N-CSR

As filed with the Securities and Exchange Commission on 2/29/2016

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-8352

LKCM Funds

(Exact name of registrant as specified in charter)

c/o Luther King Capital Management Corporation

301 Commerce Street, Suite 1600

Fort Worth, TX 76102

(Address of principal executive offices) (Zip code)

K&L Gates LLP

1601 K Street, NW

Washington, DC 20006

(Name and address of agent for service)

1-800-688-LKCM and 1-800-423-6369

Registrant’s telephone number, including area code

Date of fiscal year end: December 31

Date of reporting period: December 31, 2015

Item 1. Reports to Stockholders.

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LKCM

FUNDS

LKCM Small Cap Equity Fund

LKCM Small-Mid Cap Equity Fund

LKCM Equity Fund

LKCM Balanced Fund

LKCM Fixed Income Fund

Annual Report

December 31, 2015

Dear Fellow Shareholders:

We report the following performance information for the LKCM Funds:

Funds	Inception Dates		NAV @ 12/31/15		Net Expense Ratio*, **		Gross Expense Ratio**		One Year Total Return Ended 12/31/15		Five Year Average Annualized Return Ended 12/31/15		Ten Year Average Annualized Return Ended 12/31/15		Avg. Annual Total Return Since Incept.
LKCM Equity Fund -
Institutional Class		1/3/96	$	21.40		0.80%		0.92%		-3.54%		9.90%		7.41%		7.88%
S&P 500® Index1										1.38%		12.57%		7.31%		8.14%
LKCM Small Cap Equity Fund -
Institutional Class		7/14/94	$	19.86		0.94%		0.94%		-5.58%		7.22%		5.67%		10.23%
Russell 2000® Index2										-4.41%		9.19%		6.80%		8.85%
LKCM Small Cap Equity Fund -
Adviser Class		6/5/03	$	18.93		1.19%		1.19%		-5.81%		6.95%		5.40%		8.72%
Russell 2000® Index2										-4.41%		9.19%		6.80%		8.94%
LKCM Small-Mid Cap Equity Fund -
Institutional Class		5/2/11	$	11.15		1.00%		1.20%		-1.41%		N/A		N/A		4.39%
Russell 2500® Index3										-2.90%		N/A		N/A		8.45%
LKCM Balanced Fund		12/30/97	$	19.60		0.80%		0.99%		0.91%		8.81%		7.17%		6.14%
S&P 500® Index1										1.38%		12.57%		7.31%		6.18%
Barclays U.S. Intermediate
Government/Credit Bond Index4										1.07%		2.58%		4.04%		4.82%
LKCM Fixed Income Fund		12/30/97	$	10.50		0.50%		0.70%		-0.27%		2.21%		4.02%		4.49%
Barclays U.S. Intermediate
Government/Credit Bond Index4										1.07%		2.58%		4.04%		4.82%

Performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than the original cost. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 1-800-688-LKCM. The Funds impose a 1.00% redemption fee on shares held less than 30 days. If reflected, the fee would reduce performance shown.

* Luther King Capital Management Corporation, the Funds’ adviser, has contractually agreed to waive all or a portion of its management fee and/or reimburse expenses of the Fund to maintain designated expense ratios through April 30, 2016, other than the LKCM Fixed Income Fund, for which Luther King Capital Management Corporation has agreed to waive its management fee and/or reimburse expenses of the Fund to maintain such designated expense ratio through May 31, 2016. This expense limitation excludes interest, taxes, brokerage commissions, indirect fees and expenses related to investments in other investment companies, including money market funds, and extraordinary expenses. Investment performance reflects fee waivers, if any, in effect. In the absence of such waivers, total return would be reduced. Investment performance is based upon the net expense ratio. LKCM waived management fees and/or reimbursed expenses for each Fund, other than the LKCM Small Cap Equity Fund, during the fiscal year ended December 31, 2015.

** Expense ratios above are as of December 31, 2014, the Funds’ prior fiscal year end, as reported in the Funds’ current prospectus as supplemented on May 22, 2015. Expense ratios reported for other periods in the financial highlights of this report for the Funds’ fiscal year ended December 31, 2015 may differ due to the inclusion of acquired fund fees and expenses.

1 The S&P 500^® Index is an unmanaged capitalization-weighted index of 500 selected stocks that is generally representative of the performance of large capitalization companies in the U.S. stock market.

2 The Russell 2000^® Index is an unmanaged index which measures the performance of the 2,000 smallest companies in the Russell 3000^® Index.

3 The Russell 2500^® Index is an unmanaged index which measures the performance of the 2,500 smallest companies in the Russell 3000^® Index.

4 The Barclays U.S. Intermediate Government/Credit Bond Index is an unmanaged market value weighted index measuring both the principal price changes of, and income provided by, the underlying universe of securities that comprise the index. Securities included in the index must meet the following criteria: fixed as opposed to variable rate; remaining maturity of one to ten years; minimum outstanding par value of $250 million; rated investment grade or higher by Moody’s Investors Service or equivalent; must be dollar denominated and non-convertible; and must be publicly issued.

Note: These indices defined above are not available for direct investment and the index performance therefore does not include expenses.

2015 Review

2015 proved to be an unkind year for nearly all asset classes. Commodities were especially weak due to the downturn in global manufacturing activity, most notably in China. The story of global oversupply of crude oil is well known at this point. Technological innovation in shale oil production domestically and the unwillingness of the Organization of Petroleum Exporting Countries, or OPEC, to curtail production, in conjunction with a rising U.S. dollar, contributed to an approximate 31% decline in the price of West Texas Intermediate crude oil in 2015. This price decline occurred on the back of an approximate 46% decline in West Texas Intermediate crude oil in 2014. Domestic intermediate-term investment grade bond returns were slightly positive during the year, while domestic high yield bonds and emerging market bonds posted negative returns for 2015.

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We believe that there were two key divergences within the domestic equity market during the year. First, growth stocks outpaced value stocks, which typically is characteristic of the mature stage of an equity market cycle. We believe it is common to see the equity market leadership narrow during this phase, as it did in 2015. Second, large capitalization stocks outperformed small capitalization stocks, as reflected by the Standard & Poor’s 500 Index, or S&P 500^® Index, outperformance of the Russell 2000^® Index. Thus, we believe the U.S. equity market in 2015 can best be characterized as one in which a narrow group of larger capitalization companies performed best. For example, if the market-capitalization weighted S&P 500^® Index was instead equal weighted, the S&P 500^® Index would have declined approximately 4.1%, not including dividends, for 2015, versus the 1.38% return posted by the S&P 500^® Index during 2015.

In December 2015, the Federal Reserve raised the federal funds target interest rate 0.25% for the first time since June 2006, bringing to a close a seven-year chapter of zero percent interest rates. When the Federal Reserve raises interest rates, it is typically an important marker in the business cycle. In our view, the first such interest rate hike is often seen as conviction by the Federal Reserve that an economic expansion is intensifying. We believe capital markets generally are sanguine about the first couple of interest rate increases by the Federal Reserve. Historically, the tenor typically changes once inflation readings become sufficiently strong that capital markets perceive the Federal Reserve may quicken its pace of restricting monetary policy. We believe this often results in slowing economic growth, inflationary declines, and a resetting of the business cycle. We believe we are in the early stages of monetary policy normalization, and market expectations are for interest rates to rise gradually. If the Federal Reserve were to raise interest rates at each consecutive meeting in 2016, it would be a negative surprise to capital markets in our view. We believe such action would be concerning unless such steps were in response to significantly stronger economic data than current trend. Our forecast is for a very gradual rise in interest rates commensurate with very moderate inflation readings and modest real economic growth in 2016.

The Federal Reserve appears to be charting a new course this cycle. We believe the Federal Reserve most often raises interest rates in response to an uncomfortable pace of rising inflation. Inflation is generally a lagging economic indicator, meaning the Federal Reserve typically acts well after the economic growth is in full bloom. Given the lack of inflationary pressures we have seen to date, we believe the Federal Reserve is attempting to normalize monetary policy coincident with what it perceives could be increasing price pressures as domestic economic and labor economy slack appear to continue to decline.

2016 Outlook

At any given time, there are both structural and cyclical forces at work on the economy. Structural forces typically include trends in demographics, fiscal debt burdens, tax regimes, and pace of innovation. Cyclical forces generally are shorter-term in nature, such as changes in monetary or fiscal policy, inflation, and trade balances. We believe the sweet spot of economic growth occurs in periods when both structural and cyclical forces provide tailwinds; this occurred in Japan in the 1980s, the United States in the 1990s, and China in the 2000s. In our view, when structural and cyclical forces collide, cyclical forces often prevail for a period of time before structural forces again win the day. Structural forces weighed on the global economy in 2015. In our view, the repeated possibilities of a Greek exit from the European Union and the United Kingdom’s upcoming referendum on European Union membership are proxy battles for the structural challenges of a monetary union without a fiscal union. In China household consumption as a percentage of Gross Domestic Product (GDP) remains stagnant and well below the rate of developed economies and presents another structural headwind. Domestically, the United States is facing a continuous rise in the number of aging baby boomers and the corresponding strain that imposes on fiscal resources from entitlement programs. These are all examples of structural challenges that continue to weigh on key contributors to aggregate global GDP.

To ease these structural issues, governments have looked first to cyclical forces such as monetary policy. Unfortunately, we believe monetary policy has now achieved much of what it can in terms of bolstering economic growth and, globally, there appears to be scant room for interest rates to fall further. The remaining two forms of monetary transmission, supporting asset prices through quantitative easing and currency depreciation, are less effective in our view. There are inherent risks to both of these channels, including creating asset valuation bubbles and currency wars. Although structural challenges appear to impair potential economic growth rates around the globe, the growth path for the United States appears higher than for Japan or Europe where structural challenges seem greatest and economies appear less dynamic.

With cyclical tailwinds in the United States losing some of their intensity, we believe that domestic economic growth is again likely to remain muted in 2016, although stronger than in 2015. Consequently, we forecast corporate profit growth will resume in 2016 following a hiatus in 2015. Earnings within the Energy sector declined approximately 60% in 2015, which contributed to virtually no corporate earnings growth for the S&P 500^® Index during 2015. Although we anticipate earnings in the Energy sector will decline again this year in aggregate, the sector now represents only approximately 3.8% of S&P 500^® Index earnings, down from approximately 11.7% in the summer of 2014. We believe corporate profits, as measured by S&P 500^® Index earnings, should grow 4-6% for 2016 with the negative impact of a strong U.S. dollar on firms’ income statements being less in 2016. Overall, we think corporate balance sheets remain healthy with near record levels of cash and reasonable debt burdens. Interest rates for lower quality balance sheets have risen recently, influenced in part by deterioration in the prospects for select energy companies. While we believe this phenomenon has been largely contained to the Energy sector, we remain vigilant with regard to rising credit spreads outside of the Energy sector, as credit spreads are often harbingers of future economic stress.

Although the equity market displayed characteristics of a mature equity market in 2015, our forecast is for the current bull market to remain in place. We note, however, that real GDP growth has been sub-par during this expansion, averaging just approximately 1.8%

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annually compared with approximately 4.2% for previous expansions since 1960. We think the longevity of this economic cycle and accompanying bull market in equities is consistent with a benign inflation outlook. The two shortest economic cycles since 1960 both began in the highly inflationary 1970s. If our forecast for modest inflation is accurate, then we believe it is reasonable to expect that this current economic cycle has multiple years remaining to grow. Unfortunately, history teaches that when economic growth is less robust, capital market volatility is typically higher. Finally, there always remains the possibility of significant exogenous events such as terrorist acts, an expanding Middle Eastern conflict, or escalating tensions on the Korean Peninsula or Crimea. These events are impossible to predict in scope or magnitude, but any of which could negatively impact our forecast.

In our view, the base case for 2016 is that investors must continue to adjust to a lower expected return environment, as slow growth and deflationary pressures are the result of structural forces rather than simply residue from the financial crisis. We are likely to witness the continued struggle between governments’ need to address long-run structural issues and mollifying current issues of the day such as preventing deflation and propping-up job growth. As we enter a Presidential election year, it is a reminder of our view that simulative fiscal policy has largely been absent in recent years and always possesses the promise to be a catalyst for growth in the future.

LKCM Equity Fund

The LKCM Equity Fund declined 3.54% for the year ended December 31, 2015 against the 1.38% return for the Fund’s benchmark, the S&P 500^® Index. Stock selection in the Industrials, Consumer Discretionary and Information Technology sectors contributed to underperformance relative to the benchmark, along with the Fund’s overweight positions in the Materials and Industrials sectors and underweight position in the Information Technology sector relative to the benchmark. We remain committed to our investment strategy and stock selection process for the Fund, and we believe the Fund is well positioned for 2016 with a portfolio of high quality companies that we believe have solid balance sheets, are reasonably valued, and otherwise meet our investment criteria.

LKCM Small Cap Equity Fund

The LKCM Small Cap Equity Fund—Institutional Class declined 5.58% for the year ended December 31, 2015 against the 4.41% decline for the Fund’s benchmark, the Russell 2000^® Index. Stock selection was solid in the Energy and Information Technology sectors relative to the benchmark, while the Fund experienced relative weakness in stock selection in the Healthcare sector. The Fund benefited from overweight positions in the Healthcare and Information Technology sectors relative to the benchmark, while the Fund’s overweight position in the Industrials sector detracted from relative performance. During the year, two of the Fund’s portfolio companies were acquired at significant premiums to the Fund’s cost basis in those companies. As a core manager that focuses on high quality companies that meet our stringent investment criteria, we continue to have the Fund tilted towards growth companies as we believe this area provides the most attractive investment opportunities for the Fund in the current market environment.

LKCM Small-Mid Cap Equity Fund

The LKCM Small-Mid Cap Equity Fund outperformed its benchmark, the Russell 2500^® Index, during the year ended December 31, 2015, declining 1.41% against the 2.90% decline for the benchmark. Stock selection and sector allocation decisions contributed to the Fund’s outperformance relative to the benchmark. Stock selection was solid in the Energy and Industrials sectors relative to the benchmark, while the Fund experienced relative weakness in stock selection in the Healthcare sector. The Fund benefited from an underweight position in the Materials sector and an overweight position in the Healthcare sector relative to the benchmark. During the year, two of the Fund’s portfolio companies were acquired at significant premiums to the Fund’s cost basis in those companies. As a core manager that focuses on high quality companies that meet our stringent investment criteria, we continue to have the Fund tilted towards growth companies as we believe this area provides the most attractive investment opportunities for the Fund in the current market environment.

LKCM Fixed Income Fund

The LKCM Fixed Income Fund declined 0.27% for the year ended December 31, 2015 against the 1.07% return for the Fund’s benchmark, the Barclays U.S. Intermediate Government/Credit Bond Index. The Fund’s overweight position in corporate bonds relative to the benchmark, specifically BBB-rated corporate bonds, was the primary detractor from relative performance as credit spreads widened substantially with the sharp decline in commodity prices and the challenged growth in the manufacturing sector. In this flight-to-quality environment, government and agency bonds outperformed their lower quality counterparts in the corporate bond sector. The Fund’s defensive average duration posture of 3.2 years, versus an average duration of 4.0 years for the benchmark, contributed to relative performance ahead of the much-anticipated tightening of monetary policy by the Federal Reserve in December as shorter duration securities generally outperformed their longer duration counterparts. The Fund remains largely focused on short-to-intermediate investment grade corporate bonds in an effort to manage risk during this challenging slow growth, low interest rate environment.

LKCM Balanced Fund

The LKCM Balanced Fund advanced 0.91% for the year ended December 31, 2015 against the 1.38% return for the S&P 500 Index^® and the 1.07% return for the Barclays U.S. Intermediate Government/Credit Bond Index. Both the equity and the fixed income sectors

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detracted from the Fund’s performance relative to the benchmark. The Fund’s fixed income sector’s focus on short-to-intermediate high quality corporate bonds benefited the Fund’s relative performance as lower quality, longer maturity bonds underperformed during the year. We believe the Fund is well-positioned to meet the challenges and opportunities the financial markets are expected to present in the upcoming year.

J. Luther King, Jr., CFA, CIC

February 1, 2016

The information provided herein represents the opinion of J. Luther King, Jr., CFA, CIC and is not intended to be a forecast of future events, a guarantee of future results, nor investment advice.

Please refer to the Schedule of Investments found on pages 15-27 of the report for more information on Fund holdings. Fund holdings and sector allocations are subject to change and are not recommendations to buy or sell any securities.

Mutual fund investing involves risk. Principal loss is possible. Past performance is not a guarantee of future results. Small and medium capitalization funds typically carry additional risks, since smaller companies generally have a higher risk of failure, and, historically, their stocks have experienced a greater degree of market volatility than stocks on average. Investments in debt securities typically decrease in value when interest rates rise. This risk is greater for longer-term debt securities. Investments in mortgage backed securities include additional risks that investors should be aware of such as credit risk, prepayment risk, possible illiquidity and default, as well as increased susceptibility to adverse economic developments. These risks are discussed in the Funds’ summary and statutory prospectuses.

Earnings growth is not a measure of future performance.

Duration is a commonly used measure of the potential volatility of the price of a debt security, or the aggregate market value of a portfolio of debt securities, prior to maturity. Securities with a longer duration generally have more volatile prices than securities of comparable quality with a shorter duration.

Spread is the percentage point difference between yields of various classes of bonds compared to treasury bonds.

BBB refers to bond ratings. Bond ratings are grades given to bonds that indicate their credit quality as determined by private independent rating services such as Standard & Poor’s, Moody’s and Fitch. These firms evaluate a bond issuer’s financial strength, or its ability to pay a bond’s principal and interest in a timely fashion. Ratings are expressed as letters ranging from ‘AAA’, which is the highest grade, to ‘D’, which is the lowest grade.

Must be preceded or accompanied by a prospectus.

Quasar Distributors, LLC, distributor.

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PERFORMANCE:

The following information illustrates the historical performance of LKCM Small Cap Equity Fund as of December 31, 2015 compared to the Fund’s representative benchmark and peer group indices.

Performance data quoted represents past performance; past performance does not guarantee future results. The graph and table reflect the reinvestment of dividends and other distributions, if any, but do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 1-800-688-LKCM.

An index is an unmanaged portfolio and does not trade or incur any expenses. One can not invest in an unmanaged index.

AVERAGE ANNUAL TOTAL RETURN (Periods Ended December 31, 2015)

	Past 1 Year		Past 5 Years(1)		Past 10 Years(1)		Since Inception(1)(2)
LKCM Small Cap Equity Fund – Institutional Class		-5.58%		7.22%		5.67%		10.23%
Russell 2000® Index		-4.41%		9.19%		6.80%		8.85%
Lipper Small-Cap Core Funds Index		-4.23%		8.64%		6.69%		9.71%

⁽¹⁾  Annualized.

⁽²⁾  July 14, 1994

A HYPOTHETICAL $10,000 INVESTMENT IN LKCM SMALL CAP EQUITY FUND – INSTITUTIONAL CLASS

(for the ten years ended December 31, 2015)

The Russell 2000^® Index is an unmanaged index consisting of the 2,000 smallest companies in the Russell 3000^® Index.

The Lipper Small-Cap Core Funds Index is an index of small cap core mutual funds tracked by Lipper, Inc.

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AVERAGE ANNUAL TOTAL RETURN (Periods Ended December 31, 2015)

	Past 1 Year		Past 5 Years(1)		Past 10 Years(1)		Since Inception(1)(2)
LKCM Small Cap Equity Fund – Adviser Class		-5.81%		6.95%		5.40%		8.72%
Russell 2000® Index		-4.41%		9.19%		6.80%		8.94%
Lipper Small-Cap Core Funds Index		-4.23%		8.64%		6.69%		9.32%

⁽¹⁾  Annualized.

⁽²⁾  June 5, 2003

A HYPOTHETICAL $10,000 INVESTMENT IN LKCM SMALL CAP EQUITY FUND – ADVISER CLASS

(for the ten years ended December 31, 2015)

The Russell 2000^® Index is an unmanaged index consisting of the 2,000 smallest companies in the Russell 3000^® Index.

The Lipper Small-Cap Core Funds Index is an index of small cap core mutual funds tracked by Lipper, Inc.

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PERFORMANCE:

The following information illustrates the historical performance of LKCM Small-Mid Cap Equity Fund as of December 31, 2015 compared to the Fund’s benchmark and peer group indices.

Performance data quoted represents past performance; past performance does not guarantee future results. The graph and table reflect the reinvestment of dividends and other distributions, if any, but do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 1-800-688-LKCM.

An index is an unmanaged portfolio and does not trade or incur any expenses. One can not invest in an unmanaged index.

AVERAGE ANNUAL TOTAL RETURN (Periods Ended December 31, 2015)

	Past 1 Year		Past 3 Years		Since Inception(1)(2)
LKCM Small-Mid Cap Equity Fund – Institutional Class		-1.41%		8.10%		4.39%
Russell 2500® Index		-2.90%		12.46%		8.45%
Lipper Small-Cap Core Funds Index		-4.23%		10.71%		7.01%

⁽¹⁾  Annualized.

⁽²⁾  May 2, 2011

A HYPOTHETICAL $10,000 INVESTMENT IN LKCM SMALL-MID CAP EQUITY FUND – INSTITUTIONAL CLASS

(for the period from May 2, 2011 to December 31, 2015)

The Russell 2500^® Index is an unmanaged index consisting of the 2,500 smallest companies in the Russell 3000^® Index.

The Lipper Small-Cap Core Funds Index is an index of small cap core mutual funds tracked by Lipper, Inc.

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PERFORMANCE:

The following information illustrates the historical performance of LKCM Equity Fund as of December 31, 2015 compared to the Fund’s benchmark and peer group indices.

Performance data quoted represents past performance; past performance does not guarantee future results. The graph and table reflect the reinvestment of dividends and other distributions, if any, but do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 1-800-688-LKCM.

An index is an unmanaged portfolio and does not trade or incur any expenses. One can not invest in an unmanaged index.

AVERAGE ANNUAL TOTAL RETURN (Periods Ended December 31, 2015)

	Past 1 Year		Past 5 Years(1)		Past 10 Years(1)		Since Inception(1)(2)
LKCM Equity Fund – Institutional Class		-3.54%		9.90%		7.41%		7.88%
S&P 500® Index		1.38%		12.57%		7.31%		8.14%
Lipper Large-Cap Core Funds Index		-0.67%		10.97%		6.35%		7.10%

⁽¹⁾  Annualized.

⁽²⁾  January 3, 1996

A HYPOTHETICAL $10,000 INVESTMENT IN LKCM EQUITY FUND – INSTITUTIONAL CLASS

(for the ten years ended December 31, 2015)

The S&P 500^® Index is an unmanaged capitalization-weighted index of 500 selected stocks that is generally representative of the performance of large capitalization companies in the U.S. stock market.

The Lipper Large-Cap Core Funds Index is an index of large cap core mutual funds tracked by Lipper, Inc.

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PERFORMANCE:

The following information illustrates the historical performance of LKCM Balanced Fund as of December 31, 2015 compared to the Fund’s benchmark and peer group indices.

Performance data quoted represents past performance; past performance does not guarantee future results. The graph and table reflect the reinvestment of dividends and other distributions, if any, but do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 1-800-688-LKCM.

An index is an unmanaged portfolio and does not trade or incur any expenses. One can not invest in an unmanaged index.

AVERAGE ANNUAL TOTAL RETURN (Periods Ended December 31, 2015)

	Past 1 Year		Past 5 Years(1)		Past 10 Years(1)		Since Inception(1)(2)
LKCM Balanced Fund		0.91%		8.81%		7.17%		6.14%
Barclays U.S. Intermediate Government/Credit Bond Index		1.07%		2.58%		4.04%		4.82%
S&P 500® Index		1.38%		12.57%		7.31%		6.18%
Lipper Mixed-Asset Target Allocation Growth Funds Index		-0.54%		7.69%		5.85%		5.84%

⁽¹⁾  Annualized.

⁽²⁾  December 30, 1997

A HYPOTHETICAL $10,000 INVESTMENT IN LKCM BALANCED FUND

(for the ten years ended December 31, 2015)

The Barclays U.S. Intermediate Government/Credit Bond Index is an unmanaged market value weighted index measuring both the principal price changes of, and income provided by, the underlying universe of securities that comprise the index. Securities included in the index must meet the following criteria; fixed as opposed to variable rate; remaining maturity of one to ten years; minimum outstanding par value of $250 million; rated investment grade or higher by Moody’s Investors Service or equivalent; must be dollar denominated and non-convertible; and must be publicly issued.

The Lipper Mixed-Asset Target Allocation Growth Funds Index is an unmanaged index consisting of funds tracked by Lipper, Inc. that, by portfolio practice, maintain a mix of between 60%-80% equity securities, with the remainder invested in bonds, cash and cash equivalents.

The S&P 500^® Index is an unmanaged capitalization-weighted index of 500 selected stocks that is generally representative of the performance of large capitalization companies in the U.S. stock market.

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PERFORMANCE:

The following information illustrates the historical performance of LKCM Fixed Income Fund as of December 31, 2015 compared to the Fund’s benchmark and peer group indices.

Performance data quoted represents past performance; past performance does not guarantee future results. The graph and table reflect the reinvestment of dividends and other distributions, if any, but do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 1-800-688-LKCM.

An index is an unmanaged portfolio and does not trade or incur any expenses. One can not invest in an unmanaged index.

AVERAGE ANNUAL TOTAL RETURN (Periods Ended December 31, 2015)

	Past 1 Year		Past 5 Years(1)		Past 10 Years(1)		Since Inception(1)(2)
LKCM Fixed Income Fund		-0.27%		2.21%		4.02%		4.49%
Barclays U.S. Intermediate Government/Credit Bond Index		1.07%		2.58%		4.04%		4.82%
Lipper Short Intermediate Investment-Grade Debt Funds Index		0.15%		2.21%		3.50%		4.18%

⁽¹⁾  Annualized.

⁽²⁾  December 30, 1997

A HYPOTHETICAL $10,000 INVESTMENT IN LKCM FIXED INCOME FUND

(for the ten years ended December 31, 2015)

The Barclays U.S. Intermediate Government/Credit Bond Index is an unmanaged market value weighted index measuring both the principal price changes of, and income provided by, the underlying universe of securities that comprise the index. Securities included in the index must meet the following criteria: fixed as opposed to variable rate; remaining maturity of one to ten years; minimum outstanding par value of $250 million; rated investment grade or higher by Moody’s Investors Service or equivalent; must be dollar denominated and non-convertible; and must be publicly issued.

The Lipper Short Intermediate Investment-Grade Debt Funds Index is an index of short intermediate investment grade mutual funds tracked by Lipper, Inc.

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LKCM Funds Expense Example — December 31, 2015

As a shareholder of the Funds, you incur two types of costs: (1) transaction costs, including redemption fees; and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (7/1/15-12/31/15).

ACTUAL EXPENSES

The first line of the tables below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period. Although the Funds charge no sales load, you will be assessed fees for outgoing wire transfers, returned checks and stop payment orders at prevailing rates charged by U.S. Bancorp Fund Services, LLC, the Funds’ transfer agent. If you request that a redemption be made by wire transfer, currently a $15.00 fee is charged by the Funds’ transfer agent. You will be charged a redemption fee equal to 1.00% of the net amount of the redemption if you redeem your shares of the LKCM Small Cap Equity, Small-Mid Cap Equity, Equity, Balanced and Fixed Income Funds within 30 days of purchase, unless otherwise determined by the Funds in their discretion. To the extent the Funds invest in shares of other investment companies as part of their investment strategies, you will indirectly bear your proportionate share of any fees and expenses charged by the underlying funds in which the Funds invest in addition to the expenses of the Funds. Actual expenses of the underlying funds are expected to vary among the various underlying funds. These expenses are not included in the example below. The example below includes management fees, registration fees and other expenses. However, the example below does not include portfolio trading commissions and related expenses and other extraordinary expenses as determined under generally accepted accounting principles.

HYPOTHETICAL EXAMPLES FOR COMPARISON PURPOSES

The second line of the tables below provides information about hypothetical account values and hypothetical expenses based on the Funds’ actual expense ratios and an assumed rate of return of 5% per year before expenses, which are not the Funds’ actual returns. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Funds and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as redemption fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactions costs were included, your costs would have been higher.

	LKCM Small Cap Equity Fund – Institutional Class
	Beginning Account Value 7/1/2015		Ending Account Value 12/31/15		Expenses Paid During Period* 7/1/15–12/31/15
Actual	$	1,000.00	$	881.80	$	4.65
Hypothetical (5% return before expense)	$	1,000.00	$	1,020.27	$	4.99

* Expenses are equal to the Fund’s annualized net expense ratio of 0.98%, multiplied by the average account value over the period, multiplied by 184/365 to reflect the one-half year period.

	LKCM Small Cap Equity Fund – Adviser Class
	Beginning Account Value 7/1/15		Ending Account Value 12/31/15		Expenses Paid During Period* 7/1/15–12/31/15
Actual	$	1,000.00	$	880.90	$	5.83
Hypothetical (5% return before expense)	$	1,000.00	$	1,019.00	$	6.26

* Expenses are equal to the Fund’s annualized net expense ratio of 1.23%, multiplied by the average account value over the period, multiplied by 184/365 to reflect the one-half year period.

	LKCM Small-Mid Cap Equity Fund
	Beginning Account Value 7/1/15		Ending Account Value 12/31/15		Expenses Paid During Period* 7/1/15–12/31/15
Actual	$	1,000.00	$	904.50	$	4.80
Hypothetical (5% return before expense)	$	1,000.00	$	1,020.16	$	5.09

* Expenses are equal to the Fund’s annualized net expense ratio of 1.00%, multiplied by the average account value over the period, multiplied by 184/365 to reflect the one-half year period.

12

	LKCM Equity Fund
	Beginning Account Value 7/1/15		Ending Account Value 12/31/15		Expenses Paid During Period* 7/1/15–12/31/15
Actual	$	1,000.00	$	959.90	$	3.95
Hypothetical (5% return before expense)	$	1,000.00	$	1,021.17	$	4.08

* Expenses are equal to the Fund’s annualized net expense ratio of 0.80%, multiplied by the average account value over the period, multiplied by 184/365 to reflect the one-half year period.

	LKCM Balanced Fund
	Beginning Account Value 7/1/15		Ending Account Value 12/31/15		Expenses Paid During Period* 7/1/15–12/31/15
Actual	$	1,000.00	$	987.00	$	4.01
Hypothetical (5% return before expense)	$	1,000.00	$	1,021.17	$	4.08

* Expenses are equal to the Fund’s annualized net expense ratio of 0.80%, multiplied by the average account value over the period, multiplied by 184/365 to reflect the one-half year period.

	LKCM Fixed Income Fund
	Beginning Account Value 7/1/15		Ending Account Value 12/31/15		Expenses Paid During Period* 7/1/15–12/31/15
Actual	$	1,000.00	$	994.30	$	2.51
Hypothetical (5% return before expense)	$	1,000.00	$	1,022.68	$	2.55

* Expenses are equal to the Fund’s annualized net expense ratio of 0.50%, multiplied by the average account value over the period, multiplied by 184/365 to reflect the one-half year period.

13

ALLOCATION OF PORTFOLIO HOLDINGS — LKCM Funds — December 31, 2015

Percentages represent market value as a percentage of total investments.

LKCM Small Cap Equity Fund

LKCM Equity Fund

LKCM Fixed Income Fund

LKCM Small-Mid Cap Equity Fund

LKCM Balanced Fund

14

LKCM SMALL CAP EQUITY FUND

SCHEDULE OF INVESTMENTS

December 31, 2015

COMMON STOCKS - 99.9%	Shares		Value
Aerospace & Defense - 1.2%
Hexcel Corporation		152,385	$	7,078,283
Automobiles - 2.3%
Lithia Motors, Inc. - Class A		124,625		13,293,749
Banks - 10.3%
BancorpSouth, Inc.		412,104		9,886,375
Bank of the Ozarks, Inc.		249,385		12,334,582
Columbia Banking System, Inc.		366,405		11,911,827
Hanmi Financial Corporation		350,485		8,313,504
PrivateBancorp, Inc.		228,145		9,358,508
Texas Capital Bancshares, Inc. (a)		149,075		7,367,286
				59,172,082
Biotechnology - 4.0%
Charles River Laboratories International, Inc. (a)		140,270		11,276,305
EXACT Sciences Corporation (a)		335,605		3,097,634
Neogen Corporation (a)		149,330		8,440,132
				22,814,071
Building Products - 2.1%
Apogee Enterprises, Inc.		82,825		3,603,716
PGT, Inc. (a)		760,166		8,658,291
				12,262,007
Capital Markets - 0.9%
BGC Partners Inc - Class A		533,155		5,230,251
Commercial Services & Supplies - 4.4%
Healthcare Services Group, Inc.		370,705		12,926,483
Multi-Color Corporation		43,455		2,599,044
Ritchie Bros. Auctioneers Incorporated (b)		414,970		10,004,927
				25,530,454
Communications Equipment - 2.6%
Ciena Corporation (a)		227,505		4,707,078
Infinera Corporation (a)		573,565		10,392,998
				15,100,076
Construction & Engineering - 0.7%
MasTec Inc. (a)		230,750		4,010,435
Construction Materials - 2.1%
Headwaters Incorporated (a)		390,900		6,594,483
Summit Materials, Inc. - Class A (a)		282,261		5,656,517
				12,251,000
Diversified Financials - 1.4%
HFF, Inc. - Class A		260,787		8,102,652
Food & Staples Retailing - 0.5%
Sprouts Farmers Market Inc. (a)		114,655		3,048,676
Food Products - 3.2%
Post Holdings Inc. (a)		182,230		11,243,591
TreeHouse Foods, Inc. (a)		94,665		7,427,416
				18,671,007

COMMON STOCKS	Shares		Value
Health Care Equipment & Supplies - 7.2%
Cantel Medical Corp.		66,695	$	4,144,427
Cynosure, Inc. - Class A (a)		275,588		12,310,516
LDR Holding Corporation (a)		250,000		6,277,500
PRA Health Sciences, Inc. (a)		127,577		5,775,411
VWR Corporation (a)		469,925		13,303,577
				41,811,431
Health Care Providers & Services - 4.4%
Acadia Healthcare Company, Inc. (a)		141,508		8,838,590
Aceto Corporation		346,143		9,338,938
Omnicell, Inc. (a)		223,215		6,937,522
				25,115,050
Hotels, Restaurants & Leisure - 2.2%
La Quinta Holdings Inc (a)		138,681		1,887,448
Popeyes Louisiana Kitchen, Inc. (a)		138,240		8,087,040
Zoe’s Kitchen Inc (a)		98,950		2,768,621
				12,743,109
Internet Software & Services - 8.3%
Criteo SA - ADR (a)(b)		211,515		8,375,994
Demandware Inc. (a)		95,115		5,133,357
Euronet Worldwide, Inc. (a)		205,130		14,857,566
LogMeIn, Inc. (a)		136,070		9,130,297
SPS Commerce, Inc. (a)		144,090		10,116,559
				47,613,773
Leisure Equipment & Products - 2.1%
Pool Corporation		153,165		12,372,669
Machinery - 1.1%
Barnes Group Inc.		173,355		6,135,033
Media - 1.8%
The E.W. Scripps Company - Class A		558,115		10,604,185
Multiline Retail - 1.0%
Burlington Stores, Inc. (a)		127,465		5,468,249
Oil & Gas & Consumable Fuels - 2.5%
Diamondback Energy Inc. (a)		105,470		7,055,943
PDC Energy, Inc. (a)		83,345		4,448,956
Synergy Resources Corporation (a)		336,635		2,868,130
				14,373,029
Paper & Forest Products - 0.5%
KapStone Paper and Packaging Corporation		134,715		3,043,212
Pharmaceuticals - 3.6%
Akorn, Inc. (a)		326,173		12,169,515
Cambrex Corp. (a)		185,260		8,723,893
				20,893,408
Professional Services - 2.5%
The Advisory Board Company (a)		162,340		8,053,687
FTI Consulting, Inc. (a)		177,200		6,141,752
				14,195,439

The accompanying notes are an integral part of these financial statements.

15

LKCM SMALL CAP EQUITY FUND

SCHEDULE OF INVESTMENTS, CONTINUED

December 31, 2015

COMMON STOCKS	Shares		Value
Real Estate Investment Trusts - 7.5%
CubeSmart		344,685	$	10,554,255
Kennedy-Wilson Holdings Inc.		327,842		7,894,435
LaSalle Hotel Properties		135,590		3,411,444
Sovran Self Storage, Inc.		131,890		14,153,116
Stag Industrial, Inc.		401,155		7,401,310
				43,414,560
Semiconductor Equipment & Products - 1.6%
Rambus Inc. (a)		785,125		9,099,599
Software - 11.8%
ACI Worldwide, Inc. (a)		524,015		11,213,921
Callidus Software, Inc. (a)		264,975		4,920,586
Fair Isaac Corporation		122,595		11,545,997
Guidewire Software Inc. (a)		98,005		5,895,981
Interactive Intelligence Group, Inc. (a)		94,050		2,955,051
Manhattan Associates, Inc. (a)		141,620		9,370,995
Proofpoint, Inc. (a)		145,205		9,439,777
Take-Two Interactive Software, Inc. (a)		372,375		12,973,545
				68,315,853
Specialty Retail - 1.9%
Monro Muffler Brake, Inc.		163,555		10,830,612
Thrifts & Mortgage Finance - 2.1%
Home Bancshares Inc.		291,448		11,809,473
Trading Companies & Distributors - 2.1%
Watsco, Inc.		101,855		11,930,276
TOTAL COMMON STOCKS
(Cost $465,079,111)				576,333,703
SHORT-TERM INVESTMENT - 0.3%
Money Market Fund (c) - 0.3%
Federated Government Obligations Fund - Institutional Shares, 0.01%		1,836,907		1,836,907
TOTAL SHORT-TERM INVESTMENT
(Cost $1,836,907)				1,836,907
Total Investments - 100.2%
(Cost $466,916,018)				578,170,610
Liabilities in Excess of Other Assets - (0.2)%				(1,151,191	)
TOTAL NET ASSETS - 100.0%			$	577,019,419

ADR American Depository Receipt.

(a) Non-income producing security.

(b) Security issued by non-U.S. incorporated company.

(c) The rate quoted is the annualized seven-day yield of the fund at period end.

Investments are classified by asset class and industry pursuant to the Global Industry Classification Standard (GICS^®) which was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor Financial Services LLC (“S&P”). GICS is a service mark of MSCI and S&P and has been licensed for use by U.S. Bancorp Fund Services, LLC.

The accompanying notes are an integral part of these financial statements.

16

LKCM SMALL-MID CAP EQUITY FUND

SCHEDULE OF INVESTMENTS

December 31, 2015

COMMON STOCKS - 93.2%	Shares		Value
Aerospace & Defense - 1.3%
Hexcel Corporation		94,685	$	4,398,118
Automobiles - 2.1%
Lithia Motors, Inc. - Class A		63,920		6,818,346
Banks - 9.0%
BancorpSouth, Inc.		216,710		5,198,873
Bank of the Ozarks, Inc.		134,640		6,659,294
PrivateBancorp, Inc.		169,950		6,971,349
Signature Bank (a)		48,300		7,407,770
Texas Capital Bancshares, Inc. (a)		76,405		3,775,935
				30,013,221
Biotechnology - 2.5%
Charles River Laboratories International, Inc. (a)		102,575		8,246,004
Building Products - 2.3%
Fortune Brands Home & Security Inc.		137,885		7,652,618
Capital Markets - 2.9%
E*Trade Financial Corporation (a)		319,695		9,475,760
Commercial Services & Supplies - 2.4%
Healthcare Services Group, Inc.		224,295		7,821,167
Communications Equipment - 2.4%
Ciena Corporation (a)		139,960		2,895,772
Infinera Corporation (a)		281,930		5,108,572
				8,004,344
Construction Materials - 2.1%
Martin Marietta Materials, Inc.		51,125		6,982,652
Containers & Packaging - 1.6%
Ball Corporation		71,405		5,193,286
Diversified Financials - 1.7%
Jones Lang LaSalle Incorporated		34,460		5,508,776
Electrical Equipment & Instruments - 2.5%
Acuity Brands, Inc.		35,840		8,379,392
Energy Equipment & Services - 0.9%
Core Laboratories N.V. (b)		28,920		3,144,761
Food Products - 3.0%
TreeHouse Foods, Inc. (a)		74,080		5,812,317
The WhiteWave Foods Company (a)		107,240		4,172,708
				9,985,025
Health Care Equipment & Supplies - 7.7%
Align Technology, Inc. (a)		60,055		3,954,622
DexCom Inc. (a)		92,740		7,595,405
PerkinElmer, Inc.		121,775		6,523,487
VWR Corporation (a)		260,950		7,387,495
				25,461,009
Health Care Providers & Services - 2.0%
Acadia Healthcare Company, Inc. (a)		108,200		6,758,172

COMMON STOCKS	Shares		Value
Hotels, Restaurants & Leisure - 1.0%
La Quinta Holdings Inc (a)		245,735	$	3,344,453
Household Durables - 1.5%
Lennar Corporation - Class A		103,300		5,052,403
Internet Software & Services - 4.7%
Criteo SA - ADR (a) (b)		137,745		5,454,702
Euronet Worldwide, Inc. (a)		141,955		10,281,801
				15,736,503
Leisure Equipment & Products - 2.3%
Pool Corporation		92,845		7,500,019
Machinery - 1.8%
The Middleby Corporation (a)		56,470		6,091,419
Media - 2.1%
TEGNA Inc.		278,610		7,110,127
Multiline Retail - 1.3%
Burlington Stores, Inc. (a)		97,715		4,191,974
Oil & Gas & Consumable Fuels - 3.8%
Diamondback Energy Inc. (a)		94,900		6,348,809
Matador Resources Company (a)		166,015		3,282,117
Memorial Resource Development Corp. (a)		172,985		2,793,708
				12,424,634
Pharmaceuticals - 2.7%
Akorn, Inc. (a)		236,405		8,820,271
Professional Services - 0.9%
FTI Consulting, Inc. (a)		84,280		2,921,145
Real Estate Investment Trusts - 6.0%
CubeSmart		193,610		5,928,338
Kennedy-Wilson Holdings Inc.		148,145		3,567,332
LaSalle Hotel Properties		68,300		1,718,428
Sovran Self Storage, Inc.		81,740		8,771,519
				19,985,617
Semiconductor Equipment & Products - 1.2%
Rambus Inc. (a)		350,492		4,062,202
Software - 10.9%
ACI Worldwide, Inc. (a)		362,715		7,762,101
Fair Isaac Corporation		70,330		6,623,679
Fortinet Inc. (a)		242,125		7,547,036
Manhattan Associates, Inc. (a)		96,575		6,390,368
Take-Two Interactive Software, Inc. (a)		226,055		7,875,757
				36,198,941
Specialty Retail - 4.8%
Monro Muffler Brake, Inc.		62,405		4,132,459
Tractor Supply Company		62,570		5,349,735
Ulta Salon, Cosmetics & Fragrance, Inc. (a)		35,320		6,534,201
				16,016,395

The accompanying notes are an integral part of these financial statements.

17

LKCM SMALL-MID CAP EQUITY FUND

SCHEDULE OF INVESTMENTS, CONTINUED

December 31, 2015

COMMON STOCKS	Shares		Value
Trading Companies & Distributors - 1.8%
Watsco, Inc.		51,380	$	6,018,139
TOTAL COMMON STOCKS
(Cost $259,480,350)				309,316,893
SHORT-TERM INVESTMENTS - 6.9%
Money Market Funds (c) - 6.9%
Dreyfus Government Cash Management Fund - Institutional Shares, 0.01%		10,029,886		10,029,886
Federated Government Obligations Fund - Institutional Shares, 0.01%		10,022,732		10,022,732
Invesco Short Term Investments Trust - Treasury Portfolio - Institutional Shares, 0.02%		2,751,648		2,751,648
				22,804,266
TOTAL SHORT-TERM INVESTMENTS
(Cost $22,804,266)				22,804,266
Total Investments - 100.1%
(Cost $282,284,616)				332,121,159
Liabilities in Excess of Other Assets - (0.1)%				(167,293	)
TOTAL NET ASSETS - 100.0%			$	331,953,866

ADR American Depository Receipt.

(a) Non-income producing security.

(b) Security issued by non-U.S. incorporated company.

(c) The rate quoted is the annualized seven-day yield of the fund at period end.

Investments are classified by asset class and industry pursuant to the Global Industry Classification Standard (GICS^®) which was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor Financial Services LLC (“S&P”). GICS is a service mark of MSCI and S&P and has been licensed for use by U.S. Bancorp Fund Services, LLC.

The accompanying notes are an integral part of these financial statements.

18

LKCM EQUITY FUND

SCHEDULE OF INVESTMENTS

December 31, 2015

COMMON STOCKS - 99.9%	Shares		Value
Aerospace & Defense - 3.5%
Honeywell International Inc.		60,000	$	6,214,200
Rockwell Collins, Inc.		40,000		3,692,000
				9,906,200
Auto Components - 1.3%
Gentex Corporation		230,000		3,682,300
Banks - 9.3%
Bank of America Corporation		290,000		4,880,700
Comerica Incorporated		108,000		4,517,640
Cullen/Frost Bankers, Inc.		65,000		3,900,000
Glacier Bancorp, Inc.		60,000		1,591,800
SunTrust Banks, Inc.		109,604		4,695,435
Wells Fargo & Company		120,000		6,523,200
				26,108,775
Beverages - 3.0%
The Coca-Cola Company		65,000		2,792,400
PepsiCo, Inc.		55,000		5,495,600
				8,288,000
Biotechnology - 4.4%
Amgen Inc.		40,000		6,493,200
Celgene Corporation (a)		50,000		5,988,000
				12,481,200
Chemicals - 5.9%
E. I. du Pont de Nemours and Company		60,000		3,996,000
ECOLAB INC.		30,000		3,431,400
FMC Corporation		110,000		4,304,300
Monsanto Company		50,000		4,926,000
				16,657,700
Commercial Services & Supplies - 2.7%
Copart, Inc. (a)		100,000		3,801,000
Waste Connections, Inc.		65,000		3,660,800
				7,461,800
Computers & Peripherals - 2.3%
Apple Inc.		60,000		6,315,600
Construction Materials - 1.2%
Martin Marietta Materials, Inc.		25,000		3,414,500
Containers & Packaging - 1.9%
Ball Corporation		75,000		5,454,750
Diversified Financials - 1.5%
JPMorgan Chase & Co.		65,000		4,291,950
Electrical Equipment & Instruments - 2.4%
Franklin Electric Co., Inc.		85,000		2,297,550
Roper Industries, Inc.		23,000		4,365,170
				6,662,720
Electronic Equipment & Instruments - 1.1%
National Instruments Corporation		55,000		1,577,950
Trimble Navigation Limited (a)		70,000		1,501,500
				3,079,450

COMMON STOCKS	Shares		Value
Energy Equipment & Services - 1.0%
Schlumberger Limited (b)		39,500	$	2,755,125
Food & Drug Retailing - 1.5%
Walgreens Boots Alliance, Inc.		50,000		4,257,750
Food Products - 1.2%
The WhiteWave Foods Company (a)		90,000		3,501,900
Health Care Equipment & Supplies - 6.4%
Medtronic, PLC (b)		73,000		5,615,160
PerkinElmer, Inc.		100,000		5,357,000
Thermo Fisher Scientific Inc.		50,000		7,092,500
				18,064,660
Household Durables - 2.9%
Jarden Corporation (a)		142,500		8,139,600
Household Products - 2.7%
Kimberly-Clark Corporation		45,000		5,728,500
The Procter & Gamble Company		23,750		1,885,988
				7,614,488
Internet Software & Services - 3.3%
Akamai Technologies, Inc. (a)		90,000		4,736,700
Sabre Corporation		160,000		4,475,200
				9,211,900
IT Consulting & Services - 1.0%
PayPal Holdings, Inc. (a)		75,000		2,715,000
Machinery - 6.9%
Danaher Corporation		75,000		6,966,000
Generac Holdings, Inc. (a)		108,000		3,215,160
The Gorman-Rupp Company		67,500		1,804,275
The Toro Company		37,000		2,703,590
Valmont Industries, Inc.		45,000		4,770,900
				19,459,925
Marine - 0.8%
Kirby Corporation (a)		45,000		2,367,900
Media - 2.3%
Time Warner Inc.		27,200		1,759,024
The Walt Disney Company		43,385		4,558,896
				6,317,920
Metals & Mining - 0.5%
Carpenter Technology Corporation		48,000		1,452,960
Oil & Gas & Consumable Fuels - 7.8%
Cabot Oil & Gas Corporation		140,000		2,476,600
ConocoPhillips		115,000		5,369,350
EOG Resources, Inc.		60,000		4,247,400
Exxon Mobil Corporation		70,000		5,456,500
Occidental Petroleum Corporation		65,000		4,394,650
				21,944,500
Personal Products - 0.8%
The Estee Lauder Companies Inc. - Class A		25,000		2,201,500

The accompanying notes are an integral part of these financial statements.

19

LKCM EQUITY FUND

SCHEDULE OF INVESTMENTS, CONTINUED

December 31, 2015

COMMON STOCKS	Shares		Value
Pharmaceuticals - 7.0%
Abbott Laboratories		90,000	$	4,041,900
AbbVie Inc.		65,000		3,850,600
Johnson & Johnson		38,000		3,903,360
Merck & Co., Inc.		80,000		4,225,600
Pfizer Inc.		115,000		3,712,200
				19,733,660
Road & Rail - 2.5%
Kansas City Southern		20,000		1,493,400
Union Pacific Corporation		70,000		5,474,000
				6,967,400
Software - 3.5%
Adobe Systems Incorporated (a)		45,000		4,227,300
Microsoft Corporation		100,000		5,548,000
				9,775,300
Specialty Retail - 4.5%
The Home Depot, Inc.		50,000		6,612,500
Tiffany & Co.		35,000		2,670,150
Tractor Supply Company		40,000		3,420,000
				12,702,650
Textiles, Apparel & Luxury Goods - 2.8%
NIKE, Inc. - Class B		67,000		4,187,500
V.F. Corporation		60,000		3,735,000
				7,922,500
TOTAL COMMON STOCKS
(Cost $195,406,832)				280,911,583
SHORT-TERM INVESTMENT - 0.1%
Money Market Fund (c) - 0.1%
Federated Government Obligations Fund - Institutional Shares, 0.01%		322,887		322,887
TOTAL SHORT-TERM INVESTMENT
(Cost $322,887)				322,887
Total Investments - 100.0%
(Cost $195,729,719)				281,234,470
Liabilities in Excess of Other Assets - 0.0%				(34,747	)
TOTAL NET ASSETS - 100.0%			$	281,199,723

(a) Non-income producing security.

(b) Security issued by non-U.S. incorporated company.

(c) The rate quoted is the annualized seven-day yield of the fund at period end.

Investments are classified by asset class and industry pursuant to the Global Industry Classification Standard (GICS^®) which was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor Financial Services LLC (“S&P”). GICS is a service mark of MSCI and S&P and has been licensed for use by U.S. Bancorp Fund Services, LLC.

The accompanying notes are an integral part of these financial statements.

20

LKCM BALANCED FUND

SCHEDULE OF INVESTMENTS

December 31, 2015

COMMON STOCKS - 69.4%	Shares		Value
Aerospace & Defense - 2.4%
General Dynamics Corporation		1,400	$	192,304
Honeywell International Inc.		3,400		352,138
Rockwell Collins, Inc.		4,400		406,120
				950,562
Air Freight & Logistics - 0.6%
United Parcel Service, Inc. - Class B		2,600		250,198
Banks - 5.6%
Bank of America Corporation		17,000		286,110
Comerica Incorporated		9,500		397,385
Cullen/Frost Bankers, Inc.		3,900		234,000
SunTrust Banks, Inc.		10,300		441,252
Wells Fargo & Company		7,571		411,560
Zions Bancorporation		15,100		412,230
				2,182,537
Beverages - 1.9%
The Coca-Cola Company		8,600		369,456
PepsiCo, Inc.		3,600		359,712
				729,168
Biotechnology - 1.7%
Celgene Corporation (a)		5,400		646,704
Chemicals - 3.8%
Air Products and Chemicals, Inc.		2,500		325,275
Airgas, Inc.		3,000		414,960
E. I. du Pont de Nemours and Company		4,200		279,720
ECOLAB INC.		1,400		160,132
Monsanto Company		2,900		285,708
				1,465,795
Commercial Services & Supplies - 1.9%
Copart, Inc. (a)		11,000		418,110
Waste Management, Inc.		6,100		325,557
				743,667
Communications Equipment - 0.3%
QUALCOMM Incorporated		2,000		99,970
Computers & Peripherals - 2.8%
Apple Inc.		5,950		626,297
EMC Corporation		9,400		241,392
International Business Machines Corporation		1,500		206,430
				1,074,119
Construction Materials - 0.9%
Martin Marietta Materials, Inc.		2,700		368,766
Containers & Packaging - 1.0%
Ball Corporation		5,400		392,742
Diversified Financial Services - 1.0%
Moody’s Corporation		4,000		401,360
Diversified Financials - 0.8%
JPMorgan Chase & Co.		4,800		316,944

COMMON STOCKS	Shares		Value
Diversified Telecommunication Services - 1.6%
AT&T Inc.		13,832	$	475,959
Verizon Communications, Inc.		2,841		131,311
				607,270
Electrical Equipment & Instruments - 0.4%
Emerson Electric Co.		3,000		143,490
Electronic Equipment & Instruments - 1.4%
National Instruments Corporation		7,500		215,175
Trimble Navigation Limited (a)		16,000		343,200
				558,375
Energy Equipment & Services - 0.6%
Schlumberger Limited (b)		3,395		236,801
Food & Drug Retailing - 2.6%
CVS Health Corporation		3,700		361,749
Wal-Mart Stores, Inc.		4,100		251,330
Walgreens Boots Alliance, Inc.		4,900		417,259
				1,030,338
Health Care Equipment & Supplies - 5.1%
Medtronic, PLC (b)		6,100		469,212
PerkinElmer, Inc.		11,600		621,412
Thermo Fisher Scientific Inc.		3,100		439,735
VWR Corporation (a)		17,000		481,270
				2,011,629
Household Durables - 2.0%
Jarden Corporation (a)		7,900		451,248
Whirlpool Corporation		2,300		337,801
				789,049
Household Products - 2.8%
Colgate-Palmolive Company		5,500		366,410
Kimberly-Clark Corporation		3,600		458,280
The Procter & Gamble Company		3,500		277,935
				1,102,625
Industrial Conglomerates - 1.0%
General Electric Company		12,400		386,260
Insurance - 1.5%
MetLife, Inc.		6,300		303,723
Prudential Financial, Inc.		3,400		276,794
				580,517
Internet Catalog & Retail - 1.7%
Amazon.com, Inc. (a)		1,000		675,890
Internet Software & Services - 3.5%
Akamai Technologies, Inc. (a)		5,400		284,202
Alphabet, Inc. - Class A (a)		350		272,304
Alphabet, Inc. - Class C (a)		350		265,608
eBay Inc. (a)		6,000		164,880
Sabre Corporation		14,000		391,580
				1,378,574

The accompanying notes are an integral part of these financial statements.

21

LKCM BALANCED FUND

SCHEDULE OF INVESTMENTS, CONTINUED

December 31, 2015

COMMON STOCKS	Shares		Value
IT Consulting & Services - 2.1%
Accenture PLC - Class A (b)		3,200	$	334,400
Automatic Data Processing, Inc.		3,200		271,104
PayPal Holdings, Inc. (a)		6,000		217,200
				822,704
Machinery - 1.2%
Danaher Corporation		4,900		455,112
Media - 2.6%
CBS Corporation - Class B		5,600		263,928
Time Warner Inc.		5,100		329,817
The Walt Disney Company		4,000		420,320
				1,014,065
Oil & Gas & Consumable Fuels - 3.4%
Cabot Oil & Gas Corporation		10,200		180,438
Chevron Corporation		2,695		242,442
EOG Resources, Inc.		3,800		269,002
Exxon Mobil Corporation		3,227		251,545
Memorial Resource Development Corp. (a)		7,500		121,125
Pioneer Natural Resources Company		1,400		175,532
Range Resources Corporation		4,000		98,440
				1,338,524
Pharmaceuticals - 4.2%
Abbott Laboratories		11,000		494,010
AbbVie Inc.		6,300		373,212
Merck & Co., Inc.		8,900		470,098
Pfizer Inc.		10,000		322,800
				1,660,120
Real Estate Investment Trusts - 0.6%
American Tower Corporation		2,600		252,070
Road & Rail - 0.6%
Union Pacific Corporation		3,000		234,600
Software - 1.7%
Adobe Systems Incorporated (a)		3,900		366,366
Citrix Systems, Inc. (a)		4,000		302,600
				668,966
Specialty Retail - 2.6%
The Home Depot, Inc.		4,000		529,000
O’Reilly Automotive, Inc. (a)		1,900		481,498
				1,010,498
Textiles, Apparel & Luxury Goods - 0.9%
V.F. Corporation		5,700		354,825
Thrifts & Mortgage Finance - 0.6%
Capitol Federal Financial Inc.		17,500		219,800
TOTAL COMMON STOCKS
(Cost $16,733,386)				27,154,634

CORPORATE BONDS - 27.4%	Principal Amount		Value
Banks - 3.8%
Bank of America Corporation
2.625%, 10/19/2020	$	250,000	$	247,131
BB&T Corporation:
2.150%, 03/22/2017
Callable 02/22/2017		200,000		201,576
2.250%, 02/01/2019
Callable 01/02/2019		115,000		115,502
Comerica Incorporated
2.125%, 05/23/2019
Callable 04/23/2019		310,000		307,980
SunTrust Banks, Inc.
3.500%, 01/20/2017
Callable 12/20/2016		300,000		305,250
Wells Fargo & Company:
2.625%, 12/15/2016		100,000		101,372
2.150%, 01/15/2019		200,000		201,205
				1,480,016
Beverages - 0.9%
Anheuser-Busch InBev Worldwide Inc.
1.375%, 07/15/2017		100,000		99,690
PepsiCo, Inc.
3.000%, 08/25/2021		250,000		257,831
				357,521
Biotechnology - 2.2%
Amgen Inc.:
2.125%, 05/15/2017		225,000		226,448
2.200%, 05/22/2019
Callable 04/22/2019		100,000		99,955
Celgene Corporation
1.900%, 08/15/2017		175,000		175,722
Gilead Sciences, Inc.
2.050%, 04/01/2019		335,000		335,776
				837,901
Chemicals - 2.2%
Air Products and Chemicals, Inc.
1.200%, 10/15/2017		150,000		149,180
Eastman Chemical Company
2.400%, 06/01/2017		160,000		160,928
ECOLAB INC.
1.450%, 12/08/2017		250,000		247,748
The Sherwin-Williams Company
1.350%, 12/15/2017		300,000		297,522
				855,378
Communications Equipment - 0.9%
QUALCOMM Incorporated
2.250%, 05/20/2020		350,000		346,813

The accompanying notes are an integral part of these financial statements.

22

LKCM BALANCED FUND

SCHEDULE OF INVESTMENTS, CONTINUED

December 31, 2015

CORPORATE BONDS	Principal Amount		Value
Computers & Peripherals - 1.6%
Apple Inc.
2.850%, 05/06/2021	$	300,000	$	307,457
NetApp, Inc.
2.000%, 12/15/2017		300,000		298,130
				605,587
Consumer Finance - 0.7%
American Express Credit Corporation:
2.375%, 03/24/2017		175,000		176,932
2.600%, 09/14/2020
Callable 04/14/2020		100,000		100,296
				277,228
Consumer Services - 0.6%
The Western Union Company
2.875%, 12/10/2017		225,000		227,781
Diversified Financials - 0.8%
JPMorgan Chase & Co.
2.000%, 08/15/2017		300,000		301,088
Diversified Telecommunication Services - 0.7%
AT&T Inc.
2.450%, 06/30/2020
Callable 05/30/2020		300,000		295,758
Electrical Equipment - 0.7%
Rockwell Automation Inc.
2.050%, 03/01/2020
Callable 02/01/2020		288,000		285,679
Electrical Equipment & Instruments - 0.8%
Roper Technologies, Inc.
1.850%, 11/15/2017		300,000		298,558
Energy Equipment & Services - 0.5%
National Oilwell Varco, Inc.
1.350%, 12/01/2017		200,000		195,755
Food & Drug Retailing - 1.3%
CVS Health Corporation:
5.750%, 06/01/2017		100,000		105,916
2.250%, 12/05/2018
Callable 11/05/2018		175,000		175,965
Walgreens Boots Alliance, Inc.
3.300%, 11/18/2021
Callable 09/18/2021		250,000		245,505
				527,386
Food Products - 0.2%
Kraft Foods Group, Inc.
2.250%, 06/05/2017		75,000		75,568
Health Care Equipment & Supplies - 0.8%
Thermo Fisher Scientific Inc.
1.850%, 01/15/2018		325,000		324,118
Health Care Providers & Services - 0.1%
Express Scripts Holding Co.
2.650%, 02/15/2017		45,000		45,454

CORPORATE BONDS	Principal Amount		Value
Internet Catalog & Retail - 0.7%
Amazon.com, Inc.
1.200%, 11/29/2017	$	295,000	$	294,224
Internet Software & Services - 0.3%
eBay Inc.
1.350%, 07/15/2017		125,000		124,057
Media - 0.8%
DIRECTV Holdings LLC
2.400%, 03/15/2017		300,000		302,502
Oil & Gas & Consumable Fuels - 1.9%
EOG Resources, Inc.
2.450%, 04/01/2020
Callable 03/01/2020		200,000		197,956
Kinder Morgan Inc.
2.000%, 12/01/2017		200,000		192,787
Noble Holding International Limited (b)
2.500%, 03/15/2017		150,000		141,554
Occidental Petroleum Corporation
1.750%, 02/15/2017		200,000		200,433
				732,730
Pharmaceuticals - 2.1%
Abbott Laboratories
2.000%, 03/15/2020		250,000		249,315
AbbVie Inc.
2.000%, 11/06/2018		134,000		133,495
AbbVie Inc.
2.500%, 05/14/2020
Callable 04/14/2020		175,000		173,418
Merck & Co., Inc.
1.100%, 01/31/2018		275,000		273,566
				829,794
Real Estate Investment Trusts - 0.8%
American Tower Corporation:
3.400%, 02/15/2019		200,000		205,309
2.800%, 06/01/2020
Callable 05/01/2020		100,000		98,951
				304,260
Semiconductor Equipment & Products - 1.5%
Broadcom Corporation
2.700%, 11/01/2018		300,000		301,297
Intel Corporation
1.350%, 12/15/2017		300,000		300,485
				601,782
Software - 0.5%
Oracle Corporation
1.200%, 10/15/2017		200,000		200,159
TOTAL CORPORATE BONDS
(Cost $10,786,344)				10,727,097

The accompanying notes are an integral part of these financial statements.

23

LKCM BALANCED FUND

SCHEDULE OF INVESTMENTS, CONTINUED

December 31, 2015

SHORT-TERM INVESTMENT - 2.3%	Shares		Value
Money Market Fund (c) - 2.3%
Federated Government Obligations Fund - Institutional Shares, 0.01%		909,995	$	909,995
TOTAL SHORT-TERM INVESTMENT
(Cost $909,995)				909,995
Total Investments - 99.1%
(Cost $28,429,725)				38,791,726
Other Assets in Excess of Liabilities - 0.9%				361,406
TOTAL NET ASSETS - 100.0%			$	39,153,132

(a) Non-income producing security.

(b) Security issued by non-U.S. incorporated company.

(c) The rate quoted is the annualized seven-day yield of the fund at period end.

Investments are classified by asset class and industry pursuant to the Global Industry Classification Standard (GICS^®) which was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor Financial Services LLC (“S&P”). GICS is a service mark of MSCI and S&P and has been licensed for use by U.S. Bancorp Fund Services, LLC.

The accompanying notes are an integral part of these financial statements.

24

LKCM FIXED INCOME FUND

SCHEDULE OF INVESTMENTS

December 31, 2015

CORPORATE BONDS - 75.8%	Principal Amount		Value
Aerospace & Defense - 0.6%
Lockheed Martin Corporation
7.650%, 05/01/2016	$	1,250,000	$	1,277,853
Air Freight & Logistics - 1.2%
FedEx Corp.
3.200%, 02/01/2025		2,500,000		2,436,332
Banks - 10.5%
Bank of America Corporation:
1.317%, 03/22/2018 (a)		2,000,000		2,007,504
4.200%, 08/26/2024		4,000,000		3,975,840
Branch Banking & Trust Company:
0.862%, 09/13/2016 (a)		2,325,000		2,320,280
0.793%, 05/23/2017 (a)		2,534,000		2,522,711
1.350%, 10/01/2017
Callable 09/01/2017		500,000		499,220
Comerica Incorporated
2.125%, 05/23/2019
Callable 04/23/2019		1,000,000		993,484
SunTrust Banks, Inc.
3.500%, 01/20/2017
Callable 12/20/2016		875,000		890,312
Wells Fargo & Company:
0.863%, 04/23/2018 (a)		2,500,000		2,499,890
4.125%, 08/15/2023		5,000,000		5,197,930
				20,907,171
Beverages - 0.1%
PepsiCo, Inc.
7.900%, 11/01/2018		214,000		250,853
Biotechnology - 2.1%
Celgene Corporation
4.000%, 08/15/2023		4,000,000		4,110,908
Building Products - 0.8%
Masco Corporation
7.125%, 03/15/2020		1,350,000		1,562,625
Capital Markets - 3.0%
Morgan Stanley (a):
1.514%, 04/25/2018		2,500,000		2,528,125
1.083%, 01/24/2019		3,500,000		3,493,620
				6,021,745
Chemicals - 1.4%
Airgas, Inc.
2.950%, 06/15/2016
Callable 05/15/2016		950,000		955,466
ECOLAB INC.
3.000%, 12/08/2016		1,760,000		1,785,670
				2,741,136
Commercial Services & Supplies - 0.6%
Republic Services, Inc.
5.500%, 09/15/2019		1,000,000		1,101,131

CORPORATE BONDS	Principal Amount		Value
Communications Equipment - 0.9%
Cisco Systems, Inc.:
5.500%, 02/22/2016	$	1,000,000	$	1,006,395
4.950%, 02/15/2019		700,000		765,291
				1,771,686
Computers & Peripherals - 2.8%
Hewlett-Packard Company:
4.650%, 12/09/2021		2,000,000		1,994,992
4.050%, 09/15/2022		2,000,000		1,907,830
International Business Machines Corporation
5.700%, 09/14/2017		1,500,000		1,609,266
				5,512,088
Consumer Finance - 2.7%
American Express Company
0.823%, 05/22/2018 (a)		3,533,000		3,513,169
American Express Credit Corporation
2.800%, 09/19/2016		1,900,000		1,924,402
				5,437,571
Consumer Services - 3.0%
The Western Union Company:
5.930%, 10/01/2016		1,000,000		1,031,941
2.875%, 12/10/2017		2,250,000		2,277,808
3.650%, 08/22/2018		2,500,000		2,564,195
				5,873,944
Containers & Packaging - 2.6%
Ball Corporation:
5.000%, 03/15/2022		2,000,000		2,050,000
5.250%, 07/01/2025		3,000,000		3,078,750
				5,128,750
Diversified Financials - 3.6%
JPMorgan Chase & Co.:
3.450%, 03/01/2016		2,125,000		2,133,914
1.134%, 01/25/2018 (a)		3,000,000		3,007,689
3.875%, 09/10/2024		2,000,000		1,993,126
				7,134,729
Diversified Telecommunication Services - 8.0%
AT&T Inc. (a):
1.146%, 11/27/2018		3,000,000		3,004,737
0.909%, 03/11/2019		1,500,000		1,490,401
CenturyLink, Inc.:
6.150%, 09/15/2019		1,402,000		1,437,050
5.800%, 03/15/2022		2,500,000		2,300,625
Verizon Communications Inc. (a):
1.771%, 09/15/2016		4,000,000		4,025,180
1.991%, 09/14/2018		2,000,000		2,049,208
4.150%, 03/15/2024
Callable 12/15/2023		1,500,000		1,544,093
				15,851,294

The accompanying notes are an integral part of these financial statements.

25

LKCM FIXED INCOME FUND

SCHEDULE OF INVESTMENTS, CONTINUED

December 31, 2015

CORPORATE BONDS	Principal Amount		Value
Energy Equipment & Services - 0.7%
Weatherford International Ltd. (b)
4.500%, 04/15/2022
Callable 01/15/2022	$	2,000,000	$	1,442,500
Food & Drug Retailing - 4.5%
CVS Health Corporation:
1.200%, 12/05/2016		2,000,000		2,000,808
5.750%, 06/01/2017		2,750,000		2,912,698
4.125%, 05/15/2021
Callable 02/15/2021		2,000,000		2,118,230
Walgreens Boots Alliance, Inc.
3.800%, 11/18/2024
Callable 08/18/2024		2,000,000		1,943,946
				8,975,682
Food Products - 0.3%
Kraft Foods Group, Inc.
2.250%, 06/05/2017		555,000		559,205
Health Care Equipment & Supplies - 3.7%
DENTSPLY International Inc.
2.750%, 08/15/2016		1,446,000		1,456,885
PerkinElmer, Inc.
5.000%, 11/15/2021
Callable 08/15/2021		1,094,000		1,156,644
Thermo Fisher Scientific, Inc.
4.150%, 02/01/2024
Callable 11/01/2023		4,500,000		4,681,859
				7,295,388
Health Care Providers & Services - 2.5%
Express Scripts Holding Co
3.125%, 05/15/2016		2,760,000		2,778,668
McKesson Corporation
3.250%, 03/01/2016		2,275,000		2,283,254
				5,061,922
Hotels, Restaurants & Leisure - 0.5%
McDonald’s Corporation
5.350%, 03/01/2018		1,000,000		1,071,317
Household Products - 0.5%
The Procter & Gamble Company
8.000%, 09/01/2024		775,000		1,038,148
Insurance - 1.5%
Prudential Financial, Inc.
3.000%, 05/12/2016		3,023,000		3,040,007
Media - 0.8%
The Walt Disney Company
5.625%, 09/15/2016		1,500,000		1,550,136
Metals & Mining - 0.3%
Alcoa Inc.
5.550%, 02/01/2017		500,000		514,375

CORPORATE BONDS	Principal Amount		Value
Multiline Retail - 2.3%
Family Dollar Stores, Inc.
5.000%, 02/01/2021	$	4,500,000	$	4,612,338
Oil & Gas & Consumable Fuels - 9.4%
Anadarko Petroleum Corporation:
5.950%, 09/15/2016		2,000,000		2,055,466
6.375%, 09/15/2017		2,000,000		2,098,088
Enterprise Products Operating LLC:
3.200%, 02/01/2016		2,229,000		2,229,751
3.750%, 02/15/2025
Callable 11/15/2024		4,000,000		3,665,736
Kinder Morgan Energy Partners, L.P.
4.250%, 09/01/2024
Callable 06/01/2024		3,000,000		2,556,360
Noble Holding International Ltd. (b)
3.950%, 03/15/2022		2,500,000		1,655,520
Range Resources Corporation
5.000%, 08/15/2022
Callable 02/15/2017		5,850,000		4,402,125
				18,663,046
Pharmaceuticals - 0.5%
Allergan, Inc.
1.350%, 03/15/2018		1,017,000		999,745
Real Estate Investment Trusts - 2.0%
American Tower Corporation:
5.050%, 09/01/2020		1,250,000		1,350,862
5.000%, 02/15/2024		2,500,000		2,650,713
				4,001,575
Road & Rail - 0.1%
Burlington Northern Santa Fe Corporation
5.650%, 05/01/2017		185,000		194,621
Semiconductor Equipment & Products - 0.5%
Texas Instruments Incorporated
2.375%, 05/16/2016		1,000,000		1,005,589
Software & Services - 1.3%
Sabre GLBL Inc. (c)
5.375%, 04/15/2023
Callable 04/15/2018 (Acquired 04/08/2015, Cost $2,548,100)		2,500,000		2,500,000
Specialty Retail - 0.5%
O’Reilly Automotive, Inc.
4.875%, 01/14/2021
Callable 10/14/2020		1,000,000		1,082,878
TOTAL CORPORATE BONDS
(Cost $153,320,906)				150,728,288

The accompanying notes are an integral part of these financial statements.

26

LKCM FIXED INCOME FUND

SCHEDULE OF INVESTMENTS, CONTINUED

December 31, 2015

PREFERRED STOCKS - 0.9%	Shares		Value
Capital Markets - 0.9%
Merrill Lynch Preferred Capital Trust III		75,000	$	1,883,250
TOTAL PREFERRED STOCKS
(Cost $1,820,339)				1,883,250
U.S. GOVERNMENT ISSUES - 8.3%	Principal Amount
U.S. Treasury Notes - 8.3%
4.500%, 02/15/2016	$	500,000		502,380
2.000%, 07/31/2020		2,000,000		2,023,282
2.250%, 07/31/2021		2,000,000		2,037,774
2.000%, 11/30/2022		2,000,000		1,989,296
2.000%, 02/15/2023		2,000,000		1,988,750
2.500%, 08/15/2023		2,000,000		2,052,344
2.250%, 11/15/2024		3,000,000		2,998,944
2.000%, 02/15/2025		3,000,000		2,933,085
TOTAL U.S. GOVERNMENT ISSUES
(Cost $16,552,530)				16,525,855
U.S. GOVERNMENT SPONSORED     ENTITIES - 11.8%
Fannie Mae - 3.5%
5.000%, 03/15/2016		1,000,000		1,009,348
2.625%, 09/06/2024		2,000,000		2,023,460
2.000%, 07/12/2027
Callable 07/12/2016		2,000,000		1,996,832
2.500%, 09/30/2030
Callable 09/30/2016		2,000,000		1,982,068
				7,011,708
Federal Home Loan Banks - 8.0%
4.875%, 05/17/2017		1,000,000		1,052,413
1.000%, 03/30/2020
Callable 03/30/2016		2,500,000		2,501,713
1.000%, 09/30/2021
Callable 09/30/2016		5,000,000		4,994,995
1.500%, 11/25/2022
Callable 02/25/2016		2,900,000		2,884,473
1.000%, 03/26/2025
Callable 03/26/2016		2,500,000		2,500,445
1.000%, 05/13/2030
Callable 05/13/2016		2,000,000		1,988,728
				15,922,767
Freddie Mac - 0.3%
5.125%, 11/17/2017		500,000		537,074
TOTAL U.S. GOVERNMENT SPONSORED ENTITIES
(Cost $23,424,797)				23,471,549

SHORT-TERM INVESTMENT - 2.3%	Shares		Value
Money Market Fund (d) - 2.3%
Federated Government Obligations Fund - Institutional Shares, 0.01%		4,521,549	$	4,521,549
TOTAL SHORT-TERM INVESTMENT
(Cost $4,521,549)				4,521,549
Total Investments - 99.1%
(Cost $199,640,121)				197,130,491
Other Assets in Excess of Liabilities - 0.9%				1,710,372
TOTAL NET ASSETS - 100.0%			$	198,840,863

(a) Floating rate.

(b) Security issued by non-U.S. incorporated company.

(c) Restricted security. Resale to the public may require registration or may extend only to qualified institutional buyers. The fair market value of the security was $2,500,000 representing 1.3% of the Fund’s total net assets.

(d) The rate quoted is the annualized seven-day yield of the fund at period end.

Investments are classified by asset class and industry pursuant to the Global Industry Classification Standard (GICS^®) which was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor Financial Services LLC (“S&P”). GICS is a service mark of MSCI and S&P and has been licensed for use by U.S. Bancorp Fund Services, LLC.

The accompanying notes are an integral part of these financial statements.

27

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2015

	LKCM Small Cap Equity Fund			LKCM Small-Mid Cap Equity Fund			LKCM Equity Fund			LKCM Balanced Fund		LKCM Fixed Income Fund
Assets:
Investments, at value*	$	578,170,610		$	332,121,159		$	281,234,470		$	38,791,726	$	197,130,491
Receivable for Fund shares sold		240,237			489,924			255,648			341,984		100,000
Dividends and interest receivable		375,059			144,486			374,575			82,113		1,817,881
Other assets		91,721			30,442			31,452			8,532		20,776
Total assets		578,877,627			332,786,011			281,896,145			39,224,355		199,069,148
Liabilities:
Payable for Fund shares redeemed		205,600			123,723			167,541			4,000		—
Payable for investment advisory fees (Note B)		1,273,220			539,382			413,011			41,944		145,979
Payable for administrative fees		84,114			45,586			40,109			5,249		29,491
Payable for accounting and transfer agent fees and expenses		79,525			52,724			35,144			11,392		22,646
Payable for custody fees and expenses		14,106			6,200			5,497			919		4,032
Payable for reports to shareholders		16,345			31,111			5,268			641		3,868
Payable for distribution expense (Note B)		7,052			—			—			—		—
Payable for professional expense		48,101			24,305			21,686			6,060		16,662
Payable for trustees’ expense		14,182			5,657			5,263			664		3,508
Distribution payable		108,543			—			—			—		—
Accrued expenses and other liabilities		7,420			3,457			2,903			354		2,099
Total liabilities		1,858,208			832,145			696,422			71,223		228,285
Net assets	$	577,019,419		$	331,953,866		$	281,199,723		$	39,153,132	$	198,840,863
Net assets consist of:
Paid in capital	$	466,081,780		$	283,606,340		$	195,794,705		$	28,787,833	$	201,503,073
Accumulated net investment income		63,219			—			—			84		—
Accumulated net realized gain (loss) on investments		(380,172	)		(1,489,017	)		(99,733	)		3,214		(152,580	)
Net unrealized appreciation (depreciation) on investments		111,254,592			49,836,543			85,504,751			10,362,001		(2,509,630	)
Net assets	$	577,019,419		$	331,953,866		$	281,199,723		$	39,153,132	$	198,840,863
INSTITUTIONAL CLASS
Net assets	$	568,421,373		$	331,953,866		$	281,199,723		$	39,153,132	$	198,840,863
Shares of beneficial interest outstanding (unlimited shares of no par value authorized)		28,624,201			29,779,774			13,140,555			1,998,060		18,932,619
Net asset value per share (offering and redemption price)	$	19.86		$	11.15		$	21.40		$	19.60	$	10.50
ADVISER CLASS**
Net assets	$	8,598,046
Shares of beneficial interest outstanding (unlimited shares of no par value authorized)		454,162
Net asset value per share (offering and redemption price)	$	18.93
*     Cost of Investments	$	466,916,018		$	282,284,616		$	195,729,719		$	28,429,725	$	199,640,121

** Currently, Adviser Class shares are authorized only for the Small Cap Equity, Small-Mid Cap Equity and Equity Funds and are offered only by the Small Cap Equity Fund.

The accompanying notes are an integral part of these financial statements.

28

STATEMENT OF OPERATIONS

For the Year Ended December 31, 2015

	LKCM Small Cap Equity Fund			LKCM Small-Mid Cap Equity Fund			LKCM Equity Fund			LKCM Balanced Fund			LKCM Fixed Income Fund
Investment Income:
Dividends*	$	7,814,917		$	1,797,762		$	5,022,881		$	478,609		$	131,250
Interest		2,043			2,554			1,103			176,937			6,305,504
Total income		7,816,960			1,800,316			5,023,984			655,546			6,436,754
Expenses:
Investment advisory fees (Note B)		5,757,215			2,683,053			2,175,798			244,255			1,107,208
Distribution expense – Adviser Class (Note B)		28,903			—			—			—			—
Administrative fees		567,204			296,277			249,909			30,149			180,513
Accounting and transfer agent fees and expenses		427,776			652,142			181,117			59,451			123,099
Professional fees		139,402			68,011			58,177			10,258			42,352
Trustees’ fees		131,392			55,951			47,057			5,297			32,234
Custody fees and expenses		93,953			40,312			32,792			5,486			24,064
Federal and state registration		81,451			59,587			55,305			15,578			29,970
Reports to shareholders		45,121			110,736			15,584			1,980			17,816
Other		208,886			96,715			82,391			9,400			56,914
Total expenses		7,481,303			4,062,784			2,898,130			381,854			1,614,170
Less, expense waiver and/or reimbursement (Note B)		—			(485,380	)		(411,504	)		(81,232	)		(377,915	)
Net expenses		7,481,303			3,577,404			2,486,626			300,622			1,236,255
Net investment income (loss)		335,657			(1,777,088	)		2,537,358			354,924			5,200,499
Realized and Unrealized Gain (Loss) on Investments:
Net realized gain on investments		68,905,500			21,067,361			5,946,987			1,005,163			529,547
Net change in unrealized appreciation/depreciation on investments		(101,306,129	)		(22,958,355	)		(18,969,032	)		(956,345	)		(6,384,631	)
Net realized and unrealized gain (loss) on investments		(32,400,629	)		(1,890,994	)		(13,022,045	)		48,818			(5,855,084	)
Net Increase (Decrease) in Net Assets Resulting from Operations	$	(32,064,972	)	$	(3,668,082	)	$	(10,484,687	)	$	403,742		$	(654,585	)
*     Net of foreign taxes withheld	$	28,633		$	—		$	—		$	—		$	—

The accompanying notes are an integral part of these financial statements.

29

STATEMENTS OF CHANGES IN NET ASSETS

	LKCM Small Cap Equity Fund						LKCM Small-Mid Cap Equity Fund
	Year Ended December 31, 2015			Year Ended December 31, 2014			Year Ended December 31, 2015			Year Ended December 31, 2014
Operations:
Net investment income (loss)	$	335,657		$	(2,268,621	)	$	(1,777,088	)	$	(2,328,956	)
Net realized gain on investments		68,905,500			116,963,656			21,067,361			21,926,334
Net change in unrealized appreciation/depreciation on investments		(101,306,129	)		(152,665,777	)		(22,958,355	)		(35,932,810	)
Net decrease in net assets resulting from operations		(32,064,972	)		(37,970,742	)		(3,668,082	)		(16,335,432	)
Dividends and Distributions to Institutional Class Shareholders:
Net investment income		(272,438	)		—			—			—
Net realized gain on investments		(74,954,483	)		(111,270,982	)		(22,188,977	)		(9,716,281	)
		(75,226,921	)		(111,270,982	)		(22,188,977	)		(9,716,281	)
Dividends and Distributions to Adviser Class Shareholders:
Net investment income		—			—			—			—
Net realized gain on investments		(1,148,479	)		(1,943,645	)		—			—
		(1,148,479	)		(1,943,645	)		—			—
Net increase (decrease) in net assets resulting from Fund share transactions (Note C)		(169,836,141	)		(82,278,249	)		(33,856,876	)		51,296,819
Total increase (decrease) in net assets		(278,276,513	)		(233,463,618	)		(59,713,935	)		25,245,106
Net Assets:
Beginning of period		855,295,932			1,088,759,550			391,667,801			366,422,695
End of period*	$	577,019,419		$	855,295,932		$	331,953,866		$	391,667,801
*     Including accumulated net investment income of	$	63,219		$	—		$	—		$	—

The accompanying notes are an integral part of these financial statements.

30

STATEMENTS OF CHANGES IN NET ASSETS

	LKCM Equity Fund						LKCM Balanced Fund
	Year Ended December 31, 2015			Year Ended December 31, 2014			Year Ended December 31, 2015			Year Ended December 31, 2014
Operations:
Net investment income	$	2,537,358		$	2,335,783		$	354,924		$	440,532
Net realized gain on investments		5,946,987			13,262,162			1,005,163			921,573
Net change in unrealized appreciation/depreciation on investments		(18,969,032	)		5,085,860			(956,345	)		777,601
Net increase (decrease) in net assets resulting from operations		(10,484,687	)		20,683,805			403,742			2,139,706
Dividends and Distributions to Shareholders:
Net investment income		(2,560,056	)		(2,313,547	)		(355,959	)		(439,413	)
Net realized gain on investments		(5,283,852	)		(12,862,260	)		(957,923	)		(835,323	)
		(7,843,908	)		(15,175,807	)		(1,313,882	)		(1,274,736	)
Net increase (decrease) in net assets resulting from Fund share transactions (Note C)		(34,163,801	)		4,252,493			3,035,605			830,413
Total increase (decrease) in net assets		(52,492,396	)		9,760,491			2,125,465			1,695,383
Net Assets:
Beginning of period		333,692,119			323,931,628			37,027,667			35,332,284
End of period*	$	281,199,723		$	333,692,119		$	39,153,132		$	37,027,667
*     Including accumulated net investment income of	$	—		$	22,236		$	84		$	1,119

The accompanying notes are an integral part of these financial statements.

31

STATEMENTS OF CHANGES IN NET ASSETS

	LKCM Fixed Income Fund
	Year Ended December 31, 2015			Year Ended December 31, 2014
Operations:
Net investment income	$	5,200,499		$	4,364,854
Net realized gain on investments		529,547			1,423,528
Net change in unrealized appreciation/depreciation on investments		(6,384,631	)		(2,042,637	)
Net increase (decrease) in net assets resulting from operations		(654,585	)		3,745,745
Dividends and Distributions to Shareholders:
Net investment income		(5,211,497	)		(4,405,305	)
Return of capital		—			(17,185	)
Net realized gain on investments		(607,274	)		(1,154,873	)
		(5,818,771	)		(5,577,363	)
Net increase (decrease) in net assets resulting from Fund share transactions (Note C)		(17,390,017	)		3,431,422
Total increase (decrease) in net assets		(23,863,373	)		1,599,804
Net Assets:
Beginning of period		222,704,236			221,104,432
End of period*	$	198,840,863		$	222,704,236

The accompanying notes are an integral part of these financial statements.

32

FINANCIAL HIGHLIGHTS

SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING

	LKCM Small Cap Equity Fund – Institutional Class
	Year Ended December 31, 2015			Year Ended December 31, 2014			Year Ended December 31, 2013			Year Ended December 31, 2012			Year Ended December 31, 2011
Net Asset Value – Beginning of Period	$	24.05		$	28.33		$	22.69		$	22.45		$	21.49
Net investment income (loss)		0.01			(0.06	)(1)		(0.06	)(2)		0.13	(1)		(0.08	)(1)
Net realized and unrealized gain (loss) on investments		(1.29	)		(0.77	)		8.02			2.01			1.04
Total from investment operations		(1.28	)		(0.83	)		7.96			2.14			0.96
Dividends from net investment income		(0.01	)		—			—			(0.13	)		—
Distributions from net realized gains		(2.90	)		(3.45	)		(2.32	)		(1.77	)		—
Total dividends and distributions		(2.91	)		(3.45	)		(2.32	)		(1.90	)		—
Net Asset Value – End of Period	$	19.86		$	24.05		$	28.33		$	22.69		$	22.45
Total Return		-5.58%			-3.11%			35.11%			9.74%			4.47%
Ratios and Supplemental Data:
Net assets, end of period (thousands)	$	568,421		$	840,631		$	1,047,607		$	819,985		$	785,280
Ratio of expenses to average net assets:		0.97%			0.94%			0.95%			0.94%			0.95%
Ratio of net investment income (loss) to average net assets:		0.05%			(0.21)%			(0.23)%			0.53%			(0.33)%
Portfolio turnover rate(3)		62%			60%			47%			49%			50%

⁽¹⁾  Net investment income (loss) per share represents net investment income (loss) divided by the average shares outstanding throughout the period.

⁽²⁾  Net investment loss per share is calculated using the ending balance of undistributed net investment loss prior to considerations of adjustments for permanent book and tax differences.

⁽³⁾  Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued.

	LKCM Small Cap Equity Fund – Adviser Class
	Year Ended December 31, 2015			Year Ended December 31, 2014			Year Ended December 31, 2013			Year Ended December 31, 2012			Year Ended December 31, 2011
Net Asset Value – Beginning of Period	$	23.11		$	27.43		$	22.07		$	21.88		$	21.00
Net investment income (loss)		(0.05	)		(0.12	)(1)		(0.13	)(2)		0.07	(1)		(0.13	)(1)
Net realized and unrealized gain (loss) on investments		(1.23	)		(0.75	)		7.81			1.95			1.01
Total from investment operations		(1.28	)		(0.87	)		7.68			2.02			0.88
Dividends from net investment income		—			—			—			(0.06	)		—
Distributions from net realized gains		(2.90	)		(3.45	)		(2.32	)		(1.77	)		—
Total dividends and distributions		(2.90	)		(3.45	)		(2.32	)		(1.83	)		—
Net Asset Value – End of Period	$	18.93		$	23.11		$	27.43		$	22.07		$	21.88
Total Return		-5.81%			-3.35%			34.81%			9.45%			4.19%
Ratios and Supplemental Data:
Net assets, end of period (thousands)	$	8,598		$	14,665		$	41,153		$	40,737		$	43,124
Ratio of expenses to average net assets:		1.22%			1.19%			1.20%			1.19%			1.20%
Ratio of net investment income (loss) to average net assets:		(0.20)%			(0.46)%			(0.48)%			0.28%			(0.58)%
Portfolio turnover rate(3)		62%			60%			47%			49%			50%

⁽¹⁾  Net investment income (loss) per share represents net investment income (loss) divided by the average shares outstanding throughout the period.

⁽²⁾  Net investment loss per share is calculated using the ending balance of undistributed net investment loss prior to considerations of adjustments for permanent book and tax differences.

⁽³⁾  Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued.

The accompanying notes are an integral part of these financial statements.

33

FINANCIAL HIGHLIGHTS

SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING

	LKCM Small-Mid Cap Equity Fund
	Year Ended December 31, 2015			Year Ended December 31, 2014			Year Ended December 31, 2013			Year Ended December 31, 2012			May 2, 2011(1) through December 31, 2011
Net Asset Value – Beginning of Period	$	12.10		$	12.97		$	9.68		$	8.86		$	10.00
Net investment loss		(0.06	)(2)		(0.08	)(3)		(0.06	)(2)		(0.03	)(3)		(0.02	)(3)
Net realized and unrealized gain (loss) on investments		(0.10	)		(0.48	)		3.35			0.85			(1.12	)
Total from investment operations		(0.16	)		(0.56	)		3.29			0.82			(1.14	)
Distributions from net realized gains		(0.79	)		(0.31	)		—			—			—
Net Asset Value – End of Period	$	11.15		$	12.10		$	12.97		$	9.68		$	8.86
Total Return		-1.41%			-4.39%			33.99%			9.26%			-11.40%	(4)
Ratios and Supplemental Data:
Net assets, end of period (thousands)	$	331,954		$	391,668		$	366,423		$	250,164		$	23,755
Ratio of expenses to average net assets:
Before expense waiver and/or reimbursement		1.14%			1.20%			1.18%			1.18%			2.14%	(5)
After expense waiver and/or reimbursement		1.00%			1.00%			1.00%			1.00%			1.00%	(5)
Ratio of net investment loss to average net assets:
Before expense waiver and/or reimbursement		(0.63)%			(0.82)%			(0.77)%			(0.50)%			(1.55)%	(5)
After expense waiver and/or reimbursement		(0.49)%			(0.62)%			(0.59)%			(0.32)%			(0.41)%	(5)
Portfolio turnover rate		70%			72%			49%			56%			36%

⁽¹⁾  Commencement of operations.

⁽²⁾  Net investment loss per share is calculated using the ending balance of undistributed net investment loss prior to considerations of adjustments for permanent book and tax differences.

⁽³⁾  Net investment loss per share represents net investment loss divided by the average shares outstanding throughout the period.

⁽⁴⁾  Not annualized.

⁽⁵⁾  Annualized.

	LKCM Equity Fund
	Year Ended December 31, 2015			Year Ended December 31, 2014			Year Ended December 31, 2013(1)			Year Ended December 31, 2012			Year Ended December 31, 2011
Net Asset Value – Beginning of Period	$	22.81		$	22.44		$	17.62		$	15.34		$	15.18
Net investment income		0.18	(2)		0.17	(3)		0.14	(2)		0.14	(2)		0.11	(2)
Net realized and unrealized gain (loss) on investments		(0.98	)		1.28			5.27			2.27			0.39
Total from investment operations		(0.80	)		1.45			5.41			2.41			0.50
Dividends from net investment income		(0.20	)		(0.16	)		(0.12	)		(0.12	)		(0.10	)
Distributions from net realized gains		(0.41	)		(0.92	)		(0.47	)		(0.01	)		(0.24	)
Total dividends and distributions		(0.61	)		(1.08	)		(0.59	)		(0.13	)		(0.34	)
Net Asset Value – End of Period	$	21.40		$	22.81		$	22.44		$	17.62		$	15.34
Total Return		-3.54%			6.40%			30.74%			15.69%			3.30%
Ratios and Supplemental Data:
Net assets, end of period (thousands)	$	281,200		$	333,692		$	323,932		$	161,129		$	102,548
Ratio of expenses to average net assets:
Before expense waiver and/or reimbursement		0.93%			0.92%			0.93%			0.96%			0.99%
After expense waiver and/or reimbursement		0.80%			0.80%			0.80%			0.80%			0.80%
Ratio of net investment income to average net assets:
Before expense waiver and/or reimbursement		0.68%			0.59%			0.53%			0.69%			0.54%
After expense waiver and/or reimbursement		0.81%			0.71%			0.66%			0.85%			0.73%
Portfolio turnover rate		13%			14%			17%			12%			20%

⁽¹⁾  On May 10, 2013, the Armstrong Fund was reorganized into the LKCM Equity Fund. Activity after May 10, 2013 reflects the Funds’ combined operations.

⁽²⁾  Net investment income per share represents net investment income divided by the average shares outstanding throughout the period.

⁽³⁾  Net investment income per share is calculated using the ending balance of undistributed net investment income prior to considerations of adjustments for permanent book and tax differences.

The accompanying notes are an integral part of these financial statements.

34

FINANCIAL HIGHLIGHTS

SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING

	LKCM Balanced Fund
	Year Ended December 31, 2015			Year Ended December 31, 2014			Year Ended December 31, 2013			Year Ended December 31, 2012			Year Ended December 31, 2011
Net Asset Value – Beginning of Period	$	20.10		$	19.63		$	16.11		$	14.53		$	14.25
Net investment income		0.19			0.24			0.17			0.19			0.17
Net realized and unrealized gain (loss) on investments		(0.00	)(1)		0.94			3.55			1.58			0.28
Total from investment operations		0.19			1.18			3.72			1.77			0.45
Dividends from net investment income		(0.19	)		(0.24	)		(0.17	)		(0.19	)		(0.17	)
Distributions from net realized gains		(0.50	)		(0.47	)		(0.03	)		—			—
Total dividends and distributions		(0.69	)		(0.71	)		(0.20	)		(0.19	)		(0.17	)
Net Asset Value – End of Period	$	19.60		$	20.10		$	19.63		$	16.11		$	14.53
Total Return		0.91%			5.99%			23.18%			12.20%			3.16%
Ratios and Supplemental Data:
Net assets, end of period (thousands)	$	39,153		$	37,028		$	35,332		$	21,800		$	18,560
Ratio of expenses to average net assets:
Before expense waiver and/or reimbursement		1.02%			0.99%			1.04%			1.10%			1.14%
After expense waiver and/or reimbursement		0.80%			0.80%			0.80%			0.80%			0.80%
Ratio of net investment income to average net assets:
Before expense waiver and/or reimbursement		0.73%			1.02%			0.72%			0.91%			0.83%
After expense waiver and/or reimbursement		0.95%			1.21%			0.96%			1.21%			1.17%
Portfolio turnover rate		16%			20%			10%			15%			34%

⁽¹⁾  Amount is less than $0.005.

	LKCM Fixed Income Fund
	Year Ended December 31, 2015			Year Ended December 31, 2014			Year Ended December 31, 2013			Year Ended December 31, 2012			Year Ended December 31, 2011
Net Asset Value – Beginning of Period	$	10.82		$	10.91		$	11.23		$	11.04		$	11.03
Net investment income		0.25	(2)		0.22			0.27			0.34			0.37
Net realized and unrealized gain (loss) on investments		(0.28	)		(0.03	)		(0.26	)		0.25			0.09
Total from investment operations		(0.03	)		0.19			0.01			0.59			0.46
Dividends from net investment income		(0.26	)		(0.22	)		(0.27	)		(0.34	)		(0.37	)
Distributions from net realized gains		(0.03	)		(0.06	)		(0.06	)		(0.06	)		(0.08	)
Total dividends and distributions		(0.29	)		(0.28	)		(0.33	)		(0.40	)		(0.45	)
Net Asset Value – End of Period	$	10.50		$	10.82		$	10.91		$	11.23		$	11.04
Total Return		-0.27%			1.72%			0.07%			5.44%			4.22%
Ratios and Supplemental Data:
Net assets, end of period (thousands)	$	198,841		$	222,704		$	221,104		$	205,880		$	178,116
Ratio of expenses to average net assets:
Before expense waiver and/or reimbursement		0.73%	(1)		0.70%			0.72%			0.71%			0.72%
After expense waiver and/or reimbursement		0.56%	(1)		0.65%			0.65%			0.65%			0.65%
Ratio of net investment income to average net assets:
Before expense waiver and/or reimbursement		2.18%	(1)		1.92%			2.34%			2.98%			3.31%
After expense waiver and/or reimbursement		2.35%	(1)		1.97%			2.41%			3.04%			3.38%
Portfolio turnover rate		29%			46%			30%			31%			24%

⁽¹⁾  Effective May 22, 2015, the Adviser contractually agreed to lower the expense cap for the Fund from 0.65% to 0.50% of the Fund’s average daily net assets (Note B).

⁽²⁾  Net investment income per share represents net investment income divided by the average shares outstanding during the period.

The accompanying notes are an integral part of these financial statements.

35

LKCM FUNDS

NOTES TO THE FINANCIAL STATEMENTS

A.    Organization and Significant Accounting Policies:    LKCM Funds (the “Trust”) is registered under the Investment Company Act of 1940 (“1940 Act”) as an open-end, management investment company. The Trust was organized as a Delaware statutory trust on February 10, 1994 and consists of eight diversified series, five of which are presented herein and include the LKCM Small Cap Equity Fund, LKCM Small-Mid Cap Equity Fund, LKCM Equity Fund, LKCM Balanced Fund and LKCM Fixed Income Fund (collectively, the “Funds”), the assets of which are invested in separate, independently managed portfolios. Investment operations of the Funds began on July 14, 1994 (LKCM Small Cap Equity Fund), January 3, 1996 (LKCM Equity Fund), December 30, 1997 (LKCM Balanced Fund and LKCM Fixed Income Fund), and May 2, 2011 (LKCM Small-Mid Cap Equity Fund—Institutional and Adviser Class Shares). The Small Cap Equity Fund and the Equity Fund created a second class of shares, Adviser Class Shares, and renamed the initial class as Institutional Class Shares on May 1, 2003. The Small Cap Equity Adviser Class Shares were initially sold on June 5, 2003 and are subject to expenses pursuant to the Rule 12b-1 plan described in Note B. The Equity Fund and Small-Mid Cap Equity Fund Adviser Class Shares have not yet commenced operations. Each Fund charges a 1% redemption fee for redemptions on Fund shares held for less than 30 days, unless otherwise determined by a Fund in its discretion.

The LKCM Small Cap Equity Fund seeks to maximize long-term capital appreciation by investing under normal circumstances at least 80% of its net assets in equity securities of smaller companies (those with market capitalizations at the time of investment between $600 million and $4.5 billion) which Luther King Capital Management Corporation (the “Adviser”) believes are likely to have above-average growth in revenue and/or earnings and potential for above-average capital appreciation. The LKCM Small-Mid Cap Equity Fund seeks to maximize long-term capital appreciation by investing under normal circumstances at least 80% of its net assets in equity securities of small-mid capitalization companies (those with market capitalizations at the time of investment between $1.25 billion and $10 billion) which the Adviser believes are likely to have above-average growth in revenue and/or earnings and potential for above average capital appreciation. The LKCM Equity Fund seeks to maximize long-term capital appreciation by investing under normal circumstances at least 80% of its net assets in equity securities of companies which the Adviser believes are likely to have above-average growth in revenue and/or earnings, above-average returns on shareholders’ equity, and/or potential for above-average capital appreciation. The LKCM Balanced Fund seeks to provide investors with current income and long-term capital appreciation by investing primarily in a portfolio of equity and fixed income securities and cash equivalent securities with at least 25% of the Fund’s total assets invested in fixed income securities under normal circumstances. The LKCM Fixed Income Fund seeks current income by investing under normal circumstances at least 80% of its net assets in a portfolio of investment grade corporate and U.S. government fixed income securities.

The following is a summary of significant accounting policies followed by the Funds in preparation of the financial statements. The Funds are investment companies and, accordingly, follow the investment company accounting and reporting guidance of the Financial Accounting Standards Board Accounting Standards Codification Topic 946, Investment Companies.

1.    Security Valuation:    Equity securities listed or traded on a U.S. securities exchange for which market quotations are readily available are valued at the last quoted sale price on the exchange on which the security is primarily traded. Nasdaq Global Market securities are valued at the Nasdaq Official Closing Price (“NOCP”). Unlisted U.S. securities and listed U.S. securities not traded on a particular valuation date are valued at the mean of the most recent quoted bid and ask price on the relevant exchanges or markets. Equity securities listed on a foreign exchange for which market quotations are readily available are valued at the last quoted sales price on the exchange on which the security is primarily traded. Debt securities are normally valued at the mean of the closing bid and ask price and/or by using a combination of broker quotations or evaluated prices provided by an independent pricing service. Other assets and securities for which no market or broker quotations or evaluated prices are readily available (including restricted securities) are valued in good faith at fair value using guidelines approved by the Board of Trustees. The Board has adopted specific guidelines and procedures for valuing portfolio securities and delegated their implementation to the Adviser. The guidelines and procedures authorize the Adviser to make determinations regarding the fair value of a portfolio security and to report such determinations to the Board of Trustees. The Funds may use prices provided by independent pricing services to assist in the fair valuation of the Funds’ portfolio securities.

The Trust has adopted accounting standards which establish an authoritative definition of fair value and set out a hierarchy for measuring fair value. These standards require additional disclosures about the various inputs and valuation techniques used to develop the measurements of fair value and a discussion of changes in valuation techniques and related inputs during the period. These standards define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy is organized into three levels based upon the assumptions (referred to as “inputs”) used in pricing the asset or liability. These standards state that “observable inputs” reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from independent sources and “unobservable inputs” reflect an entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability. These inputs are summarized in the three broad levels listed below.

36

Level 1	–	Quoted unadjusted prices for identical instruments in active markets to which the Trust has access at the date of measurement.
Level 2	–	Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. Level 2 inputs are those in markets for which there are few transactions, the prices are not current, little public information exists or instances where prices vary substantially over time or among brokered market makers.
Level 3	–	Model derived valuations in which one or more significant inputs or significant value drivers are unobservable. Unobservable inputs are those inputs that reflect the Trust’s own assumptions that market participants would use to price the asset or liability based on the best available information.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. As of December 31, 2015, the Funds’ assets carried at fair value were classified as follows:

LKCM Small Cap Equity Fund
Description	Level 1		Level 2		Level 3		Total
Common Stocks	$	576,333,703	$	—	$	—	$	576,333,703
Money Market Fund		1,836,907		—		—		1,836,907
Total Investments*	$	578,170,610	$	—	$	—	$	578,170,610
LKCM Small-Mid Cap Equity Fund
Description	Level 1		Level 2		Level 3		Total
Common Stocks	$	309,316,893	$	—	$	—	$	309,316,893
Money Market Funds		22,804,266		—		—		22,804,266
Total Investments*	$	332,121,159	$	—	$	—	$	332,121,159
LKCM Equity Fund
Description	Level 1		Level 2		Level 3		Total
Common Stocks	$	280,911,583	$	—	$	—	$	280,911,583
Money Market Fund		322,887		—		—		322,887
Total Investments*	$	281,234,470	$	—	$	—	$	281,234,470
LKCM Balanced Fund
Description	Level 1		Level 2		Level 3		Total
Common Stocks	$	27,154,634	$	—	$	—	$	27,154,634
Corporate Bonds		—		10,727,097		—		10,727,097
Money Market Fund		909,995		—		—		909,995
Total Investments*	$	28,064,629	$	10,727,097	$	—	$	38,791,726
LKCM Fixed Income Fund
Description	Level 1		Level 2		Level 3		Total
Preferred Stock	$	1,883,250	$	—	$	—	$	1,883,250
Corporate Bonds		—		150,728,288		—		150,728,288
U.S. Government Issues		—		16,525,855		—		16,525,855
U.S. Government Sponsored Entities		—		23,471,549		—		23,471,549
Money Market Fund		4,521,549		—		—		4,521,549
Total Investments*	$	6,404,799	$	190,725,692	$	—	$	197,130,491

* Additional information regarding the industry classifications of these investments is disclosed in the Schedule of Investments.

There were no transfers into or out of Level 1, Level 2 or Level 3 fair value measurements during the reporting period. Transfers between levels are recognized at the end of the reporting period.

2.    Federal Income Taxes:    The Funds have elected to be treated as “regulated investment companies” under Subchapter M of the Internal Revenue Code and each Fund intends to distribute all of its investment company net taxable income and net capital gains to shareholders. Therefore, no federal income tax provision is recorded.

3.    Distributions to Shareholders:    The LKCM Small Cap Equity, LKCM Small-Mid Cap Equity and LKCM Equity Funds generally intend to pay dividends and net capital gain distributions, if any, at least on an annual basis. The LKCM Balanced and LKCM Fixed Income Funds generally intend to pay dividends on a quarterly basis and net capital gain distributions, if any, at least on an annual basis.

37

4.    Foreign Securities:    Investing in securities of foreign companies and foreign governments involves special risks and considerations not typically associated with investing in U.S. companies and securities of the U.S. government. These risks include devaluation of currencies and future adverse political and economic developments. Moreover, securities of many foreign companies and foreign governments and their markets may be less liquid and their prices more volatile than those of securities of comparable U.S. companies and securities of the U.S. government.

5.    Expense Allocation:    Expenses incurred by the Funds are allocated among the Funds based upon (i) relative average net assets, (ii) a specific identification basis as incurred, or (iii) evenly among the Funds, depending on the nature of the expense. Expenses that are directly attributable to a class of shares, such as Rule 12b-1 distribution fees, are charged to that class. For multi-class Funds, income, unrealized and realized gains/losses are generally allocated between the Fund’s classes in proportion to their respective net assets.

6.    Use of Estimates:    The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

7.    Guarantees and Indemnifications:    In the normal course of business, the Funds enter into contracts with service providers that contain general indemnification clauses. The Funds’ maximum exposure under these arrangements is unknown as this would involve future claims against the Funds that have not yet occurred. Based on experience, the Funds expect the risk of loss to be remote.

8.    Security Transactions and Investment Income:    Security and shareholder transactions are recorded on the trade date. Realized gains and losses on sales of investments are calculated on the identified cost basis. Dividend income and dividends and distributions to shareholders are recorded on the ex-dividend date. Withholding taxes on foreign dividends have been provided for in accordance with the Funds’ understanding of the applicable country’s tax rules and rates. Interest income is recognized on the accrual basis. All discounts and premiums are amortized based on the effective interest method for tax and financial reporting purposes. The Funds may hold the securities of real estate investment trusts (“REITs”). Distributions from such investments may include income, capital gains and return of capital.

9.    Other:    Generally accepted accounting principles require that certain components of net assets be adjusted to reflect permanent differences between financial and tax reporting. These reclassifications have no effect on net assets or net asset values per share.

Accordingly, at December 31, 2015, reclassifications were recorded as follows:

	LKCM Small Cap Equity Fund			LKCM Small-Mid Cap Equity Fund			LKCM Equity Fund			LKCM Balanced Fund			LKCM Fixed Income Fund
Accumulated net investment income		$—			$1,777,088			$462			$—			$10,998
Accumulated loss		(24,189,894	)		(6,945,182	)		(768,527	)		(97,057	)		(72,330	)
Capital stock		24,189,894			5,168,094			768,065			97,057			61,332

10.    Restricted and Illiquid Securities:    The Funds are permitted to invest in securities that are subject to legal or contractual restrictions on resale or are illiquid. Restricted securities generally may be resold in transactions exempt from registration. A security may be considered illiquid if it lacks a readily available market or if its valuation has not changed for a certain period of time. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at the current valuation may be difficult.

B.    Investment Advisory and Other Agreements:    Luther King Capital Management Corporation (the “Adviser”) serves as the investment adviser to the Funds under an Investment Advisory Agreement (the “Agreement”). The Adviser receives a fee, computed daily and payable quarterly, at the annual rates presented below as applied to each Fund’s average daily net assets. The Adviser has contractually agreed to waive all or a portion of its management fee and/or reimburse expenses of the Funds through April 30, 2016 in order to limit each Fund’s operating expenses to the annual cap rates presented below, other than the LKCM Fixed Income Fund, for which the Adviser has contractually agreed to waive such management fees and/or reimburse expenses of the Fund to maintain such designated expense ratio through May 31, 2016. This expense limitation excludes interest, taxes, brokerage commissions, indirect fees and expenses relating to investments in other investment companies, including money market funds, and extraordinary expenses. For the year ended December 31, 2015, the Adviser waived the following management fees to meet its expense cap obligations:

	LKCM Small Cap Equity Fund			LKCM Small-Mid Cap Equity Fund		LKCM Equity Fund		LKCM Balanced Fund		LKCM Fixed Income Fund
Annual Management Fee Rate		0.75%			0.75%		0.70%		0.65%		0.50%
Annual Cap on Expenses		1.00%	(Inst.)		1.00%		0.80%		0.80%		0.50%	*
		1.25%	(Adviser)
Fees Waived in 2015		—			$485,380		$411,504		$81,232		$377,915

* Effective May 22, 2015, the Adviser contractually agreed to lower the expense cap for the Fund from 0.65% to 0.50% of the Fund’s average daily net assets.

38

U.S. Bancorp Fund Services, LLC serves as transfer agent and administrator for the Trust and serves as accounting services agent for the Trust. U.S. Bank, N.A. serves as custodian for the Funds.

Distribution services are performed pursuant to a distribution contract with Quasar Distributors, LLC, the Trust’s principal underwriter.

The Small Cap Equity Fund, Small-Mid Cap Equity and the Equity Fund have adopted a Rule 12b-1 plan under which the Adviser Class of each Fund may pay up to 1.00% of its average daily net assets for distribution and other services. However, the Board of Trustees has currently only authorized a fee of 0.25% of each Fund’s average daily net assets. For the year ended December 31, 2015, fees incurred by the Small Cap Equity Fund pursuant to the 12b-1 Plan were $28,903. The Adviser Class shares of the Equity Fund and the Small-Mid Cap Equity Fund have not yet commenced operations. The Funds have also adopted an Institutional Class Distribution Plan, under which each Fund may pay up to 0.75% of its average daily net assets for distribution and other services. Currently, the Board of Trustees has not authorized payments under this plan and, as a result, the Funds currently neither accrue nor pay any fees under the plan.

C.    Fund Shares:    At December 31, 2015, there was an unlimited number of shares of beneficial interest, no par value, authorized. The following table summarizes the activity in shares of each Fund:

LKCM Small Cap Equity Fund
	Year Ended December 31, 2015						Year Ended December 31, 2014
	Institutional Class						Institutional Class
	Shares			Amount			Shares			Amount
Shares sold		2,997,132		$	72,867,416			5,090,394		$	137,885,561
Shares issued to shareholders in reinvestment of distributions		3,306,174			67,148,391			3,894,617			95,145,501
Shares redeemed		(12,636,846	)		(305,284,952	)		(11,007,819	)		(292,497,239	)
Redemption fee					6,506						1,665
Net decrease		(6,333,540	)	$	(165,262,639	)		(2,022,808	)	$	(59,464,512	)
Shares Outstanding:
Beginning of period		34,957,741						36,980,549
End of period		28,624,201						34,957,741
	Year Ended December 31, 2015						Year Ended December 31, 2014
	Adviser Class						Adviser Class
	Shares			Amount			Shares			Amount
Shares sold		37,553		$	879,930			90,701		$	2,387,553
Shares issued to shareholders in reinvestment of distributions		58,116			1,125,135			82,216			1,929,605
Shares redeemed		(276,218	)		(6,578,572	)		(1,038,683	)		(27,132,211	)
Redemption fee					5						1,316
Net decrease		(180,549	)	$	(4,573,502	)		(865,766	)	$	(22,813,737	)
Shares Outstanding:
Beginning of period		634,711						1,500,477
End of period		454,162						634,711
Total Net Decrease				$	(169,836,141	)				$	(82,278,249	)
LKCM Small-Mid Cap Equity Fund
	Year Ended December 31, 2015						Year Ended December 31, 2014
	Shares			Amount			Shares			Amount
Shares sold		6,196,826		$	77,641,362			9,234,059		$	115,420,906
Shares issued to shareholders in reinvestment of distributions		1,880,563			21,343,975			746,263			9,164,107
Shares redeemed		(10,664,162	)		(132,842,460	)		(5,856,919	)		(73,288,257	)
Redemption fee					247						63
Net increase (decrease)		(2,586,773	)	$	(33,856,876	)		4,123,403		$	51,296,819
Shares Outstanding:
Beginning of period		32,366,547						28,243,144
End of period		29,779,774						32,366,547

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LKCM Equity Fund
	Year Ended December 31, 2015						Year Ended December 31, 2014
	Shares			Amount			Shares			Amount
Shares sold		1,221,990		$	27,628,704			3,761,309		$	85,328,023
Shares issued to shareholders in reinvestment of distributions		344,143			7,485,106			610,212			14,126,415
Shares redeemed		(3,055,836	)		(69,278,705	)		(4,176,956	)		(95,202,980	)
Redemption fee					1,094						1,035
Net increase (decrease)		(1,489,703	)	$	(34,163,801	)		194,565		$	4,252,493
Shares Outstanding:
Beginning of period		14,630,258						14,435,693
End of period		13,140,555						14,630,258
LKCM Balanced Fund
	Year Ended December 31, 2015						Year Ended December 31, 2014
	Shares			Amount			Shares			Amount
Shares sold		412,913		$	8,327,748			305,782		$	6,086,579
Shares issued to shareholders in reinvestment of distributions		64,253			1,273,898			60,084			1,218,695
Shares redeemed		(321,117	)		(6,567,767	)		(324,088	)		(6,475,021	)
Redemption fee					1,726						160
Net increase		156,049		$	3,035,605			41,778		$	830,413
Shares Outstanding:
Beginning of period		1,842,011						1,800,233
End of period		1,998,060						1,842,011
LKCM Fixed Income Fund
	Year Ended December 31, 2015						Year Ended December 31, 2014
	Shares			Amount			Shares			Amount
Shares sold		1,816,505		$	19,700,563			3,038,338		$	33,371,642
Shares issued to shareholders in reinvestment of distributions		494,647			5,274,361			468,864			5,108,498
Shares redeemed		(3,952,618	)		(42,364,956	)		(3,194,984	)		(35,048,778	)
Redemption fee					15						60
Net increase (decrease)		(1,641,466	)	$	(17,390,017	)		312,218		$	3,431,422
Shares Outstanding:
Beginning of period		20,574,085						20,261,867
End of period		18,932,619						20,574,085

D.    Security Transactions:    Purchases and sales of investment securities, other than short-term investments, for the year ended December 31, 2015 were as follows:

	Purchases				Sales
	U.S. Government		Other		U.S. Government		Other
LKCM Small Cap Equity Fund	$	—	$	459,469,119	$	—	$	719,682,441
LKCM Small-Mid Cap Equity Fund		—		236,379,808		—		289,023,894
LKCM Equity Fund		—		39,090,179		—		73,816,683
LKCM Balanced Fund		—		7,228,462		—		5,753,449
LKCM Fixed Income Fund		28,412,627		37,403,686		22,250,000		62,100,811

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E.    Tax Information:    At December 31, 2015, the components of accumulated earnings (losses) on a tax basis were as follows:

As of December 31, 2015, the components of accumulated earnings (losses) for income tax purposes were as follows:

	LKCM Small Cap Equity			LKCM Small-Mid Cap Equity			LKCM Equity			LKCM Balanced			LKCM Fixed Income
Cost of Investments	$	467,296,190		$	282,628,031		$	195,729,719		$	28,429,725		$	199,640,121
Gross Unrealized Appreciation	$	124,355,050		$	57,370,140		$	94,010,393		$	10,874,339		$	2,040,408
Gross Unrealized Depreciation		(13,480,630	)		(7,877,012	)		(8,505,642	)		(512,338	)		(4,550,038	)
Net Unrealized Appreciation	$	110,874,420		$	49,493,128		$	85,504,751		$	10,362,001		$	(2,509,630	)
Undistributed Ordinary Income	$	63,219		$	—		$	—		$	84		$	—
Undistributed Long-Term Capital Gain		—			—			—			3,214			—
Total Distributable Earnings	$	63,219		$	—		$	—		$	3,298		$	—
Other Accumulated Losses	$	—		$	(1,145,602	)	$	(99,733	)	$	—		$	(152,580	)
Total Accumulated Gains (Losses)	$	110,937,639		$	48,347,526		$	85,405,018		$	10,365,299		$	(2,662,210	)

The difference between book-basis and tax-basis unrealized appreciation is attributable primarily to the tax deferral of losses on wash sales.

At December 31, 2015, the LKCM Small-Mid Cap Equity Fund, the LKCM Equity Fund and the LKCM Fixed Income Fund deferred, on a tax basis, post-October capital losses of $1,145,602, $99,733 and $152,580, respectively.

The tax components of dividends paid during the periods shown below were as follows:

	Year Ended December 31, 2015				Year Ended December 31, 2014
	Ordinary Income		Long-Term Capital Gains		Ordinary Income		Return of Capital		Long-Term Capital Gains
LKCM Small Cap Equity Fund	$	272,438	$	76,102,962	$	—	$	—	$	113,214,627
LKCM Small-Mid Cap Equity Fund		—		22,188,977		—		—		9,716,281
LKCM Equity Fund		2,565,253		5,278,655		2,482,075		—		12,693,732
LKCM Balanced Fund		355,959		957,923		439,413		—		835,323
LKCM Fixed Income Fund		5,204,601		614,170		4,492,614		17,185		1,067,564

The Funds designated as long-term capital gain dividend, pursuant to Internal Revenue Code Section 852(b)(3), the amount necessary to reduce earnings and profits of the Funds related to net capital gain to zero for the tax years ended December 31, 2015 and 2014. The Funds designated earnings and profits distributed to shareholders upon the redemption of shares during 2015 in determining undistributed net capital gains as of December 31, 2015.

The Trust has adopted financial reporting rules regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The Trust has reviewed all open tax years and major jurisdictions and concluded that there is no impact on the Funds’ financial position or results of operations. Tax years that remain open to examination by major tax jurisdictions include tax years ended December 31, 2012 through December 31, 2015. There is no tax liability resulting from unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken on tax returns as of December 31, 2015. The Funds are not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. If applicable, the Funds would recognize interest accrued related to unrecognized tax benefits in “interest expense” and penalties in “other expense” on the statement of operations.

F.    Recent Accounting Pronouncement:    In May 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-07 “Disclosure for Investments in Certain Entities that Calculate Net Asset Value per Share (or Its Equivalent)”. The amendments in ASU No. 2015-07 remove the requirement to categorize within the fair value hierarchy investments measured using the NAV practical expedient. The ASU also removes certain disclosure requirements for investments that qualify, but do not utilize, the NAV practical expedient. The amendments in the ASU are effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Management is currently evaluating the impact these changes will have on the Fund’s financial statements and related disclosures.

G.    Subsequent Events:    In preparing these financial statements, the Trust has evaluated events after December 31, 2015 and determined that there were no significant subsequent events that would require adjustment to or additional disclosure in these financial statements.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Trustees of LKCM Funds:

We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of LKCM Funds (the “Funds”) comprising the LKCM Small Cap Equity Fund, LKCM Equity Fund, LKCM Balanced Fund, LKCM Fixed Income Fund, and LKCM Small-Mid Cap Equity Fund as of December 31, 2015, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Funds are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Funds’ internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2015, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of each of the portfolios constituting the LKCM Funds as of December 31, 2015, and the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.

Milwaukee, Wisconsin

February 19, 2016

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LKCM FUNDS

ADDITIONAL INFORMATION

December 31, 2015

Availability of Proxy Voting Information:    A description of the policies and procedures that the Funds use to determine how to vote proxies relating to their portfolio securities, as well as information regarding how the Funds voted proxies relating to portfolio securities during the most recent 12-month period ended June 30, is available without charge, upon request, by calling toll-free 1-800-688-LKCM or on the SEC website at http://www.sec.gov.

The actual voting records relating to portfolio securities during the twelve month period ended June 30 (as filed with the SEC on Form N-PX) are available without charge, upon request, by calling the Funds toll free at 1-800-688-LKCM or by accessing the SEC’s website at www.sec.gov.

Availability of Quarterly Portfolio Schedule:    The Funds’ are required to file complete schedules of portfolio holdings with the SEC for the first and third fiscal quarters on Form N-Q. Once filed, the Funds’ Form N-Q is available without charge upon request on the SEC’s website (http://www.sec.gov) and is also available by calling 1-800-688-LKCM. You can also review and copy the Funds’ Form N-Q by visiting the SEC’s Public Reference Room in Washington, DC (information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330).

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Information about the Funds’ Trustees and Officers:

The business and affairs of the Funds are managed under the direction of the Funds’ Board of Trustees. Information pertaining to the Trustees of the Funds is set forth below. The Statement of Additional Information includes additional information about the Funds’ Trustees and officers and is available, without charge, upon request by calling 1-800-688-LKCM.

Name, Address and Age	Position(s) Held with the Trust	Term of Office & Length of Time Served(1)	Principal Occupation During Past Five Years	Number of Portfolios in Fund Complex Overseen by Trustee	Other Directorships Held by Trustee
Disinterested Trustees:
H. Kirk Downey 301 Commerce Street Suite 1600 Fort Worth, TX 76102 Year of Birth: 1942	Chairman of the Board of Trustees Trustee	Since 2005 Since 1994	President and CEO, Texas Systems, LLC and CEO, Texas learning systems LLC since 1999 (education companies); Dean, M.J. Neeley School of Business, Texas Christian University Business School from 1987 to 1999.	8	AZZ Incorporated
Earle A. Shields, Jr. 301 Commerce Street Suite 1600 Fort Worth, TX 76102 Year of Birth: 1920	Trustee	Since 1994	Consultant; formerly Consultant for NASDAQ Corp. and Vice President, Merrill Lynch & Co., Inc.	8	None
Richard J. Howell 301 Commerce Street Suite 1600 Fort Worth, TX 76102 Year of Birth: 1942	Trustee Chairman of the Audit and Compliance Committee	Since 2005 Since 2008	CPA; Adjunct Faculty at SMU Cox School of Business from 2004 to 2009; Consulting Services, since 2002; Audit Partner, Arthur Andersen LLP from 1974 to 2002.	8	Red Robin Gourmet Burgers, Inc.
Larry J. Lockwood 301 Commerce Street Suite 1600 Fort Worth, TX 76102 Year of Birth: 1953	Trustee	Since 2013	C.R. Williams Professor of Finance, Stan Block Endowed Chair in Finance, Department of Finance, Neeley School of Business, Texas Christian University since 1994.	8	None
Interested Trustees:
J. Luther King, Jr.(2) 301 Commerce Street Suite 1600 Fort Worth, TX 76102 Year of Birth: 1940	Trustee, President and Chief Executive Officer	Since 1994	Chairman, President and Director, Luther King Capital Management Corporation since 1979.	8	Tyler Technologies, Inc.
Steve R. Purvis(2) 301 Commerce Street Suite 1600 Fort Worth, TX 76102 Year of Birth: 1964	Trustee Vice President	Since 2013 Since 2000	Principal, Luther King Capital Management since 2004, Vice President and Portfolio Manager Luther King Capital Management since 1996.	8	AZZ Incorporated

⁽¹⁾  Each Trustee holds office during the lifetime of the Trust until that individual resigns, retires or is otherwise removed or replaced.

⁽²⁾  Messrs. King and Purvis are each considered an “interested person” of the Trust (as defined in the 1940 Act) because of their affiliation with the Adviser.

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Information about the Funds’ Trustees and Officers, Continued

Name, Address and Age	Position(s) Held with the Trust	Term of Office & Length of Time Served(1)	Principal Occupation During Past Five Years
Officers:
J. Luther King, Jr.(2) 301 Commerce Street Suite 1600 Fort Worth, TX 76102 Year of Birth: 1940	Trustee, President and Chief Executive Officer	Since 1994	Chairman, President and Director, Luther King Capital Management Corporation since 1979.
Steven R. Purvis(2) 301 Commerce Street Suite 1600 Fort Worth, TX 76102 Year of Birth: 1964	Trustee Vice President	Since 2013 Since 2000	Principal, Luther King Capital Management since 2004, Vice President and Portfolio Manager, Luther King Capital Management since 1996.
Paul W. Greenwell 301 Commerce Street Suite 1600 Fort Worth, TX 76102 Year of Birth: 1950	Vice President	Since 1996	Principal, Luther King Capital Management since 1986, Vice President and Portfolio Manager, Luther King Capital Management since 1983.
Richard Lenart 301 Commerce Street Suite 1600 Fort Worth, TX 76102 Year of Birth: 1966	Secretary and Treasurer	Since 2006	Luther King Capital Management since 2005.
Jacob D. Smith 301 Commerce Street Suite 1600 Fort Worth, TX 76102 Year of Birth: 1974	Chief Financial Officer Chief Compliance Officer	Since 2010 Since 2006	Chief Financial Officer since 2010, General Counsel and Chief Compliance Officer, Luther King Capital Management since 2006. Principal, Luther King Capital Management since 2013.

⁽¹⁾  Each Trustee holds office during the lifetime of the Trust until that individual resigns, retires or is otherwise removed or replaced.

⁽²⁾  Messrs. King and Purvis are each considered an “interested person” of the Trust (as defined in the 1940 Act) because of their affiliation with the Adviser.

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LKCM FUNDS

PRIVACY NOTICE

Our Commitment to Your Privacy

At LKCM Funds, we are committed to safeguarding the confidentiality and privacy of nonpublic personal information about our current and former shareholders. This privacy notice describes the policies and procedures we have implemented to protect the privacy of your nonpublic personal information as well as the sources through which we may obtain nonpublic personal information about you.

How We Protect Your Nonpublic Personal Information

Protecting your nonpublic personal information is an important priority at LKCM Funds. Accordingly, we have implemented policies and procedures designed to safeguard your nonpublic personal information, such as your tax identification number, account and investment history, account numbers, account balances and nonpublic contact information, from unauthorized access. Pursuant to these policies and procedures, we maintain various physical, technological, and administrative safeguards to protect the security and confidentiality of your nonpublic personal information, and we adapt these safeguards to respond to evolving technological and other standards.

We do not disclose nonpublic personal information about you to outside firms, organizations or individuals except as authorized by you or your representatives or as required or permitted by law. We may disclose nonpublic personal information about you to nonaffiliated third parties, such as custodians, brokers, auditors, accountants, and systems and administrative service providers, in connection with the services we provide to you or on your behalf. When we provide nonpublic personal information about you to nonaffiliated third parties for these purposes, we expect them to safeguard your nonpublic personal information, use your nonpublic personal information only for the intended purposes and otherwise abide by applicable law.

How We Obtain Your Nonpublic Personal Information

We collect nonpublic personal information about you from various sources, including documents, new account applications and other information that you or your representatives, custodians, attorneys, accountants or similar parties provide to us, communications that we have with you or your representatives, custodians, attorneys, accountants or similar parties, and documents and other information related to your accounts or investment experience with us.

Please do not hesitate to contact Jacob D. Smith, our Chief Compliance Officer, if you have any questions regarding the measures we have implemented to protect the privacy of your nonpublic personal information.

U.S. Bancorp Fund Services, LLC

P.O. Box 701

Milwaukee, WI 53201-0701

LKCM FUNDS

P.O. Box 701

Milwaukee, WI 53201-0701

Officers and Trustees
J. Luther King, Jr., CFA, CIC	H. Kirk Downey	Larry J. Lockwood
Trustee, President	Chairman of the Board	Trustee
Paul W. Greenwell	Richard J. Howell	Richard Lenart
Vice President	Trustee	Secretary & Treasurer
Steven R. Purvis, CFA	Earle A. Shields, Jr.	Jacob D. Smith
Trustee, Vice President	Trustee	Chief Financial Officer
		Chief Compliance Officer
Investment Adviser
Luther King Capital Management Corporation
301 Commerce Street, Suite 1600
Fort Worth, TX 76102
Administrator, Transfer Agent, Dividend Paying Agent & Shareholder Servicing Agent
U.S. Bancorp Fund Services, LLC
P.O. Box 701
Milwaukee, WI 53201-0701
Custodian
U.S. Bank, N.A.
1555 N. River Center Drive, Suite 302
Milwaukee, WI 53212
Independent Registered Public Accounting Firm
Deloitte & Touche LLP
555 E. Wells St., Suite 1400
Milwaukee, WI 53202
Distributor
Quasar Distributors, LLC
615 E. Michigan Street
Milwaukee, WI 53202

LKCM Aquinas Value Fund

LKCM Aquinas Growth Fund

LKCM Aquinas Small Cap Fund

Annual Report

December 31, 2015

Dear Fellow Shareholders:

We report the following performance information for the LKCM Aquinas Funds:

Funds	Inception Date		NAV @ 12/31/15		Net Expense Ratio*, **			Gross Expense Ratio**			One Year Total Return Ended 12/31/15			Five Year Average Annualized Return Ended 12/31/15			Ten Year Average Annualized Return Ended 12/31/15			Avg. Annual Total Return Since Incept.***
LKCM Aquinas Value Fund		7/11/05	$	15.17		1.50	%		1.50	%		-3.28	%		8.36	%		6.27	%		6.23	%
Russell 1000 Value® Index(1)												-3.83	%		11.27	%		6.16	%		6.21	%
LKCM Aquinas Growth Fund		7/11/05	$	16.52		1.50	%		1.60	%		2.19	%		8.03	%		5.32	%		5.32	%
Russell 1000 Growth® Index(2)												5.67	%		13.53	%		8.53	%		8.62	%
LKCM Aquinas Small Cap Fund		7/11/05	$	6.11		1.50	%		2.27	%		-4.74	%		6.24	%		5.30	%		5.42	%
Russell 2000® Index(3)												-4.41	%		9.19	%		6.80	%		6.71	%

Performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than the original cost. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 1-800-423-6369. The Funds impose a 1.00% redemption fee on shares held less than 30 days. If reflected, the fee would reduce performance shown.

* Luther King Capital Management Corporation, the Funds’ adviser, has contractually agreed to waive all or a portion of its management fee and/or reimburse expenses of the Fund to maintain designated expense ratios through April 30, 2016. This expense limitation excludes interest, taxes, brokerage commissions, indirect fees and expenses relating to investments in other investment companies, including money market funds, and extraordinary expenses. Investment performance reflects fee waivers, if any, in effect. In the absence of such waivers, total return would be reduced. Investment performance is based upon the net expense ratio. LKCM waived management fees and/or reimbursed expenses for each Fund, during the fiscal year ended December 31, 2015.

** Expense ratios above are as of December 31, 2014, the Funds’ prior fiscal year end, as reported in the Funds’ current prospectus. Expense ratios reported for other periods in the financial highlights of this report for the Funds’ fiscal year ended December 31, 2015 may differ due to the inclusion of acquired fund fees and expenses.

*** On July 11, 2005, the Aquinas Funds merged into the LKCM Aquinas Funds. Due to the change in adviser and investment technique, performance is being quoted for the period after the merger.

(1) The Russell 1000 Value^® Index is an unmanaged index which measures the performance of those Russell 1000^® companies with lower price-to-book ratios and lower forecasted growth values.

(2) The Russell 1000 Growth^® Index is an unmanaged index which measures the performance of those Russell 1000^® companies with higher price-to-book ratios and higher forecasted growth values.

(3) The Russell 2000^® Index is an unmanaged index which measures the performance of the 2000 smallest companies in the Russell 3000^® Index.

Note: These indices defined above are not available for direct investment and the index performance therefore does not include expenses.

2015 Review

2015 proved to be an unkind year for nearly all asset classes. Commodities were especially weak due to the downturn in global manufacturing activity, most notably in China. The story of global oversupply of crude oil is well known at this point. Technological innovation in shale oil production domestically and the unwillingness of the Organization of Petroleum Exporting Countries, or OPEC, to curtail production, in conjunction with a rising U.S. dollar, contributed to an approximate 31% decline in the price of West Texas Intermediate crude oil in 2015. This price decline occurred on the back of an approximate 46% decline in West Texas Intermediate crude oil in 2014. Domestic intermediate-term investment grade bond returns were slightly positive during the year, while domestic high yield bonds and emerging market bonds posted negative returns for 2015.

We believe that there were two key divergences within the domestic equity market during the year. First, growth stocks outpaced value stocks, which typically is characteristic of the mature stage of an equity market cycle. We believe it is common to see the equity market leadership narrow during this phase, as it did in 2015. Second, large capitalization stocks outperformed small capitalization stocks, as reflected by the Standard & Poor’s 500 Index, or S&P 500^® Index, outperformance of the Russell 2000^® Index. Thus, we believe the U.S. equity market in 2015 can best be characterized as one in which a narrow group of larger capitalization companies performed best. For example, if the market-capitalization weighted S&P 500^® Index was instead equal weighted, the S&P 500^® Index would have declined approximately 4.1%, not including dividends, for 2015, versus the 1.38% return posted by the S&P 500^® Index during 2015.

In December 2015 the Federal Reserve raised the federal funds target interest rate 0.25% for the first time since June 2006, bringing to a close a seven-year chapter of zero percent interest rates. When the Federal Reserve raises interest rates, it is typically an important marker in the business cycle. In our view, the first such interest rate hike is often seen as conviction by the Federal Reserve that an economic expansion is intensifying. We believe capital markets generally are sanguine about the first couple of interest rate increases by the Federal Reserve. Historically, the tenor typically changes once inflation readings become sufficiently strong that capital markets perceive the Federal Reserve may quicken its pace of restricting monetary policy. We believe this often results in slowing economic growth, inflationary declines, and a resetting of the business cycle. We believe we are in the early stages of monetary policy normalization, and market expectations are for interest rates to rise gradually. If the Federal Reserve were to raise interest rates at each

2

consecutive meeting in 2016, it would be a negative surprise to capital markets in our view. We believe such action would be concerning unless such steps were in response to significantly stronger economic data than current trend. Our forecast is for a very gradual rise in interest rates commensurate with very moderate inflation readings and modest real economic growth in 2016.

The Federal Reserve appears to be charting a new course this cycle. We believe the Federal Reserve most often raises interest rates in response to an uncomfortable pace of rising inflation. Inflation is generally a lagging economic indicator, meaning the Federal Reserve typically acts well after the economic growth is in full bloom. Given the lack of inflationary pressures we have seen to date, we believe the Federal Reserve is attempting to normalize monetary policy coincident with what it perceives could be increasing price pressures as domestic economic and labor economy slack appear to continue to decline.

2016 Outlook

At any given time, there are both structural and cyclical forces at work on the economy. Structural forces typically include trends in demographics, fiscal debt burdens, tax regimes, and pace of innovation. Cyclical forces generally are shorter-term in nature, such as changes in monetary or fiscal policy, inflation, and trade balances. We believe the sweet spot of economic growth occurs in periods when both structural and cyclical forces provide tailwinds; this occurred in Japan in the 1980s, the United States in the 1990s, and China in the 2000s. In our view, when structural and cyclical forces collide, cyclical forces often prevail for a period of time before structural forces again win the day. Structural forces weighed on the global economy in 2015. In our view, the repeated possibilities of a Greek exit from the European Union and the United Kingdom’s upcoming referendum on European Union membership are proxy battles for the structural challenges of a monetary union without a fiscal union. In China household consumption as a percentage of Gross Domestic Product (GDP) remains stagnant and well below the rate of developed economies and presents another structural headwind. Domestically, the United States is facing a continuous rise in the number of aging baby boomers and the corresponding strain that imposes on fiscal resources from entitlement programs. These are all examples of structural challenges that continue to weigh on key contributors to aggregate global GDP.

To ease these structural issues, governments have looked first to cyclical forces such as monetary policy. Unfortunately, we believe monetary policy has now achieved much of what it can in terms of bolstering economic growth and, globally, there appears to be scant room for interest rates to fall further. The remaining two forms of monetary transmission, supporting asset prices through quantitative easing and currency depreciation, are less effective in our view. There are inherent risks to both of these channels, including creating asset valuation bubbles and currency wars. Although structural challenges appear to impair potential economic growth rates around the globe, the growth path for the United States appears higher than for Japan or Europe where structural challenges seem greatest and economies appear less dynamic.

With cyclical tailwinds in the United States losing some of their intensity, we believe that domestic economic growth is again likely to remain muted in 2016, although stronger than in 2015. Consequently, we forecast corporate profit growth will resume in 2016 following a hiatus in 2015. Earnings within the Energy sector declined approximately 60% in 2015, which contributed to virtually no corporate earnings growth for the S&P 500^® Index during 2015. Although we anticipate earnings in the Energy sector will decline again this year in aggregate, the sector now represents only approximately 3.8% of S&P 500^® Index earnings, down from approximately 11.7% in the summer of 2014. We believe corporate profits, as measured by S&P 500^® Index earnings, should grow 4-6% for 2016 with the negative impact of a strong U.S. dollar on firms’ income statements being less in 2016. Overall, we think corporate balance sheets remain healthy with near record levels of cash and reasonable debt burdens. Interest rates for lower quality balance sheets have risen recently, influenced in part by deterioration in the prospects for select energy companies. While we believe this phenomenon has been largely contained to the Energy sector, we remain vigilant with regard to rising credit spreads outside of the Energy sector, as credit spreads are often harbingers of future economic stress.

Although the equity market displayed characteristics of a mature equity market in 2015, our forecast is for the current bull market to remain in place. We note, however, that real GDP growth has been sub-par during this expansion, averaging just approximately 1.8% annually compared with approximately 4.2% for previous expansions since 1960. We think the longevity of this economic cycle and accompanying bull market in equities is consistent with a benign inflation outlook. The two shortest economic cycles since 1960 both began in the highly inflationary 1970s. If our forecast for modest inflation is accurate, then we believe it is reasonable to expect that this current economic cycle has multiple years remaining to grow. Unfortunately, history teaches that when economic growth is less robust, capital market volatility is typically higher. Finally, there always remains the possibility of significant exogenous events such as terrorist acts, an expanding Middle Eastern conflict, or escalating tensions on the Korean Peninsula or Crimea. These events are impossible to predict in scope or magnitude, but any of which could negatively impact our forecast.

In our view, the base case for 2016 is that investors must continue to adjust to a lower expected return environment, as slow growth and deflationary pressures are the result of structural forces rather than simply residue from the financial crisis. We are likely to witness the continued struggle between governments’ need to address long-run structural issues and mollifying current issues of the day such as preventing deflation and propping-up job growth. As we enter a Presidential election year, it is a reminder of our view that simulative fiscal policy has largely been absent in recent years and always possesses the promise to be a catalyst for growth in the future.

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LKCM Aquinas Value Fund

The LKCM Aquinas Value Fund declined 3.28% for the year ended December 31, 2015, outpacing the Fund’s benchmark, the Russell 1000^® Value Index, which declined 3.83% for the year. During the year the Fund’s performance benefited from strong stock selection, which was somewhat offset by sector allocation decisions for the Fund. The Fund’s overweight position in the Industrials sector benefitted the Fund’s relative performance, along with its underweight positions in the Energy and Utilities sectors. The Fund’s relative performance was negatively impacted by overweight positions in the Consumer Discretionary and Materials sectors and an underweight position in the Healthcare sector. The Fund’s underweight position in the Healthcare sector was primarily the result of the Fund’s Catholic values investing mandate, which limits the Fund’s ability to invest in a number of companies in this sector. Stock selection in the Information Technology, Industrials, and Consumer Staples sectors helped the Fund’s relative results during the year, which was offset somewhat by stock selection in the Consumer Discretionary sector.

Entering 2016, we believe the Fund is well positioned with a strong emphasis on companies that we believe have solid balance sheets and are reasonably valued relative to their earnings growth rates, which we believe can provide an opportunity to add value for the Fund and its shareholders in the upcoming year. We continue to emphasize holdings in which we believe that continued dividend increases or share buybacks during 2016 are probable.

LKCM Aquinas Small Cap Fund

The LKCM Aquinas Small Cap Fund declined 4.74% for the year ended December 31, 2015 against the 4.41% decline for the Fund’s benchmark, the Russell 2000^® Index. Stock selection was solid in the Energy and Information Technology sectors relative to the benchmark, while the Fund experienced relative weakness in stock selection in the Healthcare sector. The Fund benefited from overweight positions in the Healthcare and Information Technology sectors relative to the benchmark, while the Fund’s overweight position in the Industrials sector detracted from relative performance. During the year, two of the Fund’s portfolio companies were acquired at significant premiums to the Fund’s cost basis in those companies. As a core manager that focuses on high quality companies that meet our stringent investment criteria, we continue to have the Fund tilted towards growth companies as we believe this area provides the most attractive investment opportunities for the Fund in the current market environment.

LKCM Aquinas Growth Fund

The LKCM Aquinas Growth Fund returned 2.19% for the year ended December 31, 2015 compared to the 5.67% return for the Fund’s benchmark, the Russell 1000^® Growth Index. The Fund’s underweight position in the Materials sector benefited the Fund’s relative performance, but was offset by the Fund’s overweight position in the Energy sector. Stock selection in the Consumer Discretionary and Industrials sectors benefited the Fund’s relative performance, which was offset by weakness in stock selection in the Consumer Staples, Financials Healthcare and Information Technology sectors. We remain committed to our investment strategy and stock selection process for the Fund and believe we have the Fund well-positioned for the upcoming year.

J. Luther King, Jr., CFA, CIC

February 1, 2016

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The information provided herein represents the opinion of J. Luther King, Jr., CFA, CIC and is not intended to be a forecast of future events, a guarantee of future results, nor investment advice.

Please refer to the Schedule of Investments found on pages 11-15 of the report for more information on Fund holdings. Fund holdings and sector allocations are subject to change and are not recommendations to buy or sell any securities.

Mutual fund investing involves risk. Principal loss is possible. Past performance is not a guarantee of future results. Small and medium capitalization funds typically carry additional risks, since smaller companies generally have a higher risk of failure, and, historically, their stocks have experienced a greater degree of market volatility than stocks on average. These risks are discussed in the Funds’ summary and statutory prospectuses. Since the Funds practice socially responsible investing within the framework provided by the United States Conference of Catholic Bishop’s Socially Responsible Investing Guidelines, the Funds may forego a profitable investment opportunity or sell a security when it may be disadvantageous to do so.

Earnings growth is not a measure of future performance.

The Standard & Poor’s 500^® Index is an unmanaged capitalization-weighted index of 500 selected stocks that is generally representative of the performance of large capitalization companies in the U.S. stock market. One cannot invest directly in an index.

Spread is the percentage point difference between yields of various classes of bonds compared to treasury bonds.

Must be preceded or accompanied by a prospectus.

Quasar Distributors, LLC, distributor.

5

PERFORMANCE:

The following information illustrates the historical performance of LKCM Aquinas Value Fund as of December 31, 2015 compared to the Fund’s benchmark and peer group indices.

Performance data quoted represents past performance; past performance does not guarantee future results. The graph and table reflect the reinvestment of dividends and other distributions, if any, but do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 1-800-423-6369.

An index is an unmanaged portfolio and does not trade or incur any expenses. One can not invest in an unmanaged index.

AVERAGE ANNUAL TOTAL RETURN (Periods Ended December 31, 2015)

	Past 1 Year		Past 5 Years(1)		Past 10 Years(1)		Since Inception(1)(2)
LKCM Aquinas Value Fund		-3.28%		8.36%		6.27%		6.23%
Russell 1000® Value Index		-3.83%		11.27%		6.16%		6.21%
Lipper Large-Cap Value Funds Index		-3.65%		10.07%		5.71%		6.00%

⁽¹⁾ Annualized.

⁽²⁾ The assets of the Aquinas Value Fund were acquired by the LKCM Aquinas Value Fund on July 11, 2005. At the time of the reorganization, the Adviser also changed from Aquinas Investment Advisers, Inc. to Luther King Capital Management Corporation.

A HYPOTHETICAL $10,000 INVESTMENT IN LKCM AQUINAS VALUE FUND

(for the ten years ended December 31, 2015)

The Russell 1000^® Value Index is an unmanaged index consisting of those Russell 1000^® companies with lower price-to-book ratios and lower forecasted growth values.

The Lipper Large-Cap Value Funds Index is an index of large cap value mutual funds tracked by Lipper, Inc.

6

PERFORMANCE:

The following information illustrates the historical performance of LKCM Aquinas Growth Fund as of December 31, 2015 compared to the Fund’s benchmark and peer group indices.

Performance data quoted represents past performance; past performance does not guarantee future results. The graph and table reflect the reinvestment of dividends and other distributions, if any, but do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 1-800-423-6369.

An index is an unmanaged portfolio and does not trade or incur any expenses. One can not invest in an unmanaged index.

AVERAGE ANNUAL TOTAL RETURN (Periods Ended December 31, 2015)

	Past 1 Year		Past 5 Years(1)		Past 10 Years(1)		Since Inception(1)(2)
LKCM Aquinas Growth Fund		2.19%		8.03%		5.32%		5.32%
Russell 1000® Growth Index		5.67%		13.53%		8.53%		8.62%
Lipper Large-Cap Growth Funds Index		5.61%		12.17%		7.17%		7.71%

⁽¹⁾  Annualized.

⁽²⁾  The assets of the Aquinas Growth Fund were acquired by the LKCM Aquinas Growth Fund on July 11, 2005. At the time of the reorganization, the Adviser also changed from Aquinas Investment Advisers, Inc. to Luther King Capital Management Corporation.

A HYPOTHETICAL $10,000 INVESTMENT IN LKCM AQUINAS GROWTH FUND

(for the ten years ended December 31, 2015)

The Russell 1000^® Growth Index consists of those Russell 1000^® companies with higher price-to-book ratios and higher forecasted growth values.

The Lipper Large-Cap Growth Funds Index is an index of large cap growth mutual funds tracked by Lipper, Inc.

7

PERFORMANCE:

The following information illustrates the historical performance of LKCM Aquinas Small Cap Fund as of December 31, 2015 compared to the Fund’s benchmark and peer group indices.

Performance data quoted represents past performance; past performance does not guarantee future results. The graph and table reflect the reinvestment of dividends and other distributions, if any, but do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 1-800-423-6369.

An index is an unmanaged portfolio and does not trade or incur any expenses. One can not invest in an unmanaged index.

AVERAGE ANNUAL TOTAL RETURN (Periods Ended December 31, 2015)

	Past 1 Year		Past 5 Years(1)		Past 10 Years(1)		Since Inception(1)(2)
LKCM Aquinas Small Cap Fund		-4.74%		6.24%		5.30%		5.42%
Russell 2000® Index		-4.41%		9.19%		6.80%		6.71%
Lipper Small-Cap Core Funds Index		-4.23%		8.64%		6.69%		7.13%

⁽¹⁾ Annualized.

⁽²⁾ The assets of the Aquinas Small Cap Fund were acquired by the LKCM Aquinas Small Cap Fund on July 11, 2005. At the time of the reorganization, the Adviser also changed from Aquinas Investment Advisers, Inc. to Luther King Capital Management Corporation.

A HYPOTHETICAL $10,000 INVESTMENT IN LKCM AQUINAS SMALL CAP FUND

(for the ten years ended December 31, 2015)

The Russell 2000^® Index is an unmanaged index consisting of the 2,000 smallest companies in the Russell 3000^® Index.

The Lipper Small-Cap Core Funds Index is an index of small cap core mutual funds tracked by Lipper, Inc.

8

LKCM Aquinas Funds Expense Example — December 31, 2015

As a shareholder of the Funds, you incur two types of costs: (1) transaction costs, including redemption fees; and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (7/1/15 - 12/31/15).

ACTUAL EXPENSES

The first line of the tables below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period. Although the Funds charge no sales load, you will be assessed fees for outgoing wire transfers, returned checks and stop payment orders at prevailing rates charged by U.S. Bancorp Fund Services, LLC, the Funds’ transfer agent. If you request that a redemption be made by wire transfer, currently a $15 fee is charged by the Funds’ transfer agent. You will be charged a redemption fee equal to 1.00% of the net amount of the redemption if you redeem your shares of the LKCM Aquinas Value, Aquinas Growth and Aquinas Small Cap Funds within 30 days of purchase, unless otherwise determined by the Funds in their discretion. To the extent the Funds invest in shares of other investment companies as part of their investment strategies, you will indirectly bear your proportionate share of any fees and expenses charged by the underlying funds in which the Funds invest in addition to the expenses of the Funds. Actual expenses of the underlying funds are expected to vary among the various underlying funds. These expenses are not included in the example below. The example below includes management fees, registration fees and other expenses. However, the example below does not include portfolio trading commissions and related expenses and other extraordinary expenses as determined under generally accepted accounting principles.

HYPOTHETICAL EXAMPLES FOR COMPARISON PURPOSES

The second line of the tables below provides information about hypothetical account values and hypothetical expenses based on the Funds’ actual expense ratios and an assumed rate of return of 5% per year before expenses, which are not the Funds’ actual returns. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Funds and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as redemption fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactions costs were included, your costs would have been higher.

	LKCM Aquinas Value Fund
	Beginning Account Value 7/1/15		Ending Account Value 12/31/15		Expenses Paid During Period* 7/1/15 – 12/31/15
Actual . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$	1,000.00	$	938.80	$	7.33
Hypothetical (5% return before expense) . . . . . .	$	1,000.00	$	1,017.64	$	7.63

* Expenses are equal to the Fund's annualized net expense ratio of 1.50%, multiplied by the average account value over the period,

multiplied by 184/365 to reflect the one-half year period.

	LKCM Aquinas Growth Fund
	Beginning Account Value 7/1/15		Ending Account Value 12/31/15		Expenses Paid During Period* 7/1/15 – 12/31/15
Actual . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$	1,000.00	$	991.40	$	7.53
Hypothetical (5% return before expense) . . . . . .	$	1,000.00	$	1,017.64	$	7.63

* Expenses are equal to the Fund's annualized net expense ratio of 1.50%, multiplied by the average account value over the period,

multiplied by 184/365 to reflect the one-half year period.

	LKCM Aquinas Small Cap Fund
	Beginning Account Value 7/1/15		Ending Account Value 12/31/15		Expenses Paid During Period* 7/1/15 – 12/31/15
Actual . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$	1,000.00	$	886.60	$	7.13
Hypothetical (5% return before expense) . . . . . .	$	1,000.00	$	1,017.64	$	7.63

* Expenses are equal to the Fund's annualized net expense ratio of 1.50%, multiplied by the average account value over the period,

multiplied by 184/365 to reflect the one-half year period.

9

ALLOCATION OF PORTFOLIO HOLDINGS — LKCM Aquinas Funds — December 31, 2015

Percentages represent market value as a percentage of total investments.

LKCM Aquinas Value Fund

LKCM Aquinas Small Cap Fund

LKCM Aquinas Growth Fund

10

LKCM AQUINAS VALUE FUND

SCHEDULE OF INVESTMENTS

December 31, 2015

COMMON STOCKS - 95.2%	Shares		Value
Aerospace & Defense - 3.5%
Honeywell International Inc.		15,000	$	1,553,550
Auto Components - 3.6%
The Goodyear Tire & Rubber Company		50,000		1,633,500
Banks - 11.8%
BOK Financial Corporation		17,500		1,046,325
Cullen/Frost Bankers, Inc.		15,000		900,000
SunTrust Banks, Inc.		40,000		1,713,600
Zions Bancorporation		60,000		1,638,000
				5,297,925
Beverages - 4.5%
The Coca-Cola Company		17,500		751,800
PepsiCo, Inc.		12,500		1,249,000
				2,000,800
Chemicals - 1.6%
Monsanto Company		7,500		738,900
Commercial Services & Supplies - 1.5%
Copart, Inc. (a)		17,500		665,175
Construction Materials - 3.8%
Martin Marietta Materials, Inc.		12,500		1,707,250
Diversified Financials - 3.7%
JPMorgan Chase & Co.		25,000		1,650,750
Electrical Equipment & Instruments - 3.4%
Roper Technologies, Inc.		8,000		1,518,320
Electronic Equipment & Instruments - 0.2%
Trimble Navigation Limited (a)		5,000		107,250
Energy Equipment & Services - 1.3%
Schlumberger Limited (b)		8,400		585,900
Food & Drug Retailing - 3.8%
CVS Health Corporation		17,500		1,710,975
Food Products - 4.5%
The Kraft Heinz Company		9,700		705,772
Mondelez International Inc. - Class A		29,700		1,331,748
				2,037,520
Health Care Equipment & Supplies - 5.1%
DENTSPLY International Inc.		20,000		1,217,000
Medtronic, PLC (b)		14,200		1,092,264
				2,309,264
Household Durables - 2.5%
Whirlpool Corporation		7,500		1,101,525
Insurance - 6.7%
MetLife, Inc.		33,000		1,590,930
Prudential Financial, Inc.		17,500		1,424,675
				3,015,605
Internet Software & Services - 7.9%
Akamai Technologies, Inc. (a)		20,000		1,052,600
Alphabet, Inc. - Class A (a)		1,400		1,089,214
Sabre Corporation		50,000		1,398,500
				3,540,314

COMMON STOCKS	Shares		Value
IT Consulting & Services - 2.2%
PayPal Holdings, Inc. (a)		27,500	$	995,500
Machinery - 6.0%
Barnes Group Inc.		30,000		1,061,700
Danaher Corporation		17,500		1,625,400
				2,687,100
Multiline Retail - 1.9%
Kohl's Corporation		18,000		857,340
Oil & Gas & Consumable Fuels - 3.9%
Cabot Oil & Gas Corporation		30,000		530,700
ConocoPhillips		11,000		513,590
Exxon Mobil Corporation		4,000		311,800
Gulfport Energy Corporation (a)		15,000		368,550
				1,724,640
Professional Services - 1.9%
Verisk Analytics, Inc. (a)		11,000		845,680
Software - 3.8%
Adobe Systems Incorporated (a)		18,000		1,690,920
Specialty Retail - 6.1%
The Home Depot, Inc.		8,500		1,124,125
Party City Holdco Inc. (a)		55,000		710,050
Tiffany & Co.		12,000		915,480
				2,749,655
TOTAL COMMON STOCKS
(Cost $26,282,002)				42,725,358
SHORT-TERM INVESTMENTS - 5.0%
Money Market Funds (c) - 5.0%
Dreyfus Government Cash Management Fund - Institutional Shares, 0.01%		933,960		933,960
Federated Government Obligations Fund - Institutional Shares, 0.01%		1,300,853		1,300,853
				2,234,813
TOTAL SHORT-TERM INVESTMENTS
(Cost $2,234,813)				2,234,813
Total Investments - 100.2%
(Cost $28,516,815)				44,960,171
Liabilities in Excess of Other Assets - (0.2)%				(92,181	)
TOTAL NET ASSETS - 100.0%			$	44,867,990

(a) Non-income producing security.

(b) Security issued by non-U.S. incorporated company.

(c) The rate quoted is the annualized seven-day yield of the fund at period end.

Investments are classified by asset class and industry pursuant to the Global Industry Classification Standard (GICS^®) which was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor Financial Services LLC (“S&P”). GICS is a service mark of MSCI and S&P and has been licensed for use by U.S. Bancorp Fund Services, LLC.

The accompanying notes are an integral part of these financial statements.

11

LKCM AQUINAS GROWTH FUND

SCHEDULE OF INVESTMENTS

December 31, 2015

COMMON STOCKS - 97.7%	Shares		Value
Aerospace & Defense - 3.0%
Honeywell International Inc.		7,675	$	794,900
Banks - 1.1%
Cullen/Frost Bankers, Inc.		3,000		180,000
Texas Capital Bancshares, Inc. (a)		2,000		98,840
				278,840
Beverages - 1.6%
The Coca-Cola Company		10,000		429,600
Biotechnology - 2.0%
Amgen Inc.		3,275		531,631
Building Products - 1.3%
Masco Corporation		12,000		339,600
Chemicals - 0.9%
FMC Corporation		6,000		234,780
Computers & Peripherals - 7.1%
Apple Inc.		10,500		1,105,230
EMC Corporation		30,000		770,400
				1,875,630
Consumer Finance - 2.3%
American Express Company		8,750		608,562
Containers & Packaging - 1.2%
Ball Corporation		4,250		309,103
Diversified Telecommunication Services - 1.1%
AT&T Inc.		8,250		283,882
Electrical Equipment & Instruments - 4.3%
Roper Technologies, Inc.		6,000		1,138,740
Electronic Equipment & Instruments - 3.8%
National Instruments Corporation		18,000		516,420
Trimble Navigation Limited (a)		22,000		471,900
				988,320
Food & Drug Retailing - 3.5%
CVS Health Corporation		9,375		916,594
Health Care Equipment & Supplies - 1.8%
Medtronic, PLC (b)		6,000		461,520
Health Care Providers & Services - 1.0%
Express Scripts Holding Co (a)		3,000		262,230
Hotels, Restaurants & Leisure - 2.4%
Yum! Brands, Inc.		8,800		642,840
Household Durables - 1.1%
Whirlpool Corporation		2,000		293,740
Household Products - 4.0%
Colgate-Palmolive Company		12,000		799,440
The Procter & Gamble Company		3,000		238,230
				1,037,670
Internet Catalog & Retail - 4.9%
Amazon.com, Inc. (a)		1,900		1,284,191
Internet Software & Services - 13.6%
Akamai Technologies, Inc. (a)		15,000		789,450
Alphabet, Inc. - Class A (a)		1,000		778,010

COMMON STOCKS	Shares		Value
Internet Software & Services - 13.6%, Continued
Alphabet, Inc. - Class C (a)		1,002	$	760,398
Facebook, Inc. - Class A (a)		12,000		1,255,920
				3,583,778
IT Consulting & Services - 2.7%
PayPal Holdings, Inc. (a)		10,000		362,000
Visa Inc. - Class A		4,500		348,975
				710,975
Machinery - 3.9%
Danaher Corporation		11,000		1,021,680
Media - 1.8%
The Walt Disney Company		4,500		472,860
Oil & Gas & Consumable Fuels - 1.0%
Cabot Oil & Gas Corporation		15,000		265,350
Personal Products - 1.3%
The Estee Lauder Companies Inc. - Class A		4,000		352,240
Pharmaceuticals - 1.8%
Zoetis Inc		10,000		479,200
Real Estate Investment Trusts - 1.8%
American Tower Corporation		5,000		484,750
Software - 6.3%
ACI Worldwide, Inc. (a)		24,000		513,600
Manhattan Associates, Inc. (a)		6,000		397,020
Microsoft Corporation		13,625		755,915
				1,666,535
Specialty Retail - 9.9%
The Home Depot, Inc.		6,000		793,500
O'Reilly Automotive, Inc. (a)		3,000		760,260
Tractor Supply Company		8,000		684,000
Ulta Salon, Cosmetics & Fragrance, Inc. (a)		2,000		370,000
				2,607,760
Textiles, Apparel & Luxury Goods - 5.2%
NIKE, Inc. - Class B		12,000		750,000
V.F. Corporation		10,000		622,500
				1,372,500
TOTAL COMMON STOCKS
(Cost $15,571,144)				25,730,001

The accompanying notes are an integral part of these financial statements.

12

LKCM AQUINAS GROWTH FUND

SCHEDULE OF INVESTMENTS, CONTINUED

December 31, 2015

SHORT-TERM INVESTMENTS - 2.6%	Shares		Value
Money Market Funds (c) - 2.6%
Dreyfus Government Cash Management Fund - Institutional Shares, 0.01%		86,991	$	86,991
Federated Government Obligations Fund - Institutional Shares, 0.01%		600,681		600,681
				687,672
TOTAL SHORT-TERM INVESTMENTS
(Cost $687,672)				687,672
Total Investments - 100.3%
(Cost $16,258,816)				26,417,673
Liabilities in Excess of Other Assets - (0.3)%				(81,870	)
TOTAL NET ASSETS - 100.0%			$	26,335,803

(a) Non-income producing security.

(b) Security issued by non-U.S. incorporated company.

(c) The rate quoted is the annualized seven-day yield of the fund at period end.

Investments are classified by asset class and industry pursuant to the Global Industry Classification Standard (GICS^®) which was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor Financial Services LLC (“S&P”). GICS is a service mark of MSCI and S&P and has been licensed for use by U.S. Bancorp Fund Services, LLC.

The accompanying notes are an integral part of these financial statements.

13

LKCM AQUINAS SMALL CAP FUND

SCHEDULE OF INVESTMENTS

December 31, 2015

COMMON STOCKS - 96.2%	Shares		Value
Aerospace & Defense - 1.1%
Hexcel Corporation		1,565	$	72,694
Auto Components - 0.1%
Asbury Automotive Group Inc. (a)		55		3,709
Automobiles - 2.2%
Lithia Motors, Inc. - Class A		1,305		139,204
Banks - 9.4%
BancorpSouth, Inc.		4,183		100,350
Bank of the Ozarks, Inc.		2,425		119,941
Columbia Banking System, Inc.		3,470		112,810
Hanmi Financial Corporation		3,575		84,799
PrivateBancorp, Inc.		2,405		98,653
Texas Capital Bancshares, Inc. (a)		1,610		79,566
				596,119
Biotechnology - 4.3%
Charles River Laboratories International, Inc. (a)		1,475		118,575
EXACT Sciences Corporation (a)		5,715		52,749
Neogen Corporation (a)		1,840		103,997
				275,321
Building Products - 2.2%
Apogee Enterprises, Inc.		1,420		61,784
PGT, Inc. (a)		6,879		78,352
				140,136
Capital Markets - 0.9%
BGC Partners Inc - Class A		5,675		55,672
Commercial Services & Supplies - 4.0%
Healthcare Services Group, Inc.		4,150		144,710
Multi-Color Corporation		280		16,747
Ritchie Bros. Auctioneers Incorporated (b)		3,935		94,873
				256,330
Communications Equipment - 2.4%
Ciena Corporation (a)		2,300		47,587
Infinera Corporation (a)		5,975		108,267
				155,854
Construction & Engineering - 0.7%
MasTec Inc. (a)		2,460		42,755
Construction Materials - 1.2%
Headwaters Incorporated (a)		4,130		69,673
Summit Materials, Inc. - Class A (a)		356		7,126
				76,799
Diversified Financials - 1.3%
HFF, Inc. - Class A		2,675		83,112
Electronic Equipment & Instruments - 0.4%
Belden Inc.		510		24,317
Food & Staples Retailing - 0.5%
Sprouts Farmers Market Inc. (a)		1,275		33,902

COMMON STOCKS	Shares		Value
Food Products - 3.4%
Post Holdings Inc. (a)		1,910	$	117,847
TreeHouse Foods, Inc. (a)		1,295		101,606
				219,453
Health Care Equipment & Supplies - 8.2%
Cantel Medical Corp.		1,675		104,085
Cynosure, Inc. - Class A (a)		2,815		125,746
LDR Holding Corporation (a)		3,395		85,248
PRA Health Sciences, Inc. (a)		1,160		52,513
VWR Corporation (a)		5,405		153,016
				520,608
Health Care Providers & Services - 3.3%
Aceto Corporation		3,880		104,683
Omnicell, Inc. (a)		2,505		77,855
Team Health Holdings, Inc. (a)		625		27,431
				209,969
Hotels, Restaurants & Leisure - 2.3%
La Quinta Holdings Inc (a)		2,305		31,371
Popeyes Louisiana Kitchen, Inc. (a)		1,415		82,778
Zoe's Kitchen Inc (a)		1,050		29,379
				143,528
Internet Software & Services - 8.5%
Criteo SA - ADR (a) (b)		2,570		101,772
Demandware Inc. (a)		1,295		69,891
Euronet Worldwide, Inc. (a)		2,150		155,724
LogMeIn, Inc. (a)		1,465		98,302
SPS Commerce, Inc. (a)		1,650		115,847
				541,536
Leisure Equipment & Products - 2.0%
Pool Corporation		1,605		129,652
Machinery - 1.0%
Barnes Group Inc.		1,850		65,471
Media - 1.7%
The E.W. Scripps Company - Class A		5,750		109,250
Multiline Retail - 1.2%
Burlington Stores, Inc. (a)		1,735		74,432
Oil & Gas & Consumable Fuels - 2.3%
Diamondback Energy Inc. (a)		145		9,701
Memorial Resource Development Corp. (a)		3,935		63,550
PDC Energy, Inc. (a)		885		47,241
Synergy Resources Corporation (a)		3,175		27,051
				147,543
Paper & Forest Products - 1.4%
KapStone Paper and Packaging Corporation		3,815		86,181
Pharmaceuticals - 3.8%
Akorn, Inc. (a)		3,756		140,136
Cambrex Corp. (a)		2,150		101,244
				241,380

The accompanying notes are an integral part of these financial statements.

14

LKCM AQUINAS SMALL CAP FUND

SCHEDULE OF INVESTMENTS, CONTINUED

December 31, 2015

COMMON STOCKS	Shares		Value
Professional Services - 2.4%
The Advisory Board Company (a)		1,750	$	86,818
FTI Consulting, Inc. (a)		1,885		65,334
				152,152
Real Estate Investment Trusts - 7.3%
CubeSmart		3,520		107,782
Kennedy-Wilson Holdings Inc.		3,455		83,196
LaSalle Hotel Properties		2,250		56,610
Sovran Self Storage, Inc.		1,355		145,405
Stag Industrial, Inc.		3,835		70,756
				463,749
Semiconductor Equipment & Products - 1.5%
Rambus Inc. (a)		8,060		93,415
Software - 9.4%
ACI Worldwide, Inc. (a)		6,120		130,968
Callidus Software, Inc. (a)		4,170		77,437
Fair Isaac Corporation		1,475		138,916
Guidewire Software Inc. (a)		1,030		61,965
Manhattan Associates, Inc. (a)		1,460		96,608
Proofpoint, Inc. (a)		1,435		93,289
				599,183
Specialty Retail - 1.8%
Monro Muffler Brake, Inc.		1,710		113,236
Thrifts & Mortgage Finance - 1.9%
Home Bancshares Inc.		2,950		119,534
Trading Companies & Distributors - 2.1%
Watsco, Inc.		1,130		132,357
TOTAL COMMON STOCKS
(Cost $5,124,580)				6,118,553

SHORT-TERM INVESTMENTS - 3.8%	Shares		Value
Money Market Funds (c) - 3.8%
Dreyfus Government Cash Management Fund - Institutional Shares, 0.01%		91,316	$	91,316
Federated Government Obligations Fund - Institutional Shares, 0.01%		151,630		151,630
				242,946
TOTAL SHORT-TERM INVESTMENTS
(Cost $242,946)				242,946
Total Investments - 100.0%
(Cost $5,367,526)				6,361,499
Other Assets in Excess of Liabilities - 0.0%				3,103
TOTAL NET ASSETS - 100.0%			$	6,364,602

ADR American Depository Receipt.

(a) Non-income producing security.

(b) Security issued by non-U.S. incorporated company.

(c) The rate quoted is the annualized seven-day yield of the fund at period end.

Investments are classified by asset class and industry pursuant to the Global Industry Classification Standard (GICS^®) which was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor Financial Services LLC (“S&P”). GICS is a service mark of MSCI and S&P and has been licensed for use by U.S. Bancorp Fund Services, LLC.

The accompanying notes are an integral part of these financial statements.

15

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2015

	LKCM Aquinas Value Fund			LKCM Aquinas Growth Fund		LKCM Aquinas Small Cap Fund
Assets:
Investments, at value*	$	44,960,171		$	26,417,673	$	6,361,499
Receivable for Fund shares sold		62,816			4,982		9,763
Dividends and interest receivable		37,697			15,801		3,945
Other assets		13,658			11,708		12,124
Total assets		45,074,342			26,450,164		6,387,331
Liabilities:
Payable for investment advisory fees (Note B)		96,325			49,797		47
Payable for distribution expense (Note B)		61,711			37,633		4,971
Payable for Fund shares redeemed		13,895			103		34
Payable for accounting and transfer agent fees and expenses		11,648			10,416		7,295
Payable for reports to shareholders		13,331			4,161		994
Payable for administrative fees		6,901			4,742		3,412
Payable for custody fees and expenses		1,099			1,003		1,340
Accrued expenses and other liabilities		1,442			6,506		4,636
Total liabilities		206,352			114,361		22,729
Net Assets	$	44,867,990		$	26,335,803	$	6,364,602
Net Assets Consist of:
Paid in capital	$	28,617,960		$	16,035,772	$	5,394,560
Accumulated net investment income		6,270			—		—
Accumulated net realized gain on securities		(199,596	)		141,174		(23,931	)
Net unrealized appreciation on investments		16,443,356			10,158,857		993,973
Net Assets	$	44,867,990		$	26,335,803	$	6,364,602
Net Assets	$	44,867,990		$	26,335,803	$	6,364,602
Shares of beneficial interest outstanding (unlimited shares of no par value authorized)		2,957,210			1,593,949		1,042,328
Net asset value per share (offering and redemption price)	$	15.17		$	16.52	$	6.11
*     Cost of Investments	$	28,516,815		$	16,258,816	$	5,367,526

The accompanying notes are an integral part of these financial statements.

16

STATEMENT OF OPERATIONS

For the Year Ended December 31, 2015

	LKCM Aquinas Value Fund			LKCM Aquinas Growth Fund			LKCM Aquinas Small Cap Fund
Investment Income:
Dividends*	$	842,174		$	355,982		$	76,739
Interest		128			84			38
Total income		842,302			356,066			76,777
Expenses:
Investment advisory fees (Note B)		447,834			263,038			73,961
Distribution expense (Note B)		124,398			73,066			18,490
Accounting and transfer agent fees and expenses		70,279			61,013			42,758
Administrative fees		42,522			27,705			19,775
Federal and state registration		25,152			21,954			16,657
Reports to shareholders		18,701			10,967			2,808
Professional fees		12,882			8,981			5,066
Trustees’ fees		8,280			5,072			1,570
Custody fees and expenses		6,382			5,957			8,514
Other		13,558			7,776			1,896
Total expenses		769,988			485,529			191,495
Less, expense waiver and/or reimbursement (Note B)		(23,599	)		(47,134	)		(80,554	)
Net expenses		746,389			438,395			110,941
Net investment income (loss)		95,913			(82,329	)		(34,164	)
Realized and Unrealized Gain (Loss) on Investments:
Net realized gain on investments		2,840,203			1,882,599			301,906
Net change in unrealized appreciation/depreciation on investments		(4,331,225	)		(1,010,548	)		(601,687	)
Net realized and unrealized gain (loss) on investments		(1,491,022	)		872,051			(299,781	)
Net Increase (Decrease) in Net Assets Resulting from Operations	$	(1,395,109	)	$	789,722		$	(333,945	)
*     Net of foreign taxes withheld	$	—		$	—		$	268

The accompanying notes are an integral part of these financial statements.

17

STATEMENTS OF CHANGES IN NET ASSETS

	LKCM Aquinas Value Fund						LKCM Aquinas Growth Fund
	Year Ended December 31, 2015			Year Ended December 31, 2014			Year Ended December 31, 2015			Year Ended December 31, 2014
Operations:
Net investment income (loss)	$	95,913		$	558,967		$	(82,329	)	$	(154,305	)
Net realized gain on investments		2,840,203			4,786,797			1,882,599			6,691,524
Net change in unrealized appreciation/depreciation on investments		(4,331,225	)		(3,575,491	)		(1,010,548	)		(6,149,001	)
Net increase (decrease) in net assets resulting from operations		(1,395,109	)		1,770,273			789,722			388,218
Dividends and Distributions to Shareholders:
Net investment income		(100,679	)		(547,931	)		—			—
Net realized gain on investments		(3,123,858	)		(4,148,241	)		(1,641,652	)		(6,673,458	)
		(3,224,537	)		(4,696,172	)		(1,641,652	)		(6,673,458	)
Net decrease in net assets resulting from Fund share transactions (Note C)		(3,164,344	)		(3,482,797	)		(3,895,863	)		(6,567,812	)
Total decrease in net assets		(7,783,990	)		(6,408,696	)		(4,747,793	)		(12,853,052	)
Net Assets:
Beginning of period		52,651,980			59,060,676			31,083,596			43,936,648
End of period*	$	44,867,990		$	52,651,980		$	26,335,803		$	31,083,596
*     Including accumulated net investment income of	$	6,270		$	11,036		$	—		$	—

The accompanying notes are an integral part of these financial statements.

18

STATEMENTS OF CHANGES IN NET ASSETS

	LKCM Aquinas Small Cap Fund
	Year Ended December 31, 2015			Year Ended December 31, 2014
Operations:
Net investment loss	$	(34,164	)	$	(104,580	)
Net realized gain on investments		301,906			1,754,393
Net change in unrealized appreciation/depreciation on investments		(601,687	)		(2,448,267	)
Net decrease in net assets resulting from operations		(333,945	)		(798,454	)
Dividends and Distributions to Shareholders:
Net realized gain on investments		(1,106,020	)		(1,153,966	)
Net increase (decrease) in net assets resulting from Fund share transactions (Note C)		375,658			(5,292,103	)
Total decrease in net assets		(1,064,307	)		(7,244,523	)
Net Assets:
Beginning of period		7,428,909			14,673,432
End of period	$	6,364,602		$	7,428,909

The accompanying notes are an integral part of these financial statements.

19

FINANCIAL HIGHLIGHTS

SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING

	LKCM Aquinas Value Fund
	Year Ended December 31, 2015			Year Ended December 31, 2014			Year Ended December 31, 2013			Year Ended December 31, 2012			Year Ended December 31, 2011
Net Asset Value – Beginning of Period	$	16.87		$	17.99		$	14.18		$	12.72		$	12.68
Net investment income		0.03			0.17	(2)		0.04	(1)		0.07	(1)		0.02	(1)
Net realized and unrealized gain (loss) on investments		(0.56	)		0.34			4.72			1.46			0.04
Total from investment operations		(0.53	)		0.51			4.76			1.53			0.06
Dividends from net investment income		(0.04	)		(0.19	)		(0.04	)		(0.07	)		(0.02	)
Distributions from net realized gains		(1.13	)		(1.44	)		(0.91	)		—			—
Total dividends and distributions		(1.17	)		(1.63	)		(0.95	)		(0.07	)		(0.02	)
Net Asset Value – End of Period	$	15.17		$	16.87		$	17.99		$	14.18		$	12.72
Total Return		-3.28%			2.73%			33.60%			12.01%			0.46%
Ratios and Supplemental Data:
Net assets, end of period (thousands)	$	44,868		$	52,652		$	59,061		$	46,902		$	42,056
Ratio of expenses to average net assets:
Before expense waiver and/or reimbursement		1.55%			1.49%			1.52%			1.54%			1.55%
After expense waiver and/or reimbursement		1.50%			1.49%			1.50%			1.50%			1.50%
Ratio of net investment income to average net assets:
Before expense waiver and/or reimbursement		0.14%			0.95%			0.21%			0.44%			0.11%
After expense waiver and/or reimbursement		0.19%			0.95%			0.23%			0.48%			0.16%
Portfolio turnover rate		11%			23%			9%			28%			29%

⁽¹⁾ Net investment income per share is calculated using the ending balance of accumulated net investment income prior to considerations of adjustments for permanent book and tax differences.

⁽²⁾ Net investment income per share represents net investment income divided by the average shares outstanding throughout the period.

	LKCM Aquinas Growth Fund
	Year Ended December 31, 2015			Year Ended December 31, 2014			Year Ended December 31, 2013			Year Ended December 31, 2012			Year Ended December 31, 2011
Net Asset Value – Beginning of Period	$	17.21		$	21.44		$	18.53		$	16.86		$	16.61
Net investment loss		(0.05	)(1)		(0.09	)(1)		(0.13	)(2)		(0.07	)(1)		(0.10	)(1)
Net realized and unrealized gain on investments		0.45			0.43			5.07			1.84			0.35
Total from investment operations		0.40			0.34			4.94			1.77			0.25
Distributions from net realized gains		(1.09	)		(4.57	)		(2.03	)		(0.10	)		—
Net Asset Value – End of Period	$	16.52		$	17.21		$	21.44		$	18.53		$	16.86
Total Return		2.19%			1.25%			26.74%			10.52%			1.51%
Ratios and Supplemental Data:
Net assets, end of period (thousands)	$	26,336		$	31,084		$	43,937		$	35,315		$	33,698
Ratio of expenses to average net assets:
Before expense waiver and/or reimbursement		1.66%			1.60%			1.58%			1.58%			1.60%
After expense waiver and/or reimbursement		1.50%			1.50%			1.50%			1.50%			1.50%
Ratio of net investment loss to average net assets:
Before expense waiver and/or reimbursement		(0.44)%			(0.51)%			(0.69)%			(0.44)%			(0.71)%
After expense waiver and/or reimbursement		(0.28)%			(0.41)%			(0.61)%			(0.36)%			(0.61)%
Portfolio turnover rate		21%			30%			44%			42%			50%

⁽¹⁾ Net investment loss per share is calculated using the ending balance of accumulated net investment loss prior to considerations of adjustments for permanent book and tax differences.

⁽²⁾  Net investment loss per share represents net investment loss divided by the average shares outstanding throughout the period.

The accompanying notes are an integral part of these financial statements.

20

FINANCIAL HIGHLIGHTS

SELECTED DATA FOR EACH SHARE OF CAPITAL STOCK OUTSTANDING

	LKCM Aquinas Small Cap Fund
	Year Ended December 31, 2015			Year Ended December 31, 2014			Year Ended December 31, 2013			Year Ended December 31, 2012			Year Ended December 31, 2011
Net Asset Value – Beginning of Period	$	7.66		$	9.39		$	7.34		$	7.35		$	7.07
Net investment loss		(0.04	)(2)		(0.07	)(2)		(0.07	)(1)		(0.00	)(1)(3)		(0.06	)(1)
Net realized and unrealized gain (loss) on investments		(0.30	)		(0.33	)		2.45			0.59			0.34
Total from investment operations		(0.34	)		(0.40	)		2.38			0.59			0.28
Distributions from net realized gains		(1.21	)		(1.33	)		(0.33	)		(0.60	)		—
Net Asset Value – End of Period	$	6.11		$	7.66		$	9.39		$	7.34		$	7.35
Total Return		-4.74%			-4.54%			32.41%			8.16%			3.96%
Ratios and Supplemental Data:
Net assets, end of period (thousands)	$	6,365		$	7,429		$	14,673		$	11,684		$	11,037
Ratio of expenses to average net assets:
Before expense waiver and/or reimbursement		2.59%			2.27%			2.25%			2.32%			2.44%
After expense waiver and/or reimbursement		1.50%			1.50%			1.50%			1.50%			1.50%
Ratio of net investment loss to average net assets:
Before expense waiver and/or reimbursement		(1.55)%			(1.55)%			(1.54)%			(0.84)%			(1.81)%
After expense waiver and/or reimbursement		(0.46)%			(0.78)%			(0.79)%			(0.02)%			(0.87)%
Portfolio turnover rate		72%			66%			60%			82%			70%

⁽¹⁾ Net investment loss per share is calculated using the ending balance of accumulated net investment loss prior to considerations of adjustments for permanent book and tax differences.

⁽²⁾  Net investment loss per share represents net investment loss divided by the average shares outstanding throughout the period.

⁽³⁾  Less than $(0.005).

The accompanying notes are an integral part of these financial statements.

21

LKCM FUNDS

NOTES TO THE FINANCIAL STATEMENTS

A.    Organization and Significant Accounting Policies:    LKCM Funds (the “Trust”) is registered under the Investment Company Act of 1940 (“1940 Act”) as an open-end, management investment company. The Trust was organized as a Delaware statutory trust on February 10, 1994 and consists of eight diversified series, three of which are presented herein and include the LKCM Aquinas Value Fund, LKCM Aquinas Growth Fund and LKCM Aquinas Small Cap Fund (collectively, the “Funds”), the assets of which are invested in separate, independently managed portfolios. On July 11, 2005, the Funds acquired the assets and assumed the liabilities of the Aquinas Funds. The Funds are subject to expenses pursuant to the Rule 12b-1 plan described in Note B. Each Fund charges a 1% redemption fee for redemptions on Fund shares held for less than 30 days, unless otherwise determined by the Funds in their discretion.

The LKCM Aquinas Value Fund seeks to maximize long-term capital appreciation, while incorporating Catholic values investing principles in the investment process. The LKCM Aquinas Value Fund seeks to achieve its investment objective by investing under normal circumstances in equity securities of companies that Luther King Capital Management Corporation (the “Adviser”) believes to be undervalued relative to a company’s earnings. The LKCM Aquinas Growth Fund seeks to maximize long-term capital appreciation, while incorporating Catholic values investing principles in the investment process. The LKCM Aquinas Growth Fund seeks to achieve its investment objective by investing under normal circumstances in equity securities of companies that the Adviser believes generally have above-average growth in revenue and/or earnings, above-average returns on shareholders’ equity, and/or potential for above-average capital appreciation. The LKCM Aquinas Small Cap Fund seeks to maximize long-term capital appreciation, while incorporating Catholic values investing principles in the investment process. The LKCM Aquinas Small Cap Fund seeks to achieve its investment objective by investing under normal circumstances at least 80% of its net assets in equity securities of smaller companies (those with market capitalizations at the time of investment between $600 million and $4.5 billion) that the Adviser believes are likely to have above-average growth in revenue and/or earnings and potential for above-average capital appreciation.

The Funds practice socially responsible investing within the framework provided by the United States Conference of Catholic Bishops’ Socially Responsible Investing Guidelines (the “Guidelines”). Each Fund’s investment approach incorporates the Guidelines through a combination of screening portfolio companies based on criteria set forth in the Guidelines, dialogue with companies whose policies and practices may conflict with the Guidelines, and/or potentially excluding from each Fund’s portfolio the securities of those companies that are unwilling to alter their policies and practices over a reasonable period of time. The Adviser monitors companies selected for the Funds for policies on various issues contemplated by the Guidelines. If a Fund invests in a company whose policies and practices are inconsistent with the Guidelines, the Adviser may attempt to influence the company, sell the company’s securities or otherwise exclude future investments in such company.

The following is a summary of significant accounting policies followed by the Funds in preparation of the financial statements. The Funds are investment companies and, accordingly, follow the investment company accounting and reporting guidance of the Financial Accounting Standards Board Accounting Standards Codification Topic 946, Investment Companies.

1.    Security Valuation:    Equity securities listed or traded on a U.S. securities exchange for which market quotations are readily available are valued at the last quoted sale price on the exchange on which the security is primarily traded. Nasdaq Global Market securities are valued at the Nasdaq Official Closing Price (“NOCP”). Unlisted U.S. securities and listed U.S. securities not traded on a particular valuation date are valued at the mean of the most recent quoted bid and ask price on the relevant exchanges or markets. Equity securities listed on a foreign exchange for which market quotations are readily available are valued at the last quoted sales price on the exchange on which the security is primarily traded. Debt securities are normally valued at the mean of the closing bid and ask price and/or by using a combination of broker quotations or evaluated prices provided by an independent pricing service. Other assets and securities for which no market or broker quotations or evaluated prices are readily available (including restricted securities) are valued in good faith at fair value using guidelines approved by the Board of Trustees. The Board has adopted specific guidelines and procedures for valuing portfolio securities and delegated their implementation to the Adviser. The guidelines and procedures authorize the Adviser to make determinations regarding the fair value of a portfolio security and to report such determinations to the Board of Trustees. The Funds may use prices provided by independent pricing services to assist in the fair valuation of the Funds’ portfolio securities.

The Trust has adopted accounting standards which establish an authoritative definition of fair value and set out a hierarchy for measuring fair value. These standards require additional disclosures about the various inputs and valuation techniques used to develop the measurements of fair value and a discussion of changes in valuation techniques and related inputs during the period. These standards define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy is organized into three levels based upon the assumptions (referred to as “inputs”) used in pricing the asset or liability. These standards state that “observable inputs” reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from independent sources and “unobservable inputs” reflect an entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability. These inputs are summarized in the three broad levels listed below.

22

Level 1	–	Quoted unadjusted prices for identical instruments in active markets to which the Trust has access at the date of measurement.
Level 2	–	Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. Level 2 inputs are those in markets for which there are few transactions, the prices are not current, little public information exists or instances where prices vary substantially over time or among brokered market makers.
Level 3	–	Model derived valuations in which one or more significant inputs or significant value drivers are unobservable. Unobservable inputs are those inputs that reflect the Trust’s own assumptions that market participants would use to price the asset or liability based on the best available information.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. As of December 31, 2015, the Funds’ assets carried at fair value were classified as follows:

LKCM Aquinas Value Fund
Description	Level 1		Level 2		Level 3		Total
Common Stocks	$	42,725,358	$	—	$	—	$	42,725,358
Money Market Funds		2,234,813		—		—		2,234,813
Total Investments*	$	44,960,171	$	—	$	—	$	44,960,171
LKCM Aquinas Growth Fund
Description	Level 1		Level 2		Level 3		Total
Common Stocks	$	25,730,001	$	—	$	—	$	25,730,001
Money Market Funds		687,672		—		—		687,672
Total Investments*	$	26,417,673	$	—	$	—	$	26,417,673
LKCM Aquinas Small Cap Fund
Description	Level 1		Level 2		Level 3		Total
Common Stocks	$	6,118,553	$	—	$	—	$	6,118,553
Money Market Funds		242,946		—		—		242,946
Total Investments*	$	6,361,499	$	—	$	—	$	6,361,499

* Additional information regarding the industry classifications of these investments is disclosed in the Schedule of Investments.

There were no transfers into or out of Level 1, Level 2 or Level 3 fair value measurements during the reporting period. Transfers between levels are recognized at the end of the reporting period.

2.    Federal Income Taxes:    The Funds have elected to be treated as “regulated investment companies” under Subchapter M of the Internal Revenue Code and each Fund intends to distribute all of its investment company net taxable income and net capital gains to shareholders. Therefore, no federal income tax provision is recorded.

3.    Distributions to Shareholders:    The LKCM Aquinas Value, LKCM Aquinas Growth and LKCM Aquinas Small Cap Funds generally intend to pay dividends and net capital gain distributions, if any, at least on an annual basis.

4.    Foreign Securities:    Investing in securities of foreign companies and foreign governments involves special risks and considerations not typically associated with investing in U.S. companies and securities of the U.S. government. These risks include devaluation of currencies and future adverse political and economic developments. Moreover, securities of many foreign companies and foreign governments and their markets may be less liquid and their prices more volatile than those of securities of comparable U.S. companies and securities of the U.S. government.

5.    Expense Allocation:    Expenses incurred by the Funds are allocated among the Funds based upon (i) relative average net assets, (ii) a specific identification basis as incurred, or (iii) evenly among the Funds, depending on the nature of the expense.

6.    Use of Estimates:    The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

7.    Guarantees and Indemnifications:    In the normal course of business, the Funds enter into contracts with service providers that contain general indemnification clauses. The Funds’ maximum exposure under these arrangements is unknown as this would involve future claims against the Funds that have not yet occurred. Based on experience, the Funds expect the risk of loss to be remote.

23

8.    Security Transactions and Investment Income:    Security and shareholder transactions are recorded on the trade date. Realized gains and losses on sales of investments are calculated on the identified cost basis. Dividend income and dividends and distributions to shareholders are recorded on the ex-dividend date. Withholding taxes on foreign dividends have been provided for in accordance with the Funds’ understanding of the applicable country’s tax rules and rates. Interest income is recognized on the accrual basis. All discounts and premiums are amortized based on the effective interest method for tax and financial reporting purposes. The Funds may hold the securities of real estate investment trusts (“REITs”). Distributions from such investments may include income, capital gains and return of capital.

9.    Other:    Generally accepted accounting principles require that certain components of net assets be adjusted to reflect permanent differences between financial and tax reporting. These reclassifications have no effect on net assets or net asset values per share.

Accordingly, at December 31, 2015, reclassifications were as follows:

	LKCM Aquinas Value Fund			LKCM Aquinas Growth Fund			LKCM Aquinas Small Cap Fund
Accumulated net investment income	$	—		$	82,329		$	34,164
Accumulated Loss		(557,131	)		(246,019	)		(321,757	)
Paid in capital		557,131			163,690			287,593

10.    Restricted and Illiquid Securities:    The Funds are permitted to invest in securities that are subject to legal or contractual restrictions on resale or are illiquid. Restricted securities generally may be resold in transactions exempt from registration. A security may be considered illiquid if it lacks a readily available market or if its valuation has not changed for a certain period of time. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at the current valuation may be difficult.

B.    Investment Advisory and Other Agreements:    Luther King Capital Management Corporation (the “Adviser”) serves as the investment adviser to the Funds under an Investment Advisory Agreement (the “Agreement”). The Adviser receives a fee, computed daily and payable quarterly, at the annual rates presented below as applied to each Fund’s average daily net assets. The Adviser has contractually agreed to waive all or a portion of its management fee and/or reimburse expenses of the Funds through April 30, 2016 in order to limit each Fund’s operating expenses to the annual cap rates identified below. This expense limitation excludes interest, taxes, brokerage commissions, indirect fees and expenses relating to investments in other investment companies, including money market funds, and extraordinary expenses. For the year ended December 31, 2015, the Adviser waived the following management fees and/or reimbursed expenses to meet its expense cap obligations:

	LKCM Aquinas Value Fund		LKCM Aquinas Growth Fund		LKCM Aquinas Small Cap Fund
Annual Management Fee Rate		0.90%		0.90%		1.00%
Annual Cap on Expenses		1.50%		1.50%		1.50%
Fees Waived and/or Expenses Reimbursed in 2015		$23,599		$47,134		$80,554

U.S. Bancorp Fund Services, LLC serves as transfer agent and administrator for the Trust and serves as accounting services agent for the Funds. U.S. Bank, N.A. serves as custodian for the Funds.

Distribution services are performed pursuant to a distribution contract with Quasar Distributors, LLC, the Trust’s principal underwriter.

The LKCM Funds have adopted a Rule 12b-1 plan for the LKCM Aquinas Value, LKCM Aquinas Growth and LKCM Aquinas Small Cap Funds, under which each Fund may pay up to 1.00% of its average daily net assets for distribution and other services. However, the Board of Trustees has currently only authorized a fee of 0.25% of the average daily net assets for the LKCM Aquinas Value, LKCM Aquinas Growth and LKCM Aquinas Small Cap Funds. For the year ended December 31, 2015, fees incurred by the LKCM Aquinas Value, LKCM Aquinas Growth and LKCM Aquinas Small Cap Funds pursuant to the 12b-1 Plan were $124,398, $73,066, and $18,490, respectively.

24

C.    Fund Shares:    At December 31, 2015, there was an unlimited number of shares of beneficial interest, no par value, authorized. The following table summarizes the activity in shares of each Fund:

Aquinas Value Fund
	Year Ended December 31, 2015						Year Ended December 31, 2014
	Shares			Amount			Shares			Amount
Shares sold		565,895		$	9,525,123			481,234		$	8,649,355
Shares issued to shareholders in reinvestment of distributions		191,725			2,958,315			251,947			4,303,201
Shares redeemed		(921,665	)		(15,647,910	)		(895,608	)		(16,435,642	)
Redemption fee					128						289
Net decrease		(164,045	)	$	(3,164,344	)		(162,427	)	$	(3,482,797	)
Shares Outstanding:
Beginning of period		3,121,255						3,283,682
End of period		2,957,210						3,121,255
Aquinas Growth Fund
	Year Ended December 31, 2015						Year Ended December 31, 2014
	Shares			Amount			Shares			Amount
Shares sold		161,029		$	2,800,797			141,239		$	2,972,887
Shares issued to shareholders in reinvestment of distributions		86,945			1,464,551			353,769			6,183,269
Shares redeemed		(460,277	)		(8,161,230	)		(737,779	)		(15,724,066	)
Redemption fee					19						98
Net decrease		(212,303	)	$	(3,895,863	)		(242,771	)	$	(6,567,812	)
Shares Outstanding:
Beginning of period		1,806,252						2,049,023
End of period		1,593,949						1,806,252
Aquinas Small Cap Fund
	Year Ended December 31, 2015						Year Ended December 31, 2014
	Shares			Amount			Shares			Amount
Shares sold		298,922		$	2,369,397			238,715		$	2,172,452
Shares issued to shareholders in reinvestment of distributions		167,677			1,046,300			135,998			1,060,787
Shares redeemed		(393,895	)		(3,040,051	)		(967,697	)		(8,525,990	)
Redemption fee					12						648
Net increase (decrease)		72,704		$	375,658			(592,984	)	$	(5,292,103	)
Shares Outstanding:
Beginning of period		969,624						1,562,608
End of period		1,042,328						969,624

D.    Security Transactions:    Purchases and sales of investment securities, other than short-term investments, for the year ended December 31, 2015 were as follows:

	Purchases				Sales
	U.S. Government		Other		U.S. Government		Other
LKCM Aquinas Value Fund	$	—	$	5,250,858	$	—	$	12,966,356
LKCM Aquinas Growth Fund		—		6,036,105		—		12,331,929
LKCM Aquinas Small Cap Fund		—		5,056,585		—		6,084,962

25

E.    Tax Information:    At December 31, 2015, the components of accumulated earnings (losses) on a tax basis were as follows:

	LKCM Aquinas Value Fund			LKCM Aquinas Growth Fund			LKCM Aquinas Small Cap Fund
Cost of Investments	$	28,516,815		$	16,259,715		$	5,367,526
Gross Unrealized Appreciation	$	16,845,859		$	10,221,144		$	1,137,124
Gross Unrealized Depreciation		(402,503	)		(63,186	)		(143,151	)
Net Unrealized Appreciation	$	16,443,356		$	10,157,958		$	993,973
Undistributed Ordinary Income	$	6,270		$	—		$	—
Undistributed Long-Term Capital Gain		—			142,073			—
Total Distributable Earnings	$	6,270		$	142,073		$	—
Other Accumulated Loss	$	(199,596	)	$	—		$	(23,931	)
Total Accumulated Gains	$	16,250,030		$	10,300,031		$	970,042

The difference between book-basis and tax-basis unrealized appreciation, if any, is attributable primarily to the tax deferral of losses on wash sales.

To the extent the Funds realize future net capital gains, taxable distributions will be reduced by any unused capital loss carryforwards as permitted by the Internal Revenue Code. The Funds currently have no unused capital loss carryforwards.

At December 31, 2015, the LKCM Aquinas Value Fund and the LKCM Aquinas Small Cap Fund deferred, on a tax basis, post-October capital losses of $199,596 and $23,931, respectively.

The tax components of dividends paid during the periods shown below were as follows:

	Year Ended December 31, 2015				Year Ended December 31, 2014
	Ordinary Income		Long-Term Capital Gains		Ordinary Income		Long-Term Capital Gains
LKCM Aquinas Value Fund	$	100,679	$	3,123,858	$	550,565	$	4,145,607
LKCM Aquinas Growth Fund		—		1,641,652		—		6,673,458
LKCM Aquinas Small Cap Fund		—		1,106,020		—		1,153,966

The Funds designated as long-term capital gain dividend, pursuant to Internal Revenue Code Section 852(b)(3), the amount necessary to reduce earnings and profits of the Funds related to net capital gain to zero for the tax years ended December 31, 2015 and 2014. The Funds designated earnings and profits distributed to shareholders upon the redemption of shares during 2015 in determining undistributed net capital gains as of December 31, 2015.

The Trust has adopted financial reporting rules regarding recognition and measurement of tax positions taken or expected to be taken on a tax return. The Trust has reviewed all open tax years and major jurisdictions and concluded that there is no impact on the Funds’ financial position or results of operations. Tax years that remain open to examination by major tax jurisdictions include tax years ended December 31, 2012 through December 31, 2015. There is no tax liability resulting from unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken on tax returns as of December 31, 2015. The Funds are not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. If applicable, the Funds would recognize interest accrued related to unrecognized tax benefits in “interest expense” and penalties in “other expense” on the statement of operations.

F.    Recent Accounting Pronouncements:    In May 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-07 “Disclosure for Investments in Certain Entities that Calculate Net Asset Value per Share (or Its Equivalent)”. The amendments in ASU No. 2015-07 remove the requirement to categorize within the fair value hierarchy investments measured using the NAV practical expedient. The ASU also removes certain disclosure requirements for investments that qualify, but do not utilize, the NAV practical expedient. The amendments in the ASU are effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Management is currently evaluating the impact these changes will have on the Fund’s financial statements and related disclosures.

G.    Subsequent Events:    In preparing these financial statements, the Trust has evaluated events after December 31, 2015 and determined that there were no significant subsequent events that would require adjustment to or additional disclosure in these financial statements.

26

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Trustees of LKCM Funds:

We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of LKCM Aquinas Funds (the “Funds”) comprising the LKCM Aquinas Value Fund, LKCM Aquinas Growth Fund, and LKCM Aquinas Small Cap Fund as of December 31, 2015, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Funds are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Funds’ internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2015, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of each of the portfolios constituting the LKCM Aquinas Funds as of December 31, 2015, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended in conformity with accounting principles generally accepted in the United States of America.

Milwaukee, Wisconsin

February 19, 2016

27

LKCM FUNDS

ADDITIONAL INFORMATION

December 31, 2015

Availability of Proxy Voting Information:    A description of the policies and procedures that the Funds use to determine how to vote proxies relating to their portfolio securities, as well as information regarding how the Funds voted proxies relating to portfolio securities during the most recent 12-month period ended June 30, is available without charge, upon request, by calling toll-free 1-800-688-LKCM or on the SEC website at http://www.sec.gov.

The actual voting records relating to portfolio securities during the twelve month period ended June 30 (as filed with the SEC on Form N-PX) are available without charge, upon request, by calling the Funds toll free at 1-800-688-LKCM or by accessing the SEC’s website at www.sec.gov.

Availability of Quarterly Portfolio Schedule:    The Funds’ are required to file complete schedules of portfolio holdings with the SEC for the first and third fiscal quarters on Form N-Q. Once filed, the Funds’ Form N-Q is available without charge upon request on the SEC’s website (http://www.sec.gov) and is also available by calling 1-800-688-LKCM. You can also review and copy the Funds’ Form N-Q by visiting the SEC’s Public Reference Room in Washington, DC (information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330).

28

Information about the Funds’ Trustees and Officers:

The business and affairs of the Funds are managed under the direction of the Funds’ Board of Trustees. Information pertaining to the Trustees of the Funds is set forth below. The Statement of Additional Information includes additional information about the Funds’ Trustees and officers and is available, without charge, upon request by calling 1-800-688-LKCM.

Name, Address and Age	Position(s) Held with the Trust	Term of Office & Length of Time Served(1)	Principal Occupation During Past Five Years	Number of Portfolios in Fund Complex Overseen by Trustee	Other Directorships Held by Trustee
Disinterested Trustees:
H. Kirk Downey 301 Commerce Street Suite 1600 Fort Worth, TX 76102 Year of Birth: 1942	Chairman of the Board of Trustees Trustee	Since 2005 Since 1994	President and CEO, Texas Systems, LLC and CEO, Texas learning systems LLC since 1999 (education companies); Dean, M.J. Neeley School of Business, Texas Christian University Business School from 1987 to 1999.	8	AZZ Incorporated
Earle A. Shields, Jr. 301 Commerce Street Suite 1600 Fort Worth, TX 76102 Year of Birth: 1920	Trustee	Since 1994	Consultant; formerly Consultant for NASDAQ Corp. and Vice President, Merrill Lynch & Co., Inc.	8	None
Richard J. Howell 301 Commerce Street Suite 1600 Fort Worth, TX 76102 Year of Birth: 1942	Trustee Chairman of the Audit and Compliance Committee	Since 2005 Since 2008	CPA; Adjunct Faculty at SMU Cox School of Business from 2004 to 2009; Consulting Services, since 2002; Audit Partner, Arthur Andersen LLP from 1974 to 2002.	8	Red Robin Gourmet Burgers, Inc.
Larry J. Lockwood 301 Commerce Street Suite 1600 Fort Worth, TX 76102 Year of Birth: 1953	Trustee	Since 2013	C.R. Williams Professor of Finance, Stan Block Endowed Chair in Finance, Department of Finance, Neeley School of Business, Texas Christian University since 1994.	8	None
Interested Trustees:
J. Luther King, Jr.(2) 301 Commerce Street Suite 1600 Fort Worth, TX 76102 Year of Birth: 1940	Trustee, President and Chief Executive Officer	Since 1994	Chairman, President and Director, Luther King Capital Management Corporation since 1979.	8	Tyler Technologies, Inc.
Steve R. Purvis(2) 301 Commerce Street Suite 1600 Fort Worth, TX 76102 Year of Birth: 1964	Trustee Vice President	Since 2013      Since 2000	Principal, Luther King Capital Management since 2004, Vice President and Portfolio Manager, Luther King Capital Management since 1996.	8	AZZ Incorporated

⁽¹⁾  Each Trustee holds office during the lifetime of the Trust until that individual resigns, retires or is otherwise removed or replaced.

⁽²⁾  Messrs. King and Purvis are each considered an “interested person” of the Trust (as defined in the 1940 Act) because of their affiliation with the Adviser.

29

Information about the Funds’ Trustees and Officers, Continued

Name, Address and Age	Position(s) Held with the Trust	Term of Office & Length of Time Served(1)	Principal Occupation During Past Five Years
Officers:
J. Luther King, Jr.(2) 301 Commerce Street Suite 1600 Fort Worth, TX 76102 Year of Birth: 1940	Trustee, President and Chief Executive Officer	Since 1994	Chairman, President and Director, Luther King Capital Management Corporation since 1979.
Steven R. Purvis(2) 301 Commerce Street Suite 1600 Fort Worth, TX 76102 Year of Birth: 1964	Trustee Vice President	Since 2013 Since 2000	Principal, Luther King Capital Management since 2004, Vice President and Portfolio Manager, Luther King Capital Management since 1996.
Paul W. Greenwell 301 Commerce Street Suite 1600 Fort Worth, TX 76102 Year of Birth: 1950	Vice President	Since 1996	Principal, Luther King Capital Management since 1986, Vice President and Portfolio Manager, Luther King Capital Management since 1983.
Richard Lenart 301 Commerce Street Suite 1600 Fort Worth, TX 76102 Year of Birth: 1966	Secretary and Treasurer	Since 2006	Luther King Capital Management since 2005.
Jacob D. Smith 301 Commerce Street Suite 1600 Fort Worth, TX 76102 Year of Birth: 1974	Chief Financial Officer Chief Compliance Officer	Since 2010 Since 2006	Chief Financial Officer since 2010, General Counsel and Chief Compliance Officer, Luther King Capital Management since 2006. Principal, Luther King Capital Management since 2013.

⁽¹⁾  Each Trustee holds office during the lifetime of the Trust until that individual resigns, retires or is otherwise removed or replaced.

⁽²⁾  Messrs. King and Purvis are each considered an “interested person” of the Trust (as defined in the 1940 Act) because of their affiliation with the Adviser.

30

LKCM FUNDS

PRIVACY NOTICE

Our Commitment to Your Privacy

At LKCM Funds, we are committed to safeguarding the confidentiality and privacy of nonpublic personal information about our current and former shareholders. This privacy notice describes the policies and procedures we have implemented to protect the privacy of your nonpublic personal information as well as the sources through which we may obtain nonpublic personal information about you.

How We Protect Your Nonpublic Personal Information

Protecting your nonpublic personal information is an important priority at LKCM Funds. Accordingly, we have implemented policies and procedures designed to safeguard your nonpublic personal information, such as your tax identification number, account and investment history, account numbers, account balances and nonpublic contact information, from unauthorized access. Pursuant to these policies and procedures, we maintain various physical, technological, and administrative safeguards to protect the security and confidentiality of your nonpublic personal information, and we adapt these safeguards to respond to evolving technological and other standards.

We do not disclose nonpublic personal information about you to outside firms, organizations or individuals except as authorized by you or your representatives or as required or permitted by law. We may disclose nonpublic personal information about you to nonaffiliated third parties, such as custodians, brokers, auditors, accountants, and systems and administrative service providers, in connection with the services we provide to you or on your behalf. When we provide nonpublic personal information about you to nonaffiliated third parties for these purposes, we expect them to safeguard your nonpublic personal information, use your nonpublic personal information only for the intended purposes and otherwise abide by applicable law.

How We Obtain Your Nonpublic Personal Information

We collect nonpublic personal information about you from various sources, including documents, new account applications and other information that you or your representatives, custodians, attorneys, accountants or similar parties provide to us, communications that we have with you or your representatives, custodians, attorneys, accountants or similar parties, and documents and other information related to your accounts or investment experience with us.

Please do not hesitate to contact Jacob D. Smith, our Chief Compliance Officer, if you have any questions regarding the measures we have implemented to protect the privacy of your nonpublic personal information.

U.S. Bancorp Fund Services, LLC

P.O. Box 701

Milwaukee, WI 53201-0701

LKCM FUNDS

P.O. Box 701

Milwaukee, WI 53201-0701

Officers and Trustees
J. Luther King, Jr., CFA, CIC	H. Kirk Downey	Larry J. Lockwood
Trustee, President	Chairman of the Board	Trustee
Paul W. Greenwell	Richard J. Howell	Richard Lenart
Vice President	Trustee	Secretary & Treasurer
Steven R. Purvis, CFA	Earle A. Shields, Jr.	Jacob D. Smith
Trustee, Vice President	Trustee	Chief Financial Officer
		Chief Compliance Officer
Investment Adviser
Luther King Capital Management Corporation
301 Commerce Street, Suite 1600
Fort Worth, TX 76102
Administrator, Transfer Agent, Dividend Paying Agent & Shareholder Servicing Agent
U.S. Bancorp Fund Services, LLC
P.O. Box 701
Milwaukee, WI 53201-0701
Custodian
U.S. Bank, N.A.
1555 N. River Center Drive, Suite 302
Milwaukee, WI 53212
Independent Registered Public Accounting Firm
Deloitte & Touche LLP
555 E. Wells St., Suite 1400
Milwaukee, WI 53202
Distributor
Quasar Distributors, LLC
615 E. Michigan Street
Milwaukee, WI 53202

Item 2. Code of Ethics.

The registrant has adopted a code of ethics that applies to the registrant’s principal executive officer and principal financial officer. The registrant has not made any amendments to its code of ethics during the period covered by this report. The registrant has not granted any waivers from any provisions of the code of ethics during the period covered by this report.

A copy of the registrant’s Code of Ethics is filed herewith.

Item 3. Audit Committee Financial Expert.

The registrant’s board of trustees has determined that there is at least one audit committee financial expert serving on its audit committee. Richard J. Howell is the “audit committee financial expert” and is considered to be “independent” as each term is defined in Item 3 of Form N-CSR.

Item 4. Principal Accountant Fees and Services.

The registrant has engaged its principal accountant to perform audit services, audit-related services, tax services and other services during the past two fiscal years. “Audit services” refer to performing an audit of the registrant’s annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years. “Audit-related services” refer to the assurance and related services by the principal accountant that are reasonably related to the performance of the audit. “Tax services” refer to professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning. The following table details the aggregate fees billed or expected to be billed for each of the last two fiscal years for audit fees, audit-related fees, tax fees and other fees by the principal accountant.

	FYE 12/31/2015		FYE 12/31/2014
Audit Fees	$	146,700	$	147,000
Audit-Related Fees	$	0	$	0
Tax Fees	$	34,550	$	30,625
All Other Fees	$	0	$	0

The audit committee has adopted pre-approval policies and procedures that require the audit committee to pre-approve all audit and non-audit services of the registrant, including services provided to any entity affiliated with the registrant.

The percentage of fees billed by Deloitte & Touche LLP applicable to non-audit services pursuant to waiver of pre-approval requirement were as follows:

	FYE 12/31/2015			FYE 12/31/2014
Audit-Related Fees		0	%		0	%
Tax Fees		0	%		0	%
All Other Fees		0	%		0	%

1

All of the principal accountant’s hours spent on auditing the registrant’s financial statements were attributed to work performed by full-time permanent employees of the principal accountant. The following table indicates the non-audit fees billed or expected to be billed by the registrant’s accountant for services to the registrant and to the registrant’s investment adviser (including any entity controlling, controlled by, or under common control with the adviser) for the last two years. The audit committee of the board of trustees has considered whether the provision of non-audit services that were rendered to the registrant’s investment adviser is compatible with maintaining the principal accountant’s independence and has concluded that the provision of such non-audit services by the accountant has not compromised the accountant’s independence.

Non-Audit Related Fees	FYE 12/31/2015		FYE 12/31/2014
Registrant	$	34,550	$	30,625
Registrant’s Investment Adviser	$	0	$	0

Item 5. Audit Committee of Listed Registrants.

Not applicable to registrants who are not listed issuers (as defined in Rule 10A-3 under the Securities Exchange Act of 1934).

Item 6. Investments.

(a) Schedule of Investments is included as part of the report to shareholders filed under Item 1 of this Form.

(b) Not applicable.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Not applicable to open-end investment companies.

Item 8. Portfolio Managers of Closed-End Management Investment Companies.

Not applicable to open-end investment companies.

Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

Not applicable to open-end investment companies.

Item 10. Submission of Matters to a Vote of Security Holders.

There have been no material changes to the procedures by which shareholders may recommend nominees to the registrant’s board of trustees.

2

Item 11. Controls and Procedures.

(a) The registrant’s Chief Executive Officer and Chief Financial Officer 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 reasonably designed to ensure that information required to be disclosed in this report is recorded, processed, summarized and reported within the required time periods and that information required to be disclosed by the registrant in reports that it files or submits on Form N-CSR is accumulated and communicated to the registrant’s management, including its principal executive and financial officers, as appropriate to allow timely decisions regarding required disclosure.

(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 have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 12. Exhibits.

(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. Filed herewith.

(2) A separate certification for each principal executive and principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Filed herewith.

(3) Any written solicitation to purchase securities under Rule 23c-1 under the Act sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons. Not applicable to open-end investment companies.

(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Furnished herewith.

3

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

(Registrant) LKCM Funds
By (Signature and Title	/s/ Luther King
	J. Luther King, Jr., President

Date 2/25/16

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

By (Signature and Title)	/s/ Luther King
	J. Luther King, Jr., President

Date 2/25/16

By (Signature and Title)	/s/ Jacob D. Smith
	Jacob D. Smith, Chief Financial Officer

Date 2/25/16

4

EX-99.CODE

LKCM FUNDS

CODE OF ETHICS FOR CHIEF EXECUTIVE OFFICER, CHIEF FINANCIAL OFFICER AND TREASURER

1. Covered Officers and Purposes of this Code

This code of ethics (“Code”) applies to the Chief Executive Officer, Chief Financial Officer and the Treasurer (the “Covered Officers”) of the LKCM Funds (the “Trust”). The Code serves to promote:

(a) honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;

(b) full, fair, accurate, timely and understandable disclosure in reports and documents that a registrant files with, or submits to, the Securities and Exchange Commission (“SEC”) and in other public communications made by the Trust;

(c) compliance with applicable laws and governmental rules and regulations;

(d) the prompt internal reporting of violations of the Code to an appropriate person or persons identified in the Code; and

(e) accountability for adherence to the Code.

Each Covered Officer should adhere to a high standard of business ethics and should be sensitive to situations that may give rise to actual as well as apparent conflicts of interest.

2. Covered Officers Should Resolve Ethically Any Actual or Apparent Conflicts of Interest

A “conflict of interest” occurs when a Covered Officer’s private interest interferes with the interests of, or his or her service to, the Trust. For example, a conflict of interest would arise if a Covered Officer, or a member of his or her family, receives improper personal benefits as a result of his position with the Trust.

Certain conflicts of interest arise out of the relationships between Covered Officers and the Trust and already are subject to conflict of interest provisions in the Investment Company Act of 1940, as amended (“1940 Act”), and the Investment Advisers Act of 1940, as amended (“Advisers Act”). For example, Covered Officers may not engage individually in certain transactions (such as the purchase or sale of securities or other property) with the Trust because of their status as “affiliated persons” of the Trust.

Conflicts also may arise from a Covered Officer’s position or employment at Luther King Capital Management Corporation (“LKCM”) and his or her position with the Trust. This Code recognizes that the Covered Officers, in the normal course of their duties (whether formally for the Trust or for LKCM, or for both), will be involved in establishing policies and implementing decisions that will have different effects on LKCM and the Trust. The participation of the Covered Officers in such activities is inherent in the contractual relationship between the Trust

and LKCM and is consistent with the performance by the Covered Officers of their duties as officers of the Trust. Thus, if performed in conformity with the provisions of the 1940 Act and the Advisers Act, such activities will be deemed to have been handled ethically.

Other conflicts of interest are covered by the Code, even if such conflicts of interest are not subject to provisions in the 1940 Act and the Advisers Act. The following list provides examples of conflicts of interest under the Code, but Covered Officers should keep in mind that these examples are not exhaustive. The overarching principle is that the personal interest of a Covered Officer should not be placed improperly before the interest of the Trust. Thus, a Covered Officer should not:

(a) use personal influence or personal relationships improperly to influence investment decisions or financial reporting by the Trust whereby the Covered Officer would benefit personally to the detriment of the Trust; or

(b) cause the Trust to take action, or fail to take action, for the personal benefit of the Covered Officer, rather than the benefit of the Trust.

At times, certain situations may arise that may, or may not be, considered conflicts of interest under this Code. Covered Officers are encouraged to discuss such situations with legal counsel to the Trust if they are concerned that the situation poses a conflict of interest to him or her. Examples of these types of situations include:

(a) service as director on the board of any public or private company;

(b) the receipt of any non-nominal gifts;

(c) the receipt of any entertainment from any company with which the Trust has current or prospective business dealings unless such entertainment is business-related, reasonable in cost, appropriate as to time and place, and not so frequent as to raise any question of impropriety;

(d) any ownership interest in, or any consulting or employment relationship with, any of the Trusts’ service providers, other than LKCM, or any affiliated person thereof; and

(e) a direct or indirect financial interest in commissions, transaction charges or spreads paid by the Trust for effecting portfolio transactions or for selling or redeeming shares other than an interest arising from the Covered Officer’s employment, such as compensation or equity ownership.

3. Disclosure and Compliance

It is Trust policy to make full, fair, accurate, timely and understandable disclosure in compliance with all applicable laws and regulations in all reports and documents that the Trust files with, or submits to, the Securities and Exchange Commission and in all other public communications made by the Trust. Covered Officers are required to promote compliance with this policy by all employees and to abide by Trust standards, policies and procedures designed to promote compliance with this policy. Thus, a Covered Officer shall

(a) familiarize himself or herself with the disclosure requirements generally applicable to the Trust;

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(b) not knowingly misrepresent, or cause others to misrepresent, facts regarding the Trust to others, whether within or outside the Trust, including to the Trust’s Trustees and auditors, and to governmental regulators and self-regulatory organizations;

(c) to the extent appropriate, within his or her area of responsibility, consult with other officers and employees of the Trust and LKCM with the goal of promoting full, fair, accurate, timely and understandable disclosure in the reports and documents the Trust files with, or submit to, the SEC and in other public communications made by the Trust; and

(d) promote compliance with the standards and restrictions imposed by applicable laws, rules and regulations.

4. Reporting and Accountability

Each Covered Officer must:

(a) upon adoption of the Code (or thereafter as applicable, upon becoming a Covered Officer), affirm in writing to the Board that he or she has received, read, and understands the Code;

(b) annually thereafter affirm to the Board that he or she has complied with the requirements of the Code;

(c) not retaliate against any other Covered Officer or any employee of the Trust or their affiliated persons for reports of potential violations that are made in good faith;

(d) notify the Audit and Compliance Committee (“Committee”) promptly if he or she knows of any violation of this Code (failure to do so is itself a violation of the Code); and

(e) report at least annually any affiliations or other relationships related to conflicts of interest in accordance with the Trust’s Trustees and Officers Questionnaire.

The Committee is responsible for applying this Code to any specific situations presented to it and has the authority to interpret this Code in any particular situation. Any approvals or waivers sought by Covered Officers shall be considered by the Committee.

The following procedures will be used by the Committee in investigating and enforcing this Code:

(a) the Committee will take all appropriate action to investigate any potential violations reported to the Committee;

(b) if, after such investigation, the Committee believes that no violation has occurred, no further action is required;

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(c) if the Committee believes that a violation has occurred, it will inform and make a recommendation to the Board, which will consider appropriate action, which may include review of, and appropriate modifications to, applicable policies and procedures; notification to appropriate personnel of the investment adviser or its board; or a recommendation to dismiss the Covered Officer;

(d) the Committee will be responsible for granting waivers, as appropriate; and

(e) any changes to or waivers of this Code will, to the extent required, be disclosed as provided by SEC rules.

The Committee may retain appropriate counsel or other experts to assist and to perform the foregoing duties and its other duties under this Code.

5. Other Policies and Procedures

This Code shall be the sole code of ethics adopted by the Trust for purposes of Section 406 of the Sarbanes-Oxley Act of 2002 and the rules and forms applicable to registered investment companies thereunder. Any other policies or procedures of the Trust, LKCM, or other service providers that govern or purport to govern the behavior or activities of the Covered Officers who are subject to this Code are to be interpreted and enforced in conjunction with this Code. The codes of ethics under Rule 17j-1 under the 1940 Act for the Trust and LKCM, contain separate requirements applying to the Covered Officers and others and are not part of this Code.

6. Amendments

Any amendments to this Code must be approved or ratified by a majority vote of the Board, including a majority of independent Trustees.

7. Confidentiality

All reports and records prepared or maintained pursuant to this Code will be considered confidential and shall be maintained and protected accordingly. Except as otherwise required by law or this Code, such matters shall not be disclosed to anyone other than the Board, Trust counsel and LKCM.

8. Internal Use

The Code is intended solely for the internal use by the Trust and does not constitute an admission, by or on behalf of the Trust, as to any fact, circumstance, or legal conclusion.

May 18, 2010

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EX-99.CERT

EX.99.CERT

CERTIFICATIONS

I, J. Luther King, Jr., certify that:

1. I have reviewed this report on Form N-CSR of LKCM Funds;

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;

(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:	2/25/16	/s/ Luther King
		J. Luther King, Jr. President

EX.99.CERT

CERTIFICATIONS

I, Jacob D. Smith, certify that:

1. I have reviewed this report on Form N-CSR of LKCM Funds;

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;

(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:	2/25/16	/s/ Jacob D. Smith
		Jacob D. Smith Chief Financial Officer

EX-99.906CERT

EX.99.906CERT

Certification Pursuant to Section 906 of the Sarbanes-Oxley Act

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, each of the undersigned officers of the LKCM Funds, does hereby certify, to such officer’s knowledge, that the report on Form N-CSR of the LKCM Funds for the year ended December 31, 2015 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as applicable, and that the information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the LKCM Funds for the stated period.

/s/ Luther King		/s/ Jacob D. Smith
J. Luther King, Jr.		Jacob D. Smith
President, LKCM Funds		Chief Financial Officer, LKCM Funds
Dated:	2/25/16

This statement accompanies this report on Form N-CSR pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed as filed by LKCM Funds for purposes of Section 18 of the Securities Exchange Act of 1934.