---------------------------
The latest report from your
Fund's management team
---------------------------
SEMIANNUAL REPORT
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[GRAPHIC OMITTED]
Bank and Thrift
Opportunity
Fund
APRIL 30, 2000
[LOGO] JOHN HANCOCK FUNDS
A Global Investment Management Firm
<PAGE>
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TRUSTEES
Stephen L. Brown
James F. Carlin*
William H. Cunningham
Ronald R. Dion*
Maureen R. Ford
Charles L. Ladner
Steven R. Pruchansky*
Richard S. Scipione
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
Osbert M. Hood
Executive Vice President and
Chief Financial 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 Stree
Boston, Massachusetts 02110
LEGAL COUNSEL
Hale and Dorr LLP
60 State Street
Boston, Massachusetts 02109-1803
Listed New York Stock Exchange Symbol: BTO
For Shareholder Assistance
Refer to Page 17
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==================================CEO CORNER====================================
DEAR SHAREHOLDERS:
Over the last six months, New Economy technology stocks dominated the
business-news headlines and the stock market's performance. Red-hot tech stocks
pushed the NASDAQ Composite Index to the stratosphere, as investors
single-mindedly pursued anything technology related. But after setting a new
high on March 10 amid significantly heightened volatility, the tables started to
turn rapidly. Concerns about Microsoft's antitrust ruling and out-of-sight
valuation levels finally triggered waves of selling that sent the index down
nearly 25% from its high by the end of April.
In this same period, fixed-income securities of all types, including bonds and
preferred stocks, struggled as interest rates rose on fears that the roaring
U.S. economy and the rebound of many others around the world would spark an
inflation outbreak.
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[A 1" x 1" photo of Maureen R. Ford, Vice Chairman, President and Chief
Executive Officer, flush right next to second paragraph.]
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While the battle between old and new rages on, several things are clear: More
than ever, diversification and a long-term investment perspective are two of an
investor's best allies. Since not all parts of your portfolio will perform
equally well all the time, we believe it is important to allocate your assets
among different types of investments and funds that target a variety of stock-
and bond-market segments. This strategy, executed under the guidance of a
seasoned investment professional, could provide you with a better chance of both
realizing longer-term results and weathering the market's changing conditions.
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
Bank stocks suffer downdraft before rebounding in March
-------------------------------------------------------
For much of the last six months, bank stocks continued to buck the stiff
headwinds of rising interest rates and a red-hot technology sector that held
investors' undivided attention. News of earnings shortfalls at several of the
well-managed and strong superregional banks further rattled bank stocks,
although overall earnings growth for the group remained solid. Adding insult to
injury, underperforming value funds continued to fall out of favor as investors
jumped on the growth/technology bandwagon. So value fund managers, who are
typically buyers of financial stocks, either sold them to meet the tide of
redemptions, further depressing prices, or they ignored them in favor of
technology stocks.
The tables turned decidedly positive in early March, when tech stocks
plunged from their stratospheric levels and investors finally broadened their
horizons to include bank stocks. But this encouraging upturn at the end of the
period, and the brief flurry at the beginning of the period last November after
financial reform legislation was enacted, were by no means enough to overcome
the difficult times in between.
Good fundamentals, record low prices
In fact, when bank stocks hit bottom on March 8, they had fallen to historically
low levels by some standards. For example, the price-earnings ratio for bank
stocks was only 40% of the ratio of the Standard & Poor's 500 Stock Index. That
was at or near the level set in 1990, when many banks
--------------------------------------------------------------------------------
[A 3" x 2" 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, Tom Goggins and Tom Finucane. Seated (l-r): Lisa Welch,
Jim Schmidt and Patricia Ouimet."]
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"...stiff headwinds of rising interest rates and a red-hot technology sector..."
3
<PAGE>
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John Hancock Funds - Bank and Thrift Opportunity Fund
"...bank fundamentals are worlds better."
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[Table at top left hand column entitled "Top Five Stocks." The first listing is
Firstar Corp. 4.0%, the second is SunTrust Banks 3.2%, the third U.S. Bancorp
3.0%, the fourth Summit Bancorp 3.0% and the fifth Bank of America 3.0%. A note
below the table reads "As a percentage of net assets on April 30, 2000."]
--------------------------------------------------------------------------------
were in crisis due to the economic recession and a critical number of problem
loans. Then, those stock price levels were understandable, as many banks were on
the verge of collapse.
The frustration today is that bank fundamentals are worlds better.
Earnings growth, while slower than it was several years ago, is still averaging
12%. Loan growth remains excellent, the level of non-performing assets is still
very low, and revenue growth remains good, especially in the non-interest
income, fee-related line. Yet with each of the half-dozen or so bank earnings
disappointments announced during the period, the market seriously overreacted,
in our view, punishing the stock not only of the offending bank, but also of
regional banks in general. In this environment, only five of our approximately
150 holdings managed stock price increases (excluding takeovers) in the last six
months.
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[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 Eldorado
Bancshares followed by a down arrow with the phrase "Hits mortgage-banking
pothole. Will this miscue finally force a sale?." The second listing is National
Commerce followed by a down arrow with the phrase "Market votes with its feet on
wisdom of CCB deal." The third listing is Financial Institutions followed by an
up arrow with the phrase "Market recognized tremendous value in small upstate NY
franchise." A note below the table reads "See `Schedule of Investments.'
Investment holdings are subject to change."]
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Regional banks hurt fund
Although we ended April on a high note, with the Fund's net asset value
rebounding by nearly 20% between early March and the end of April, the six-month
period as a whole was a difficult and disappointing one for John Hancock Bank
and Thrift Opportunity Fund. For the six months ended April 30, 2000, the Fund
posted a total return of -22.32% at net asset value. That compared to the -8.76%
return of the average open-end financial services fund, according to Lipper,
Inc.
Our performance versus the Lipper financial services funds suffered
from our concentration in regional banks. The best financial stocks to own
during this period were securities brokers, money-center banks and the larger
diversified firms such as American Express and AIG. In addition, despite
generally on-target earnings, we did have positions in several banks whose
stocks declined due to disappointing earnings, such as U.S. Bancorp and First
Tennessee.
Basic strategy intact
Over the last six months 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. Because of the steady increase in interest
rates, we are especially wary of banks or thrifts that have asset liability
mismatches that make them vulnerable to high rates. We think that a valuation
disparity has opened up between some of the high-quality, liquid superregional
banks that institutional investors favor and some of the better-managed smaller
regionals that the market is ignoring. For example, we have reduced our holdings
in Wells Fargo and Firstar in favor of Old Kent Financial and Southwest
4
<PAGE>
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John Hancock Funds - Bank and Thrift Opportunity Fund
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[Bar chart at top of left hand column with heading "Fund Performance". Under the
heading is a note that reads "For the six months ended April 30, 2000." The
chart is scaled in increments of 5% with -30% at the bottom and 5% at the top.
The first bar represents the -22.32% total return for John Hancock Bank and
Thrift Opportunity Fund . The second bar represents the -8.76% total return for
Average open-end financial services fund. A note below the chart reads "The
total return for John Hancock Bank and Thrift Opportunity Fund is at net asset
value with all distributions reinvested. The average open-end fund is tracked by
Lipper, Inc."]
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Bancorp. of Texas. We will continue to adhere to this value strategy, on the
belief that by buying well-managed companies at unusually inexpensive prices we
will come out ahead in the long run.
Mergers still a factor
Since the beginning of 2000, eight of the Fund's holdings announced they were
being taken over, a slight pickup in pace over 1999. Although the recent merger
activity has been among smaller names, the environment remains good. The larger
acquiring banks have maintained higher price-earnings ratios than the smaller
target banks, and that makes mergers easier to effect. Furthermore, 2000 is
likely to be the last year for using the more favorable "pooling" method of
accounting for acquisitions, and that could provide extra incentive for more
banks to act sooner rather than later.
One positive merger development that occurred during the period
involved Dime Bancorp., which was in the process of merging with Hudson United.
However, the price was so cheap that another bank, North Fork, entered a hostile
bid, broke up the merger and put forth an alternative proposal. While such
takeovers don't happen often in banking, we like to see them because they
usually result in higher prices for bank shareholders. Furthermore, the periodic
threat of them prompts underperforming bank managements to pay more attention to
shareholder value.
Reasons for optimism
We are encouraged by the latest upswing in bank stock prices and believe that
there are a number of reasons for optimism. Although earnings growth for the
banks has slowed from the unsustainable levels of the past five years, it has
been far better than the performance of the stocks would indicate. Lately,
investors seem to be taking notice and are turning away from some of the
higher-priced NASDAQ issues in favor of some of the value-oriented "old economy"
stocks such as banks. The belief could also be building that the Federal Reserve
is getting closer to the end of this cycle of interest-rate hikes. We witnessed
similar activity at the start of 1995, when, after a crushing series of rate
increases in 1994, bank and thrift stocks started an explosive rally in advance
of the Fed's final tightening in February 1995. We have been through many
periods before when our stocks have been unpopular, and those companies that
achieved our earnings targets have always rewarded us eventually.
--------------------------------------------------------------------------------
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 different, and sometimes greater, risks than the
market as a whole.
"We are encouraged by the latest upswing in bank stock prices..."
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 April 30, 2000. You'll also
find the net asset value for each common share as of that date.
Statement of Assets and Liabilities
April 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
Assets:
Investments at value - Note C:
Common stocks and warrants
(cost - $389,477,950)..................................... $642,084,408
Preferred stocks (cost - $8,695,000) ...................... 8,228,120
Bonds (cost - $7,020,000) ................................. 6,654,213
Short-term investments (cost - $55,735,879) ............... 55,735,879
----------------
712,702,620
Cash ....................................................... 91,436
Receivable for investments sold ............................ 1,393,202
Interest receivable ........................................ 161,109
Dividends receivable ....................................... 1,516,306
Other assets ............................................... 116,123
----------------
Total Assets ................. 715,980,796
-----------------------------------------------
Liabilities:
Payable for securities purchased ........................... 5,368,962
Payable upon return of securities on loan - Note A ......... 27,336,089
Payable to John Hancock Advisers, Inc.
and affiliates - Note B ................................... 859,488
Accounts payable and accrued expenses ...................... 69,989
----------------
Total Liabilities ............ 33,634,528
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Net Assets:
Capital paid-in ............................................ 396,962,340
Accumulated net realized gain on investments ............... 27,577,923
Net unrealized appreciation of investments ................. 251,773,791
Undistributed net investment income ........................ 6,032,214
----------------
Net Assets ................... $682,346,268
===============================================
Net Asset Value Per Share:
(Based on 84,400,000 shares of beneficial interest
outstanding - unlimited number of shares authorized
with no par value) ........................................ $8.08
============================================================================
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
Six months ended April 30, 2000 (Unaudited)
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Investment Income:
Dividends (including $209,996 received from affiliated
issuers and net of foreign withholding taxes of
$11,640) .................................................. $12,160,086
Interest (including income on securities loaned of $22,395) 1,370,415
----------------
13,530,501
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Expenses:
Investment management fee - Note B ........................ 4,293,990
Administration fee - Note B ............................... 933,476
Printing .................................................. 115,632
Custodian fee ............................................. 76,693
New York Stock Exchange fee ............................... 37,523
Transfer agent fee ........................................ 20,416
Auditing fee .............................................. 18,580
Trustees' fees ............................................ 18,361
Miscellaneous ............................................. 16,303
Legal fees ................................................ 8,649
----------------
Total Expenses ............... 5,539,623
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Net Investment Income ........ 7,990,878
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Realized and Unrealized Gain (Loss) on Investments:
Net realized gain on investments sold (including net
realized gain of $923,543 on sales of investments
in affiliated issuers) .................................... 27,602,264
Change in net unrealized appreciation/depreciation
of investments ............................................ (249,006,800)
----------------
Net Realized and Unrealized
Loss on Investments .......... (221,404,536)
------------------------------------------------
Net Decrease in Net Assets
Resulting from Operations .... ($213,413,658)
===============================================
SEE NOTES TO FINANCIAL STATEMENTS.
6
<PAGE>
=============================FINANCIAL STATEMENTS===============================
John Hancock Funds - Bank and Thrift Opportunity Fund
Statement of Changes in Net Assets
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED APRIL 30, 2000
OCTOBER 31, 1999 (UNAUDITED)
------------------- --------------------
<S> <C> <C>
Increase (Decrease) in Net Assets:
From Operations:
Net investment income .......................................................... $ 12,461,676 $ 7,990,878
Net realized gain on investments sold .......................................... 46,611,110 27,602,264
Change in net unrealized appreciation/depreciation of investments .............. (17,505,982) (249,006,800)
---------------- ----------------
Net Increase (Decrease) in Net Assets Resulting from Operations ............... 41,566,804 (213,413,658)
Distributions to Shareholders: ---------------- ----------------
Dividends from net invest 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 $6,032,214, respectively) .................................. $ 954,846,030 $ 682,346,268
================ ================
* Analysis of Fund Share Transactions:
SIX MONTHS ENDED
YEAR ENDED APRIL 30, 2000
OCTOBER 31, 1999 (UNAUDITED)
------------------------------------- ------------------------------------------
SHARES AMOUNT SHARES AMOUNT
------------- -------------- ------------- ----------------
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) - -
------------- ---------------- ------------- ----------------
Shares outstanding, end of period ....... 84,400,000 $396,962,340 84,400,000 $396,962,340
============= ================ ============= ================
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, SIX MONTHS ENDED
________________________________________________________ APRIL 30, 2000
1995 1996 1997 1998 1999 (UNAUDITED)
-------- -------- -------- -------- -------- --------------
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance(1)
Net Asset Value, Beginning of Period .................... $4.95 $6.62 $7.83 $12.01 $11.08 $11.31
-------- -------- -------- -------- -------- --------
Net Investment Income(2) ................................ 0.13 0.14 0.14 0.14 0.14 0.09
Net Realized and Unrealized Gain (Loss) on Investments .. 1.60 1.64 4.08 0.67 0.40 (2.62)
-------- -------- -------- -------- -------- --------
Total from Investment Operations ....................... 1.73 1.78 4.22 0.81 0.54 (2.53)
-------- -------- -------- -------- -------- --------
Less Distributions:
Dividends from Net Investment Income .................... (0.06) (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 .................................... (0.06) (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 .......................... $6.62 $7.83 $12.01 $11.08 $11.31 $8.08
======== ======== ======== ======== ======== ========
Per Share Market Value, End of Period ................... $5.69 $6.75 $10.64 $11.69 $9.50 $6.63
======== ======== ======== ======== ======== ========
Total Investment Return at Market Value ................ 27.91% 29.78% 58.95% 25.35% (16.44%) (24.17%)(3)
Ratios and Supplemental Data
Net Assets, End of Period (000s omitted) ................$608,724 $701,675 $1,061,398 $978,644 $954,846 $682,346
Ratio of Expenses to Average Net Assets ................. 1.49% 1.50% 1.45% 1.47% 1.48% 1.49%(4)
Ratio of Net Investment Income to Average Net Assets .... 2.22% 1.96% 1.42% 1.07% 1.29% 2.15%(4)
Portfolio Turnover Rate ................................. 8% 13% 9% 6% 5% 7%
(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.
(3) Not annualized.
(4) Annualized.
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
April 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
The Schedule of Investments is a complete list of all securities owned by the
Bank and Thrift Opportunity Fund on April 30, 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 (1.03%)
Popular, Inc. (Puerto Rico)............... 348,500 $7,013,562
----------
Superregional Banks (20.75%)
Bank of America Corp. (NC) ............... 412,010 20,188,490
Bank One Corp. (OH) ...................... 357,880 10,915,340
First Union Corp. (NC) ................... 518,625 16,531,172
FleetBoston Financial Corp. (MA) ......... 380,912 13,498,569
PNC Bank Corp. (PA) ...................... 458,500 20,002,063
SunTrust Banks, Inc. (GA) ................ 428,652 21,754,089
U.S. Bancorp (MN) ........................ 1,019,484 20,708,269
Wells Fargo Co. (CA) ..................... 437,527 17,965,952
-----------
141,563,944
-----------
Regional Banks (61.52%)
ABC Bancorp. (GA) ........................ 76,900 759,388
Alabama National Bancorp. (AL) ........... 164,500 3,290,000
American Bancorp. (WV) ................... 34,000 403,750
AmSouth Bancorp. (AL) .................... 1,131,879 16,482,988
Associated Banc-Corp. (WI) ............... 70,788 1,809,518
BancFirst Corp. (OK) ..................... 65,141 1,754,736
BancFirst Ohio Corp. (OH) ................ 43,000 833,125
BancorpSouth, Inc. (MS) .................. 124,250 1,918,109
BancWest Corp. (HI) ...................... 287,400 5,263,012
Bank of the Ozarks, Inc. (AR) ............ 80,750 1,433,313
Banknorth Group, Inc. (VT) ............... 151,620 3,619,927
BB&T Corp. (NC) .......................... 732,025 19,490,166
Beverly National Corp. (MA) .............. 50,000 700,000
BT Financial Corp. (PA) .................. 56,145 964,992
Camden National Corp. (ME) ............... 115,000 1,581,250
Cascade Bancorp. (OR) .................... 57,250 565,344
CCB Financial Corp. (NC) ................. 454,650 17,987,091
MARKET
ISSUER, DESCRIPTION, STATE NUMBER OF SHARES VALUE
-------------------------- ---------------- ------
Regional Banks (continued)
CCBT Financial Cos., Inc. (MA) ........... 187,700 $2,604,337
Centura Banks, Inc. (NC) ................. 101,250 4,182,891
Chittenden Corp. (VT) .................... 174,157 4,626,045
City National Corp. (CA) ................. 114,477 4,214,185
Colonial BancGroup, Inc. (AL) ............ 1,471,700 13,797,187
Columbia Bancorp. (MD) ................... 110,000 990,000
Columbia Bancorp. (OR) ................... 81,500 529,750
Comerica, Inc. (MI) ...................... 368,900 15,632,137
Commercial Bankshares, Inc. (FL) ......... 45,770 812,418
Commonwealth Bankshares, Inc. (VA) ....... 52,534 315,204
Community Banks, Inc. (PA) ............... 62,026 1,124,221
Community Bankshares, Inc. (VA) .......... 38,662 705,582
Community First Bankshares, Inc. (ND) .... 288,500 4,868,437
Compass Bancshares, Inc. (AL) ............ 758,357 14,029,604
Desert Community Bank (CA) ............... 62,500 1,265,625
DNB Financial Corp. (PA) ................. 58,696 792,396
East-West Bancorp., Inc. (CA) ............ 965,000 11,941,875
Eldorado Bancshares, Inc.* (CA) .......... 80,500 563,500
Empire Banc Corp. (MI) ................... 34,689 1,326,854
F & M National Corp. (VA) ................ 32,437 776,461
Fifth Third Bancorp. (OH) ................ 142,236 8,978,647
Financial Institutions, Inc. (NY) ....... 84,750 1,054,078
First Charter Corp. (NC) ................. 71,250 988,594
First Financial Corp. (RI) ............... 109,000 1,171,750
First Security Corp. (UT) ................ 488,266 6,896,757
First State Bancorp. (NM) ................ 130,437 1,695,681
First Tennessee National Corp. (TN) ...... 287,400 5,460,600
Firstar Corp. (WI) ....................... 1,096,681 27,279,940
FirstMerit Corp. (OH) .................... 150,000 2,456,250
F.N.B. Corp. (PA) ........................ 55,648 1,099,048
FNB Bankshares (ME) ...................... 20,780 519,500
FNB Financial Service Corp. (NC) ......... 78,000 838,500
FVNB Corp. (TX) .......................... 57,500 1,955,000
Gold Banc Corp., Inc. (KS) .............. 83,766 518,302
Harleysville National Corp. (PA) ......... 52,325 1,530,506
Imperial Bancorp.* (CA) .................. 231,217 4,537,634
Independence Community Bank Corp.
(NY) .................................... 200,466 2,355,475
Independent Bank Corp. (MI) .............. 100,250 1,353,375
Keystone Financial, Inc. (PA) ............ 129,750 1,946,250
M&T Bank Corp. (NY) ...................... 16,816 7,386,428
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)
Mahaska Investment Co. (IA) .............. 98,771 $790,168
Main Street Bancorp., Inc. (PA) .......... 84,307 779,840
Marathon Financial Corp. (VA) ............ 16,000 92,000
Merrill Merchants Bankshares, Inc. (ME) .. 30,000 266,250
MetroBanCorp. (IN) ....................... 57,849 289,245
Midwest Banc Holdings, Inc. (IL) ......... 34,000 480,250
Mississippi Valley Bancshares, Inc. (MO) . 115,600 2,543,200
National City Corp. (OH) ................. 962,724 16,366,308
National Commerce Bancorp. (TN) .......... 367,500 6,040,781
North Fork Bancorp., Inc. (NY) ........... 354,400 5,736,850
Northrim Bank (AK) ....................... 66,990 514,986
Oak Hill Financial, Inc. (OH) ............ 50,000 700,000
Old Kent Financial Corp. (MI) ............ 357,315 10,764,114
One Valley Bancorp., Inc. (WV) ........... 131,390 4,459,048
Pacific Capital Bancorp. (CA) ............ 147,625 4,078,141
Pacific Century Financial Corp. (HI) ..... 580,000 11,926,250
Pittsburgh Financial Corp. (PA) .......... 79,000 661,625
Provident Bankshares Corp. (MD) .......... 342,651 5,118,349
Regions Financial Corp. (AL) ............. 149,912 3,063,826
Riggs National Corp. (DC) ................ 38,000 515,375
S&T Bancorp., Inc. (PA) .................. 114,700 2,014,419
Salem Bank & Trust (VA) .................. 64,990 877,365
Shore Financial Corp. (VA) .............. 27,500 199,375
Silicon Valley Bancshares* (CA) .......... 25,000 1,543,750
Six Rivers National Bank* (CA) ........... 26,000 338,000
Sky Financial Group, Inc. (OH) ........... 223,574 3,674,998
SouthTrust Corp. (AL) .................... 673,425 16,078,022
Southwest Bancorp. of Texas, Inc.* (TX) .. 330,230 6,460,124
Summit Bancorp (NJ) ...................... 804,805 20,421,927
Summit Bancshares, Inc. (TX) ............. 244,400 3,849,300
Sun Bancorp., Inc.* (NJ) ................. 69,142 466,709
TCF Financial Corp. (MN) ................. 39,008 911,812
Tehama Bancorp. (CA) ..................... 63,307 791,338
Texas Regional Bancshares, Inc.
(Class A) (TX) .......................... 53,100 1,516,669
TriCo Bancshares (CA) .................... 34,000 539,750
UCBH Holdings, Inc. (CA) (r) ............. 133,333 2,799,993
Union Planters Corp. (TN) ................ 378,927 10,728,371
United Security Bancorp.* (WA) ........... 232,730 2,240,026
Univest Corp. (PA) ....................... 119,450 2,598,037
Vail Banks, Inc. (CO) .................... 71,150 675,925
Valley National Bancorp. (NJ) ............ 142,000 3,736,375
VRB Bancorp. (OR) ........................ 122,804 644,721
West Coast Bancorp. (OR) ................. 102,708 1,065,596
Whitney Holding Corp. (LA) ............... 151,500 5,283,562
MARKET
ISSUER, DESCRIPTION, STATE NUMBER OF SHARES VALUE
-------------------------- ---------------- ------
Regional Banks (continued)
Wilmington Trust Corp. (DE) .............. 90,000 $4,151,250
Yardville National Bancorp. (NJ) ......... 162,400 1,603,700
Zions Bancorp. (UT) ...................... 130,975 5,435,462
----------
419,810,915
-----------
Thrifts (10.34%)
Astoria Financial Corp. (NY) ............. 160,955 4,436,322
Bank West Financial Corp. (MI) ........... 103,000 650,188
BostonFed Bancorp., Inc. (MA) ............ 106,000 1,404,500
Cameron Financial Corp. (MO) ............. 72,500 951,563
Charter One Financial, Inc. (OH) ......... 35,715 725,461
Commercial Federal Corp. (NE) ............ 129,842 2,020,666
Dime Bancorp., Inc. (NY) ................. 17,500 328,125
Dime Community Bancshares., Inc. (NY) .... 87,754 1,519,241
First Defiance Financial Corp. (OH) ...... 69,000 603,750
First Keystone Financial, Inc. (PA) ...... 66,000 660,000
GA Financial, Inc. (PA) .................. 65,500 781,906
GreenPoint Financial Corp. (NY) .......... 564,500 10,513,812
Guaranty Financial Corp. (VA) ............ 42,500 318,750
Highland Bancorp., Inc. (CA) ............. 156,334 3,752,016
Hingham Institute for Savings (MA) ....... 90,000 1,125,000
HMN Financial, Inc. (MN) ................. 54,750 622,781
InterWest Bancorp., Inc. (WA) ............ 11,637 186,192
ISB Financial Corp. (LA) ................. 106,000 1,484,000
Lawrence Savings Bank (MA) ............... 70,000 490,000
Local Financial Corp. (OK) ............... 310,000 2,499,375
New Hampshire Thrift Bancshares, Inc.
(NH) .................................... 28,000 360,500
Pamrapo Bancorp., Inc. (NJ) .............. 86,000 1,655,500
PennFed Financial Services, Inc. (NJ) .... 611,000 7,522,937
People's Bancshares, Inc. (MA) ........... 45,000 855,000
Peoples Heritage Financial Group, Inc.
(ME) .................................... 332,333 4,341,100
Quaker City Bancorp., Inc.* (CA) ......... 97,500 1,377,188
SFC Acquisition Corp.* (AR) (r) .......... 150,000 1,575,000
Southern Missouri Bancorp., Inc. (MO) .... 16,000 204,000
Sovereign Bancorp., Inc. (PA) ............ 82,348 566,143
Sturgis Federal Savings Bank (MI) ........ 106,000 702,250
Superior Financial Corp.* (AR) ........... 56,250 590,625
Warren Bancorp., Inc. (MA) ............... 165,000 1,196,250
Washington Mutual, Inc. (WA) ............. 291,875 7,461,055
Webster Financial Corp. (CT) ............. 205,110 4,384,226
Wells Financial Corp. (MN) ............... 107,000 1,284,000
WesterFed Financial Corp. (MT) ........... 101,162 1,408,365
----------
70,557,787
----------
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 (0.31%)
Capital One Financial Corp. (VA) ......... 47,500 $2,078,125
Core Cap, Inc. (Class A)* (NY) (r) ....... 500 8,200
----------
2,086,325
----------
WARRANTS (0.15%)
Golden State Bancorp., Inc.* (CA) ........ 255,000 1,051,875
----------
TOTAL COMMON STOCKS AND WARRANTS
(Cost $389,477,950) ......... ( 94.10%) 642,084,408
--------- -----------
PREFERRED STOCKS
Banks & Thrifts (1.20%)
Astoria Financial Corp., Ser B,
12.00% (NY) ............................. 40,000 870,000
Chevy Chase Savings, 13.00% (MD) ......... 55,000 1,388,750
First Preferred Capital I, 9.25% (MO) .... 50,000 1,237,500
First Republic Preferred Capital Corp.,
10.50% (CA) (r) ......................... 2,000 1,880,000
IFC Capital Trust I, 9.25% (IN) .......... 40,000 1,010,000
MVBI Capital Trust 8.14%** (MO) .......... 40,000 880,000
Sterling Bancshares Capital Trust I,
9.28% (TX) .............................. 20,000 460,000
VBC Capital I, 9.50% (CO) ................ 20,000 490,000
----------
8,216,250
----------
Other (0.00%)
Core Cap, Inc., Ser A/I, 10.00% (NY) (r) . 500 11,870
----------
TOTAL PREFERRED STOCKS
(Cost $8,695,000) (1.20%) 8,228,120
-------- ----------
INTEREST PAR VALUE MARKET
ISSUER, DESCRIPTION RATE (000s OMITTED) VALUE
------------------- -------- -------------- ------
BONDS
BFC Capital Trust I,
Capital Securities, Ser A,
01-15-27 ..................... 9.650% $250 $234,063
Coastal Bancorp., Inc.,
Sr Note 06-30-02 ............. 10.000 3,000 2,970,000
CSBI Capital Trust I,
Sub Cap Income, Ser A,
06-06-27 ..................... 11.750 770 823,900
Fidelity Federal Bancorp.,
Sub Note 06-01-05 ............ 10.000 1,000 900,000
ML Capital Trust I,
Capital Securities 03-01-27 .. 9.875 1,000 786,250
Ocwen Federal Bank,
Sub Deb 06-15-05 ............. 12.000 1,000 940,000
----------
TOTAL BONDS
(Cost $7,020,000) (0.98%) 6,654,213
-------- ----------
SHORT-TERM INVESTMENTS
Certificates of Deposit (0.01%)
Deposits in Mutual Banks ...... 66,790
----------
Joint Repurchase Agreement (4.15%)
Investment in a joint repurchase
agreement transaction with
SBC Warburg, Inc. - Dated
04-28-00, due 05-01-00
(Secured by U.S. Treasury
Bonds, 8.875% due 08-15-17
and 7.875% due 02-15-21)
- Note A...................... 5.730% 28,333 28,333,000
----------
Cash Equivalents (4.01%)
Navigator Securities Lending
Prime Portfolio*** ..................... 27,336,089
----------
TOTAL SHORT-TERM INVESTMENTS (8.17%) 55,735,879
-------- -----------
TOTAL INVESTMENTS (104.45%) 712,702,620
-------- -----------
OTHER ASSETS AND LIABILITIES, NET (4.45%) (30,356,352)
-------- -----------
TOTAL NET ASSETS (100.00%) $682,346,268
======== ============
SEE NOTES TO FINANCIAL STATEMENTS.
11
<PAGE>
=============================FINANCIAL STATEMENTS===============================
John Hancock Funds - Bank and Thrift Opportunity Fund
NOTES TO SCHEDULE OF INVESTMENTS
* Non-income producing security.
** Floating rate effective April 30, 2000.
*** Represents investment of security lending collateral - Note A.
(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 APRIL 30,
DATE COST NET ASSETS 2000
----------- ----------- ---------- ----------
Core Cap, Inc.
(Common Stock).......... 10-31-97 $10,000 0.00% $8,200
(Preferred Stock) ...... 10-31-97 12,500 0.00 11,870
First Republic
Preferred
Capital Corp. .......... 05-25-99 2,000,000 0.28 1,880,000
SFC Acquisition
Corp. .................. 03-30-98 1,500,000 0.23 1,575,000
UCBH Holdings, Inc. ..... 04-16-98 2,000,000 0.41 2,799,993
---- ---------
0.92% $6,275,063
===== ==========
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.
12
<PAGE>
=========================NOTES TO FINANCIAL STATEMENTS==========================
John Hancock Funds - Bank and Thrift Opportunity Fund
(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. The Fund's primary investment objective is long-term capital
appreciation.
As authorized by the Board of Trustees, the Fund repurchased four
million shares of the Fund in a repurchase program which commenced September
1998 and ran through September 1999.
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 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.
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, 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.
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.
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 April 30, 2000, the Fund
loaned securities having a market value of $26,037,742 collateralized by cash in
the amount of $27,336,089, which was invested in a short-term instrument.
OPTIONS Listed options will be valued at the last quoted sales price on the
exchange on which they are primarily traded. Over-the-counter options will be
valued at the mean between the last bid and asked prices. 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
13
<PAGE>
=========================NOTES TO FINANCIAL STATEMENTS==========================
John Hancock Funds - Bank and Thrift Opportunity Fund
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 ("credit risk"), 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, 2000.
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. Stephen L. Brown, Ms. Maureen R. Ford 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 Adviser owns 20,000 shares of beneficial interest of
the Fund. The compensation of unaffiliated Trustees is borne by the 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 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
investment had no impact on the operations of the Fund.
NOTE C -
INVESTMENT TRANSACTIONS
Purchases and proceeds from sales of securities, other than short-term
obligations, during the period ended April 30, 2000, aggregated $50,386,757 and
$72,758,273, respectively.
The cost of investments owned at April 30, 2000 for federal income tax
purposes was $460,941,372. Gross unrealized appreciation and depreciation of
investments aggregated $270,138,852 and $18,377,604, respectively, resulting in
net unrealized appreciation of $251,761,248.
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.
14
<PAGE>
=========================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 period ended April
30, 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
--------- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Desert Community Bank (CA) 57,500 5,000 $120,438 - $ - 62,500 $ - $5,535 $1,265,625
First Financial Corp. (RI) 109,000 - - - - 109,000 - 22,890 1,171,750
Mahaska Investment Co. (IA) 224,171 - - 125,400 1,128,578 98,771 (135,402) 67,251 790,168
MVBI Capital Trust (MO) 40,000 - - - - 40,000 - - 880,000
Northwest Equity Corp. (WI) 61,000 - - 61,000 473,688 - 1,007,393 20,740 -
PennFed Financial Services, Inc. (NJ) 611,000 - - - - 611,000 - 48,880 7,522,937
Pittsburgh Financial Corp. (PA)(1) 90,000 - - 11,000 125,125 79,000(2) 10,308 8,100 -
Wells Financial Corp. (MN) 122,000 $122,000 - - 15,000 140,625 107,000 41,244 36,600 1,284,000
---------- --------- ---------- --------- -----------
$120,438 $1,868,016 ($923,543) $209,996 $12,914,480
========== ========== ========== ========= ===========
(1) Name changed from Pittsburgh Home Financial Corp. effective April 3, 2000.
(2) As of April 30, 2000, no longer an affiliated issuer.
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: (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
Touch 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.
</TABLE>
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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