Page 1
|
Shareholder Letter
|
Exhibit 1
|
Portfolio Transactions During the
|
Pages 3 – 4
|
Period from January 1, 2013 through
|
June 30, 2013
|
|
Exhibit 2
|
Selected Historical Financial Information
|
Pages 5 – 6
|
|
Pages 7 – 8
|
Expense Example
|
Page 9
|
Allocation of Portfolio Holdings
|
Pages 10 – 24
|
Financial Statements
|
Pages 25 – 31
|
Additional Disclosures
|
Shareholder Letter
|
July 5, 2013
|
Sincerely,
|
|
![]() |
|
Edson L. Bridges III, CFA
|
|
President and Chief Executive Officer
|
Bought or
|
Held After
|
|
Securities
|
Received
|
Transactions
|
Common Stock Unless
|
$1,000 Par
|
$1,000 Par
|
Described Otherwise
|
Value (M)
|
Value (M)
|
or Shares
|
or Shares
|
|
Actavis Inc.(1)
|
5,000
|
15,000
|
Biogen Idec Inc.
|
2,000
|
2,000
|
BlackRock, Inc.
|
2,000
|
6,000
|
Capital One Financial Corporation
|
5,000
|
55,000
|
Celgene Corporation
|
7,000
|
20,000
|
Chicago Bridge & Iron Company N.V.
|
2,000
|
32,000
|
Cognizant Technology Solutions Corporation
|
3,000
|
18,000
|
DaVita HealthCare Partners Inc.
|
7,000
|
7,000
|
DIRECTV
|
7,000
|
40,000
|
The Walt Disney Company
|
5,000
|
25,000
|
eBay, Inc.
|
2,000
|
25,000
|
Ecolab Inc.
|
8,000
|
8,000
|
Express Scripts Holding Company
|
3,000
|
48,000
|
iShares Core S&P Mid Cap ETF
|
5,000
|
40,000
|
iShares Core S&P Small Cap ETF
|
5,000
|
35,000
|
JPMorgan Chase & Co.
|
15,000
|
15,000
|
Priceline.com Incorporated
|
300
|
3,000
|
Union Pacific Corporation
|
1,000
|
27,000
|
Valmont Industries, Inc.
|
6,000
|
6,000
|
Wells Fargo & Company
|
5,000
|
70,000
|
Sold or
|
Held After
|
|
Securities
|
Exchanged
|
Transactions
|
Common Stock Unless
|
$1,000 Par
|
$1,000 Par
|
Described Otherwise
|
Value (M)
|
Value (M)
|
or Shares
|
or Shares
|
|
Apache Corporation
|
5,000
|
15,000
|
Capital One Financial Corporation
|
5,000
|
50,000
|
Caterpillar Inc.
|
3,000
|
20,000
|
Chesapeake Energy Corporation
|
5,000
|
20,000
|
FedEx Corp.
|
10,000
|
—
|
General Electric Company
|
15,000
|
50,000
|
MasterCard, Inc.
|
1,700
|
9,000
|
McDonald’s Corporation
|
2,000
|
15,000
|
Nike, Inc. Class B
|
10,000
|
—
|
PepsiCo, Inc.
|
2,000
|
13,000
|
Perrigo Company
|
6,000
|
—
|
Philip Morris International Inc.
|
2,000
|
18,000
|
Schlumberger Limited
|
3,000
|
17,000
|
Visa Inc. Class A
|
1,500
|
11,500
|
Valuation
|
Net
|
Shares
|
Net Asset
|
Dividend/
|
Capital
|
|||||||||||||||||
Date
|
Assets
|
Outstanding
|
Value/Share
|
Share
|
Gains/Share
|
|||||||||||||||||
07-01-63 | $ | 109,000 | 10,900 | $ | 10.00 | $ | — | $ | — | |||||||||||||
12-31-63 | 159,187 | 15,510 | 10.13 | .07 | — | |||||||||||||||||
12-31-64 | 369,149 | 33,643 | 10.97 | .28 | — | |||||||||||||||||
12-31-65 | 621,241 | 51,607 | 12.04 | .285 | .028 | |||||||||||||||||
12-31-66 | 651,282 | 59,365 | 10.97 | .295 | — | |||||||||||||||||
12-31-67 | 850,119 | 64,427 | 13.20 | .295 | — | |||||||||||||||||
12-31-68 | 1,103,734 | 74,502 | 14.81 | .315 | — | |||||||||||||||||
12-31-69 | 1,085,186 | 84,807 | 12.80 | .36 | — | |||||||||||||||||
12-31-70 | 1,054,162 | 90,941 | 11.59 | .37 | — | |||||||||||||||||
12-31-71 | 1,236,601 | 93,285 | 13.26 | .37 | — | |||||||||||||||||
12-31-72 | 1,272,570 | 93,673 | 13.59 | .35 | .08 | |||||||||||||||||
12-31-73 | 1,025,521 | 100,282 | 10.23 | .34 | .07 | |||||||||||||||||
12-31-74 | 757,545 | 106,909 | 7.09 | .35 | — | |||||||||||||||||
12-31-75 | 1,056,439 | 111,619 | 9.46 | .35 | — | |||||||||||||||||
12-31-76 | 1,402,661 | 124,264 | 11.29 | .38 | — | |||||||||||||||||
12-31-77 | 1,505,147 | 145,252 | 10.36 | .428 | .862 | |||||||||||||||||
12-31-78 | 1,574,097 | 153,728 | 10.24 | .481 | .049 | |||||||||||||||||
12-31-79 | 1,872,059 | 165,806 | 11.29 | .474 | .051 | |||||||||||||||||
12-31-80 | 2,416,997 | 177,025 | 13.65 | .55 | .0525 | |||||||||||||||||
12-31-81 | 2,315,441 | 185,009 | 12.52 | .63 | .0868 | |||||||||||||||||
12-31-82 | 2,593,411 | 195,469 | 13.27 | .78 | .19123 | |||||||||||||||||
12-31-83 | 3,345,988 | 229,238 | 14.60 | .85 | .25 | |||||||||||||||||
12-31-84 | 3,727,899 | 278,241 | 13.40 | .80 | .50 | |||||||||||||||||
12-31-85 | 4,962,325 | 318,589 | 15.58 | .70 | .68 | |||||||||||||||||
12-31-86 | 6,701,786 | 407,265 | 16.46 | .688 | .86227 | |||||||||||||||||
12-31-87 | 7,876,275 | 525,238 | 15.00 | .656 | 1.03960 | |||||||||||||||||
12-31-88 | 8,592,807 | 610,504 | 14.07 | .85 | 1.10967 | |||||||||||||||||
12-31-89 | 10,895,182 | 682,321 | 15.97 | .67 | .53769 | |||||||||||||||||
12-31-90 | 11,283,448 | 744,734 | 15.15 | .67 | .40297 | |||||||||||||||||
12-31-91 | 14,374,679 | 831,027 | 17.30 | .66 | .29292 | |||||||||||||||||
12-31-92 | 17,006,789 | 971,502 | 17.51 | .635 | .15944 | |||||||||||||||||
12-31-93 | 17,990,556 | 1,010,692 | 17.80 | .6225 | .17075 | |||||||||||||||||
12-31-94 | 18,096,297 | 1,058,427 | 17.10 | .59 | .17874 | |||||||||||||||||
12-31-95 | 24,052,746 | 1,116,620 | 21.54 | .575 | .19289 | |||||||||||||||||
12-31-96 | 29,249,488 | 1,190,831 | 24.56 | .55 | .25730 | |||||||||||||||||
12-31-97 | 36,647,535 | 1,262,818 | 29.02 | .5075 | .30571 | |||||||||||||||||
12-31-98 | 48,433,113 | 1,413,731 | 34.26 | .44 | 2.11648 |
Valuation
|
Net
|
Shares
|
Net Asset
|
Dividend/
|
Capital
|
|||||||||||||||||
Date
|
Assets
|
Outstanding
|
Value/Share
|
Share
|
Gains/Share
|
|||||||||||||||||
12-31-99 | $ | 69,735,684 | 1,508,154 | $ | 46.24 | $ | .30 | $ | .91088 | |||||||||||||
12-31-00 | 71,411,520 | 1,850,301 | 38.59 | .40 | .80880716 | |||||||||||||||||
12-31-01 | 60,244,912 | 1,940,494 | 31.05 | .26 | — | |||||||||||||||||
12-31-02 | 45,854,541 | 1,989,769 | 23.05 | .20 | — | |||||||||||||||||
12-31-03 | 62,586,435 | 2,016,560 | 31.04 | .24 | — | |||||||||||||||||
12-31-04 | 74,281,648 | 2,230,038 | 33.31 | .305 | — | |||||||||||||||||
12-31-05 | 80,715,484 | 2,305,765 | 35.01 | .2798 | — | |||||||||||||||||
12-31-06 | 82,754,479 | 2,336,366 | 35.42 | .2695 | — | |||||||||||||||||
12-31-07 | 77,416,617 | 2,258,380 | 34.28 | .2364 | 2.5735 | |||||||||||||||||
12-31-08 | 49,448,417 | 2,257,410 | 21.91 | .2603 | — | |||||||||||||||||
12-31-09 | 67,435,343 | 2,303,377 | 29.28 | .17 | — | |||||||||||||||||
12-31-10 | 75,014,486 | 2,307,301 | 32.51 | .126 | — | |||||||||||||||||
12-31-11 | 73,779,028 | 2,266,478 | 32.55 | .1586 | — | |||||||||||||||||
12-31-12 | 83,361,384 | 2,256,216 | 36.95 | .207 | — |
Valuation
|
Net
|
Shares
|
Net Asset
|
Dividend/
|
Capital
|
|||||||||||||||||
Date
|
Assets
|
Outstanding
|
Value/Share
|
Share
|
Gains/Share
|
|||||||||||||||||
06-30-12 | $ | 79,224,905 | 2,242,474 | $ | 35.33 | $ | .08 | — | ||||||||||||||
06-30-13 | 93,082,924 | 2,271,697 | 40.98 | .10 | — |
Expenses Paid
|
|||
Beginning
|
Ending
|
During Period*
|
|
Account Value
|
Account Value
|
January 1, 2013 –
|
|
January 1, 2013
|
June 30, 2013
|
June 30, 2013
|
|
Actual
|
$1,000.00
|
$1,111.80
|
$4.54
|
Hypothetical
|
|||
(5% return before expenses)
|
1,000.00
|
1,020.50
|
4.34
|
*
|
Expenses are equal to the Fund’s annualized expense ratio of 0.87%, multiplied by the average account value over the period, multiplied by 181/365 to reflect the one-half year period.
|
Common Stock
|
$ | 82,412,240 | ||
Exchange Traded Funds
|
8,551,550 | |||
Corporate Bonds
|
1,655,612 | |||
Short Term Investments
|
1,195,227 | |||
Total
|
$ | 93,814,629 |
Title of Security
|
Shares
|
Cost
|
Value
|
|||||||||
COMMON STOCKS – 88.54%
|
||||||||||||
Ambulatory Health Care Services – 0.91%
|
||||||||||||
DaVita Healthcare Partners, Inc. (a)
|
7,000 | $ | 829,558 | $ | 845,600 | |||||||
Amusement, Gambling, and
Recreation Industries – 1.70%
|
||||||||||||
The Walt Disney Co.
|
25,000 | $ | 1,095,036 | $ | 1,578,750 | |||||||
Beverage and Tobacco
Product Manufacturing – 3.76%
|
||||||||||||
Altria Group, Inc.
|
25,000 | $ | 478,400 | $ | 874,750 | |||||||
PepsiCo, Inc.
|
13,000 | 632,331 | 1,063,270 | |||||||||
Philip Morris International, Inc.
|
18,000 | 628,549 | 1,559,160 | |||||||||
$ | 1,739,280 | $ | 3,497,180 | |||||||||
Broadcasting (except Internet) – 2.65%
|
||||||||||||
DIRECTV (a)
|
40,000 | $ | 1,657,230 | $ | 2,464,800 | |||||||
Chemical Manufacturing – 3.67%
|
||||||||||||
Actavis, Inc. (a)
|
15,000 | $ | 1,309,354 | $ | 1,893,300 | |||||||
Allergan, Inc.
|
10,000 | 412,855 | 842,400 | |||||||||
Ecolab, Inc.
|
8,000 | 687,005 | 681,520 | |||||||||
$ | 2,409,214 | $ | 3,417,220 | |||||||||
Computer and Electronic
Product Manufacturing – 10.58%
|
||||||||||||
Apple, Inc.
|
11,000 | $ | 1,283,013 | $ | 4,356,880 | |||||||
EMC Corp. (a)
|
65,000 | 1,595,462 | 1,535,300 | |||||||||
QUALCOMM, Inc.
|
50,000 | 2,174,726 | 3,054,000 | |||||||||
Waters Corp. (a)
|
9,000 | 472,047 | 900,450 | |||||||||
$ | 5,525,248 | $ | 9,846,630 | |||||||||
Couriers and Messengers – 0.93%
|
||||||||||||
United Parcel Service, Inc. – Class B
|
10,000 | $ | 671,348 | $ | 864,800 | |||||||
Credit Intermediation and
Related Activities – 7.33%
|
||||||||||||
Capital One Financial Corp.
|
50,000 | $ | 1,579,084 | $ | 3,140,500 |
(a)
|
Non Income Producing.
|
Title of Security
|
Shares
|
Cost
|
Value
|
|||||||||
COMMON STOCKS (Continued)
|
||||||||||||
Credit Intermediation and
Related Activities – 7.33% (Continued)
|
||||||||||||
JPMorgan Chase & Co.
|
15,000 | $ | 819,921 | $ | 791,850 | |||||||
Wells Fargo & Co.
|
70,000 | 1,821,947 | 2,888,900 | |||||||||
$ | 4,220,952 | $ | 6,821,250 | |||||||||
Food Services and Drinking Places – 2.65%
|
||||||||||||
McDonald’s Corp.
|
15,000 | $ | 1,130,056 | $ | 1,485,000 | |||||||
Starbucks Corp.
|
15,000 | 561,001 | 982,350 | |||||||||
$ | 1,691,057 | $ | 2,467,350 | |||||||||
Health and Personal Care Stores – 3.18%
|
||||||||||||
Express Scripts Holding Co. (a)
|
48,000 | $ | 1,210,860 | $ | 2,961,120 | |||||||
Heavy and Civil
Engineering Construction – 2.05%
|
||||||||||||
Chicago Bridge & Iron Co. N.V.
|
32,000 | $ | 1,135,154 | $ | 1,909,120 | |||||||
Insurance Carriers and Related Activities – 2.40%
|
||||||||||||
Berkshire Hathaway, Inc. – Class B (a)
|
20,000 | $ | 678,649 | $ | 2,238,400 | |||||||
Machinery Manufacturing – 4.62%
|
||||||||||||
Caterpillar, Inc.
|
20,000 | $ | 1,126,404 | $ | 1,649,800 | |||||||
General Electric Co.
|
50,000 | 746,325 | 1,159,500 | |||||||||
Roper Industries, Inc.
|
12,000 | 547,802 | 1,490,640 | |||||||||
$ | 2,420,531 | $ | 4,299,940 | |||||||||
Nonstore Retailers – 2.43%
|
||||||||||||
Amazon.com, Inc. (a)
|
3,500 | $ | 565,147 | $ | 971,915 | |||||||
eBay, Inc. (a)
|
25,000 | 915,819 | 1,293,000 | |||||||||
$ | 1,480,966 | $ | 2,264,915 | |||||||||
Oil and Gas Extraction – 3.64%
|
||||||||||||
Anadarko Petroleum Corp.
|
20,000 | $ | 1,335,558 | $ | 1,718,600 | |||||||
Apache Corp.
|
15,000 | 1,188,510 | 1,257,450 | |||||||||
Chesapeake Energy Corp.
|
20,000 | 435,079 | 407,600 | |||||||||
$ | 2,959,147 | $ | 3,383,650 |
(a)
|
Non Income Producing.
|
Title of Security
|
Shares
|
Cost
|
Value
|
||||||||||
COMMON STOCKS (Continued)
|
|||||||||||||
Other Information Services – 3.78%
|
|||||||||||||
Google, Inc. – Class A (a)
|
4,000 | $ | 1,691,413 | $ | 3,521,480 | ||||||||
Petroleum and Coal
Products Manufacturing – 2.92%
|
|||||||||||||
Chevron Corp.
|
23,000 | $ | 1,061,445 | $ | 2,721,820 | ||||||||
Professional, Scientific, and
Technical Services – 16.21%
|
|||||||||||||
Accenture PLC – Class A
|
20,000 | $ | 1,123,676 | $ | 1,439,200 | ||||||||
Biogen Idec, Inc. (a)
|
2,000 | 344,562 | 430,400 | ||||||||||
Celgene Corp. (a)
|
20,000 | 1,651,657 | 2,338,200 | ||||||||||
Cognizant Technology
|
|||||||||||||
Solutions Corp. – Class A (a)
|
18,000 | 1,245,560 | 1,126,980 | ||||||||||
Mastercard, Inc.
|
9,000 | 1,612,127 | 5,170,500 | ||||||||||
priceline.com, Inc. (a)
|
3,000 | 1,554,059 | 2,481,390 | ||||||||||
Visa, Inc.
|
11,500 | 838,573 | 2,101,625 | ||||||||||
$ | 8,370,214 | $ | 15,088,295 | ||||||||||
Publishing Industries (except Internet) – 1.11%
|
|||||||||||||
Microsoft Corp.
|
30,000 | $ | 921,971 | $ | 1,035,900 | ||||||||
Rail Transportation – 4.48%
|
|||||||||||||
Union Pacific Corp.
|
27,000 | $ | 1,725,558 | $ | 4,165,560 | ||||||||
Securities, Commodity Contracts,
and Other Financial Investments
and Related Activities – 2.83%
|
|||||||||||||
Blackrock, Inc.
|
6,000 | $ | 1,191,188 | $ | 1,541,100 | ||||||||
T. Rowe Price Group, Inc.
|
15,000 | 725,747 | 1,097,250 | ||||||||||
$ | 1,916,935 | $ | 2,638,350 | ||||||||||
Support Activities for Mining – 1.31%
|
|||||||||||||
Schlumberger Ltd.
|
17,000 | $ | 1,345,023 | $ | 1,218,220 | ||||||||
Telecommunications – 0.92%
|
|||||||||||||
Valmont Industries, Inc.
|
6,000 | $ | 903,459 | $ | 858,540 |
(a)
|
Non Income Producing.
|
Title of Security
|
Shares
|
Cost
|
Value
|
|||||||||
COMMON STOCKS (Continued)
|
||||||||||||
Transportation Equipment
Manufacturing – 2.48%
|
||||||||||||
Eaton Corp. PLC
|
35,000 | $ | 1,816,696 | $ | 2,303,350 | |||||||
TOTAL COMMON STOCKS
|
||||||||||||
(Cost $49,476,944)
|
$ | 49,476,944 | $ | 82,412,240 | ||||||||
EXCHANGE TRADED FUNDS – 9.19%
|
||||||||||||
Funds, Trusts, and Other
|
||||||||||||
Financial Vehicles – 9.19%
|
||||||||||||
iShares Core S&P Mid-Cap ETF
|
40,000 | $ | 3,684,766 | $ | 4,620,000 | |||||||
iShares Core S&P Small-Cap ETF
|
35,000 | 2,407,647 | 3,160,150 | |||||||||
iShares MSCI Emerging Markets ETF
|
20,000 | 827,798 | 771,400 | |||||||||
TOTAL EXCHANGE TRADED FUNDS
|
||||||||||||
(Cost $6,920,211)
|
$ | 6,920,211 | $ | 8,551,550 | ||||||||
Principal
|
||||||||||||
Amount
|
Cost
|
Value
|
||||||||||
CORPORATE BONDS – 1.78%
|
||||||||||||
Broadcasting (except Internet) – 0.25%
|
||||||||||||
Comcast Corp.
|
||||||||||||
6.500%, 01/15/2017
|
200,000 | $ | 199,592 | $ | 232,316 | |||||||
Building Material and Garden
Equipment and Supplies Dealers – 0.24%
|
||||||||||||
Home Depot, Inc.
|
||||||||||||
5.400%, 03/01/2016
|
200,000 | $ | 191,398 | $ | 222,857 | |||||||
Funds, Trusts, and Other
Financial Vehicles – 0.34%
|
||||||||||||
Spectra Energy Capital, LLC
|
||||||||||||
8.000%, 10/01/2019
|
250,000 | $ | 264,169 | $ | 316,401 |
Principal
|
||||||||||||
Title of Security
|
Amount
|
Cost
|
Value
|
|||||||||
CORPORATE BONDS (Continued)
|
||||||||||||
General Merchandise Stores – 0.35%
|
||||||||||||
JC Penney Corp., Inc.
|
||||||||||||
7.400%, 04/01/2037
|
400,000 | $ | 400,851 | $ | 325,000 | |||||||
Machinery Manufacturing – 0.32%
|
||||||||||||
Applied Materials, Inc.
|
||||||||||||
7.125%, 10/15/2017
|
250,000 | $ | 252,527 | $ | 297,432 | |||||||
Oil and Gas Extraction – 0.28%
|
||||||||||||
Anadarko Petroleum Corp.
|
||||||||||||
7.625%, 03/15/2014
|
250,000 | $ | 247,953 | $ | 261,606 | |||||||
TOTAL CORPORATE BONDS
|
||||||||||||
(Cost $1,556,490)
|
$ | 1,556,490 | $ | 1,655,612 | ||||||||
Shares
|
Cost
|
Value
|
||||||||||
SHORT-TERM INVESTMENTS – 1.28%
|
||||||||||||
Mutual Fund – 1.28%
|
||||||||||||
SEI Daily Income Trust
|
||||||||||||
Treasury Fund, 0.01% (b)
|
1,195,227 | $ | 1,195,227 | $ | 1,195,227 | |||||||
TOTAL SHORT-TERM INVESTMENTS
|
||||||||||||
(Cost $1,195,227)
|
$ | 1,195,227 | $ | 1,195,227 | ||||||||
TOTAL INVESTMENTS – 100.79%
|
$ | 59,148,872 | $ | 93,814,629 | ||||||||
LIABILITIES IN EXCESS
|
||||||||||||
OF OTHER ASSETS – (0.79)%
|
(731,705 | ) | ||||||||||
TOTAL NET ASSETS – 100.00%
|
$ | 93,082,924 |
(b)
|
Variable rate security: the rate shown is the effective rate as of June 30, 2013.
|
ASSETS:
|
||||
Investments in securities, at fair value (cost: $59,148,872)
|
$ | 93,814,629 | ||
Receivables
|
||||
Investments sold
|
269,069 | |||
Dividends and interest
|
138,112 | |||
Fund shares issued
|
2,879 | |||
Prepaid Expenses
|
9,643 | |||
TOTAL ASSETS
|
$ | 94,234,332 | ||
LIABILITIES:
|
||||
Payables
|
||||
Investments purchased
|
$ | 951,954 | ||
Distribution to shareholders
|
15,239 | |||
Advisory fees
|
109,359 | |||
Payable to directors
|
16,888 | |||
Withholding tax payable
|
240 | |||
Accrued expenses
|
57,728 | |||
TOTAL LIABILITIES
|
$ | 1,151,408 | ||
TOTAL NET ASSETS
|
$ | 93,082,924 | ||
NET ASSETS CONSIST OF:
|
||||
Capital stock
|
$ | 56,378,563 | ||
Accumulated undistributed net investment income
|
28,744 | |||
Accumulated undistributed net realized gain on investments
|
2,009,860 | |||
Unrealized appreciation on investments
|
34,665,757 | |||
TOTAL NET ASSETS
|
$ | 93,082,924 | ||
SHARES OUTSTANDING
|
||||
($0.0001 par value; 100,000,000 shares authorized)
|
2,271,697 | |||
NET ASSET VALUE, OFFERING AND
|
||||
REDEMPTION PRICE PER SHARE
|
$ | 40.98 |
INVESTMENT INCOME:
|
||||
Dividend income (net of foreign tax withheld of $480)
|
$ | 578,438 | ||
Interest income
|
56,831 | |||
Total investment income
|
$ | 635,269 | ||
EXPENSES:
|
||||
Advisory fees
|
$ | 226,941 | ||
Administration fees
|
55,133 | |||
Fund accounting fees
|
24,255 | |||
Dividend disbursing and transfer agent fees
|
21,869 | |||
Independent director’s expenses and fees
|
16,888 | |||
Professional Services
|
16,756 | |||
Other
|
12,363 | |||
Printing and supplies
|
7,717 | |||
Custody fees
|
5,909 | |||
Taxes and licenses
|
729 | |||
Total expenses
|
$ | 388,560 | ||
NET INVESTMENT INCOME
|
$ | 246,709 | ||
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS
|
||||
Net realized gain on investments
|
1,942,686 | |||
Net change in unrealized appreciation on investments
|
7,143,187 | |||
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS
|
9,085,873 | |||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$ | 9,332,582 |
2013
|
2012
|
|||||||
OPERATIONS:
|
||||||||
Net investment income
|
$ | 246,709 | $ | 191,789 | ||||
Net realized gain on investments
|
1,942,686 | 2,021,368 | ||||||
Net increase in unrealized
|
||||||||
appreciation on investments
|
7,143,187 | 4,302,883 | ||||||
Net increase in net assets
|
||||||||
resulting from operations
|
$ | 9,332,582 | $ | 6,516,040 | ||||
Net equalization of debits/credits
|
444 | (2,069 | ) | |||||
Distributions to shareholders:
|
||||||||
From net investment income
|
(226,861 | ) | (179,125 | ) | ||||
Total distributions
|
$ | (226,861 | ) | $ | (179,125 | ) | ||
Capital Share Transactions:
|
||||||||
Net increase/(decrease) in net assets
|
||||||||
from capital share transactions
|
615,375 | (888,969 | ) | |||||
Total Increase in Net Assets
|
$ | 9,721,540 | $ | 5,445,877 | ||||
NET ASSETS:
|
||||||||
Beginning of the Period
|
$ | 83,361,384 | $ | 73,779,028 | ||||
End of the Period (including undistributed net
|
||||||||
investment income of $28,744 and $10,595 respectively)
|
$ | 93,082,924 | $ | 79,224,905 |
For the Six
|
||||||||||||||||||||||||
Months Ended
|
||||||||||||||||||||||||
June 30, 2013
|
Years Ended December 31,
|
|||||||||||||||||||||||
(Unaudited)
|
2012
|
2011
|
2010
|
2009
|
2008
|
|||||||||||||||||||
Net asset value,
|
||||||||||||||||||||||||
beginning of period
|
$ | 36.95 | $ | 32.55 | $ | 32.51 | $ | 29.28 | $ | 21.91 | $ | 34.28 | ||||||||||||
Income (loss) from investment operations:
|
||||||||||||||||||||||||
Net investment income1
|
0.11 | 0.21 | 0.16 | 0.14 | 0.17 | 0.25 | ||||||||||||||||||
Net realized and unrealized
|
||||||||||||||||||||||||
gain/(loss) on investments
|
4.02 | 4.40 | 0.04 | 3.22 | 7.37 | (12.36 | ) | |||||||||||||||||
Total from
|
||||||||||||||||||||||||
investment operations
|
4.13 | 4.61 | 0.20 | 3.36 | 7.54 | (12.11 | ) | |||||||||||||||||
Less dividends and distributions:
|
||||||||||||||||||||||||
Dividends from net
|
||||||||||||||||||||||||
investment income
|
(0.10 | ) | (0.21 | ) | (0.16 | ) | (0.13 | ) | (0.17 | ) | (0.25 | ) | ||||||||||||
Distributions from
|
||||||||||||||||||||||||
net realized gains
|
— | — | — | — | — | — | ||||||||||||||||||
Distributions from
|
||||||||||||||||||||||||
tax return of capital
|
— | — | — | — | — | (0.01 | ) | |||||||||||||||||
Total dividends
|
||||||||||||||||||||||||
and distributions
|
(0.10 | ) | (0.21 | ) | (0.16 | ) | (0.13 | ) | (0.17 | ) | (0.26 | ) | ||||||||||||
Net asset value, end of period
|
$ | 40.98 | $ | 36.95 | $ | 32.55 | $ | 32.51 | $ | 29.28 | $ | 21.91 | ||||||||||||
Total return
|
11.18 | %2 | 14.16 | % | 0.62 | % | 11.50 | % | 34.61 | % | (35.47 | %) | ||||||||||||
Supplemental data and ratios:
|
||||||||||||||||||||||||
Net assets, end of period
|
||||||||||||||||||||||||
(in thousands)
|
$ | 93,083 | $ | 83,361 | $ | 73,779 | $ | 75,014 | $ | 67,435 | $ | 49,448 | ||||||||||||
Ratio of net expenses
|
||||||||||||||||||||||||
to average net assets:
|
0.87 | %3 | 0.88 | % | 0.88 | % | 0.90 | % | 1.02 | % | 0.77 | % | ||||||||||||
Ratio of net investment income
|
||||||||||||||||||||||||
to average net assets:
|
0.55 | %3 | 0.58 | % | 0.47 | % | 0.42 | % | 0.63 | % | 0.86 | % | ||||||||||||
Portfolio turnover rate
|
6.2 | % | 17.0 | % | 26.6 | % | 26.3 | % | 18.2 | % | 23.4 | % | ||||||||||||
1
|
Net investment income per share is calculated using the ending balances prior to consideration or adjustment for permanent book-to-tax differences.
|
2
|
Not Annualized.
|
|
3
|
Annualized.
|
(1)
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
Bridges Investment Fund, Inc. (the “Fund”) is registered under the Investment Company Act of 1940 as a diversified, open-end management investment company. The primary investment objective of the Fund is long-term capital appreciation. In pursuit of that objective, the Fund invests primarily in common stocks. The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”).
|
A.
|
Investments –
|
|
Security transactions are recorded on trade date. Dividend income is recognized on the ex-dividend date, and interest income is recognized on an accrual basis. Discount and premium on fixed income securities is accreted or amortized into interest income using the effective interest method.
|
||
The net realized gain (loss) from the sales of securities is determined for income tax and accounting purposes on the basis of the cost of specific securities.
|
||
Securities owned are reflected in the accompanying statement of assets and liabilities and the schedule of investments at fair value based on quoted market prices. Bonds and other fixed-income securities (other than the short-term securities) are valued using the bid price provided by an independent pricing service. Other securities traded on a national securities exchange are valued at the last reported sale price at the close of regular trading on each day the exchange is open for trading. Securities listed on the NASDAQ National Market System for which market quotations are readily available are valued using the NASDAQ Official Closing Price (“NOCP”). If no sales were reported on that day, quoted market price represents the closing bid price.
|
||
Securities for which prices are not readily available were valued by the Fund’s valuation committee (the “Valuation Committee”) at a fair value determined in good faith under procedures established by and under the general supervision of the Fund’s Board of Directors.
|
||
The Valuation Committee concluded that a price determined under the Fund’s valuation procedures was not readily available if, among other things, the Valuation Committee believed that the value of the security might have been materially affected by an intervening significant event. A significant event may be related to a single issuer, to an entire market sector, or to the entire market. These events may include, among other things: issuer–specific events including rating agency action, earnings announcements and corporate actions, significant fluctuations in domestic or foreign markets, natural disasters, armed conflicts, and government actions. In the event that the market quotations are not readily available, the fair value of such securities will be
|
determined in good faith, taking into consideration: (i) fundamental analytical data relating to the investment; (ii) the nature and duration of restrictions on disposition of the securities; and (iii) an evaluation of the forces which influence the market in which these securities are purchased and sold. The members of the Valuation Committee shall continuously monitor for significant events that might necessitate the use of fair value procedures.
|
||
B.
|
Federal Income Taxes –
|
|
It is the Fund’s policy to comply with the requirements of the Internal Revenue Code applicable to Regulated Investment Companies (“RICs”) to distribute all of its taxable income to shareholders. Therefore, no Federal income tax provision for the Fund is required. Under applicable foreign tax law, a withholding tax may be imposed on interest, dividends, and capital gains earned on foreign securities.
|
||
The character of distributions made during the year from net investment income or net realized gains may differ from its ultimate characterization for federal income tax purposes. In addition, due to the timing of dividend distributions, the fiscal year in which amounts are distributed may differ from the year that the income or realized gains or losses were recorded by the Fund. The Fund has reclassified the components of its capital accounts for the year ended December 31, 2012 by increasing accumulated investment income by $2,333 and decreasing capital stock by $2,333.
|
||
The Fund has not recorded any liability for material unrecognized tax benefits as of June 30, 2013. It is the Fund’s policy to recognize accrued interest and penalties related to uncertain benefits in income taxes as appropriate. Tax years that remain open to examination by major jurisdiction include tax years ended December 31, 2009 through December 31, 2012.
|
||
C.
|
Distribution To Shareholders –
|
|
The Fund pays dividends to shareholders on a quarterly basis on the ex-dividend date. Distribution of net realized gains, if any, are made on an annual basis to shareholders on the ex-dividend date.
|
||
D.
|
Equalization –
|
|
The Fund uses the accounting practice of equalization by which a portion of the proceeds from sales and costs of redemption of capital shares, equivalent on a per share basis to the amount of undistributed net investment income on the date of the transactions, is credited or charged to undistributed income. As a result, undistributed net investment income per share is unaffected by sales or redemption of capital shares.
|
||
E.
|
Use of Estimates –
|
|
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates.
|
||
In preparing these financial statements, the Fund has evaluated events and transactions for potential recognition or disclosure through the date the financial statements were issued.
|
F.
|
Fair Value Measurements –
|
|
GAAP defines fair value as the price that each Fund would receive upon selling an investment in a timely transaction to an independent buyer in the principal or most advantageous market of the investment. A three-tier hierarchy is used to maximize the use of observable market data “inputs” and minimize the use of unobservable “inputs” and to establish classification of fair value measurements for disclosure purposes. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The three-tier hierarchy of inputs is summarized in the three broad Levels listed below:
|
Level 1 –
|
Unadjusted quoted prices in active markets for identical investments.
|
|
Level 2 –
|
Observable inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
|
|
Level 3 –
|
Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available; representing the Fund’s own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available.
|
The valuation techniques used by the Fund to measure fair value for the six months ended June 30, 2013 maximized the use of observable inputs and minimized the use of unobservable inputs. During the six months ended June 30, 2013, no securities held by the fund were deemed as Level 3.
|
||
The following is a summary of the inputs used as of June 30, 2013 in valuing the Fund’s investments carried at fair value:
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||||
Investments
|
|||||||||||||||||
Common Stock
|
$ | 82,412,240 | $ | — | $ | — | $ | 82,412,240 | |||||||||
Exchange Traded Funds
|
8,551,550 | — | — | 8,551,550 | |||||||||||||
Corporate Bonds
|
— | 1,655,612 | — | 1,655,612 | |||||||||||||
Short-Term Investments
|
1,195,227 | — | — | 1,195,227 | |||||||||||||
Total Investments
|
|||||||||||||||||
in Securities
|
$ | 92,159,017 | $ | 1,655,612 | $ | — | $ | 93,814,629 |
There were no transfers between Levels 1 and 2 during the six months ended June 30, 2013. Transfers between levels are recognized at the end of the reporting period. Refer to the Schedule of Investments for further information on the classification of investments.
|
(2)
|
INVESTMENT ADVISORY CONTRACT AND
|
OTHER TRANSACTIONS WITH AFFILIATES
|
|
Under an Investment Advisory Contract, Bridges Investment Management, Inc. (the “Investment Adviser”) furnishes investment advisory services for the Fund. In return, the Fund has agreed to pay the Investment Adviser a management fee computed on a quarterly basis at the rate of 1/8 of 1% of the average month-end net asset value of the Fund during the quarter, equivalent to 1/2 of 1% per annum. Certain officers and directors of the Fund are also officers and directors of the Investment Adviser. These officers do not receive any compensation from the Fund other than that which is received indirectly through the Investment Adviser. For the six months ended June 30, 2013, the Fund incurred $226,941 in advisory fees.
|
|
The contract between the Fund and the Investment Adviser provides that total expenses of the Fund in any year, exclusive of taxes, but including fees paid to the Investment Adviser, shall not exceed, in total, a maximum of 1 and 1/2% of the average month end net asset value of the Fund for the year. Amounts, if any, expended in excess of this limitation are reimbursed by the Investment Adviser as specifically identified in the Investment Advisory Contract. There were no amounts reimbursed during the six months ended June 30, 2013.
|
|
The Fund has entered into a Board-approved contract with the Investment Adviser in which the Investment Adviser acts as primary administrator to the Fund at an annual rate of $42,000. U.S. Bancorp Fund Services, LLC acts as sub-administrator to the Fund, and for its services, receives an annual fee at the rate of 0.065% for the first $50 million of the Fund’s average net assets, 0.050% on the next $50 million of average net assets, and 0.04% on the balance, subject to an annual minimum of $40,000. These administrative expenses are shown as Administration Fees on the Statement of Operations.
|
Quasar Distributors, LLC (the “Distributor”), a registered broker-dealer, acts as the Fund’s principal underwriter in a continuous public offering of the Fund’s shares. The Distributor is an affiliate of U.S. Bancorp Fund Services, LLC.
|
(3)
|
SECURITY TRANSACTIONS
|
The cost of long-term investment purchases during the six months ended June 30, 2013 and 2012, was:
|
2013
|
2012
|
||||||||
Non U.S. government securities
|
$ | 8,248,371 | $ | 8,381,282 |
Net proceeds from sales of long-term investments during the six months ended June 30, 2013 and 2012, were:
|
2013
|
2012
|
||||||||
Non U.S. government securities
|
$ | 5,499,820 | $ | 9,911,649 |
There were no long-term U.S. government transactions for the six months ended June 30, 2013 and 2012.
|
(4)
|
NET ASSET VALUE
|
The net asset value per share represents the effective price for all subscription and redemptions.
|
(5)
|
CAPITAL STOCK
|
Shares of capital stock issued and redeemed during the six months ended June 30, 2013 and 2012, were as follows:
|
2013
|
2012
|
||||||||
Shares sold
|
49,956 | 36,114 | |||||||
Shares issued to shareholders in
|
|||||||||
reinvestment of net investment income
|
4,962 | 4,337 | |||||||
54,918 | 40,451 | ||||||||
Shares redeemed
|
(39,437 | ) | (64,455 | ) | |||||
Net increase/(decrease)
|
15,481 | (24,004 | ) |
Value of capital stock issued and redeemed during the six months ended June 30, 2013 and 2012, was as follows:
|
2013
|
2012
|
||||||||
Shares sold
|
$ | 1,985,414 | $ | 1,299,283 | |||||
Shares issued to shareholders in
|
|||||||||
reinvestment of net investment income
|
201,313 | 157,619 | |||||||
2,186,727 | |||||||||
1,456,902 | |||||||||
Shares redeemed
|
(1,571,352 | ) | (2,345,871 | ) | |||||
Net increase/(decrease)
|
$ | 615,375 | $ | (888,969 | ) |
(6)
|
DISTRIBUTIONS TO SHAREHOLDERS
|
On March 28, 2013 and June 28, 2013, cash distributions were declared from net investment income accrued through March 28, 2013 and June 28, 2013, respectively. These distributions were calculated as $0.04 and $0.06 per share. The dividends were paid on March 28, 2013 and June 28, 2013, to shareholders of record on March 27, 2013 and June 27, 2013.
|
|
(7)
|
FEDERAL INCOME TAX INFORMATION
|
The tax character of distributions during the years ended December 31, 2012 and 2011 were as follows:
|
Ordinary
|
Long-Term
|
||||||||
Income
|
Capital Gain
|
||||||||
12/31/12
|
$465,276 | $— | |||||||
12/31/11
|
$363,000 | — |
As of December 31, 2012, the components of the tax basis cost of investments and net unrealized appreciation were as follows:
|
Federal tax cost of investments
|
$ | 55,930,186 | |||
Unrealized appreciation
|
$ | 28,377,683 | |||
Unrealized depreciation
|
(882,914 | ) | |||
Net unrealized appreciation
|
$ | 27,494,769 |
As of December 31, 2012, the components of distributable earnings on a tax basis were as follows:
|
Net unrealized appreciation
|
$ | 27,494,769 | |||
Undistributed ordinary income
|
$ | 8,452 | |||
Undistributed long term gains
|
94,975 | ||||
Distributable earnings
|
103,427 | ||||
Other accumulated loss
|
— | ||||
Total accumulated capital earnings
|
$ | 27,598,196 |
The Fund utilized $835,256 of prior capital loss carryovers during the year ended December 31, 2012 and has no remaining capital loss carryovers. At December 31, 2012, the Fund did not defer any post-October losses.
|
(8)
|
RESULTS OF THE MEETING OF SHAREHOLDERS OF THE FUND
|
A special meeting of the Fund’s shareholders was held on March 26, 2013. The matter voted on by the shareholders and the results of the vote at the shareholders meeting were as follows:
|
% of Fund’s
|
||||||
% of
|
Outstanding
|
|||||
Shares
|
Shares
|
Shares
|
||||
Voted
|
Voted
|
Voted
|
||||
1.
|
To ratify the prior appointment of
|
For
|
1,613,830
|
99.96%
|
71.08%
|
|
Edson L. Bridges to the Board of Directors.
|
Withheld
|
600
|
0.04%
|
0.03%
|
||
2.
|
To ratify the prior appointment of
|
For
|
1,613,830
|
99.96%
|
71.08%
|
|
Robert W. Bridges to the Board of Directors.
|
Withheld
|
600
|
0.04%
|
0.03%
|
||
3.
|
To ratify the prior appointment of
|
For
|
1,613,603
|
99.95%
|
71.07%
|
|
Nathan P. Dodge III to the Board of Directors.
|
Withheld
|
827
|
0.05%
|
0.04%
|
||
4.
|
To ratify the prior appointment of
|
For
|
1,613,830
|
99.96%
|
71.08%
|
|
Adam M. Koslosky to the Board of Directors.
|
Withheld
|
600
|
0.04%
|
0.03%
|
||
5.
|
To ratify the prior appointment of
|
For
|
1,613,830
|
99.96%
|
71.08%
|
|
Michael C. Meyer to the Board of Directors.
|
Withheld
|
600
|
0.04%
|
0.03%
|
||
6.
|
To ratify the prior appointment of
|
For
|
1,613,830
|
99.96%
|
71.08%
|
|
Gary L. Peterson to the Board of Directors.
|
Withheld
|
600
|
0.04%
|
0.03%
|
||
7.
|
To ratify the prior appointment of
|
For
|
1,613,830
|
99.96%
|
71.08%
|
|
Robert Slezak to the Board of Directors.
|
Withheld
|
600
|
0.04%
|
0.03%
|
||
8.
|
To approve the appointment of
|
For
|
1,613,830
|
99.96%
|
71.08%
|
|
Kelly A. Walters to the Board of Directors.
|
Withheld
|
600
|
0.04%
|
0.03%
|
||
9.
|
To approve the appointment of
|
For
|
1,612,425
|
99.88%
|
71.02%
|
|
Lyn Wallin Ziegenbein to the
|
||||||
Board of Directors.
|
Withheld
|
2,005
|
0.12%
|
0.09%
|
Name, Age,
|
|
Position with
|
|
Fund and Term
|
|
of Office
|
Principal Occupation(s) and Directorships*
|
Nathan Phillips
|
Mr. Dodge is the Executive Vice President of N.P. Dodge Company.
|
Dodge III
|
He has worked at N.P. Dodge Company since October, 1993. Mr.
|
Age: 49
|
Dodge is also a principal officer and director of a number of subsidiary
|
and affiliated companies in the property management, insurance, and
|
|
Director
|
real estate syndication fields. Mr. Dodge became a Director of
|
(2010 – present)
|
Lauritzen Corp. in 2008 and of First State Bank of Loomis in 2003.
|
Name, Age,
|
||
Position with
|
||
Fund and Term
|
||
of Office
|
Principal Occupation(s) and Directorships*
|
|
Adam M. Koslosky
|
Mr. Koslosky is the President and Chief Executive Officer of Magnolia
|
|
Age: 56
|
Metal Corporation. Magnolia Metal Corporation is a bronze bearing
|
|
manufacturer located in Omaha, Nebraska. Mr. Koslosky commenced
|
||
Director
|
his career with Magnolia Metal Corporation in 1978. Mr. Koslosky
|
|
(2007 – present)
|
also is a general partner of Mack Investments, Ltd., a privately held
|
|
investment company located in Omaha, Nebraska. He has been a
|
||
Director of Nebraska Methodist Hospital Foundation since 1993. Mr.
|
||
Koslosky has been determined to be an “audit committee financial
|
||
expert” within the meaning of the Sarbanes Oxley Act of 2002 and the
|
||
regulations related thereto by the Fund’s Board of Directors. Mr.
|
||
Koslosky serves as the Chairman of the Fund’s Audit Committee.
|
||
Michael C. Meyer
|
Michael C. Meyer was elected Chairman of the Board on
|
|
Age: 54
|
April 10, 2012. Beginning March 1, 2013, Mr. Meyer transitioned to
|
|
Vice President of Finance at Tenaska, Inc., on a part-time basis, and
|
||
Director
|
joined McCarthy Capital Corporation as Operating Partner. McCarthy
|
|
(2008 – present)
|
Capital is an Omaha based private equity firm focused on lower middle
|
|
market companies. Prior to his current positions, Mr. Meyer was Vice
|
||
Chairman
|
President of Asset Management at Tenaska and has held several
|
|
(2012 – present)
|
positions at Tenaska since commencing employment there in 1995.
|
|
Tenaska is a privately held energy company that develops, constructs, owns, and operates large-scale non-utility power plants. Tenaska also markets natural gas, electricity and biofuels products and provides associated energy risk management services; provides management and operation services to private equity partnerships; and engages in natural gas exploration, production and associated transportation systems. In his 30-plus years of financial and operations management experience in the banking and energy industries, Mr. Meyer has held positions with the United States Treasury Department’s Office of the Comptroller of the Currency, the Farm Credit System and the First National Bank of Omaha.
|
||
Gary L. Petersen
|
Mr. Petersen is the retired President of Petersen Manufacturing Co.
|
|
Age: 70
|
Inc. of DeWitt, Nebraska. Mr. Petersen commenced employment with
|
|
the company in February, 1966. He became President in May, 1979,
|
||
Director
|
and retired in June, 1986. Petersen Manufacturing Co. Inc. produced a
|
|
(1987 – present)
|
broad line of hand tools for national and worldwide distribution under
|
|
the brand names Vise-Grip, Unibit, Prosnip, and Punch Puller. Mr.
|
||
Petersen serves as Chairman of the Fund’s Administration and
|
||
Nominating Committee.
|
Name, Age,
|
||
Position with
|
||
Fund and Term
|
||
of Office
|
Principal Occupation(s) and Directorships*
|
|
Robert Slezak
|
Mr. Slezak was elected Vice Chairman on April 10, 2012. Mr. Slezak
|
|
Age: 55
|
is currently an independent management consultant, and has been since
|
|
November 1999. Prior to that, Mr. Slezak served as Vice President,
|
||
Director
|
Chief Financial Officer and Treasurer of the Ameritrade Holding
|
|
(2008 – present)
|
Corporation from January 1989 to November 1999 and as a director
|
|
from October 1996 to September 2002. Mr. Slezak currently serves as
|
||
Vice Chairman
|
a member of the board of directors of United Western Bancorp, Inc.
|
|
(2012 – present)
|
and Xanadoo Company, a provider of wireless communication
|
|
services. Mr. Slezak has been determined to be an “audit committee
|
||
financial expert” within the meaning of the Sarbanes Oxley Act of 2002
|
||
and the regulations related thereto by the Fund’s Board of Directors.
|
||
Kelly A. Walters
|
Mr. Walters is currently Director, President and Chief Executive
|
|
Age: 52
|
Officer (“CEO”) of Supertel Hospitality, Inc. (“Supertel”), a NASDAQ
|
|
listed hospitality real estate investment trust based in Norfolk,
|
||
Director
|
Nebraska. Mr. Walters joined Supertel in April 2009 as President and
|
|
(2013 – present)
|
CEO, and was elected to the Supertel Board of Directors in April 2010. Prior to joining Supertel, Mr. Walters was the Senior Vice President of Capital Markets at Investors Real Estate Trust (“IRET”) from October 2006 to March 2009. Prior to IRET, Mr. Walters was a Senior Vice President and Chief Investment Officer of Magnum Resources, Inc. (“Magnum”), a privately held real estate investment and operating company, from 1996 to 2006. Prior to Magnum, Mr. Walters was a Deputy Manager of Brown Brother Harriman from 1993 to 1996, an Investment Manager at Peter Kiewit Sons, Inc. from 1985 to 1993, and a stockbroker at Piper, Jaffrey and Hopwood from 1983 to 1985.
|
|
Lyn Wallin Ziegenbein
|
Lyn Wallin Ziegenbein is an attorney, and from March 1983 until May
|
|
Age: 61
|
of 2013 served as the Executive Director of the Peter Kiewit
|
|
Foundation, a private foundation awarding charitable grants throughout
|
||
Director
|
Nebraska and portions of Iowa and Wyoming. She now serves in an
|
|
(2013 – present)
|
emerita position at the Foundation and continues to work on active and special projects for the Foundation. Ms. Ziegenbein has served on the Board of Directors of Assurity Life Insurance Company since 1984. She also served on the Federal Reserve Bank of Kansas City’s Omaha Branch Board of Directors from 2006 to 2011, the last year as Chair. Ms. Ziegenbein’s prior experience also includes serving as a director of Norwest Bank Nebraska and Lincoln Telephone and Telegraph. Ms. Wallin Ziegenbein served as an Assistant United States Attorney for Nebraska from 1978 to 1982.
|
*
|
Except as otherwise indicated, each individual has held the position shown or other positions in the same company for the last five years.
|
Name, Age,
|
||
Position with
|
||
Fund and Term
|
||
of Office
|
Principal Occupation(s) and Directorships*
|
|
Edson L.
|
Since December 2000, Mr. Bridges has been President, Chief
|
|
Bridges III, CFA
|
Executive Officer, and Director of Bridges Investment Management,
|
|
Age: 55
|
Inc. Since August of 1983, Mr. Bridges was a full-time member of the
|
|
professional staff of Bridges Investment Counsel, Inc. where he has
|
||
President
|
served as Executive Vice President since 1993. Mr. Bridges is also a
|
|
(1997 – present)
|
Director of that firm. Mr. Bridges has been responsible for securities
|
|
research and the investment management for an expanding base of
|
||
Chief Executive
|
discretionary management accounts, including the Fund, for more than
|
|
Officer
|
15 years. Mr. Bridges was elected President of Bridges Investment
|
|
(2004 – present)
|
Fund, Inc. on April 11, 1997, and he assumed the position of Portfolio
|
|
Manager at the close of business on that date. Mr. Bridges became
|
||
Director
|
Chief Executive and Investment Officer of the Fund on April 13, 2004.
|
|
(1991 – present)
|
Mr. Bridges is Chairman and a director of Bridges Investor Services,
|
|
Inc. and Chairman of the Board and a director of Provident Trust
|
||
Company. Mr. Bridges became a Director of Stratus Fund, Inc., an
|
||
open-end, regulated investment company located in Lincoln, Nebraska,
|
||
in October, 1990 and is Chairman of the Audit Committee of the
|
||
Stratus Fund.
|
||
Robert W.
|
Mr. Bridges is a Director and Senior Equity Analyst at Sterling Capital
|
|
Bridges, CFA
|
Management LLC. Sterling Capital Management LLC, located in
|
|
Age: 47
|
Charlotte, North Carolina, is an investment management company
|
|
founded in 1970. Mr. Bridges commenced his career with Sterling
|
||
Director
|
Capital Management, LLC in 1996 and served in a variety of
|
|
(2007 – present)
|
capacities including client service, systems integration, and
|
|
compliance before assuming his current position in 2000. Mr. Bridges
|
||
has been a Director of Bridges Investment Counsel, Inc. since
|
||
December 2006, and a Director of Provident Trust Company since
|
||
2007. Prior to joining Sterling, Mr. Bridges served in accounting,
|
||
research analysis and several other roles for Bridges Investment
|
||
Counsel, Inc. for six years. Mr. Bridges earned his B.S. in Business
|
||
from Wake Forest University, and became a CFA charter holder in
|
||
2003.
|
Name, Age,
|
||
Position with
|
||
Fund and Term
|
||
of Office
|
Principal Occupation(s) and Directorships*
|
|
Edson L.
|
Mr. Bridges was elected Chairman Emeritus on April 15, 2006. Mr.
|
|
Bridges II, CFA
|
Bridges had previously served as Chairman, Vice-Chairman, Chief
|
|
Age: 81
|
Executive Officer, and President of the Fund. Mr. Bridges was
|
|
replaced by Edson L. Bridges III as Chief Executive Officer of the
|
||
Chairman Emeritus
|
Fund on April 13, 2004. Since December 2000, Mr. Bridges has
|
|
(2006 – present)
|
served as a director of Bridges Investment Management, Inc. In
|
|
September, 1959, Mr. Bridges became associated with the predecessor
|
||
Vice-Chairman
|
firm to Bridges Investment Counsel, Inc. and is presently the President,
|
|
(2005 – 2006)
|
Director, CEO, and Chief Compliance Officer of Bridges Investment
|
|
Counsel, Inc. Mr. Bridges is also President and Director of Bridges
|
||
Chairman
|
Investor Services, Inc., and is President, Director, and Chief Executive
|
|
(1997 – 2005)
|
Officer of Provident Trust Company, chartered to conduct business on
|
|
March 11, 1992.
|
||
Chief Executive
|
||
Officer
|
||
(1997 – 2004)
|
||
President
|
||
(1970 – 1997)
|
||
Director
|
||
(1963 – 2007)
|
||
Nancy K. Dodge
|
Ms. Dodge has been an employee of Bridges Investment Management,
|
|
Age: 52
|
Inc. since 1994, where she serves as a Senior Vice President. After
|
|
joining Bridges Investment Counsel, Inc. in January of 1980, her
|
||
Treasurer
|
career progressed through the accounting department of that Firm, to
|
|
(1986 – present)
|
her present position as Senior Vice President of Investor Support and
|
|
Fund Services. Ms. Dodge is the person primarily responsible for
|
||
Chief Compliance
|
overseeing day to day operations for the Fund, and she is also the key
|
|
Officer
|
person for handling relations with shareholders, the custodian bank,
|
|
(2006 – present)
|
transfer agent, and the auditor. She was appointed Chief Compliance
|
|
Officer of the Fund, as of November 21, 2006. Ms. Dodge is a Senior
|
||
Vice President and Director of Bridges Investor Services, Inc., and a
|
||
Vice President and Trust Officer for Provident Trust Company.
|
Name, Age,
|
||
Position with
|
||
Fund and Term
|
||
of Office
|
Principal Occupation(s) and Directorships*
|
|
Brian
|
Mr. Kirkpatrick has been an employee of Bridges Investment
|
|
Kirkpatrick, CFA
|
Management since 1994. Mr. Kirkpatrick serves as a Senior Vice
|
|
Age: 41
|
President, Director of Research, Chief Compliance Officer, and
|
|
Director of Bridges Investment Management. Having joined Bridges
|
||
Executive Vice
|
Investment Counsel, Inc. on August 24, 1992, He is a Senior Vice
|
|
President
|
President of Bridges Investment Counsel, and has been a full-time
|
|
(2006 – present)
|
member of the professional staff of Bridges Investment Counsel, Inc.,
|
|
responsible for securities research, and the investment management for
|
||
Vice President
|
an expanding base of discretionary management accounts, including
|
|
(2000 – 2006)
|
the Fund, for more than 15 years. Mr. Kirkpatrick was appointed Sub
|
|
Portfolio Manager of the Fund on April 12, 2005. Mr. Kirkpatrick also
|
||
serves as a Vice President for Provident Trust Company.
|
||
Mary Ann Mason
|
Ms. Mason has been an employee of Bridges Investment Management
|
|
Age: 61
|
since 1994, where she currently serves as Senior Vice President,
|
|
Corporate Secretary, and Treasurer. She joined Bridges Investment
|
||
Secretary
|
Counsel, Inc. in June 1981, and currently is Senior Vice President,
|
|
(1987 – present)
|
Corporate Secretary and Treasurer of such entity, and the Secretary, Treasurer and Director of Bridges Investor Services, Inc. Ms. Mason also acts as Vice President, Secretary and Treasurer for Provident Trust
|
|
Company.
|
||
Linda Morris
|
Ms. Morris has been an employee of Bridges Investment Management,
|
|
Age: 46
|
Inc. since 1994. Having joined Bridges Investment Counsel, Inc. in
|
|
August 1992, her career has been largely in the client accounting area
|
||
Assistant Treasurer
|
where she currently serves as Associate Director of Accounting.
|
|
(1999 – present)
|
Ms. Morris was elected Assistant Treasurer of the Fund in April 1999. Ms. Morris is also a Trust Assistant for Provident Trust Company.
|
Name, Age,
|
||
Position with
|
||
Fund and Term
|
||
of Office
|
Principal Occupation(s) and Directorships*
|
|
Trinh Wu
|
Ms. Wu has been an employee of Bridges Investment Management and
|
|
Age: 56
|
has served Bridges Investment Counsel, Inc. since February 1, 1997.
|
|
Ms. Wu has functioned as the lead accountant for the day to day
|
||
Controller
|
operation of the Fund. Ms. Wu currently is the Senior Accountant of
|
|
(2001 – present)
|
Bridges Investment Counsel, Inc. Prior to her employment at Bridges
|
|
Investment Management, Inc., Ms. Wu performed operating and
|
||
accounting activities for 17 years in the Estate and Trust Department of
|
||
the predecessor institutions to U.S. Bank, N.A. Nebraska. Ms. Wu was
|
||
elected to the position of Controller of the Fund at the October 16,
|
||
2001 meeting of the Board of Directors.
|
*
|
Except as otherwise indicated, each individual has held the position shown or other positions in the same company for the last five years.
|
Edson L. Bridges III
|
Gary L. Petersen
|
Robert W. Bridges
|
Robert Slezak
|
Nathan Phillips Dodge III
|
Kelly A. Walters
|
Adam M. Koslosky
|
Lyn Wallin Ziegenbein
|
Michael C. Meyer
|
|
Officers | |
Michael C. Meyer
|
Chairman and Lead Independent Director
|
Edson L. Bridges II
|
Chairman Emeritus
|
Edson L. Bridges III
|
President and Chief Executive and
|
Investment Officer
|
|
Brian M. Kirkpatrick
|
Executive Vice President
|
Mary Ann Mason
|
Secretary
|
Nancy K. Dodge
|
Treasurer and Chief Compliance Officer
|
Linda J. Morris
|
Assistant Treasurer
|
Trinh Wu
|
Controller
|
Independent Registered Public Accounting Firm
|
|
Cohen Fund Audit Services, Ltd.
|
|
1350 Euclid Avenue, Suite 800
|
|
Cleveland, Ohio 44115
|
|
Corporate Counsel
|
Counsel to Independent Directors
|
Baird, Holm, LLP
|
Koley Jessen P.C.
|
Attorneys at Law
|
Attorneys at Law
|
1500 Woodmen Tower
|
One Pacific Place, Suite 800
|
Omaha, Nebraska 68102
|
1125 South 103 Street
|
Omaha, Nebraska 68124
|
|
Special Counsel
|
Distributor
|
Ballard, Spahr, Andrews & Ingersoll, LLP
|
Quasar Distributors, LLC
|
1225 Seventeenth Street, Suite 2300
|
615 East Michigan Street
|
Denver, Colorado 80202
|
Milwaukee, Wisconsin 53202
|
(a)
|
The Registrant’s President and Treasurer have reviewed the Registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “Act”)) as of a date within 90 days of the filing of this report, as required by Rule 30a-3(b) under the Act and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934. Based on their review, such officers have concluded that the disclosure controls and procedures are effective in ensuring that information required to be disclosed in this report is appropriately recorded, processed, summarized and reported and made known to them by others within the Registrant and by the Registrant’s service provider.
|
(b)
|
There were no changes in the Registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) 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, the Registrant's internal control over financial reporting.
|
(a)
|
(1) Any code of ethics or amendment thereto, that is the subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy Item 2 requirements through filing an exhibit. Incorporated by reference to the Registrant’s Form N-CSR filed March 3, 2008.
|
(b)
|
Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Furnished herewith.
|
1.
|
I have reviewed this report on Form N-CSR of Bridges Investment Fund, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting 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, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: 8/16/2013
|
/s/ Edson L. Bridges III
Edson L. Bridges III
President, Chief Executive Officer, Chief Investment Officer
|
1.
|
I have reviewed this report on Form N-CSR of Bridges Investment Fund, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting 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, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: 8/16/2013
|
/s/ Brian M. Kirkpatrick
Brian M. Kirkpatrick
Executive Vice President
|
1.
|
I have reviewed this report on Form N-CSR of Bridges Investment Fund, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting 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, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: 8/16/2013
|
/s/ Nancy K. Dodge
Nancy K. Dodge
Treasurer, Chief Compliance Officer
|
/s/ Edson L. Bridges III
Edson L. Bridges III
President, CEO, CIO
Bridges Investment Fund, Inc.
|
/s/ Brian M. Kirkpatrick
Brian M. Kirkpatrick
Executive Vice President
Bridges Investment Fund, Inc.
|
Dated: 8/16/2013
|
Dated: 8/16/2013
|
/s/ Nancy K. Dodge
Nancy K. Dodge
Treasurer, CCO
Bridges Investment Fund, Inc.
|
Dated: 8/16/2013
|
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