UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811- 8568

John Hancock Financial Opportunities Fund
(Exact name of registrant as specified in charter)

601 Congress Street, Boston, Massachusetts 02210
(Address of principal executive offices) (Zip code)

Salvatore Schiavone

Treasurer

601 Congress Street

Boston, Massachusetts 02210
(Name and address of agent for service)

Registrant's telephone number, including area code: 617-663-4497

Date of fiscal year end: December 31
Date of reporting period: September 30, 2016

 

 


 

ITEM 1. SCHEDULE OF INVESTMENTS

 



John Hancock

Financial Opportunities Fund


Quarterly portfolio holdings 9/30/16

jhnq_logo.jpg


Fund's investmentsFinancial Opportunities Fund



                                         
  As of 9-30-16 (unaudited)  
        Shares     Value  
  Common stocks 104.3% (86.4% of Total investments)     $525,744,653  
  (Cost $354,974,976)  
  Financials 104.3%     525,744,653  
  Banks 91.8 %  
  1st Source Corp.     121,706     4,344,296  
  Access National Corp.     51,655     1,234,555  
  Ameris Bancorp     284,635     9,947,993  
  Anchor Bancorp, Inc. (I)     52,992     1,331,159  
  Atlantic Capital Bancshares, Inc. (I)(L)(Z)     186,650     2,796,017  
  Avidbank Holdings, Inc. (I)     200,000     3,007,000  
  Bank of America Corp.     432,436     6,767,615  
  Bank of Marin Bancorp     55,638     2,766,878  
  Bankwell Financial Group, Inc.     37,539     889,299  
  Bar Harbor Bankshares     80,020     2,938,334  
  BB&T Corp. (L)(Z)     346,799     13,081,258  
  Berkshire Hills Bancorp, Inc.     338,903     9,391,002  
  Bryn Mawr Bank Corp.     80,000     2,559,200  
  Cambridge Bancorp     59     2,953  
  Camden National Corp.     36,776     1,755,686  
  Capstar Financial Holdings, Inc. (I)(L)(Z)     37,768     640,168  
  Carolina Financial Corp. (L)(Z)     58,559     1,308,208  
  Chemical Financial Corp. (L)(Z)     217,502     9,598,363  
  Citigroup, Inc.     28,193     1,331,555  
  Citizens Financial Group, Inc.     519,529     12,837,562  
  City Holding Company     39,363     1,979,565  
  Comerica, Inc.     167,706     7,935,848  
  Commerce Bancshares, Inc. (L)(Z)     105,204     5,182,349  
  Communities First Financial Corp. (I)     115,523     1,144,833  
  County Bancorp, Inc.     59,348     1,187,553  
  CU Bancorp (I)     91,813     2,094,255  
  Cullen/Frost Bankers, Inc. (L)(Z)     178,964     12,874,670  
  DCB Financial Corp. (I)     16,530     126,455  
  DNB Financial Corp.     78,515     1,986,430  
  Eagle Bancorp Montana, Inc.     75,106     1,086,784  
  Eastern Virginia Bankshares, Inc.     198,225     1,593,729  
  Equity Bancshares, Inc., Class A (I)     94,860     2,460,668  
  Evans Bancorp, Inc.     69,760     1,922,586  
  FCB Financial Holdings, Inc., Class A (I)     221,342     8,506,173  
  Fifth Third Bancorp (L)(Z)     452,067     9,249,291  
  First Bancorp, Inc. (Z)     266,499     6,387,981  
  First Bancshares, Inc.     210,000     4,080,300  
  First Business Financial Services, Inc. (L)(Z)     60,700     1,426,450  
  First Citizens BancShares, Inc., Class A (L)(Z)     15,038     4,419,518  
  First Community Corp.     136,228     2,145,591  
  First Connecticut Bancorp, Inc. (Z)     202,450     3,601,586  
  First Financial Bancorp     146,045     3,189,623  
  First Hawaiian, Inc. (I)(L)(Z)     117,345     3,151,887  
  First Merchants Corp.     118,683     3,174,770  
  First Security Group, Inc. (I)     83,942     1,972,637  
  Flushing Financial Corp.     139,050     3,298,266  

2SEE NOTES TO FUND'S INVESTMENTS


Financial Opportunities Fund

                                         
        Shares     Value  
  Financials  (continued)        
  Banks (continued)  
  FNB Corp. (L)(Z)     592,045     $7,282,154  
  German American Bancorp, Inc. (L)(Z)     40,060     1,559,536  
  Glacier Bancorp, Inc. (L)(Z)     223,556     6,375,817  
  Great Southern Bancorp, Inc. (L)(Z)     21,838     888,807  
  Great Western Bancorp, Inc. (L)(Z)     159,455     5,313,041  
  Hamilton State Bancshares, Inc. (I)     500,000     4,240,302  
  Hancock Holding Company (L)(Z)     245,752     7,969,737  
  HCSB Financial Corp. (I)     22,238,470     2,522,043  
  Heritage Commerce Corp.     387,733     4,241,799  
  Heritage Financial Corp.     194,590     3,492,891  
  Heritage Oaks Bancorp (Z)     650,719     5,335,896  
  HomeTown Bankshares Corp. (I)     174,720     1,572,480  
  Horizon Bancorp (L)(Z)     179,816     5,282,994  
  Howard Bancorp, Inc. (I)     104,350     1,378,464  
  Independent Bank Corp. (MA) (L)(Z)     184,240     9,965,542  
  Independent Bank Corp. (MI)     125,407     2,110,600  
  JPMorgan Chase & Co. (L)(Z)     203,805     13,571,375  
  KeyCorp     667,659     8,125,410  
  M&T Bank Corp. (L)(Z)     117,579     13,650,922  
  Mackinac Financial Corp.     40,000     459,600  
  MainSource Financial Group, Inc.     185,504     4,628,325  
  MB Financial, Inc. (L)(Z)     183,150     6,967,026  
  Merchants Bancshares, Inc.     56,125     1,817,889  
  MutualFirst Financial, Inc.     100,539     2,787,946  
  National Commerce Corp. (I)(Z)     50,542     1,367,667  
  Northrim BanCorp, Inc.     99,739     2,568,279  
  Oak Valley Bancorp     1,732     17,355  
  Old National Bancorp (L)(Z)     464,937     6,537,014  
  Old Second Bancorp, Inc.     202,363     1,681,637  
  Pacific Continental Corp.     183,645     3,088,909  
  PacWest Bancorp (L)(Z)     71,112     3,051,416  
  Park National Corp. (L)(Z)     42,113     4,042,848  
  Park Sterling Corp.     585,931     4,757,760  
  Peoples Bancorp, Inc.     122,945     3,023,218  
  Pinnacle Financial Partners, Inc. (L)(Z)     108,000     5,840,640  
  QCR Holdings, Inc.     48,822     1,549,610  
  Regions Financial Corp.     542,484     5,354,317  
  Renasant Corp.     159,629     5,368,323  
  Sandy Spring Bancorp, Inc.     68,417     2,092,192  
  SBT Bancorp, Inc.     37,879     750,004  
  Shore Bancshares, Inc.     183,579     2,162,561  
  Southern First Bancshares, Inc. (I)     131,586     3,629,142  
  Southwest Bancorp, Inc.     110,118     2,091,141  
  State Bank Financial Corp.     53,182     1,213,613  
  Stock Yards Bancorp, Inc.     66,324     2,186,039  
  Sun Bancorp, Inc.     126,066     2,907,082  
  SunTrust Banks, Inc.     278,451     12,196,154  
  The Community Financial Corp.     62,497     1,418,682  
  The First of Long Island Corp. (L)(Z)     38,215     1,266,827  

SEE NOTES TO FUND'S INVESTMENTS3


Financial Opportunities Fund

                                         
        Shares     Value  
  Financials  (continued)        
  Banks (continued)  
  The PNC Financial Services Group, Inc.     146,047     $13,157,374  
  Towne Bank (L)(Z)     157,856     3,793,280  
  TriCo Bancshares     202,536     5,421,889  
  U.S. Bancorp     310,100     13,300,189  
  Union Bankshares Corp.     161,410     4,320,946  
  United Bankshares, Inc. (L)(Z)     74,856     2,819,826  
  Washington Trust Bancorp, Inc.     123,905     4,983,459  
  Wells Fargo & Company (L)(Z)     269,099     11,915,704  
  Westbury Bancorp, Inc. (I)     88,349     1,725,456  
  Yadkin Financial Corp.     253,318     6,659,730  
  Zions Bancorporation (L)(Z)     265,769     8,244,154  
  Capital markets 3.6 %  
  Ares Capital Corp. (L)(Z)     171,449     2,657,460  
  Fifth Street Finance Corp.     976,087     5,671,065  
  Intermediate Capital Group     336,897     2,572,430  
  KKR & Company LP     233,755     3,333,346  
  The Blackstone Group LP     109,070     2,784,557  
  TriplePoint Venture Growth BDC Corp.     100,780     1,068,268  
  Consumer finance 0.3 %  
  Capital One Financial Corp.     21,985     1,579,183  
  Insurance 0.6 %  
  Gjensidige Forsikring ASA     165,452     3,094,489  
  Thrifts and mortgage finance 8.0 %  
  Bank Mutual Corp.     161,841     1,242,939  
  BSB Bancorp, Inc. (I)     177,195     4,151,679  
  First Defiance Financial Corp.     110,515     4,933,390  
  Georgetown Bancorp, Inc.     65,000     1,356,550  
  HomeStreet, Inc. (I)     208,636     5,228,418  
  Provident Financial Holdings, Inc.     97,339     1,903,951  
  Provident Financial Services, Inc. (L)(Z)     108,750     2,308,763  
  Southern Missouri Bancorp, Inc.     112,188     2,793,481  
  United Community Financial Corp.     634,588     4,511,921  
  United Financial Bancorp, Inc.     268,885     3,721,368  
  WSFS Financial Corp.     221,361     8,077,463  
  Preferred securities 6.1% (5.1% of Total investments)     $30,779,347  
  (Cost $28,633,951)  
  Financials 3.1%     15,700,088  
  Banks 0.9 %  
  OFG Bancorp, Series C, 8.750%           1,671     1,634,760  
  SB Financial Group, Inc., 6.500%           250,000     3,122,500  
  Capital markets 1.7 %  
  JMP Group LLC, 7.250%           80,000     2,020,000  
  JMP Group LLC, 8.000%           82,428     2,085,428  
  TriplePoint Venture Growth BDC Corp., 6.750%           168,000     4,292,400  
  Mortgage real estate investment trusts 0.5 %  
  Arbor Realty Trust, Inc., 7.375%           100,000     2,545,000  

4SEE NOTES TO FUND'S INVESTMENTS


Financial Opportunities Fund

                                         
        Shares     Value  
  Real estate 3.0%     $15,079,259  
  Equity real estate investment trusts 3.0 %  
  American Homes 4 Rent (5.500% to 3-31-21, then 10.000% thereafter)           100,000     2,786,000  
  Bluerock Residential Growth REIT, Inc., 8.250%           84,140     2,229,710  
  FelCor Lodging Trust, Inc., Series A, 1.950%           86,950     2,174,620  
  Invesco Mortgage Capital, Inc. (7.750% to 12-27-24, then 3 month LIBOR + 5.180%)           150,000     3,817,500  
  Sotherly Hotels LP, 7.000%           99,475     2,571,429  
  Sotherly Hotels, Inc., 8.000%           60,000     1,500,000  
        Rate (% )    Maturity date     Par value^     Value  
  Corporate bonds 9.6% (7.9% of Total investments)     $48,247,218  
  (Cost $47,811,828)  
  Financials 9.6%     48,247,218  
  Banks 6.6 %  
  Avenue Financial Holdings, Inc. (6.750% to 1-1-20, then 3 month LIBOR + 4.950%) (S)     6.750     12-29-24           2,500,000     2,606,250  
  Avidbank Holdings, Inc. (6.875% to 11-15-25, then 3 month LIBOR + 5.367%) (S)     6.875     11-15-25           3,000,000     3,030,000  
  Cadence Financial Corp. (S)     4.875     06-28-19           1,500,000     1,417,500  
  Cadence Financial Corp. (6.500% to 3-11-20, then 3 month LIBOR + 4.663%) (S)     6.500     03-11-25           5,000,000     4,250,000  
  First Business Financial Services, Inc.     6.500     09-01-24           5,000,000     5,076,582  
  Northeast Bancorp (P)     6.750     07-01-26           5,000,000     5,150,000  
  Popular, Inc.     7.000     07-01-19           6,000,000     6,180,000  
  VantageSouth Bancshares, Inc.     7.625     08-12-23           5,000,000     5,638,837  
  Diversified financial services 1.2 %  
  NewStar Financial, Inc.     7.250     05-01-20           5,935,000     5,845,975  
  Thrifts and mortgage finance 1.8 %  
  Flagstar Bancorp, Inc. (S)     6.125     07-15-21           6,000,000     6,112,074  
  Nationstar Mortgage LLC     6.500     07-01-21           3,000,000     2,940,000  
        Shares     Value  
  Warrants 0.4% (0.3% of Total investments)     $1,720,533  
  (Cost $1,437,378)  
  Financials 0.4%     1,720,533  
  Banks 0.4 %  
  Comerica, Inc. (Expiration Date: 11-14-18; Strike Price: $29.40) (I)     93,762     1,720,533  
        Yield * (%)    Maturity date     Par value^     Value  
  Certificate of deposit 0.0% (0.0% of Total investments)     $79,010  
  (Cost $78,085)  
  Country Bank for Savings     1.000     08-27-18           2,016     2,011  
  First Bank Richmond     0.990     12-05-16           20,395     20,403  
  First Bank System, Inc.     0.549     04-03-17           4,960     4,960  
  First Federal Savings Bank of Louisiana     0.100     01-06-17           3,039     3,039  
  Home Banks     1.739     11-04-21           18,927     19,859  
  Hudson Savings     0.700     04-24-17           2,158     2,162  
  Machias Savings Bank     0.500     05-26-17           1,965     1,965  
  Midstate Federal Savings and Loan     1.000     05-30-17           2,009     2,009  
  Milford Federal Savings And Loan Bank     0.300     06-08-17           1,902     1,898  
  Milford Federal Savings and Loan Bank     1.000     10-24-16           2,034     2,030  
  Mount McKinley Savings Bank     0.180     12-02-16           1,700     1,699  
  Mt. Washington Bank     0.650     10-31-17           1,899     1,899  
  MutualOne Bank     0.900     09-08-17           4,011     4,011  
  Newburyport Five Cent Savings Bank     0.200     10-20-16           2,093     2,092  

SEE NOTES TO FUND'S INVESTMENTS5


Financial Opportunities Fund

                                         
        Yield * (%)    Maturity date     Par value^     Value  
  Banks (continued)  
  Newton Savings Bank     1.000     05-30-17           1,946     $1,946  
  OBA Federal Savings and Loan     0.390     12-15-17           1,338     1,338  
  Plymouth Savings Bank     0.200     04-21-17           1,938     1,935  
  Salem Five Cents Savings Bank     0.250     12-15-16           1,730     1,730  
  Sunshine Federal Savings and Loan Association     0.500     05-10-17           2,025     2,024  
  Short-term investments 0.4% (0.3% of Total investments)     $2,163,993  
  (Cost $2,163,993)  
  U.S. Government Agency 0.2%     1,072,993  
  Federal Farm Credit Bank Discount Note     0.150     10-03-16     416,000     415,997  
  Federal Home Loan Bank Discount Note     0.100     10-03-16     657,000     656,996  
              Par value^     Value  
  Repurchase agreement 0.2%     $1,091,000  
  Repurchase Agreement with State Street Corp. dated 9-30-16 at 0.030% to be repurchased at $1,091,003 on 10-3-16, collateralized by $1,010,000 U.S. Treasury Notes, 3.500% due 5-15-20 (valued at $1,113,525, including interest)     1,091,000     1,091,000  
  Total investments (Cost $435,100,211)† 120.8%     $608,734,754  
  Other assets and liabilities, net (20.8%)     ($104,819,750 )
  Total net assets 100.0%     $503,915,004  

                                         
  The percentage shown for each investment category is the total value of the category as a percentage of the net assets of the fund, unless otherwise indicated.  
  ^All par values are denominated in U.S. dollars unless otherwise indicated.  
  Key to Security Abbreviations and Legend  
  LIBOR     London Interbank Offered Rate  
  (I)     Non-income producing security.  
  (L)     A portion of this security is on loan as of 9-30-16, and is a component of the fund's leverage under the Liquidity Agreement. The value of securities on loan amounted to $100,497,794.  
  (P)     Variable rate obligation. The coupon rate shown represents the rate at period end.  
  (S)     These securities are exempt from registration under Rule 144A of the Securities Act of 1933. Such securities may be resold, normally to qualified institutional buyers, in transactions exempt from registration.  
  (Z)     All or a portion of this security is pledged as collateral pursuant to the Liquidity Agreement. Total collateral value at 9-30-16 was $118,342,861.  
  *     Yield represents either the annualized yield at the date of purchase, the stated coupon rate or, for floating rate securities, the rate at period end.  
      At 9-30-16, the aggregate cost of investment securities for federal income tax purposes was $436,127,127. Net unrealized appreciation aggregated to $172,607,627, of which $181,122,531 related to appreciated investment securities and $8,514,904 related to depreciated investment securities.  

6SEE NOTES TO FUND'S INVESTMENTS


Notes to Fund's investments (unaudited)

Security valuation. Investments are stated at value as of the scheduled close of regular trading on the New York Stock Exchange (NYSE), normally at 4:00 p.m., Eastern Time. In case of emergency or other disruption resulting in the NYSE not opening for trading or the NYSE closing at a time other than the regularly scheduled close, the net asset value may be determined as of the regularly scheduled close of the NYSE pursuant to the fund's Valuation Policies and Procedures. The time at which shares and transactions are priced and until which orders are accepted may vary to the extent permitted by the Securities and Exchange Commission and applicable regulations.

In order to value the securities, the fund uses the following valuation techniques: Equity securities held by the fund are typically valued at the last sale price or official closing price on the exchange or principal market where the security was acquired or most likely will be sold. In the event there were no sales during the day or closing prices are not available, the securities are valued using the last available bid price. Debt obligations are valued based on the evaluated prices provided by an independent pricing vendor or from broker-dealers. Independent pricing vendors utilize matrix pricing which takes into account factors such as institutional-size trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other market data, as well as broker supplied prices. Swaps are valued using evaluated prices obtained from an independent pricing vendor. Foreign securities and currencies are valued in U.S. dollars, based on foreign currency exchange rates supplied by an independent pricing vendor.

In certain instances, the Pricing Committee may determine to value equity securities using prices obtained from another exchange or market if trading on the exchange or market on which prices are typically obtained did not open for trading as scheduled, or if trading closed earlier than scheduled, and trading occurred as normal on another exchange or market.

Other portfolio securities and assets, for which reliable market quotations are not readily available, are valued at fair value as determined in good faith by the fund's Pricing Committee following procedures established by the Board of Trustees. The frequency with which these fair valuation procedures are used cannot be predicted and fair value of securities may differ significantly from the value that would have been used had a ready market for such securities existed. Trading in foreign securities may be completed before the scheduled daily close of trading on the NYSE. Significant events at the issuer or market level may affect the values of securities between the time when the valuation of the securities is generally determined and the close of the NYSE. If a significant event occurs, these securities may be fair valued, as determined in good faith by the fund's Pricing Committee, following procedures established by the Board of Trustees. The fund uses fair value adjustment factors provided by an independent pricing vendor to value certain foreign securities in order to adjust for events that may occur between the close of foreign exchanges or markets and the close of the NYSE.

The fund uses a three-tier hierarchy to prioritize the pricing assumptions, referred to as inputs, used in valuation techniques to measure fair value. Level 1 includes securities valued using quoted prices in active markets for identical securities. Level 2 includes securities valued using other significant observable inputs. Observable inputs may include quoted prices for similar securities, interest rates, prepayment speeds and credit risk. Prices for securities valued using these inputs are received from independent pricing vendors and brokers and are based on an evaluation of the inputs described. Level 3 includes securities valued using significant unobservable inputs when market prices are not readily available or reliable, including the fund's own assumptions in determining the fair value of investments. Factors used in determining value may include market or issuer specific events or trends, changes in interest rates and credit quality. The inputs or methodology used for valuing securities are not necessarily an indication of the risks associated with investing in those securities. Changes in valuation techniques and related inputs may result in transfers into or out of an assigned level within the disclosure hierarchy.

The following is a summary of the values by input classification of the fund's investments as of September 30, 2016, by major security category or type:

                                   
        Total
value at
9-30-16
    Level 1
quoted
price
    Level 2
significant
observable
inputs
    Level 3
significant
unobservable
inputs
 
  Common stocks                          
        Banks     $462,753,932     $452,984,587     $3,007,000     $6,762,345  
        Capital markets     18,087,126     15,514,696     2,572,430      
        Consumer finance     1,579,183     1,579,183          
        Insurance     3,094,489         3,094,489      
        Thrifts and mortgage finance     40,229,923     40,229,923          
  Preferred securities                          
        Banks     4,757,260     3,122,500     1,634,760      
        Capital markets     8,397,828     8,397,828          
        Mortgage real estate investment trusts     2,545,000     2,545,000          
        Equity real estate investment trusts     15,079,259     15,079,259            
  Corporate bonds                          
        Banks     33,349,169         22,633,750     10,715,419  
        Diversified financial services     5,845,975         5,845,975      
        Thrifts and mortgage finance     9,052,074         9,052,074      
  Warrants     1,720,533     1,720,533          
  Certificate of deposit     79,010         79,010      
  Short-term investments     2,163,993         2,163,993      

       7


                                   
        Total
value at
9-30-16
    Level 1
quoted
price
    Level 2
significant
observable
inputs
    Level 3
significant
unobservable
inputs
 
  Total investments in securities     $608,734,754     $541,173,509     $50,083,481     $17,477,764  
  Other financial instruments:                          
  Interest rate swaps     ($419,089 )       ($419,089 )    

The following is a reconciliation of Level 3 assets for which significant unobservable inputs were used to determine fair value.

                       
  Investments in securities     Common stocks     Corporate bonds     Total  
  Balance as of 12-31-15     $3,580,376     $13,128,221     $16,708,597  
  Realized gain (loss)              
  Change in unrealized appreciation (depreciation)     958,122     587,198     1,545,320  
  Purchases     2,223,847         2,223,847  
  Sales         (3,000,000 )   (3,000,000 )
  Transfers into Level 3              
  Transfers out of Level 3              
  Balance as of 9-30-16     $6,762,345     $10,715,419     $17,477,764  
  Change in unrealized at period end*     $958,122     $576,892     $1,535,014  

*Change in unrealized appreciation (depreciation) attributable to Level 3 securities held at the period end.

The valuation techniques and significant amounts of unobservable inputs used in the fair value measurement of the fund's Level 3 securities are outlined in the table below.

           
  Fair value
at 9-30-16
  Valuation
technique
Significant
unobservable inputs
Input/ range
           
Common stocks $6,762,345   Market Approach Price to book value multiple
Discount
1.23x - 1.62x
(weighted average 1.47x)
10%
           
Corporate bonds 10,715,419   Market Approach Yield 537bps - 592bps
(weighted average 563bps)
           
Total $17,477,764        

A change to unobservable inputs of a fund's Level 3 securities may result in changes to the fair value measurement, as follows:

     
Significant unobservable input Impact to valuation
if input increases
Impact to valuation
if input decreases
Discount Decrease Increase
Price to book value multiple Increase Decrease
Yield Decrease Increase

Repurchase agreements. The fund may enter into repurchase agreements. When the fund enters into a repurchase agreement, it receives collateral that is held in a segregated account by the fund's custodian. The collateral amount is marked-to-market and monitored on a daily basis to ensure that the collateral held is in an amount not less than the principal amount of the repurchase agreement plus any accrued interest. Collateral received by the fund for repurchase agreements is disclosed in the Fund's investments as part of the caption related to the repurchase agreement.

Repurchase agreements are typically governed by the terms and conditions of the Master Repurchase Agreement and/or Global Master Repurchase Agreement (collectively, MRA). Upon an event of default, the non-defaulting party may close out all transactions traded under the MRA and net amounts owed. Absent an event of default, assets and liabilities resulting from repurchase agreements are not offset. In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the collateral value may decline or the counterparty may have insufficient assets to pay back claims resulting from close-out of the transactions.

Interest rate swaps. Interest rate swaps represent an agreement between the fund and a counterparty to exchange cash flows based on the difference between two interest rates applied to a notional amount. The payment flows are usually netted against each other, with the difference being paid by one party to the other. The fund settles accrued net interest receivable or payable under the swap contracts at specified, future intervals. Swap agreements are privately negotiated in the OTC market or may be executed on a registered commodities exchange (centrally cleared swaps). Upfront payments made/received by the fund are amortized/accreted for financial reporting purposes, with the unamortized/unaccreted portion included in the Statement of assets and liabilities. (include previous sentence only if applies) Swaps are marked-to-market daily and the change in value is recorded as unrealized appreciation/depreciation of swap contracts. A termination payment by the counterparty or

       8


the fund is recorded as realized gain or loss, as well as the net periodic payments received or paid by the fund. The value of the swap will typically impose collateral posting obligations on the party that is considered out-of-the-money on the swap.

During the period ended September 30, 2016, the fund used interest rate swaps to manage against anticipated interest rate changes. The following table summarizes the interest rate swap contracts held as of September 30, 2016.

                                   
        USD notional
amount
    Payments made
by fund
    Payments received
by fund
    Maturity
date
    Market
value
 
  Centrally Cleared Swaps                                
        $5,000,000     Fixed 1.2945%     3-Month LIBOR(a)     Aug 2019     ($34,910 )
        10,000,000     Fixed 1.4265%     3-Month LIBOR(a)     Aug 2019     (109,415 )
        5,000,000     Fixed 1.5940%     3-Month LIBOR(a)     Dec 2020     (115,368 )
        5,000,000     Fixed 1.7895%     3-Month LIBOR(a)     Aug 2022     (159,396 )
  Total     $25,000,000                       ($419,089 )

(a) At 9-30-16, the 3-Month LIBOR rate was 0.8456%

For additional information on the fund's significant accounting policies, please refer to the fund's most recent semiannual or annual shareholder report.

       9


More information

     
How to contact us
Internet www.jhinvestments.com  
Mail Computershare
P.O. Box 30170
College Station, TX 77842-3170
 
Phone Customer service representatives
Portfolio commentary
24-hour automated information
TDD line
800-852-0218
800-344-7054
800-843-0090
800-231-5469

     
  P9Q3 09/16
This report is for the information of the shareholders of John Hancock Financial Opportunities Fund.   11/16


 

ITEM 2. CONTROLS AND PROCEDURES.

 

(a)      Based upon their evaluation of the registrant's disclosure controls and procedures as conducted within 90 days of the filing date of this Form N-Q, the registrant's principal executive officer and principal accounting officer have concluded that those disclosure controls and procedures provide reasonable assurance that the material information required to be disclosed by the registrant on this report is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms.

 

(b)      There were no changes in the registrant's internal control over financial reporting that occurred during the registrant's last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

 

ITEM 3. EXHIBITS.

 

Separate certifications for the registrant's principal executive officer and principal accounting officer, as required by Rule 30a-2(a) under the Investment Company Act of 1940, are attached.

 


 

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.

 

John Hancock Financial Opportunities Fund

 

By:

/s/ Andrew Arnott

_______________________________

Andrew Arnott

President

 

 

Date: November 11, 2016

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

 

By:

/s/ Andrew Arnott

_______________________________

Andrew Arnott

President

 

 

Date: November 11, 2016

 

 

By:

/s/ Charles A. Rizzo

_______________________________

Charles A. Rizzo

Chief Financial Officer

 

 

Date: November 11, 2016