CROFT FUNDS CORP, N-30D, 1999-12-30

CROFT FUNDS CORP
N-30D, 1999-12-30

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CROFT LEOMINSTER

VALUE FUND

SEMI-ANNUAL REPORT
OCOTBER 31, 1999

<PAGE>

December 15, 1999

Dear Shareholder,

From January 1, 1999 to December 15, 1999, your Value Fund is up 4.8%.*
Over the same period the S&P 500 is up 16.4% and the Lipper Multi-Cap Value
Index is up 2.7%.* The Lipper Multi-Cap Value Index is how we are measured
versus funds with the same investment style.

For the following reasons, we believe the portfolio is well structured
for good performance over the next few years:

1. OUR RISK PROFILE.

-- Our risk profile is more favorable than the overall market where
high growth stocks are currently being valued by discounting back
revenues from beyond 2008. The best performing stocks are selling at
multiples of 14 to 100 times revenues. Many of these companies do
not have any profits.

-- Historically, less than 2% of companies have ever been able to grow
earnings more than 20% for 5 consecutive years.

-- Unit growth of personal computers grew 25% for over a decade, yet
only one company founded during the early boom survives today
(Apple). Dell and Compaq emerged only after the PC bubble had burst.

2. There have been some periods in the past that are analogous to the current
market disparities.

-- From the beginning of the decade until January 1973, the highest P/E
stocks (The Nifty Fifty) outperformed the market by more than 2.5
times for the two year period. A bear market followed in which Value
outperformed. Cumulatively Value stocks outperformed by more than
100% over the next 10 years.

-- The lack of breadth is almost at its January 1973 extreme.

3. Your portfolio is currently structured with the following characteristics
that we believe will drive performance:

A. VERY LOW VALUATIONS BASED ON EARNINGS, CASH FLOW, AND BOOK VALUE.

-- The average stock in this category sells at 10.5X 2000 estimated
earnings per share with an estimated growth rate of approximately
10.5%.

-- Examples include: Terex Corp, Hartford Financial Services Group
Washington Mutual Inc. and Federal Mogul.

B. VALUATIONS BELOW THE S&P 500 INDEX

-- Price to earnings multiples relative to growth rates are more
favorable than the overall market.

-- Based on future price to earnings, growth rates, cash flows and/or
book values.

-- Examples: Citigroup Inc, SPX Corp, Kansas Southern Industries and
American Home Products.

C. TECHNOLOGY AND COMMUNICATIONS

-- We have increased our exposure in this area with companies that have
quality earnings.

-- Generally these companies are industry leaders who are more
reasonably valued within their sectors, have good growth rates and
will be in existence in seven years.

-- Examples include MCI Worldcom Inc, International Business Machines
(IBM), Qwest Communications Intl Inc, GTE Corp, Lucent Technologies,
Oak Industries and Microsoft Corp.

D. ENERGY

-- The energy sector is selling at approximately 3.1 times cash flows
versus a norm of about 6 times cash flows.

-- The average company is selling at a discount of approximately 39% to
net asset value, when usually these stocks would sell at a price
equivalent to net asset value.

-2-

<PAGE>

E. FINANCIALS

-- These companies will benefit from the resent passage of House
Resolution 10, which allows banks to increase their exposure to
other financial service areas such as insurance. We expect to see a
significant amount of merger and acquisition activity in the
industry.

-- Merger activity should also increase because integration risks will
lower with Year 2000 issues behind the banks.

F. SPECIAL SITUATIONS

-- CBS Corp and (Koninklijke) Philips Electronics NV.

Value investing has under-performed the S&P 500 over the last two years
for two main reasons. First, the S&P 500 index is market capitalization
weighted. Its overall performance has been dominated by a small number of very
large-cap, high-growth stocks. These are mostly technology companies with
extreme valuations. In contrast, the average S&P 500 stock is down approximately
21/2% year to date through December 15, 1999. Secondly, because of the sector's
high valuations, most value investors have not had enough technology exposure.

Going forward, over the next three to five years the odds are very much
with the value investor given the current high valuations of certain sectors of
the market. It should be easier (and with less risk) for a stock trading at a 10
P/E to reach a 14 P/E, than it is to go from a 70 P/E to a 100 P/E.

We thank you for investing with us.

With kindest regards,

Sincerely,

Kent Croft

* Past performance is not indicative of future performance. Investment return
and principal will fluctuate. An investor's shares, when redeemed, may be worth
more or less than the original value. The Standard and Poor's 500 (S&P 500) is
an unmanaged index that is widely recognized indicator of the overall market.
The Lipper Multicap Value Index is comprised of 409 stock funds investing in
companies of various size, normally those that are considered undervalued
relative to major stock indexes based on price-to-current-earnings and
price-to-book ratios. Comments about the Value Fund Portfolio and the S&P 500
are as of 12/15/99.

-3-

<PAGE>

Croft Funds Corporation
CROFT-LEOMINSTER VALUE FUND
SCHEDULE OF INVESTMENTS
October 31, 1999
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>

SHARES MARKET VALUE
------ ------------

COMMON STOCKS - 97.33%
<C> <S> <C>
AUTO & AUTOMOTIVE PRODUCTS - 2.93%
5,550 Federal-Mogul Corp. ............................$ 139,444

BANKS, S&L'S AND BROKERS - 8.39%
500 Astoria Financial Corp. ........................ 18,000
2,415 BankAtlantic Bancorp Inc. ...................... 12,226
1,100 BankUnited Corp. ............................... 42,900
1,900 Dime Bancorp Inc. Cl B ......................... 33,963
1,600 Mellon Bank Corp. .............................. 59,200
2,100 Summit Bancorp ................................. 72,713
3,476 Washington Mutual Inc. ......................... 124,919
600 Zion Bancorporation ............................ 35,438
-----------
399,359
-----------

BASIC MATERIALS - 0.53%
4,200 National Steel Corp Cl B ....................... 25,200
-----------

BRAZILIAN INVESTMENT TRUSTS - 0.22%
18,000 Brazilian Smaller Co. .......................... 10,260
-----------

BUILDING & CONSTRUCTION - 4.23%
2,800 Foster Wheeler Corp. ........................... 31,500
4,850 Owens Corning .................................. 99,425
2,200+ SLI Inc. ....................................... 23,650
1,300 Texas Industries Inc. .......................... 46,556
-----------
201,131
-----------

BUSINESS SERVICES - 0.55%
1,000+ Nova Corporation ............................... 26,000
-----------

CAPITAL EQUIPMENT - 4.26%
3,200+ Brown & Sharpe Manufacturing Co. ............... 9,400
2,200 Kennametal Inc. ................................ 63,250
3,750+ Terex Corp. .................................... 99,141
1,100 Xerox Corp. .................................... 30,800
-----------
202,591
-----------

The accompanying notes are an integral part of these financial statements.

-4-

<PAGE>

CHEMICALS - 2.26%
2,000 CK Witco Corporation ...........................$ 18,750
1,500 Hanna M.A. Co. ................................. 16,031
700+ International Specialty Products Inc. .......... 5,294
2,400 Lyondell Chemical Co. .......................... 29,100
3,300 NL Industries Inc. ............................. 38,156
-----------
107,331
-----------
CLOSED END FUNDS - INDIA - 1.00%
534+ India Growth Fund Inc. ......................... 6,241
2,800+ Jardine Fleming India Fund ..................... 25,025
600+ Morgan Stanley India Invt. Fund ................ 7,575
700+ The India Fund Inc. ............................ 8,663
-----------
47,504
-----------
CONSUMER CYCLICALS - 3.28%
1,100 Black & Decker Corp. ........................... 47,300
778+ Konin Klijke Philips Electronics NV. ........... 80,863
700 Maytag Corp. ................................... 28,044
-----------
156,207
-----------

CONSUMER NONDURABLES - 0.57%
1,500 Pepsi Bottling Group ........................... 27,281
-----------

CONSUMER SERVICES - 1.27%
2,458 Viad Corp. ..................................... 60,375
-----------

FINANCIAL SERVICES - 7.63%
3,400 Capital One Financial Corp. .................... 180,200
3,375 Citigroup Inc. ................................. 182,672
-----------
362,872
-----------

HEALTHCARE - 0.46%
1,100 McKesson HBOC Inc. ............................. 22,069
-----------

The accompanying notes are an integral part of these financial statements.

-5-

<PAGE>

INSURANCE - 5.08%
3,000 Ace Ltd. .......................................$ 58,312
500 Aetna Life & Casualty Co. ...................... 25,125
800 Allstate Corp. ................................. 23,000
2,200 Hartford Financial Services Group Inc. ......... 113,987
6,000 Reliance Group Holdings Inc. ................... 21,375
-----------
241,799
-----------

MEDIA & ENTERTAINMENT - 9.38%
300+ AMFM Inc. ...................................... 21,000
3,500+ Big City Radio Inc. ............................ 12,469
300+ Cablevision Systems Cl A ....................... 20,269
6,300+ CBS Inc. ....................................... 307,519
1,200 News Corporation Ltd ADR ....................... 35,550
1,000 Seagram Co. Ltd "ACES" ......................... 49,438
-----------
446,245
-----------

MULTI-INDUSTRY - 9.57%
3,200+ Alpine Group Inc. .............................. 42,200
4,026+ SPX Corp. ...................................... 341,203
1,800 Tyco International Ltd. ........................ 71,888
-----------
455,291
-----------

NATURAL GAS - 6.88%
900 Anadarko Petroleum Corp. ....................... 27,731
500 Burlington Resources Inc. ...................... 17,437
16,200+ Comstock Resources Inc. ........................ 63,787
1,300+ Mallon Resources Corp. ......................... 8,206
29,708+ Meridian Resources Corp. ....................... 131,829
24,200+ Panaco Inc. .................................... 11,858
7,900+ Titan Exploration Inc. ......................... 33,081
2,300 Union Pacific Resources Group .................. 33,350
-----------
327,279
-----------

OIL - 1.48%
800 Apache Corp. ................................... 31,200
39,300+ Equity Oil Co. ................................. 39,300
-----------
70,500
-----------

The accompanying notes are an integral part of these financial statements.

-6-

<PAGE>

OIL & GAS PIPELINES - 2.44%
3,100 Williams Companies Inc. ........................$ 116,250
-----------

PAPER & FOREST PRODUCTS - 7.37%
3,000 Boise Cascade Corp. ............................ 106,875
11,261+ Smurfit-Stone Container Corp. .................. 243,519
-----------
350,394
-----------

PHARMACEUTICALS - 2.59%
1,300 American Home Products Corp. ................... 67,925
600+ Elan Corp ADR .................................. 15,450
500 Warner Lambert Co. ............................. 39,906
-----------
123,281
-----------

REAL ESTATE INVESTMENT TRUSTS - 0.87%
1,800 Starwood Hotels & Resorts Worldwide ............ 41,287
-----------

RETAIL STORES - 0.52%
700+ Safeway Inc. ................................... 24,719
-----------

SPECIALITY RETAIL - 0.37%
800+ Staples Inc. ................................... 17,750
-----------

TECHNOLOGY - 1.37%
900+ DII Group Inc. ................................. 32,400
500 Lockheed Martin Corp. .......................... 10,000
1,000+ Varian Semiconductor Equipment Associates Inc. . 22,625
-----------
65,025
-----------

TELEPHONE & CELLULAR - 6.62%
300 GTE Corp. ...................................... 22,500
2,400+ MCI Worldcom Inc. .............................. 205,950
1,730+ Qwest Communications International Inc. ........ 62,280
400 U.S. West Inc. ................................. 24,425
-----------
315,155
-----------

TRANSPORTATION - 3.39%
3,400 Kansas City Southern Industries Inc. ........... 161,288
-----------

The accompanying notes are an integral part of these financial statements.

-7-

<PAGE>

UTILITIES - 0.97%
2,900+ Niagara Mohawk Holdings Inc. ...................$ 46,037
-----------

WASTE MANAGEMENT - 0.85%
2,200 Waste Management Inc. .......................... 40,425
-----------

TOTAL COMMON STOCK
(Cost $4,075,661) .......................................... 4,630,349
-----------

MUTUAL FUNDS - 0.03%
147+ Schroder All Asia (Cost $1,629) ................ 1,549
-----------

SHORT TERM INVESTMENTS - 3.64%
173,117 Firstar Treasury Fund
(Cost $173,117) ................................ 173,117
-----------

TOTAL INVESTMENTS (Cost $4,248,778) ..............101.00% 4,805,015

Liabilities in excess of other assets .............(1.00%) (47,691)
-------- -----------
TOTAL NET ASSETS .................................100.00% $ 4,757,324
======== ===========

(1) Federal Tax Information: At October 31, 1999 the net unrealized
appreciation based on cost for Federal Income tax purposes of
$4,248,778 was as follows:
Aggregate gross unrealized appreciation for all investments
for which there was an excess of value over cost ...........$ 1,187,583
Aggregate gross unrealized depreciation for all investments
for which there was an excess of cost over value ........... (631,346)

Net unrealized appreciation .......................................$ 556,237
<FN>

+ Non-income producing security
</FN>
</TABLE>

The accompanying notes are an integral part of these financial statements.

-8-

<PAGE>

Croft Funds Corporation
CROFT-LEOMINSTER VALUE FUND
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1999
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>

ASSETS:
<S> <C>
Investments in securities, at value (cost $4,248,778) (Note 2) .. $ 4,805,015
Receivable for securities sold .................................. 8,625
Dividends and interest receivable ............................... 2,877
Prepaid expenses ................................................ 9,451
-----------
Total Assets ............................................ 4,825,968
-----------

LIABILITIES:
Payables:
Payable for securities purchased .......... $ 28,490
Due to advisor (Note 3) ................... 17,736
Accrued expenses .......................... 22,418
-----------
Total Liabilities ....................................... 68,644
-----------

Net Assets .............................................. $ 4,757,324
===========

NET ASSETS CONSIST OF:
Additional paid in capital .............................. $ 4,344,428
Accumulated net investment loss ......................... (12,576)
Accumulated net realized loss from
investment transactions ......................... (130,765)
Net unrealized appreciation on
investments ..................................... 556,237
-----------
Net Assets .............................................. $ 4,757,324
===========

Net asset value and redemption price per share
($4,757,324/311,631 shares of capital stock outstanding)
(Note 4) ................................................ $ 15.27
===========
</TABLE>

The accompanying notes are an integral part of these financial statements.

-9-

<PAGE>

Croft Funds Corporation
CROFT-LEOMINSTER VALUE FUND
STATEMENT OF OPERATIONS
For the six months ended October 31, 1999
(Unaudited)

- --------------------------------------------------------------------------------
<TABLE>

INVESTMENT INCOME:
<S> <C>
Dividends ...................................................... $ 21,436
Interest ....................................................... 2,741
---------
24,177
EXPENSES:
Investment advisory fee (Note 3) ............................... 23,032
Administration fee ............................................. 9,742
Legal fee ...................................................... 7,800
Transfer agent fee ............................................. 5,457
Printing ....................................................... 4,447
Custody fee .................................................... 4,192
Insurance ...................................................... 3,201
Audit fee ...................................................... 1,623
Registration ................................................... 1,281
Trustee fee .................................................... 756
Other (Note 3) ................................................. (3,813)
---------
Total expenses ......................................... 57,718
Less: Expense reimbursement (Note 3) .................. (20,965)
---------
Net expenses ........................................... 36,753
---------
Net investment income (loss) ........................... (12,576)
---------

NET REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS (Note 2)
Net realized gain from investment transactions ................. 25,480
Net change in unrealized appreciation of investments ........... (419,901)
---------

Net realized and unrealized loss on investments ................ (394,421)
---------

Net decrease in net assets resulting from operations ........... $(406,997)
=========
</TABLE>

The accompanying notes are an integral part of these financial statements.

-10-

<PAGE>

Croft Funds Corporation
CROFT-LEOMINSTER VALUE FUND
STATEMENT OF CHANGES IN NET ASSETS

- --------------------------------------------------------------------------------

For the six months
ended For the year
October 31, 1999 ended
(Unaudited) April 30, 1999
----------- --------------

<S> <C> <C>
Net investment loss ................................... $ (12,576) $ (16,724)
Net realized gain (loss) from investment transactions . 25,480 (156,944)
Net change in unrealized appreciation (depreciation) of
investments ........................................... (419,901) 7,115
----------- -----------
Net decrease in net assets resulting from operations .. (406,997) (166,553)

Distributions from net investment income .............. 0 0
Distributions from net gain on investments ............ 0 (105,002)

Net capital share transactions (Note 4) ............... 265,806 (93,167)
----------- -----------

Net decrease in net assets ............................ (141,191) (364,722)

NET ASSETS:
Beginning of period ................................... 4,898,515 5,263,237
----------- -----------

End of period ......................................... $ 4,757,324 $ 4,898,515
=========== ===========

</TABLE>

The accompanying notes are an integral part of these financial statements.

-11-

<PAGE>

Croft Funds Corporation
CROFT-LEOMINSTER VALUE FUND
NOTES TO FINANCIAL STATEMENTS
October 31, 1999
(Unaudited)

- --------------------------------------------------------------------------------

NOTE 1. ORGANIZATION
The Croft-Leominster Value Fund (the "Fund"), is a managed portfolio of
the Croft Funds Corporation, is registered under the Investment Company Act of
1940, as amended, as a diversified, open-end management company. The Fund is one
of a series of Funds of the Croft Funds Corporation, which also includes the
Croft-Leominster Income Fund. The Fund's investment objective is to seek growth
of capital. It invest primarily (under normal market conditions, at least 65% of
its total assets) in common stocks which are believed by the Manager to be
undervalued and have good prospects for capital appreciation.

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed
by the Fund in the preparation of its financial statements.
SECURITY VALUATION - Securities which are traded on any exchange or on
the NASDAQ over-the-counter market are valued at the last quoted sale price.
Investments for which no sale is reported are valued at the last bid price.
FEDERAL INCOME TAXES - The Fund intends to comply with requirements of
the Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its net investment income as dividends to its
shareholders. The Fund intends to distribute its net long-term capital gains and
its net short-term capital gains at least once a year. Therefore no provision
for income taxes is required.
OTHER - The Fund follows industry practice and records security
transactions on the trade date. The specific identification method is used for
determining gains or losses for financial statement and income tax purposes.
Dividend income is recorded on the ex-dividend date and interest income is
recorded on an accrual basis. Discounts and premiums on securities purchased are
amortized over the life of the respective securities.
ESTIMATES - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

NOTE 3. INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
The Fund retains Croft-Leominster Inc. (the "Adviser") as its
investment adviser. Under the terms of the management agreement, the Adviser
receives a fee, computed daily and payable monthly at the annual rate of .94% of
the Fund's average daily net asset value. Until December 31, 2001, the Adviser
guarantees that the overall expense ratio for the Fund, which exclude ordinary
brokerage commission incurred in the purchase or sale of portfolio securities,
will not exceed 1.50%. As a result, for the six months ended October 31, 1999,
the Adviser accrued reimbursements to the Fund of $20,965.
Pursuant to a plan of Distribution the Fund pays a distribution fee of
up to .25% of the average daily net assets to broker-dealers for distribution
assistance, and to financial institutions and intermediaries such as banks,

-12-

<PAGE>

Croft Funds Corporation
CROFT-LEOMINSTER VALUE FUND
NOTES TO FINANCIAL STATEMENTS
October 31, 1999
(Unaudited)

- --------------------------------------------------------------------------------

savings and loan associations, insurance companies and investment counselors as
compensation for services rendered or expenses incurred in connection with
distribution assistance. The Croft Funds Corporation elected to waive the 12b-1
fee for the Fund on May 1, 1999. The 12b-1 fee will be waived into the
foreseeable future; however, the Croft Funds Corporation reserves the right to
terminate the waiver and reinstate the 12b-1 fee at any time in its sole
discretion.
Certain Directors and officers of the Corporation are "interested
persons" (as defined in the Investment Company Act of 1940) of the Corporation.
Each "non-interested" Director is entitled to receive an annual fee of $500 plus
expenses for services relating to the Corporation.

NOTE 4. CAPITAL SHARE TRANSACTIONS
At October 31, 1999 there was 30,000,000, $0.001 par value shares of
capital stock authorized for the Croft Funds Corporation, and capital paid-in
amounted to $4,344,428 for the Fund.

Transactions in capital stock were as follows:
<TABLE>
<CAPTION>

For the six months
ended For the year
October 31, 1999 ended
(Unaudited) April 30, 1999
Shares Amount Shares Amount
------ ------ ------ ------

<S> <C> <C> <C> <C>
Shares sold .................... 29,009 $ 455,323 146,546 $ 2,269,700

Shares issued in reinvestment of
Dividends .............. 0 0 7,044 103,048

Shares redeemed ................ (11,526) (189,517) (168,416) (2,465,915)
------- ----------- -------- -----------

Net increase (decrease) ........ 17,483 $ 265,806 (14,826) $ (93,167)
------- ----------- -------- -----------
</TABLE>

NOTE 5. INVESTMENT TRANSACTIONS
Purchases and sales, excluding short term securities, for the six
months ended October 31, 1999 aggregated $1,260,560, and $1,142,535,
respectively, for the Fund.

NOTE 6. DISTRIBUTIONS TO SHAREHOLDERS
During the six months ended October 31, 1999, the Fund did not declare
any dividends.

NOTE 7. FINANCIAL INSTRUMENT DISCLOSURE
There are no reportable financial instruments that have off balance
sheet risk as of October 31, 1999.

-13-

<PAGE>

Croft Funds Corporation
CROFT-LEOMINSTER VALUE FUND
FINANCIAL HIGHLIGHTS
(For a fund share outstanding throughout each period)
<TABLE>
<CAPTION>

For the
six months For the For the For the May 4, 1995
ended year ended year ended year ended through
October 31, April 30, April 30, April 30, April 30,
1999 1999 1998 1997 1996*
(Unaudited)
------------ ---------- ---------- ---------- -----------

<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ....... $ 16.65 $ 17.03 $ 13.32 $ 11.74 $ 10.00

Income (loss) from investment operations
Net investment income ...................... (0.04) (0.04) 0.00 0.04 0.10
Net realized and unrealized gain (loss)
on investments ..................... (1.34) (0.10) 5.49 2.11 1.75
--------- --------- -------- --------- ---------
Total from investment operations ........... (1.38) (0.14) 5.49 2.15 1.85
--------- --------- -------- --------- ---------

Less distributions
Dividends from net investment income ....... 0.00 0.00 0.00 (0.05) (0.07)
Distribution from realized gains from
security transactions .............. 0.00 (0.24) (1.78) (0.52) (0.04)
--------- --------- -------- --------- ---------
Total distributions ........................ 0.00 (0.24) (1.78) (0.57) (0.11)
--------- --------- -------- --------- ---------

Net asset value, end of period ............. $ 15.27 $ 16.65 $ 17.03 $ 13.32 $ 11.74
========= ========= ======== ========= =========

Total return** ............................. (8.29)% (0.63)% 43.14% 18.71% 18.57%

Ratios/supplemental data
Net assets end of period (in 000's) ....... 4,757 4,899 5,263 2,064 1,255
Ratio of expenses to average net assets
before reimbursement ............... 2.39%^ 2.59% 2.75% 5.40% 1.50%^
Ratio of expenses to average net
assets after reimbursement ......... 1.50%^ 1.50% 1.50% 1.50% 1.50%^
Ratio of net investment income (loss) to
average net assets before fee waiver (1.39%)^ (1.37%) (1.25%) (3.56%) 0.89%^
Ratio of net investment income (loss) to
average net assets after fee waiver (0.52%)^ (0.29%) 0.00 0.34% 0.89%^
Portfolio turnover rate .................... 24.38% 89.33% 80.98% 105.72% 65.38%
<FN>

- ----------------
* Commencement of operations
** Based on net asset value per share
^ Annualized
</FN>
</TABLE>

The accompanying notes are an integral part of these financial statements.

-14-

<PAGE>

CROFT LEOMINSTER

VALUE FUND

1-800-746-3322

<PAGE>

CROFT LEOMINSTER

INCOME FUND

SEMI-ANNUAL REPORT
OCOTBER 31, 1999

<PAGE>

December 7, 1999

Dear Income Fund Shareholder,

As of December 7, 1999, your Croft-Leominster Income Fund has returned
0.10% with a current yield of approximately 7.7%.* Over the same time period the
Merrill Lynch US Corporate Master Bond Index is down 0.89%.**

Many of the same trends continue in the US economy that we highlighted
in our last report to you dated June 14, 1999. US economic growth remains robust
as consumers continue to spend at a torrid pace. In addition, global economies
continue to recover from last year's problems and oil prices are at two-year
highs. In an attempt to diminish the threat of future inflation, the Federal
Reserve Bank has responded by raising the Federal Funds Rate by 3/4 of one
percent over the past six months. The Fed remains ready to act to raise rates
again if it believes it is necessary.

Because of this, the bond market remains volatile. The long bond has
traded in a range from approximately 6% to 6.5% during this period of
uncertainty. We believe that once the uncertainty is removed, we will see a
rally in the bond market.

The Income Fund continues to seek a high level of current income with
capital appreciation as a secondary objective. As of November 30, 1999, the
Income Fund has the following characteristics: weighted average yield to
maturity of 8.9%, weighted average duration of 8.3 years and weighted average
maturity of 18.5 years. In order to minimize credit risk, we maintain strong
diversification. We hold 72 corporate bond issues, which are spread among 20
industries.

We thank you for investing with Croft-Leominster.

Sincerely,

Kent Croft

- ----------------
*Past performance is not indicative of future performance. Investment return and
principal will fluctuate. An investor's shares, when redeemed, may be worth more
or less than the original value.

**The Merrill Lynch US Corporate Master Bond Index is comprised of approximately
3571 different US corporate bond issues. Source Merrill Lynch. Income Fund
characteristics are as of 12/7/99.

-1-

<PAGE>

SHARES MARKET VALUE
------ ------------

<C> <S> <C>
COMMON STOCKS - 3.04%
BOND FUNDS - 3.04%
6,200 Alliance World Dollar Govt. II ...................$ 55,412
11,000 First Australia Prime Income Fund ................ 66,000
4,500 Salomon Brothers Worldwide Income Fund ........... 49,781
10,300 Templeton Emerging Markets Income Fund ........... 100,425
-----------
TOTAL COMMON STOCKS (Cost $301,090) 271,618
-----------

PREFERRED STOCKS - 1.99%
2,820 Conseco Financing Trust, 8.70% ................... 63,802
2,100 Foster Wheeler Trust, 9.00% ...................... 48,694
1,300 MediaOne Finance Trust, 9.04% .................... 33,312
1,400 Oxy Capital Trust, 8.16% ......................... 31,588
-----------
TOTAL PREFERRED STOCKS (Cost $190,396) ............................ 177,396
-----------
PRINCIPAL VALUE
- ---------------
CORPORATE BONDS - 93.18%
AUTOS & AUTOMOTIVE PRODUCTS - 1.57%
150,000 Federal Mogul Corp. Notes, 7.75%, 07/01/06 .......$ 140,516
-----------

BUILDING MATERIALS & HOUSING - 2.75%
22,000 Oakwood Homes Corp. Senior Notes,
8.125%, 03/01/09 .............................. 16,836
50,000 Owens-Corning, Debentures, 7.50%, 08/01/18 ....... 42,488
200,000 Owens-Corning, Notes, 7.70%, 05/01/08 ............ 185,595
-----------
244,919
-----------
CABLE TV & CELLULAR TELEPHONE - 7.68%
60,000 Adelphia Communications Debentures,
11.875%, 9/15/04 .............................. 63,000
185,000 CF Cable TV Inc. Senior Secured Notes,
9.125%, 07/15/07 .............................. 199,940
325,000 Tele-Communications Inc. Notes,
7.875%, 08/01/13 .............................. 339,860
80,000 Tele-Communications Inc. Senior Debentures,
8.75%, 02/15/23 ............................... 83,472
-----------
686,272
-----------
CAPITAL GOODS - 1.05%
90,000 Caterpillar Inc. Sinking Fund Debentures,
9.75%, 06/01/19 .............................. 94,069
-----------

The accompanying notes are an integral part of these financial statements.

-2-

<PAGE>

Croft Funds Corporation
CROFT-LEOMINSTER INCOME FUND
SCHEDULE OF INVESTMENTS
October 31, 1999
(Unaudited)
- --------------------------------------------------------------------------------
PRINCIPAL VALUE MARKET VALUE
- --------------- ------------
CHEMICALS - 3.00%
75,000 Agrium Inc.Yankee Debentures, 7.80%, 02/01/27 ....$ 66,365
35,000 ARCO Chemical Co. Debentures, 9.90%, 11/01/00 .... 35,247
65,000 ARCO Chemical Co. Debentures, 10.25%, 11/01/10 ... 66,813
105,000 ARCO Chemical Co. Debentures, 9.80%, 02/01/20 .... 99,852
-----------
268,277
-----------

CONTAINERS & PAPER - 20.30%
150,000 Abitibi-Consolidated, Debentures,
7.40%, 04/01/18 ............................... 134,639
175,000 Champion International, Debentures,
7.625%, 09/01/23 .............................. 168,421
46,000 Georgia Pacific Corp. Debentures,
9.875%, 11/01/21 .............................. 49,630
380,000 Georgia Pacific Corp. Debentures,
9.625%, 03/15/22 .............................. 406,433
700,000 Georgia Pacific Corp. Debentures,
9.125%, 07/01/22 .............................. 707,045
50,000 Owens-Illinois Inc. Debentures,
7.80%, 05/15/18 .............................. 44,151
65,000 Stone Container Corp. Senior Notes,
9.875%, 02/01/01 ............................. 65,000
140,000 Stone Container Corp. Senior Subordinated
Debentures, 10.75%, 04/01/02 ................ 139,300
100,000 Stone Container Corp. Senior Subordinated
Units, 12.25%, 04/01/02 ...................... 100,000
-----------
1,814,619
-----------

ELECTRIC & GAS UTILITIES - 3.20%
40,000 Houston Lighting & Power, 1st Mortgage,
8.75%, 03/01/22 .............................. 41,663
70,000 Monongahela Power, 1st Mortgage,
8.625%, 11/01/21 .............................. 73,737
115,000 Old Dominion Electric, 1st Mortgage,
8.76%, 12/01/22 ............................... 121,173
50,000 Portland General Electric, 1st Mortgage,
7.75%, 04/15/23 ............................... 49,046
-----------
285,619
-----------

ENVIRONMENTAL SERVICES/POLLUTION CONTROL - 0.46%
50,000 Waste Management Inc Debentures,
7.65%, 03/15/11 ............................... 41,488
-----------

ENERGY & ENERGY SERVICES - 7.84%
65,000 Global Marine Inc, Notes, 7.00%, 06/01/28 ........ 57,611
50,000 Magnum Hunter Res, Debentures, 10.00%, 06/01/07 .. 47,500
135,000 Mariner Energy Corp. Senior Subordinated
Notes, 10.50%, 08/01/06 ....................... 122,850
100,000 Mobil Corp. Debentures, 8.00%, 08/12/32 .......... 103,685
240,000 Occidental Petroleum, Debentures,
7.20%, 04/01/28 ............................... 221,310
125,000 Panaco Inc. Notes, 10.625%, 10/01/04 ............. 98,125
50,000 YPF Sociedad Anonima, Notes, 8.00%, 02/15/04 ..... 49,406
-----------
700,487
-----------

The accompanying notes are an integral part of these financial statements.

-3-

<PAGE>

FINANCIAL SERVICES - 6.20%
105,000 APP International Finance, Global Bond,
11.75%, 10/01/05 .............................. 77,700
123,000 Aetna Services Inc. Debentures,
8.00%, 01/15/17 ............................... 120,232
95,000 Aetna Services Inc. Debentures,
7.25%, 08/15/23 ............................... 84,729
105,000 Lincoln National Corp. Debentures,
9.125%, 10/01/24 .............................. 113,017
180,000 Reliance Group Holdings, Senior Subordinated
Debentures, 9.75%, 11/15/03 ................... 138,600
20,000 Washington Mutual Cap Company Guarantee,
8.375%, 06/01/27 .............................. 19,503
-----------
553,781
-----------

FOOD & DRUG PRODUCERS - 0.81%
80,000 Borden Inc. Sinking Fund Debentures,
9.25%, 06/15/19 ............................... 71,958
-----------

GAS & GAS TRANSMISSION - 2.10%
40,000 Bellwether Exploration Co. Senior Subordinated,
10.875%, 04/01/07 ............................. 36,450
165,000 KN Energy Inc, Debentures, 7.25%, 03/01/28 ....... 151,658
-----------
188,108

INDUSTRIAL GOODS - 12.36%
60,000 Crown Cork & Seal, Debentures, 8.00%, 04/15/23 ... 55,450
75,000 Cummins Engine Company, Inc. Debentures,
6.75%, 02/15/27 ............................... 72,013
85,000 National Equipment Services, Senior Subordinated
Notes, 10.00%, 11/30/04 ....................... 82,875
75,000 Tenneco Inc. Debentures, 7.625%, 06/15/17 ........ 71,963
50,000 Terex Corp. Company Guarantee, 8.875%, 04/01/08 .. 46,500
50,000 Tyco International Group SA Company Guarantee,
6.875%, 01/15/29 .............................. 44,240
65,000 Westinghouse Electric Corp. Debentures,
8.625%, 08/01/12 .............................. 68,373
670,000 Westinghouse Electric Corp. Debentures,
7.875%, 09/01/23 .............................. 662,856
-----------
1,104,270
-----------

The accompanying notes are an integral part of these financial statements.

-4-

<PAGE>

MEDIA & ENTERTAINMENT - 8.40%
200,000 CBS Inc. Senior Debentures, 8.875%, 06/01/22 $ 204,511
100,000 Granite Broadcasting, Senior Subordinated Notes,
10.375%, 05/15/05 102,500
345,000 Time Warner Inc. Debentures, 9.15%, 02/01/23 395,576
45,000 Time Warner Inc. Debentures, 8.375%, 03/15/23 48,556
-----------
751,143
-----------

MEDICAL-DRUGS - 1.30%
80,000 Dura Pharmaceuticals Convertible,
3.50%, 07/15/02 ............................... 62,000
55,000 Rhone-Poulenc Rorer Inc. Yankee Bond,
8.62%, 01/05/21 ............................... 54,600
-----------
116,600
-----------

METALS & MINING - 5.52%
180,000 Alcan Aluminum Ltd. Debentures,
8.875%, 01/15/22 .............................. 193,163
285,000 USX Corp. Debentures, 8.50%, 03/01/23 ............ 299,901
-----------
493,064
-----------

MISC. CONSUMER GOODS & SERVICES - 0.12%
10,000 Eastman Kodak Co. Notes, 9.375%, 03/15/03 ........ 10,810

RETAIL STORES - 1.81%
30,000 Dayton Hudson Co. Debentures, 8.60%, 01/15/12 .... 33,304
115,000 Great Atlantic & Pacific Tea Co. Debentures,
7.75%, 04/15/07 .............................. 108,152
30,000 Rite Aid Corp. Notes, 7.125%, 01/15/07 ........... 20,250
-----------
161,706
-----------

TECHNOLOGY - 0.54%
50,000 Lockheed Martin Co. Guarantee, 7.65%, 05/01/16 ... 48,036
-----------

TELEPHONES - 6.00%
50,000 BellSouth Telecommunications, Debentures,
7.875%, 08/01/32 .............................. 48,850
125,000 GTE Corp. Debentures, 8.75%, 11/01/21 ............ 139,970
70,000 New York Telephone Co. Debentures, 9.375%,
07/15/31 ...................................... 76,318
18,749 Nynex Corp. Amortized Debentures, 9.55%,
05/01/10 ...................................... 20,481
50,000 Sprint Capital Corp. Company Guarantee,
6.875%, 11/15/28 .............................. 45,884
135,000 U.S. West Communications, Debentures,
8.875%, 06/01/31 .............................. 140,846
62,000 Williams Communication Group, 10.875%,
10/01/09 ...................................... 63,860
-----------
536,209
-----------

The accompanying notes are an integral part of these financial statements.

-5-

<PAGE>

Croft Funds Corporation
CROFT-LEOMINSTER INCOME FUND
SCHEDULE OF INVESTMENTS
October 31, 1999
(Unaudited)
- --------------------------------------------------------------------------------
PRINCIPAL VALUE MARKET VALUE
- --------------- ------------
TRANSPORTATION - 0.17%
15,000 Union Pacific Corp. Sinking Fund Debentures,
8.50%, 01/15/17 ............................... 15,369
-----------
TOTAL CORPORATE BONDS - (Cost $8,469,060) ......................... 8,327,320
-----------

SHORT TERM INVESTMENTS - 1.12%
100,426 Firstar Treasury Fund (Cost $100,426) ............ 100,426
-----------

TOTAL INVESTMENTS - (Cost $9,060,972) ........99.33% 8,876,760

Cash and other assets less liabilities ....... 0.67% 60,235
------- -----------
TOTAL NET ASSETS 100.00% $ 8,936,995
======= ===========

(1) Federal Tax Information: At October 31, 1999 the net unrealized
appreciation based on cost for Federal Income tax purposes of $9,060,972
was as follows:

Aggregate gross unrealized appreciation for all
investments for which there was an excess of value
over cost ............................................$ 241,299
Aggregate gross unrealized depreciation for all
investments for which there was an excess of cost
over value ........................................... (425,511)
-----------
Net unrealized depreciation $ (184,212)
===========
<FN>

+ Non-income producing security
</FN>
</TABLE>

The accompanying notes are an integral part of these financial statements.

-6-

<PAGE>

Croft Funds Corporation
CROFT-LEOMINSTER INCOME FUND
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1999
(Unaudited)
- --------------------------------------------------------------------------------

<TABLE>

ASSETS:
<S> <C>
Investments in securities, at value (cost $9,123,429) (Note 2) .. $ 8,876,760
Dividends and interest receivable ............................... 188,691
Prepaid expenses ................................................ 7,728
-----------
Total Assets ............................................ 9,073,179
-----------

LIABILITIES:
Payables:
Advisory fees (Note 3) .................. $ 4,148
For securities purchased ................ 71,637
Fund shares repurchased ................. 40,757
Accrued expenses ........................ 19,642
-----------

Total Liabilities ....................................... 136,184
-----------

Net Assets .............................................. $ 8,936,995
===========

NET ASSETS CONSIST OF:
Additional paid in capital .............................. $ 9,342,253
Accumulated net investment income ....................... 5,048
Accumulated net realized loss from
investment transactions (Note 6 ) ............... (163,637)
Net unrealized depreciation on
investments ............................................. (246,669)
-----------
Net Assets .............................................. $ 8,936,995
-----------

Net asset value and redemption and
offering price per share ($8,936,995/904,819 shares
of capital stock outstanding) (Note 6 ) ................. $ 9.88
===========

</TABLE>

The accompanying notes are an integral part of these financial statements.

-7-

<PAGE>

Croft Funds Corporation
CROFT-LEOMINSTER INCOME FUND
STATEMENT OF OPERATIONS
For the six months ended October 31, 1999
(Unaudited)
- --------------------------------------------------------------------------------

<TABLE>

INVESTMENT INCOME:
<S> <C>
Interest ......................................................... $ 377,520
Dividends ........................................................ 24,585
---------
Total income ............................................. 402,105

EXPENSES:
Investment advisory fees (Note 3) ................................ 37,495
Administration fees .............................................. 11,452
Audit fees ....................................................... 8,327
Legal fees ....................................................... 8,100
Transfer agent fees .............................................. 5,891
Printing ......................................................... 5,415
Custody fees ..................................................... 3,336
Insurance ........................................................ 3,150
Registration fees ................................................ 1,676
Directors' fees and expenses ..................................... 252
Distribution fee (Note 3) ........................................ 0
Other ............................................................ 7,040
---------

TOTAL EXPENSES ........................................... 92,134

Less: Expense reimbursement (Note 3) .................... (39,927)
---------

Net expenses ............................................. 52,207
---------

NET INVESTMENT INCOME .................................... 349,898
---------

NET REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS (Note 2)
Net realized loss from investment transactions ................... (82,452)
Distributions of realized gains by other investment companies .... 0
Net change in unrealized depreciation of investments ............. (458,345)
---------

NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS .......... (540,797)
---------

NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS ..... $(190,899)
=========

</TABLE>

The accompanying notes are an integral part of these financial statements.

-8-

<PAGE>

Croft Funds Corporation
CROFT-LEOMINSTER INCOME FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>

For the six months
ended For the year
October 31, 1999 ended
(Unaudited) April 30, 1999
----------- --------------

Increase (Decrease) in Net Assets from Operations:
<S> <C> <C>
Net investment income ...................................... $ 349,898 $ 723,188
Net realized gain(loss) from investment transactions ....... (82,452) (34,024)
Distributions of realized gains by other
investment companies ............................... 0 0
Net change in unrealized depreciation of investments ....... (458,345) (369,529)
------------ ------------
Net increase (decrease) in net assets
resulting from operations .......................... (190,899) 319,635

Dividends paid to shareholders:
Net investment income ($.40 and .76 per share, respectively) (365,013) (712,264)
Capital gains ($.00 and .03 per share, respectively) ....... 0 (30,145)

Net capital share transactions (Note 4) .................... (628,276) 653,902
------------ ------------

Net increase (decrease) in net assets ...................... (1,184,188) 231,128

NET ASSETS:
Beginning of period ........................................ 10,121,183 9,890,055
------------ ------------

End of period .............................................. $ 8,936,995 $ 10,121,183
============ ============

</TABLE>

The accompanying notes are an integral part of these financial statements.

-9-

<PAGE>

Croft Funds Corporation
CROFT-LEOMINSTER INCOME FUND
NOTES TO FINANCIAL STATEMENTS
October 31, 1999
(Unaudited)
- --------------------------------------------------------------------------------

NOTE 1. ORGANIZATION

The Croft-Leominster Income Fund (the "Fund"), is a managed portfolio
of the Croft Funds Corporation, a diversified open-end management investment
company registered under the Investment Company Act of 1940. The Fund is one of
a series of Funds of the Croft Funds Corporation, which also includes the
Croft-Leominster Value Fund. It was organized in 1994 to succeed to the business
of Croft-Leominster Inc.'s Leominster Income Limited Partnership, an investment
company organized as a limited partnership which commenced operations January 1,
1992 for the purpose of investing the partners' capital in securities under
professional investment management. This succession occurred on May 4, 1995 when
the partnership's net assets aggregating $3,175,041 were transferred to the
Croft-Leominster Income Fund in exchange for 317,504 shares of the Fund's
capital stock. As a result of transferring such assets at their market value,
the change in unrealized appreciation of investments for the period, as shown in
the Statement of Operations will not equal the current unrealized appreciation
at October 31, 1999 as shown in the Statement of Assets and Liabilities and the
Schedule of Investments. The Croft-Leominster Income Fund seeks a high level of
current income with moderate risk of principal by investing primarily in a
diversified portfolio of investment grade fixed-income securities.

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of significant accounting policies followed
by the Fund in the preparation of its financial statements.

SECURITY VALUATION - Securities which are traded on any exchange or on
the NASDAQ over-the-counter market are valued at the last quoted sale price.
Investments, for which no sale is reported, are valued at their last bid price.
When market quotations are not readily available, when it is determined that the
last bid price does not accurately reflect the current value or when restricted
securities are being valued, such securities are valued as determined in good
faith under procedures established by and under the general supervision of the
Fund's Board of Directors.
Fixed income securities generally are valued by using market
quotations, but may be valued on the basis of prices furnished by a pricing
service when the Adviser believes such prices accurately reflect the fair market
value of such securities. A pricing service utilizes electronic data processing
techniques based on yield spreads relating to securities with similar
characteristics to determine prices for normal institutional-size trading units
of debt securities without regard to sale or bid prices. Short term investments
in fixed income securities with maturities of less than 60 days when acquired,
or which subsequently are within 60 days of maturity, are valued by using the
amortized cost method of valuation, unless the Board of Directors determine that
the amortized cost does not reflect the securities' fair value, in which case
these securities will be valued at their fair value as determined by the Board
of Directors.

-10-

<PAGE>

Croft Funds Corporation
CROFT-LEOMINSTER INCOME FUND
NOTES TO FINANCIAL STATEMENTS
October 31, 1999
(Unaudited)
- --------------------------------------------------------------------------------

FEDERAL INCOME TAXES - The Fund intends to comply with requirements of
the Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its net investment income as dividends to its
shareholders. The Fund intends to distribute its net long-term capital gains and
its net short-term capital gains at least once a year. Therefore no provision
for income taxes is required. Federal income tax loss carryforwards generated in
prior years will be used to offset a portion of current year's net realized
gains.
OTHER - The Fund follows industry practice and records security
transactions on the trade date. The specific identification method is used for
determining gains or losses for financial statement and income tax purposes.
Dividend income is recorded on the ex-dividend date, except that certain
dividends from foreign securities are recorded as soon as information is
available to the Fund. Interest income is recorded on an accrual basis.
Discounts and premiums on securities purchased are amortized over the life of
the respective securities.
ESTIMATES - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

NOTE 3. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES.
The Fund retains Croft-Leominster Inc. (the "Adviser") as its
investment adviser. Under the terms of the agreement the Adviser receives a fee,
computed daily and payable monthly at the annual rate of .79% of the Income
Fund's average daily net assets. Until December 31, 2001, the Adviser guarantees
that the overall expense ratio for the Income Fund, which exclude ordinary
brokerage commissions incurred in the purchase or sale of portfolio securities,
will not exceed 1.10%. As a result, for the six months ended October 31, 1999,
the Adviser accrued reimbursements to the Fund of $39,927.
Pursuant to a plan of Distribution the Fund pays a distribution fee of
up to .25% of the average daily net assets to Broker-Dealers for distribution
assistance, and to financial institutions and intermediaries such as banks,
savings and loan associations, insurance companies and investment counselors as
compensation for services rendered or expenses incurred in connection with
distribution assistance.
The Croft Funds Corporation elected to waive the 12b-1 fee for the Fund
on August 23, 1995. The 12b-1 fee will be waived into the foreseeable future;
however, the Croft Funds Corporation reserves the right to terminate the waiver
and rei-nstate the 12b-1 fee at any time in its sole discretion.
Certain Directors and officers of the Corporation are "interested
persons" (as defined in the Investment Company Act of 1940) of the Corporation.
Each "non-interested" Director is entitled to receive an annual fee of $500 plus
expenses for services relating to the Corporation.

-11-

<PAGE>

Croft Funds Corporation
CROFT-LEOMINSTER INCOME FUND
NOTES TO FINANCIAL STATEMENTS
October 31, 1999
(Unaudited)
- --------------------------------------------------------------------------------

NOTE 4. CAPITAL SHARE TRANSACTIONS
As of October 31, 1999 there was 30,000,000, $0.001 par value shares of
capital stock authorized for the Croft Funds Corporation, and capital paid-in
amounted to $9,342,253 for the Fund.

Transactions in capital stock were as follows:
<TABLE>
<CAPTION>

For the six months For the year ended
ended October 31, 1999 April 30, 1999
(Unaudited)
Shares Amount Shares Amount
------ ------ ------ ------

<S> <C> <C> <C> <C>
Shares sold .................... 23,488 $ 236,247 193,507 $ 2,061,975

Shares issued in reinvestment of
dividends .............. 42,995 435,729 40,710 435,209

Shares redeemed ................ (127,995) (1,300,252) (171,201) (1,843,282)
-------- ----------- -------- -----------

Net increase (decrease) ........ (61,512) ($ 628,276) 63,016 $ 653,902
-------- ----------- -------- -----------
</TABLE>

NOTE 5. INVESTMENT TRANSACTIONS
Purchases and sales, excluding short-term securities, for the six
months ended October 31, 1999 aggregated $391,822 and $902,300 respectively, for
the Fund.

NOTE 6. DISTRIBUTIONS TO SHAREHOLDERS
The Fund makes dividend distributions quarterly. During the six months
ended October 31, 1999, distributions of $0.40 aggregating $365,013 were
declared from net investment income. The accompanying notes are an integral part
of these financial statements.

-12-

<PAGE>

Croft Funds Corporation
CROFT-LEOMINSTER INCOME FUND
FINANCIAL HIGHLIGHTS
(For a fund share outstanding throughout each period)
- --------------------------------------------------------------------------------

For the
six months ended For the For the For the May 4, 1995*
October 31, 1999 year ended year ended year ended through
(Unaudited) April 30, 1999 April 30, 1998 April 30,1997 April 30, 1996
--------------------------------------------------------------------------

<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ......... $ 10.47 $ 10.95 $ 10.40 $ 10.25 $ 10.00

Income (loss) from investment operations:
Net investment income ........................ 0.38 0.77 0.81 0.79 0.73
Net realized and unrealized gain(loss) on
investments .......................... (0.57) (0.46) 0.65 0.26 0.28
Total from investment operations ............. (0.19) 0.31 1.46 1.05 1.01

Less distributions:
Dividends from net investment income ......... (0.40) (0.76) (0.78) (0.84) (0.73)
Distribution from realized gains from security
transactions ......................... 0.00 (0.03) (0.13) (0.06) (0.03)
Total distributions .......................... (0.40) (0.79) (0.91) (0.90) (0.76)

Net asset value, end of period ............... $ 9.88 $ 10.47 $ 10.95 $ 10.40 $ 10.25

Total return** ............................... (1.80%) 2.91% 14.36% 10.56% 10.17%

Ratios/supplemental data:
Net assets end of period (in 000's) .......... 8,937 10,121 9,890 7,419 6,450
Ratio of expenses to average net assets,
before reimbursement ................. 1.96%^ 1.78% 1.59% 1.90% 1.10%^
Ratio of expenses to average net assets,
after reimbursement .................. 1.10%^ 1.10% 1.10% 1.10% 1.10%^
Ratio of net investment income to average
net assets, before reimbursement ..... 6.58%^ 6.47% 6.90% 6.76% 7.35%^
Ratio of net investment income to average
net assets, after reimbursement ...... 7.43%^ 7.15% 7.38% 7.57% 7.35%^
Portfolio turnover rate ...................... 4.27% 13.45% 15.62% 13.73% 13.76%^
<FN>

- ----------------
* Commencement of operations
** Based on net asset value per share.
^ Annualized
</FN>
</TABLE>

The accompanying notes are an integral part of these financial statements.

-13-

<PAGE>

CROFT LEOMINSTER

VALUE FUND

1-800-746-3322