UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number _______811-05631_____________________
__________First Pacific Mutual Fund, Inc.__________
(Exact name of registrant as specified in charter)
2756 Woodlawn Drive, Suite #6-201
___________Honolulu, HI 96822-1856__________
(Address of principal executive offices) (Zip code)
Audrey C. Talley
Drinker Biddle & Reath LLP
One Logan Square
18th and Cherry Streets
__________Philadelphia, PA 19103-6996__________
(Name and address of agent for service)
Registrant's telephone number, including area
code: 808-988-8088
Date of fiscal year end: September 30, 2003
Date of reporting period: September 30, 2003
Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
Item 1. Reports to Stockholders.
November 15, 2003
Dear Fellow Shareholder,
As we begin our 16th year of operations, I'd like to personally assure our
shareholders that our Hawaii Municipal and Hawaii Intermediate Funds have not
been involved in any of the unethical practices that have been so prevalent in
the news. Our Funds always strive to uphold the highest ethical standards.
In these uncertain financial times, isn't it comforting to know that you
are invested in the Hawaii Municipal Fund and the Hawaii Intermediate Fund? As
shareholders of the Funds, you are earning tax-free income* and supporting local
projects designed to enrich our community. The money raised through municipal
bonds is commonly used to build schools, hospitals, roads, airports, harbors,
and water and electrical systems that serve to create jobs and improve the
quality of life here in our islands. We are pleased to provide you with our
Funds' 2003 Annual Report.
Continuing weakness in the U.S. economy coupled with an accommodating
Federal Reserve monetary policy kept interest rates at relatively low levels.
The primary investment strategy of the Hawaii Municipal Fund was to purchase
high quality long-term Hawaii municipal bonds. The primary investment strategy
of the Hawaii Intermediate Fund was to purchase high quality three to ten year
Hawaii municipal bonds. The past year's performance for these Funds, which is
presented in this Annual Report, was primarily a result of the implementation of
these strategies in the current investing conditions.
We are proud to report that as a Hawaii resident, 100% of the dividends
earned in 2003 were both state and federal tax-free.* There were no capital gain
distributions for the Hawaii Intermediate Fund in 2003. There will be a
long-term capital gain distribution in 2003 to shareholders of the Hawaii
Municipal Fund.
If you have any questions about this Annual Report or would like us to
provide information about the Funds to your family or friends, please call us at
988-8088.
Thank you for your business as well as the many referrals. On behalf of the
staff and management of the Funds, I would like to extend to you and your family
best wishes for a safe and happy holiday season.
Warmest Aloha,
/s/ Terrence K.H. Lee
Terrence K.H. Lee
President and CEO First Pacific Securities, Inc., Distributor/Member SIPC
A description of the of the policies and procedures that the Funds use to
determine how to vote proxies relating to portfolio securities is available
without charge, upon request, by calling (808) 988-8088.
*Some income may be subject to the federal alternative minimum tax for certain
investors. Before investing, read the prospectus carefully for complete
information including all fees and expenses. Call 988-8088 for a free
prospectus. Fund's yields, share prices and investment returns fluctuate so that
you may receive more or less than your original investment upon redemption. Past
performance is no guarantee of future results. Hawaii Municipal Fund and Hawaii
Intermediate Fund are series of First Pacific Mutual Fund, Inc.
Hawaii Municipal Fund Investor Class
$10,000 Investment in Fund Compared to
Lehman Muni Bond Index
AVERAGE ANNUAL TOTAL RETURN
1 YEAR 5 YEAR 10 YEAR
3.98% 4.70% 4.84%
Plot Points
Hawaii Municipal Fund Investor Class Lehman Muni Bond Index
09/30/93 $10,000 $10,000
09/30/94 $ 9,791 $ 9,831
09/30/95 $10,617 $10,931
09/30/96 $11,214 $11,069
09/30/97 $12,009 $12,712
09/30/98 $12,752 $13,820
09/30/99 $12,745 $13,641
09/30/00 $13,220 $13,570
09/30/01 $14,291 $14,982
09/30/02 $15,432 $16,320
09/30/03 $16,046 $16,954
The graph above compares the increase in value of a $10,000 investment in the
Hawaii Municipal Fund Investor Class with the performance of the Lehman Muni
Bond Index. The objective of the graph is to permit you to compare the
performance of the Fund with the current market and to give perspective to
market conditions and investment strategies and techniques pursued by the
investment manager that materially affected the performance of the Fund. The
Lehman Muni Bond Index reflects reinvestment of dividends but not the expenses
of the Fund. The return and principal value of an investment in the Fund will
fluctuate so that an investor's shares, when redeemed, may be worth more or less
than their original cost. Past performance is not indicative of future results.
The total returns are before taxes on distributions or redemptions of Fund
shares.
Hawaii Intermediate Fund
$10,000 Investment in Fund Compared to
Lehman Muni Bond Index
AVERAGE ANNUAL TOTAL RETURN
1 YEAR 5 YEAR 10 YEAR
2.77% 4.17% 4.76%
Plot Points
Hawaii Intermediate Fund Lehman Muni Bond Index
07/07/94 $10,000 $10,000
09/30/94 $10,112 $10,070
09/30/95 $10,909 $11,197
09/30/96 $11,339 $11,943
09/30/97 $11,925 $13,021
09/30/98 $12,530 $14,155
09/30/99 $12,716 $13,972
09/30/00 $13,212 $13,899
09/30/01 $14,217 $15,345
09/30/02 $14,965 $16,715
09/30/03 $15,371 $17,365
The graph above compares the increase in value of a $10,000 investment in the
Hawaii Intermediate Fund with the performance of the Lehman Muni Bond Index. The
objective of the graph is to permit you to compare the performance of the Fund
with the current market and to give perspective to market conditions and
investment strategies and techniques pursued by the investment manager that
materially affected the performance of the Fund. The Lehman Muni Bond Index
reflects reinvestment of dividends but not the expenses of the Fund. The return
and principal value of an investment in the Fund will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than their original
cost. Past performance is not indicative of future results. The total returns
are before taxes on distributions or redemptions of Fund shares.
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors and Shareholders
First Pacific Mutual Fund, Inc.
Honolulu, Hawaii
We have audited the accompanying statements of assets and liabilities of Hawaii
Municipal Fund and Hawaii Intermediate Fund (each a series of shares of First
Pacific Mutual Fund, Inc.) including the schedules of investments, as of
September 30, 2003, and the related statements of operations for the year then
ended, the statements of changes in net assets for each of the two years in the
period then ended and the financial highlights for the periods indicated
thereon. 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
audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of September 30, 2003, by correspondence with the custodian.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Hawaii
Municipal Fund and Hawaii Intermediate Fund as of September 30, 2003, the
results of their operations for the year then ended, the changes in their net
assets for each of the two years in the period then ended and the financial
highlights for each of the periods indicated thereon, in conformity with
accounting principles generally accepted in the United States of America.
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
October 31, 2003
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
<table>
<caption>
HAWAII MUNICIPAL FUND
SCHEDULE OF INVESTMENTS
September 30, 2003
- -------------------------------------------------------------------------------------------------------------------
Value
Par Value (Note 1 (A))
HAWAII MUNICIPAL BONDS - 94.52%
Hawaii County
General Obligation Bonds - 4.87%
<s> <c> <c> <c>
$ 300,000 5.600%, 05/01/11 $ 347,007
1,000,000 5.625%, 05/15/18 1,114,070
1,000,000 5.625%, 05/15/19 1,109,210
1,025,000 5.125%, 07/15/20 1,083,148
1,250,000 5.125%, 07/15/21 1,310,775
1,000,000 5.000%, 07/15/22 1,039,950
1,000,000 5.000%, 07/15/23 1,036,750
----------------
7,040,910
Hawaii State
General Obligation Bonds - 2.27%
135,000 6.000%, 10/01/08 158,232
120,000 5.250%, 04/01/11 132,110
300,000 6.250%, 01/01/14 319,425
1,580,000 5.125%, 02/01/22 1,648,967
1,000,000 4.900%, 09/01/23 1,021,230
----------------
3,279,964
Airport Systems Revenue Bonds - 4.54%
2,000,000 8.000%, 07/01/11 2,555,720
385,000 6.900%, 07/01/12 466,739
3,000,000 6.500%, 07/01/14 3,538,260
----------------
6,560,719
COP #1 Capital District - 2.47%
1,000,000 5.000%, 05/01/16 1,081,960
555,000 5.000%, 05/01/18 592,446
1,750,000 5.500%, 05/01/20 1,894,130
----------------
3,568,536
Department of Budget & Finance
Special Purpose Revenue Bonds
Hawaiian Electric Company, Inc. - 16.99%
4,000,000 5.750%, 12/01/18 4,454,040
500,000 5.700%, 07/01/20 542,485
750,000 6.600%, 01/01/25 799,575
625,000 6.200%, 05/01/26 686,581
600,000 5.875%, 12/01/26 639,024
10,050,000 5.650%, 10/01/27 10,796,213
5,920,000 6.200%, 11/01/29 6,656,034
----------------
24,573,952
HAWAII MUNICIPAL FUND
SCHEDULE OF INVESTMENTS - (Continued)
September 30, 2003
- -------------------------------------------------------------------------------------------------------------------
Value
Par Value (Note 1 (A))
Kapiolani Health Care System - 7.45%
$ 470,000 6.300%, 07/01/08 $ 482,577
1,500,000 6.000%, 07/01/11 1,580,715
1,780,000 6.400%, 07/01/13 1,827,330
1,515,000 6.400%, 07/01/13 1,629,019
700,000 6.200%, 07/01/16 731,612
2,720,000 6.000%, 07/01/19 2,766,458
1,705,000 6.250%, 07/01/21 1,756,866
----------------
10,774,577
Kuakini Health Care System - 3.22%
1,570,000 6.300%, 07/01/22 1,600,442
3,000,000 6.375%, 07/01/32 3,050,850
----------------
4,651,292
The Queen's Health Systems - 4.74%
300,000 5.200%, 07/01/04 308,133
1,020,000 6.000%, 07/01/20 1,062,514
5,310,000 5.750%, 07/01/26 5,484,964
----------------
6,855,611
St. Francis Medical Center - 1.94%
2,765,000 6.500%, 07/01/22 2,799,922
----------------
Wilcox Hospital - 2.72%
250,000 4.800%, 07/01/04 254,615
500,000 4.900%, 07/01/05 523,140
800,000 5.250%, 07/01/13 824,192
2,245,000 5.350%, 07/01/18 2,220,013
115,000 5.500%, 04/01/28 112,107
----------------
3,934,067
Harbor Capital Improvements Revenue Bonds - 0.98%
300,000 6.250%, 07/01/15 315,531
500,000 5.500%, 07/01/19 544,835
520,000 5.750%, 07/01/29 556,249
----------------
1,416,615
Highway Revenue Bonds - 3.77%
1,000,000 5.600%, 07/01/14 1,111,150
1,100,000 5.000%, 07/01/16 1,185,327
1,000,000 5.375%, 07/01/19 1,090,040
2,000,000 5.000%, 07/01/22 2,065,960
----------------
5,452,477
HAWAII MUNICIPAL FUND
SCHEDULE OF INVESTMENTS - (Continued)
September 30, 2003
- -------------------------------------------------------------------------------------------------------------------
Value
Par Value (Note 1 (A))
Housing Authority Single Family
Mortgage Special Purpose Revenue Bonds - 7.61%
$ 410,000 5.550%, 07/01/07 $ 424,182
400,000 7.000%, 07/01/11 403,836
150,000 5.700%, 07/01/13 154,643
465,000 6.900%, 07/01/16 469,524
5,000 6.750%, 07/01/20 5,000
540,000 7.100%, 07/01/24 545,308
2,235,000 5.900%, 07/01/27 2,288,662
2,305,000 5.900%, 07/01/27 2,360,458
1,330,000 5.750%, 07/01/30 1,371,124
2,925,000 5.375%, 07/01/33 2,992,334
----------------
11,015,071
Department of Hawaiian Homelands - 2.74%
900,000 4.050%, 07/01/06 956,961
1,355,000 4.100%, 07/01/07 1,446,002
1,465,000 4.250%, 07/01/09 1,565,704
----------------
3,968,667
Housing Authority Multi-Family
Mortgage Revenue Bonds - 2.39%
1,000,000 5.700%, 07/01/18 1,015,160
2,365,000 6.100%, 07/01/30 2,446,096
----------------
3,461,256
Public Housing Authority Bonds - 0.18%
250,000 5.750%, 08/01/04 259,868
----------------
University Faculty Housing - 1.71%
800,000 5.650%, 10/01/16 870,272
1,500,000 5.700%, 10/01/25 1,600,410
----------------
2,470,682
University of Hawaii - Revenue Bonds - 2.84%
4,000,000 5.125%, 07/15/13 4,103,520
----------------
HAWAII MUNICIPAL FUND
SCHEDULE OF INVESTMENTS - (Continued)
September 30, 2003
- -------------------------------------------------------------------------------------------------------------------
Value
Par Value (Note 1 (A))
Honolulu City & County
Board of Water Supply - 2.47%
$ 200,000 5.000%, 07/01/04 $ 206,068
500,000 5.800%, 07/01/16 565,575
750,000 5.800%, 07/01/21 848,362
1,890,000 5.250%, 07/01/31 1,957,927
----------------
3,577,932
Waste Water System - 0.75%
1,000,000 5.250%, 07/01/18 1,084,350
----------------
General Obligation Bonds - 1.68%
200,000 7.350%, 07/01/06 231,160
105,000 5.500%, 09/01/16 119,254
2,000,000 5.250%, 03/01/28 2,085,900
----------------
2,436,314
Halawa Business Park - 0.25%
365,000 6.600%, 10/15/03 365,599
----------------
Housing Authority Multi-Family
Mortgage Revenue Bonds
Sunset Villas - 3.56%
2,955,000 5.600%, 07/20/21 3,058,425
2,000,000 5.700%, 07/20/31 2,096,760
----------------
5,155,185
Hale Pauahi - 0.29%
410,000 6.800%, 07/01/28 427,327
----------------
Maunakea Apartments - 0.66%
853,000 5.750%, 11/20/09 952,545
----------------
Waipahu Project - 3.03%
4,200,000 6.900%, 06/20/35 4,391,394
----------------
HAWAII MUNICIPAL FUND
SCHEDULE OF INVESTMENTS - (Continued)
September 30, 2003
- -------------------------------------------------------------------------------------------------------------------
Value
Par Value (Note 1 (A))
Kauai County
General Obligation Bonds - 5.15%
$ 410,000 5.850%, 08/01/07 $ 468,851
1,280,000 5.850%, 08/01/07 1,463,731
250,000 5.900%, 02/01/10 259,062
250,000 5.900%, 02/01/11 259,062
295,000 5.900%, 02/01/12 305,694
595,000 6.250%, 08/01/19 721,741
695,000 6.250%, 08/01/22 843,042
3,065,000 5.000%, 08/01/25 3,128,476
----------------
7,449,659
Housing Authority Paanau Project - 0.98%
1,420,000 7.250%, 04/01/12 1,421,846
----------------
Maui County
General Obligation Bonds - 2.27%
235,000 5.750%, 06/01/13 264,664
500,000 5.300%, 09/01/14 547,355
500,000 5.000%, 09/01/17 531,165
1,840,000 5.000%, 03/01/20 1,935,349
----------------
3,278,533
Total Hawaii Municipal Bonds (Cost $130,120,335) 136,728,390
----------------
HAWAII MUNICIPAL FUND
SCHEDULE OF INVESTMENTS - (Continued)
September 30, 2003
- -------------------------------------------------------------------------------------------------------------------
Value
Par Value (Note 1 (A))
PUERTO RICO MUNICIPAL BONDS - 0.42%
Puerto Rico Commonwealth
General Obligation Bonds - 0.16%
$ 230,000 6.250%, 04/01/29 $ 238,600
----------------
Housing Finance Corp.
Multi-Family Mortgage Revenue Bonds - 0.26%
120,000 7.500%, 10/01/15 123,470
255,000 7.500%, 04/01/22 255,561
----------------
379,031
Total Puerto Rico Municipal Bonds (Cost $604,466) 617,631
----------------
VIRGIN ISLANDS MUNICIPAL BONDS - 0.10%
Virgin Islands
100,000 Public Finance Authority, Series A - 0.10%
7.300%, 10/01/18 132,864
----------------
Total Virgin Islands Municipal Bonds (Cost $99,625) 132,864
----------------
Total Investments (Cost $130,824,426) (a) 95.04% 137,478,885
Other Assets Less Liabilities 4.96% 7,173,587
------- ----------------
Net Assets 100.00% $ 144,652,472
======= ================
(a) Aggregate cost for federal income tax purposes is $130,789,087.
At September 30, 2003, unrealized appreciation (depreciation)
of securities for federal income tax purposes is as follows:
Gross unrealized appreciation $ 6,727,151
Gross unrealized depreciation (37,353)
-------------
Net unrealized appreciation $ 6,689,798
=============
</table>
<table>
<caption>
HAWAII INTERMEDIATE FUND
SCHEDULE OF INVESTMENTS
September 30, 2003
- -------------------------------------------------------------------------------------------------------------------
Value
Par Value (Note 1 (A))
HAWAII MUNICIPAL BONDS - 88.73%
Hawaii County
General Obligation - 3.38%
<s> <c> <c> <c>
$ 250,000 4.000%, 07/15/13 $ 258,593
-------------
Hawaii State
COP Kapolei State Office Building - 3.67%
250,000 5.250%, 05/01/13 280,590
-------------
General Obligation Bonds - 3.70%
150,000 5.900%, 10/01/06 169,302
100,000 5.250%, 07/01/12 113,402
-------------
282,704
COP #1 Capital District - 1.44%
100,000 4.750%, 05/01/07 109,848
-------------
Airport Systems Revenue Bonds - 3.45%
250,000 5.700%, 07/01/07 263,555
-------------
Department of Budget & Finance Special Purpose Revenue Bonds
Kapiolani Health Care Systems - 16.83%
200,000 5.500%, 07/01/05 212,078
1,000,000 6.400%, 07/01/13 1,075,260
-------------
1,287,338
The Queen's Health Systems - 2.69%
200,000 5.200%, 07/01/04 205,422
-------------
Wilcox Hospital - 3.33%
250,000 4.800%, 7/01/04 254,615
-------------
Hawaiian Homelands Department - 3.48%
250,000 4.050%, 07/01/06 265,823
-------------
Highway & Transportation Authority - 3.93%
275,000 5.000%, 07/01/06 300,855
-------------
Housing Authority
Single Family Mortgage Special
Purpose Revenue Bond - 8.20%
300,000 4.800%, 07/01/07 320,514
295,000 4.650%, 07/01/12 307,024
-------------
627,538
Public Housing Authority Bonds - 2.20%
163,000 5.550%, 07/01/07 168,638
-------------
University Faculty Housing - 5.15%
380,000 4.750%, 10/01/04 393,874
-------------
HAWAII INTERMEDIATE FUND
SCHEDULE OF INVESTMENTS - (Continued)
September 30, 2003
- -------------------------------------------------------------------------------------------------------------------
Value
Par Value (Note 1 (A))
University of Hawaii
University Revenue Bonds - 4.13%
$ 300,000 4.300%, 07/15/13 $ 316,143
-------------
Honolulu City & County
Board of Water Supply - 4.00%
200,000 5.000%, 07/01/04 206,068
100,000 0.900%, 07/01/31 100,000
-------------
306,068
General Obligation Bonds - 5.40%
100,000 5.000%, 07/01/09 112,669
170,000 4.850%, 02/01/10 187,173
100,000 5.375%, 09/01/12 113,151
-------------
412,993
Waste Water Revenue - 3.01%
200,000 5.500%, 07/01/11 230,582
-------------
Multi-Family Mortgage Special Purpose Revenue Bond - 2.29%
157,000 5.750%, 11/20/09 175,322
-------------
Kauai County
General Obligation Bonds - 1.39%
100,000 4.550%, 08/01/05 106,206
-------------
Maui County
General Obligation Bonds - 7.06%
300,000 4.650%, 03/01/07 328,266
200,000 4.250%, 03/01/12 211,440
-------------
539,706
Total Hawaii Municipal Bonds (Cost $6,534,884) 6,786,413
-------------
Total Investments (Cost $6,534,884) (a) 88.73% 6,786,413
Other Assets Less Liabilities 11.27% 862,238
------- -------------
Net Assets 100.00% $ 7,648,651
======= =============
(a)Aggregate cost for federal income tax purposes is $6,534,884.
At September 30, 2003, unrealized appreciation (depreciation)
of securities for federal income tax purposes is as follows:
Gross unrealized appreciation $ 266,528
Gross unrealized depreciation (14,999)
-----------
Net unrealized appreciation $ 251,529
===========
</table>
<table>
<caption>
HAWAII MUNICIPAL FUND
HAWAII INTERMEDIATE FUND
STATEMENT OF ASSETS AND LIABILITIES
September 30, 2003
- -------------------------------------------------------------------------------------------------------------------
Municipal Intermediate
Fund Fund
<s> <c> <c>
ASSETS
Investments at market value (identified cost
$130,824,426 and $6,534,884 respectively) (Note 1 (A)) $ 137,478,885 $ 6,786,413
Cash 5,484,826 744,729
Due from Manager - 8,434
Interest receivable 2,124,874 84,526
Subscriptions receivable 9,618 31,756
Other assets 6,609 945
---------------- -------------
Total assets 145,104,812 7,656,803
---------------- -------------
LIABILITIES
Investment securities purchased 71,400 -
Distributions payable 160,121 3,872
Redemptions payable 86,053 -
Management fee payable 62,166 2,625
Distribution plan payable 18,270 -
Administration fee payable 2,436 131
Shareholder servicing fee payable 12,180 -
Transfer agent fee payable 6,870 379
Accrued expenses 32,844 1,145
---------------- -------------
Total liabilities 452,340 8,152
---------------- -------------
NET ASSETS $ 144,652,472 $ 7,648,651
================ =============
NET ASSETS, INVESTOR CLASS SHARES
Net assets
(Applicable to 12,646,704 and 1,455,229 shares outstanding,
$.01 par value, 20,000,000 shares authorized) $ 141,837,997 $ 7,648,651
================ =============
NET ASSET VALUE, OFFERING AND REPURCHASE
PRICE PER SHARE, Investor Class Shares $11.22 $ 5.26
====== =======
INSTITUTIONAL CLASS SHARES *
Net assets
(Applicable to 250,733 shares outstanding,
$.01 par value, 20,000,000 shares authorized) $ 2,814,475
================
NET ASSET VALUE, OFFERING AND REPURCHASE
PRICE PER SHARE, Institutional Class Shares $11.23
======
NET ASSETS
At September 30, 2003, net assets consisted of:
Paid-in capital $ 137,844,938 $ 7,402,669
Undistributed net investment income 35,339 -
Accumulated net realized gain (loss) on investments 117,736 (5,547)
Net unrealized appreciation 6,654,459 251,529
---------------- -------------
$ 144,652,472 $ 7,648,651
================ =============
* Commencement of Operations October 22, 2002.
HAWAII MUNICIPAL FUND
HAWAII INTERMEDIATE FUND
STATEMENT OF OPERATIONS
For the year ended September 30, 2003
- -------------------------------------------------------------------------------------------------------------------
Municipal Intermediate
Fund Fund
INVESTMENT INCOME
Interest income $ 7,196,109 $ 236,492
------------- ----------
Expenses
Management fee (Note 2) 693,103 33,136
Distribution costs (Notes 2 and 3) 204,767 -
Transfer agent fees (Note 2) 85,084 3,966
Shareholder services (Note 2) 136,509 -
Administration fee (Note 2) 27,300 1,322
Accounting fees 92,136 6,982
Legal and audit fees 67,213 7,659
Printing 20,648 1,752
Miscellaneous 7,483 1,530
Portfolio pricing fee 8,338 433
Custodian fees 25,067 1,555
Insurance 16,603 2,229
Registration fees 9,517 1,088
Directors fees 1,600 1,786
------------- ----------
Total expenses 1,395,368 63,438
Fee reductions (Note 5) (25,740) (1,612)
Expense reimbursed or waived (Note 2) - (15,126)
------------- ----------
Net expenses 1,369,628 46,700
------------- ----------
Net investment income 5,826,481 189,792
------------- ----------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net realized gain from security transactions 643,796 2,647
Change in unrealized appreciation of investments (1,033,771) (21,610)
------------- ----------
Net loss on investments (389,975) (18,963)
------------- ----------
Net increase in net assets
RESULTING FROM OPERATIONS $ 5,436,506 $ 170,829
============= ==========
- -------------------------------------------------------------------------------------------------------------------
See accompanying notes to financial statements.
</table>
<table>
<caption>
HAWAII MUNICIPAL FUND
STATEMENT OF CHANGES IN NET ASSETS
- -------------------------------------------------------------------------------------------------------------------
For The Year Ended For The Year Ended
September 30, 2003 September 30, 2002
--------------------- -----------------
<s> <c> <c>
INCREASE (DECREASE) IN NET ASSETS FROM
Operations
Net investment income $ 5,826,481 $ 5,599,590
Net realized gain on investments 643,796 91,824
Increase (decrease) in unrealized appreciation (depreciation) of investments (1,033,771) 4,184,801
------------- ------------
Net increase in net assets resulting from operations 5,436,506 9,876,215
Distributions to shareholders from:
Net investment income
Investor Class ($.47 and $.48 per share, respectively) (5,701,321) (5,551,684)
Institutional Class ($.47 and $0 per share, respectively*) (94,949) -
Capital gains
Investor Class ($0 and $0 per share, respectively) (6,771) -
Institutional Class ($0 and $0 per share, respectively) (134) -
Capital share transactions (a)
Increase in net assets resulting from capital share transactions 10,038,432 9,185,416
------------- ------------
Total increase in net assets 9,671,763 13,509,947
NET ASSETS
Beginning of year 134,980,709 121,470,762
------------- ------------
End of year (including undistributed net investment income of $35,339 and $29,499, respectively) $ 144,652,472 $134,980,709
============= ============
(a) Summary of capital share activity follows:
Investor Class b Institutional Class Investor Class
For The Year Ended For The Period Ended For The Year Ended
September 30, 2003 September 30, 2003* September 30, 2002
---------------------- ------------------------ ----------------------
Shares Value hares Value Shares Value
--------- ----------- ------- ------------ --------- ------------
Shares sold 1,624,327 $18,115,962 394,018 $ 4,350,601 1,616,456 $ 17,615,249
Shares issued on reinvestment of distributions 356,615 3,973,325 138 1,546 346,741 3,783,657
--------- ----------- --------- ------------ ---------- -----------
1,980,942 22,089,287 394,156 4,352,147 1,963,197 21,398,906
Shares redeemed (1,332,147) (14,817,427) (143,423) (1,585,575) (1,120,474) (12,213,490)
--------- ----------- --------- ------------ --------- -----------
Net increase 648,795 $ 7,271,860 250,733 $ 2,766,572 842,723 $ 9,185,416
========= =========== ========= ============ ========= ===========
* Commencement of operation October 22, 2002
</table>
<table>
<caption>
- ------------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to financial statements.
HAWAII INTERMEDIATE FUND
STATEMENT OF CHANGES IN NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------------------
For The Year Ended For The Year Ended
September 30, 2003 September 30, 2002
------------------- -----------------------
<s> <c> <c>
INCREASE (DECREASE) IN NET ASSETS FROM
Operations
Net investment income $ 189,792 $ 178,027
Net realized gain (loss) on investments 2,647 (571)
Increase (decrease) in unrealized appreciation (depreciation) of investments (21,610)
----------- 128,125
Net increase in net assets resulting from operations 170,829 305,581
Distributions to shareholders from:
Net investment income
($.15 and $.16 per share, respectively) (189,792) (178,027)
Capital share transactions (a)
Increase in net assets resulting from capital share transactions 1,322,403 1,274,121
----------- ------------
Total increase in net assets 1,303,440 1,401,675
NET ASSETS
Beginning of year 6,345,211 4,943,536
----------- ------------
End of year $ 7,648,651 $ 6,345,211
=========== ============
(a) Summary of capital share activity follows:
For The Year Ended For The Year Ended
September 30, 2003 September 30, 2002
------------------- ------------------
Shares Value Shares Value
------ ----- ------ -----
Shares sold 646,984 $ 3,396,257 425,469 $ 2,195,419
Shares issued on reinvestment of distributions 29,924 156,913 28,068 145,034
--------- ----------- --------- ------------
676,908 3,553,170 453,537 2,340,453
Shares redeemed (425,910) (2,230,767) (206,200) (1,066,332)
--------- ----------- --------- ------------
Net increase 250,998 $ 1,322,403 247,337 $ 1,274,121
========= =========== ========= ============
- ------------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to financial statements.
</table>
<table>
<caption>
HAWAII MUNICIPAL FUND
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout each period)
INVESTOR CLASS Institutional CLASS
For The Year Ended For The Period Ended INVESTOR CLASS
September 30, 2003 September 30, 2003** Years Ended September 30,
-------------------- -------------------- ----------------------------------------
<s> <c> <c> <c>
2002(b) 2001 2000 1999
------- ---- ---- ----
Net asset value
Beginning of period $11.25 $ 10.91 $ 10.89 $10.55 $ 10.68 $11.23
------ ------- ------- ------ ------- ------
Income from investment operations
Net investment income .47 .47 .48 .50 .52 .55
Net gain (loss) on securities
(both realized and unrealized) (.03) .32 .36 .34 (.13) (.55)
------ -------- ------- ------ ------ ------
Total from investment operations .44 .79 .84 .84 - -
------ -------- ------- ------ ------ ------
Less distributions
Dividends from net investment income (.47) (.47) (.48) (.50) (.52) (.55)
Distributions from capital gains - *** - *** - - - -
------ ------- ------- ------ ------ ------
Total distributions (.47) (.47) (.48) (.50) (.52) (.55)
------ -------- ------- ------ ------ ------
End of period $11.22 $ 11.23 $ 11.25 $10.89 $ 10.55 $10.68
====== ======== ======= ====== ====== ======
Total return 3.98% 7.36% 7.92% 8.11% 3.79% (.07)%
Ratios/Supplemental Data
Net assets, end of period (in 000's) $141,838 $2,814 $134,980 $121,471 $111,864 $116,449
Ratio of expenses to average net assets (a) 1.01% .76%* 1.02% 1.03% .98% .94%
Ratio of net investment income to
average net assets 4.22% 4.47%* 4.42% 4.64% 4.83% 4.88%
Portfolio turnover 16.40% 16.40% 13.06% 22.06% 20.96% 10.83%
* Annualized
** Commenced Operations October 22, 2002
*** Less than $.01 per share
(a) Ratios of expenses to average net assets after the reduction of custodian
fees and other expenses under a custodian arrangement for the Investor
Class were .99%, .96%, .94%, .91% and .87%, for the years ended September
30, 2003, 2002, 2001, 2000, and 1999, respectively. Ratio of expenses to
average net assets after the reduction of custodian fees and other expenses
under a custodian arrangement for the Institutional Class was .74% for the
period ended September 30, 2003.
(b) As required, effective October 1, 2001, the Fund has adopted the provisions
of the AICPA Audit and Accounting Guide for Investment Companies and began
amortizing market discount on debt securities. Had the Fund not amortized
market discount as an adjustment to interest income, the net investment
income to average net assets would have been 4.38%. Per share and ratios
prior to October 1, 2001 have not been restated to reflect this change in
presentation.
- ------------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to financial statements.
</table>
<table>
<caption>
HAWAII INTERMEDIATE FUND
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout each year)
For The Year Ended Years Ended September 30,
September 30, 2003 2002 2001 2000 1999
------------------ ---- ----- ---- ----
<s> <c> <c> <c> <c> <c>
Net asset value
Beginning of year $5.27 $ 5.17 $5.01 $ 5.03 $5.18
----- ------ ----- ------- -----
Income from investment operations
Net investment income .15 .16 .21 .21 .22
Net gain (loss) on securities (both realized and unrealized) (.01) .10 .16 (.02) (.14)
----- ------ ----- ------- -----
Total from investment operations .14 .26 .37 .19 .08
----- ------ ----- ------- -----
Less distributions
Dividends from net investment income (.15) (.16) (.21) (.21) (.22)
Distributions from capital gains - - - - (.01)
----- ------ ----- ------- -----
Total distributions (.15) (.16) (.21) (.21) (.23)
----- ------ ----- ------- -----
End of year $5.26 $ 5.27 $5.17 $ 5.01 $5.03
===== ====== ===== ======= =====
Total return 2.77% 5.15% 7.61% 3.97% 1.51%
Ratios/Supplemental Data
Net assets, end of year (in 000's) $7,647 $6,345 $4,944 $4,519 $5,493
Ratio of expenses to average net assets
Before expense reimbursements .96% .84% .88% .85% .98%
After expense reimbursements .73% (a) .74% (a) .88% (a) .85%(a) .89%(a)
Ratio of net investment income to average net assets
Before expense reimbursements 2.61% 3.15% 4.12% 4.07% 4.07%
After expense reimbursements 2.86% 3.15% 4.12% 4.07% 4.18%
Portfolio turnover 20.02% 18.29% 19.28% 4.22% 3.32%
(a) Ratios of expenses to average net assets after the reduction of custodian
fees and other expenses under a custodian arrangement were .71%, .69%,
.79%, .77% and .75% for the years ended September 30, 2003, 2002, 2001,
2000 and 1999, respectively.
- ------------------------------------------------------------------------------------------------------------------------------------
</table>
HAWAII MUNICIPAL FUND
HAWAII INTERMEDIATE FUND
NOTES TO FINANCIAL STATEMENTS
September 30, 2003
- --------------------------------------------------------------------------------
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Hawaii Municipal Fund and Hawaii Intermediate Fund ("Funds") are each a
series of shares of First Pacific Mutual Fund, Inc. which is registered
under the Investment Company Act of 1940, as a non-diversified open-end
management company. Hawaii Municipal Fund is authorized to offer two
Classes of Shares: Investor Shares and Institutional Shares. The Classes
offer different distribution charges and shareholder servicing fees which
may affect performance.
The investment objective of the Funds is to provide a high level of current
income exempt from federal and Hawaii state income taxes, consistent with
preservation of capital and prudent investment management. The Funds seek
to achieve their objective by investing primarily in municipal securities
which pay interest that is exempt from federal and Hawaii income taxes.
The Funds are subject to the risk of price fluctuation of the municipal
securities held in their portfolios which is generally a function of the
underlying credit rating of an issuer, the maturity length of the
securities, the securities' yield, and general economic and interest rate
conditions.
Since the Funds invest primarily in obligations of issuers located in
Hawaii, the marketability and market value of these obligations may be
affected by certain Hawaiian constitutional provisions, legislative
measures, executive orders, administrative regulations, voter initiatives,
and other political and economic developments. If any such problems arise,
they could adversely affect the ability of various Hawaiian issuers to meet
their financial obligation.
In preparing financial statements in conformity with accounting principles
generally accepted in the United States of America, management makes
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements, as well as the
reported amounts of income and expenses during the reported period. Actual
results could differ from those estimates.
(A) SECURITY VALUATION
Portfolio securities, which are fixed income securities, are valued by
an independent pricing service using market quotations, prices
provided by market-makers, or estimates of market values obtained from
yield data relating to instruments or securities with similar
characteristics, in accordance with procedures established in good
faith by the Board of Directors. Securities with remaining maturities
of 60 days or less are valued on the amortized cost basis as
reflecting fair value. All other securities are valued at their fair
value as determined in good faith by the Board of Directors.
(B) FEDERAL INCOME TAXES
It is the Funds' policy to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and
to distribute their taxable income, if any, to their shareholders.
Therefore, no federal income tax provision is required. At September
30, 2003, the Hawaii Intermediate Fund had an unused capital loss
carryforward of $4,475 which expires in 2010.
<table>
HAWAII MUNICIPAL FUND
HAWAII INTERMEDIATE FUND
NOTES TO FINANCIAL STATEMENTS - (Continued)
September 30, 2003
- ------------------------------------------------------------------------------------------------------------------------------------
(C) SECURITY TRANSACTIONS, INVESTMENT INCOME AND DISTRIBUTIONS TO
SHAREHOLDERS
Security transactions are recorded on the trade date. Interest income
is recorded on the accrual basis. Bond discounts and premiums are
amortized using the interest method. Distributions to shareholders are
declared daily and reinvested or paid in cash monthly.
The tax character of distributions paid during the years ended
September 30, 2003 and 2002 were as follows:
Exempt- Long-Term
Interest Ordinary Capital Total
Dividends Income Gains Distributions
<s> <c> <c> <c> <c>
Hawaii Municipal Fund
2003 $ 5,796,270 $ - $ 6,905 $ 5,803,175
2002 $ 5,551,684 $ - $ - $ 5,551,684
Hawaii Intermediate Fund
2003 $ 188,686 $1,106 $ - $ 189,792
2002 $ 177,791 $ 236 $ - $ 178,027
The tax character of distributable earnings at September 30, 2003
were as follows:
Undistributed Post Unrealized Total
Ordinary Undistributed Capital Loss October Gain/ Distributable
Income Capital Gains Carryforwards Loss* (Loss)** Earnings
------------- -------------- ------------- ------- ---------- ------------
Hawaii
Municipal Fund $ - $ 117,736 $ - $ - $ 6,689,798 $ 6,807,534
Intermediate Fund $ - $ - $ (4,475) $ (1,072) $ 251,529 $ 245,982
* Under the current tax law capital losses realized after October
31 and prior to the Fund's fiscal year end may be deferred as
occurring on the first day of the following fiscal year.
** The difference between book basis and tax basis unrealized
appreciation is attributable to market discount on debt
securities.
Accounting principles generally accepted in the United States of
America require that certain components of net assets be reclassified
between financial and tax reporting. These reclassifications have no
effect on net assets or net asset value per share. For the year ended
September 30, 2003, the Hawaii Municipal Fund increased realized gain
(loss) by $24,371 and decreased undistributed net investment income
$24,371.
</table>
HAWAII MUNICIPAL FUND
HAWAII INTERMEDIATE FUND
NOTES TO FINANCIAL STATEMENTS - (Continued)
September 30, 2003
- --------------------------------------------------------------------------------
(2) INVESTMENT MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
First Pacific Corporation ("FPC") provides the Funds with management and
administrative services pursuant to a management agreement and
administrative services agreement. In accordance with the terms of the
management agreement and the administrative services agreement, FPC
receives compensation at the annual rate of .50% and up to .05% of each
Fund's average daily net assets, respectively. For the year ended September
30, 2003, FPC voluntarily waived certain management fees in the amount of
$15,136 for the Hawaii Intermediate Fund.
The Funds' distributor, First Pacific Securities, Inc. ("FPS"), a
wholly-owned subsidiary of FPC, received $204,767 and $0 for costs incurred
in connection with the sale of Hawaii Municipal Fund's shares and Hawaii
Intermediate Fund's shares, respectively (See Note 3).
First Pacific Recordkeeping, Inc. ("FPR"), a wholly-owned subsidiary of
FPC, serves as the transfer agent for the Funds. In accordance with the
terms of the transfer agent agreement, FPR receives compensation at the
annual rate of .06% of each Fund's average daily net assets. FPR also
provides the Hawaii Municipal Fund with certain clerical, bookkeeping and
shareholder services pursuant to a service agreement approved by the Fund's
directors. As compensation for these services FPR receives a fee, computed
daily and payable monthly, at an annualized rate of .10% of average daily
net assets.
Certain officers and directors of the Funds are also officers of FPC, FPS
and FPR.
(3) DISTRIBUTION COSTS
The Funds' Board of Directors, including a majority of the Directors who
are not "interested persons" of the Funds, as defined in the Investment
Company Act of 1940, adopted a distribution plan pursuant to Rule 12b-1 of
the Act. The Plan regulates the manner in which a regulated investment
company may assume costs of distributing and promoting the sales of its
shares.
The Plan provides that the Funds may incur certain costs, which may not
exceed .25% per annum of the Funds' average daily net assets, for payment
to the distributor for items such as advertising expenses, selling
expenses, commissions or travel, reasonably intended to result in sales of
shares of the Funds.
(4) PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities aggregated $28,039,464 and $22,311,315,
respectively, for the Hawaii Municipal Fund. Purchases and sales of
securities for the Hawaii Intermediate Fund aggregated $2,831,933 and
$1,095,100, respectively.
- --------------------------------------------------------------------------------
HAWAII MUNICIPAL FUND
HAWAII INTERMEDIATE FUND
NOTES TO FINANCIAL STATEMENTS - (Continued)
September 30, 2003
- --------------------------------------------------------------------------------
(5) CUSTODY CREDITS
Under an agreement with the Custodian Bank, custodian fees are paid by
credits for cash balances. Any remaining credits are used to offset
expenses of other vendors and service providers. During the year ended
September 30, 2003, such reductions amounted to $25,740 and $1,612 for the
Hawaii Municipal Fund and the Hawaii Intermediate Fund, respectively.
Credits used to offset expenses were as follows:
Municipal Intermediate
Fund Fund
---------- -------------
Custody $ 19,789 $ 1,297
Accounting 3,153 167
Pricing 2,798 148
--------- -------
$ 25,740 $ 1,612
========= =======
<table>
<caption>
FIRST PACIFIC MUTUAL FUND, INC.________________________________________________
BOARD OF DIRECTORS AND OFFICERS (Unaudited)
Overall responsibility for management of First Pacific Mutual Fund, Inc., (the
"Fund") rests with the Board of Directors. Each Director serves during the
lifetime of the Fund and until its termination, or until the Director's death,
resignation, retirement or removal. The Directors, in turn, elect the officers
of the Fund to actively supervise its day-to-day operations. The officers have
been elected for an annual term. The following table provides information
regarding each Director and officer of the Fund.
Term of Office and Number of Portfolios
Name, Age Position & Office Length of Time Principal Occupation During in Fund Complex
and Address With the Fund Served the Past Five Years Overseen by
- ------------------------------------------------------------------------------------------------------------------------------------
<s> <c> <c> <c> <c>
Director
- --------
DISINTERESTED DIRECTORS
Clayton W.H. Chow (51) Director Unlimited Term Account Executive, Roadway Express 2
896 Puuikena Dr. 15 years Sr. Account Executive, Federal Express
Honolulu, HI 96821
Lynden M. Keala (49) Director Unlimited Term Account Executive, Xpedx 2
47-532 Hui Iwa St. 14 years (Distribution Division of International Paper)
Kaneohe, HI 96744 Account Executive, Reynolds & Reynolds
(formerly Vanier Business Forms)
Stuart S. Marlowe (63) Director Unlimited Term Owner, Surfside Sales and Marketing 2
274 Poipu Drive 15 years (Sales and marketing of music for the State of Hawaii)
Honolulu, HI 96825 Vice President/General Manager Navarre Corp.
(Distributor of music and software products.)
Karen T. Nakamura (59) Director Unlimited Term Executive Vice President, Building Industry 2
2825 S. King Street, #2001 6 years Association of Hawaii; Vice President, Wallpaper Hawaii Ltd.
Honolulu, HI 96826
Kim F. Scoggins (56) Director Unlimited Term Commercial Real Estate, Colliers Monroe Friedlander, Inc. 2
1221 Victoria Street, #3005 6 years Real Estate, 1250 Oceanside
Honolulu, HI 96814
Partners;
INTERESTED DIRECTORS
Terrence K.H. Lee (46) Director, Unlimited Term Director, President and CEO, First Pacific 2
1441 Victoria St., #901 President and CEO 15 years Corporation; President and CEO, First Pacific Securities,
Honolulu, HI 96822 Inc; President and CEO, First Pacific Recordkeeping, Inc.
OFFICERS
Charlotte A. Meyer (50) Treasurer Director, Treasurer, and Vice President, First
64-5251 Puu Nani Drive Pacific Corporation; Treasurer, and PO Box 2834 Vice
President, First Pacific Securities, Inc; Kamuela, HI 96743 Treasurer and Vice
President, First Pacific Recordkeeping, Inc.
Jean M. Chun (47) Secretary Director, Secretary, and Vice President,
2756 Woodlawn Drive, #6-201 First Pacific Corporation; Secretary and,
Honolulu, HI 96822 Vice President, First Pacific Securities, Inc; Secretary and
Vice
President, First Pacific Recordkeeping, Inc.
Nora B. Simpson (43) Assistant Secretary Vice President and Compliance Officer, First Pacific
503 Blackbird Drive Corporation, Vice President and Compliance Officer,
Hockessin, DE 19707 First Pacific Securities, Inc; Vice President and Compliance
Officer, First Pacific Recordkeeping, Inc.
There are no other Directorships held by any of the Directors. There are no
family relationships between the persons listed. Terrence K.H. Lee is an
interested person of First Pacific Mutual Fund, Inc. by virtue of his
relationship as President of the investment adviser and principal underwriter
and has had a material and professional relationship with the Fund for the last
three completed fiscal years.
Additional information about members of the Board of Directors and executive
officers is available in the Statement of Additional Information ("SAI"). To
obtain a free copy of the SAI, please call (808) 988-8088.
</table>
INVESTMENT MANAGER
First Pacific Corporation
2756 Woodlawn Drive, Suite #6-201
Honolulu, Hawaii 96822-1856
DISTRIBUTOR
First Pacific Securities, Inc.
2756 Woodlawn Drive, Suite #6-201
Honolulu, Hawaii 96822-1856
CUSTODIAN
Union Bank of California, N.A.
475 Sansome Street, 15th Floor
San Francisco, California 94111
LEGAL COUNSEL
Drinker Biddle & Reath LLP
One Logan Square
18th and Cherry Streets
Philadelphia, Pennsylvania 19103-6996
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Tait, Weller & Baker
1818 Market Street, Suite #2400
Philadelphia, Pennsylvania 19103-2108
TRANSFER AGENT
First Pacific Recordkeeping, Inc.
2756 Woodlawn Drive, Suite #6-201
Honolulu, Hawaii 96822-1856
Item 2. Code of Ethics.
(a) The registrant, as of the end of the period covered by this report, has
adopted a code of ethics that applies to the registrant's principal
executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions, regardless
of whether these individuals are employed by the registrant or a third
party.
(b) There have been no amendments, during the period covered by this report, to
a provision of the code of ethics that applies to the registrant's
principal executive officer, principal financial officer, principal
accounting officer or controller, or persons performing similar functions,
regardless of whether these individuals are employed by the registrant or a
third party, and that relates to any element of the code of ethics
description.
(c) The registrant has not granted any waivers, including an implicit waiver,
from a provision of the code of ethics that applies to the registrant's
principal executive officer, principal financial officer, principal
accounting officer or controller, or persons performing similar functions,
regardless of whether these individuals are employed by the registrant or a
third party, that relates to one or more of the items set forth in
paragraph (b) of item 2.
Item 3. Audit Committee Financial Expert
(a) As of the end of the period covered by the report, the registrant's
board of directors has determined that the registrant does not have a
financial expert serving on its audit committee. Based on the required
attributes of a financial expert, no independent member of the Board
of Directors qualifies as a financial expert.
Item 4. Principal Accountant Fee and Services.
Not applicable.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. [Reserved]
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
Not applicable.
Item 8. [Reserved]
Item 9. Controls and Procedures.
(a) The registrant's principal executive and principal financial officers, or
person performing similar functions, has concluded that the registrant's
disclosure controls and procedures (as defined in Rule 30a-3(c) under the
Investment Company Act of 1940, and amended (the "1940 Act") (17CFR
270.30a-3(c))) are effective, as of a date within 90 days of the filing
date of the report that includes the disclosure required by this paragraph,
based on their evaluation of these controls and procedures required by Rule
30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or
15d-15(b) under the Exchange Act (17CFR 240.13a-15(b) or 240.15d-15(b)).
(b) There were no changes in the registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR
270.30a-3(d)) that occurred during the registrant's last fiscal half-year
(the registrant's second fiscal half-year in the case of an annual report)
that has materially affected, or is reasonably likely to materially affect,
the registrant's internal control over financial reporting.
Item 10. Exhibits.
(a)(1) Code of Ethics that is the subject of disclosure required by Item 2
is filed herewith.
(a)(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of
2002 are furnished herewith.
(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of
2002 are furnished herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(registrant) __________First Pacific Mutual Fund, Inc.__________
-------------------------------
By (Signature and Title)* __________/s/ Terrence K.H. Lee__________
--------------------------------
Terrence K.H. Lee, President and CEO
(principal executive officer)
Date __________November 24, 2003__________
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* ___________/s/ Terrence K.H. Lee__________
------------------------------
Terrence K.H. Lee, President and CEO
(principal executive)
By (Signature and Title)* __________/s/ Charlotte A. Meyer__________
--------------------------------
Charlotte A. Meyer, Treasurer
(principal financial officer)
Date __________November 24, 2003__________
*Print the name and title of each signing officer under his or her signature.