,413
-------- -----------
PREFERRED STOCKS
Banks & Thrifts (1.00%)
Astoria Financial Corp., Ser B, 12.00%
(NY) .......................................... 40,000 900,000
Chevy Chase Savings, 13.00% (MD) ............... 55,000 1,402,500
First Preferred Capital I, 9.25% (MO) .......... 50,000 1,209,375
First Republic Preferred Capital Corp.,
10.50% (CA) (r) ............................... 2,000 1,660,000
IFC Capital Trust I, 9.25% (IN) ................ 40,000 970,000
MVBI Capital Trust, 8.50%** (MO) ............... 40,000 900,000
Sterling Bancshares Capital Trust I,
9.28% (TX) .................................... 20,000 472,500
VBC Capital I, 9.50% (CO) ...................... 20,000 491,250
----------
8,005,625
----------
SEE NOTES TO FINANCIAL STATEMENTS.
10
<PAGE>
=============================FINANCIAL STATEMENTS===============================
John Hancock Funds - Bank and Thrift Opportunity Fund
MARKET
ISSUER, DESCRIPTION, STATE NUMBER OF SHARES VALUE
-------------------------- ---------------- ------
Other (0.00%)
Anthracite Capital, Inc., Ser B, 10.00%
(NY) (r) ...................................... 500 $8,500
----------
TOTAL PREFERRED STOCKS
(Cost $8,691,000) ( 1.00%) 8,014,125
-------- ----------
INTEREST PAR VALUE
ISSUER, DESCRIPTION RATE (000s OMITTED)
------------------- -------- --------------
BONDS
BFC Capital Trust I,
Capital Securities,
Ser A, 01-15-27 .................... 9.650% 250 226,250
Coastal Bancorp., Inc.,
Sr Note 06-30-02 ................... 10.000 3,000 2,955,000
CSBI Capital Trust I,
Sub Cap Income,
Ser A, 06-06-27 .................... 11.750 770 770,000
Fidelity Federal Bancorp.,
Sub Note 06-01-05 .................. 10.000 1,000 900,000
Investors Capital Trust I,
Capital Securities,
Ser B, 02-01-27 (R) ................ 9.770 5,185 4,718,350
ML Capital Trust I,
Capital Securities
03-01-27 ........................... 9.875 1,000 705,000
Ocwen Federal Bank,
Sub Deb 06-15-05 ................... 12.000 1,000 905,000
----------
TOTAL BONDS
(Cost $12,118,420) (1.39%) 11,179,600
------ ----------
SHORT-TERM INVESTMENTS
Certificates of Deposit (0.01%)
Deposits in Mutual Banks ............ 67,312
----------
Joint Repurchase Agreement (6.46%)
Investment in a joint repurchase
agreement transaction with
UBS Warburg, Inc. - Dated
10-31-00, due 11-01-00
(Secured by U.S. Treasury
Bonds, 9.125% and 6.000%,
due 05-15-18 and 02-15-26)
- Note A............................ 6.560 51,958 51,958,000
----------
PAR VALUE MARKET
ISSUER, DESCRIPTION, STATE (000s OMITTED) VALUE
-------------------------- -------------- ------
Cash Equivalents (4.21%)
Navigator Securities Lending
Prime Portfolio*** ................ $33,839 $33,839,210
----------
TOTAL SHORT-TERM INVESTMENTS (10.68%) 85,864,522
--------- -----------
TOTAL INVESTMENTS (103.82%) 834,950,660
--------- -----------
OTHER ASSETS AND LIABILITIES, NET (3.82%) (30,684,604)
--------- ------------
TOTAL NET ASSETS (100.00%) $804,266,056
========= ============
* Non-income producing security.
** Floating rate effective October 31, 2000.
*** Represents investment of security lending collateral - Note A.
(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 $8,012,000.
(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:
MARKET MARKET
VALUE AS A VALUE
PERCENTAGE AS OF
ACQUISITION ACQUISITION OF FUND'S OCTOBER 31,
DATE COST NET ASSETS 2000
---------- ----------- ----------- -----------
Anthracite
Capital, Inc., Ser B
(Preferred Stock) ....... 05-15-00 $8,500 0.00% $8,500
First Republic
Preferred
Capital Corp.
(Preferred Stock) ....... 05-25-99 2,000,000 0.21 1,660,000
------ ----------
TOTAL 0.21% $1,668,500
====== ===========
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.
11
<PAGE>
=======================SEE NOTES TO FINANCIAL STATEMENTS========================
John Hancock Funds - Bank and Thrift Opportunity Fund
NOTE A -
ACCOUNTING POLICIES
John Hancock Bank and Thrift Opportunity Fund (the "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.
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 John Hancock Advisers,
Inc. (the "Adviser"), a wholly owned subsidiary of The Berkeley Financial Group,
Inc., may participate in a joint repurchase agreement transaction. Aggregate
cash balances are invested in one or more large 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.
DISCOUNT ON SECURITIES The Fund accretes discount from par value on securities
from either the date of issue or the date of purchase over the life of the
security, as required by the Internal Revenue Code.
SECURITIES LENDING The Fund may lend its securities to certain qualified brokers
who pay the Fund negotiated lender fees. These fees are included in interest
income. The loans are collateralized at all times with cash or securities with a
market value at least equal to the market value of the securities on loan. As
with other extensions of credit, the Fund may bear the risk of delay of the
loaned securities in recovery or even loss of rights in the collateral, should
the borrower of the securities fail financially. At October 31, 2000, the Fund
loaned securities having a market value of $32,931,737 collateralized by cash in
the amount of $33,839,210. The cash collateral was invested in a short-term
instrument.
FEDERAL INCOME TAXES The Fund qualifies as a "regulated investment company" by
complying with the applicable provisions of the Internal Revenue Code and will
not be subject to federal income tax on taxable income which is distributed to
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.
USE OF ESTIMATES The preparation of these financial statements, in accordance
with accounting principles generally accepted in the United States of America,
incorporates estimates made by management in determining the reported amount of
assets, liabilities, revenues and expenses of the Fund. Actual results could
differ from these estimates.
NOTE B -
MANAGEMENT FEE AND TRANSACTIONS
WITH AFFILIATES AND OTHERS
The Fund has an investment management contract with the Adviser. Under the
investment management contract, the Fund pays a monthly management fee to the
Adviser equivalent, on an annual basis, to 1.15% of the Fund's average weekly
net asset value.
The Fund has an administrative agreement with the Adviser pursuant to
which the Adviser provides certain administrative services on behalf of the
Fund. In return, the Fund pays a monthly administration fee at an annual rate of
0.25% of the Fund's average weekly net asset value.
Mr. Stephen L. Brown and Ms. Maureen R. Ford are directors 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
12
<PAGE>
=======================SEE NOTES TO FINANCIAL STATEMENTS========================
John Hancock Funds - Bank and Thrift Opportunity Fund
Fund. 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
other 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. The Deferred Compensation Plan investments had no impact on the
operations of the Fund.
NOTE C -
INVESTMENT TRANSACTIONS
Purchases and proceeds from sales of securities, other than obligations of the
U.S. government and its agencies and short-term securities, during the year
ended October 31, 2000, aggregated $94,098,093 and $138,083,677, respectively.
There were no purchases or sales of obligations of the U.S. government and its
agencies during the year ended October 31, 2000.
The cost of investments owned at October 31, 2000 (including short-term
investments) for federal income tax purposes was $489,956,074. Gross unrealized
appreciation and depreciation of investments aggregated $351,604,043 and
$6,609,457 respectively, resulting in net unrealized appreciation of
$344,994,586.
NOTE D -
CAPITAL
During the year ended October 31, 1999, 3,959,000 shares of the Fund's stock
were repurchased from stockholders at an average discount of 18% from net asset
value. These shares were retired and restored to the status of authorized but
unissued shares.
13
<PAGE>
=======================SEE NOTES TO FINANCIAL STATEMENTS========================
John Hancock Funds - Bank and Thrift Opportunity Fund
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 year ended October
31, 2000 is set forth below.
ACQUISITIONS DISPOSITIONS
BEGINNING -------------------------------------- ENDING
SHARE SHARE SHARE SHARE REALIZED DIVIDEND ENDING
AFFILIATE AMOUNT AMOUNT COST AMOUNT COST AMOUNT GAIN (LOSS) INCOME VALUE
---------------------------------------------------------------------------------------------------------------------------------
Desert Community Bank (CA) 57,500 5,000 $120,438 - - 62,500 - $11,160 $1,523,438
First Financial Corp. (RI) 109,000 - - - - 109,000 - 52,320 1,239,875
Mahaska Investment Co. (IA) 224,171 - - 224,171 $1,957,436 - ($250,431) 67,251 -
MVBI Capital Trust (MO) 40,000 - - - - 40,000 - 76,950 900,000
Northwest Equity Corp. (WI) 61,000 - - 61,000 473,688 - 1,007,393 10,370 -
PennFed Financial Services,
Inc. (NJ) 611,000 - - - - 611,000 - 97,760 8,974,062
Pittsburgh Financial Corp. (PA)(1) 90,000 - - 11,000 124,813 79,000(2) 652 29,430 -
Wells Financial Corp. (MN) 122,000 - - 122,000 1,119,500 - 334,920 36,600 -
----------- ----------- --------- ------- ----------
$120,438 $3,675,437 $1,092,534 $381,841 $12,637,375
=========== =========== ========== ======== ===========
(1) Name changed from Pittsburgh Home Financial Corp. effective April 3, 2000.
(2) As of October 31, 2000, no longer an affiliated issuer.
</TABLE>
NOTE F -
RECLASSIFICATION OF ACCOUNTS
During the year ended October 31, 2000, the Fund has reclassified amounts to
reflect an increase in net realized gain on investments of $5,730, an increase
in accumulated net investment income of $2,544 and a decrease in capital paid-in
of $8,274. This represents the amount necessary to report these balances on a
tax basis, excluding certain temporary difference, as of October 31, 2000.
Additional adjustments may be needed in subsequent reporting periods. These
reclassifications, which have no impact on the net asset value of the Fund, are
primarily attributable to accounting for book/tax differences for deferred
compensation. The calculation of net investment income (loss) per share in the
financial highlights excludes these adjustments.
14
<PAGE>
================================================================================
John Hancock Funds - Bank and Thrift Opportunity Fund
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders
John Hancock Bank and Thrift Opportunity Fund
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of John Hancock Bank and Thrift Opportunity Fund
(the "Fund") as of October 31, 2000, the related statement of operations for the
year then ended, the statements of changes in net assets for the years ended
October 31, 2000 and 1999, and the financial highlights for each of the years in
the five-year period ended October 31, 2000. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned at October 31, 2000 by correspondence with the custodian. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such financial statements and financial highlights
present fairly, in all material respects, the financial position of the Fund at
October 31, 2000, the results of its operations, the changes in its net assets,
and its financial highlights for the respective stated periods in conformity
with accounting principles generally accepted in the United States of America.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
December 8, 2000
TAX INFORMATION NOTICE (UNAUDITED)
For federal income tax purposes, the following information is furnished with
respect to the dividends of the Fund for its fiscal year ended October 31, 2000.
The Fund designated distributions to shareholders of $46,052,016 as
capital gain dividends.
With respect to distributions paid by the Fund for the fiscal year
ended October 31, 2000, 100% of the distributions qualify for the
dividends-received deduction available for corporations.
Shareholders will be mailed a 2000 U.S. Treasury Department Form
1099-DIV in January 2000. This will reflect the tax character of all
distributions for calendar year 2000.
15
<PAGE>
================================================================================
John Hancock Funds - Bank and Thrift Opportunity Fund
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 distributions
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
divided 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-certificated 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
16
<PAGE>
================================================================================
John Hancock Funds - Bank and Thrift Opportunity Fund
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, State
Street Bank and Trust Company, at P.O. Box 8209, Boston, Massachusetts
02266-8209 (telephone 1-800-426-5523).
SHAREHOLDER COMMUNICATION AND ASSISTANCE
If you have any questions concerning the John Hancock Bank and Thrift
Opportunity Fund, we will be pleased to assist you. If you hold shares in your
own name and not with a brokerage firm, please address all notices,
correspondence, questions or other communications regarding the Fund to the
transfer agent at:
State Street Bank and Trust Company
P.O. Box 8200
Boston, Massachusetts 02266-8200
Telephone: 1-800-426-5523
If your shares are held with a brokerage firm, you should contact that firm,
bank or other nominee for assistance.
SHAREHOLDER MEETING
On March 16, 2000, the Annual Meeting of the 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 WITHHELD AUTHORITY
--- ------------------
Maureen R. Ford 78,759,636 1,328,924
Ronald R. Dion 78,763,873 1,324,688
Charles L. Ladner 78,767,371 1,321,190
Richard S. Scipione 78,772,650 1,315,910
The shareholders also ratified the Trustees' selection of Deloitte and
Touche LLP as the Fund's independent auditors for the fiscal year ending October
31, 2000, with the votes tabulated as follows: 79,129,256 FOR, 586,637 AGAINST
and 372,668 ABSTAINING.
17
<PAGE>
=====================================NOTES======================================
John Hancock Funds - Bank and Thrift Opportunity Fund
18
<PAGE>
=====================================NOTES======================================
John Hancock Funds - Bank and Thrift Opportunity Fund
19
<PAGE>
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------------------
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