FIRST OMAHA FUNDS
Annual Report
MARCH 31, 1999
(LOGO) FIRST OMAHA
FAMILY OF FUNDS/R
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NOTICE TO INVESTORS
Shares of the First Omaha Funds are:
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NOT FDIC INSURED
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MAY LOSE VALUE
NO BANK GUARANTEE
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An investment in the U.S. Government
Obligations Fund is not insured or guaranteed
by the Federal Deposit Insurance Corporation or
any other government agency. Although the Fund
seeks to preserve the value of your investment
at $1.00 per share, it is possible to lose
money by investing in the Fund.
First Omaha Funds are distributed by an
independent third party, Sunstone Distribution
Services, LLC.
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<PAGE>
FIRST OMAHA FUNDS - ANNUAL REPORT
March 31, 1999
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April 1999
Dear SHAREHOLDER:
We are pleased to provide you with the First Omaha Family of Funds' Annual
Report for the period ended March 31, 1999. In it you will find helpful
information regarding your investment, its performance and its management. Also,
our portfolio managers have given their observations on the stock and bond
markets. Please read this Report carefully and retain it with your Prospectus
for future reference.
While the stock market has rewarded investors greatly over the last three years,
you should continue to remind yourself that stocks have experienced reversals
and sell-offs. The key is to maintain a long-term investment perspective and to
invest in funds which match your objective and risk tolerance.
Once again, thank you for your investment in the First Omaha Family of Funds. We
look forward to serving your future investment needs.
THE STOCK MARKET OVERVIEW
The year ended March 31, 1999 was a tumultuous one for the U.S. stock markets.
Wide daily swings in market levels was the norm rather than the exception. On 42
days in the year, the S&P 500 Index moved by 20 points or more, at or above a 2%
move per day. The Dow Jones Industrial Average ("DJIA") flirted with 10,000 and
finally closed above that level on March 29, 1999. The fear of "Asian Contagion"
that caused widespread selling in the markets, dropping the S&P 500 Index 6.8%
on August 31, abated by March 31, 1999, the fiscal year end of the First Omaha
Funds.
Against this backdrop, the market created a very difficult investment
environment. Growth investing was in and value was out. A huge divergence
between value and growth investing was evidenced by the S&P Barra Value Index
reporting a 5.73% return for the 12-months ended March 31, 1999 versus the S&P
Barra Growth Index generating a 30.69% return for the same period.
Size also mattered greatly. The large capitalization dominated stock indices
generated positive returns for the year: the DJIA was up 13.2%, the S&P 500
Index was up 18.5%, and the Nasdaq was up an astounding 34.6% for the year ended
March 31, 1999. Looking deeper than just the returns tells a different story.
Each index was driven by relatively few stocks. For example, only 208 of the S&P
500 stocks had positive performance for the year ended March 31, 1999. The
unweighted, geometric return of the S&P 500 Index was -4.9%. An unweighted
return gives, in simple terms, an equal weighting to each component of the index
rather than weighting the larger stocks heavier. Further evidence of the size
bias lies in the S&P MidCap Index return of 0.5% and the S&P SmallCap Index
falling 19.1%.
This lack of depth is cause for concern, but as always, the market's momentum is
difficult to change. The well-recognized performance of large capitalization
growth stocks has been almost self-perpetuating, as investors sold their
disappointments to join in the rally. We believe at some point this speculation
will come to an end and value investors who maintained discipline may be
rewarded.
The U.S. economy continued its strength. Growth has been non-inflationary,
consumers are spending, and deflation in commodities is holding down the price
of goods enabling U.S. producers to remain globally competitive. We do not see a
true deflationary environment coming, but we do believe that certain sectors
will continue to struggle just as we saw rolling sector recessions over the last
few years. Investors have, and we believe, will continue to mercilessly punish
stocks of companies reporting a quarter of disappointing earnings. In their
stampede out to other stocks, value is oftentimes created in the downtrodden.
We continue to believe in our value investment style. We will focus on
individual investments with long-term fundamentals providing attractive
intrinsic values. We will strive to invest in companies that have strong balance
sheets, improving returns on equity and a demonstrated ability to effectively
utilize capital.
<PAGE>
ANNUAL REPORT - FIRST OMAHA FUNDS
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FIRST OMAHA SMALL CAP VALUE FUND
The fiscal year ending March 31, 1999 was characterized by an extraordinary
divergence in performance between the large- and small-cap stocks (S&P 500 Index
vs. S&P 600 SmallCap Index); a staggering 38% point difference, the largest on
record. This underperformance occurred despite the fact that the small caps
began the year in undervalued territory versus the large caps by virtually any
historical measure. The Fund had a fiscal year return of -20.2%. This compares
to a market in which the S&P 500 Index gained 18.5%, the S&P MidCap 400 Index
gained 0.5% and the S&P 600 Index lost 19.1%. The main reason the Fund
underperformed as compared to the S&P MidCap 400 Index is the significant
divergence in performance between the large- and small-cap stocks. The S&P
MidCap 400 Index has a weighted average market cap of approximately $3.8 billion
while the weighted average market capitalization of the Fund is $790 million.
Another index, the S&P SmallCap Barra Value, is more representative of the Fund
based on market cap, valuation and investment style. The 12-month return for
this index was -22.9%, slightly lower than that of the Fund. During market
environments where such a large divergence occurs we still search for value in
selected issues that we believe can outperform over time. We believe this can be
accomplished by investing in companies with a strong market share, solid balance
sheets, and above-average or improving return on shareholder equity.
During the six-month period ending March 31 there were two new additions to the
portfolio. The two new positions were Hartmarx Corp. and Dallas Semiconductor
Corp. Hartmarx is the largest manufacturer and marketer of men's suits,
sportcoats and slacks (tailored clothing) in the U.S. Recently Hartmarx has
diversified into men's and women's sportswear, including golfwear and women's
career apparel. Substantially all of the company's products are sold through a
variety of retail channels under established brand names or the private labels
of major retailers. Hartmarx has done a good job of diversifying their product
line as growth prospects for suit sales have flattened as well as steadily
improving margins in years of low inflation and limited pricing power.
Dallas Semiconductor designs, manufactures and markets electronic chips and
chip-based subsystems. Applications include PCs, workstations, scientific and
medical equipment, industrial controls, automatic identification,
telecommunications and consumer electronics. Dallas Semiconductor's strength is
its ability to provide multiple products to multiple customers allowing them
flexibility in the cyclical semiconductor industry.
Two of our existing holdings saw their portfolio weighting increase during the
recent period. Both Nash-Finch Co. and Newfield Exploration Co. had experienced
excessive weakness and after analyzing the companies' future prospects we felt
the weakness provided potential for attractive returns going forward.
Aliant Communications, Inc. was liquidated from the portfolio at the end of
March. Aliant announced a definitive agreement to merge with ALLTEL for
approximately $39 per share. With Aliant selling above the exchange value we
felt it was appropriate to reallocate funds to investment opportunities with
more upside potential.
The current structure of the Small Cap Value Fund is a diverse portfolio of
small- and mid-cap companies with strong fundamental profiles. We believe that
the portfolio should consist of companies with solid balance sheets that can
generate sufficient cash flow and are currently selling below their intrinsic
value.
As of March 31, 1999 the portfolio was 92.6% invested in stocks and held cash
reserves of 7.4%. The equities were diversified across 30 positions with
significant exposure to the various sectors of the market.
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References to specific securities included in this letter should not be
construed as a recommendation to buy or sell shares in the companies.
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FIRST OMAHA FUNDS - ANNUAL REPORT
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SMALL CAP VALUE FUND
PORTFOLIO COMPOSITION<F1>
as of March 31, 1999
BASIC INDUSTRIES 30%
CONSUMER CYCLICALS 17%
CAPITAL GOODS 16%
CONSUMER STAPLES 13%
FINANCIAL 7%
TRANSPORTATION 7%
ENERGY 4%
UTILITIES 3%
TECHNOLOGY 3%
<F1> Sector weightings represent the percentage of the Fund's equity investments
in certain general sectors. These sectors include more than one industry.
The five largest positions in the portfolio at the end of March represented 20%
of net assets (see chart).
TOP FIVE HOLDINGS<F2>
as of March 31, 1999
% OF NET ASSETS
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CLARCOR, Inc. 4.22%
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WD-40 Co. 4.16
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Oil-Dri Corp. of America 4.06
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Newfield Exploration Co. 3.84
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Tecumsch Products Co., Class A 3.81
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<F2> Excluding cash and cash equivalents
Portfolio composition and holdings are subject to change at any time.
We believe the portfolio, on a weighted average basis, is strong fundamentally
and has an attractive valuation as demonstrated by the following tables.
PORTFOLIO VALUATION PROFILE
as of March 31, 1999
S&P
FIRST OMAHA S&P S&P SMALLCAP
SMALL CAP MIDCAP SMALLCAP 600 BARRA
VALUE FUND 400 600 VALUE
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Price/Earnings<F3> 13.0x 20.6x 17.3x 13.5x
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Price/Book Value<F3> 1.7x 2.9x 2.2x 1.5x
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Average Market Cap $692 $2.1 $516 $376
million billion million million
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<F3> Based on 1999 estimates
TOTAL RETURN
as of March 31, 1999
AVERAGE
1 YEAR ENDED ANNUAL SINCE
3/31/99 COMMENCEMENT<F4>
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First Omaha Small Cap Value Fund (20.18)% 3.79%
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<F4> Commencement date is 6/10/96
RETURN ON A $10,000 INVESTMENT
JUNE 10, MARCH MARCH MARCH
1996 1997 1998 1999
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FIRST OMAHA SMALL CAP VALUE FUND $10,000 $10,730 $13,906 $11,100
S&P MIDCAP 400 INDEX $10,000 $10,587 $15,779 $15,850
S&P SMALLCAP 600 INDEX $10,000 $9,960 $14,709 $11,895
S&P SMALLCAP 600 BARRA VALUE INDEX $10,000 $11,127 $16,853 $12,992
This chart assumes an initial investment of $10,000 made on 6/10/96. Total
Return is based on net change in N.A.V. assuming reinvestment of distributions.
Returns shown on this page include the reinvestment of all dividends and other
distributions. Performance figures reflect fee waivers in effect, represent past
performance, which is no guarantee of future results, and will fluctuate. In the
absence of fee waivers, Total Return would be reduced. The investment return and
principal value of an investment in the First Omaha Small Cap Value Fund will
fluctuate so that an investor's shares in the Fund, when redeemed, may be worth
more or less than their original cost. This Fund is advised by First National
Bank of Omaha.
The S&P MidCap 400 Index consists of 400 domestic stocks chosen for market size,
liquidity and industry group representation. It is also a market-value weighted
index and was the first benchmark of midcap stock price movement. It is not
possible to make a direct investment in an index.
The S&P SmallCap 600 Index consists of 600 domestic stocks chosen for market
size, liquidity (bid-asked spread, ownership, share turnover and number of no
trade days) and industry group representation. It too is a market-value weighted
index. It is not possible to make a direct investment in an index.
The S&P SmallCap 600 Barra Value Index is a market capitalization-weighted index
of all the stocks in the S&P SmallCap 600 that have low price to book ratios. It
is designed so that approximately 50% of the S&P SmallCap 600 market
capitalization is in the Barra Value Index. The other 50% is in the Barra Growth
Index. The Barra Value & Barra Growth indices are rebalanced semi-annually on
January 1 and July 1. The returns for this index do not reflect any fees or
expenses. It is not possible to make a direct investment in an index.
<PAGE>
ANNUAL REPORT - FIRST OMAHA FUNDS
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FIRST OMAHA GROWTH FUND
The stock market was very rewarding for many, but punishing for others, during
the past year. Shareholders in America's largest companies reaped another year
of outstanding returns while investors in smaller- and medium-sized companies
were for the most part left behind. The First Omaha Growth Fund, with an
emphasis on medium-sized companies, was down 4.3% during the 12-month period
ended March 31, 1999 compared to the 0.5% return for the S&P MidCap 400 Index.
The larger-capitalization S&P 500 Index returned 18.5% and the smaller
capitalization Russell 2000 Index declined by 16.2% for this period ended March
31, 1999. During the past year performance was directly related to company size,
and the difference in performance between large, medium and small stocks was
among the largest divergences ever recorded. Large-company stocks experienced a
sharp, but brief downturn in the July/August period while medium and small
companies had a longer and deeper decline that began in April and stretched into
October. The Growth Fund underperformed the S&P 400 MidCap Index due largely to
the poor showing of several insurance company stocks that were held. MBIA, Inc.
and MGIC Investment Corp. reported earnings gains of 15% and 23%, respectively,
during 1998, but their stock prices underperformed the market by a wide margin.
Frontier Insurance Group reported disappointing results and its stock price was
also weak. Positions in Boeing Co., First Health Group and Fluor Corp. were also
a detriment to the performance of the Fund relative to market benchmarks.
Most companies held in the Fund produced good operational results in the past
year, but still experienced weak stock prices as investors showed a preference
for the better known and more liquid large blue chip companies. Areas of
particular weakness in the Growth Fund included auto parts, insurance, managed
care and engineering/construction. Areas of strength included communications,
software and transportation.
While it is impossible to predict the future direction of the markets with any
degree of certainty, we believe that the dramatic outperformance of large-
company stocks relative to medium- and smaller-company stocks has set the stage
for a potential extended period of outperformance longer term in the event the
market moves toward historical valuation relationships between these sectors. We
will continue to seek companies with better than average growth prospects.
THE PORTFOLIO
On March 31, 1999 the Growth Fund was fully invested in stocks, with less than
one percent of assets in cash equivalents.
GROWTH FUND
PORTFOLIO COMPOSITION<F1>
as of March 31, 1999
TECHNOLOGY 17%
BASIC INDUSTRIES 14%
FINANCIAL 14%
COMMUNICATION SERVICES 11%
CAPITAL GOODS 10%
CONSUMER CYCLICALS 9%
CONSUMER STAPLES 8%
TRANSPORTATION 8%
UTILITIES 5%
HEALTH CARE 4%
The five largest holdings in the Fund represent approximately 21.5% of the value
of the Fund and are listed below.
TOP FIVE HOLDINGS<F2>
as of March 31, 1999
% OF NET ASSETS
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Qwest Communications
International Inc. 4.53%
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Sundstrand Corp. 4.37
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Century Telephone
Enterprises, Inc. 4.32
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Southwest Airlines Co. 4.23
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Cerner Corp. 4.04
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<F1> Sector weightings represent the percentage of the Fund's equity investments
in certain general sectors. These sectors include more than one industry.
<F2> Excluding cash and cash equivalents
Portfolio composition and holdings are subject to change at any time.
PORTFOLIO VALUATION PROFILE
as of March 31, 1999
FIRST OMAHA S&P
GROWTH FUND 500
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Price/Earnings<F3> 25.0x 28.6x
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Average Market Cap $9.69 billion $21.0 billion
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<F3> Based on 1999 estimates
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FIRST OMAHA FUNDS - ANNUAL REPORT
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TOTAL RETURN
as of March 31, 1999
AVERAGE
1 YEAR ENDED ANNUAL SINCE
3/31/99 COMMENCEMENT<F4>
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First Omaha Growth Fund (4.28)% (4.28)%
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<F4> Commencement date is 4/1/98
RETURN ON A $10,000 INVESTMENT
APRIL 1, JUNE SEPTEMBER DECEMBER MARCH
1998 1998 1998 1998 1999
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FIRST OMAHA GROWTH FUND $10,000 $9,609 $8,461 $9,895 $9,572
S&P MIDCAP 400 $10,000 $9,786 $8,370 $10,730 $10,046
This chart assumes an initial investment of $10,000 made on 4/1/98. Total Return
is based on net change in N.A.V. assuming reinvestment of distributions. Returns
shown on this page include the reinvestment of all dividends and other
distributions. Performance figures reflect fee waivers in effect, represent past
performance, which is no guarantee of future results, and will fluctuate. In the
absence of fee waivers, Total Return would be reduced. The investment return and
principal value of an investment in the First Omaha Growth Fund will fluctuate
so that an investor's shares in the Fund, when redeemed, may be worth more or
less than their original cost. This Fund is advised by FNC Trust Group, n.a.
The S&P MidCap 400 Index consists of 400 domestic stocks chosen for market size,
liquidity and industry group representation. It is also a market-value weighted
index and was the first benchmark of midcap stock price movement. The returns
for this index do not reflect any fees or expenses. It is not possible to make a
direct investment in an index.
FIRST OMAHA EQUITY FUND
The equity market finished the Fund's fiscal year on a positive note with both
the DJIA and the S&P 500 Index reaching new highs in March. While the returns
remained impressive for the indices, a decreasing number of stocks participated
in the spectacular advance of the equity market. The mania for a few, very
large-capitalization stocks propelled the index to record highs and a 12-month
return of 18.5% for the period ending March 31, 1999. However, this "narrow"
participation can be demonstrated by comparing the S&P 500 Index, which is a
capitalization-weighted index (larger companies influence the returns more than
smaller ones) with the unweighted S&P 500 Index return for the same period of -
4.9%. In the past we have also provided the S&P 500 Barra Value Index as a proxy
for performance of the value portion of the S&P 500. This index had a return of
5.7% for the past 12 months and demonstrates again the wide divergence of
performance within the markets. While this past year can be best characterized
by both the narrowness of the market and the volatility we've experienced, the
Fund's returns were disappointing, producing a return of -9.2% for the 12-months
ending March 31, 1999.
There are a number of reasons why the Fund's performance lagged that of the S&P
500 Index and, to a lesser extent, that of the S&P 500 Barra Value Index,
including our conservative approach and value investment style. We realize that
those managers who have been very aggressive have been rewarded better than
conservative investors. The past year has been terrific for large, growing
companies that the "growth style" favors and terrible for the out-of-favor,
cyclical types of stocks that the "value style" favors. Part of the relative
underperformance was due to the Fund's conservative characteristics and our
strategy of selling a stock when we believe it meets or exceeds our estimation
of its intrinsic value. In some cases, we underestimated the growth potential of
stocks we held. After we sold them they continued to appreciate significantly,
more so than some of the stocks we bought to replace them. Part was due to the
aforementioned drivers of the S&P 500 Index's performance.
Despite the difficult environment for traditional value investors, we continue
to favor a conservative investment approach. Our process is to buy a stock we
believe is selling for less than its intrinsic value and sell it when it meets
or exceeds our estimation of that value. We then reinvest the proceeds in other
stocks we believe are undervalued. In making investment decisions, we will
continue to focus on higher-quality, larger-capitalization companies that have
demonstrated histories of earnings, dividend and cash flow growth. Our goal is
to provide attractive long-term returns through a conservative investment
process.
<PAGE>
ANNUAL REPORT - FIRST OMAHA FUNDS
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THE PORTFOLIO
There was significant activity in the portfolio since our last Semi-Annual
Report to you. Six new stocks were added to the portfolio, as the market decline
of last fall provided us with the opportunity to purchase a number of new
companies. New positions were initiated in Union Pacific Corp., Halliburton Co.,
Banc One Corp., First Data Corp., Mattel, Inc. and Service Corp. International.
Union Pacific owns Union Pacific Railroad, which is the largest railroad in the
U.S. with about 35,000 route miles. The company serves the western two-thirds of
the United States. We believe that the Union Pacific - Southern Pacific merger
integration problems are a temporary phenomenon. The company has a positive
outlook based on capturing lost revenue and shedding costs associated with its
service troubles. We believe operating improvements will come from the
combination of recaptured revenues lost due to service problems and continued
service and quality enhancements that could provide additional cost savings.
Service Corp. International is the largest provider of death-care services in
the world. The company owns and operates 3,370 funeral service locations, 430
cemeteries and 180 crematoria in the United States, Canada, Australia, Europe
and the Pacific Rim. The company also operates flower shops, limousine services,
and burial vaults in addition to providing capital financing to other funeral
home/cemetery operators through its Provident Services subsidiary.
Banc One is a bank holding company which provides a full range of consumer and
commercial banking related financial services. The company also engages in
credit card and merchant processing, consumer and education finance, mortgage
banking, insurance, venture capital, investment and merchant banking, trust,
brokerage, investment management, equipment leasing and data processing. The
October 1998 merger between Banc One and First Chicago NBD created the largest
retail and business bank in the Midwest.
Mattel, Inc. is a premier company in the toy industry, which generates healthy
cash flows and was purchased at a very reasonable price. The company has a broad
product line which can be categorized into five major segments: Barbie; Infant
and Pre-school (Fisher Price, Sesame Street license); Entertainment (Disney and
Nickelodeon licenses); Wheels (Matchbox, Hot Wheels and Tyco radio controlled
cars); and, Other (other dolls such as American Girl and Polly Pocket and games
such as UNO and Skip-bo).
Halliburton operates in virtually every service segment possible, with the
exception of seismic field operations, in the energy services industry. This
group provides the oil industry with well cementing, well stimulation, formation
testing, measurement logging, directional drill and reservoir analysis services.
In addition, the Engineering & Construction division serves heavy industry while
the recently acquired Dresser Industry division is a force in plant construction
services.
First Data is the largest payment processing company in the world, with unique
franchises in three large, fast growing markets. The company provides
information and transaction processing and related services including:
credit/debit authorization, risk management, card embossing, electronic consumer
money transfer, healthcare claims processing and mutual fund services.
In addition, we increased the weightings in the portfolio of Rite Aid Corp.,
Eastman Kodak Co. and Emerson Electric Co. A number of positions were trimmed as
they approached our estimates of fair value. Ingersoll-Rand Co., Exxon Corp.,
Cyprus Amax Minerals Co., GTE Corp., American General Corp. and Motorola, Inc.
all had declining weights within the portfolio.
PORTFOLIO COMPOSITION
On March 31, 1999, 91% of the portfolio was invested in equities with the
balance invested in cash and cash equivalents. The portfolio held 40 company
stocks and continues to remain well diversified among market sectors, with
exposure to most sectors of the economy.
EQUITY FUND
PORTFOLIO COMPOSITION<F1>
as of March 31, 1999
CONSUMER STAPLES 18%
FINANCIAL 14%
TECHNOLOGY 12%
BASIC INDUSTRIES 11%
CONSUMER CYCLICALS 11%
ENERGY 11%
CAPITAL GOODS 10%
UTILITIES 4%
HEALTH CARE 4%
COMMUNICATION SERVICES 3%
TRANSPORTATION 2%
<PAGE>
FIRST OMAHA FUNDS - ANNUAL REPORT
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The five largest holdings are listed below. These stocks represent approximately
18% of the Fund's net assets and approximately 19% of the value of the equities
in the portfolio.
TOP FIVE HOLDINGS<F2>
as of March 31, 1999
% OF NET ASSETS
- ----------------------------------------
Ingersoll-Rand Co. 3.70%
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Motorola, Inc. 3.62
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American Financial Group, Inc. 3.58
- ----------------------------------------
Unocal Corp. 3.34
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SAFECO Corp. 3.31
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<F1> Sector weightings represent the percentage of the Fund's equity investments
in certain general sectors. These sectors include more than one industry.
<F2> Excluding cash and cash equivalents
Portfolio composition and holdings are subject to change at any time.
MARKET CAPITALIZATION COMPARISON ($ BILLIONS)
FIRST OMAHA S&P 500
EQUITY FUND S&P 500 BARRA VALUE
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Weighted Average 21.0 101.3 48.0
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Median 8.3 7.8 5.9
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PORTFOLIO VALUATION PROFILE
as of March 31, 1999
FIRST OMAHA S&P 500
EQUITY FUND S&P 500 BARRA VALUE
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Price/Earnings<F3> 17.9x 28.6x 21.0x
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Price/Book Value<F3> 3.8x 5.0x 3.1x
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Yield 2.8% 1.3% 1.9%
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<F3>Based on 1999 estimates
TOTAL RETURN
as of March 31, 1999
1 YEAR ENDED AVERAGE ANNUAL SINCE
3/31/99 COMMENCEMENT<F4>
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First Omaha Equity Fund<F5> (9.20)% 12.47%
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<F4> Commencement date is 12/13/92
<F5> Performance data from commencement through April 9, 1995 relates to a
predecessor, First Omaha Equity Fund, the assets of which were acquired
by the Fund on that date.
RETURN ON A $10,000 INVESTMENT
<TABLE>
<CAPTION>
DEC.13, MARCH MARCH MARCH MARCH MARCH MARCH MARCH
1992 1993 1994 1995 1996 1997 1998 1999
-------- -------- -------- -------- -------- -------- -------- --------
<C> <C> <C> <C> <C> <C> <C> <C> <C>
FIRST OMAHA EQUITY FUND $10,000 $10,470 $10,805 $12,757 $15,572 $17,920 $23,097 $20,973
S&P 500 COMPOSITE STOCK INDEX $10,000 $10,511 $10,666 $12,326 $16,283 $19,511 $28,876 $34,206
S&P 500/BARRA VALUE INDEX $10,000 $11,045 $11,600 $13,064 $17,368 $20,267 $28,878 $30,531
</TABLE>
This chart assumes an initial investment of $10,000 made on 12/13/92. Total
Return is based on net change in N.A.V. assuming reinvestment of distributions.
Returns shown on this page include the reinvestment of all dividends and other
distributions. Performance figures reflect fee waivers in effect, represent past
performance, which is no guarantee of future results, and will fluctuate. In the
absence of fee waivers, Total Return would be reduced. The investment return and
principal value of an investment in the First Omaha Equity Fund will fluctuate
so that an investor's shares in the Fund, when redeemed, may be worth more or
less than their original cost. This Fund is advised by First National Bank of
Omaha.
The S&P 500 Index is an unmanaged index of 500 selected common stocks, most of
which are listed on the New York Stock Exchange. The index is heavily weighted
toward stocks with large market capitalizations and represents approximately
two-thirds of the total market value of all domestic common stocks. The returns
for this index do not reflect any fees or expenses. It is not possible to make a
direct investment in an index.
The S&P 500 Barra Value Index is a market capitalization-weighted index of all
the stocks in the S&P 500 that have low price to book ratios. It is designed so
that approximately 50% of the S&P 500 market capitalization is in the Barra
Value Index. The other 50% is in the Barra Growth Index. The Barra Value and
Barra Growth indices are rebalanced semi-annually on January 1 and July 1. The
returns for this index do not reflect any fees or expenses. It is not possible
to make a direct investment in an index.
<PAGE>
ANNUAL REPORT - FIRST OMAHA FUNDS
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FIRST OMAHA BALANCED FUND
The primary goal of the First Omaha Balanced Fund is to provide a combination of
current income and capital appreciation. We attempt to meet that goal through
careful analysis and selection of securities that pass through our quantitative
and qualitative screening process for value and margin-of-safety. The investment
horizon for the Fund is three to five years; therefore, we focus on long-term
results.
The First Omaha Balanced Fund provided a one-year total return of -3.7%, which
lagged the benchmark indices due primarily to equity underperformance. Our value
philosophy has generally been unrewarding during this last phase of the bull
stock market. The equity market has experienced large volatility on an almost
daily basis, over 70% of the trading days in the quarter moved up or down by
over 0.5%. Over 40% of the trading days moved over 1%. Stocks with high
valuations have been the most volatile as investors moved to limit exposure to
volatility. There are a number of reasons why the equity portion of the Fund's
performance lagged that of the S&P 500 Index and, to a lesser extent, that of
the S&P 500 Barra Value Index, including our conservative approach and value
investment style. Part of the relative underperformance was due to the Fund's
conservative characteristics and our strategy of selling a stock when we believe
it meets or exceeds our estimation of its intrinsic value. In some cases, we
underestimated the growth potential of stocks we held. After we sold them they
continued to appreciate significantly, more so than some of the stocks we bought
to replace them. Part was due to the aforementioned drivers of the S&P 500
Index's performance which are discussed on page 5 under "First Omaha Equity
Fund." The fixed income portion of the Fund outperformed that of the Lehman
Bros. Gov't./Corp. Bond Index on a before-fee basis. The high overall credit
quality and decline of interest rates contributed significantly to the Fund's
performance. In uncertain markets such as this, we continue to believe in our
long-term, value-oriented style. While stocks gyrated through the quarter, bonds
generated stellar returns. The flight to quality was evident as treasuries and
to a lesser extent agencies and high-quality corporate bonds moved higher in
price.
THE PORTFOLIO
Our target allocation is currently 45 - 55% stocks, 40 - 50% bonds and 0 - 10%
cash equivalents. At March 31, 1999 our allocation was 55% equities, 37% bonds
and 8% cash equivalents. Our bond weight is slightly below our target allocation
due to the timing of an investment program.
In the first half of the fiscal year, we used our asset allocation change to
commit additional funds to corporate bonds rather than to treasuries as yields
on corporate debt versus treasury bonds rose. The bond segment composition at
March 31, 1999 was 40.2% treasuries and agencies and 59.8% high-quality
corporate bonds. The average quality rating of the bond portfolio was AA1,
reflecting our belief that quality is an important component of future
performance. The average maturity of the portfolio was increased to reflect our
growing confidence in the U.S. bond market. After adjusting for inflation, bond
yields are at quite high levels.
In the last six months, we introduced six new holdings into the equity portion
of the portfolio. Added were Banc One Corp., First Data Corp., Halliburton Co.,
Mattel, Inc., Service Corp. International and Union Pacific Corp. These six
stocks account for over 15% of the equity commitment. The additions were paid
for through limited trimming of a variety of equity positions and by reducing
some exposure to fixed income. The portfolio now holds common stocks in forty
different companies. At March 31, 1999, the portfolio dividend yield was 2.8%
versus the S&P 500 yield of 1.4%. The top five equity positions, accounting for
19% of the equity segment, were Motorola, Inc., Ingersoll-Rand Co., Unocal
Corp., SAFECO Corp. and Kellwood Co.
In the last six months, we have found a number of values as evidenced by adding
six new positions to the portfolio. We remain committed to a renewed focus on
higher-quality, larger-capitalization companies with a demonstrated history of
earnings, dividend and cash flow growth. We also prefer strong balance sheets
and improving returns on capital.
<PAGE>
FIRST OMAHA FUNDS - ANNUAL REPORT
- --------------------------------------------------------------------------------
BALANCED FUND
PORTFOLIO COMPOSITION
as of March 31, 1999
COMMON STOCKS 55%
CORPORATE BONDS 22%
U.S. GOVERNMENTS 13%
CASH EQUIVALENTS 8%
U.S. GOVERNMENT AGENCIES 2%
TOP FIVE HOLDINGS<F1>
as of March 31, 1999
% OF NET ASSETS
- ------------------------------------------------------------
Halliburton Co., Series A, 6.75%, 2/1/27 3.35%
- ------------------------------------------------------------
Consolidated Natural Gas Co., 6.625%, 12/1/08 3.24
- ------------------------------------------------------------
U.S. Treasury Note, 5.875%, 2/15/04 3.23
- ------------------------------------------------------------
Laclede Gas Co., 6.50%, 10/15/01 3.22
- ------------------------------------------------------------
Norwest Financial, Inc., 6.375%, 12/1/07 3.16
- ------------------------------------------------------------
<F1> Excluding cash and cash equivalents
Portfolio composition and holdings are subject to change at any time.
TOTAL RETURN
as of March 31, 1999
1 YEAR ENDED AVERAGE ANNUAL SINCE
3/31/99 COMMENCEMENT<F2>
- ---------------------------------------------------------------------
First Omaha Balanced Fund (3.73)% 8.78%
- ---------------------------------------------------------------------
<F2> Commencement date is 8/6/96
RETURN ON A $10,000 INVESTMENT
AUGUST 6, MARCH MARCH MARCH
1996 1997 1998 1999
-------- -------- -------- --------
FIRST OMAHA BALANCED FUND $10,000 $10,614 $12,985 $12,501
S&P 500 STOCK INDEX $10,000 $11,603 $17,173 $20,343
LEHMAN BROS. GOV'T/CORP. BOND INDEX $10,000 $10,378 $11,663 $12,427
This chart assumes an initial investment of $10,000 made on 8/6/96. Total Return
is based on net change in N.A.V. assuming reinvestment of distributions. Returns
shown on this page include the reinvestment of all dividends and other
distributions. Performance figures reflect fee waivers in effect, represent past
performance, which is no guarantee of future results, and will fluctuate. In the
absence of fee waivers, Total Return would be reduced. The investment return and
principal value of an investment in the First Omaha Balanced Fund will fluctuate
so that an investor's shares in the Fund, when redeemed, may be worth more or
less than their original cost. This Fund is advised by First National Bank of
Omaha.
The S&P 500 Index is an unmanaged index of 500 selected common stocks, most of
which are listed on the New York Stock Exchange. The index is heavily weighted
toward stocks with large market capitalizations and represents approximately
two-thirds of the total market value of all domestic common stocks. The returns
for this index do not reflect any fees or expenses. It is not possible to make a
direct investment in an index.
The Lehman Bros. Gov't./Corp. Bond Index includes all public obligations of the
U.S. Treasury, excluding flower bonds and foreign-targeted issues; all publicly
issued debt of U.S. government agencies and quasi-federal corporations, and
corporate debt guaranteed by the U.S. government; and all publicly issued, fixed
rate, nonconvertible, investment grade, dollar-denominated, SEC-registered
corporate debt (including debt issued or guaranteed by foreign sovereign
governments, municipalities, or governmental agencies, or international
agencies). The returns for this index do not reflect any fees or expenses. It is
not possible to make a direct investment in an index.
THE BOND MARKET OVERVIEW
The 12-months ending March 31, 1999 have been very eventful for anyone who has
followed the capital markets. The U.S. economy's growth or era of prosperity
continues to surprise most money management professionals. Take, for instance,
that the environment for Southeast Asia was recessionary, Russia defaulted on
some bonds and Latin America teetered near the edge of a financial meltdown. Add
to the mix the S&P 500 Index operating earnings which were essentially flat for
1998 yet the index returned 18%. The support for the U.S. economy can be simply
answered - the consumer. While turmoil shook most of the market participants the
last 12 months, the consumer continued to support the 4% growth environment for
all of 1998. Thus far in 1999, growth rates are expected to range between 3.5%
and 4%. The consumer's strength continues to be supported by a strong labor
market, low interest rates, strong income growth, and the wealth effect created
by incredible returns offered by the popular stock indices. Consumer spending
continued its torrid pace for the first quarter, after ending 1998 over 5%. The
average tax refund grew compared to last year and many filers used electronic
filing to receive their refunds more promptly.
<PAGE>
ANNUAL REPORT - FIRST OMAHA FUNDS
- --------------------------------------------------------------------------------
Although the General Motors strike dissipated economic growth somewhat last
summer, the earth-shaking events started to arise in the middle of August.
Russia's default started the flight to quality race that did not end until we
nearly reached 4% yield on the 10-year Treasury note in early October. Many
hedge funds that place very large leveraged bets on directions of various
markets lost incredible amounts of money, and had to be assisted by the Federal
Reserve. The crisis created the year before in Asia had spread wider and deeper
than many had realized. The Federal Reserve added liquidity back into the
markets with three cuts in the Federal Funds Rate. Those measures helped bring
back investors' confidence as we witnessed risky assets' premiums be reduced
over the last six months since the fall crisis. The shift from risk-free assets
to riskier assets have been very evident over the last six months.
Counter to the impressive growth we have experienced in the United States,
inflation has remained benign during this period. Actually, deflation has been
more prominent at the producer level. The drivers have been low commodity
prices, technological advances, overcapacity, and intense competition.
Meanwhile, consumer prices have also been subdued, helped in part by low energy
prices and other lack of pricing power. The bond market will continue to
question whether the robust economic growth we have experienced can continue
without stimulating inflationary pressures. Aside from the recent rise in oil
prices, we believe the fundamentals remain in place for a low inflation
environment.
The Federal Reserve's bias has remained neutral over the last few months, having
met twice since the beginning of the year. They have indicated that they will
remain on the sidelines until evidence for increased risk of deflationary or
inflationary pressures are seen. Fiscally, the budget surplus outlook continues
to improve monthly. Estimates now see a budget surplus of $150 billion by the
end of the government's fiscal year end, September 1999. The surplus bodes well
for Treasury's short-term performance because of the financing reshuffling the
Treasury will need to do because of the surplus.
We thought it might take a financial crisis to slow the U.S. economic growth.
Obviously, we underestimated the strength of the U.S. economy. If financial
meltdown across the globe cannot hinder our growth, the real question becomes,
can consumers sustain their spending levels to support 4% to 5% growth ratio?
Looking ahead, we will continue to monitor the multiple factors that keep the
global economy running.
The beat goes on. The economic expansion is now entering its eighth year,
continuing to exhibit above-average growth with little or no signs of inflation.
Domestic demand has been very strong, led by El Nino's mild winter effect for
much of the U.S., strong employment markets, earlier payments of tax refunds,
and increases in bonuses paid to workers. Rising incomes and lower mortgage
rates have contributed to the strength shown in the housing market. Debt burdens
by consumers look to have moderated somewhat during the first quarter. Effects
from the Asian financial crisis have only been noticeable in recent trade
figures, January's trade deficit reportedly widened to $12 billion from a $9.7
billion monthly average during the last quarter of 1998. We will likely see
continued weakness during the second quarter from our Asian trading partners.
Lower prices from overseas, especially from Asia, have contributed to the low
inflationary environment we're currently experiencing. Labor and medical care
costs pressures are mounting, but so far lower energy and commodity prices have
been able to offset these increases. Year-over-year inflation figures through
March of this year have been encouraging, consumer prices are up only 1.4%,
while producer prices have fallen 1.8%. Inflation indicators may have difficulty
finding their way lower, but the risk that they rise substantially over the next
few months is considered low.
The Federal budget outlook is very favorable. It looks like for fiscal 1998 that
the budget will record a surplus for the first time since 1969. The strong labor
markets, increases in wages and capital gain payments have all contributed to
the increase in individual tax payments. Debt management strategies will
undoubtedly change due to the budget surplus. How the Treasury handles the
budget surplus with regards to their financing remains uncertain at this time.
As we venture into the second quarter, the temporary factors such as a warmer
than normal winter and early tax refunds that most likely contributed to the
stronger than normal economic conditions in the first quarter, are likely to
cease in the second quarter. The first quarter may have borrowed some strength
from the second quarter, thus we may see some moderation in economic strength in
the coming months.
<PAGE>
FIRST OMAHA FUNDS - ANNUAL REPORT
- --------------------------------------------------------------------------------
FIRST OMAHA FIXED INCOME FUND
The First Omaha Fixed Income Fund invests at least 65% of its total assets in
investment-grade fixed income securities. The portfolio will be constructed
primarily through the laddering of bonds with various maturities. In this manner
we seek to reduce credit and reinvestment rate risk over the long term.
As of March 31, 1999, the portfolio composition was almost 25% government and
agency securities, 69% corporate bonds and less than 6% cash. The overall
weighted average credit quality of the portfolio remained the same at AA/Aa. The
weighted average maturity of the portfolio increased to 11 years.
During the last 12 months we extended the portfolio's duration and average
maturity by selling shorter maturity bonds and buying longer maturity bonds. The
shorter maturity bonds we sold either had a short maturity date or a call option
embedded within the bond. The call option gives the issuer the right to redeem
the bond earlier than the stated maturity if conditions are favorable. In a
falling interest rate environment, it is quite often to the issuer's benefit to
redeem the bonds and issue new ones at lower interest rates. For the holder of
the callable bond, having a bond called in a lower interest rate environment is
not favorable. The holder loses the high coupon bond and has to reinvest the
proceeds at lower interest rates. We purchased longer maturity bonds with an
embedded put option. This put option allows us to redeem the bonds at a
specified date in the future if conditions are favorable. Favorable conditions
would exist if interest rates increased when the put option was redeemable, so
we could redeem the lower coupon bond with a higher coupon bond, thus increasing
cash flow for the portfolio. The end result for the portfolio was that the high-
credit quality was maintained and the reinvestment risk was reduced.
In addition to the putable bonds we purchased, we added government agency bonds
to the portfolio due to the attractive relative value the bonds offered at the
time of purchase.
The Fund outperformed that of the Lehman Bros. Gov't./Corp. Bond Index on a
before-fee basis. The high overall credit quality and decline of interest rates
contributed significantly to the Fund's performance.
The turmoil that affected the fixed income markets last fall was immense. The
Fund's portfolio, however, performed very well in the face of adversity and
panic. The high-credit quality and diversification within the portfolio was
rewarded over the last 12 months. During the flight to quality last fall, the
portfolio responded relatively well. We will continue to look for relative value
in the marketplace, while striving to achieve above market returns while
managing risks.
Going forward, the economy continues to produce solid growth rates with low
inflationary pressures. The major issue facing our market over the next several
months is whether the United States can sustain its torrid growth rate, while
maintaining its low inflation posture. We feel that it will be difficult for the
economy to sustain its recent growth, but the factors for the low inflation
environment remain in place.
FIXED INCOME FUND
PORTFOLIO COMPOSITION
as of March 31, 1999
CORPORATE BONDS 69%
U.S. GOVERNMENT AGENCIES 14%
U.S. GOVERNMENTS 11%
CASH EQUIVALENTS 6%
TOP FIVE HOLDINGS<F1>
as of March 31, 1999
% OF NET ASSETS
- ------------------------------------------------------------
Federal Home Loan Bank, 5.875%, 2/2/06 4.15%
- ------------------------------------------------------------
U.S. Treasury STRIP, 2/1/07 3.93
- ------------------------------------------------------------
PPG Industries, Inc., 7.375%, 6/1/16 3.90
- ------------------------------------------------------------
Halliburton Co., Series A, 6.75%, 2/1/27 3.88
- ------------------------------------------------------------
General Electric Capital Corp., 6.90%, 9/15/15 3.79
- ------------------------------------------------------------
<F1> Excluding cash and cash equivalents
Portfolio composition and holdings are subject to change at any time.
<PAGE>
ANNUAL REPORT - FIRST OMAHA FUNDS
- --------------------------------------------------------------------------------
TOTAL RETURN
as of March 31, 1999
1 YEAR ENDED AVERAGE ANNUAL SINCE
3/31/99 COMMENCEMENT <F2>
- ---------------------------------------------------------------------
First Omaha Fixed
Income Fund<F3> 5.93% 6.91%
- ---------------------------------------------------------------------
<F2> Commencement date is 12/13/92
<F3> Performance data from commencement through April 9, 1995 relates to a
predecessor, First Omaha Fixed Income Fund, the assets of which were
acquired by the Fund on that date.
RETURN ON A $10,000 INVESTMENT
<TABLE>
<CAPTION>
DEC.13, MARCH MARCH MARCH MARCH MARCH MARCH MARCH
1992 1993 1994 1995 1996 1997 1998 1999
-------- -------- -------- -------- -------- -------- -------- --------
<C> <C> <C> <C> <C> <C> <C> <C> <C>
FIRST OMAHA FIXED INCOME FUND $10,000 $10,547 $10,852 $11,221 $12,404 $12,784 $14,381 $15,234
LEHMAN BROS. GOV'T./CORP. BOND INDEX $10,000 $10,576 $10,870 $11,368 $12,610 $13,172 $14,804 $15,774
</TABLE>
This chart assumes an initial investment of $10,000 made on 12/13/92. Total
Return is based on net change in N.A.V. assuming reinvestment of distributions.
Returns shown on this page include the reinvestment of all dividends and other
distributions. Performance figures reflect fee waivers in effect, represent past
performance, which is no guarantee of future results, and will fluctuate. In the
absence of fee waivers, Total Return would be reduced. The investment return and
principal value of an investment in the First Omaha Fixed Income Fund will
fluctuate so that an investor's shares in the Fund, when redeemed, may be worth
more or less than their original cost. This Fund is advised by First National
Bank of Omaha.
The Lehman Bros. Gov't./Corp. Bond Index includes all public obligations of the
U.S. Treasury, excluding flower bonds and foreign-targeted issues; all publicly
issued debt of U.S. government agencies and quasi-federal corporations, and
corporate debt guaranteed by the U.S. government; and all publicly issued, fixed
rate, nonconvertible, investment grade, dollar-denominated, SEC-registered
corporate debt (including debt issued or guaranteed by foreign sovereign
governments, municipalities, or governmental agencies, or international
agencies). The returns for this index do not reflect any fees or expenses. It is
not possible to make a direct investment in an index.
FIRST OMAHA SHORT/INTERMEDIATE FIXED INCOME FUND
The First Omaha Short/Intermediate Fixed Income Fund invests at least 65% of its
total assets in investment grade fixed income securities. The portfolio expects
to maintain a weighted average maturity between two to five years.
As of March 31, 1999, the portfolio's composition was 30% government and agency
securities, 68% corporate bonds, and 2% cash. The overall weighted average
credit quality remained AA/Aa for the portfolio, while the weighted average
maturity was 4.8 years.
As economic conditions caused corporate bond yields to become more attractive,
we added a total of five new corporate bond positions: Merrill Lynch & Co., AT&T
Corp., Potomac Electric Power Co., Motorola, Inc. and First Data Corp. This
allowed us to take advantage of the historically high relative yields that
corporate bonds offered. In addition, we purchased a U.S. Treasury Strip and two
government agency notes in the portfolio. These purchases resulted in a
portfolio that extended the average maturity, but maintained the overall high-
credit quality.
The Fund outperformed that of the Lehman Bros. Mutual Fund Short U.S. Gov't.
Index on a before-fee basis. The high overall credit quality and decline of
interest rates contributed significantly to the Fund's performance.
Performance for the Fund was achieved by having a structure that takes advantage
of declining rates along the entire yield curve while reducing credit risk. This
allowed the Fund to capitalize on the over performance of high-credit quality
sectors and on the lower interest rate environment during the past 12 months. We
will continue to emphasize the philosophy of laddering the maturity structure
and diversifying issuer exposure in the portfolio.
<PAGE>
FIRST OMAHA FUNDS - ANNUAL REPORT
- --------------------------------------------------------------------------------
SHORT/INTERMEDIATE FIXED INCOME FUND
PORTFOLIO COMPOSITION
as of March 31, 1999
CORPORATE BONDS 68%
U.S. GOVERNMENT AGENCIES 15%
U.S. GOVERNMENTS 15%
CASH EQUIVALENTS 2%
TOP FIVE HOLDINGS<F1>
as of March 31, 1999
% OF NET ASSETS
- -------------------------------------------------------
U.S. Treasury STRIP, 2/15/02 5.38%
- -------------------------------------------------------
Federal Home Loan Bank, 6.50%, 11/29/05 4.84
- -------------------------------------------------------
U.S. Treasury STRIP, 8/15/00 3.87
- -------------------------------------------------------
U.S. Treasury STRIP, 2/15/07 3.77
- -------------------------------------------------------
Eli Lilly & Co., 8.125%, 12/1/01 3.68
- -------------------------------------------------------
<F1> Excluding cash and cash equivalents
Portfolio composition and holdings are subject to change at any time.
TOTAL RETURN
as of March 31, 1999
1 YEAR ENDED AVERAGE ANNUAL SINCE
3/31/99 COMMENCEMENT<F2>
- ---------------------------------------------------------------------
First Omaha Short/Intermediate
Fixed Income Fund<F3> 5.61% 5.54%
- ---------------------------------------------------------------------
<F2> Commencement date is 12/13/92
<F3> Performance data from commencement through April 9, 1995 relates to a
predecessor, First Omaha Short/Intermediate Fixed Income Fund, the assets
of which were acquired by the Fund on that date.
RETURN ON A $10,000 INVESTMENT
<TABLE>
<CAPTION>
DEC.13, MARCH MARCH MARCH MARCH MARCH MARCH MARCH
1992 1993 1994 1995 1996 1997 1998 1999
-------- -------- -------- -------- -------- -------- -------- --------
<C> <C> <C> <C> <C> <C> <C> <C> <C>
FIRST OMAHA SHORT/INTERMEDIATE
FIXED INCOME FUND $10,000 $10,340 $10,561 $10,951 $11,803 $12,275 $13,302 $14,048
LEHMAN BROS. MUTUAL FUND SHORT
(1-5) U.S. GOVT. INDEX $10,000 $10,377 $10,631 $11,080 $12,016 $12,622 $13,674 $14,546
</TABLE>
This chart assumes an initial investment of $10,000 made on 12/13/92. Total
Return is based on net change in N.A.V. assuming reinvestment of distributions.
Returns shown on this page include the reinvestment of all dividends and other
distributions. Performance figures reflect fee waivers in effect, represent past
performance, which is no guarantee of future results, and will fluctuate. In the
absence of fee waivers, Total Return would be reduced. The investment return and
principal value of an investment in the First Omaha Short/Intermediate Fixed
Income Fund will fluctuate so that an investor's shares in the Fund, when
redeemed, may be worth more or less than their original cost. This Fund is
advised by First National Bank of Omaha.
The Lehman Bros. Mutual Fund Short (1-5) U.S. Government Index is an index made
up of the Treasury Bond Index (all public obligations of the U.S. Treasury,
excluding flower bonds and foreign-targeted issues) and the Agency Bond Index
(all publicly issued debt of U.S. government agencies and quasi-federal
corporations, and corporate debt guaranteed by the U.S. government). It includes
only those bonds with maturities of up to five years. The returns for this index
do not reflect any fees or expenses. It is not possible to make a direct
investment in an index.
<PAGE>
Annual Report - FIRST OMAHA FUNDS
- --------------------------------------------------------------------------------
Schedule of Portfolio Investments
March 31, 1999
SMALL CAP VALUE FUND
NUMBER
OF SHARES VALUE
- ------------- ---------
COMMON STOCKS 91.87%
AIRLINES 2.52%
11,250 Midwest Express Holdings, Inc.<F1> $ 330,469
----------
BUSINESS SERVICES 1.68%
24,400 Franklin Covey Co.<F1> 219,600
----------
CHEMICALS 11.83%
15,000 Dexter Corp. 472,500
36,500 Oil-Dri Corp. of America 531,531
18,800 WD-40 Co. 545,200
----------
1,549,231
----------
CONSUMER PRODUCTS 3.05%
82,000 Hartmarx Corp. 399,750
----------
ELECTRONICS 5.47%
10,000 Dallas Semiconductor Corp. 386,250
9,700 Teleflex, Inc. 330,406
----------
716,656
----------
ENVIRONMENTAL CONTROL 1.01%
25,400 Calgon Carbon Corp. 131,763
----------
FOOD 9.48%
20,000 Corn Products International, Inc. 478,750
48,000 Nash-Finch Co. 402,000
17,500 Universal Foods Corp. 360,938
----------
1,241,688
----------
HOME FURNISHINGS 3.73%
13,800 National Presto Industries, Inc. 489,038
----------
INSURANCE 6.66%
12,600 American Financial Group, Inc. 443,363
25,200 The Guarantee Life Companies, Inc. 428,400
----------
871,763
----------
MACHINERY & EQUIPMENT 9.73%
18,900 Lawson Products, Inc. 387,450
13,800 Modine Manufacturing Co. 387,262
9,800 Tecumseh Products Co., Class A 499,187
----------
1,273,899
----------
NUMBER
OF SHARES VALUE
- ------------- ---------
MANUFACTURING 2.46%
9,400 Tennant Co. $ 321,950
----------
METAL PRODUCTS 3.19%
25,900 Amcast Industrial Corp. 417,637
----------
MINING 2.52%
9,700 Cleveland-Cliffs, Inc. 330,406
----------
MOTOR VEHICLE PARTS & ACCESSORIES 4.22%
32,400 CLARCOR Inc. 552,825
----------
OIL & GAS 3.83%
22,200 Newfield Exploration Co.<F1> 502,275
----------
PACKAGING & CONTAINERS 3.06%
12,600 West Pharmaceutical Services, Inc. 400,838
----------
PAPER PRODUCTS 3.00%
35,100 P.H. Glatfelter Co. 392,681
----------
TEXTILE MANUFACTURING 3.27%
19,400 Kellwood Co. 428,012
----------
TIRE & RUBBER 2.49%
11,600 Bandag, Inc. 326,250
----------
TOBACCO 2.44%
12,500 Universal Corp. 319,531
----------
TRUCKING LEASING 3.61%
30,000 Werner Enterprises, Inc. 472,500
----------
UTILITIES - ELECTRIC SERVICES 2.62%
20,800 DPL Inc. 343,200
----------
Total Common Stocks (cost $14,287,800) 12,031,962
----------
<PAGE>
FIRST OMAHA FUNDS - Annual Report
- --------------------------------------------------------------------------------
NUMBER
OF SHARES VALUE
- ------------- ---------
INVESTMENT COMPANIES 7.37%
350,354 Federated Treasury Obligations $ 350,354
614,345 Goldman Sachs ILA Treasury
Obligations Portfolio 614,345
---------
Total Investment Companies (cost $964,699) 964,699
---------
Total Investments (cost $15,252,499) 99.24% 12,996,661
Other Assets, less Liabilities 0.76% 99,461
---------
NET ASSETS 100.00% $13,096,122
===========
<F1> Non-income producing security
See notes to financial statements.
<PAGE>
Annual Report - FIRST OMAHA FUNDS
- --------------------------------------------------------------------------------
Schedule of Portfolio Investments
March 31, 1999
GROWTH FUND
NUMBER
OF SHARES VALUE
- ------------- ---------
COMMON STOCKS 93.59%
AEROSPACE 4.37%
9,000 Sundstrand Corp. $ 625,500
---------
AUTOMOTIVE PARTS 5.22%
15,000 Genuine Parts Co. 432,187
38,200 OEA Inc. 315,150
---------
747,337
---------
BEVERAGES 4.00%
16,000 Robert Mondavi Corp., Class A<F1> 572,000
---------
BUSINESS SERVICES 1.16%
4,000 Automatic Data Processing, Inc. 165,500
---------
CHEMICALS 4.45%
7,500 Air Products and Chemicals, Inc. 256,875
13,000 Sigma-Aldrich Corp. 380,250
---------
637,125
---------
COMMUNICATION SERVICES 7.07%
5,000 Level 3 Communications, Inc.<F1> 364,063
9,000 Qwest Communications International Inc.<F1> 648,844
---------
1,012,907
---------
COMPUTER SERVICES 10.66%
10,100 Adobe Systems, Inc. 573,175
14,600 BMC Software, Inc.<F1> 541,112
15,650 Oracle Corp.<F1> 412,769
---------
1,527,056
---------
CONSTRUCTION 2.55%
13,500 Fluor Corp. 364,500
---------
DIVERSIFIED 1.04%
3,500 Cooper Industries, Inc. 149,187
---------
ELECTRICAL PRODUCTS 0.81%
2,200 Emerson Electric Co. 116,462
---------
NUMBER
OF SHARES VALUE
- ------------- ---------
ELECTRONICS 3.96%
30,000 Sensormatic Electronics Corp.<F1> $ 285,000
7,500 Thomas & Betts Corp. 281,719
---------
566,719
---------
FINANCIAL SERVICES 10.09%
4,000 Charles Schwab Corp. 384,500
9,200 MBIA, Inc. 533,600
15,000 MGIC Investment Corp. 525,937
---------
1,444,037
---------
FOOD 2.70%
14,700 SYSCO Corp. 386,794
---------
HEALTH CARE SERVICES 7.71%
36,000 Cerner Corp.<F1> 578,250
10,000 United Healthcare Corp. 526,250
---------
1,104,500
---------
INDUSTRIAL 3.74%
13,000 PACCAR, Inc. 535,437
---------
MACHINERY & EQUIPMENT 2.50%
10,900 Dover Corp. 358,338
---------
MANUFACTURING 3.35%
4,200 Illinois Tool Works Inc. 259,875
5,000 Nucor Corp. 220,313
---------
480,188
---------
OIL & GAS 3.93%
3,000 Enron Corp. 192,750
10,300 NICOR Inc. 370,156
---------
562,906
---------
RETAIL 0.98%
5,600 Rite Aid Corp. 140,000
---------
TELECOMMUNICATIONS 4.32%
8,800 Century Telephone Enterprise 618,200
---------
<PAGE>
FIRST OMAHA FUNDS - Annual Report
- --------------------------------------------------------------------------------
NUMBER
OF SHARES VALUE
- ------------- ---------
TRANSPORTATION 7.84%
20,000 Southwest Airlines Co. $ 605,000
20,000 Swift Transportation Co., Inc.<F1> 517,500
---------
1,122,500
---------
UTILITIES - ELECTRICAL 1.14%
4,800 New Century Energies, Inc. 163,500
---------
Total Common Stocks (cost $12,799,077) $13,400,693
-----------
NUMBER
OF SHARES VALUE
- ------------- ---------
INVESTMENT COMPANIES 0.59%
83,815 Goldman Sachs ILA Treasury
Obligations Portfolio $ 83,815
---------
Total Investment Companies (cost $83,815) 83,815
---------
REAL ESTATE INVESTMENT TRUSTS 5.61%
10,000 MGI Properties, Inc. 273,750
15,000 Spieker Properties, Inc. 528,750
---------
Total Real Estate Investment Trusts (cost $786,223) 802,500
---------
Total Investments (cost $13,669,115) 99.79% 14,287,008
Other Assets, less Liabilities 0.21% 30,526
---------
NET ASSETS 100.00% $14,317,534
===========
<F1> Non-income producing security
See notes to financial statements.
<PAGE>
Annual Report - FIRST OMAHA FUNDS
- --------------------------------------------------------------------------------
Schedule of Portfolio Investments
March 31, 1999
EQUITY FUND
NUMBER
OF SHARES VALUE
- ------------- ---------
COMMON STOCKS 91.27%
BANKING 2.27%
95,400 Banc One Corp. $5,252,963
----------
BUILDING PRODUCTS 2.29%
189,300 Lafarge Corp. 5,300,400
----------
COMMUNICATIONS EQUIPMENT 3.62%
114,300 Motorola, Inc. 8,372,475
----------
COMPUTERS & PERIPHERALS 2.25%
29,400 International Business Machines Corp. 5,211,150
----------
COSMETICS 2.83%
174,600 International Flavors & Fragrances, Inc. 6,558,413
----------
DATA PROCESSING 2.51%
136,000 First Data Corp. 5,814,000
----------
ELECTRICAL EQUIPMENT 4.59%
74,000 Emerson Electric Co. 3,917,375
196,300 Parker-Hannifin Corp. 6,723,275
----------
10,640,650
----------
ENVIRONMENTAL CONTROL 0.12%
55,600 Calgon Carbon Corp. 288,425
----------
FOOD 2.08%
58,900 BestFoods 2,768,300
85,500 Corn Products International, Inc. 2,046,656
----------
4,814,956
----------
FUNERAL SERVICES 2.35%
382,500 Service Corp. International 5,450,625
----------
GAMES & TOYS 2.35%
218,700 Mattel, Inc. 5,440,162
----------
GROCERY STORES 2.22%
242,890 Food Lion, Inc., Class A 2,235,347
322,540 Food Lion, Inc., Class B 2,902,860
----------
5,138,207
----------
NUMBER
OF SHARES VALUE
- ------------- ---------
INSURANCE 10.85%
235,600 American Financial Group, Inc. $8,290,175
46,300 American General Corp. 3,264,150
79,900 Marsh & McLennan Cos., Inc. 5,927,581
189,300 SAFECO Corp. 7,654,819
----------
25,136,725
----------
MACHINERY 3.70%
172,600 Ingersoll-Rand Co. 8,565,275
----------
MANUFACTURING 2.61%
239,800 Harsco Corp. 6,039,962
----------
MEDICAL SUPPLIES 1.53%
92,500 Becton, Dickinson & Co. 3,543,906
----------
MINING 2.66%
507,200 Cyprus Amax Minerals Co. 6,149,800
----------
MOTOR VEHICLE PARTS & ACCESSORIES 1.21%
163,600 CLARCOR Inc. 2,791,425
----------
OIL 9.80%
47,700 Exxon Corp. 3,365,831
133,200 Halliburton Co. 5,128,200
114,000 Texaco Inc. 6,469,500
210,300 Unocal Corp. 7,741,669
----------
22,705,200
----------
PACKAGING & CONTAINERS 2.11%
212,900 Sonoco Products Co. 4,896,700
----------
PHARMACEUTICALS 1.87%
67,300 Bristol-Myers Squibb Co. 4,328,231
----------
PHOTOGRAPHY 2.70%
97,900 Eastman Kodak Co. 6,253,363
----------
PUBLISHING 2.30%
165,500 R.R. Donnelley & Sons Co. 5,327,031
----------
RETAIL 5.22%
150,500 J.C. Penney Co., Inc. 6,095,250
239,700 Rite Aid Corp. 5,992,500
----------
12,087,750
----------
<PAGE>
FIRST OMAHA FUNDS - Annual Report
- --------------------------------------------------------------------------------
NUMBER
OF SHARES VALUE
- ------------- ---------
SOAPS & CLEANING AGENTS 1.76%
44,200 Colgate-Palmolive Co. $4,066,400
----------
TELEPHONE 2.64%
101,100 GTE Corp. 6,116,550
----------
TEXTILE MANUFACTURING 3.10%
325,300 Kellwood Co. 7,176,931
----------
TOBACCO 2.32%
210,300 Universal Corp. 5,375,794
----------
TRANSPORTATION 2.01%
86,900 Union Pacific Corp. 4,643,719
----------
UTILITIES - ELECTRIC SERVICES 3.40%
300,800 DPL Inc. 4,963,200
70,100 Texas Utilities Co. 2,922,294
----------
7,885,494
----------
Total Common Stocks (cost $181,171,612) 211,372,682
----------
INVESTMENT COMPANIES 8.49%
10,690,808 Federated Trust for
U.S. Treasury Obligations 10,690,808
8,974,629 Goldman Sachs ILA Treasury
Obligations Portfolio 8,974,629
----------
Total Investment Companies (cost $19,665,437) 19,665,437
----------
Total Investments (cost $200,837,049) 99.76% 231,038,119
Other Assets, less Liabilities 0.24% 548,178
----------
NET ASSETS 100.00% $231,586,297
============
See notes to financial statements.
<PAGE>
Annual Report - FIRST OMAHA FUNDS
- --------------------------------------------------------------------------------
Schedule of Portfolio Investments
March 31, 1999
BALANCED FUND
NUMBER
OF SHARES VALUE
- ------------- ---------
COMMON STOCKS 55.07%
BANKING 1.38%
6,000 Banc One Corp. $330,375
----------
BUILDING PRODUCTS 1.23%
10,500 Lafarge Corp. 294,000
----------
COMMUNICATIONS EQUIPMENT 2.36%
7,700 Motorola, Inc. 564,025
----------
COMPUTERS & PERIPHERALS 1.86%
2,500 International Business Machines Corp. 443,125
----------
COSMETICS 1.57%
10,000 International Flavors & Fragrances, Inc. 375,625
----------
DATA PROCESSING 1.61%
9,000 First Data Corp. 384,750
----------
ELECTRICAL EQUIPMENT 2.61%
4,900 Emerson Electric Co. 259,394
10,600 Parker-Hannifin Corp. 363,050
----------
622,444
----------
ENVIRONMENTAL CONTROL 0.06%
2,800 Calgon Carbon Corp. 14,525
----------
FOOD 1.26%
3,300 BestFoods 155,100
6,100 Corn Products International, Inc. 146,019
----------
301,119
----------
FUNERAL SERVICES 1.50%
25,200 Service Corp. International 359,100
----------
GAMES & TOYS 1.46%
14,000 Mattel, Inc. 348,250
----------
GROCERY STORES 1.38%
14,000 Food Lion, Inc., Class A 128,844
22,270 Food Lion, Inc., Class B 200,430
----------
329,274
----------
INSURANCE 6.11%
13,000 American Financial Group, Inc. 457,437
3,000 American General Corp. 211,500
4,400 Marsh & McLennan Cos., Inc. 326,425
NUMBER
OF SHARES VALUE
- ------------- ---------
INSURANCE 6.11% (CONT'D.)
11,500 SAFECO Corp. $ 465,031
----------
1,460,393
----------
MACHINERY 2.22%
10,700 Ingersoll-Rand Co. 530,987
----------
MANUFACTURING 1.46%
13,800 Harsco Corp. 347,587
----------
MEDICAL SUPPLIES 0.82%
5,100 Becton, Dickinson & Co. 195,394
----------
MINING 1.60%
31,500 Cyprus Amax Minerals Co. 381,938
----------
MOTOR VEHICLE PARTS & ACCESSORIES 0.74%
10,350 CLARCOR Inc. 176,597
----------
OIL 6.04%
3,100 Exxon Corp. 218,744
8,500 Halliburton Co. 327,250
7,300 Texaco Inc. 414,275
13,100 Unocal Corp. 482,244
----------
1,442,513
----------
PACKAGING & CONTAINERS 1.14%
11,800 Sonoco Products Co. 271,400
----------
PHARMACEUTICALS 1.02%
3,800 Bristol-Myers Squibb Co. 244,387
----------
PHOTOGRAPHY 1.74%
6,500 Eastman Kodak Co. 415,188
----------
PUBLISHING 1.37%
10,200 R.R. Donnelley & Sons Co. 328,312
----------
RETAIL 3.21%
9,800 J.C. Penney Co., Inc. 396,900
14,800 Rite Aid Corp. 370,000
----------
766,900
----------
SOAPS & CLEANING AGENTS 0.92%
2,400 Colgate-Palmolive Co. 220,800
----------
<PAGE>
FIRST OMAHA FUNDS - Annual Report
- --------------------------------------------------------------------------------
NUMBER
OF SHARES VALUE
- ------------- ---------
TELEPHONE 1.70%
6,700 GTE Corp. $ 405,350
----------
TEXTILE MANUFACTURING 1.94%
21,000 Kellwood Co. 463,313
----------
TOBACCO 1.46%
13,600 Universal Corp. 347,650
----------
TRANSPORTATION 1.23%
5,500 Union Pacific Corp. 293,906
----------
UTILITIES - ELECTRIC SERVICES 2.07%
18,600 DPL Inc. 306,900
4,500 Texas Utilities Co. 187,594
----------
494,494
----------
Total Common Stocks (cost $13,147,994) 13,153,721
----------
PRINCIPAL
AMOUNT
- -------------
CORPORATE BONDS 21.71%
FINANCIAL SERVICES 5.34%
$500,000 General Electric Capital Corp.,
6.90%, 9/15/15 520,800
750,000 Norwest Financial, Inc.,
6.375%, 12/1/07 754,733
----------
1,275,533
----------
FOOD PRODUCTS 2.18%
500,000 Anheuser-Busch Cos., Inc.,
6.75%, 8/1/03 519,515
----------
OIL 3.35%
750,000 Halliburton Co., Series A,
6.75%, 2/1/27 800,100
----------
RAIL CAR LEASING 2.28%
500,000 Union Tank Car Co.,
7.45%, 6/1/09 545,655
----------
UTILITIES - ELECTRIC SERVICES 2.10%
500,000 Tampa Electric Co.,
5.75%, 5/1/00 501,510
----------
PRINCIPAL
AMOUNT VALUE
- ------------- ---------
UTILITIES - NATURAL GAS 6.46%
$ 750,000 Consolidated Natural Gas Co.,
6.625%, 12/1/08 $ 774,240
750,000 Laclede Gas Co.,
6.50%, 10/15/12 769,192
----------
1,543,432
----------
Total Corporate Bonds (cost $5,057,980) 5,185,745
----------
U.S. GOVERNMENT AGENCIES 2.14%
500,000 Federal National Mortgage Association,
7.27%, 8/24/05 509,920
----------
Total U.S. Government Agencies (cost $510,881) 509,920
----------
U.S. TREASURY NOTES 10.75%
200,000 6.75%, 5/31/99 200,648
500,000 6.625%, 6/30/01 516,595
750,000 5.875%, 2/15/04 772,327
500,000 6.50%, 8/15/05 530,640
500,000 7.00%, 7/15/06 547,000
----------
Total U.S. Treasury Notes (cost $2,452,904) 2,567,210
----------
U.S. TREASURY STRIPS 1.69%
850,000 2/15/12 402,543
----------
Total U.S. Treasury Strips (cost $356,386) 402,543
----------
NUMBER
OF SHARES
- -------------
INVESTMENT COMPANIES 8.00%
1,033,419 Federated Trust for
U.S. Treasury Obligations 1,033,419
877,167 Goldman Sachs ILA Treasury
Obligations Portfolio 877,167
----------
Total Investment Companies (cost $1,910,586) 1,910,586
----------
Total Investments (cost $23,436,731) 99.36% 23,729,725
Other Assets, less Liabilities 0.64% 153,355
----------
NET ASSETS 100.00% $23,883,080
===========
See notes to financial statements.
<PAGE>
Annual Report - FIRST OMAHA FUNDS
- --------------------------------------------------------------------------------
Schedule of Portfolio Investments
March 31, 1999
FIXED INCOME FUND
PRINCIPAL
AMOUNT VALUE
- ------------- ---------
CORPORATE BONDS 67.71%
CHEMICAL 3.04%
$2,500,000 Monsanto Co.,
6.00%, 7/1/00 $2,507,675
----------
COMMUNICATIONS EQUIPMENT 3.75%
3,000,000 Motorola, Inc.,
6.50%, 3/1/08 3,086,220
----------
CONSUMER GOODS 3.02%
2,500,000 Gillette Co.,
5.75%, 10/15/05 2,488,325
----------
DATA PROCESSING 3.69%
3,000,000 First Data Corp.,
6.375%, 12/15/07 3,041,100
----------
FINANCIAL SERVICES 10.46%
3,000,000 First Union National Bank,
6.18%, 2/15/36 2,997,210
2,500,000 General Electric Capital Corp.,
5.50%, 11/1/01 2,499,275
3,000,000 General Electric Capital Corp.,
6.90%, 9/15/15 3,124,800
----------
8,621,285
----------
FOREST PRODUCTS 3.17%
2,500,000 Kimberly-Clark Corp.,
6.875%, 2/15/14 2,616,050
----------
GROCERY STORES 2.46%
2,000,000 Albertson's, Inc.,
6.34%, 2/25/13 2,031,840
----------
INDUSTRIAL GOODS & SERVICES 6.35%
2,000,000 Air Products & Chemicals, Inc.,
6.25%, 6/15/03 2,018,220
3,000,000 PPG Industries, Inc.,
7.375%, 6/1/16 3,215,880
----------
5,234,100
----------
MACHINERY 3.70%
3,000,000 Ingersoll-Rand Co.,
6.443%, 11/15/27 3,048,300
----------
PRINCIPAL
AMOUNT VALUE
- ------------- ---------
OIL 7.05%
$2,500,000 Amoco Canada Petroleum Co. Ltd.,
6.75%, 2/15/05 $2,611,300
3,000,000 Halliburton Co., Series A,
6.75%, 2/1/27 3,200,400
----------
5,811,700
----------
PHARMACEUTICALS 3.71%
3,000,000 Eli Lilly & Co.,
6.25%, 3/15/03 3,057,360
----------
RAILROADS 0.61%
500,000 Southern Railway Co.,
7.75%, 8/1/99 503,520
----------
SOAPS & CLEANING AGENTS 1.84%
1,500,000 Colgate-Palmolive Co.,
6.85%, 11/24/99 1,513,035
----------
UTILITIES - ELECTRIC SERVICES 6.29%
2,500,000 National Rural Utilities Cooperative
Finance Corp., 6.50%, 9/15/02 2,561,575
2,500,000 Union Electric Co.,
6.75%, 5/1/08 2,625,075
----------
5,186,650
----------
UTILITIES - ELECTRIC & OTHER SERVICES
COMBINED 4.82%
2,750,000 Citizens Utilities Co.,
7.60%, 6/1/06 2,960,870
1,000,000 Louisville Gas & Electric Co.,
7.50%, 7/1/02 1,010,490
----------
3,971,360
----------
UTILITIES - NATURAL GAS 3.75%
3,000,000 Laclede Gas Co.,
6.50%, 11/15/10 3,088,500
----------
Total Corporate Bonds (cost $54,691,793) 55,807,020
----------
<PAGE>
FIRST OMAHA FUNDS - Annual Report
- --------------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
- ------------- ---------
U.S. GOVERNMENT AGENCIES 11.09%
$3,380,000 Federal Home Loan Bank,
5.875%, 2/2/06 $ 3,420,391
3,000,000 Federal Home Loan Bank,
6.41%, 11/13/12 3,118,740
2,500,000 Federal National Mortgage Association,
6.50%, 7/16/07 2,599,425
----------
Total U.S. Government Agencies (cost $9,417,079) 9,138,556
----------
U.S. GOVERNMENT AGENCY STRIPS 2.86%
5,300,000 Federal Home Loan Bank, 7/2/12 1,887,489
1,320,000 Federal Home Loan Bank, 7/2/12 470,078
----------
Total U.S. Government Agency Strips (cost $2,334,445) 2,357,567
----------
U.S. TREASURY BONDS 1.41%
1,000,000 9.125%, 5/15/09 1,158,670
----------
Total U.S. Treasury Bonds (cost $1,149,687) 1,158,670
----------
U.S. TREASURY STRIPS 9.81%
2,122,000 5/15/02 1,813,864
4,963,000 2/15/07 3,237,117
6,400,000 2/15/12 3,030,912
----------
Total U.S. Treasury Strips (cost $6,801,712) 8,081,893
----------
NUMBER
OF SHARES
- -------------
INVESTMENT COMPANIES 5.86%
977,508 Federated Trust for
U.S. Treasury Obligations 977,508
3,856,336 Goldman Sachs ILA Treasury
Obligations Portfolio 3,856,336
----------
Total Investment Companies (cost $4,833,844) 4,833,844
----------
Total Investments (cost $79,228,560) 98.74% 81,377,550
Other Assets, less Liabilities 1.26% 1,042,125
----------
NET ASSETS 100.00% $82,419,675
===========
See notes to financial statements.
<PAGE>
Annual Report - FIRST OMAHA FUNDS
- --------------------------------------------------------------------------------
Schedule of Portfolio Investments
March 31, 1999
SHORT/INTERMEDIATE FIXED INCOME FUND
PRINCIPAL
AMOUNT VALUE
- ------------- ---------
CORPORATE BONDS 66.79%
COMMUNICATIONS EQUIPMENT 7.18%
$750,000 AT&T Corp.,
6.75%, 4/1/04 $ 781,215
750,000 Motorola, Inc.,
6.50%, 3/1/08 771,555
----------
1,552,770
----------
DATA PROCESSING 3.35%
750,000 First Data Corp.,
5.80%, 12/15/08 724,313
----------
FINANCIAL SERVICES 13.92%
750,000 Ford Motor Credit Co.,
6.125%, 1/9/06 745,372
750,000 General Electric Capital Corp.,
6.875%, 4/15/00 761,242
750,000 LG&E Capital Corp.,
6.46%, 1/15/08 736,710
750,000 Merrill Lynch & Co.,
6.64%, 9/19/02 768,015
----------
3,011,339
----------
FOOD PRODUCTS 3.49%
750,000 Anheuser-Busch Cos., Inc.,
6.90%, 10/1/02 754,485
----------
PHARMACEUTICALS 10.71%
750,000 Eli Lilly & Co.,
8.125%, 12/1/01 795,615
750,000 SmithKline Beecham PLC,
6.625%, 10/1/05 769,268
750,000 Upjohn Co.,
5.875%, 4/15/00 752,527
----------
2,317,410
----------
RETAIL 7.13%
750,000 Sears Roebuck Acceptance Notes,
6.90%, 8/1/03 770,520
750,000 Wal-Mart Stores, Inc.,
6.50%, 6/1/03 772,755
----------
1,543,275
----------
PRINCIPAL
AMOUNT VALUE
- ------------- ---------
UTILITIES - ELECTRIC SERVICES 10.58%
$ 750,000 Florida Power & Light Co.,
5.50%, 7/1/99 $ 750,848
750,000 Monongahela Power Co.,
5.625%, 4/1/00 751,020
750,000 Union Electric Co.,
6.875%, 8/1/04 787,988
----------
2,289,856
----------
UTILITIES - ELECTRIC & OTHER SERVICES
COMBINED 6.95%
750,000 Northern States Power Co.,
5.75%, 10/1/03 747,817
750,000 Potomac Electric Power Co.,
6.25%, 10/15/07 756,810
----------
1,504,627
----------
UTILITIES - TELECOMMUNICATIONS 3.48%
750,000 Chesapeake & Potomac Telephone
Co. of Maryland, 5.875%, 9/15/99 751,928
----------
Total Corporate Bonds (cost $14,307,600) 14,450,003
----------
U.S. GOVERNMENT AGENCIES 15.17%
750,000 Federal Farm Credit Bank,
5.72%, 4/13/05 752,632
1,000,000 Federal Home Loan Bank,
6.50%, 11/29/05 1,046,540
750,000 Federal Home Loan Bank,
5.45%, 1/12/09 722,415
750,000 Federal Home Loan Mortgage Corp.,
5.95%, 1/19/06 761,633
----------
Total U.S. Government Agencies (cost $3,286,404) 3,283,220
----------
U.S. TREASURY NOTES 1.19%
250,000 5.875%, 2/15/04 257,442
----------
Total U.S. Treasury Notes (cost $241,602) 257,442
----------
U.S. TREASURY STRIPS 13.02%
896,000 8/15/00 837,930
1,345,000 2/15/02 1,163,976
1,250,000 2/15/07 815,313
----------
Total U.S. Treasury Strips (cost $2,787,830) 2,817,219
----------
<PAGE>
FIRST OMAHA FUNDS - Annual Report
- --------------------------------------------------------------------------------
NUMBER
OF SHARES VALUE
- ------------- ---------
INVESTMENT COMPANIES 2.17%
468,106 Goldman Sachs ILA Treasury
Obligations Portfolio $468,106
----------
Total Investment Companies (cost $468,106) 468,106
----------
Total Investments (cost $21,091,542) 98.34% 21,275,990
Other Assets, less Liabilities 1.66% 360,146
----------
NET ASSETS 100.00% $21,636,136
===========
Schedule of Portfolio Investments
March 31, 1999
U.S. GOVERNMENT OBLIGATIONS FUND
PRINCIPAL
AMOUNT VALUE
- ------------- ---------
U.S. TREASURY BILLS 33.45%
$ 5,000,000 4/1/99 $5,000,000
5,000,000 4/15/99 4,991,493
10,000,000 4/29/99 9,966,205
5,000,000 5/6/99 4,978,733
5,000,000 5/13/99 4,974,450
5,000,000 6/3/99 4,961,588
5,000,000 7/1/99 4,943,694
5,000,000 8/12/99 4,919,276
----------
Total U.S. Treasury Bills (cost $44,735,439) 44,735,439
----------
U.S. TREASURY NOTES 15.03%
10,000,000 5.875%, 8/31/99 10,049,636
10,000,000 5.75%, 9/30/99 10,055,138
----------
Total U.S. Treasury Notes (cost $20,104,774) 20,104,774
----------
REPURCHASE AGREEMENTS 51.78%
14,239,870 G.X. Clarke & Co., 4.95%, dated 3/31/99,
repurchase price $14,241,827, maturing
4/1/99 (collateralized by U.S. Treasury
Bills, 4.44%, 5/20/99 and U.S. Treasury Bills,
4.48%, 5/6/99) 14,239,870
25,000,000 Merrill Lynch, 4.75%, dated 3/31/99,
repurchase price $25,003,298, maturing
4/1/99 (collateralized by U.S. Treasury
Notes, 5.375%, 2/15/01) 25,000,000
30,000,000 Spear, Leeds & Kellogg, 4.875%, dated 3/31/99,
repurchase price $30,004,062, maturing
4/1/99 (collateralized by U.S. Treasury
Notes, 7.00%, 7/15/06) 30,000,000
----------
Total Repurchase Agreements (cost $69,239,870) 69,239,870
----------
Total Investments (cost $134,080,083) 100.26% 134,080,083
Liabilities, less Other Assets (0.26)% (349,782)
----------
NET ASSETS 100.00% $133,730,301
============
See notes to financial statements.
<PAGE>
Annual Report - FIRST OMAHA FUNDS
- --------------------------------------------------------------------------------
Statements of Assets and Liabilities
March 31, 1999
<TABLE>
<CAPTION>
SHORT/ U.S.
SMALL CAP FIXED INTERMEDIATE GOVERNMENT
VALUE GROWTH EQUITY BALANCED INCOME FIXED INCOME OBLIGATIONS
FUND FUND FUND FUND FUND FUND FUND
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments, at value (cost
$15,252,499, $13,669,115,
$200,837,049, $23,436,731,
$79,228,560, $21,091,542 and
$64,840,213, respectively) $12,996,661 $14,287,008 $231,038,119 $23,729,725 $81,377,550 $21,275,990 $64,840,213
- -----------------------------------
Repurchase agreements, at value
(cost $0, $0, $0, $0, $0, and
$69,239,870, respectively) _ _ _ _ _ _ 69,239,870
- -----------------------------------
Receivable for securities sold 81,706 _ 181,333 8,961 _ _ _
- -----------------------------------
Interest and dividends receivable 20,786 30,365 402,757 155,615 1,048,786 352,541 62,004
- -----------------------------------
Organizational expenses, net of
accumulated amortization 4,209 12,024 7,139 2,193 7,139 7,139 7,139
- -----------------------------------
Other assets 9,206 7,101 53,086 8,346 23,427 18,263 51,101
- ----------------------------------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Total Assets 13,112,568 14,336,498 231,682,434 23,904,840 82,456,902 21,653,933 134,200,327
- ----------------------------------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
LIABILITIES:
Dividend payable _ _ _ _ _ _ 408,579
- -----------------------------------
Accrued expenses and other
liabilities 15,148 17,609 61,761 19,207 28,552 15,936 37,105
- -----------------------------------
Accrued investment advisory fee 1,298 1,355 34,376 2,553 8,675 1,861 24,342
- ----------------------------------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Total Liabilities 16,446 18,964 96,137 21,760 37,227 17,797 470,026
- ----------------------------------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
NET ASSETS $13,096,122 $14,317,534 $231,586,297 $23,883,080 $82,419,675 $21,636,136 $133,730,301
- ----------------------------------- =========== =========== =========== =========== =========== =========== ===========
NET ASSETS CONSIST OF:
Capital stock 13 15 173 22 79 22 1,337
- -----------------------------------
Paid-in capital in excess of par 15,191,155 14,627,520 182,494,481 23,343,408 79,406,576 21,680,596 133,739,121
- -----------------------------------
Undistributed net investment income 7,063 _ 12,142 10,654 85,653 22,599 8,012
- -----------------------------------
Undistributed net realized gain
(loss) on investments 153,729 (927,894) 18,878,431 236,002 778,377 (251,529) (18,169)
- -----------------------------------
Net unrealized appreciation
(depreciation) on investments (2,255,838) 617,893 30,201,070 292,994 2,148,990 184,448 _
- ----------------------------------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Net Assets $13,096,122 $14,317,534 $231,586,297 $23,883,080 $82,419,675 $21,636,136 $133,730,301
- ----------------------------------- =========== =========== =========== =========== =========== =========== ===========
CAPITAL STOCK, $0.00001 PAR VALUE
Authorized 50,000,000 50,000,000 50,000,000 50,000,000 50,000,000 50,000,000 300,000,000
- -----------------------------------
Issued and outstanding 1,330,017 1,510,461 17,338,883 2,158,774 7,911,550 2,161,570 133,748,382
- -----------------------------------
NET ASSET VALUE, REDEMPTION PRICE,
AND OFFERING PRICE PER SHARE
(NET ASSETS/SHARES OUTSTANDING) $9.85 $9.48 $13.36 $11.06 $10.42 $10.01 $1.00
- ----------------------------------- ====== ====== ====== ====== ====== ====== ======
</TABLE>
See notes to financial statements.
<PAGE>
FIRST OMAHA FUNDS - Annual Report
- --------------------------------------------------------------------------------
Statements of Operations
For the Period from April 1, 1998 to March 31, 1999
<TABLE>
<CAPTION>
SHORT/ U.S.
SMALL CAP FIXED INTERMEDIATE GOVERNMENT
VALUE GROWTH EQUITY BALANCED INCOME FIXED INCOME OBLIGATIONS
FUND FUND FUND FUND FUND FUND FUND
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 56,644 $ 30,598 $ 1,524,690 $ 748,906 $5,448,870 $ 1,258,866 $5,445,405
Dividends 366,681 257,486 6,274,819 324,894 _ _ _
- ----------------------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
423,325 288,084 7,799,509 1,073,800 5,448,870 1,258,866 5,445,405
----------- ----------- ----------- ----------- ----------- ----------- -----------
EXPENSES:
Investment advisory fees 130,263 91,814 2,111,587 191,387 491,124 104,500 268,858
- -----------------------------------
Fund administration and
accounting fees 50,000 50,000 563,090 51,037 163,708 41,800 215,087
- -----------------------------------
Shareholder servicing fees 28,663 18,813 75,382 30,112 38,180 29,238 41,278
- -----------------------------------
Federal and state registration fees 16,142 15,595 23,969 12,362 14,729 9,844 17,686
- -----------------------------------
Administrative services plan fees 14,151 _ 251,787 20,570 76,001 18,657 _
- -----------------------------------
Professional fees 10,731 10,797 30,593 10,997 15,106 10,878 12,468
- -----------------------------------
Custody fees 4,598 3,673 84,463 7,655 24,556 6,270 32,263
- -----------------------------------
Reports to shareholders 2,913 1,920 51,327 4,503 11,060 2,615 13,059
- -----------------------------------
Amortization of organization
expenses 1,924 3,003 6,946 935 6,946 6,946 6,946
- -----------------------------------
Pricing fees 1,322 1,882 1,755 3,749 4,307 3,332 374
- -----------------------------------
Directors' fees 836 531 15,674 1,383 4,538 1,188 6,178
- -----------------------------------
Insurance 394 _ 10,649 680 2,869 733 4,155
- -----------------------------------
Other expenses 534 763 4,841 684 1,565 465 1,234
- ----------------------------------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Total expenses before waiver 262,471 198,791 3,232,063 336,054 854,689 236,466 619,586
- -----------------------------------
Waiver of expenses (77,650) (50,944) (321,568) (79,065) (135,817) (34,307) (42,477)
- ----------------------------------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Net Expenses 184,821 147,847 2,910,495 256,989 718,872 202,159 577,109
- ----------------------------------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
NET INVESTMENT INCOME 238,504 140,237 4,889,014 816,811 4,729,998 1,056,707 4,868,296
- ----------------------------------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on
investments 443,626 (972,963) 32,830,496 833,920 1,053,007 91,388 1,111
- -----------------------------------
Change in unrealized appreciation
(depreciation) on investments (4,312,605) 617,893 (64,096,533) (2,619,384) (1,136,109) (39,148) _
- ----------------------------------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Net Gain (Loss) on Investments (3,868,979) (355,070) (31,266,037) (1,785,464) (83,102) 52,240 1,111
- ----------------------------------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM OPERATIONS $(3,630,475) $(214,833) $(26,377,023) $(968,653) $4,646,896 $1,108,947 $4,869,407
- ----------------------------------- =========== =========== =========== =========== =========== =========== ==========
</TABLE>
See notes to financial statements.
<PAGE>
Annual Report - FIRST OMAHA FUNDS
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
SMALL CAP VALUE FUND GROWTH FUND EQUITY FUND
------------------------- ------------ -------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31,
1999 1998 1999 1999 1998
- --------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income $238,504 $182,706 $140,237 $4,889,014 $5,431,047
- -----------------------------------
Net realized gain (loss)
on investments 443,626 576,625 (972,963) 32,830,496 15,146,102
- -----------------------------------
Change in unrealized appreciation
(depreciation) on investments (4,312,605) 1,932,576 617,893 (64,096,533) 51,301,415
- ----------------------------------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) in net
assets resulting from operations (3,630,475) 2,691,907 (214,833) (26,377,023) 71,878,564
- ----------------------------------- ----------- ----------- ----------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income (238,661) (181,609) (125,285) (4,882,142) (5,458,420)
- -----------------------------------
Net capital gains (451,358) (454,364) _ (20,488,813) (19,230,779)
- ----------------------------------- ----------- ----------- ----------- ----------- -----------
Total distributions (690,019) (635,973) (125,285) (25,370,955) (24,689,199)
- ----------------------------------- ----------- ----------- ----------- ----------- -----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from sale of shares 5,961,795 9,529,746 19,440,805 34,157,608 36,250,380
- -----------------------------------
Proceeds from reinvestment
of dividends 680,419 634,827 119,796 25,169,606 24,523,415
- -----------------------------------
Redemption of shares (6,245,000) (2,373,895) (4,902,949) (88,066,228) (55,089,677)
- ----------------------------------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) from share
transactions 397,214 7,790,678 14,657,652 (28,739,014) 5,684,118
- ----------------------------------- ----------- ----------- ----------- ----------- -----------
TOTAL INCREASE (DECREASE) IN
NET ASSETS (3,923,280) 9,846,612 14,317,534 (80,486,992) 52,873,483
- -----------------------------------
NET ASSETS:
Beginning of period 17,019,402 7,172,790 _ 312,073,289 259,199,806
- ----------------------------------- ----------- ----------- ----------- ----------- -----------
End of period $13,096,122 $17,019,402 $14,317,534 $231,586,297 $312,073,289
- ----------------------------------- =========== =========== =========== =========== ===========
Undistributed net investment income,
end of period $ 7,063 $ 5,296 $ _ $ 12,142 $ 3,256
- ----------------------------------- =========== =========== =========== =========== ===========
</TABLE>
<F1> Commencement of operations
See notes to financial statements.
<PAGE>
FIRST OMAHA FUNDS - Annual Report
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
SHORT/INTERMEDIATE U.S. GOVERNMENT
BALANCED FUND FIXED INCOME FUND FIXED INCOME FUND OBLIGATIONS FUND
------------------------ ------------------------ ------------------------ ------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31, MAR. 31,
1999 1998 1999 1998 1999 1998 1999 1998
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income $816,811 $662,106 $4,729,998 $4,422,924 $1,056,707 $1,108,779 $4,868,296 $5,327,594
- -----------------------
Net realized gain (loss)
on investments 833,920 247,580 1,053,007 (25,309) 91,388 10,043 1,111 _
- -----------------------
Change in unrealized
appreciation
(depreciation)
on investments (2,619,384) 2,925,211 (1,136,109) 4,616,812 (39,148) 476,475 _ _
- ----------------------- ---------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease)
in net assets resulting
from operations (968,653) 3,834,897 4,646,896 9,014,427 1,108,947 1,595,297 4,869,407 5,327,594
- ----------------------- ---------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
DISTRIBUTIONS TO
SHAREHOLDERS:
Net investment income (818,531) (657,708) (4,730,231) (4,427,433) (1,056,399) (1,112,789) (4,868,296) (5,327,594)
- -----------------------
Net capital gains (754,425) (134,164) (217,671) _ _ _ _ _
- ----------------------- ---------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Total distributions (1,572,956) (791,872) (4,947,902) (4,427,433) (1,056,399) (1,112,789) (4,868,296) (5,327,594)
- ----------------------- ---------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
CAPITAL SHARE
TRANSACTIONS:
Proceeds from sale
of shares 8,207,537 14,375,680 16,794,091 11,070,510 7,845,847 3,159,589 394,777,417 378,648,091
- -----------------------
Proceeds from
reinvestment
of dividends 1,564,415 789,660 4,874,511 4,382,227 1,018,299 1,063,195 154,244 158,162
- -----------------------
Redemption of shares (9,038,833) (3,411,519) (16,619,283) (17,892,679) (6,789,605) (6,238,476) (361,699,190) (403,722,643)
- ----------------------- ---------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease)
from share transactions 733,119 11,753,821 5,049,319 (2,439,942) 2,074,541 (2,015,692) 33,232,471 (24,916,390)
- ----------------------- ---------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
TOTAL INCREASE
(DECREASE) IN NET
ASSETS (1,808,490) 14,796,846 4,748,313 2,147,052 2,127,089 (1,533,184) 33,233,582 (24,916,390)
- -----------------------
NET ASSETS:
Beginning of period $25,691,570 $10,894,724 77,671,362 75,524,310 19,509,047 21,042,231 100,496,719 125,413,109
- ----------------------- ---------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
End of period $23,883,080 $25,691,570 $82,419,675 $77,671,362 $21,636,136 $19,509,047 $133,730,301 $100,496,719
- ----------------------- ========== =========== =========== =========== =========== =========== =========== ===========
Undistributed net
investment income,
end of period $10,654 $11,439 $85,653 $ 83,872 $ 22,599 $20,277 $8,012 $5,998
- ----------------------- ========== =========== =========== =========== =========== =========== =========== ===========
</TABLE>
<F1> Commencement of operations
<PAGE>
Annual Report - FIRST OMAHA FUNDS
- --------------------------------------------------------------------------------
Financial Highlights<F1>
<TABLE>
<CAPTION>
SMALL CAP VALUE FUND GROWTH FUND EQUITY FUND
---------------------------------------- ------------- -------------------------
YEAR ENDED YEAR ENDED JUNE 10, YEAR ENDED YEAR ENDED YEAR ENDED
MAR. 31, MAR. 31, 1996<F2> TO MAR. 31, MAR. 31, MAR. 31,
1999 1998 MAR. 31, 1997 1999 1999 1998
- ---------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $12.94 $10.52 $10.00 $10.00 $16.19 $13.74
- ------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.18 0.19 0.15 0.10 0.26 0.29
- ------------------------------------
Net realized and unrealized gains
(losses) on investments (2.73) 2.88 0.58 (0.53) (1.66) 3.50
- ------------------------------------ ---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations (2.55) 3.07 0.73 (0.43) (1.40) 3.79
- ------------------------------------ ---------- ---------- ---------- ---------- ---------- ----------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net
investment income 0.18 0.19 0.15 0.09 0.26 0.29
- ------------------------------------
Distributions from capital gains 0.36 0.46 0.06 _ 1.17 1.05
- ------------------------------------ ---------- ---------- ---------- ---------- ---------- ----------
Total distributions 0.54 0.65 0.21 0.09 1.43 1.34
- ------------------------------------ ---------- ---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $9.85 $12.94 $10.52 $ 9.48 $13.36 $16.19
- ------------------------------------ ========== ========== ========== ========== ========== ==========
TOTAL RETURN<F3> (20.18)% 29.60% 7.30% (4.28)% (9.20)% 28.89%
- ------------------------------------
SUPPLEMENTAL DATA AND RATIOS:
Net assets, end of period (000s) $13,096 $17,019 $7,173 $14,318 $231,586 $312,073
- ------------------------------------
Ratio of net expenses to average
net assets<F4> 1.21% 1.11% 1.34% 1.21% 1.03% 1.03%
- ------------------------------------
Ratio of net investment
income to average net assets<F4> 1.55% 1.62% 2.15% 1.15% 1.74% 1.89%
- ------------------------------------
Ratio of net expenses to average
net assets<F4><F5> 1.71% 1.92% 3.76% 1.63% 1.15% 1.14%
- ------------------------------------
Ratio of net investment income
to average net assets<F4><F5> 1.05% 0.81% (0.27)% 0.73% 1.62% 1.78%
- ------------------------------------
Portfolio turnover rate<F3> 26.20% 16.54% 7.45% 71.80% 24.19% 15.87%
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
<F1> Performance data for each Fund prior to April 10, 1995 relates to a
corresponding predecessor First Omaha Fund, the assets of which were
acquired on that date.
<F2> Commencement of operations
<F3> Not annualized
<F4> Annualized
<F5> During the period, certain fees were voluntarily reduced. If such
voluntary fee reductions had not occurred, the ratios would have been as
indicated.
See notes to financial statements.
<PAGE>
FIRST OMAHA FUNDS - Annual Report
- --------------------------------------------------------------------------------
Financial Highlights<F1>
<TABLE>
<CAPTION>
EQUITY FUND (CONT'D.) BALANCED FUND
---------------------------------------------------- ---------------------------------------
YEAR ENDED APRIL 10, 1995 JULY 1, 1994 YEAR ENDED YEAR ENDED YEAR ENDED AUG. 6,
MAR. 31, <F2> THROUGH TO JUNE 30, MAR. 31, MAR. 31, 1996 <F2> TO
1997 MAR. 31, 1996 APRIL 9, 1995 1994 1999 1998 MAR. 31, 1997
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $13.07 $11.39 $10.48 $10.55 $12.24 $10.41 $10.00
- ------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.30 0.28 0.21 0.20 0.38 0.38 0.21
- ------------------------------------
Net realized and unrealized gains
(losses) on investments 1.63 2.13 1.48 0.15 (0.81) 1.90 0.40
- ------------------------------------ ---------- ---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations 1.93 2.41 1.69 0.35 (0.43) 2.28 0.61
- ------------------------------------ ---------- ---------- ---------- ---------- ---------- ---------- ----------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net
investment income 0.30 0.28 0.22 0.20 0.38 0.38 0.20
- ------------------------------------
Distributions from capital gains 0.96 0.45 0.56 0.22 0.37 0.07 _
- ------------------------------------ ---------- ---------- ---------- ---------- ---------- ---------- ----------
Total distributions 1.26 0.73 0.78 0.42 0.75 0.45 0.20
- ------------------------------------ ---------- ---------- ---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $13.74 $13.07 $11.39 $10.48 $11.06 $12.24 $10.41
- ------------------------------------ ========== ========== ========== ========== ========== ========== ==========
TOTAL RETURN<F3> 14.99% 21.52% 16.48% 3.34% (3.73)% 22.34% 6.14%%
- ------------------------------------
SUPPLEMENTAL DATA AND RATIOS:
Net assets, end of period (000s) $259,200 $224,169 $161,323 $129,381 $23,883 $25,692 $10,895
- ------------------------------------
Ratio of net expenses to average
net assets<F4> 1.04% 0.99% 1.03% 1.04% 1.01% 0.88% 1.16%
- ------------------------------------
Ratio of net investment
income to average net assets<F4> 2.17% 2.32% 2.50% 1.93% 3.20% 3.37% 3.25%
- ------------------------------------
Ratio of net expenses to average
net assets<F4><F5> 1.10% 1.07% 1.62% 1.54% 1.32% 1.43% 3.04%
- ------------------------------------
Ratio of net investment income
to average net assets<F4><F5> 2.11% 2.24% 1.91% 1.43% 2.89% 2.82% 1.37%
- ------------------------------------
Portfolio turnover rate<F3> 25.66% 26.60% 14.36% 15.86% 33.17% 10.46% 5.92%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<F1> Performance data for each Fund prior to April 10, 1995 relates to a
corresponding predecessor First Omaha Fund, the assets of which were
acquired on that date.
<F2> Commencement of operations
<F3> Not annualized
<F4> Annualized
<F5> During the period, certain fees were voluntarily reduced. If such
voluntary fee reductions had not occurred, the ratios would have been as
indicated.
<PAGE>
Annual Report - FIRST OMAHA FUNDS
- --------------------------------------------------------------------------------
Financial Highlights<F1> (continued)
<TABLE>
<CAPTION>
FIXED INCOME FUND
--------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED APRIL 10, JULY 1, 1994 YEAR ENDED
MAR. 31, MAR. 31, MAR. 31, 1995<F2> TO TO JUNE 30,
1999 1998 1997 MAR. 31, 1996 APRIL 9, 1995 1994
- ----------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $10.45 $ 9.84 $10.00 $ 9.63 $9.58 $10.49
- ------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.61 0.59 0.45 0.59 0.51 0.67
- ------------------------------------
Net realized and unrealized gains
(losses) on investments _ 0.61 (0.15) 0.35 0.07 (0.88)
- ------------------------------------ ---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations 0.61 1.20 0.30 0.94 0.58 (0.21)
- ------------------------------------ ---------- ---------- ---------- ---------- ---------- ----------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net
investment income 0.61 0.59 0.46 0.57 0.53 0.67
- ------------------------------------
Distributions from capital gains 0.03 _ _ _ _ 0.03
- ------------------------------------ ---------- ---------- ---------- ---------- ---------- ----------
Total distributions 0.64 0.59 0.46 0.57 0.53 0.70
- ------------------------------------ ---------- ---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $10.42 $10.45 $ 9.84 $10.00 $9.63 $ 9.58
- ------------------------------------ ========== ========== ========== ========== ========== ==========
TOTAL RETURN<F3> 5.93% 12.50% 3.06% 9.79% 6.35% (2.29)%
- ------------------------------------
SUPPLEMENTAL DATA AND RATIOS:
Net assets, end of period (000s) $82,420 $77,671 $75,524 $76,342 $66,488 $61,714
- ------------------------------------
Ratio of net expenses to average
net assets<F4> 0.88% 0.89% 0.89% 0.83% 0.87% 0.86%
- ------------------------------------
Ratio of net investment
income to average net assets<F4> 5.78% 5.74% 4.48% 5.94% 6.98% 6.52%
- ------------------------------------
Ratio of net expenses to average
net assets<F4><F5> 1.05% 1.05% 1.00% 0.96% 1.51% 1.41%
- ------------------------------------
Ratio of net investment income
to average net assets<F4><F5> 5.61% 5.58% 4.37% 5.81% 6.34% 5.97%
- ------------------------------------
Portfolio turnover rate<F3> 31.35% 19.03% 12.66% 37.35% 7.04% 13.09%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<F1> Performance data for each Fund prior to April 10, 1995 relates to a
corresponding predecessor First Omaha Fund, the assets of which were
acquired on that date.
<F2> Commencement of operations
<F3> Not annualized
<F4> Annualized
<F5> During the period, certain fees were voluntarily reduced. If such
voluntary fee reductions had not occurred, the ratios would have been as
indicated.
See notes to financial statements.
<PAGE>
FIRST OMAHA FUNDS - Annual Report
- --------------------------------------------------------------------------------
Financial Highlights<F1> (continued)
<TABLE>
<CAPTION>
SHORT/INTERMEDIATE FIXED INCOME FUND
---------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED APRIL 10, JULY 1, 1994 YEAR ENDED
MAR. 31, MAR. 31, MAR. 31, 1995<F2> TO TO JUNE 30,
1999 1998 1997 MAR. 31, 1996 APRIL 9, 1995 1994
- ----------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $9.97 $9.73 $9.85 $9.66 $9.62 $10.18
- ------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.51 0.56 0.49 0.52 0.42 0.55
- ------------------------------------
Net realized and unrealized gains
(losses) on investments 0.04 0.24 (0.10) 0.17 0.05 (0.56)
- ------------------------------------ ---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations 0.55 0.80 0.39 0.69 0.47 (0.01)
- ------------------------------------ ---------- ---------- ---------- ---------- ---------- ----------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net
investment income 0.51 0.56 0.51 0.50 0.43 0.55
- ------------------------------------
Distributions from capital gains _ _ _ _ _ _
- ------------------------------------ ---------- ---------- ---------- ---------- ---------- ----------
Total distributions 0.51 0.56 0.51 0.50 0.43 0.55
- ------------------------------------ ---------- ---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $10.01 $9.97 $9.73 $9.85 $9.66 $ 9.62
- ------------------------------------ ========== ========== ========== ========== ========== ==========
TOTAL RETURN<F3> 5.61% 8.37% 4.00% 7.24% 5.05% (0.22)%
- ------------------------------------
SUPPLEMENTAL DATA AND RATIOS:
Net assets, end of period (000s) $21,636 $19,509 $21,042 $22,056 $22,130 $21,938
- ------------------------------------
Ratio of net expenses to average
net assets<F4> 0.97% 0.99% 0.97% 0.89% 0.88% 0.83%
- ------------------------------------
Ratio of net investment
income to average net assets<F4> 5.05% 5.54% 5.01% 5.34% 5.63% 5.44%
- ------------------------------------
Ratio of net expenses to average
net assets<F4><F5> 1.13% 1.15% 1.08% 1.02% 1.51% 1.38%
- ------------------------------------
Ratio of net investment income
to average net assets<F4><F5> 4.89% 5.38% 4.90% 5.21% 5.00% 4.89%
- ------------------------------------
Portfolio turnover rate<F3> 21.36% 26.58% 4.73% 41.45% 9.93% 20.52%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<F1> Performance data for each Fund prior to April 10, 1995 relates to a
corresponding predecessor First Omaha Fund, the assets of which were
acquired on that date.
<F2> Commencement of operations
<F3> Not annualized
<F4> Annualized
<F5> During the period, certain fees were voluntarily reduced. If such
voluntary fee reductions had not occurred, the ratios would have been as
indicated.
See notes to financial statements.
<PAGE>
Annual Report - FIRST OMAHA FUNDS
- --------------------------------------------------------------------------------
Financial Highlights<F1> (continued)
<TABLE>
<CAPTION>
U.S. GOVERNMENT OBLIGATIONS FUND
--------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED APRIL 10, JULY 1, 1994 YEAR ENDED
MAR. 31, MAR. 31, MAR. 31, 1995<F2>TO TO JUNE 30,
1999 1998 1997 MAR. 31, 1996 APRIL 9, 1995 1994
- ----------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
- ------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.05 0.05 0.05 0.05 0.04 0.03
- ------------------------------------
Net realized and unrealized gains
(losses) on investments _ _ _ _ _ _
- ------------------------------------ ---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations 0.05 0.05 0.05 0.05 0.04 0.03
- ------------------------------------ ---------- ---------- ---------- ---------- ---------- ----------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net
investment income 0.05 0.05 0.05 0.05 0.04 0.03
- ------------------------------------
Distributions from capital gains _ _ _ _ _ _
- ------------------------------------ ---------- ---------- ---------- ---------- ---------- ----------
Total distributions 0.05 0.05 0.05 0.05 0.04 0.03
- ------------------------------------ ---------- ---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
- ------------------------------------ ========== ========== ========== ========== ========== ==========
TOTAL RETURN<F3> 4.63% 4.95% 4.76% 5.14% 3.51% 2.74%
- ------------------------------------
SUPPLEMENTAL DATA AND RATIOS:
Net assets, end of period (000s) $133,730 $100,497 $125,413 $87,715 $76,105 $89,195
- ------------------------------------
Ratio of net expenses to average
net assets<F4> 0.54% 0.55% 0.58% 0.54% 0.63% 0.60%
- ------------------------------------
Ratio of net investment
income to average net assets<F4> 4.52% 4.83% 4.66% 5.12% 4.46% 2.68%
- ------------------------------------
Ratio of net expenses to average
net assets<F4><F5> 0.58% 0.58% 0.59% 0.59% 1.23% 1.13%
- ------------------------------------
Ratio of net investment income
to average net assets<F4><F5> 4.48% 4.80% 4.65% 5.07% 3.86% 2.15%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<F1> Performance data for each Fund prior to April 10, 1995 relates to a
corresponding predecessor First Omaha Fund, the assets of which were
acquired on that date.
<F2> Commencement of operations
<F3> Not annualized
<F4> Annualized
<F5> During the period, certain fees were voluntarily reduced. If such
voluntary fee reductions had not occurred, the ratios would have been as
indicated.
See notes to financial statements.
<PAGE>
FIRST OMAHA FUNDS - Annual Report
- --------------------------------------------------------------------------------
Notes to Financial Statements
March 31, 1999
1.ORGANIZATION
First Omaha Funds, Inc. (the "Company") was organized in October, 1994 as a
Nebraska corporation and is registered under the Investment Company Act of 1940,
as amended (the "1940 Act"), as an open-end management investment company
issuing its shares in series, each series representing a distinct portfolio with
its own investment objectives and policies. At March 31, 1999, the only series
presently authorized are the Small Cap Value Fund, the Growth Fund, the Equity
Fund, the Balanced Fund, the Fixed Income Fund, the Short/Intermediate Fixed
Income Fund and the U.S. Government Obligations Fund (individually referred to
as a "Fund" and collectively as the "Funds").
2.SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their financial statements. These
policies are in conformity with generally accepted accounting principles.
(A) INVESTMENT VALUATION
Securities traded over-the-counter or on a national securities exchange are
valued on the basis of market value in their principal and most representative
market. Securities where the principal and most representative market is a
national securities exchange are valued at the latest reported sale price on
such exchange. Exchange-traded securities for which there were no transactions
are valued at the latest reported bid price.
Securities traded on only over-the-counter markets are valued at the latest bid
price. Debt securities (other than short-term instruments) are valued at prices
furnished by a pricing service, subject to review by the respective Fund's
investment adviser, First National Bank of Omaha ("First National") or FNC Trust
Group, n.a. ("FNC;" collectively, the "Advisers"), and determination of the
appropriate price whenever a furnished price is significantly different from the
previous day's furnished price. Short-term obligations (maturing within 60
days) are valued on an amortized cost basis. Securities for which quotations are
not readily available and other assets are valued at fair value as determined in
good faith by the Adviser under the supervision of the Board of Directors.
Pursuant to Rule 2a-7 of the 1940 Act, investments of the U.S. Government
Obligations Fund are valued at either amortized cost, which approximates market
value, or at original cost, which combined with accrued interest, approximates
market value. Under the amortized cost valuation method, discount or premium is
amortized on a constant basis to the maturity of the security. In addition, the
Fund may not (i) purchase any instrument with a remaining maturity greater than
13 months unless such investment is subject to a demand feature, or (ii)
maintain a dollar-weighted average portfolio maturity which exceeds 90 days.
(B) REPURCHASE AGREEMENTS
The Funds may acquire repurchase agreements from financial institutions such as
banks and broker/dealers which the Advisers deem creditworthy under guidelines
approved by the Board of Directors, subject to the seller's agreement to
repurchase such securities at a mutually agreed-upon date and price. The
repurchase price generally equals the price paid by each Fund plus interest
negotiated on the basis of current short-term rates, which may be more or less
than the rate on the underlying portfolio securities. The seller, under a
repurchase agreement, is required to maintain the value of collateral held
pursuant to the agreement at not less than the repurchase price (including
accrued interest). Securities subject to repurchase agreements are held by the
Funds' custodian or another qualified custodian or in the Federal
Reserve/Treasury book-entry system. Repurchase agreements are considered to be
loans by the Funds under the 1940 Act.
(C) ORGANIZATION COSTS
Costs incurred by the Funds in connection with their organization, registration
and the initial public offering of shares have been deferred and will be
amortized on a straight-line basis over a period of five years from the date
upon which the
<PAGE>
Annual Report - FIRST OMAHA FUNDS
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
March 31, 1999
Funds commenced their investment activities. Organization costs have been
allocated equally among the respective Funds or by specific identification, as
applicable. If any of the original shares of a Fund are redeemed by any holder
thereof prior to the end of the amortization period, the redemption proceeds
will be reduced by the pro rata share of the unamortized expenses as of the date
of redemption. The pro rata share by which the proceeds are reduced will be
derived by dividing the number of original shares of the Fund being redeemed by
the total number of original shares outstanding at the time of redemption.
(D) EXPENSES
The Funds are charged for those expenses that are directly attributable to each
portfolio, such as advisory and custodian fees. Expenses that are not directly
attributable to a portfolio are typically allocated among the portfolios in
proportion to their respective net assets.
(E) DISTRIBUTIONS TO SHAREHOLDERS
The U.S. Government Obligations Fund declares dividends of net investment income
daily. The remaining Funds declare dividends monthly; all of the Funds pay
dividends of net investment income monthly. Distributions of net realized
capital gains, if any, will be declared at least annually. Distributions to
shareholders are recorded on the ex-dividend date.
The character of distributions made during the year from net investment income
or net realized gains may differ from the characterization for federal income
tax purposes due to differences in the recognition of income, expense or gain
items for financial statement and tax purposes. Where appropriate,
reclassifications between net asset accounts are made for such differences that
are permanent in nature.
Accordingly, at March 31, 1999, reclassifications were recorded to increase
(decrease) undistributed net investment income by $1,924, $(14,952), $2,014,
$935, $2,014, $2,014 and $2,014; decrease undistributed net realized loss on
investments by $0, $45,069, $0,$0,$0,$0 and $0; and decrease paid-in capital in
excess of par by $1,924, $30,117, $2,014, $935, $2,014, $2,014 and $2,014 for
the Small Cap Value Fund, the Growth Fund, the Equity Fund, the Balanced Fund,
the Fixed Income Fund, the Short/Intermediate Fixed Income Fund and the U.S.
Government Obligations Fund, respectively.
(F) FEDERAL INCOME TAXES
Each Fund intends to comply with the requirements of the Internal Revenue Code
necessary to qualify as a regulated investment company and to make the requisite
distributions of the income to its shareholders which will be sufficient to
relieve it from all or substantially all federal income taxes.
As of March 31, 1999, each of the Growth Fund, Short/Intermediate Fixed Income
Fund and U.S. Government Obligations Fund had federal income tax capital loss
carryforwards of $267,823, $246,727 and $18,169, respectively. The $267,823
federal income tax loss carryforward for the Growth Fund expires in 2007. The
$246,727 federal income tax loss carryforward for the Short/Intermediate Fixed
Income Fund expires as follows: $81,532 in 2003, $109,194 in 2004 and $56,001 in
2005. The $18,169 federal income tax loss carryforward for the U.S. Government
Obligations Fund expires as follows: $14,927 in 2003 and $3,242 in 2006. It is
management's intention to make no distribution of any future realized capital
gains until the federal income tax loss carryforwards are exhausted.
(G) USE OF 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 at the date of the
financial statements and the reported changes in net assets during the reporting
period. Actual results could differ from those estimates.
(H) OTHER
Investment transactions are accounted for on the trade date
<PAGE>
FIRST OMAHA FUNDS - Annual Report
- --------------------------------------------------------------------------------
plus one. The Funds determine the gain or loss realized from investment
transactions by comparing the original cost of the security lot sold with the
net sale proceeds. Dividend income is recognized on the ex-dividend date and
interest income is recognized on an accrual basis. Original issue discount is
amortized over the expected life of each applicable security.
3.INVESTMENT ADVISORY AND OTHER AGREEMENTS
The Funds have agreements with the respective Advisers to furnish investment
advisory services to the Funds. Under the terms of these agreements, the Funds
will pay a monthly fee at the annual rate of the following percentages on
average daily net assets: to First National, 0.85% for the Small Cap Value Fund,
0.75% for the Equity Fund, 0.75% for the Balanced Fund, 0.60% for the Fixed
Income Fund, 0.50% for the Short/Intermediate Fixed Income Fund and 0.25% for
the U.S. Government Obligations Fund; and to FNC, 0.75% for the Growth Fund. For
the year ended March 31, 1999, advisory fees of $53,638, $30,604, $51,037,
$40,927 and $10,450 were waived in the Small Cap Value Fund, the Growth Fund,
the Balanced Fund, the Fixed Income Fund and the Short/Intermediate Fixed Income
Fund, respectively.
First National also serves as custodian and transfer agent for each of the
Funds. The custodian receives compensation from each of the Funds for such
services in an amount equal to a fee, computed daily and payable monthly, at an
annual rate of 0.03% of each Fund's average daily net assets. For the year ended
March 31, 1999, custody fees of $4,598, $3,673, $84,463, $7,655, $24,556 and
$6,270 were waived in the Small Cap Value Fund, the Growth Fund, the Equity
Fund, the Balanced Fund, the Fixed Income Fund and the Short/Intermediate Fixed
Income Fund, respectively. The transfer agent also receives compensation from
each of the Funds for such services.
Sunstone Financial Group, Inc. (the "Administrator") acts as Administrator for
each of the Funds. As compensation for its administrative and fund accounting
services and the assumption of certain administrative expenses, the
Administrator is entitled to a fee, computed daily and payable monthly, at an
annual rate of 0.20% of each Fund's average daily net assets. The Small Cap
Value Fund and the Growth Fund are each subject to a $50,000 minimum annual fee.
For the year ended March 31, 1999, administrative fees of $12,337, $16,667,
$111,200, $10,079, $32,330, $8,255 and $42,477 were waived in the Small Cap
Value Fund, the Growth Fund, the Equity Fund, the Balanced Fund, the Fixed
Income Fund, the Short/Intermediate Fixed Income Fund and the U.S. Government
Obligations Fund, respectively.
The Advisers and the Administrator may periodically volunteer to reduce all or a
portion of their fees with respect to one or more Funds. These waivers may be
terminated at any time. The Advisers and the Administrator may not seek
reimbursement of such voluntarily reduced fees at a later date. The reduction of
such fees will cause the yield of that Fund to be higher than it would be in the
absence of such reduction.
Sunstone Distribution Services, LLC (the "Distributor") acts as Distributor for
each of the Funds. The Distributor receives no compensation from the Funds under
its Distribution Agreement with the Company, but may receive compensation under
the Distribution and Service Plan.
4.DISTRIBUTION AND SERVICE PLAN
Pursuant to Rule 12b-1 under the 1940 Act, the Company has adopted a
Distribution and Service Plan (the "Plan"), under which each Fund is authorized
to pay a periodic amount representing distribution expenses calculated at an
annual rate not to exceed 0.25% of the average daily net assets of that Fund.
Such amount may be used to pay banks, broker/dealers and other institutions,
which may include the Advisers, their correspondent and affiliated banks and the
Distributor (each a "Participating Organization") for distribution and/or
shareholder service assistance pursuant to an agreement between the Distributor
and the Participating Organization. As of March 31, 1999, there are no 12b-1
Agreements with any Participating Organizations.
5.ADMINISTRATIVE SERVICES PLAN
The Company has adopted an Administrative Services Plan pursuant to which each
Fund is authorized to pay compensa-
<PAGE>
Annual Report - FIRST OMAHA FUNDS
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
March 31, 1999
tion to banks and other financial institutions, which may include the Advisers,
their correspondent and affiliated banks and the Administrator (each a "Service
Organization"). Such Service Organizations agree to provide certain ministerial,
recordkeeping and/or administrative support services for their customers or
account holders who are the beneficial or record owner of shares of that Fund.
In consideration for such services, a Service Organization receives a fee from a
Fund, computed daily and paid monthly at an annual rate of up to 0.25% of the
average daily net asset value of shares of that Fund owned beneficially or of
record by such Service Organization's customers for whom the Service
Organization provides such services. Effective November 1, 1996, the Company
entered into an agreement under the Plan with First National at an annual rate
of 0.10% of the average daily net assets serviced for each of the Small Cap
Value Fund, the Equity Fund, the Balanced Fund, the Fixed Income Fund and the
Short/Intermediate Fixed Income Fund. For the year ended March 31, 1999, fees of
$14,151, $251,787, $20,570, $76,001 and $18,657 were accrued under this
agreement, respectively, and fees of $7,077, $125,905, $10,294, $38,004 and
$9,332 were waived by First National, respectively.
6.CAPITAL STOCK
The Company is authorized to issue a total of 1,000,000,000 shares of common
stock in series with a par value of $0.00001 per share. The Board of Directors
is empowered to issue other series of the Company's shares without share-
holder approval.
Each share of stock will have a pro rata interest in the assets of the Fund to
which the stock of that series relates and will have no interest in the assets
of any other Fund.
Transactions in shares of the Funds for the year ended March 31, 1999 were as
follows:
<TABLE>
<CAPTION> SHORT/ U.S.
SMALL CAP FIXED INTERMEDIATE GOVERNMENT
VALUE GROWTH EQUITY BALANCED INCOME FIXED INCOME OBLIGATIONS
FUND FUND FUND FUND FUND FUND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 524,972 2,004,652 2,294,411 696,332 1,576,999 774,357 394,777,417
- ------------------------------------
Shares issued to holders in
reinvestment of dividends 61,549 12,688 1,743,861 133,981 459,506 100,822 154,244
- ------------------------------------
Shares redeemed (571,580) (506,879) (5,972,650) (770,810) (1,555,867) (671,178) (361,699,190)
- ------------------------------------ ---------- ----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) 14,941 1,510,461 (1,934,378) 59,503 480,638 204,001 33,232,471
- ------------------------------------ ========== =========== =========== =========== =========== =========== ===========
</TABLE>
Transactions in shares of the Funds for the year ended March 31, 1998 were as
follows:
<TABLE>
<CAPTION>
SHORT/ U.S.
SMALL CAP FIXED INTERMEDIATE GOVERNMENT
VALUE GROWTH EQUITY BALANCED INCOME FIXED INCOME OBLIGATIONS
FUND FUND FUND FUND FUND FUND FUND
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 781,847 _ 2,375,188 1,284,222 1,077,720 317,106 378,648,091
- ------------------------------------
Shares issued to holders in
reinvestment of dividends 51,971 _ 1,679,612 68,840 427,624 107,312 158,162
- ------------------------------------
Shares redeemed (200,574) _ (3,648,325) (300,447) (1,747,925) (628,537) (403,722,643)
- ------------------------------------ ----------- ----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) 633,244 _ 406,475 1,052,615 (242,581) (204,119) (24,916,390)
- ------------------------------------ ========== =========== =========== =========== =========== =========== ===========
</TABLE>
<PAGE>
FIRST OMAHA FUNDS - Annual Report
- --------------------------------------------------------------------------------
7.INVESTMENT TRANSACTIONS
The aggregate purchases and sales of securities, excluding short-term
investments, for the Funds for the year ended March 31, 1999 were as follows:
<TABLE>
<CAPTION>
SHORT/ U.S.
SMALL CAP FIXED INTERMEDIATE GOVERNMENT
VALUE GROWTH EQUITY BALANCED INCOME FIXED INCOME OBLIGATIONS
FUND FUND FUND FUND FUND FUND FUND
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C>
Purchases
U.S. Government _ _ _ $ 253,672 $ 9,417,079 $2,300,848 _
Other $4,337,596 $22,564,868 $60,222,316 7,692,416 15,809,039 3,857,040 _
- ------------------------------------------------------------------------------------------------------------------------------------
Sales
U.S. Government _ _ _ 1,813,891 10,365,125 2,524,946 _
Other 3,691,922 8,006,604 92,853,344 7,338,214 14,350,575 1,750,000 _
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
As of March 31, 1999, gross unrealized appreciation and depreciation of
investments, based on cost for federal income tax purposes of $15,279,336,
$13,709,928, $201,052,673, $23,469,482, $79,228,560, $21,091,542 and
$134,080,083, were as follows:
<TABLE>
<CAPTION>
SHORT/ U.S.
SMALL CAP FIXED INTERMEDIATE GOVERNMENT
VALUE GROWTH EQUITY BALANCED INCOME FIXED INCOME OBLIGATIONS
FUND FUND FUND FUND FUND FUND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C>
Appreciation $448,244 $1,867,644 $ 43,459,432 $1,656,057 $2,698,849 $322,669 _
- ------------------------------------
(Depreciation) (2,730,919) (1,290,564) (13,473,986) (1,395,814) (549,859) (138,221) _
- ----------------------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
Net appreciation (depreciation)
on investments $(2,282,675) $577,080 $29,985,446 $260,243 $2,148,990 $184,448 _
- ------------------------------------=========== =========== =========== =========== =========== =========== ===========
</TABLE>
For the period ended March 31, 1999, 100%, 100%, 100% and 36% of dividends paid
from net investment income, excluding short-term capital gains, qualifies for
the dividends received deduction available to corporate shareholders of the
Small Cap Value Fund, the Growth Fund, the Equity Fund and the Balanced Fund,
respectively.
<PAGE>
Annual Report - FIRST OMAHA FUNDS
- --------------------------------------------------------------------------------
Independent Auditors' Report
To the Shareholders and
Board of Directors of
First Omaha Funds, Inc.
We have audited the accompanying statements of assets and liabilities of First
Omaha Funds, Inc. (comprised, respectively, of the Small Cap Value Fund, the
Growth Fund, the Equity Fund, the Balanced Fund, the Fixed Income Fund, the
Short/Intermediate Fixed Income Fund and the U.S. Government Obligations Fund;
collectively, the "Funds"), including the schedules of portfolio investments as
of March 31, 1999, and the related statements of operations and changes in net
assets and the financial highlights for each of the periods indicated herein.
These financial statements and financial highlights are the responsibility of
the Funds' management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and financial highlights are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements and
financial highlights. Our procedures included confirmation of securities owned
as of March 31, 1999, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Funds as of March 31, 1999, and the results of their operations, changes in
their net assets and the financial highlights for each of the periods indicated
herein, in conformity with generally accepted accounting principles.
KPMG LLP
Omaha, Nebraska
April 16, 1999
<PAGE>
INVESTMENT ADVISER AND CUSTODIAN
First National Bank of Omaha
Attention: Trust Division
1620 Dodge
Omaha, Nebraska 68102
ADMINISTRATOR
Sunstone Financial Group, Inc.
207 E. Buffalo St., Suite 400
Milwaukee, Wisconsin 53202
DISTRIBUTOR
Sunstone Distribution Services, LLC
207 E. Buffalo St., Suite 400
Milwaukee, Wisconsin 53202
LEGAL COUNSEL
Cline, Williams, Wright, Johnson & Oldfather
One Pacific Place
1125 S. 103rd St., Suite 720
Omaha, Nebraska 68124-1071
AUDITORS
KPMG Peat Marwick LLP
Two Central Park Plaza, Suite 1501
Omaha, Nebraska 68102
This report has been prepared for the general information of First Omaha Funds
shareholders. It is not authorized for distribution to prospective investors
unless accompanied or preceded by an effective First Omaha Funds prospectus. The
prospectus contains more complete information about First Omaha Funds'
investment objectives, management fees and expenses, risks and operating
policies. Please read the prospectus carefully before investing or sending
money.
- -----------------------------------
For more INFORMATION
call 1-800-OMAHA-03
or write to:
First Omaha Funds
P.O. Box 219022
Kansas City, Missouri 64121-9022
- -----------------------------------
