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 811-09277
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VIKING MUTUAL FUNDS
-------------------
(Exact name of registrant as specified in charter)
116 1st St SW Suite C, MINOT, ND 58701
(Address of principal executive offices) (Zip code)
Shannon D. Radke, 116 1st St SW Suite C, MINOT, ND 58701
-----------------------------------------------------
(Name and address of agent for service)
Registrants telephone number, including area code: (701) 852-1264
--------------
Date of fiscal year end: 12/31
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Date of reporting period: 06/30/07
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ITEM 1. REPORTS TO STOCKHOLDERS.
SHAREHOLDER LETTER
Dear Fellow Shareholder:
It is a pleasure to bring you the Viking Mutual Funds Semi-Annual Report
for the six months ended June 30, 2007.
While the U.S. economy continued to grow during the first quarter of 2007,
the pace of expansion moderated from 2006. Most of the deceleration
stemmed from additional concerns related to the housing market. The
Federal Reserve held benchmark interest rates steady at 5.25% at their
March meeting. In a statement outlining its decision, the Fed indicated
it continued to focus on inflation risks and stands ready to raise
borrowing costs further if needed. Analyst views differed on the pace of
economic activity, and with it, what the Fed would do next. On average
the economy seemed to be a Goldilocks, that is, not too hot, not too
cold. Although statistics pointed to sporadic growth, the economy
remained fairly strong through the second quarter, albeit below 2006
levels. Much of the strength originated overseas as global economies
continued to surprise on the upside. Clearly expansion in China, and more
broadly in Asia, has exceeded expectations. At the same time, economic
activity in Europe has been robust. Domestically, the fully employed
labor market continues to support growth. The manufacturing sector also
rebounded from the first quarter. The source of our slowdown is
concentrated in housing, with activity down, inventories growing, and
prices falling. Continued pressure on the housing market is likely due to
higher rates, an increasing number of mortgages resetting, and tightened
lending standards resulting from deterioration in the sub-prime mortgage
market. The Federal Reserve kept interest rates steady in late June,
stating the predominant policy concern remains the risk that inflation
will fail to moderate as expected. The Fed has been on hold since June
2006 after raising the overnight Fed Funds rate by an unprecedented
quarter point 17 times in a row starting in June 2004. The policy makers
now appear to be paralyzed by uncertainty about the depth of economic
slowing on the one hand and the impact of inflation on the other.
U.S. stocks had a wild ride in the first three months of 2007, although a
glance at the negligible net changes of market benchmarks masks the depth
of the turmoil. For the quarter, the Dow ended down 0.87%, while the S&P
500 ended up 0.18% and the NASDAQ closed up 0.26%. Despite increased
volatility and fears of decelerating earnings growth, both of which would
normally direct investors toward the relative safety of large-cap stocks,
small-cap stocks outperformed large-caps during the period. Most major
domestic market indices ended the second quarter of 2007 in positive
territory. Global growth helped the market put in strong performances in
April and May which more than offset a challenging June. For the quarter,
the Dow rallied 8.5%, while the S&P advanced 5.8% and the NASDAQ gained
7.5%. Small-cap stocks underperformed large-cap stocks, as concerns over
rising interest rates, the health of the U.S. economy (principally
consumer spending), and a potentially broadening sub-prime crisis caused
a flight to quality during the period.
The fixed income market rallied a bit in the first quarter in response to
data indicative of a slowing economy, a correction in the global equity
markets (albeit a brief one), and a slight shift in the bias of the
Federal Reserve. The fixed income market broke out of its range-bound
trading pattern seen over the past couple of quarters and sold off
considerably in the second quarter. Accordingly, yields increased
significantly. After an extended lack of volatility, the bond market
reacted to a myriad of developments, including the continued strength of
economies overseas, the resilience of the U.S. economy despite accelerated
weakness in the housing market, and a heightened sensitivity to
creditworthiness.
In this type of market environment, it continues to be highly important to
seek the help of a professional when investing. Making the right
decisions in these markets can be very difficult and an experienced
investment professional can address your concerns about the market and
provide the guidance needed to help you diversify your investments and
stay focused on the long term.
Fund reports containing a discussion of individual Fund performance as
well as the Funds portfolios and financial statements are presented
within for your review.
We thank you for your confidence in Viking Mutual Funds. Our interests
are closely aligned with those of our shareholders because our money is
invested alongside their own. As always we will do our best to make sure
your experience as a shareholder is a rewarding one.
Sincerely,
/s/Shannon D. Radke
Shannon D. Radke
President
Viking Mutual Funds
VIKING TAX-FREE FUND FOR MONTANA
By: Shannon D. Radke
President/Portfolio Manager
Viking Tax-Free Fund for Montana provided a total return of 0.13% (at net
asset value with distributions reinvested) for the six months ended June
30, 2007.
The fixed income market rallied a bit in the first quarter in response to
data indicative of a slowing economy, a correction in the global equity
markets (albeit a brief one), and a slight shift in the bias of the
Federal Reserve. The Funds share price remained relatively flat. The
fixed income market broke out of its range-bound trading pattern seen over
the past couple of quarters and sold off considerably in the second
quarter. Accordingly, yields increased significantly, while the Funds
share price declined moderately. After an extended lack of volatility,
the bond market reacted to a myriad of developments, including the
continued strength of economies overseas, the resilience of the U.S.
economy despite accelerated weakness in the housing market, and a
heightened sensitivity to creditworthiness.
Despite the continued scarcity of Montana municipal bonds throughout the
period, the Fund was able to obtain an adequate supply of high quality
bonds of various maturities. Average credit quality remained a lofty AA+.
Going forward, we remain committed to our non-interest rate anticipatory
style of investing. Rather than betting on the direction of rates, we
will continue to seek out the best value among high quality issues of
varying maturities. The highest level of current income that is exempt
from Federal and Montana income taxes and is consistent with preservation
of capital remains the investment objective of the Fund.
VIKING TAX-FREE FUND FOR MONTANA
Growth of a $10,000 Investment
August 3, 1999 through June 30, 2007 (Unaudited)
Comparison of Change in Value of a $10,000 Investment in Viking
Tax-Free Fund for Montana vs. the Lehman Brother Municipal Bond Index
[Comparative index graph]
Viking Tax-Free Fund Viking Tax-Free Fund Lehman Brothers
for Montana for Montana Municipal Bond
with max sales charge without max sales charge Index
---------------------------------------------------------------------
August 3, 1999 $ 9,550 $10,000 $10,000
October 31, 1999 $ 9,196 $ 9,628 $ 9,817
December 31, 1999 $ 9,125 $ 9,554 $ 9,846
February 28, 2000 $ 9,185 $ 9,617 $ 9,918
April 30, 2000 $ 9,405 $ 9,847 $10,075
June 30, 2000 $ 9,468 $ 9,913 $10,288
August 31, 2000 $ 9,748 $10,206 $10,592
October 31, 2000 $ 9,796 $10,257 $10,652
December 31, 2000 $10,058 $10,531 $10,998
February 28, 2001 $10,185 $10,664 $11,142
April 30, 2001 $10,103 $10,578 $11,121
June 30, 2001 $10,263 $10,745 $11,317
August 31, 2001 $10,672 $11,173 $11,674
October 31, 2001 $10,719 $11,223 $11,772
December 31, 2001 $10,509 $11,002 $11,563
February 28, 2002 $10,785 $11,292 $11,905
April 30, 2002 $10,821 $11,330 $11,899
June 28, 2002 $10,981 $11,498 $12,099
August 31, 2002 $11,276 $11,806 $12,402
October 31, 2002 $11,329 $11,862 $12,463
December 31, 2002 $11,549 $12,092 $12,673
February 28, 2003 $11,710 $12,260 $12,818
April 30, 2003 $11,750 $12,303 $12,910
June 30, 2003 $11,934 $12,495 $13,155
July 31, 2003 $11,490 $12,030 $12,695
August 31, 2003 $11,575 $12,119 $12,790
September 30, 2003 $11,908 $12,468 $13,166
October 31, 2003 $11,832 $12,388 $13,100
November 30, 2003 $11,950 $12,511 $13,237
December 31, 2003 $12,063 $12,630 $13,347
January 31, 2004 $12,136 $12,706 $13,423
February 29, 2004 $12,313 $12,892 $13,625
March 31, 2004 $12,274 $12,850 $13,578
April 30, 2004 $12,001 $12,565 $13,256
May 31, 2004 $11,941 $12,503 $13,208
June 30, 2004 $12,006 $12,570 $13,256
July 31, 2004 $12,165 $12,737 $13,429
August 31, 2004 $12,374 $12,956 $13,698
September 30, 2004 $12,436 $13,020 $13,771
October 31, 2004 $12,484 $13,071 $13,889
November 30, 2004 $12,414 $12,997 $13,775
December 31, 2004 $12,551 $13,141 $13,943
January 31, 2005 $12,601 $13,194 $14,074
February 28, 2005 $12,587 $13,179 $14,027
March 31, 2005 $12,443 $13,028 $13,939
April 30, 2005 $12,604 $13,196 $14,160
May 31, 2005 $12,693 $13,290 $14,260
June 30, 2005 $12,757 $13,356 $14,349
July 29, 2005 $12,682 $13,278 $14,284
August 31, 2005 $12,749 $13,348 $14,428
September 30, 2005 $12,750 $13,349 $14,332
October 31, 2005 $12,678 $13,274 $14,244
November 30, 2005 $12,718 $13,315 $14,313
December 31, 2005 $12,797 $13,398 $14,436
January 31, 2006 $12,865 $13,469 $14,475
February 28, 2006 $12,889 $13,495 $14,572
March 31, 2006 $12,845 $13,449 $14,471
April 30, 2006 $12,819 $13,422 $14,467
May 31, 2006 $12,916 $13,524 $14,532
June 30, 2006 $12,802 $13,404 $14,477
July 31, 2006 $12,986 $13,596 $14,649
August 31, 2006 $13,133 $13,750 $14,866
September 30, 2006 $13,225 $13,847 $14,970
October 31, 2006 $13,245 $13,867 $15,064
November 30, 2006 $13,339 $13,966 $15,189
December 31, 2006 $13,328 $13,954 $15,136
January 31, 2007 $13,307 $13,933 $15,097
February 28, 2007 $13,492 $14,126 $15,296
March 31, 2007 $13,472 $14,105 $15,258
April 30, 2007 $13,462 $14,094 $15,303
May 31, 2007 $13,413 $14,043 $15,236
June 30, 2007 $13,346 $13,973 $15,157
The chart assumes $10,000 invested on August 3, 1999 and includes the
effect of a 4.50% front-end sales charge, as applicable and the
reinvestment of all dividends and capital gains. It is intended to
give you an ideal of how your fund performed compared to the index over
the period 08/03/99-06/30/07. It is important to understand the
differences between your fund and an index. An index measures the
performance of a hypothetical portfolio. A market index such as the
Lehman Brothers Municipal Bond Index is not managed and incurs no sales
charges, expenses or fees. If you could buy all the securities that
make up a market index, you would incur expenses that would affect your
investments return. Returns shown do not reflect the deduction of the
taxes that a shareholder would pay on fund distributions or redemption of
fund shares. Past performance does not guarantee future
results.
Average Annual Total Returns Lifetime
Through June 30, 2007 One-Year Three-Year Five Year (Est. 8/3/99)
- - ----------------------------------------------------------------------------
Excluding Sales Charge 4.25% 3.59% 3.98% 4.32%
Including Sales Charge 0.38% 2.01% 3.02% 3.71%
Returns reflect reinvestment of distributions and the maximum sales
charge, as applicable. The total returns for the three year, five year and
lifetime periods reflect a maximum sales charge of 4.50%. The current
maximum sales charge is 3.75. Therefore, the total returns,
for the three year, five year and lifetime would have been higher had the
current maximum sales charge been in effect for
those stated periods. Return and share values will fluctuate so that
shares, when redeemed, may be worth more or less than
their original cost. Returns shown do not reflect the deduction of the
taxes that a shareholder would pay on fund
distributions or redemption of fund shares. Past performance is not a
guarantee of future results.
VIKING TAX-FREE FUND FOR NORTH DAKOTA
By: Shannon D. Radke
President/Portfolio Manager
Viking Tax-Free Fund for North Dakota provided a total return of -0.33%
(at net asset value with distributions reinvested) for the six months
ended June 30, 2007.
The fixed income market rallied a bit in the first quarter in response to
data indicative of a slowing economy, a correction in the global equity
markets (albeit a brief one), and a slight shift in the bias of the
Federal Reserve. The Funds share price remained relatively flat. The
fixed income market broke out of its range-bound trading pattern seen over
the past couple of quarters and sold off considerably in the second
quarter. Accordingly, yields increased significantly, while the Funds
share price declined moderately. After an extended lack of volatility,
the bond market reacted to a myriad of developments, including the
continued strength of economies overseas, the resilience of the U.S.
economy despite accelerated weakness in the housing market, and a
heightened sensitivity to creditworthiness.
Despite the continued scarcity of North Dakota municipal bonds throughout
the period, the Fund was able to obtain an adequate supply of high quality
bonds of various maturities. Average credit quality remained a lofty AA.
Going forward, we remain committed to our non-interest rate anticipatory
style of investing. Rather than betting on the direction of rates, we
will continue to seek out the best value among high quality issues of
varying maturities. The highest level of current income that is exempt
from Federal and North Dakota income taxes and is consistent with
preservation of capital remains the investment objective of the Fund.
VIKING TAX-FREE FUND FOR NORTH DAKOTA
Growth of a $10,000 Investment
August 3, 1999 through June 30, 2007 (Unaudited)
Comparison of Change in Value of a $10,000 Investment in Viking
Tax-Free Fund for North Dakota vs. the Lehman Brother Municipal Bond
Index
[Comparative index graph]
Viking Tax-Free Fund Viking Tax-Free Fund Lehman Brothers
for North Dakota for North Dakota Municipal Bond
with max sales charge without max sales charge Index
---------------------------------------------------------------------
August 3, 1999 $ 9,550 $10,000 $10,000
October 31, 1999 $ 9,163 $ 9,594 $ 9,817
December 31, 1999 $ 9,211 $ 9,644 $ 9,846
February 28, 2000 $ 9,227 $ 9,660 $ 9,918
April 30, 2000 $ 9,422 $ 9,864 $10,075
June 30, 2000 $ 9,533 $ 9,981 $10,288
August 31, 2000 $ 9,833 $10,295 $10,592
October 31, 2000 $ 9,965 $10,434 $10,652
December 31, 2000 $10,252 $10,734 $10,998
February 28, 2001 $10,412 $10,901 $11,142
April 30, 2001 $10,303 $10,795 $11,121
June 30, 2001 $10,419 $10,909 $11,317
August 31, 2001 $10,809 $11,317 $11,674
October 31, 2001 $10,825 $11,334 $11,772
December 31, 2001 $10,586 $11,084 $11,563
February 28, 2002 $10,910 $11,423 $11,905
April 30, 2002 $10,934 $11,448 $11,899
June 28, 2002 $11,108 $11,630 $12,099
August 31, 2002 $11,409 $11,945 $12,402
October 31, 2002 $11,452 $11,990 $12,463
December 31, 2002 $11,652 $12,200 $12,673
February 28, 2003 $11,815 $12,369 $12,818
April 30, 2003 $11,868 $12,426 $12,910
June 30, 2003 $12,074 $12,641 $13,155
July 31, 2003 $11,652 $12,196 $12,695
August 31, 2003 $11,761 $12,314 $12,790
September 30, 2003 $12,046 $12,612 $13,166
October 31, 2003 $11,982 $12,545 $13,100
November 30, 2003 $12,087 $12,656 $13,237
December 31, 2003 $12,188 $12,761 $13,347
January 31, 2004 $12,284 $12,862 $13,423
February 29, 2004 $12,450 $13,035 $13,625
March 31, 2004 $12,386 $12,968 $13,578
April 30, 2004 $12,100 $12,668 $13,256
May 31, 2004 $12,026 $12,591 $13,208
June 30, 2004 $12,077 $12,645 $13,256
July 31, 2004 $12,214 $12,788 $13,429
August 31, 2004 $12,435 $13,019 $13,698
September 30, 2004 $12,495 $13,082 $13,771
October 31, 2004 $12,568 $13,158 $13,889
November 30, 2004 $12,497 $13,084 $13,775
December 31, 2004 $12,646 $13,240 $13,943
January 31, 2005 $12,721 $13,319 $14,074
February 28, 2005 $12,719 $13,316 $14,027
March 31, 2005 $12,576 $13,167 $13,939
April 30, 2005 $12,761 $13,360 $14,160
May 31, 2005 $12,864 $13,469 $14,260
June 30, 2005 $12,915 $13,522 $14,349
July 29, 2005 $12,816 $13,418 $14,284
August 31, 2005 $12,895 $13,501 $14,428
September 30, 2005 $12,884 $13,489 $14,332
October 31, 2005 $12,824 $13,427 $14,244
November 30, 2005 $12,851 $13,455 $14,313
December 30, 2005 $12,929 $13,537 $14,436
January 31, 2006 $13,009 $13,621 $14,475
February 28, 2006 $13,021 $13,633 $14,572
March 31, 2006 $12,990 $13,600 $14,471
April 30, 2006 $12,938 $13,546 $14,467
May 31, 2006 $13,036 $13,649 $14,532
June 30, 2006 $12,935 $13,543 $14,477
July 31, 2006 $13,149 $13,767 $14,649
August 31, 2006 $13,323 $13,949 $14,866
September 30, 2006 $13,429 $14,060 $14,970
October 31, 2006 $13,448 $14,080 $15,064
November 30, 2006 $13,556 $14,193 $15,189
December 31, 2006 $13,546 $14,182 $15,136
January 31, 2007 $13,499 $14,134 $15,097
February 28, 2007 $13,685 $14,328 $15,296
March 31, 2007 $13,665 $14,307 $15,258
April 30, 2007 $13,656 $14,298 $15,303
May 31, 2007 $13,607 $14,247 $15,236
June 30, 2007 $13,500 $14,135 $15,157
The chart assumes $10,000 invested on August 3, 1999 and includes the
effect of a 4.50% front-end sales charge, as applicable and the
reinvestment of all dividends and capital gains. It is intended to
give you an ideal of how your fund performed compared to the index over
the period 08/03/99-06/30/07. It is important to understand the
differences between your fund and an index. An index measures the
performance of a hypothetical portfolio. A market index such as the
Lehman Brothers Municipal Bond Index is not managed and incurs no sales
charges, expenses or fees. If you could buy all the securities that
make up a market index, you would incur expenses that would affect your
investments return. Returns shown do not reflect the deduction of the
taxes that a shareholder would pay on fund distributions or redemption of
fund shares. Past performance does not guarantee future
results.
Average Annual Total Returns Lifetime
Through June 30, 2007 One-Year Three-Year Five Year (Est. 8/3/99)
- - ----------------------------------------------------------------------------
Excluding Sales Charge 4.37% 3.79% 3.98% 4.47%
Including Sales Charge 0.43% 2.22% 3.03% 3.87%
Returns reflect reinvestment of distributions and the maximum sales charge,
as applicable. The total returns for the three year, five year and lifetime
periods reflect a maximum sales charge of 4.50%. The current
maximum sales charge is 3.75%. Therefore, the total returns,
for the three year, five year, and lifetime would have been higher had the
current maximum sales charge been in effect for
the stated periods. Return and share values will fluctuate so that shares,
when redeemed, may be worth more or less than
their original cost. Returns shown do not reflect the deduction of the taxes
that a shareholder would pay on fund
distributions or redemption of fund shares. Past performance is not a
guarantee of future results.
VIKING LARGE-CAP VALUE FUND
By: William E. Dodge, President and CEO, Fox Asset Management, LLC
Shannon D. Radke, President
Viking Large-Cap Value Fund provided a total return of 11.54% (at net
asset value) for the six months ended June 30, 2007.
U.S. stocks had a wild ride in the first three months of 2007, although a
glance at the negligible net changes of market benchmarks masks the depth
of the turmoil. For the quarter, the Dow ended down 0.87%, while the S&P
500 ended up 0.18% and the NASDAQ closed up 0.26%. Despite increased
volatility and fears of decelerating earnings growth, both of which would
normally direct investors toward the relative safety of large-cap stocks,
small-cap stocks outperformed large-caps during the period. The Fund rose
3.1% during the first quarter. The positive performance was driven by a
combination of an underweight position in the financial and consumer
discretionary sectors, and an overweight position in the materials sector.
Stock selection within most sectors was particularly strong.
Most major domestic market indices ended the second quarter of 2007 in
positive territory. Global growth helped the market put in strong
performances in April and May which more than offset a challenging June.
For the quarter, the Dow rallied 8.5%, while the S&P advanced 5.8% and the
NASDAQ gained 7.5%. Large-cap stocks outperformed small-cap stocks, as
concerns over rising interest rates, the health of the U.S. economy
(principally consumer spending), and a potentially broadening sub-prime
crisis caused a flight to quality during the period. The Fund was up
8.1% for the quarter. Performance was positively impacted by the enhanced
prospects for continued economic growth as those sectors that are direct
beneficiaries of continued growth, domestically and abroad, did well.
Overweight sectors such as industrials, materials, and information
technology led the way with most of the excess return in those areas
coming from successful stock selection. Our strong underweight of the
financial sector also added to strong performance.
As always, we remain steadfast in our commitment to finding higher quality
companies, with strong balance sheets and cash flow, selling at discount
valuations. Long-term total return and capital preservation remains the
investment objective of the Fund.
VIKING LARGE-CAP VALUE FUND
Growth of a $10,000 Investment
August 3, 1999 through June 30, 2007 (Unaudited)
Comparison of Change in Value of a $10,000 Investment in Viking
Large-Cap Value Fund vs. the Russell 1000 Value Index
[Comparative index graph]
Viking Large-Cap Viking Large-Cap Russell 1000
Value Fund Value Fund Value Index
with max sales charge without max sales charge
---------------------------------------------------------------------
August 3, 1999 $ 9,475 $10,000 $10,000
October 31, 1999 $ 9,147 $ 9,650 $ 9,875
December 31, 1999 $ 9,406 $ 9,924 $ 9,845
February 28, 2000 $ 8,057 $ 8,500 $ 8,816
April 30, 2000 $ 9,292 $ 9,803 $ 9,777
June 30, 2000 $ 9,245 $ 9,753 $ 9,428
August 31, 2000 $ 9,957 $10,505 $10,078
October 31, 2000 $10,252 $10,816 $10,420
December 31, 2000 $10,598 $11,181 $10,535
February 28, 2001 $10,483 $11,059 $10,282
April 30, 2001 $11,018 $11,624 $10,405
June 30, 2001 $10,665 $11,251 $10,403
August 31, 2001 $10,368 $10,938 $ 9,965
October 31, 2001 $ 9,431 $ 9,949 $ 9,184
December 31, 2001 $10,308 $10,875 $ 9,947
February 28, 2002 $10,298 $10,865 $ 9,886
April 30, 2002 $10,471 $11,047 $ 9,998
June 28, 2002 $ 9,588 $10,115 $ 9,472
July 31, 2002 $ 8,571 $ 9,042 $ 8,591
August 31, 2002 $ 8,542 $ 9,012 $ 8,656
September 30, 2002 $ 7,486 $ 7,898 $ 7,693
October 31, 2002 $ 7,697 $ 8,121 $ 8,263
November 30, 2002 $ 8,302 $ 8,759 $ 8,784
December 31, 2002 $ 7,929 $ 8,365 $ 8,403
January 31, 2003 $ 7,668 $ 8,090 $ 8,199
February 28, 2003 $ 7,417 $ 7,825 $ 7,980
March 31, 2003 $ 7,349 $ 7,753 $ 7,994
April 30, 2003 $ 7,890 $ 8,324 $ 8,697
May 31, 2003 $ 8,413 $ 8,875 $ 9,259
June 30, 2003 $ 8,606 $ 9,079 $ 9,375
July 31, 2003 $ 8,606 $ 9,079 $ 9,514
August 31, 2003 $ 8,828 $ 9,314 $ 9,663
September 30, 2003 $ 8,645 $ 9,120 $ 9,568
October 31, 2003 $ 9,138 $ 9,640 $10,154
November 30, 2003 $ 9,351 $ 9,865 $10,291
December 31, 2003 $ 9,786 $10,324 $10,926
January 31, 2004 $ 9,806 $10,345 $11,118
February 29, 2004 $10,049 $10,601 $11,356
March 31, 2004 $ 9,883 $10,427 $11,257
April 30, 2004 $ 9,845 $10,386 $10,982
May 31, 2004 $ 9,932 $10,478 $11,094
June 30, 2004 $10,175 $10,735 $11,356
July 31, 2004 $ 9,786 $10,324 $11,196
August 31, 2004 $ 9,757 $10,294 $11,355
September 30, 2004 $ 9,874 $10,417 $11,531
October 31, 2004 $ 9,971 $10,519 $11,723
November 30, 2004 $10,428 $11,002 $12,316
December 31, 2004 $10,631 $11,215 $12,728
January 31, 2005 $10,523 $11,102 $12.502
February 28, 2005 $11,061 $11,669 $12,921
March 31, 2005 $11,041 $11,648 $12,739
April 30, 2005 $10,738 $11,329 $12,510
May 31, 2005 $11,031 $11,638 $12,812
June 30, 2005 $11,168 $11,782 $12,952
July 29, 2005 $11,490 $12,122 $13,327
August 31, 2005 $11,393 $12,019 $13,269
September 30, 2005 $11,490 $12,122 $13,455
October 31, 2005 $10,963 $11,566 $13,114
November 30, 2005 $11,373 $11,999 $13,543
December 30, 2005 $11,456 $12,086 $13,626
January 31, 2006 $11,771 $12,418 $14,155
February 28, 2006 $11,810 $12,460 $14,241
March 31, 2006 $11,968 $12,626 $14,434
April 30, 2006 $12,283 $12,958 $14,801
May 31, 2006 $12,046 $12,709 $14,427
June 30, 2006 $12,046 $12,709 $14,519
July 31, 2006 $12,086 $12,750 $14,872
August 31, 2006 $12,204 $12,875 $15,121
September 30, 2006 $12,411 $13,093 $15,423
October 31, 2006 $12,775 $13,477 $15,927
November 30, 2006 $13,070 $13,789 $16,291
December 31, 2006 $13,241 $13,969 $16,657
January 31, 2007 $13,473 $14,214 $16,870
February 28, 2007 $13,301 $14,033 $16,607
March 31, 2007 $13,655 $14,406 $16,864
April 30, 2007 $14,262 $15,047 $17,487
May 31, 2007 $14,910 $15,730 $18,118
June 30, 2007 $14,768 $15,580 $17,694
The chart assumes $10,000 invested on August 3, 1999 and includes the
effect of a 5.25% front-end sales charge, as applicable and the
reinvestment of all dividends and capital gains. It is intended to
give you an ideal of how your fund performed compared to the index over
the period 08/03/99-06/30/07. It is important to understand the
differences between your fund and an index. An index measures the
performance of a hypothetical portfolio. A market index such as the
Russell 1000 Value Index is not managed and incurs no sales
charges, expenses or fees. If you could buy all the securities that
make up a market index, you would incur expenses that would affect your
investments return. Past performance does not guarantee future
results.
Average Annual Total Returns Lifetime
Through June 30, 2007 One-Year Three-Year Five Year (Est. 8/3/99)
- - ----------------------------------------------------------------------------
Excluding Sales Charge 22.59% 13.22% 9.02% 5.76%
Including Sales Charge 16.14% 11.20% 7.86% 5.05%
Returns reflect reinvestment of distributions and the effect of a 5.25%
front-end sales charge, as applicable. Return and share values will
fluctuate so that shares, when redeemed, may be worth more or less than
their original cost. Returns shown do not reflect the deduction of the
taxes that a shareholder would pay on fund distributions or redemption of
fund shares. Past performance is not a guarantee of future
results.
VIKING SMALL-CAP VALUE FUND
By: George C. Pierides, Senior Managing Director, Fox Asset Management, LLC
Shannon D. Radke, President
Viking Small-Cap Value Fund provided a total return of 10.50% (at net
asset value) for the six months ended June 30, 2007.
U.S. stocks had a wild ride in the first three months of 2007, although a
glance at the negligible net changes of market benchmarks masks the depth
of the turmoil. For the quarter, the Dow ended down 0.87%, while the S&P
500 ended up 0.18% and the NASDAQ closed up 0.26%. Despite increased
volatility and fears of decelerating earnings growth, both of which would
normally direct investors toward the relative safety of large-cap stocks,
small-cap stocks outperformed large-caps during the period. The Fund rose
4.9% during the first quarter. An underweighting and favorable stock
selection in the financial services sector contributed to our relative
performance during the quarter. Our performance was also helped by
favorable stock selection in the energy and technology sectors. An
overweighting in both consumer staples and industrials also helped
performance in the quarter. Adverse stock selection within consumer
staples was the principle drag on performance during the quarter.
Most major domestic market indices ended the second quarter of 2007 in
positive territory. Global growth helped the market put in strong
performances in April and May which more than offset a challenging June.
For the quarter, the Dow rallied 8.5%, while the S&P advanced 5.8% and the
NASDAQ gained 7.5%. Small-cap stocks underperformed large-cap stocks, as
concerns over rising interest rates, the health of the U.S. economy
(principally consumer spending), and a potentially broadening sub-prime
crisis caused a flight to quality during the period. The Fund was up
5.4% for the quarter. Our underweighting in the financial services
sector, along with some favorable stock selection in the group,
contributed positively to relative performance during the quarter. An
overweighting and favorable stock selection in energy was a plus for the
portfolio. We also had a very successful quarter with our technology
holdings as all of them outperformed the sector and broader market. On
the negative side, we experienced adverse results from our stock picks
within the health care and materials sectors.
As always, we remain steadfast in our commitment to finding higher quality
companies, with strong balance sheets and cash flow, selling at discount
valuations. Long-term total return and capital preservation remains the
investment objective of the Fund.
VIKING SMALL-CAP VALUE FUND
Growth of a $10,000 Investment
May 3, 1999 through June 30, 2007 (Unaudited)
Comparison of Change in Value of a $10,000 Investment in Viking
Small-Cap Value Fund vs. the Russell 2000 Value Index
[Comparative index graph]
Viking Small-Cap Viking Small-Cap Russell 2000
Value Fund Value Fund Value Index
with max sales charge without max sales charge
---------------------------------------------------------------------
May 3, 2001 $ 9,475 $10,000 $10,000
June 30, 2001 $ 9,697 $10,230 $10,665
July 31, 2001 $ 9,421 $ 9,940 $10,426
August 31, 2001 $ 9,299 $ 9,810 $10,390
September 30, 2001 $ 8,227 $ 8,680 $ 9,243
October 31, 2001 $ 8,682 $ 9,160 $ 9,484
November 30, 2001 $ 9,204 $ 9,710 $10,166
December 31, 2001 $ 9,725 $10,260 $10,788
January 31, 2002 $ 9,839 $10,380 $10,932
February 28, 2002 $ 9,754 $10,290 $10,998
March 31, 2002 $10,597 $11,180 $11,821
April 30, 2002 $10,891 $11,490 $12,238
May 31, 2002 $10,768 $11,360 $11,833
June 28, 2002 $10,332 $10,900 $11,571
July 31, 2002 $ 8,910 $ 9,400 $ 9,852
August 31, 2002 $ 8,986 $ 9,480 $ 9,808
September 30, 2002 $ 8,569 $ 9,040 $ 9,108
October 31, 2002 $ 8,682 $ 9,160 $ 9,245
November 30, 2002 $ 9,137 $ 9,640 $ 9,982
December 31, 2002 $ 8,863 $ 9,350 $ 9,556
January 31, 2003 $ 8,474 $ 8,940 $ 9,287
February 28, 2003 $ 8,483 $ 8,950 $ 8,975
March 31, 2003 $ 8,626 $ 9,100 $ 9,070
April 30, 2003 $ 9,156 $ 9,660 $ 9,932
May 31, 2003 $ 9,668 $10,200 $10,946
June 30, 2003 $ 9,829 $10,370 $11,132
July 31, 2003 $10,218 $10,780 $11,687
August 31, 2003 $10,692 $11,280 $12,131
September 30, 2003 $10,502 $11,080 $11,991
October 31, 2003 $11,175 $11,790 $12,969
November 30, 2003 $11,555 $12,190 $13,467
December 31, 2003 $11,782 $12,430 $13,954
January 31, 2004 $11,839 $12,490 $14,437
February 29, 2004 $12,028 $12,690 $14,716
March 31, 2004 $12,047 $12,710 $14,920
April 30, 2004 $11,848 $12,500 $14,148
May 31, 2004 $11,924 $12,580 $14,319
June 30, 2004 $12,645 $13,340 $15,046
July 31, 2004 $12,237 $12,910 $14,354
August 31, 2004 $12,265 $12,940 $14,495
September 30, 2004 $12,664 $13,360 $15,069
October 31, 2004 $12,758 $13,460 $15,303
November 30, 2004 $13,602 $14,350 $16,661
December 31, 2004 $13,886 $14,649 $17,058
January 31, 2005 $13,394 $14,131 $16,398
February 28, 2005 $13,857 $14,619 $16,724
March 31, 2005 $13,674 $14,426 $16,380
April 30, 2005 $13,066 $13,785 $15,535
May 31, 2005 $13,799 $14,558 $16,482
June 30, 2005 $14,011 $14,782 $17,211
July 29, 2005 $14,484 $15,280 $18,190
August 31, 2005 $14,503 $15,300 $17,773
September 30, 2005 $14,551 $15,351 $17,743
October 31, 2005 $14,214 $14,995 $17,298
November 30, 2005 $14,628 $15,433 $17,999
December 30, 2005 $14,666 $15,261 $17,861
January 31, 2006 $15,516 $16,370 $19,338
February 28, 2006 $15,203 $16,039 $19,337
March 31, 2006 $15,769 $16,636 $20,274
April 30, 2006 $15,931 $16,807 $20,328
May 31, 2006 $15,213 $16,050 $19,486
June 30, 2006 $15,547 $16,402 $19,725
July 31, 2006 $15,193 $16,029 $19,452
August 31, 2006 $15,456 $16,306 $20,033
September 30, 2006 $15,557 $16,412 $20,229
October 31, 2006 $15,870 $16,743 $21,258
November 30, 2006 $16,365 $17,265 $21,865
December 31, 2006 $16,494 $17,401 $22,055
January 31, 2007 $16,804 $17,728 $22,385
February 28, 2007 $16,782 $17,705 $22,110
March 31, 2007 $17,296 $18,247 $22,377
April 30, 2007 $17,702 $18,675 $22,609
May 31, 2007 $18,450 $19,465 $23,438
June 30, 2007 $18,226 $19,228 $22,892
The chart assumes $10,000 invested on May 3, 2001 and includes the
effect of a 5.25% front-end sales charge, as applicable and the
reinvestment of all dividends and capital gains. It is intended to
give you an idea of how your fund performed compared to the index over
the period 05/03/01-06/30/07. It is important to understand the
differences between your fund and an index. An index measures the
performance of a hypothetical portfolio. A market index such as the
Russell 2000 Value Index is not managed and incurs no sales
charges, expenses or fees. If you could buy all the securities that
make up a market index, you would incur expenses that would affect your
investments return. Past performance does not guarantee future
results.
Average Annual Total Returns Lifetime
Through June 30, 2007 One-Year Three-Year Five Year (Est. 5/3/01)
- --------------------------------------------------------------------------------
Excluding Sales Charge 17.23% 12.96% 12.02% 11.19%
Including Sales Charge 11.09% 10.95% 10.83% 10.23%
Returns reflect reinvestment of distributions and the effect of a 5.25%
front-end sales charge, as applicable. Return and share values will
fluctuate so that shares, when redeemed, may be worth more or less than
their original cost. Returns shown do not reflect the deduction of the
taxes that a shareholder would pay on fund distributions or redemption of
fund shares. Past performance is not a guarantee of future
results.
VIKING MUTUAL FUNDS
Schedule of Investments (Unaudited)
June 30, 2007
Viking Tax-Free Fund for Montana
PRINCIPAL MARKET
AMOUNT VALUE
MUNICIPAL BONDS 99.2%
General Obligations 6.9%
Bozeman MT Ser A 4.95% 07/01/20 170,000 $174,763
Puerto Rico Mun Fin Agy Ser A (FSA) 5.50% 08/01/23 250,000 260,570
Ravalli Cnty MT Sch Dist No. 003 Hamilton (FSA) 4.65% 07/01/09 105,000 106,009
Gallatin Cnty MT Hgh Sch Dist No 7 Bozeman (CIFG) 4.20% 06/01/21 150,000 146,958
---------
688,300
---------
Continuing Care Revenue Bonds 0.7%
MT St Hlth Facs Auth Rev Hillcrest Sr Ctr 6.90% 06/01/15 30,000 32,256
MT St Hlth Facs Auth Rev Hillcrest Sr Ctr 7.25% 06/01/25 35,000 38,414
---------
70,670
---------
Higher Education Revenue Bonds 14.2%
MT St Hgher Ed Stud Assist Corp Rev Ser B 6.40% 12/01/32 415,000 431,554
MT St Brd Regents (MSU) Rev Facs Imp-E (AMBAC) 5.00% 11/15/21 80,000 80,913
MT Brd Regents (MSU) Hghr Ed Rev (AMBAC) 4.30% 11/15/19 200,000 199,230
MT Brd Regents (U of M) Hgher Ed Rev Ser F (MBIA) 5.75% 05/15/24 135,000 142,480
*Univ of MT Revs Facs Acq & Imp Ser C (MBIA) 5.00% 11/15/17 140,000 147,780
Univ of MT Revs Higher Ed Facs Imp Ser D (MBIA) 5.375% 05/15/19 370,000 401,554
---------
1,403,511
---------
Hospital Revenue Bonds 23.6%
MT Fac Fin Auth Providence Svcs (MBIA) 4.60% 12/01/18 80,000 81,717
MT Fac Fin Auth Providence Svcs (MBIA) 5.00% 12/01/18 270,000 282,334
MT Fac Fin Auth Providence Svcs (MBIA) 4.80% 12/01/20 105,000 108,678
MT Fac Fin Auth Rev Benefis Hlth Sys (GTY) 4.75% 01/01/24 150,000 153,402
MT Fac Fin Auth Rev Benefis Hlth Sys (GTY) 4.75% 01/01/25 125,000 125,270
MT Fac Fin Auth Providence Svcs (MBIA) 4.80% 12/01/20 95,000 97,349
MT Hlth Fac Fin Auth Rev Mstr Ln Program Comm Med Ctr 5.20% 12/01/21 145,000 148,231
*MT Hlth Fac Auth Sisters Chrty Leavenworth (MBIA) 5.125% 12/01/18 200,000 204,208
MT Hlth Fac Auth Sisters Chrty Leavenworth (MBIA) 5.00% 12/01/24 515,000 519,759
MT Fac Fin Auth Hlth Master Ln Pg NE MT 4.50% 05/01/27 250,000 246,185
MT St Hlth Fac Auth Rev Comm Med Ctr 6.375% 06/01/18 370,000 371,103
---------
2,338,236
---------
Housing Revenue Bonds 17.3%
*MT St Brd Hsg Sngle Fam Mtg Ser A-2 5.75% 06/01/30 70,000 69,915
*MT St Brd Hsg Sngle Fam Ser A-2 5.50% 12/01/20 80,000 79,731
*MT St Brd Hsg Sngle Fam Ser A-2 5.60% 12/01/23 65,000 64,792
MT St Brd Hsg Sngle Fam Ser A-2 5.20% 12/01/22 110,000 109,637
MT St Brd Hsg Sngle Fam Ser B-2 4.85% 12/01/15 90,000 89,563
MT St Brd Hsg Sngle Fam Mtg Ser B-2 5.55% 06/01/33 155,000 155,522
MT St Brd Hsg Sngle Fam Mtg Ser C2 4.85% 12/01/26 200,000 197,180
MT St Brd Hsg Sngle Fam Prog Ser B 4.55% 12/01/11 320,000 320,198
MT St Brd Hsg Sngle Fam Mtg Ser A 4.30% 06/01/12 230,000 226,785
MT St Brd Hsg Sngle Fam Mtg Ser A-1 4.50% 12/01/27 300,000 288,885
MT St Brd Hsg Sngle Fam Mtg Ser B 4.75% 12/01/27 110,000 107,382
---------
1,709,590
---------
Psychiatric and Substance Abuse Hospital Bonds 13.1%
MT Fac Fin Auth Developmental Ctr Prog 4.50% 06/01/16 250,000 250,575
MT Fac Fin Auth Developmental Ctr Prog 4.75% 06/01/19 170,000 172,907
MT Fac Fin Auth Childrens Home 4.55% 01/01/17 250,000 250,525
MT Fac Fin Auth Rev Cmnty Counsl & Corectnl Svcs (CIFG) 4.50% 10/01/23 340,000 336,243
MT Fac Fin Auth Boyd Andrew Cmnty Svcs Proj (CIFG) 4.375% 10/01/20 285,000 284,461
---------
1,294,711
---------
Utility Revenue Bonds 10.5%
Forsyth MT Poll Ctl Rev Ref Puget Sound Energy (AMBAC) 5.00% 03/01/31 190,000 194,241
*Forsyth MT Poll Ctl Rev Northwestern Corp (AMBAC) 4.65% 08/01/23 850,000 842,996
---------
1,037,237
---------
Water Revenue Bonds 1.0%
Great Falls MT Wtr Sys Rev Ref Ser A (AMBAC) 3.85% 08/01/08 100,000 100,141
---------
100,141
---------
Other Revenue Bonds 11.9%
Missoula MT Spl Impt Dists No 540 4.60% 07/01/24 100,000 96,995
Missoula MT Spl Impt Dists No 540 4.60% 07/01/25 105,000 101,727
Missoula Tax Increment Urban Renewal (RADIAN) 5.125% 07/01/26 125,000 130,732
MT Fac Fin Auth Prerelease Ctr Rev (XLCA) 5.25% 10/01/20 300,000 318,147
MT St Brd Invt Refunded 1996 Pay Tax (MBIA) 6.875% 06/01/20 105,000 108,609
MT St Brd Invt Refunded 1996 Pay Tax (MBIA) 6.875% 06/01/20 105,000 108,452
Puerto Rico Childrens Trust Fund Tobacco Settlement Rev 6.00% 07/01/26 195,000 206,599
Puerto Rico Comwlth Inf Fin Auth Ser A (AMBAC) 5.25% 07/01/10 100,000 102,203
---------
1,173,464
----------
Total Municipal Bonds (cost $9,813,399) 9,815,860
SHORT-TERM INVESMENTS 0.1%
Federated Municipal Obligations Fund #852 9,000 9,000
Total Short-Term Investments (cost: $9,000) ----------
TOTAL MARKET VALUE OF SECURITIES OWNED 99.3% (COST $9,822,399) 9,824,860
RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES 0.7% 67,167
-----------
NET ASSETS APPLICABLE TO 1,001,535 SHARES (0.001 PAR VALUE) OUTSTANDING - 100.0% $9,892,027
===========
*Indicates bonds are segregated by the custodian to cover when-issued or
delayed-delivery purchases.
The accompanying notes are an integral part of these financial statements.
Summary of Abbreviations:
AMBAC Insured by the AMBAC Indemnity Corporation
FGIC Insured by the Financial Guaranty Insurance Company
FSA Insured by Financial Security Assurance
MBIA Insured by the Municipal Bond Insurance Association
XLCA Insured by XL Capital Assurance
RADIAN Insured by Radian Group Inc.
GTY Insured by Assured Guaranty
VIKING MUTUAL FUNDS
Schedule of Investments (Unaudited)
June 30, 2007
Viking Tax-Free Fund for North Dakota
PRINCIPAL MARKET
AMOUNT VALUE
MUNICIPAL BONDS 101.5%
General Obligations 26.2%
Bismarck ND Ref & Impt Ser T 4.45% 05/01/21 100,000 $98,469
Fargo ND Ref & Impt Ser A (MBIA) 4.625% 05/01/28 175,000 171,990
*Fargo ND Ref & Imp - Ser B (FGIC) 5.125% 05/01/17 60,000 60,700
*Fargo ND Ref & Impt Ser D (MBIA) 5.00% 05/01/28 200,000 204,572
Grand Forks ND Pub Bldg Ser A (FSA) 4.625% 12/01/26 100,000 98,050
Hillsboro ND Pub Sch Dist No. 9 (FSA) 4.85% 06/01/19 50,000 50,640
*Jamestown ND Pub Sch Dist No. 011 (FGIC) 4.60% 05/01/15 50,000 49,937
*Mandan ND Ref & Imp - Ser B (MBIA) 5.00% 05/01/16 70,000 69,785
Mandan ND Ref Impt Ser C (AMBAC) 4.50% 05/01/18 200,000 199,332
Minot ND Ref Impt Ser A 4.50% 10/01/22 195,000 192,054
Puerto Rico Commonwealth (MBIA) 5.375% 07/01/25 50,000 50,005
Valley City ND (CIFG) 4.50% 06/01/24 80,000 77,779
West Fargo ND Ref & Impt Ser D (MBIA) 4.25% 05/01/20 150,000 144,708
West Fargo ND Pub Sch Dist No. 006 (FGIC) 5.00% 05/01/14 50,000 51,730
---------
1,519,751
---------
Building Authority Revenue Bonds 7.8%
Fargo ND Bldg Auth Lease Rev Ser A 5.00% 05/01/20 50,000 50,995
GF Cnty ND Bldg Auth Rev 5.00% 12/01/20 200,000 206,646
ND St Bldg Auth Lease Rev Ser A (MBIA) 5.00% 12/01/17 50,000 51,514
ND St Bldg Auth Lease Rev Ser A (MBIA) 5.00% 12/01/16 50,000 51,299
ND St Bldg Auth Lease Rev Ser A (MBIA) 5.20% 12/01/19 90,000 93,461
---------
453,915
---------
Continuing Care Revenue Bonds 3.9%
Burleigh Cnty Indl Dev Rev MO Slope Luth Care Ctr 5.05% 11/01/18 125,000 123,795
Grand Forks ND Sr Hsg Rev Ref 4000 Valley Square Proj 5.00% 12/01/16 100,000 99,717
---------
223,512
---------
Education Revenue Bonds 7.9%
Fargo ND School District Bldg Auth Rev (MBIA) 5.50% 05/01/14 50,000 51,115
Minot Pub School District No 1 Bldg Auth 4.80% 05/01/23 310,000 309,355
West Fargo Pub School District Bldg Auth Lease Rev 4.20% 05/01/17 100,000 97,817
---------
458,287
---------
Higher Education Revenue Bonds 12.5%
ND St Brd Hgher Ed Student Svcs Facs Rev MSU 5.50% 08/01/23 125,000 123,504
ND St Brd Hgher Ed Student Svcs Facs MSU 5.00% 08/01/18 175,000 171,708
ND St Brd Hgher Ed Rev Hsg & Aux Facs UND (FGIC) 4.375% 04/01/26 105,000 100,057
ND St Brd Hgher Ed Rev Hsg & Aux BSC 4.75% 05/01/19 100,000 99,657
ND St Brd Hgher Ed Rev Hsg & Aux Facs UND (FSA) 5.00% 04/01/21 150,000 153,745
NDSU Rev Ser 2006A (AMBAC) 4.75% 04/01/29 75,000 73,785
---------
722,456
---------
Hospital Revenue Bonds 9.6%
Fargo ND Hlth Sys Rev Meritcare Obl (AMBAC) 5.125% 06/01/27 75,000 76,748
Fargo ND Hlth Sys Rev Meritcare Ser A (MBIA) 5.375% 06/01/27 100,000 102,025
Fargo ND Hlth Sys Rev Meritcare Obl (FSA) 5.375% 06/01/15 65,000 67,618
Fargo ND Hlth Sys Rev Meritcare Obl (AMBAC) 5.00% 06/01/22 45,000 45,423
Grand Forks ND Hlth Care Altru Hlth Obl Group (MBIA) 5.60% 08/15/17 20,000 20,371
Grand Forks ND Hlth Care Altru Hlth Obl Group 7.125% 08/15/24 20,000 21,459
Ward Cnty ND Hlth Care Facs Rev Trinity Obl Group - B 6.00% 07/01/10 25,000 25,438
Ward Cnty ND Hlth Care Facs Rev Trinity Obl Group 5.125% 07/01/29 200,000 196,844
---------
555,926
---------
Housing Revenue Bonds 10.1%
Fargo ND Multifam Rev Ref Hsg Trollwood Village 6.90% 09/01/13 25,000 25,932
ND St Hsg Fin Agy Rev Home Mtg Prog C 4.90% 07/01/15 150,000 150,343
ND St Hsg Fin Agy Rev Hsg Fin Home MTG Fin-C 4.45% 07/01/16 200,000 195,280
ND St Hsg Fin Agy Hsg Fin Home MTG-C-RMK 6.10% 07/01/28 5,000 5,000
ND St Hsg Fin Agy Rev Hsg Fin Pg Home Mtg B 5.85% 07/01/28 5,000 5,000
ND St Hsg Fin Agy Rev Hsg Fin Pg Home Mtg A 5.25% 07/01/18 40,000 39,998
ND St Hsg Fin Agy Rev Hsg Fin Pg Home Mtg A 5.80% 07/01/10 55,000 55,643
ND St Hsg Fin Agy Rev Hsg Fin Pg Home Mtg A 5.70% 07/01/09 50,000 50,575
*ND St Hsg Fin Agy Rev Hsg Fin Pg Home Mtg A 5.55% 07/01/22 60,000 59,947
---------
587,718
---------
Transportation Revenue Bonds 2.7%
Guam Intl Arpt Auth Ser C (MBIA) 5.375% 10/01/17 150,000 158,265
---------
158,265
---------
Water Revenue Bonds 5.2%
ND St Water Comm Rev Water Dev & Mgmt Prg Ser A (MBIA) 5.50% 08/01/10 50,000 52,276
ND St Water Comm Rev Water dev & Mgmt Prog (MBIA) 5.00% 08/01/25 100,000 102,593
South Central Reg Water Dist Burleigh Cnty Rev 5.00% 10/01/23 150,000 147,909
---------
302,778
---------
Other Revenue Bonds 15.6%
*Grand Forks ND Sales Tax Rev Dike Imp (AMBAC) 4.50% 09/01/10 50,000 50,768
Mercer Cnty ND PCR Otter Tail Corp (AMBAC) 4.85% 09/01/22 115,000 114,808
ND Pub Fin Auth Cap Fin Prog Ser A 5.00% 06/01/31 100,000 100,916
ND Pub Fin Auth Indl Dev Prog Ser A 5.00% 06/01/20 150,000 148,978
ND St Muni Bond Bank Cap Fing Prog 6.00% 06/01/21 25,000 25,994
ND St Muni Bond Bank St Revolv Fund Prog Ser A 4.90% 10/01/18 50,000 51,066
ND St Muni Bond Bank St Revolv Fund Prog Ser A 4.625% 10/01/19 135,000 136,069
Puerto Rico Childrens Trust Fund Tobacco Settlement Rev 6.00% 07/01/26 15,000 15,892
Puerto Rico Pub Fin Corp Ser A (MBIA) 5.375% 08/01/24 150,000 157,968
Williams Cnty ND Sales Tax Rev 5.00% 11/01/21 100,000 101,298
---------
903,757
---------
Total Municipal Bonds (cost $5,917,691) 5,886,365
SHORT-TERM INVESMENTS 0.5%
Franklin Double Tax-Free Income Fund 2,570 30,327
----------
Total Short-Term Investments (cost: $30,584) 30,327
---------
TOTAL MARKET VALUE OF SECURITIES OWNED 102.0% (COST $5,948,275) 5,916,692
RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES (2.0%) (113,946)
----------
NET ASSETS APPLICABLE TO 580,877 SHARES (0.001 PAR VALUE) OUTSTANDING - 100.00% $5,802,746
==========
*Indicates bonds are segregated by the custodian to cover when-issued or
delayed-delivery purchases.
The accompanying notes are an integral part of these financial statements.
Summary of Abbreviations:
AMBAC Insured by the AMBAC Indemnity Corporation
FGIC Insured by the Financial Guaranty Insurance Company
FSA Insured by Financial Security Assurance
MBIA Insured by the Municipal Bond Insurance Association
CIFG Insured by CIFG Company
XLCA Insured by XL Capital Assurance
VIKING MUTUAL FUNDS
Schedule of Investments (Unaudited)
June 30, 2007
Viking Large-Cap Value Fund
SHARES VALUE
Common Stocks 93.4%
Basic Materials 27.2%
ALCOA 2,700 $109,431
Anadarko Petroleum 2,200 114,378
Apache 1,600 130,544
BP Amoco Plc ADR 1,600 115,424
Bunge Limited 1,300 109,850
Chevron Texaco 2,100 176,904
Conoco Phillips 2,100 164,850
Exxon Mobil 2,900 243,252
Freeport-McMoran Copper & Gold 1,400 115,948
Questar 1,000 52,850
Rio Tinto Plc ADS 300 91,836
--------
1,425,267
--------
Conglomerates 2.4%
Honeywell 2,200 123,816
--------
123,816
--------
Consumer Goods 7.1%
Dean Foods 2,100 66,927
Johnson Controls 1,100 127,347
Kimberly-Clark 1,900 127,091
Sealed Air 1,600 49,632
--------
370,997
--------
Financial Services 20.4%
American International Group 1,700 119,051
Bank of America 2,900 141,781
Citigroup 3,000 153,870
Hartford Financial Services Group 1,100 108,361
Legg Mason 900 88,542
Morgan Stanley 800 67,104
PNC Financial Services Group 1,300 93,054
Sun Trust Bank 1,100 94,314
U.S. Bancorp 3,100 102,145
Wachovia 2,000 102,500
---------
1,070,722
---------
Healthcare 5.3%
Merck 3,200 159,360
Pfizer 4,700 120,179
--------
279,539
--------
Industrial Goods 2.3%
Ingersoll-Rand 2,200 120,604
--------
120,604
--------
Services 13.3%
Amerisource Bergen 1,000 49,470
AT&T 2,700 112,050
Canadian Pacific 1,700 116,994
Citadel Broadcasting Corp.* 253 1,632
CVS Corp. 2,800 102,060
Disney 3,300 112,662
Idearc Inc. 2,810 99,277
Union Pacific 900 103,635
--------
697,780
--------
Technology 8.8%
Hewlett-Packard 1,100 49,082
Intel 4,500 106,830
Microsoft 3,100 91,357
Nokia 4,300 120,873
Verizon Communications 2,200 90,574
--------
458,716
--------
Utilities 6.6%
American Electric Power 2,700 121,608
Dominion Resources 1,100 94,941
Public Service Enterprise Group 1,500 131,670
--------
348,219
--------
Total Common Stocks (Cost $3,555,152) 4,895,660
SHORT-TERM INVESTMENTS 6.5%
Federated Prime Value Obligations #853 220,000 220,000
First Western Bank Collective Asset Fund 120,249 120,249
----------
Total Short-Term Investments (cost: $340,249) 340,249
----------
TOTAL MARKET VALUE OF SECURITIES OWNED 99.9% (COST $3,895,401) 5,235,909
RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES 0.1% 3,493
----------
NET ASSETS APPLICABLE TO 358,926 SHARES ($0.001 PAR VALUE)
OUTSTANDING 100.0% $5,239,402
==========
*Non-income producing investments.
The accompanying notes are an integral part of these financial statements.
VIKING MUTUAL FUNDS
Schedule of Investments (Unaudited)
June 30, 2007
Viking Small-Cap Value Fund
SHARES VALUE
Common Stocks 93.7%
Basic Materials 4.4%
Oil States Intl Inc.* 2,200 $90,948
Pioneer Drilling* 3,000 44,730
Cimarex Energy 1,200 47,292
--------
182,970
--------
Conglomerates 2.1%
Teleflex 1,100 89,958
--------
89,958
--------
Consumer Goods 19.7%
AO Smith 1,550 61,830
AptarGroup 2,800 99,568
Borg Warner Automotive 600 51,624
Carters Inc.* 3,400 88,196
Chiquita Brands Intl 6,100 115,656
Church & Dwight 2,300 111,458
Clarcor 2,400 89,832
RC 2 Corp* 2,000 80,020
Tupperware 4,400 126,456
--------
824,640
--------
Financial 20.9%
Boston Private Financial Holdings 1,800 48,366
First Midwest Bancorp 1,700 60,367
Hanmi Financial 3,500 59,710
Highland Hospitality 5,200 99,840
Protective Life 1,500 71,715
Provident Bankshares 1,500 49,170
Senior Housing Properties Trust 3,100 63,085
Strategic Hotels & Resorts 3,400 76,466
Sunstone Hotel Investors 2,600 73,814
UCBH Holdings 3,400 62,118
Umpqua Holdings 2,600 61,126
Zenith National Insurance Corp. 1,300 61,217
IPC Holdings 2,700 87,183
--------
696,159
--------
Healthcare 5.0%
Chattem* 1,000 63,380
PolyMedica 1,600 65,360
West Pharmaceutical Services 1,700 80,155
--------
208,895
--------
Industrial Groups 6.3%
Albany International 2,800 113,232
Mueller Water Products Inc. 3,900 66,534
RPM 3,700 85,507
--------
265,273
--------
Services 16.7%
Arkansas Best 1,400 54,558
Applebees 1,900 45,790
BJs Wholesale* 2,600 93,678
CBRL Group 700 29,736
Bristow Group* 1,800 89,190
Owens & Minor 2,900 101,326
Performance Food Group* 2,400 77,976
Stage Stores 4,600 96,416
Tween Brands, Inc.* 1,400 62,440
YRC Worldwide* 1,300 47,840
--------
698,950
--------
Technology 10.9%
Aeroflex Inc.* 4,300 60,931
Diodes Inc. 2,100 87,717
Epicor Software Corp. 6,000 89,220
ON Semiconductor* 9,900 106,128
Smith Micro Software 1,400 21,084
Technitrol 3,200 91,744
--------
456,824
--------
Utilities 7.7%
Cleco Corpoartion 3,400 83,300
Piedmont Natural Gas 4,100 101,065
Pike Electric Corp* 4,300 96,234
Questar 800 42,280
--------
322,879
--------
Total Common Stocks (Cost $3,145,340) 3,924,566
SHORT-TERM INVESTMENTS 6.4%
Federated Prime Value Obligations Fund #853 105,000 105,000
First Western Bank Collective Asset Fund 161,534 161,534
----------
Total Short-Term Investments (Cost $266,534) 266,534
TOTAL MARKET VALUE OF SECURITIES OWNED 100.1% (COST $3,411,874) 4,191,100
RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES (0.1)% (2,515)
----------
NET ASSETS APPLICABLE TO 245,684 SHARES ($0.001 PAR VALUE)
OUTSTANDING 100.0% $4,188,585
==========
*Non-income producing investments.
The accompanying notes are an integral part of these financial statements.
VIKING MUTUAL FUNDS
Financial Statements
Statements of Assets and Liabilities (Unaudited)
June 30, 2007
Tax-Free Fund Tax-Free Fund Large-Cap Small-Cap
for Montana for North Dakota Value Fund Value Fund
ASSETS:
Investments in securities:
Cost $9,822,399 $5,948,275 $3,895,401 $3,411,874
------------------------------------------------------------------------------------
Value 9,824,860 5,916,692 5,235,909 4,191,099
Cash 16,188 4,506 5,125 85,948
Receivable for fund shares sold 0 0 0 0
Prepaid assets 518 291 1,044 1,124
Security sales receivable 0 140,000 0 0
Interest & dividends receivable 98,390 63,605 9,379 7,292
Other Receivables 153 25 81 81
------------------------------------------------------------------------------------
Total assets 9,940,109 6,125,119 5,251,538 4,285,544
------------------------------------------------------------------------------------
LIABILITIES:
Security purchases payable 0 298,573 0 89,626
Payable for shares redeemed 9,304 0 4,773 0
Distributions payable 30,413 17,817 0 0
Other accounts payable and
accrued expenses 8,365 5,983 7,363 7,333
------------------------------------------------------------------------------------
Total liabilities 48,082 322,373 12,136 96,959
------------------------------------------------------------------------------------
NET ASSETS 9,892,027 5,802,746 5,239,402 4,188,585
------------------------------------------------------------------------------------
COMPONENTS OF NET ASSETS AT June 30, 2007
Capital shares, $0.001 par value,
unlimited shares authorized 10,036,361 5,916,352 3,771,171 3,174,813
Net unrealized appreciation
(depreciation) 2,461 (31,583) 1,340,508 779,225
Accumulated net realized gain
(loss) on investments (146,795) (82,023) 46,463 233,432
Undistributed net investment
income (loss) 0 0 81,260 1,115
------------------------------------------------------------------------------------
NET ASSETS $9,892,027 $5,802,746 $5,239,402 $4,188,585
------------------------------------------------------------------------------------
NET ASSET VALUE AND
OFFERING PRICE PER SHARE
Net assets, at value $9,892,027 $5,802,746 $5,239,402 $4,188,585
Shares outstanding 1,001,535 580,877 358,926 245,684
Net asset value per share $9.88 $9.99 $14.60 $17.05
Maximum offering price per share
(net asset value per share divided
by 96.25%, 96.25%, 94.75% and
94.75%, respectively) $10.26 $10.38 $15.41 $17.99
------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
VIKING MUTUAL FUNDS
Financial Statements
Statements of Operations (Unaudited)
For the six months ended June 30, 2007
Tax-Free Fund Tax-Free Fund Large-Cap Small-Cap
for Montana for North Dakota Value Fund Value Fund
-------------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest $239,524 $131,714 $ 0 $ 0
Dividends 2,474 2,385 113,239 32,147
-------------------------------------------------------------------------------------
Total investment income 241,998 134,099 113,239 32,147
-------------------------------------------------------------------------------------
EXPENSES:
Investment advisory fees 26,255 14,543 16,582 18,807
Administrative fees 5,251 2,909 2,369 1,881
Distribution fees 13,128 7,272 9,475 7,523
Transfer agent fees 1,714 925 2,900 3,202
Accounting fees 2,626 1,454 1,184 940
Professional fees 4,844 4,790 4,805 4,806
Insurance 1,483 726 494 376
Trustee fees 336 338 340 339
Registration fees 500 59 449 443
Custodian fees 1,734 1,734 1,744 1,744
Other 0 0 0 0
-------------------------------------------------------------------------------------
Total expenses 57,871 34,750 40,342 40,061
-------------------------------------------------------------------------------------
Less expenses waived or
reimbursed (19,457) (13,549) (8,363) (9,029)
------------------------------------------------------------------------------------
Net expenses 38,414 21,201 31,979 31,032
-------------------------------------------------------------------------------------
NET INVESTMENT INCOME (LOSS) 203,584 112,898 81,260 1,115
-------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss)
on investments (1,871) 902 46,463 233,432
Net change in unrealized
appreciation (depreciation)
of investments (174,813) (130,841) 387,167 139,397
-------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS (176,684) (129,939) 433,630 372,829
-------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN
NET ASSETS RESULTING
FROM OPERATIONS $26,900 $(17,041) $514,890 $373,944
-------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
VIKING MUTUAL FUNDS
Financial Statements
Statements of Changes in Net Assets (Unaudited)
For the six months ended June 30, 2007
Tax-Free Fund Tax-Free Fund Large-Cap Small-Cap
for Montana for North Dakota Value Fund Value Fund
-------------------------------------------------------------------------------------
INCREASE (DECREASE) IN
NET ASSETS FROM
OPERATIONS:
Net investment income (loss) $203,584 $112,898 $81,260 $1,115
Net realized gain (loss)
on investments (1,871) 902 46,463 233,432
Net change in unrealized
appreciation (depreciation)
of investments (174,813) (130,841) 387,167 139,397
-------------------------------------------------------------------------------------
Net increase (decrease) in
net assets resulting
from operations 26,900 (17,041) 514,890 373,944
-------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (203,584) (112,898) 0 0
Net realized gains 0 0 0 0
-------------------------------------------------------------------------------------
Total distributions to
shareholders (203,584) (112,898) 0 0
-------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold 711,494 493,249 528,696 565,212
Proceeds from reinvestment
of distributions 154,267 72,412 117,676 188,207
Cost of shares repurchased (1,881,090) (508,803) (207,399) (181,538)
-------------------------------------------------------------------------------------
Increase in net assets
derived from capital share
transactions (1,015,329) 56,858 438,973 571,881
-------------------------------------------------------------------------------------
NET INCREASE (DECREASE)
IN NET ASSETS $(1,192,013) $(73,081) $953,863 $945,825
-------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period $11,084,040 $5,875,827 $4,285,539 $3,242,760
-------------------------------------------------------------------------------------
End of period $9,892,027 $5,802,746 $5,239,402 $4,188,585
-------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
VIKING MUTUAL FUNDS
Financial Statements
Statements of Changes in Net Assets
For the year ended December 31, 2006
Tax-Free Fund Tax-Free Fund Large-Cap Small-Cap
for Montana for North Dakota Value Fund Value Fund
-------------------------------------------------------------------------------------
INCREASE (DECREASE) IN
NET ASSETS FROM
OPERATIONS:
Net investment income (loss) $457,227 $236,469 $47,130 $2,485
Net realized gain (loss)
on investments (51,061) (38,426) 209,203 186,137
Net change in unrealized
appreciation (depreciation)
of investments 67,400 74,203 328,319 216,025
-------------------------------------------------------------------------------------
Net increase (decrease) in
net assets resulting
from operations 473,566 272,246 584,652 404,647
-------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (457,227) (236,469) (47,130) (2,485)
Net realized gains 0 0 (71,842) (186,137)
-------------------------------------------------------------------------------------
Total distributions to
shareholders (457,227) (236,469) (118,972) (188,622)
-------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold 1,727,487 431,577 470,724 598,354
Proceeds from reinvestment
of distributions 339,997 146,177 26,175 119,026
Cost of shares repurchased (3,408,165) (1,278,230) (312,682) (199,712)
-------------------------------------------------------------------------------------
Increase in net assets
derived from capital share
transactions (1,340,681) (700,476) 184,217 517,668
-------------------------------------------------------------------------------------
NET INCREASE (DECREASE)
IN NET ASSETS $(1,324,342) $(664,699) $649,897 $733,693
-------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period $12,408,382 $6,540,526 $3,635,642 $2,509,067
-------------------------------------------------------------------------------------
End of period $11,084,040 $5,875,827 $4,285,539 $3,242,760
-------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
VIKING MUTUAL FUNDS
Financial Highlights
Viking Tax-Free Fund for Montana
Selected data for each share of the Fund outstanding throughout each period
were as follows:
For the Period
01/01/07- 01/01/06- 01/01/05- 01/01/04- 01/01/03- 01/01/02-
06/30/07 12/31/06 12/31/05 12/31/04 12/31/03 12/31/02
(Unaudited)
--------------------------------------------------------------------------
Net asset value, beginning of period $10.06 $10.04 $10.22 $10.20 $10.18 $9.74
--------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 0.20 0.39 0.38 0.38 0.42 0.46
Net realized and unrealized gain
(loss) on investments (0.18) 0.02 (0.18) 0.02 0.02 0.48
--------------------------------------------------------------------------
Total from investment operations 0.02 0.41 0.20 0.40 0.44 0.94
--------------------------------------------------------------------------
Less distributions from:
Net investment income (0.20) (0.39) (0.38) (0.38) (0.42) (0.46)
Net realized gains 0.00 0.00 0.00 0.00 0.00 (0.04)
---------------------------------------------------------------------------
Total distributions (0.20) (0.39) (0.38) (0.38) (0.42) (0.50)
---------------------------------------------------------------------------
Net asset value, end of period $9.88 $10.06 $10.04 $10.22 $10.20 $10.18
---------------------------------------------------------------------------
Total return1 0.13% 4.15% 1.96% 4.05% 4.45% 9.90%
---------------------------------------------------------------------------
Ratios/supplemental data:
Net assets, end of period (000's) $9,892 $11,084 $12,408 $12,206 $12,634 $8,513
Ratio of net expenses to average net assets 0.74%2,3 0.63%2 0.55%2 0.41%2 0.31%2 0.15%2
Ratio of net investment income to
average net assets 1.94%3 3.87% 3.71% 3.78% 4.13% 4.58%
Portfolio turnover rate 14.15% 24.39% 24.59% 26.55% 24.72% 40.09%
1Total return assumes reinvestment of distributions at net asset value and
does not reflect the impact of a sales charge.
2Viking Fund Management, LLC, the Funds investment manager, has
Contractually agreed to waive its fees or reimburse the Fund for its
expenses through August 1, 2009 so that the Funds total operating
expenses during this period will notexceed 0.85% of its average net assets
on an annual basis. For the periods indicated above Viking Fund
Management, LLC waived fees and reimbursed expenses
totaling $19,457, $53,771, $65,270, $80,645, $81,954 and $67,712.
If the fees had not been waived or expenses had not been reimbursed, the
annualized ratio of total expenses to average net assets would have been
1.11%, 1.08%, 1.06%, 1.06%, 1.09% and 1.30% respectively.
3Annualized
The accompanying notes are an integral part of these financial statements.
VIKING MUTUAL FUNDS
Financial Highlights
Viking Tax-Free Fund for North Dakota
Selected data for each share of the Fund outstanding throughout each period
were as follows:
For the Period
01/01/07- 01/01/06- 01/01/05- 01/01/04- 01/01/03- 01/01/02-
06/30/07 12/31/06 12/31/05 12/31/04 12/31/03 12/31/02
(Unaudited)
----------------------------------------------------------------------------
Net asset value, beginning of period $10.22 $10.14 $10.29 $10.29 $10.25 $9.76
----------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 0.19 0.39 0.38 0.38 0.42 0.47
Net realized and unrealized gain
(loss) on investments (0.23) 0.08 (0.15) 0.00 0.04 0.49
----------------------------------------------------------------------------
Total from investment operations (0.04) 0.47 0.23 0.38 0.46 0.96
----------------------------------------------------------------------------
Less distributions from:
Net investment income (0.19) (0.39) (0.38) (0.38) (0.42) (0.47)
Net realized gains 0.00 0.00 0.00 0.00 0.00 0.00
----------------------------------------------------------------------------
Total distributions (0.19) (0.39) (0.38) (0.38) (0.42) (0.47)
----------------------------------------------------------------------------
Net asset value, end of period $9.99 $10.22 $10.14 $10.29 $10.29 $10.25
----------------------------------------------------------------------------
Total return1 -0.33% 4.77% 2.24% 3.76% 4.60% 10.07%
Ratios/supplemental data:
Net assets, end of period (000's) $5,803 $5,876 $6,541 $6,086 $4,781 $2,059
Ratio of net expenses to average net assets 0.74%2,3 0.62%2 0.52%2 0.44%2 0.36%2 0.22%2
Ratio of net investment income to
average net assets 1.94%3 3.86% 3.70% 3.68% 4.06% 4.73%
Portfolio turnover rate 12.37% 35.84% 17.61% 22.36% 7.49% 27.95%
1Total return assumes reinvestment of distributions at net asset value and does
not reflect the impact of a sales charge.
2Viking Fund Management, LLC, the Funds investment manager, has contractually
agreed to waive its fees or reimburse the Fund for its expenses through August
1, 2009 so that the Funds total operating expenses during this period will not
exceed 0.85% of its average net assets on an annual basis. For the periods
indicated above, Viking Fund Management, LLC waived fees and reimbursed
expenses totaling $13,549, $34,667, $41,214, $40,375, $32,710 and $30,993.
If the fees had not been waived or expenses had not been reimbursed, the
annualized ratio of total expenses to average net assets would have been
1.21%, 1.18%, 1.16%, 1.18%, 1.32% and 1.90% respectively.
3Annualized
The accompanying notes are an integral part of these financial statements.
VIKING MUTUAL FUNDS
Financial Highlights
Viking Large-Cap Value Fund
Selected data for each share of the Fund outstanding throughout each period
were as follows:
For the Period
01/01/07- 01/01/06- 01/01/05- 01/01/04- 01/01/03- 01/01/02-
06/30/07 12/31/06 12/31/05 12/31/04 12/31/03 12/31/02
----------------------------------------------------------------------------
Net asset value, beginning of period $13.09 $11.64 $10.88 $10.06 $8.20 $10.74
----------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 0.23 0.14 0.08 0.05 0.06 0.06
Net realized and unrealized gain
(loss) on investments 1.28 1.67 0.76 0.82 1.86 (2.54)
----------------------------------------------------------------------------
Total from investment operations 1.51 1.81 0.84 0.87 1.92 (2.48)
----------------------------------------------------------------------------
Less distributions from:
Net investment income 0.00 (0.14) (0.08) (0.05) (0.06) (0.06)
Net realized gains 0.00 (0.22) 0.00 0.00 0.00 0.00
----------------------------------------------------------------------------
Total distributions 0.00 (0.36) (0.08) (0.05) (0.06) (0.06)
----------------------------------------------------------------------------
Net asset value, end of period $14.60 $13.09 $11.64 $10.88 $10.06 $8.20
----------------------------------------------------------------------------
Total return1 11.54% 15.58% 7.76% 8.63% 23.42% (23.08)%
Ratios/supplemental data:
Net assets, end of period (000's) $5,239 $4,286 $3,636 $3,088 $2,745 $1,962
Ratio of net expenses to average net assets 1.36%2,3 1.35%2 1.34%2 1.34%2 1.35%2 1.35%2
Ratio of net investment income to
average net assets 1.71%3 1.18% 0.81% 0.47% 0.73% 0.71%
Portfolio turnover rate 8.61% 22.53% 37.51% 25.70% 26.75% 36.52%
1Total return assumes reinvestment of distributions at net asset value and does
not reflect the impact of a sales charge.
2Viking Fund Management, LLC, the Funds investment manager, has contractually
agreed to waive its fees or reimburse the Fund for its expenses through August
1, 2009 so that the Funds total operating expenses during this period will not
exceed 1.35% of its average net assets on an annual basis. For the periods
indicated above, Viking Fund Management, LLC waived fees and reimbursed
expenses totaling $8,363, $17,512, $15,575, $14,372, $15,021 and $20,422.
If the fees had not been waived or expenses had not been reimbursed, the
annualized ratio of total expenses to average net assets would have been
1.71%, 1.78%, 1.82%, 1.84%, 2.02% and 2.34% respectively.
3Annualized
The accompanying notes are an integral part of these financial statements.
VIKING MUTUAL FUNDS
Financial Highlights
Viking Small-Cap Value Fund
Selected data for each share of the Fund outstanding throughout the period
was as follows:
For the Period
01/01/07- 01/01/06- 01/01/05- 01/01/04- 01/01/03- 01/01/02-
06/30/07 12/31/06 12/30/05 12/31/04 12/31/03 12/31/02
----------------------------------------------------------------------------
Net asset value, beginning of period $15.43 $14.32 $14.40 $12.43 $9.35 $10.26
----------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) 0.00 0.01 (0.03) (0.06) (0.03) (0.03)
Net realized and unrealized gain
(loss) on investments 1.62 2.00 0.63 2.22 3.11 (0.88)
----------------------------------------------------------------------------
Total from investment operations 1.62 2.01 0.60 2.16 3.08 (0.91)
----------------------------------------------------------------------------
Less distributions from:
Net investment income 0.00 (0.01) 0.00 0.00 0.00 0.00
Net realized gains 0.00 (0.89) (0.68) (0.25) 0.00 0.00
----------------------------------------------------------------------------
Total distributions 0.00 (0.90) (0.68) (0.25) 0.00 0.00
----------------------------------------------------------------------------
Net asset value, end of period $17.05 $15.43 $14.32 $14.40 $12.43 $9.35
----------------------------------------------------------------------------
Total return1 10.50% 14.02% 4.18% 17.86% 32.94% (8.87)%
Ratios/supplemental data:
Net assets, end of period (000's) $4,189 $3,243 $2,509 $1,715 $1,250 $604
Ratio of net expenses to average net assets 1.67%2,3 1.65%2 1.65%2 1.65%2 1.65%2 1.65%2
Ratio of net investment income to average
net assets 0.03%3 0.08% (0.21)% (0.46)% (0.37)% (0.41)%
Portfolio turnover rate 18.60% 36.96% 21.93% 15.39% 14.77% 16.24%
1Total return assumes reinvestment of distributions at net asset value and
does not reflect the impact of a sales charge.
2Viking Fund Management, LLC, the Funds investment manager, has
contractually agreed to waive its fees or reimburse the Fund for its
expenses through August1, 2009 so that the Funds total operating expenses
during this period will not exceed 1.65% of its average net assets on an
annual basis. For the periods indicated above, Viking Fund Management,
LLC waived fees and reimbursed expenses totaling $9,029, $17,847, $15,661,
$14,316, $12,883 and $17,392. If the fees had not been waived or expenses
had not been reimbursed, the annualized ratio of total expenses to average
net assets would have been 2.15%, 2.23%, 2.39%, 2.63%, 3.16% and 5.24%
respectively.
3Annualized
The accompanying notes are an integral part of these financial statements.
VIKING MUTUAL FUNDS
Notes to Financial Statements (Unaudited)
June 30, 2007
1. ORGANIZATION
Viking Mutual Funds (the Company) is registered under the Investment Company
Act of 1940 as a non-diversified, open-end management investment company,
consisting of four series (the Funds).
The Viking Tax-Free Fund for Montana and Viking Tax-Free Fund for North Dakota
(each a Tax-Free Fund), each a non-diversified Fund, seek the highest level
of current income that is exempt from both federal and state income taxes and
is consistent with preservation of capital. The Viking Large-Cap Value Fund
(Large-Cap) and Viking Small-Cap Value Fund (Small-Cap), each a
diversified Fund, seek long-term total return and capital preservation.
2. SIGNIFICANT ACCOUNTING POLICIES
The following accounting policies are in accordance with accounting
principles generally accepted in the United States of America and are
consistently followed by the Funds.
Security Valuation Securities listed or traded on a recognized national
exchange or NASDAQ are valued at the last reported sales price. Securities
for which market quotations are not readily available (which will constitute
a majority of the securities held by the Tax-Free Funds) are valued using a
matrix system at fair value as determined by management in
accordance with procedures established by the Board of Trustees. The matrix
system gives consideration to the following: yields or prices of municipal
bonds of comparable quality, type of issue, coupon, maturity, rating, and
indications as to value from dealers and general market conditions.
Because the market value of municipal securities can only be established by
Agreement between parties in a sales transaction, and because of uncertainty
inherent in the valuation process, the fair values as determined may differ
from the value that would have been used had a ready market for the
securities existed.
Federal Income Taxes The Funds intend to qualify for treatment as a regulated
investment company under Subchapter M of the Internal Revenue Code, and the
funds intend to distribute investment company net taxable income and net
capital gains to shareholders. Therefore, no federal tax provision is
recorded.
Premiums and Discounts Premiums and discounts on municipal securities are
amortized for financial reporting purposes.
Security Transactions, Investment Income, Expenses and Distributions
Security transactions are accounted for on trade date. Realized gains
and losses on security transactions are determined on the identified cost
basis. Interest income and estimated expenses are accrued daily. Dividend
income is recognized on the ex-dividend date. Premiums and discounts on
municipal securities are amortized to interest income using the constant
yield method over the estimated lives of the respective securities. The
Tax-Free Funds declare dividends from net investment income daily and pay
such dividends monthly. The Large-Cap Fund and the Small-Cap Fund will
declare and pay dividends from net investment income at least annually.
Capital gains, if any, are distributed annually. Income and capital gain
distributions are determined in accordance with federal income tax
regulations and may differ from net investment income and realized gains
determined in accordance with accounting principles generally accepted in
the United States of America. These differences are primarily due to
differing treatment for market discount, capital loss carryforwards and
losses due to wash sales and futures transactions.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid-in
capital. Temporary book and tax basis differences will reverse in a
subsequent period. Common expenses incurred by the Company are
allocated among the Funds based on the ratio of net assets of each Fund
to the combined net assets. Other expenses are charged to each Fund on
a specific identification basis.
Use of Estimates The preparation of financial statements in accordance
with accounting principles generally accepted in the United States of
America 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 amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
3. DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid during the six months ended
June 30, 2007 and year ended December 31, 2006 were as follows:
Tax-Free Fund for Tax-Free Fund for Large-Cap Small-Cap
Montana North Dakota Value Fund Value Fund
-----------------------------------------------------------------------------------
2007 2006 2007 2006 2007 2006 2007 2006
-----------------------------------------------------------------------------------
Distributions paid from:
Tax-exempt income $203,584 $457,227 $112,898 $236,469 $0 $0 $0 $0
Ordinary income $0 $0 $0 $0 $0 $47,130 $0 $2,485
Long-term capital gain $0 $0 $0 $0 $0 $71,842 $0 $186,137
4. CAPITAL STOCK
Transactions in capital shares were as follows:
Tax-Free Fund Tax-Free Fund Large-Cap Small-Cap
for Montana for North Dakota Value Fund Value Fund
--------------------------------------------------------------------------
For the Period For the Period For the Period For the Period
from 01/01/07 from 01/01/07 from 01/01/07 from 01/01/07
through 06/30/07 through 06/30/07 through 06/30/07 through 06/30/07
----------------------------------------------------------------------------
Shares sold 149,987 58,986 51,159 46,275
Shares issued in reinvestment
of distributions 15,364 7,110 8,990 12,197
Shares redeemed (266,127) (60,388) (28,551) (22,920)
----------------------------------------------------------------------------
Net Increase (Decrease) (100,776) 5,708 31,598 35,552
----------------------------------------------------------------------------
5. INVESTMENT MANAGEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
The Funds have retained Viking Fund Management, LLC (VFM) to provide the
Funds with investment advice and portfolio management. As compensation for
the advisory services furnished to the Funds, the Funds pay VFM monthly
compensation calculated daily by applying the annual rates of 0.50% to the
Tax-Free Funds daily net assets, 0.70% to the Large-Cap Funds daily net
assets and 1.00% to the Small-Cap Funds daily net assets. The Tax-Free
Fund for Montana recognized $26,255 of investment advisory fees for the
six months ended June 30, 2007. On June 30, 2007, the Tax-Free Fund for
Montana had a payable to VFM for investment advisory fees of $3,843. The
Tax-Free Fund for North Dakota recognized $14,543 of investment advisory
fees after a partial waiver for the six months ended June 30, 2007. On
June 30, 2007, the Tax-Free Fund for North Dakota had a payable to VFM for
investment advisory fees of $2,098. The Large-Cap Fund recognized $16,582
of investment advisory fees for the six months ended June 30, 2007. On
June 30, 2007, the Large-Cap Fund had a payable to VFM for investment
advisory fees of $2,933. The Small-Cap Fund recognized $18,807 of
investment advisory fees for the six months ended June 30, 2007. On June
30, 2007, the Small-Cap Fund had a payable to VFM for investment advisory
fees of $3,346. Under a sub-advisory agreement between Fox Asset
Management, LLC (the sub-adviser) and VFM, the sub-adviser provides the
Large-Cap Fund and the Small-Cap Fund with investment advice and portfolio
management subject to the overall supervision of VFM. As compensation for
its services provided to the Large-Cap Fund, VFM pays the sub-adviser
monthly compensation calculated daily by applying the annual rate of 0.40%
to the Large-Cap Funds daily net assets of up to $100 million and 0.35% to
the Large-Cap Funds daily net assets in excess of $100 million. As
compensation for its services provided to the Small-Cap fund, VFM pays the
sub-adviser monthly compensation calculated daily by applying the annual
rate of 0.40% to the Small-Cap Funds daily net assets until the net assets
reach $5 million and 0.60% to the Small-Cap Funds daily net assets when
the net assets surpass $5 million.
The Funds have also entered into an agreement with VFM to provide
administrative services, portfolio accounting and transfer agent
services to each of the Funds for a fee at an annual rate of 0.15%
of daily net assets, plus a per account charge and reimbursement of
certain direct expenses. After the Fee waivers, no fees for
administrative services, portfolio accounting or transfer agent services
were recognized by the Funds, for the six months ended June 30, 2007.
The Funds have a distribution plan, sometimes known as a Rule 12b-1 plan,
that allows the Tax-Free Funds to pay distribution and service fees of up
to 0.25% of average daily net assets per year and the Large-Cap Fund and
the Small-Cap Fund to pay distribution and service fees of up to 0.40% of
average daily net assets per year to Viking Fund Distributors, LLC (VFD)
for distributing each Funds shares and for servicing shareholder
accounts. For the six months ended June 30, 2007, the Tax-Free Fund for
Montana recognized $3,262, the Tax-Free Fund for North Dakota recognized
$88, Large-Cap Value Fund recognized $7,566 and Small-Cap Value Fund
recognized $4,517 of 12b-1 fees after a partial waiver. On June 30, 2007,
the Tax Free Fund for Montana, the Large-Cap Fund and Small-Cap Fund had
payables to VFD for 12b-1 fees of $446, $1,449 and $924, respectively.
For the six months ending June 30, 2007, the net amounts of sales charges
deducted from the proceeds of sale of capital shares which were retained
by VFD as principal underwriter were $5,491, $1,787, $2,779 and $2,876
for the Tax-Free Fund for Montana, Tax-Free Fund for North Dakota, Large-
Cap Fund and Small-Cap Fund, respectively. On June 30, 2007, the Tax-Free
Fund for Montana, Tax-Free for North Dakota, Large-Cap Fund and Small-Cap
Fund had payables to VFD for underwriting fees of $1,444, $1,262, $78, and
$121, respectively.
VFM has contractually agreed to waive its fees or reimburse the Funds
for their expenses through August 1, 2009 so that the Tax-Free Funds
total operating expenses during this period will not exceed 0.85% of
average net assets on an annual basis, the Large-Cap Funds total
operating expenses during this period will not exceed 1.35% of average net
assets on an annual basis and the Small-Cap Funds total operating
expenses during this period will not exceed 1.65% of average net assets on
an annual basis.
Certain officers and trustees of the Funds are also officers and governors
of VFM and VFD.
6. INCOME TAXES
No provision has been made for income taxes because each Funds policy is
to qualify as a regulated investment company under the Internal Revenue
Code and to distribute substantially all of its taxable income. At
December 31, 2006, the Funds most recently completed year end, Tax-Free
Fund for Montana and Tax-Free Fund for North Dakota had capital losses of
$144,923 and $82,925 respectively, which may be carried over to offset
future capital gains. Such losses start to expire in 2008.
At June 30, 2007, the net unrealized appreciation based on the cost of
investments for federal income tax purposes was as follows:
Tax-Free Fund Tax-Free Fund Large-Cap Small-Cap
for Montana for North Dakota Value Fund Value Fund
------------------------------------------------------------------------------------
Investments at cost $9,822,399 $5,948,275 $3,895,401 $3,411,874
------------------------------------------------------------------------------------
Unrealized appreciation 83,187 27,015 1,366,169 832,289
Unrealized depreciation (80,726) (58,598) (25,661) (53,064)
------------------------------------------------------------------------------------
Net unrealized appreciation
(depreciation) $2,461 ($31,583) $1,340,508 $779,225
------------------------------------------------------------------------------------
7. INVESTMENT TRANSACTIONS
Purchases and sales of securities (excluding short-term securities) for the
six months ended June 30, 2007 were as follows:
Tax-Free Fund Tax-Free Fund Large-Cap Small-Cap
for Montana for North Dakota Value Fund Value Fund
------------------------------------------------------------------------------------
Purchases $1,488,162 $973,939 $581,014 $1,034,256
Sales $2,496,649 $718,753 $408,770 $698,888
8. CREDIT AND MARKET RISK
The Tax-Free Funds concentrate their investments in securities mainly issued
by each specific states municipalities. The value of these investments may
be adversely affected by new legislation within the state, regional or local
economic conditions, and differing levels of supply and demand for municipal
bonds. Many municipalities insure repayment for their obligations. Although
bond insurance reduces the risk of loss due to default by an issuer, such
bonds remain subject to the risk that market value may fluctuate for other
reasons and there is no assurance that the insurance company will meet its
obligations. These securities have been identified in the Statement of
Investments.
9. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In September 2006, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 157, Fair Value
Measurements. This standard defines fair value, establishes a framework for
measuring fair value in accordance with generally accepted accounting
principles and expands disclosures about fair value measurements. SFAS 157
is effective for fiscal years beginning after November 15, 2007, and interim
periods within those fiscal years. The Fund is presently evaluating the impact
of adopting SFAS 157.
VIKING MUTUAL FUNDS
Miscellaneous Information (Unaudited)
June 30, 2007
Board Approval of Investment Advisory Agreement
In connection with each annual approval, the Board of Trustees is provided
with information to assist it in evaluating whether to approve the
continuance of the Agreement.
In considering whether to approve the Investment Advisory and Sub-Advisory
Agreements, the Board, including the Independent Trustees, considered a
number of factors they believed to be relevant. These factors included
the following: (1) the nature, extent and quality of the services provided
by the advisor; (2) the resources, experience and expertise of the
advisor; (3) the performance of the Funds and the advisor; (4) the
financial capability of the advisor; (5) the compliance history of the
advisor; (6) the performance of the Funds in comparison to similarly
managed funds; (7) the amount of the contractual advisory fee in
comparison to similarly managed funds; (8) the profitability of the
advisor; (9) the extent of any economies of scale; and (10) the existence
of any collateral benefits realized by the advisor and by the Funds.
On the basis of the information provided for their review, the Trustees
reached the following conclusions with respect to the Advisory Agreement:
(1) a comparison of the net operating expenses for the Viking Tax-Free
Fund for Montana and for the Viking Tax-Free Fund for North Dakota to
other funds of similar objective and size reflected that the Viking Tax-
Free Funds have lower expense structures than most of the other funds;
(2) a comparison of the net operating expense for the Viking Large-Cap
Value Fund to other funds of similar objective and size reflect that the
Large-Cap Value Fund has a lower expense structure than most of the other
funds; (3) a comparison of the net operating expense for the Viking Small-
Cap Value Fund to other funds of similar objective and size reflect that
the Small-Cap Value Fund has an expense structure similar to the average
of the other funds; (4) a comparison of the management fees charged by the
Advisor seemed reasonable to the Trustees when compared to similar funds
in objective and size; (5) upon a review of the total return history and
category rankings of each Fund, the Trustees deemed the performance of
each Fund to be satisfactory; (6) the overall nature and quality of the
services provided by the Advisor had historically been, and continued to
be, satisfactory to the Trustees; (7) the Trustees discussed the fact that
the advisor does not benefit from economies of scale due to its
relationship to the Funds as the Viking Funds are relatively small and are
its only advisory clients; (8) the Trustees discussed the profitability
issues regarding the Advisor and felt comfortable with the direction of
the Advisor and its prospects for profitability.
On the basis of the information provided for their review, the Trustees
reached the following conclusions with respect to the Sub-Advisory
Agreement: (1) the Trustees felt the overall nature and quality of
services of Fox Asset Management, LLC (Fox) are satisfactory; (2) the
sub-advisory fees paid to Fox are fair and reasonable in light of the sub-
advisory services expected to be provided and the comparability of the
sub-advisory fees paid by other funds and separately managed accounts; (3)
the investment performance of Fox has lagged somewhat in the past, but has
continued to improve during the last three years and year-to-date; (4) the
Trustees are satisfied with Fox regarding its staffing and capabilities to
manage the Value Funds, including the retention of personnel with
significant portfolio management experience.
VIKING MUTUAL FUNDS
Miscellaneous Information (Unaudited)
June 30, 2007
Your Funds Expenses
As a Fund shareholder, you can incur two types of costs:
* Transaction costs, including sales charges (loads) on Fund purchases; and
* Ongoing Fund costs, including management fees, distribution and service
(12b-1) fees, and other Fund expenses. All mutual funds have ongoing costs,
sometimes referred to as operating expenses.
The following table shows ongoing costs of investing in each Fund and can help
you understand these costs and compare them with those of other mutual
funds. The table assumes a $1,000 investment held for the six months indicated.
Actual Fund Expenses
The first line (Actual) for each Fund listed in the table below provides
actual account values and expenses. The Ending Account Value is derived
from each Funds actual return, which includes the effect of Fund expenses.
You can estimate the expenses you paid during the period, by following these
steps. Of course, your account value and expenses will differ from those
in this illustration:
1. Divide your account value by $1,000.
If an account had an $8,600 value, then $8,600 / $1,000 = 8.6.
2. Multiply the result by the number under the heading Expenses Paid During
Period for the Fund(s) you own shares in.
If Expenses Paid During Period were $7.50, then 8.6 x $7.50 = $64.50.
In this illustration, the estimated expenses paid this period are $64.50.
Hypothetical Example for Comparison with Other Funds
Information in the second line (Hypothetical) for each Fund in the table can
help you compare ongoing costs of investing in the Fund(s) you own with those
of other mutual funds. This information may not be used to estimate the
actual ending account balance or expenses you paid during the period. The
hypothetical Ending Account Value is based on the actual expense ratio for
each Fund and an assumed 5% annual rate of return before expenses, which
does not represent each Funds actual return. The figure under the heading
Expenses Paid During Period shows the hypothetical expenses your account
would have incurred under this scenario. You can compare this figure with
the 5% hypothetical examples that appear in shareholder reports of other funds.
Please note that expenses shown in the table are meant to highlight ongoing
costs and do not reflect any transaction costs, such as sales charges.
Therefore, the second line for each Fund is useful in comparing ongoing costs
only, and will not help you compare total costs of owning different funds.
In addition, if transaction costs were included, your total costs would
have been higher. Please refer to the Fund prospectus for additional
information on operating expenses.
Beginning Account Ending Account Expenses Paid During
Value 01/01/07 Value 06/30/07 Period1 01/01/07-06/30/07
Viking Tax-Free Fund for Montana
Actual $1,000.00 $1,001.30 $3.67 2
Hypothetical (5% return before expenses) $1,000.00 $1,021.12 $3.71 2
Viking Tax-Free Fund for North Dakota
Actual $1,000.00 $996.70 $3.66 2
Hypothetical (5% return before expenses) $1,000.00 $1,021.12 $3.71 2
Viking Large-Cap Value Fund
Actual $1,000.00 $1,115.35 $7.08
Hypothetical (5% return before expenses) $1,000.00 $1,018.10 $6.76
Viking Small-Cap Value Fund
Actual $1,000.00 $1,104.99 $8.61
Hypothetical (5% return before expenses) $1,000.00 $1,016.61 $8.25
1Expenses are equal to the annualized expense ratio for each Fund (Viking
Tax-Free Fund for Montana: 0.74%; Viking Tax-Free Fund for North Dakota:
0.74%; Viking Large-Cap Value Fund: 1.35%; and Viking Small-Cap Value
Fund: 1.65%), multiplied by the average account value over the period,
multiplied by 181/365 to reflect the one-half year period.
2Expenses for the Viking Tax-Free Fund for North Dakota and Viking Tax
Free Fund for Montana have increased since the
Funds most recent fiscal half-year. Had the current expense ratio of the
Fund, 0.80% and 0.79%, been in place throughout the entire most recent
fiscal half-year, the Actual Expenses Paid During Period would have been
$3.96 and $3.92, respectively, and the Hypothetical Expenses Paid During
Period would have been $3.71 for each of the Funds.
Proxy Voting on Fund Portfolio Securities
A description of the policies and procedures that the Funds use to
determine how to vote proxies relating to securities held in the Funds
portfolios is available, without charge and upon request, by calling 1-
800-933-8413. A report on Form N-PX of how the Funds voted any such
proxies during the most recent 12-month period ended June 30 is available,
without charge, and upon request, by calling 1-800-933-8413 and on the
SECs website at http://www.sec.gov.
Quarterly Portfolio Schedule
The Funds file their complete schedule of portfolio holdings with the SEC
for the first and third quarters of each fiscal year on Form N-Q. The
Funds Forms N-Q is available on the SECs website at http://www.sec.gov.
The Funds Form N-Q may be reviewed and copied at the SECs Public
Reference Room in Washington, DC and information on the operation of the
Public Reference Room may be obtained by calling 1-800-SEC-0330.
VIKING MUTUAL FUNDS
Trustee Information (Unaudited)
June 30, 2007
NAME AND PRINCIPAL OCCUPATION(S)
ADDRESS AGE POSITION(S) HELD DURING PAST 5 YEARS
- -----------------------------------------------------------------------------------------------------------------------
Shannon D. Radke 40 Trustee President, Viking Fund Management, LLC
116 1st St SW Suite C President (1998- pres.); President, Viking Fund
Minot, ND 58701 Treasurer Distributors, LLC (1999-pres.); Trustee,
President and Treasurer, Viking Mutual
Funds (1999-pres.).
Mike Timm 70 Trustee Retired; Trustee, Viking Mutual Funds
116 1st St SW Suite C (1999-pres.); President and General
Minot, ND 58701 Manager, Timm Moving and Storage (1959-
2000); State Representative, North Dakota
House of Representatives (1973-pres.);
Speaker of the North Dakota House of
Representatives (1997).
Peter C. Zimmerman 41 Trustee General Manager, Holiday Inn Riverside
116 1st St SW Suite C (1995-pres.); Trustee, Viking Mutual
Minot, ND 58701 Funds (2004-pres.)
The SAI has additional information about the Trustees and is available
at (800) 933-8413 without charge upon request.
VIKING MUTUAL FUNDS
116 1st St SW Suite C
Minot, ND 58701
BOARD OF TRUSTEES
Shannon D. Radke
Mike Timm
Peter C. Zimmerman
INVESTMENT MANAGER
Viking Fund Management, LLC
116 1st St SW Suite C
Minot, ND 58701
SUB-ADVISOR
(For Viking Large-Cap Value Fund)
(For Viking Small-Cap Value Fund)
Fox Asset Management, LLC
331 Newman Springs Road Suite 122
Red Bank, NJ 07701
DISTRIBUTOR
Viking Fund Distributors, LLC
116 1st St SW Suite C
Minot, ND 58701
CUSTODIAN
First Western Bank & Trust
900 South Broadway
Minot, ND 58701
TRANSFER AGENT
Viking Fund Management, LLC
P.O. Box 500
Minot, ND 58702
INDEPENDENT AUDITORS
Brady, Martz & Associates, P.C.
201 East Broadway, Suite 200
Bismarck, ND 58501
Shareholder Services
1-800-933-8413
701-852-1264
When used with prospective investors, this report must be preceded by
a current Viking Mutual Funds prospectus. The prospectus sets forth details
about charges, expenses, investment objectives and operating policies of each
of the Funds. You should read the prospectus carefully before you invest.
To obtain a prospectus, contact your investment professional or Viking Mutual
Funds.
ITEM 2. CODE OF ETHICS.
Not applicable to semi-annual reports.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable to semi-annual reports.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable to semi-annual reports.
ITEM 5. Audit Committee of Listed Registrants
Not Applicable
ITEM 6. Schedule of Investments
Included as part of report to shareholders under Item 1
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. Portfolio Managers of Closed End Management Investment Companies
Not applicable.
ITEM 9. Purchases of Equity Securities by Closed End Management Investment
Company and Affiliated Purchasers.
Not applicable.
ITEM 10. Submission of Matters to a Vote of Security Holders.
Not applicable.
ITEM 11. CONTROLS AND PROCEDURES.
(a) Disclosure Controls and Procedures. The Principal Executive and
Financial Officers concluded that the Registrants Disclosure Controls
and Procedures are effective based on their evaluation of the Disclosure
Controls and Procedures as of a date within 90 days of the filing date of this
report.
(b) Internal Controls. There was no change in the internal controls
over financial reporting (as defined in Rule 30a-3(d) under the Act)
of the registrant that occurred during the second fiscal quarter of the
period covered by this report that has materially affected or is reasonably
likely to materially affect, its internal control over financial reporting.
ITEM 12 EXHIBITS.
(a)(1) Not applicable to semi-annual reports.
(a)(2) The certifications required by Rule 30a-2(a) under the Investment
Company Act of 1940 are filed and attached as exhibits.
(a)(3) Not applicable.
(b) Certifications of principal executive officer and principal financial
officer as required by Rule 30a-2(b) under the Investment Company Act of
1940. Certification of principal executive officer and principal
financial officer as required by Section 906 of the Sarbanes-Oxley
Act of 2002.
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.
VIKING MUTUAL FUNDS
Date: September 6, 2007
/s/Shannon D. Radke
--------------------------------
Shannon D. Radke
President
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.
Date: September 6, 2007
/s/ Shannon D. Radke
--------------------------------
Shannon D. Radke
President
Date: September 6, 2007
/s/ Shannon D. Radke
--------------------------------
Shannon D. Radke
Treasurer