PROVIDIAN SERIES TRUST, N-30D, 1998-02-24

PROVIDIAN SERIES TRUST
N-30D, 1998-02-24

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<PAGE>
PB SERIES TRUST

ANNUAL
REPORT

DECEMBER 31, 1997
<PAGE>
PB Series Trust
Annual Report
For the Period Ending December 31, 1997

Table of Contents

<TABLE>
<S> <C>
Contract Owners Letter.................................. 1

Management's Discussion and Analysis.................... 2

PB Series Trust Financial Statements

Report of Independent Auditors.................... 16

Schedule of Investments........................... 17

Statements of Assets and Liabilities.............. 28

Statements of Operations.......................... 30

Statements of Changes in Net Assets............... 32

Financial Highlights.............................. 34

Notes to Financial Statements..................... 37

Trustees and Executive Officers................... Inside
Back
Cover
</TABLE>
<PAGE>
CONTRACT OWNERS LETTER

Dear Contract Owners:

As President of the PB Series Trust, I am pleased to bring you performance,
market and portfolio activity information on the portfolios of the PB Series
Trust ("Portfolios") for the fiscal year ended December 31, 1997.

The PGA Retirement Annuity represents a variety of Investment Managers and a
diverse choice of investment disciplines with distinctly different management
styles. Under the direction of the PB Series Trust Board of Trustees and the
Investment Managers, the Portfolios delivered competitive returns while
providing its shareholders with a quality portfolio of investments.

The following pages include a section authored by the Investment Managers for
each Portfolio. Their discussions review portfolio management strategies and
performance for the period ended December 31, 1997 and provide an outlook for
the investment environment for 1998.

My sincere thanks for your continued support of the PGA Retirement Annuity and
the PB Series Trust. If you should have any comments, please do not hesitate to
contact us.

Sincerely,

[LOGO]

Thomas J. Hartlage
President

February 6, 1998

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MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED DECEMBER 31, 1997

PB SERIES TRUST INVESTMENT PORTFOLIOS
PORTFOLIOS MANAGED BY ATLANTA CAPITAL MANAGEMENT COMPANY, L.L.C.

The PB Series Trust Investment Portfolios ("Portfolios") began operation on May
9, 1997. These Portfolios are designed for long-term investors who seek a
diversified portfolio of high-quality securities with a targeted level of risk.

Five separate Portfolios make up the series. Each Portfolio invests in two or
more of the following investment classes: US money market securities, US bonds,
US common stocks, and international stocks. A Portfolio's exposure to each
investment class is carefully set to reflect the risk characteristics
appropriate for that particular Portfolio.

Risk is defined as the possibility of loss. In general the lower the risk of an
investment, the lower the potential return. The higher the risk of an
investment, the higher the potential return. Money-market investments are
usually considered lower risk, lower-return investments, while common stocks are
considered higher risk, higher-return investments.

Atlanta Capital Management Company, L.L.C. manages investment portfolios of US
bonds and US stocks for the Portfolios. US bonds are managed in the PB Series
Trust Fixed Income Fund, an intermediate-maturity bond fund of investment grade
issues. US stocks are managed in the PB Series Trust High Quality Stock Fund, a
widely diversified portfolio of high-quality US stocks in all capitalization
ranges.

Blairlogie Capital Management of Scotland manages the international-stock
portfolio for the Portfolios with the PB Series Trust International Active Fund.
Federated Investment Counseling of Pittsburgh, Pennsylvania manages the
money-market portfolio for the Portfolio with the PB Series Trust Money Market
Fund.

The Capital Preservation Portfolio is the most conservative and the least risky
of the five Portfolios. Its current investment allocation is 50% money-market
securities and 50% of US bonds. This Portfolio generated a total return (income
plus price change) of 4.92% after fees and expenses (net of fees) compared with
5.09% of Composite Index (50% Lehman Brothers Intermediate Aggregate Index, 50%
of U.S. Treasury Bill Index) from inception through December 31, 1997. This
compares with returns of 3.52% for US Treasury bills over the same period. For
the three months ending 12/31/97, the portfolio returned 1.79%, compared with
1.25% for Treasury bills. Rising bond prices during the latter half of the year
helped boost the portfolio's return above prevailing money-market securities,
which normally do not fluctuate in price.

The Income Oriented Portfolio is a moderate-risk portfolio designed to produce
an attractive level of current income with moderate prospects for growth. Its
current investment allocation is 28% US common stocks, 7% international stocks,
50% US bonds, and 15% money market securities. The Portfolio generated a total
return of 8.84% net of fees compared with 9.28% of Composite Index (50% Lehman
Brothers Intermediate Aggregate Index, 15% of U.S. Treasury Bill Index, 7%
Morgan Stanley Capital International (MSCI) Europe, Australia and Far East
(EAFE) Index, 28% Russell 3000 Index) from inception through December 31, 1997.
This compared with 20.38% for US stocks as measured by the Russell 3000 stock
index, and 6.67% for US bonds as measured by Lehman Intermediate Aggregate Bond
index. For the three months ending 12/31/97, the Portfolio returned 2.07%,
compared with 2.25% for the Russell 3000 and 2.22% for the Lehman Intermediate
Aggregate. International stocks as measured by the MSCI EAFE stock index
declined during this reporting period and modestly detracted from the
performance of the portfolio.

The Growth & Income Portfolio is a moderate-risk fund designed to provide a
balance between current income and growth. Its current investment allocation is
40% US stocks, 10% international stocks, 40% US bonds, and 10% money market
securities. The Portfolio generated a total return of 10.25% net of fees
compared with 10.74% of Composite Index (40% Lehman Brothers Intermediate
Aggregate Index, 10% of

2
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U.S. Treasury Bill Index, 10% MSCI EAFE Index, 40% Russell 3000 Index) from
inception through December 31, 1997. For the three months ending 12/31/97, the
portfolio returned 2.06%.

The Capital Growth Portfolio is a more aggressive, less conservative portfolio
with an emphasis on growth of capital. Its current investment allocation is 60%
US stocks, 15% International stocks, and 25% US bonds. The Portfolio generated a
total return of 12.67% net of fees compared with 13.21% of Composite Index (25%
Lehman Brothers Intermediate Aggregate Index, 15% MSCI EAFE Index, 60% Russell
3000 Index) from inception through December 31, 1997. For the three months
ending 12/31/97, the portfolio returned 2.06%.

The Maximum Appreciation Portfolio is the most aggressive, least conservative
portfolio in the five Portfolios. Its current investment allocation is 80% US
stocks and 20% international stocks. The Portfolio generated a total return of
14.82% net of fees compared with 15.32% of Composite Index (20% MSCI EAFE Index,
80% Russell 3000 Index) from inception through December 31, 1997. For the three
months ending 12/31/97, the Portfolio returned 1.95%.

PERFORMANCE ATTRIBUTION

The year 1997 was characterized by strong economic growth and low inflation, a
near perfect environment for investors. US stocks turned in their third
consecutive "20% plus" year of returns, an unprecedented string of strong
performances. US bond prices rose sharply in their second half of the year as
inflation remained benign and an economic crisis erupted in Asia. The Asian
financial crisis gave investors conviction that the Federal Reserve would not
raise short-term interest rates anytime soon. Moreover, the crisis seemed to
cause a "flight to quality" which benefited many of the fixed income securities
held in the Portfolios.

OUTLOOK

Looking ahead, it is doubtful that many investors will enjoy the same level of
return in 1998 that they enjoyed in 1997. Asia accounts for about one-third of
world economic activity. Problems in Asia coupled with tight labor markets here
in the US suggest slower-profit growth for US corporations, particularly
large-capitalization multi-nationals. We believe US stock investors should
expect more modest returns in 1998 than in 1997. International stock investors,
on the other hand, could enjoy more favorable returns, relative to US stock
investors in 1998. International stocks as measured by EAFE stock index
significantly underperformed the US stock market in 1997, and indeed, the past
seven years. Now many foreign countries are making much needed US style
financial and economic reforms. This bodes well for many depressed foreign stock
markets.

HIGH QUALITY STOCK FUND
FUND MANAGED BY ATLANTA CAPITAL MANAGEMENT COMPANY, L.L.C.

The fourth quarter of 1997 produced mixed results for most US equity investors
as concerns about the worsening economic crisis in Asia dominated the investment
news. Large capitalization stocks represented by the Standard & Poors 500 (S&P)
stock index posted a respectable 2.87% total return for the three months ending
December 31, 1997. Smaller capitalization stocks, however, were generally lower
during the quarter. The Wilshire 750, a medium-cap stock index, posted a -1.91%
return over the final three months of 1997 while the Russell 2000 small-cap
index recorded a -3.35% return.

Against a backdrop of uneven results for the broad market of US stocks, the PB
Series Trust High Quality Stock Fund posted strong results for the three months
ending December 31, 1997. The Fund's total return was 3.82% net of fees,
compared with a return of 2.35% for the Russell 3000 stock index, the
performance benchmark for the Fund. The Fund's return was 3.97% before
investment management fees and operating expenses (gross of fees) for the fourth
quarter. This performance ranked the Fund in the top 12% of Lipper Growth and
Income-Equity Fund Universe.

From the inception date of the Fund (May 9, 1997) through year-end, the Fund
posted a total return of 19.72% net of fees (20.42% gross of fees), in line with
the Russell 3000's return of 20.38%. The total return calculated is after
investment advisory fees of .65% annually and operating expenses which are
capped at .25% annually and after all brokerage commissions. The Fund's total
returns are based on a net asset value of $11.74 on

3
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December 31, 1997 and $10.00 per share on May 9, 1997, adjusted for the
distribution of $0.22 per share of net investment income and net realized gains.

PERFORMANCE ATTRIBUTION

The favorable relative performance of the Fund during the fourth quarter of 1997
was due to good stock selection. At December 31, 1997, the Fund was comprised of
51% large-capitalization stocks, 19% medium-cap stocks, 29% small-cap stocks and
1% cash equivalents. During the fourth quarter, each of the three capitalization
components of the Fund outperformed its respective benchmark index. A key reason
for good stock selection was the Fund's emphasis on high-quality securities.
Each stock in the Fund has an S&P Equity Quality Ranking of B+ or better. Such
stocks have superior long-term records of earnings and dividend growth. During
periods of financial crisis, like we witnessed in Asia recently, investors often
gravitate to higher-quality, more liquid securities. This was certainly the case
in the final months of 1997.

The Fund continues to maintain a significant over-weighting in small- and
medium-capitalization stocks relative to its benchmark, the Russell 3000. The
Fund contains approximately 50% large-cap issues and small-and medium-cap
issues. This contrasts with an approximate 78% large-cap weighting and an
approximate 11% weighting for both small- and medium-cap issues in the Russell
3000. We continue to find better values among the smaller-capitalization stocks
than the larger-capitalization stocks.

OUTLOOK

Looking ahead through 1998, US economic growth is likely to slow given the
turmoil in Asia, which represents about one-third of world economic activity.
Slower economic growth means slower profit growth and continued low inflation.
The outlook for profits is even more clouded considering the fact that many
companies are experiencing renewed labor cost pressures at a time when they find
it difficult to raise prices. With corporate profits under intensifying pressure
and equity valuations at or near record highs, we remain cautious on the outlook
for stocks.

FIXED INCOME FUND
FUND MANAGED BY ATLANTA CAPITAL MANAGEMENT COMPANY, L.L.C.

The fourth quarter of 1997 was a good quarter for intermediate term bond
portfolios. Spurred by continued low inflation, and the growing concern that the
Asian financial crisis would eventually impede economic growth, both at home and
abroad, bond prices climbed higher bringing yields to their lowest levels of the
year. The quarter saw interest rates on the two-year Treasury note fall 0.14% to
5.64% while rates on five-year Treasury securities fell 0.28% to 5.71%. Since
September 30, the bellwether thirty-year Treasury bond fell 0.48% in yield to
close the year at 5.92%.

For the three months ending December 31, 1997, the PB Series Fixed Income Fund's
total return was 2.36% net of fees and 2.60% gross of fees. The Fund's
benchmark, the Lehman Brothers Intermediate Aggregate Index, returned 2.22% for
the quarter. From the inception date of the Fund (May 9, 1997) through year-end,
the Fund's total return was 6.30% net of fees (6.96% gross of fees) in line with
the benchmark index 6.67%.

PERFORMANCE ATTRIBUTION

The principal reason for the Fund's outperformance for both the quarter and
since inception periods is that the Fund's modified duration averaged 10-20%
longer than that of the benchmark in a falling rate environment. (Modified
duration is a measure of an investment's price sensitivity to interest rate
changes. For example, a portfolio with a 3.5 year modified duration will
increase in value by 3.5% if interest rates fall by 1%.) This longer duration
reflected Atlanta Capital's expectations for slower economic growth and a stable
price environment, the sum of which created a positive environment for bonds. On
December 31, 1997, the Fund's modified duration was 3.5 years.

Atlanta Capital utilizes Treasuries, Agencies, collateralized mortgage
obligations (CMOs), asset backed securities (ABSs) and corporate bond securities
in its fixed income investment portfolios. Since the Fund's

4
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inception, CMOs, ABSs and corporate bonds have offered only modest yield
premiums over Treasury securities relative to their long run averages.
Therefore, we have concentrated the Fund in Treasuries and Agencies augmenting
this government position with selective purchases of short CMO issues. We will
continue to monitor the CMO, ABS and corporate markets for opportunities to swap
into higher yielding securities while keeping historical valuations in mind.

OUTLOOK

Going forward, our outlook for fixed income investments remains favorable. The
forces at work that have acted to drive interest rates lower remain in place.
Technology driven gains in productivity resulting from increases in capital
spending and fierce competition on a global basis, bolstered by a strong US
dollar, will continue to curb inflation. Furthermore, the downward pressure on
US exports resulting from decreased demand in the Asian markets, along with
increased competition form imports, will act to restrain domestic economic
growth. In this environment, we will maintain the Fund's duration longer than
its benchmark.

INTERNATIONAL ACTIVE FUND
FUND MANAGED BY BLAIRLOGIE CAPITAL MANAGEMENT

Overall 1997 was a good year, The EAFE index rose 2.1%, and it was another
banner year for the U.S. equity market as evidenced by the S&P 500 rising 31%.
Switzerland was the best performing developed market up 44.8% and there was a
handful of outstanding emerging markets: Turkey 118%, Russia 112% and Hungary
95.2%. There was also solid improvement in Latin America: perhaps a herald of
better things to come once the financial tornadoes have blown out in Asia.

1997 was a year of regional dichotomies as Europe ended a strong rally with a
22% gain while Asia deteriorated by 26%. Europe's strength came from European
Monetary Unit convergence of interest rates, corporate restructuring, controlled
inflation and a strong US Dollar which helps to re-liquify foreign corporations
with US earnings. Asia's unraveling began with Thailand and Malaysia removing
their pegs to the US Dollar causing local financial turmoil. But when Korea's
economic demise ensued following the Won's fall, the significance of this event
was felt globally. Right through year end international markets continued their
pronounced divergence with Europe again outstripping Asia by a huge margin.
During the fourth quarter MSCI Europe was 0.1% higher while MSCI Far East
plummeted 21%.

Latin America had a very solid 1997 as all markets were up in double digits
except Chile, which only rose 5.5%. There was some emerging market contagion
from the Far East which hit some markets in the fourth quarter, but the region
was relatively stable and has very sound fundamentals.

South Africa fell 8.2% in 1997 where deflationary forces led to weak gold and
metal prices which were the primary drag on the market.

PERFORMANCE ATTRIBUTION

Our strategy of being overweight in Continental Europe at the expense of a large
below-index position in the Far East paid off handsomely. This benefit was
compounded by the above average cash position which we carried through the
second half of 1997.

There was no hiding place in Asia where every country suffered from collapsing
currencies and stock markets. Our view on many Asian markets turned negative as
earnings downgrades began to appear in our country model in August. This
combined with the contagion effect of currency weakness, a rapidly deteriorating
outlook for growth and a rising number of bankruptcies caused us to slash our
Asian ex-Japan exposure to zero early in October. Japan, already having debt
problems of its own, is unable to escape further adversity from its Asian
trading partners, therefore we trimmed our underweight position further.

In Europe the common pattern of reasonable valuations, strong earnings surprises
and neutral-to-loose money policies have us continuing to build our overweight
position in Continental Europe while staying well below index weight in the UK.
This is likely to be the case until we decide to reinvest in Asia.

5
<PAGE>
OUTLOOK

The recent weakness in global equities has undoubtedly taken the froth from the
stock prices which generally have shifted from being expensive to fair value
(with exception of the US).

We see good value in France, Italy, Ireland and Finland in the developed
markets. Portugal, Hungary and Chile look good in the emerging area. One key
question for 1998 is the point of inflection for Asia. While most Asian markets
and economies still look dire, there should be opportunities to trade profitably
from very depressed bases. But there remains the possibility of a protracted
bust like Japan's since 1990, so we will continue to approach Asia with extreme
caution.

Looking across asset classes, emerging markets have been hardest hit, almost
indiscriminately in the latter part of the year. Our models indicate that as a
group they offer the most exciting prospects for 1998 but will continue to be
highly leveraged to the mood swings of investors in the near term.

MONEY MARKET FUND
FUND MANAGED BY FEDERATED INVESTMENT COUNSELING

PB Series Trust Money Market Fund invests exclusively in short-term debt
instruments. The average maturity of these securities, computed on a dollar
weighted basis, is restricted to 90 days or less. Portfolio securities must be
rated in one of the two highest short-term rating categories by one or more of
the nationally recognized statistical rating organizations or be of comparable
quality to securities having such ratings. Typical security types include, but
are not limited to, commercial paper, certificates of deposit, time deposits,
variable rate instruments and repurchase agreements.

Growth during 1997 continued at an above-average pace, but slow moderately as
the year progressed. Specifically, first quarter GDP registered at 4.9% while
second quarter declined to 3.3% and third quarter decreased slightly more to
3.1%. Despite the high growth, though, inflation remained subdued by all
measures. The consumer price index rose just 1.7% for the 12 months ending
December 31, 1997. For the same time period, the producer price index actually
declined 1.3%, due mostly to a decline in energy prices, while the employment
cost index grew an annualized 3.3% pace through the third quarter.

Thirty day commercial paper started the period at 5.58% on January 1, 1997, and
then fell back in January and February with 30-day commercial paper reaching a
low 5.26% on February 21, 1997. Rates rose dramatically in late March and early
April to 5.60% reflecting the 0.25% hike in the Federal Funds rate. They hovered
near this same level until December 1997 when year-end technical pressures
pushed the rate as high as 5.98% before subsiding slightly to end the year at
5.77%.

The money market yield curve steepened slightly throughout the time period. One
month commercial paper rates rose 0.19% while six month rates rose 0.25%
reflecting the concern in the market about the more rapid economic growth.

The target average maturity range for the Fund remained at 35-45 days throughout
the time period, reflecting neutral economic and monetary sentiment. Given the
seed money nature of the Fund's current asset base, however, the actual average
maturity has been much lower. In structuring the Fund, there is continued
emphasis placed on positioning 30-35% of the Fund's core assets in variable rate
demand notes and accomplishing a modest barbell structure.

PERFORMANCE GRAPHS

The following graphs illustrate the change of a $10,000 investment in each of
the Portfolios and Funds in comparison to its respective market indices. The
chart assumes that an investor starts with $10,000 and shows the changes in that
investment from May 9, 1997 (commencement of operations) to December 31, 1997.

6
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COMPARISON OF $10,000
CAPITAL PRESERVATION PORTFOLIO VS. COMPOSITE INDEX+
FOR THE PERIOD MAY 9, 1997 (COMMENCEMENT OF OPERATIONS) TO DECEMBER 31, 1997

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
5/9/97 5/31/97 6/30/97 7/31/97 8/31/97 9/30/97 10/31/97 11/30/97 12/31/97
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Capital Preservation $10,000 $10,020 $10,105 $10,239 $10,234 $10,307 $10,386 $10,420 $10,492
Composite Index $10,000 $10,046 $10,116 $10,240 $10,241 $10,330 $10,408 $10,441 $10,509
</TABLE>

TOTAL RETURN SINCE INCEPTION *

<TABLE>
<S> <C>
Capital Preservation
Portfolio 4.92%

Composite Index 5.09%
</TABLE>

+50% Lehman Brothers Intermediate Aggregate Index, 50% of U.S. Treasury Bill
Index.

* Total Return is net of fees and is calculated including reinvestment of all
income dividends and capital gain distributions for the period May 9, 1997
(commencement of operations) to December 31, 1997. Results represent past
performance and do not indicated future results. The value of an investment in
the Portfolio and the return on the investment will fluctuate and redemption
proceeds may be higher or lower than an investor's original cost.

7
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COMPARISON OF $10,000
INCOME ORIENTED PORTFOLIO VS. COMPOSITE INDEX+
FOR THE PERIOD MAY 9, 1997 (COMMENCEMENT OF OPERATIONS) TO DECEMBER 31, 1997

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
5/9/97 5/31/97 6/30/97 7/31/97 8/31/97 9/30/97 10/31/97 11/30/97 12/31/97
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Income Oriented $10,000 $10,060 $10,230 $10,540 $10,388 $10,663 $10,618 $10,720 $10,884
Composite Index $10,000 $10,124 $10,337 $10,686 $10,494 $10,773 $10,680 $10,808 $10,928
</TABLE>

TOTAL RETURN SINCE INCEPTION *

<TABLE>
<S> <C>
Income Oriented
Portfolio 8.84%

Composite Index 9.28%
</TABLE>

+50% Lehman Brothers Intermediate Aggregate Index, 15% of U.S. Treasury Bill
Index,

7% MSCI EAFE Index, 28% Russell 3000 Index.

8
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COMPARISON OF $10,000
GROWTH & INCOME PORTFOLIO VS. COMPOSITE INDEX+
FOR THE PERIOD MAY 9, 1997 (COMMENCEMENT OF OPERATIONS) TO DECEMBER 31, 1997

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
5/9/97 5/31/97 6/30/97 7/31/97 8/31/97 9/30/97 10/31/97 11/30/97 12/31/97
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Growth & Income $10,000 $10,075 $10,267 $10,648 $10,446 $10,803 $10,687 $10,823 $11,025
Composite Index $10,000 $10,156 $10,426 $10,857 $10,588 $10,944 $10,766 $10,935 $11,074
</TABLE>

TOTAL RETURN SINCE INCEPTION *

<TABLE>
<S> <C>
Growth & Income
Portfolio 10.25%

Composite Index 10.74%
</TABLE>

+40% Lehman Brothers Intermediate Aggregate Index, 10% of U.S. Treasury Bill
Index,

10% MSCI EAFE Index, 40% Russell 3000 Index.

9
<PAGE>
COMPARISON OF $10,000
CAPITAL GROWTH PORTFOLIO VS. COMPOSITE INDEX+
FOR THE PERIOD MAY 9, 1997 (COMMENCEMENT OF OPERATIONS) TO DECEMBER 31, 1997

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
5/9/97 5/31/97 6/30/97 7/31/97 8/31/97 9/30/97 10/31/97 11/30/97 12/31/97
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Capital Growth $10,000 $10,094 $10,346 $10,833 $10,553 $11,039 $10,812 $11,001 $11,267
Composite Index $10,000 $10,209 $10,575 $11,151 $10,744 $11,232 $10,908 $11,149 $11,321
</TABLE>

TOTAL RETURN SINCE INCEPTION *

<TABLE>
<S> <C>
Capital Growth
Portfolio 12.67%

Composite Index 13.21%
</TABLE>

+25% Lehman Brothers Intermediate Aggregate Index, 15% MSCI EAFE Index,

60% Russell 3000 Index.

10
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COMPARISON OF $10,000
MAXIMUM APPRECIATION PORTFOLIO VS. COMPOSITE INDEX+
FOR THE PERIOD MAY 9, 1997 (COMMENCEMENT OF OPERATIONS) TO DECEMBER 31, 1997

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
5/9/97 5/31/97 6/30/97 7/31/97 8/31/97 9/30/97 10/31/97 11/30/97 12/31/97
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Maximum Appreciation $10,000 $10,113 $10,423 $10,999 $10,650 $11,263 $10,910 $11,155 $11,482
Composite Index $10,000 $10,263 $10,718 $11,426 $10,885 $11,501 $11,015 $11,331 $11,532
</TABLE>

TOTAL RETURN SINCE INCEPTION *

<TABLE>
<S> <C>
Maximum Appreciation
Portfolio 14.82%

Composite Index 15.32%
</TABLE>

+20% MSCI EAFE Index, 80% Russell 3000 Index.

11
<PAGE>
COMPARISON OF $10,000
HIGH QUALITY STOCK FUND VS. RUSSELL 3000 INDEX
FOR THE PERIOD MAY 9, 1997 (COMMENCEMENT OF OPERATIONS) TO DECEMBER 31, 1997

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
5/9/97 5/31/97 6/30/97 7/31/97 8/31/97 9/30/97 10/31/97 11/30/97 12/31/97
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
High Quality Stock $10,000 $10,153 $10,426 $11,106 $10,904 $11,532 $11,266 $11,598 $11,972
Russell 3000 $10,000 $10,329 $10,758 $11,602 $11,131 $11,762 $11,367 $11,802 $12,038
</TABLE>

TOTAL RETURN SINCE INCEPTION *

<TABLE>
<S> <C>
High Quality Stock Fund 19.72%

Russell 3000 Index 20.38%
</TABLE>

12
<PAGE>
COMPARISON OF $10,000
FIXED INCOME FUND VS. LEHMAN BROTHERS INDEX
FOR THE PERIOD MAY 9, 1997 (COMMENCEMENT OF OPERATIONS) TO DECEMBER 31, 1997

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
5/9/97 5/31/97 6/30/97 7/31/97 8/31/97 9/30/97 10/31/97 11/30/97 12/31/97
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Fixed Income $10,000 $10,038 $10,118 $10,345 $10,260 $10,385 $10,509 $10,537 $10,630
Lehman Brothers $10,000 $10,050 $10,151 $10,352 $10,311 $10,435 $10,550 $10,578 $10,667
</TABLE>

TOTAL RETURN SINCE INCEPTION *

<TABLE>
<S> <C>
Fixed Income Fund 6.30%

Lehman Brothers Intermediate Aggregate 6.67%
Index
</TABLE>

13
<PAGE>
COMPARISON OF $10,000
INTERNATIONAL ACTIVE FUND VS. MSCI EAFE INDEX
FOR THE PERIOD MAY 12, 1997 (COMMENCEMENT OF OPERATIONS) TO DECEMBER 31, 1997

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
5/12/97 5/31/97 6/30/97 7/31/97 8/31/97 9/30/97 10/31/97 11/30/97 12/31/97
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
International Active $10,000 $9,960 $10,415 $10,579 $9,658 $10,210 $9,537 $9,462 $9,620
MSCI EAFE $10,000 $9,998 $10,551 $10,724 $9,926 $10,484 $9,680 $9,584 $9,670
</TABLE>

TOTAL RETURN SINCE INCEPTION *

<TABLE>
<S> <C>
International Active Fund -3.80%

Morgan Stanley Capital International -3.30%
Europe, Australasia and Far East Index
</TABLE>

* Total Return is net of fees and is calculated including reinvestment of all
income dividends and capital gain distributions for the period May 12, 1997
(commencement of operations) to December 31, 1997. Results represent past
performance and do not indicated future results. The value of an investment in
the Portfolio and the return on the investment will fluctuate and redemption
proceeds may be higher or lower than an investor's original cost.

14
<PAGE>
COMPARISON OF $10,000
MONEY MARKET FUND VS. US TREASURY BILL INDEX
FOR THE PERIOD MAY 9, 1997 (COMMENCEMENT OF OPERATIONS) TO DECEMBER 31, 1997

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
5/9/97 5/31/97 6/30/97 7/31/97 8/31/97 9/30/97 10/31/97 11/30/97 12/31/97
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Money Market $10,000 $10,031 $10,072 $10,114 $10,157 $10,199 $10,243 $10,286 $10,331
US Treasury Bill $10,000 $10,043 $10,080 $10,127 $10,171 $10,225 $10,266 $10,306 $10,352
</TABLE>

TOTAL RETURN SINCE INCEPTION *

<TABLE>
<S> <C>
Money Market Fund 3.31%

US Treasury Bill Index 3.52%
</TABLE>

15
<PAGE>
REPORT OF INDEPENDENT AUDITORS

To the Contractholders and Board of Trustees
PB Series Trust

We have audited the accompanying statements of assets and liabilities, including
the schedules of investments of PB Series Trust (formerly Providian Series
Trust) (comprised of the Capital Preservation Portfolio, Growth and Income
Portfolio, Income Oriented Portfolio, Capital Growth Portfolio, Maximum
Appreciation Portfolio, High Quality Stock Fund, Fixed Income Fund,
International Active Fund and Money Market Fund) (the Trust) as of December 31,
1997, the related statements of operations, changes in net assets and the
financial highlights for the periods indicated therein. These financial
statements and the financial highlights are the responsibility of the Trust's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.

We have conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures included confirmation of
investments owned as of December 31, 1997, by correspondence with the custodian.
As to securities relating to uncompleted transactions, we performed other audit
procedures. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the portfolios and funds within the Trust at December 31, 1997, and the
results of their operations, changes in their net assets and the financial
highlights for the periods indicated therein in conformity with generally
accepted accounting principles.

[LOGO]

Kansas City, Missouri
February 6, 1998

16
<PAGE>
PB SERIES TRUST
CAPITAL PRESERVATION PORTFOLIO
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1997

<TABLE>
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- --------------------------------------------- --------- ----------
<S> <C> <C>
INVESTMENT COMPANIES - 100.0%
PB Series Trust
Money Market Fund........................ 13,322 $ 13,322
PB Series Trust
Fixed Income Fund........................ 1,311 13,451
----------
TOTAL INVESTMENT COMPANIES
- (Cost $26,964) 26,773
----------
TOTAL INVESTMENTS - (Cost $26,964) - 100.0% 26,773
OTHER ASSETS LESS LIABILITIES - 0.0% 1
----------
NET ASSETS -100.0% $ 26,774
----------
----------
</TABLE>

The percentage shown for each investment category is the total value of that
category as a percentage of the net assets of the Portfolio.

PB SERIES TRUST
INCOME ORIENTED PORTFOLIO
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1997

<TABLE>
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- --------------------------------------------- --------- ----------
<S> <C> <C>
INVESTMENT COMPANIES - 100.0%
PB Series Trust
Money Market Fund........................ 1,225 $ 1,225
PB Series Trust
High Quality Stock Fund.................. 201 2,363
PB Series Trust
Fixed Income Fund........................ 399 4,091
PB Series Trust
International Active Fund................ 60 577
----------
TOTAL INVESTMENT COMPANIES
- (Cost $8,331) 8,256
----------
TOTAL INVESTMENTS - (Cost $8,331) - 100.0% 8,256
OTHER ASSETS LESS LIABILITIES - 0.0% 0
----------
NET ASSETS - 100.0% $ 8,256
----------
----------
</TABLE>

The percentage shown for each investment category is the total value of that
category as a percentage of the net assets of the Portfolio.

THE NOTES TO THE FINANCIALS ARE AN INTEGRAL PART OF THIS REPORT.
17
<PAGE>
PB SERIES TRUST
GROWTH & INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1997

<TABLE>
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- --------------------------------------------- --------- ----------
<S> <C> <C>
INVESTMENT COMPANIES - 100.0%
PB Series Trust
Money Market Fund........................ 17,686 $ 17,686
PB Series Trust
High Quality Stock Fund.................. 6,346 74,535
PB Series Trust
Fixed Income Fund........................ 6,955 71,356
PB Series Trust
International Active Fund................ 1,796 17,250
----------
TOTAL INVESTMENT COMPANIES
- (Cost $179,915) 180,827
----------
TOTAL INVESTMENTS - (Cost $179,915) - 100.0% 180,827
OTHER ASSETS LESS LIABILITIES - 0.0% 3
----------
NET ASSETS - 100.0% $ 180,830
----------
----------
</TABLE>

The percentage shown for each investment category is the total value of that
category as a percentage of the net assets of the Portfolio.

PB SERIES TRUST
CAPITAL GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1997

<TABLE>
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- --------------------------------------------- --------- ----------
<S> <C> <C>
INVESTMENT COMPANIES - 100.0%
PB Series Trust
High Quality Stock Fund.................. 42,018 $ 493,478
PB Series Trust
Fixed Income Fund........................ 19,780 202,940
PB Series Trust
International Active Fund................ 12,489 119,931
----------
TOTAL INVESTMENT COMPANIES
- (Cost $812,087) 816,349
----------
TOTAL INVESTMENTS - (Cost $812,087) - 100.0% 816,349
OTHER ASSETS LESS LIABILITIES - 0.0% 0
----------
NET ASSETS - 100.0% $ 816,349
----------
----------
</TABLE>

The percentage shown for each investment category is the total value of that
category as a percentage of the net assets of the Portfolio.

THE NOTES TO THE FINANCIALS ARE AN INTEGRAL PART OF THIS REPORT.
18
<PAGE>
PB SERIES TRUST
MAXIMUM APPRECIATION PORTFOLIO
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1997

<TABLE>
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- --------------------------------------------- --------- ----------
<S> <C> <C>
INVESTMENT COMPANIES - 100.0%
PB Series Trust
High Quality Stock Fund.................. 16,894 $ 198,415
PB Series Trust
International Active Fund................ 4,824 46,323
----------
TOTAL INVESTMENT COMPANIES
- (Cost $239,079) 244,738
----------
TOTAL INVESTMENTS - (Cost $239,079) - 100.0% 244,738
OTHER ASSETS LESS LIABILITIES - 0.0% 0
----------
NET ASSETS - 100.0% $ 244,738
----------
----------
</TABLE>

The percentage shown for each investment category is the total value of that
category as a percentage of the net assets of the Portfolio.

PB SERIES TRUST
HIGH QUALITY STOCK FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1997

<TABLE>
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- --------------------------------------------- --------- ----------
<S> <C> <C>
COMMON STOCK - 95.4%
AEROSPACE - 1.8%
Allied Signal Incorporated............... 3,300 $ 128,494
Boeing Company........................... 2,000 97,875
----------
226,369
----------
APPAREL & TEXTILES - 1.2%
Guilford Mills Incorporated.............. 2,200 60,225
Nautica Enterprises Incorporated (a)..... 1,800 41,850
Unifi Incorporated....................... 1,100 44,756
----------
146,831
----------
AUTO PARTS - 1.7%
Eaton Corporation........................ 1,300 116,025
Modine Manufacturing Company............. 1,100 37,538
OEA Incorporated......................... 1,000 28,938
Superior Industries International
Incorporated........................... 1,300 34,856
----------
217,357
----------
BANKS - 8.2%
Banc One Corporation..................... 2,200 119,487
BancorpSouth Incorporated................ 1,400 66,150
CCB Financial Corporation................ 600 64,500
Citizens Banking Corporation............. 1,950 67,274
CoreStates Financial Corporation....... . 1,800 144,113
Deposit Guaranty Corporation............. 1,300 73,937
First Commercial Corporation............. 1,050 61,556
First Virginia Banks Incorporated...... . 900 46,518
Firstbank of Illinois Company............ 1,650 60,740
Old Kent Financial Corporation......... . 1,260 49,927
Union Planters Corporation............... 700 47,555
U.S. Trust Corporation................... 900 56,363
Wachovia Corporation..................... 1,500 121,688
Wilmington Trust Corporation............. 800 49,900
----------
1,029,708
----------
BROADCASTING - 0.4%
TCA Cable TV Incorporated................ 1,200 55,200
----------
BUILDING CONSTRUCTION - 0.7%
Harsco Corporation....................... 900 38,813
Lawson Products Incorporated............. 1,700 50,575
----------
89,388
----------
BUSINESS SERVICES - 3.0%
ABM Industries Incorporated.............. 2,100 64,181
American Management Systems
Incorporated (a)....................... 1,500 29,250
Automatic Data Processing Incorporated... 2,100 128,888
Fair Issac & Company Incorporated........ 900 29,981
G & K Services Incorporated.............. 1,200 50,400
Olsten Corporation....................... 1,900 28,500
Sungard Data Systems Incorporated (a).... 1,400 43,400
----------
374,600
----------
</TABLE>

THE NOTES TO THE FINANCIALS ARE AN INTEGRAL PART OF THIS REPORT.
19
<PAGE>
PB SERIES TRUST
HIGH QUALITY STOCK FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1997

<TABLE>
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- --------------------------------------------- --------- ----------
COMMON STOCK (CONTINUED)
<S> <C> <C>
CHEMICALS - 3.2%
Avery Dennison Corporation............... 2,800 $ 125,300
Brady W. H. Company...................... 1,600 49,600
E.I. Du Pont de Nemours & Company........ 1,700 102,106
Fuller H.B. Company...................... 800 39,600
MacDermid Incorporated................... 600 50,925
Nalco Chemical Company................... 900 35,606
----------
403,137
----------
COMMUNICATIONS SERVICES - 1.4%
Interpublic Group of Companies
Incorporated........................... 2,400 119,550
True North Communications Incorporated... 2,100 51,975
----------
171,525
----------
COMPUTERS & BUSINESS EQUIPMENT - 3.4%
American Business Products
Incorporated........................... 1,800 38,925
Cabletron Systems Incorporated (a)....... 3,300 49,500
Electronic Data Systems Corporation...... 2,900 127,419
General Binding Corporation.............. 1,400 42,000
Hewlett-Packard Company.................. 1,900 118,750
Sci Systems Incorporated................. 1,000 43,563
----------
420,157
----------
CONGLOMERATES - 1.7%
Mark IV Industries Incorporated.......... 1,500 32,813
National Service Industries.............. 800 39,650
Teleflex Incorporated.................... 1,200 45,300
Textron Incorporated..................... 1,600 100,000
----------
217,763
----------
CONSTRUCTION & MINING EQUIPMENT - 0.2%
Foster Wheeler Corporation............... 900 24,356
----------
CONSTRUCTION MATERIALS - 0.3%
Vulcan Materials Company................. 400 40,850
----------
CONTAINERS & GLASS - 0.7%
Bemis Company Incorporated............... 800 35,250
Clarcor Incorporated..................... 1,700 50,363
----------
85,613
----------
DRUGS & HEALTH CARE - 8.5%
Abbott Laboratories...................... 1,700 111,455
Bard C.R. Incorporated................... 1,000 31,313
Biomet Incorporated...................... 1,900 48,688
Block Drug Company Incorporated.......... 927 40,093
Diagnostic Products Corporation.......... 1,300 36,074
Invacare Corporation..................... 1,600 34,800
Johnson & Johnson........................ 1,800 118,575
Life Technologies Incorporated........... 1,500 49,875
Manor Care Incorporated.................. 1,100 38,500
Mylan Laboratories Incorporated.......... 1,700 35,593
Patterson Dental Company (a)............. 1,200 54,300
Pfizer Incorporated...................... 2,000 149,125
Schering Plough Corporation.............. 2,200 136,674
Thermedics Incorporated (a).............. 2,500 40,938
Warner-Lambert Company................... 1,100 136,400
----------
1,062,403
----------
</TABLE>

PB SERIES TRUST
HIGH QUALITY STOCK FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1997

<TABLE>
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- --------------------------------------------- --------- ----------
COMMON STOCK (CONTINUED)
<S> <C> <C>

ELECTRIC UTILITIES - 2.6%
Central & South West Corporation......... 4,900 $ 132,606
Duke Power Company....................... 2,600 143,975
UtiliCorp United Incorporated............ 1,300 50,456
----------
327,037
----------
ELECTRICAL EQUIPMENT - 2.7%
Baldor Electric Company.................. 1,866 40,483
Dentsply International Incorporated...... 1,200 36,600
Federal Signal Corporation............... 1,300 28,113
General Electric Company................. 1,700 124,738
Hubbell Incorporated..................... 800 39,450
Technitrol Incorporated.................. 1,400 42,000
Thomas & Betts Corporation............... 600 28,350
----------
339,734
----------
ELECTRONICS - 5.0%
AMP Incorporated......................... 2,900 121,800
Avnet Incorporated....................... 500 33,000
Cohu Incorporated........................ 900 27,563
Dionex Corporation....................... 1,000 50,250
Harris Corporation....................... 800 36,700
Intel Corporation........................ 1,600 112,400
Kronos Incorporated...................... 1,600 49,300
Methode Electronics...................... 2,200 35,750
MTS Systems Corporation.................. 1,000 37,500
Nichols Research Corporation............. 1,900 47,500
Varian Associates Incorporated........... 600 30,338
X-Rite Incorporated...................... 2,500 45,625
----------
627,726
----------
FINANCIAL SERVICES - 1.8%
Legg Mason Incorporated.................. 1,066 59,629
Merrill Lynch & Company.................. 1,700 123,994
ReliaStar Financial Corporation.......... 1,000 41,188
----------
224,811
----------
FOOD & BEVERAGES - 2.6%
CPC International Incorporated........... 1,200 129,300
Dean Foods Company....................... 900 53,550
Hormel Foods Corporation................. 1,300 42,575
PepsiCo Incorporated..................... 2,900 105,669
----------
331,094
----------
FOOD SERVICE - 1.1%
Sysco Corporation........................ 3,100 141,244
----------
FUNERAL SERVICES - 0.4%
Stewart Enterprises Incorporated......... 1,000 46,625
----------
GAS DISTRIBUTION - 1.7%
Energen Corporation...................... 1,200 47,700
Northwest Natural Gas Company............ 1,600 49,600
Oneok Incorporated....................... 1,400 56,525
Piedmont Natural Gas Company
Incorporated........................... 1,600 57,500
----------
211,325
----------
</TABLE>

THE NOTES TO THE FINANCIALS ARE AN INTEGRAL PART OF THIS REPORT.
20
<PAGE>
PB SERIES TRUST
HIGH QUALITY STOCK FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1997

<TABLE>
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- --------------------------------------------- --------- ----------
COMMON STOCK (CONTINUED)
<S> <C> <C>
GAS EXPLORATION - 2.7%
Coastal Corporation...................... 2,000 $ 123,875
Eastern Enterprises...................... 1,200 54,000
Equitable Resources Incorporated......... 1,200 42,450
National Fuel Gas Company................ 800 38,950
Questar Corporation...................... 900 40,163
Southwestern Energy Company.............. 3,200 41,200
----------
340,638
----------
HOME BUILDERS - 0.7%
Lennar Corporation....................... 1,100 23,719
Thor Industries Incorporated............. 1,800 61,763
----------
85,482
----------
HOUSEHOLD APPLIANCES - 0.8%
Interface Incorporated................... 1,700 49,300
La-Z-Boy Incorporated.................... 1,200 51,750
----------
101,050
----------
HOUSEHOLD PRODUCTS - 3.1%
Colgate-Palmolive Company................ 1,500 110,250
Kimberly-Clark Corporation............... 2,600 128,213
Lancaster Colony Corporation............. 800 45,100
Newell Company........................... 2,600 110,500
----------
394,063
----------
HOTELS & RESTAURANTS - 0.3%
Cracker Barrel Old Country Store
Incorporated........................... 1,200 40,050
----------
INDUSTRIAL MACHINERY - 2.4%
Crane Company............................ 800 34,700
Deere & Company.......................... 2,200 128,288
Graco Incorporated....................... 1,400 52,238
Pentair Incorporated..................... 1,000 35,938
Tennant Company.......................... 1,400 50,925
----------
302,089
----------
INSURANCE - 6.4%
American Bankers Insurance Group
Incorporated........................... 1,600 73,500
American Heritage Life Investment
Corporation............................ 1,500 54,000
American International Group
Incorporated........................... 1,250 135,937
Berkley (WR) Corporation................. 1,050 46,069
Chubb Corporation........................ 1,500 113,437
Fremont General Corporation.............. 900 49,274
Frontier Insurance Group Incorporated.... 1,400 32,024
General Re Corporation................... 500 106,000
Liberty Corporation...................... 1,000 46,750
NAC Re Corporation....................... 900 43,930
Orion Capital Corporation................ 1,200 55,725
Protective Life Corporation.............. 700 41,824
----------
798,470
----------
INTERNATIONAL OIL - 1.3%
Mobil Corporation........................ 1,700 122,719
Murphy Oil Corporation................... 700 37,931
----------
160,650
----------
</TABLE>

PB SERIES TRUST
HIGH QUALITY STOCK FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1997

<TABLE>
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- --------------------------------------------- --------- ----------
COMMON STOCK (CONTINUED)
<S> <C> <C>

INVESTMENT ADVISORY FIRMS - 2.0%
A.G. Edwards Incorporated................ 1,350 $ 53,663
Eaton Vance Corporation.................. 1,500 56,625
T. Rowe Price & Associates
Incorporated........................... 700 44,013
SEI Investment Company................... 1,600 67,200
United Asset Management Corporation...... 1,200 29,325
----------
250,826
----------
NEWSPAPERS - 1.8%
Lee Enterprises Incorporated............. 1,300 38,431
Pulitzer Publishing Company.............. 800 50,250
Tribune Company.......................... 2,100 130,725
----------
219,406
----------
NON-FERROUS METALS - 0.3%
Commercial Metals Company................ 1,300 41,031
----------
PAPER - 1.6%
Lydall Incorporated (a).................. 1,800 35,100
Sonoco Products Company.................. 3,400 117,938
Wausau-Mosinee Paper Corporation......... 2,100 42,000
----------
195,038
----------
PETROLEUM SERVICES - 2.4%
Dresser Industries Incorporated.......... 2,900 121,619
MAPCO Incorporated....................... 1,100 50,875
Unocal Corporation....................... 3,300 128,081
----------
300,575
----------
PUBLISHING - 0.8%
Banta Corporation........................ 1,500 40,500
Houghton Mifflin Company................. 1,400 53,725
----------
94,225
----------
RAILROADS & EQUIPMENT - 1.3%
GATX Corporation......................... 600 43,538
Norfolk Southern Corporation............. 3,900 120,169
----------
163,707
----------
RETAIL GROCERY - 0.4%
Casey's General Stores Incorporated...... 2,200 55,825
----------
RETAIL TRADE - 3.6%
Arbor Drugs Incorporated................. 3,000 55,500
Home Depot Incorporated.................. 2,250 132,469
Office Depot Incorporated................ 2,000 47,875
Pep Boys - Manny Moe & Jack.............. 1,400 33,425
Ruddick Corporation...................... 3,000 52,313
Wal-Mart Stores Incorporated............. 3,200 126,200
----------
447,782
----------
SOFTWARE - 1.3%
Autodesk Incorporated.................... 900 33,300
Computer Associates International
Incorporated........................... 2,400 126,900
----------
160,200
----------
</TABLE>

THE NOTES TO THE FINANCIALS ARE AN INTEGRAL PART OF THIS REPORT.
21
<PAGE>
PB SERIES TRUST
HIGH QUALITY STOCK FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1997

<TABLE>
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- --------------------------------------------- --------- ----------
COMMON STOCK (CONTINUED)
<S> <C> <C>
STEEL - 1.6%
Carpenter Technology Corporation......... 900 $ 43,256
Nucor Corporation........................ 2,500 120,781
Worthington Industries Incorporated...... 1,800 29,700
----------
193,737
----------
TELEPHONE - 4.0%
Aliant Communications Incorporated....... 2,100 65,888
Alltel Corporation....................... 3,100 127,294
Bell Atlantic Corporation................ 1,400 127,400
Century Telephone Enterprises
Incorporated........................... 1,100 54,794
Frontier Corporation..................... 5,100 122,719
----------
498,095
----------
TIRES & RUBBER - 0.4%
Carlisle Companies Incorporated.......... 1,200 51,300
----------
TOBACCO - 1.0%
Philip Morris Companies Incorporated..... 2,800 126,875
----------
TRUCKING & FREIGHT FORWARDING - 0.9%
Air Express International Corporation.... 1,800 54,900
Rollins Truck Leasing Corporation........ 2,900 51,838
----------
106,738
----------
TOTAL COMMON STOCK (Cost $10,272,726) 11,942,705
----------
SHORT-TERM INVESTMENTS - 3.6%
INVESTMENT COMPANY - 3.6%
SSgA U.S. Government Money Market Fund... 450,000 450,000
----------
TOTAL SHORT-TERM INVESTMENTS (Cost $450,000) 450,000
----------
TOTAL INVESTMENTS - (Cost $10,722,726) - 99.0% 12,392,705
OTHER ASSETS LESS LIABILITIES - 1.0% 122,359
----------
NET ASSETS - 100.0% $12,515,064
----------
----------
</TABLE>

The percentage shown for each investment category is the total value of that
category as a percentage of the net assets of the Fund.
(a) Non-income producing securities.

PB SERIES TRUST
FIXED INCOME FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
PRINCIPAL
SECURITY DESCRIPTION AMOUNT VALUE
- --------------------------------------------- --------- ----------
<S> <C> <C>
MORTGAGE BACKED SECURITIES - 1.8%
GE Capital Mortgage 6.500%, 01/25/18..... $ 100,000 $ 99,812
----------
TOTAL MORTGAGE BACKED SECURITIES
- (Cost $99,503) 99,812
----------

U.S. GOVERNMENT AND AGENCY SECURITIES - 71.9%
GOVERNMENT AGENCY - 30.7%
Federal Home Loan Mortgage Corporation
5.950%, 01/19/06....................... 750,000 744,727
Federal National Mortgage Association
6.375%, 01/16/02....................... 500,000 507,890
5.875%, 02/02/06....................... 275,000 272,165
5.750%, 06/25/10....................... 100,000 99,156
5.500%, 02/25/17....................... 100,000 98,656
----------
1,722,594
----------
U.S. GOVERNMENT - 41.2%
U.S. Treasury Notes
5.875%, 08/31/99....................... 750,000 752,340
6.125%, 12/31/01....................... 250,000 253,320
6.500%, 08/15/05....................... 1,250,000 1,304,300
----------
2,309,960
----------
TOTAL U.S. GOVERNMENT AND AGENCY SECURITIES - (Cost
$3,904,871) 4,032,554
----------

<CAPTION>
SHARES
---------
<S> <C> <C>

SHORT TERM INVESTMENTS - 24.5%
INVESTMENT COMPANY - 4.0%
SSgA U.S. Government Money Market Fund... 225,000 225,000
----------
<CAPTION>
PRINCIPAL
AMOUNT
---------
<S> <C> <C>

REPURCHASE AGREEMENT - 2.9%
Agreement with State Street Bank and
Trust Company, dated 12/31/1997,
4.250%, to be repurchased at $164,719
on 01/02/1998 (collateralized by
$170,000 par value U.S. Treasury Notes,
6.125 %, due 3/31/1998, with a value of
$172,763).............................. $ 164,680 164,680
----------
GOVERNMENT AGENCY - 17.6%
Federal Farm Credit Bank Discount Note
5.390%, 01/09/98....................... 500,000 499,389
Federal Home Loan Bank Discount Note
6.080%, 5/29/98........................ 500,000 488,850
----------
988,239
----------
TOTAL SHORT TERM INVESTMENTS
- (Cost $1,377,886) 1,377,919
----------
TOTAL INVESTMENTS - (Cost $5,382,260) - 98.2% 5,510,285
OTHER ASSETS LESS LIABILITIES - 1.8% 96,402
----------
NET ASSETS - 100.0% $5,606,687
----------
----------
</TABLE>

The percentage shown for each investment category is the total value of that
category as a percentage of the net assets of the Fund.

THE NOTES TO THE FINANCIALS ARE AN INTEGRAL PART OF THIS REPORT.
22
<PAGE>
PB SERIES TRUST
INTERNATIONAL ACTIVE FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1997

<TABLE>
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- --------------------------------------------- --------- ----------
<S> <C> <C>
COMMON STOCK AND OTHER
EQUITY INTERESTS - 91.8%
ARGENTINA - 0.8%
Astra CIA................................ 4,340 $ 7,597
BCO De Galicia........................... 1,506 9,640
BCO Frances RI........................... 518 4,808
Molions Rio PL........................... 1,172 2,813
Perez Company ADR........................ 1,500 20,813
Siderca S.A.............................. 4,880 13,569
Telefonica De Arg SA ADR................. 637 23,728
----------
82,968
----------
AUSTRALIA - 0.8%
Amcor Limited............................ 1,485 6,531
Broken Hill Proprietary Company
Limited................................ 1,213 11,261
Comalco Limited.......................... 1,946 8,037
Leighton Holdings Limited................ 1,117 3,900
News Corporation Limited................. 2,340 12,912
Pasminco Limited......................... 8,806 10,097
QNI Limited.............................. 2,569 1,708
TABCORP Holdings Limited................. 1,044 4,898
Westpac Banking Corporation Limited...... 3,463 22,147
----------
81,491
----------
BELGIUM - 2.1%
Webs Index Fund Belgium Index............ 12,475 206,617
----------
CHILE - 1.4%
Banco Santander Chile ADR................ 1,020 14,409
Chilgener SA Sponsored ADR............... 687 16,833
Compania Cervecerias Unidas SA Sponsored
ADR.................................... 339 9,958
Compania de Telecom De Chile Sponsored
ADR.................................... 1,015 30,324
Empresa Nacional Electricidad Sponsored
ADR.................................... 1,169 20,677
Enersis Sponsored ADR.................... 945 27,406
Madeco SA Sponsored ADR.................. 312 4,758
Maderas Y Sinteticos Sponsored ADR....... 432 4,105
Quimica Y Minera Chile SA Sponsored
ADR.................................... 190 8,360
----------
136,830
----------
FINLAND - 4.2%
Enso..................................... 1,600 12,395
Hartwall Ab Oy........................... 379 31,307
Metsa Serla Oy........................... 3,231 25,207
Neste Oy................................. 606 14,684
Nokia Ab Oy.............................. 2,710 192,517
Okobank Osuuspankk....................... 1,652 26,201
Rautaruukki Oy........................... 2,273 18,358
UPM Kymmene Corporation Oy............... 1,536 30,732
Viking Line AB........................... 200 8,077
WSOYB.................................... 1,002 37,337
YIT-Yhtymaoy Oy.......................... 1,399 15,793
----------
412,608
----------
FRANCE - 12.3%
Alcatel Alsthom.......................... 632 80,360
AXA UAP.................................. 685 53,022
Banque Nationale de Paris................ 2,010 106,873
Compagnie De St. Gobain.................. 330 46,896
</TABLE>

PB SERIES TRUST
INTERNATIONAL ACTIVE FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1997

<TABLE>
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- --------------------------------------------- --------- ----------
COMMON STOCK AND OTHER
EQUITY INTERESTS (CONTINUED)
<S> <C> <C>

FRANCE - (CONTINUED)
Compagnie Generale des Eaux.............. 521 $ 72,740
Credit Commer France..................... 490 33,596
Elf Aquitaine SA......................... 626 72,833
France Telecom (a)....................... 1,800 65,311
Groupe Danone............................ 411 73,435
Group GTM................................ 800 53,852
L'Oreal.................................. 220 86,113
Lafarge SA............................... 914 59,992
Peugeot.................................. 680 85,784
Pinault-Printe........................... 130 69,380
Schneider SA............................. 504 27,375
Societe Generale......................... 827 112,713
Total B FRF 50........................... 500 54,433
Valeo SA................................. 685 46,475
----------
1,201,183
----------
GERMANY - 9.9%
Allianz AG............................... 355 91,589
BASF AG.................................. 1,300 46,407
Bayer AG................................. 2,943 109,231
Commerzbank AG........................... 1,190 46,318
Daimler-Benz AG.......................... 657 46,395
Degussa AG............................... 1,036 51,268
Deutsche Bank............................ 550 38,473
Dresdner Bank AG......................... 661 30,065
MAN AG................................... 231 52,405
Mannesmann AG............................ 298 149,626
RWE AG................................... 1,400 75,121
Siemens AG............................... 985 59,424
VEBA AG.................................. 2,010 136,909
Volkswagon AG............................ 65 36,322
----------
969,553
----------
IRELAND - 3.3%
Allied Irish............................. 11,800 114,510
CRH PLC.................................. 6,900 80,942
Irish Life PLC........................... 7,700 44,284
Kerry Group PLC.......................... 2,100 22,506
Smurfit (Jefferson) Group................ 23,000 64,990
----------
327,232
----------
ISRAEL - 1.7%
Bank Hapoalim Limited.................... 7,900 18,957
Bezeq Israeli Telecommunication
Corporation Limited.................... 4,500 12,427
Blue Square-Israel Limited (a)........... 1,100 10,508
Clal Israel Limited...................... 40,000 11,906
ECI Telecommunication Limited............ 1,000 25,501
Elco Holdings Limited.................... 1,200 9,837
Elite Industries Limited................. 300 8,906
Formula Systems Limited (a).............. 410 12,619
Industrial Buildings Corporation......... 7,800 13,272
Israel Chemicals Limited................. 12,800 17,329
Teva Pharmaceutical Industries Limited... 480 22,765
----------
164,027
----------
</TABLE>

THE NOTES TO THE FINANCIALS ARE AN INTEGRAL PART OF THIS REPORT.
23
<PAGE>
PB SERIES TRUST
INTERNATIONAL ACTIVE FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1997

<TABLE>
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- --------------------------------------------- --------- ----------
COMMON STOCK AND OTHER
EQUITY INTERESTS (CONTINUED)
<S> <C> <C>
ITALY - 7.7%
Alleanza Assicurazioni................... 3,521 $ 35,039
Assic Generali........................... 2,000 49,123
Banca Commerciale Italiana............... 19,767 68,719
Benetton Group SPA....................... 2,080 34,039
Danieli & Company........................ 5,001 34,348
Edison SPA............................... 8,000 48,388
Eni SPA.................................. 20,903 118,514
Fiat SPA................................. 15,301 44,501
Instituto Nazionale delle Assicurazioni
Istituto............................... 20,646 41,839
Istituto Mobiliare Italiano SPA.......... 7,018 83,309
Italcementi SPA.......................... 5,000 34,849
Telecom Italia SPA....................... 13,080 83,549
Telecom Italia Mobile SPA................ 18,000 83,078
----------
759,295
----------
JAPAN - 13.6 %
Aoyama Trading Company Limited........... 3,300 58,957
Bridgestone Company...................... 2,000 43,399
Canon Incorporated....................... 2,000 46,621
Fanuc.................................... 3,200 121,214
Fuji Photo Film Company.................. 3,000 115,018
Fujisawa Pharmaceutical Company.......... 6,000 52,448
Hitachi Limited.......................... 6,000 42,787
Ito-Yokado............................... 1,000 50,992
Kirin Brewery Company.................... 7,000 50,992
Matsushita Electric Works................ 3,000 43,937
Mitsui O.S.K. Lines Limited (a).......... 36,000 49,963
Murata Manufacturing Company Limited..... 3,000 75,452
NEC Corporation.......................... 11,000 117,242
Nippon Telephone & Telegraph
Corporation............................ 32 137,407
Sumitomo Bank Limited.................... 10,000 114,250
Sumitomo Trust & Banking................. 12,000 62,385
Tokio Marine & Fire Insurance............ 5,000 56,741
Tokyo Electric........................... 2,100 38,323
Toyota Motor............................. 2,000 57,355
----------
1,335,483
----------
MEXICO - 1.7%
Webs Index Fund Mexico Free Index........ 10,100 166,650
----------
NETHERLANDS - 5.0%
ABN AMRO Holdings NV..................... 1,532 29,862
Akzo Nobel............................... 203 35,021
Elsevier................................. 1,500 24,279
ING Groep NV............................. 569 23,979
Koninklijke PTT Nederland NV............. 755 31,518
Philips Electronics NV................... 424 25,443
Polygram NV.............................. 550 26,326
Royal Dutch Petroleum Company............ 2,848 156,418
Unilever NV, PLC......................... 936 57,735
Vendex International NV.................. 593 32,744
VNU-Verenigde Nederlandse
Uitgeversbedrijven Verenigd Bezit...... 1,610 45,443
----------
488,768
----------
</TABLE>

PB SERIES TRUST
INTERNATIONAL ACTIVE FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1997

<TABLE>
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- --------------------------------------------- --------- ----------
COMMON STOCK AND OTHER
EQUITY INTERESTS (CONTINUED)
<S> <C> <C>

PORTUGAL - 4.1%
Banco Comercia Portugues................. 2,200 $ 45,017
Banco Espirito........................... 2,200 65,504
Brisa (a)................................ 400 14,336
Cimpor Cimento........................... 1,700 44,582
Elec De Portugal (a)..................... 2,500 47,364
Jeronimo Martins......................... 1,250 39,684
Portugal Telecom......................... 2,700 125,349
Sonae Investimento....................... 550 22,257
----------
404,093
----------
SPAIN - 2.4%
Argentaria Corporation SA................ 450 27,381
Banco Bilbao............................. 1,000 32,359
Banco Popular............................ 450 31,457
Gas Natural SD........................... 380 19,704
Gas Y Electric........................... 300 21,659
Iberdrola SA............................. 2,600 34,216
Repsol SA................................ 700 29,864
Telefonica De Espana..................... 1,350 38,544
----------
235,184
----------
SWITZERLAND - 8.5%
ABB AG................................... 30 37,654
Clariant AG.............................. 61 50,903
Credit Suisse Group...................... 368 56,886
Holderbank Financiere Glarus AG.......... 51 41,581
Kuoni Reisen Holding AG.................. 14 52,428
Nestle SA................................ 67 100,316
Novartis AG.............................. 126 204,254
Roche Holding AG......................... 15 148,820
Tag Heuer International SA (a)........... 349 30,316
Union Bank of Switzerland................ 77 111,233
----------
834,391
----------
UNITED KINGDOM - 10.9%
Abbey National PLC....................... 3,375 58,477
Boots Company PLC........................ 3,826 55,801
British Petroleum........................ 2,400 31,732
British Telecommunications PLC........... 4,474 35,453
Commercial Union PLC..................... 3,667 54,389
EMI Group PLC............................ 4,123 35,702
Glaxo Wellcome........................... 1,800 42,752
HSBC Holdings............................ 1,450 37,625
IMI PLC.................................. 5,277 35,344
Lasmo PLC................................ 10,500 46,912
Lloyds TSB Group PLC..................... 8,496 110,299
Prudential Corporation PLC............... 4,685 54,671
Scottish & Newcastle PLC................. 4,971 60,388
Scottish Power PLC....................... 7,284 64,546
Shell Transport & Trading Company PLC.... 7,177 52,336
Smithkline Beecham PLC................... 6,788 70,129
Tesco.................................... 4,400 35,610
Unilever PLC............................. 7,452 64,188
Wolseley PLC............................. 5,159 41,157
Zeneca Group PLC......................... 2,246 79,387
----------
1,066,898
----------
</TABLE>

THE NOTES TO THE FINANCIALS ARE AN INTEGRAL PART OF THIS REPORT.
24
<PAGE>
PB SERIES TRUST
INTERNATIONAL ACTIVE FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
SECURITY DESCRIPTION SHARES VALUE
- --------------------------------------------- --------- ----------
COMMON STOCK AND OTHER
EQUITY INTERESTS (CONTINUED)
<S> <C> <C>
VENEZUELA - 1.4%
Ceramica Carabobo ADR.................... 12,650 $ 10,372
Cia Anonima Telef De Ven ADR............. 2,000 83,250
Mavesa SA ADR............................ 1,750 11,156
Siderurgica Venez SIV ADR................ 4,650 18,382
Sudamtex De Venezuela ADR................ 1,232 10,934
----------
134,094
----------
TOTAL COMMON STOCK AND OTHER EQUITY INTERESTS (Cost
$8,722,898) 9,007,365
----------

<CAPTION>
PRINCIPAL
AMOUNT
---------
<S> <C> <C>
SHORT TERM INVESTMENTS - 6.8%
TIME DEPOSIT - 6.8%
State Street Bank and Trust Company Time
Deposit, 1/02/98....................... $ 664,000 $ 664,000
----------
TOTAL SHORT TERM INVESTMENTS
- (Cost $664,000) 664,000
----------
TOTAL INVESTMENTS - (Cost $9,386,898) - 98.6% 9,671,365
OTHER ASSETS LESS LIABILITIES - 1.4% 132,900
----------
NET ASSETS - 100.0% $9,804,265
----------
----------
</TABLE>

The percentage shown for each investment category is the total value of that
category as a percentage of the net assets of the Fund.

(a) Non-income producing securities.

ADR- American Depositary Receipts.

PB SERIES TRUST
INTERNATIONAL ACTIVE FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1997

<TABLE>
<S> <C>
INDUSTRY HOLDINGS AT DECEMBER 31, 1997

Banking......................................... 14.82 %
Telecommunications.............................. 9.87 %
Energy Sources.................................. 6.72 %
Health & Personal Care.......................... 6.50 %
Utilities-Electrical & Gas...................... 5.13 %
Insurance....................................... 4.89 %
Electrical & Electronics........................ 4.02 %
Building Materials & Components................. 3.89 %
Investment Companies............................ 3.80 %
Food & Household Products....................... 3.58 %
Chemicals....................................... 2.97 %
Merchandising................................... 2.90 %
Automobiles..................................... 2.76 %
Electronic Components, Instruments.............. 2.61 %
Recreation, Other Consumer Goods................ 2.59 %
Machinery & Engineering......................... 2.41 %
Forest Products & Paper......................... 1.47 %
Beverages & Tobacco............................. 1.46 %
Broadcasting & Publishing....................... 1.22 %
Financial Services.............................. 1.11 %
Construction & Housing.......................... 1.03 %
Miscellaneous Materials......................... 1.02 %
Business & Public Services...................... 0.89 %
Appliances & Household Durables................. 0.71 %
Transportation-Shipping......................... 0.59 %
Leisure & Tourism............................... 0.59 %
Metals-Non Ferrous.............................. 0.56 %
Metals-Steel.................................... 0.52 %
Textiles & Apparel.............................. 0.46 %
Industrial Components........................... 0.44 %
Real Estate..................................... 0.14 %
Multi-Industry.................................. 0.12 %
Energy Equipment & Services..................... 0.08 %
----------
Total Investments by Industry................. 91.87 %
Time Deposit.................................... 6.77 %
----------
Total Investments............................. 98.64 %
Other Assets Less Liabilities................... 1.36 %
----------
Net Assets...................................... 100.00 %
----------
----------
</TABLE>

THE NOTES TO THE FINANCIALS ARE AN INTEGRAL PART OF THIS REPORT.
25
<PAGE>
PB SERIES TRUST
MONEY MARKET FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1997

<TABLE>
<CAPTION>
PRINCIPAL
SECURITY DESCRIPTION AMOUNT VALUE
- --------------------------------------------- --------- ----------
<S> <C> <C>
ASSET-BACKED SECURITIES - 4.3%
Arcadia Automobile Receivables Trust
1997-C, 5.650%, 09/15/98............... $ 56,048 $ 56,048
Copelco Capital Funding Corp.
1997-A, 5.809%, 07/20/98............... 46,256 46,256
----------
TOTAL ASSET BACKED SECURITIES
- (Cost $102,304) 102,304
----------

VARIABLE RATE NOTES - 30.5%
Edgefield County, SC County School
District, Series, 1997
5.719%, 12/01/04 +..................... 100,000 100,000
Grand Aire Express, Inc., Series 1997
5.700%, 07/01/12 +..................... 100,000 100,000
International Processing Corporation
5.790%, 01/02/08 +..................... 10,000 10,000
IT Spring Wire, LLC, Series 1997
5.700%, 07/01/07 +..................... 100,000 100,000
JFK Family Borrowing, LLP, Series 1997
5.706%, 10/01/22 +..................... 50,000 50,000
La-Man Corporation
5.660%, 09/01/12 +..................... 100,000 100,000
Scranton Times, LP., Series 1997
5.710%, 05/31/07 +..................... 100,000 100,000
Triangle Fund, Series 1997
5.750%, 11/16/98 +..................... 100,000 100,000
Westcourt
5.790%, 06/01/16 +..................... 60,000 60,000
----------
TOTAL VARIABLE RATE NOTES
- (Cost $720,000) 720,000
----------

SHORT TERM INVESTMENTS - 63.8%
JOINT REPURCHASE AGREEMENTS - 63.8%
Joint agreement with Fuji Government
Securities Incorporated, dated
12/31/1997, bearing 6.600%, to be
repurchased at $520,191 on 01/02/1998
(collateral: U.S Treasury
Notes/Bonds/Bills/Tips, 3.375% -
15.75%, 04/09/98 - 11/15/18, value
equal to 102% of the repurchase
agreement)............................. 520,000 520,000

Joint agreement with HSBC Securities
Incorporated, dated 12/31/1997, bearing
6.800%, to be repurchased at $100,038
on 01/02/1998 (collateral: U.S Treasury
Bonds/ Bills, 7.250% - 12.000%,
01/02/98 - 08/15/17, value equal to
102% of the repurchase agreement)...... 100,000 100,000

Joint agreement with PaineWebber
Incorporated, dated 12/31/1997, bearing
6.600%, to be repurchased at $520,191
on 01/02/1998 (collateral: U.S Treasury
Bonds/Bills, 7.250% - 12.000%, 01/02/98
- 08/15/17, value equal to 102% of the
repurchase agreement).................. 520,000 520,000
</TABLE>

PB SERIES TRUST
MONEY MARKET FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
PRINCIPAL
SECURITY DESCRIPTION AMOUNT VALUE
- --------------------------------------------- --------- ----------
SHORT TERM INVESTMENTS (CONTINUED)
<S> <C> <C>

Joint agreement with Societe Generale,
dated 12/31/1997, bearing 6.600%, to be
repurchased at $100,037 on 01/02/1998
(collateral: U.S Treasury Note/Tips,
3.375% - 6.500%, 10/15/06 - 01/15/07,
value equal to 102% of the repurchase
agreement)............................. $ 100,000 $ 100,000

Joint agreement with State Street Bank
and Trust Company, dated 12/31/1997,
bearing 6.550%, to be repurchased at
$66,024 on 01/02/1998 (collateral: U.S
Treasury Note, 5.875%, 04/30/98, value
equal to 102% of the repurchase
agreement)............................. 66,000 66,000

Joint agreement with Swiss Bank
Corporation, dated 12/31/1997, bearing
6.550%, to be repurchased at $100,036
on 01/02/1998 (collateral: U.S Treasury
Bonds, 6.500% - 12.500%, 05/15/09 -
11/15/26, value equal to 102% of the
repurchase agreement).................. 100,000 100,000

Joint agreement with UBS Securities,
dated 12/31/1997, bearing 6.800%, to be
repurchased at $100,036 on 01/02/1998
(collateral: Federal Home Loan Mortgage
Corporation, 5.500% - 9.000%, 12/15/07
- 12/30/27, value equal to 102% of the
repurchase agreement).................. 100,000 100,000
----------

TOTAL SHORT TERM INVESTMENTS
(Cost $1,506,000) 1,506,000
----------
TOTAL INVESTMENTS AT AMORTIZED COST AND VALUE -
98.6% $2,328,304
OTHER ASSETS LESS LIABILITIES - 1.4% 33,037
----------
NET ASSETS - 100.0% $2,361,341
----------
----------
</TABLE>

The percentage shown for each investment category is the total value of that
category as a percentage of the net assets of the Fund.

+ Variable rate demand notes are payable upon not more than one, seven, or
thirty day's notice. Variable rate security which may be reset weekly. The
interest rate shown reflects the rate currently in effect.

THE NOTES TO THE FINANCIALS ARE AN INTEGRAL PART OF THIS REPORT.
26
<PAGE>
(This page has been left blank intentionally.)

27
<PAGE>
PB SERIES TRUST
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1997

<TABLE>
<CAPTION>
CAPITAL INCOME GROWTH &
PRESERVATION ORIENTED INCOME
PORTFOLIO PORTFOLIO PORTFOLIO
------------ -------- ---------
<S> <C> <C> <C>
ASSETS
Investments in
securities, at value
(a).................. $26,773 $ 8,256 $180,827
Repurchase agreement,
at value (a)......... -- -- --
Cash, including foreign
currency, at value... 3,050 3,044 3,218
Receivable for forward
currency contracts
(Note 6)............. -- -- --
Interest receivable.... -- -- --
Dividends receivable... -- -- --
Prepaid insurance...... 1,213 1,213 1,213
Receivable from
Investment Adviser
(Note 3)............. 303 286 301
Foreign income tax
reclaim receivable... -- -- --
------------ -------- ---------
TOTAL ASSETS......... 31,339 12,799 185,559
LIABILITIES
Payable to Investment
Adviser.............. -- -- --
Accounts payable and
accrued expenses..... 4,565 4,543 4,729
------------ -------- ---------
TOTAL LIABILITIES.... 4,565 4,543 4,729
------------ -------- ---------
NET ASSETS........... $26,774 $ 8,256 $180,830
------------ -------- ---------
------------ -------- ---------
NET ASSETS CONSIST OF:
Paid-in capital (Note
5)................... $26,963 $ 8,331 $179,972
Undistributed
(distribution in
excess of) net
investment income
(Note 2)............. 2 -- 19
Accumulated net
realized gain (loss)
on investments and
foreign currency
transactions......... -- -- (73)
Net unrealized
appreciation
(depreciation) of:
Investments.......... (191) (75) 912
Translations of
assets and
liabilities in
foreign
currencies......... -- -- --
------------ -------- ---------
NET ASSETS........... $26,774 $ 8,256 $180,830
------------ -------- ---------
------------ -------- ---------
NET ASSET VALUE PER SHARE

Offering and redemption
price per share
(based on shares of
beneficial interest
outstanding)......... $ 10.23 $ 10.63 $ 10.72

Total shares
outstanding at end of
period (Note 5)...... 2,618 777 16,869

Capital shares
authorized........... Indefinite Indefinite Indefinite

(a) Investments in
securities, including
repurchase agreements,
at cost................ $26,964 $ 8,331 $179,915
</TABLE>

* Commencement of investment operations.

THE NOTES TO THE FINANCIALS ARE AN INTEGRAL PART OF THIS REPORT.
28
<PAGE>

<TABLE>
<CAPTION>
CAPITAL MAXIMUM HIGH FIXED MONEY
GROWTH APPRECIATION QUALITY INCOME INTERNATIONAL MARKET
PORTFOLIO PORTFOLIO STOCK FUND FUND ACTIVE FUND FUND
--------- ------------ ----------- ---------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments in
securities, at value
(a).................. $ 816,349 $244,738 $12,392,705 $5,345,605 $ 9,671,365 $ 822,304
Repurchase agreement,
at value (a)......... -- -- -- 164,680 -- 1,506,000
Cash, including foreign
currency, at value... 3,041 3,044 128,105 24,190 131,014 40,681
Receivable for forward
currency contracts
(Note 6)............. -- -- -- -- 3,080 --
Interest receivable.... -- -- 74 88,129 106 4,514
Dividends receivable... -- -- 16,677 -- 5,283 --
Prepaid insurance...... 1,213 1,213 1,213 1,213 1,213 1,213
Receivable from
Investment Adviser
(Note 3)............. 311 337 5,885 9,237 14,311 10,487
Foreign income tax
reclaim receivable... -- -- -- -- 6,227 --
--------- ------------ ----------- ---------- ------------- ---------
TOTAL ASSETS......... 820,914 249,332 12,544,659 5,633,054 9,832,599 2,385,199
LIABILITIES
Payable to Investment
Adviser.............. -- -- 6,524 2,981 7,317 711
Accounts payable and
accrued expenses..... 4,565 4,594 23,071 23,386 21,017 23,147
--------- ------------ ----------- ---------- ------------- ---------
TOTAL LIABILITIES.... 4,565 4,594 29,595 26,367 28,334 23,858
--------- ------------ ----------- ---------- ------------- ---------
NET ASSETS........... $ 816,349 $244,738 $12,515,064 $5,606,687 $ 9,804,265 $2,361,341
--------- ------------ ----------- ---------- ------------- ---------
--------- ------------ ----------- ---------- ------------- ---------
NET ASSETS CONSIST OF:
Paid-in capital (Note
5)................... $ 812,120 $239,094 $10,757,591 $5,478,662 $10,203,681 $2,361,341
Undistributed
(distribution in
excess of) net
investment income
(Note 2)............. -- 32 15 -- (12,039) --
Accumulated net
realized gain (loss)
on investments and
foreign currency
transactions......... (33) (47) 87,479 -- (673,728) --
Net unrealized
appreciation
(depreciation) of:
Investments.......... 4,262 5,659 1,669,979 128,025 284,467 --
Translations of
assets and
liabilities in
foreign
currencies......... -- -- -- -- 1,884 --
--------- ------------ ----------- ---------- ------------- ---------
NET ASSETS........... $ 816,349 $244,738 $12,515,064 $5,606,687 $ 9,804,265 $2,361,341
--------- ------------ ----------- ---------- ------------- ---------
--------- ------------ ----------- ---------- ------------- ---------
NET ASSET VALUE PER SHARE

Offering and redemption
price per share
(based on shares of
beneficial interest
outstanding)......... $ 11.04 $ 11.29 $ 11.74 $ 10.26 $ 9.60 $ 1.00

Total shares
outstanding at end of
period (Note 5)...... 73,920 21,679 1,065,622 546,467 1,021,010 2,361,341

Capital shares
authorized........... Indefinite Indefinite Indefinite Indefinite Indefinite Indefinite

(a) Investments in
securities, including
repurchase agreements,
at cost................. $ 812,087 $239,079 $10,722,726 $5,382,260 $ 9,386,898 $2,328,304
</TABLE>

THE NOTES TO THE FINANCIALS ARE AN INTEGRAL PART OF THIS REPORT.
29
<PAGE>
PB SERIES TRUST
STATEMENTS OF OPERATIONS
FOR THE PERIOD MAY 9, 1997* THROUGH DECEMBER 31, 1997

<TABLE>
<CAPTION>
CAPITAL INCOME GROWTH &
PRESERVATION ORIENTED INCOME
PORTFOLIO PORTFOLIO PORTFOLIO
------------ --------- ---------
<S> <C> <C> <C>
INVESTMENT INCOME
Interest income........ $ 180 $ 5 $ 193
Dividend income........ 425 147 2,799
Less foreign taxes
withheld........... -- -- --
------------ --------- ---------
TOTAL INVESTMENT
INCOME............... 605 152 2,992
EXPENSES
Investment adviser fee
(Note 3)............. -- -- --
Administrative fee..... 1,358 1,331 1,333
Accounting fee......... 4,294 4,294 4,344
Audit fee.............. 1,559 1,543 1,621
Custodian fees and
expenses............. 68 67 164
Trustee's fees (Note
3)................... 1,176 1,175 1,179
Printing expense....... 428 428 430
Legal fee.............. 150 150 169
Insurance expense...... 2,149 2,149 2,149
Miscellaneous
expense.............. 28 26 28
------------ --------- ---------
Total operating
expenses before
reimbursement...... 11,210 11,163 11,417
Expenses reimbursed by
the Investment
Adviser (Note 3)..... (11,210) (11,163) (11,417)
------------ --------- ---------
NET EXPENSES......... 0 0 0
------------ --------- ---------
NET INVESTMENT
INCOME............. 605 152 2,992
NET REALIZED AND
UNREALIZED GAIN (LOSS)
FROM INVESTMENTS AND
FOREIGN CURRENCY
Net realized gain
(loss) from:
Investments.......... 33 -- 895
Distribution from
underlying funds... 40 40 1,073
Foreign currency
transactions....... -- -- --
------------ --------- ---------
73 40 1,968
Change in unrealized
appreciation
(depreciation)
during the period on:
Investments.......... (191) (75) 912
Translations of
assets and
liabilities in
foreign
currencies......... -- -- --
------------ --------- ---------
(191) (75) 912
------------ --------- ---------
NET REALIZED AND
UNREALIZED GAIN
(LOSS)............... (118) (35) 2,880
------------ --------- ---------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM OPERATIONS........ $ 487 $ 117 $ 5,872
------------ --------- ---------
------------ --------- ---------
</TABLE>

* Commencement of investment operations.

THE NOTES TO THE FINANCIALS ARE AN INTEGRAL PART OF THIS REPORT.
30
<PAGE>

<TABLE>
<CAPTION>
CAPITAL MAXIMUM HIGH FIXED MONEY
GROWTH APPRECIATION QUALITY INCOME INTERNATIONAL MARKET
PORTFOLIO PORTFOLIO STOCK FUND FUND ACTIVE FUND FUND
--------- ------------ ---------- -------- ------------- --------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Interest income........ $ -- $ -- $ 43,591 $204,045 $ 28,297 $ 75,611
Dividend income........ 3,441 1,462 106,636 -- 127,691 --
Less foreign taxes
withheld........... -- -- -- -- (12,982) --
--------- ------------ ---------- -------- ------------- --------
TOTAL INVESTMENT
INCOME............... 3,441 1,462 150,227 204,045 143,006 75,611
EXPENSES
Investment adviser fee
(Note 3)............. -- -- 46,919 21,981 58,636 5,321
Administrative fee..... 1,331 1,331 8,653 8,655 8,655 8,659
Accounting fee......... 4,294 4,294 8,482 8,929 8,108 8,519
Audit fee.............. 1,559 1,559 7,733 7,772 7,772 7,772
Custodian fees and
expenses............. 110 151 2,138 1,577 22,382 1,118
Trustee's fees (Note
3)................... 1,175 1,175 1,172 1,176 1,175 1,175
Printing expense....... 428 428 535 535 535 535
Legal fee.............. 150 150 121 84 121 62
Insurance expense...... 2,149 2,149 2,149 2,149 2,149 2,149
Miscellaneous
expense.............. 26 26 180 202 203 203
--------- ------------ ---------- -------- ------------- --------
Total operating
expenses before
reimbursement...... 11,222 11,263 78,082 53,060 109,736 35,513
Expenses reimbursed by
the Investment
Adviser (Note 3)..... (11,222) (11,263) (13,117 ) (22,624) (34,811) (26,866)
--------- ------------ ---------- -------- ------------- --------
NET EXPENSES......... 0 0 64,965 30,436 74,925 8,647
--------- ------------ ---------- -------- ------------- --------
NET INVESTMENT
INCOME............. 3,441 1,462 85,262 173,609 68,081 66,964
NET REALIZED AND
UNREALIZED GAIN (LOSS)
FROM INVESTMENTS AND
FOREIGN CURRENCY
Net realized gain
(loss) from:
Investments.......... 266 334 229,655 16,311 (673,728) --
Distribution from
underlying funds... 2,193 2,300 -- -- -- --
Foreign currency
transactions....... -- -- -- -- (62,431) --
--------- ------------ ---------- -------- ------------- --------
2,459 2,634 229,655 16,311 (736,159) --
Change in unrealized
appreciation
(depreciation)
during the period on:
Investments.......... 4,262 5,659 1,669,979 128,025 284,467 --
Translations of
assets and
liabilities in
foreign
currencies......... -- -- -- -- 1,884 --
--------- ------------ ---------- -------- ------------- --------
4,262 5,659 1,669,979 128,025 286,351 --
--------- ------------ ---------- -------- ------------- --------
NET REALIZED AND
UNREALIZED GAIN
(LOSS)............... 6,721 8,293 1,899,634 144,336 (449,808) --
--------- ------------ ---------- -------- ------------- --------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM OPERATIONS......... $ 10,162 $ 9,755 $1,984,896 $317,945 $(381,727) $ 66,964
--------- ------------ ---------- -------- ------------- --------
--------- ------------ ---------- -------- ------------- --------
</TABLE>

THE NOTES TO THE FINANCIALS ARE AN INTEGRAL PART OF THIS REPORT.
31
<PAGE>
PB SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE PERIOD MAY 9, 1997* THROUGH DECEMBER 31, 1997

<TABLE>
<CAPTION>
CAPITAL INCOME GROWTH &
PRESERVATION ORIENTED INCOME
PORTFOLIO PORTFOLIO PORTFOLIO
------------ -------- ---------
<S> <C> <C> <C>
INCREASE (DECREASE) IN
NET ASSETS FROM
OPERATIONS FOR THE
PERIOD ENDED DECEMBER
31, 1997
Net investment
income............... $ 605 $ 152 $ 2,992
Net realized gain
(loss)............... 73 40 1,968
Change in unrealized
appreciation
(depreciation)
during the period.... (191) (75) 912
------------ -------- ---------
Net increase (decrease)
in net assets
resulting from
operations........... 487 117 5,872
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment
income............... (603) (152) (2,989)

Net realized gain...... (73) (40) (2,026)
FUND SHARE TRANSACTIONS
(NOTE 5)............. 26,963 8,331 179,973
------------ -------- ---------
TOTAL INCREASE IN NET
ASSETS............... 26,774 8,256 180,830
NET ASSETS:
Beginning of period.... -- -- --
------------ -------- ---------
End of period (a)...... $26,774 $8,256 $180,830
------------ -------- ---------
------------ -------- ---------

(a) Including
undistributed
(distribution in excess
of) net investment
income................. $ 2 $ -- $ 19
------------ -------- ---------
------------ -------- ---------
</TABLE>

* Commencement of investment operations.

THE NOTES TO THE FINANCIALS ARE AN INTEGRAL PART OF THIS REPORT.
32
<PAGE>

<TABLE>
<CAPTION>
CAPITAL MAXIMUM HIGH FIXED MONEY
GROWTH APPRECIATION QUALITY INCOME INTERNATIONAL MARKET
PORTFOLIO PORTFOLIO STOCK FUND FUND ACTIVE FUND FUND
--------- ------------ ----------- ---------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN
NET ASSETS FROM
OPERATIONS FOR THE
PERIOD ENDED DECEMBER
31, 1997
Net investment
income............... $ 3,441 $ 1,462 $ 85,262 $ 173,609 $ 68,081 $ 66,964
Net realized gain
(loss)............... 2,459 2,634 229,655 16,311 (736,159) --
Change in unrealized
appreciation
(depreciation)
during the period.... 4,262 5,659 1,669,979 128,025 286,351 --
--------- ------------ ----------- ---------- ------------- ----------
Net increase (decrease)
in net assets
resulting from
operations........... 10,162 9,755 1,984,896 317,945 (381,727) 66,964
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment
income............... (3,441) (1,462) (85,247 ) (173,971) (17,693) (66,964)

Net realized gain...... (2,492) (2,649) (142,176 ) (16,311) -- --
FUND SHARE TRANSACTIONS
(NOTE 5)............. 812,120 239,094 10,757,591 5,479,024 10,203,685 2,356,341
--------- ------------ ----------- ---------- ------------- ----------
TOTAL INCREASE IN NET
ASSETS............... 816,349 244,738 12,515,064 5,606,687 9,804,265 2,356,341
NET ASSETS:
Beginning of period.... -- -- -- -- -- 5,000
--------- ------------ ----------- ---------- ------------- ----------
End of period (a)...... $ 816,349 $244,738 $12,515,064 $5,606,687 $9,804,265 $2,361,341
--------- ------------ ----------- ---------- ------------- ----------
--------- ------------ ----------- ---------- ------------- ----------

(a) Including
undistributed
(distribution in excess
of) net investment
income.................. $ -- $ 32 $ 15 $ -- $ (12,039) $ --
--------- ------------ ----------- ---------- ------------- ----------
--------- ------------ ----------- ---------- ------------- ----------
</TABLE>

THE NOTES TO THE FINANCIALS ARE AN INTEGRAL PART OF THIS REPORT.
33
<PAGE>
PB SERIES TRUST
FINANCIAL HIGHLIGHTS
For a share outstanding throughout the period May 9, 1997
(commencement of investment operations) through December 31, 1997

<TABLE>
<CAPTION>
CAPITAL INCOME GROWTH &
PRESERVATION ORIENTED INCOME
PORTFOLIO PORTFOLIO PORTFOLIO
------------ --------- --------
<S> <C> <C> <C>
Net asset value, beginning of period...................................................... $ 10.00 $ 10.00 $ 10.00
------------ --------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income..................................................................... 0.24 0.20 0.18
Net realized and unrealized gain on investments........................................... 0.26 0.68 0.84
------------ --------- --------
Total from investment operations.......................................................... 0.50 0.88 1.02
------------ --------- --------
LESS DISTRIBUTIONS FROM:
Net investment income..................................................................... (0.24) (0.20) (0.18 )
Net realized gains........................................................................ (0.03) (0.05) (0.12 )
------------ --------- --------
Total distributions....................................................................... (0.27) (0.25) (0.30 )
------------ --------- --------
Net asset value, end of period............................................................ $ 10.23 $ 10.63 $ 10.72
------------ --------- --------
------------ --------- --------
Total return (2).......................................................................... 4.92% 8.84% 10.25%
------------ --------- --------
------------ --------- --------
RATIOS AND SUPPLEMENTAL DATA:

Net assets, end of period................................................................. $26,774 $ 8,256 $180,830

Ratio of operating expenses to average net assets (3)..................................... -- -- --

Ratio of operating expenses to average net assets before voluntary expense reimbursement
(1)(3)................................................................................... 161.07% 1,978.36% 30.27%

Ratio of net investment income to average net assets (3).................................. 8.69% 26.94% 7.93%

Ratio of net investment income to average net assets before voluntary expense
reimbursement (1)(3)..................................................................... (152.38)% (1,951.42)% (22.34 )%

Portfolio turnover rate (4)............................................................... 32% 0% 24%
</TABLE>

- ------------------------

(1) Net investment income is after reimbursement of certain fees and expenses by
PB Investment Advisors, Inc. (See Note 3 to the financial statements). Had
PB Investment Advisors, Inc. not undertaken to reimburse expenses related to
the Portfolios and Funds, the ratios of net investment income and operating
expenses to average net assets would have been as noted above.

(2) Total return figures are not annualized. Total returns do not reflect
expenses that apply to the separate account or related variable insurance
contracts and inclusion of these charges would result in reducing the total
return figures for the period shown.

(3) Annualized for periods less than one year.

(4) Portfolio turnover rates are not annualized.

THE NOTES TO THE FINANCIALS ARE AN INTEGRAL PART OF THIS REPORT.
34
<PAGE>
PB SERIES TRUST
FINANCIAL HIGHLIGHTS
For a share outstanding throughout the period May 9, 1997
(commencement of investment operations) through December 31, 1997

<TABLE>
<CAPTION>
CAPITAL MAXIMUM HIGH
GROWTH APPRECIATION QUALITY
PORTFOLIO PORTFOLIO STOCK FUND
--------- ------------ -----------
<S> <C> <C> <C>
Net asset value, beginning of period.................................................... $ 10.00 $ 10.00 $ 10.00
--------- ------------ -----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income................................................................... 0.13 0.07 0.08
Net realized and unrealized gain on investments......................................... 1.13 1.41 1.88
--------- ------------ -----------
Total from investment operations........................................................ 1.26 1.48 1.96
--------- ------------ -----------
LESS DISTRIBUTIONS FROM:
Net investment income................................................................... (0.13) (0.07) (0.08 )
Net realized gains...................................................................... (0.09) (0.12) (0.14 )
--------- ------------ -----------
Total distributions..................................................................... (0.22) (0.19) (0.22 )
--------- ------------ -----------
Net asset value, end of period.......................................................... $ 11.04 $ 11.29 $ 11.74
--------- ------------ -----------
--------- ------------ -----------
Total return (2)........................................................................ 12.67% 14.82% 19.72%
--------- ------------ -----------
--------- ------------ -----------
RATIOS AND SUPPLEMENTAL DATA:

Net assets, end of period............................................................... $ 816,349 $244,738 $12,515,064

Ratio of operating expenses to average net assets (3)................................... -- -- 0.90%

Ratio of operating expenses to average net assets before voluntary expense reimbursement
(1)(3)................................................................................. 20.00% 24.59% 1.08%

Ratio of net investment income to average net assets (3)................................ 6.13% 3.19% 1.18%

Ratio of net investment income to average net assets before voluntary expense
reimbursement (1)(3)................................................................... (13.87)% (21.40)% 1.00%

Portfolio turnover rate (4)............................................................. 2% 6% 14%

Average commission rate paid per equity share traded N/A N/A $ 0.0598
</TABLE>

- ------------------------

(3) Annualized for periods less than one year.

(4) Portfolio turnover rates are not annualized.

THE NOTES TO THE FINANCIALS ARE AN INTEGRAL PART OF THIS REPORT.
35
<PAGE>
PB SERIES TRUST
FINANCIAL HIGHLIGHTS
For a share outstanding throughout the period May 9, 1997
(commencement of investment operations) through December 31, 1997

<TABLE>
<CAPTION>
FIXED MONEY
INCOME INTERNATIONAL MARKET
FUND ACTIVE FUND FUND
---------- ------------- ----------
<S> <C> <C> <C>
Net asset value, beginning of period.................................................. $ 10.00 $ 10.00 $ 10.00
---------- ------------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income................................................................. 0.34 0.07 0.03
Net realized and unrealized gain on investments....................................... 0.29 (0.45) --
---------- ------------- ----------
Total from investment operations...................................................... 0.63 (0.38) 0.03
---------- ------------- ----------
LESS DISTRIBUTIONS FROM:
Net investment income................................................................. (0.34) (0.02) (0.03)
Net realized gains.................................................................... (0.03) -- --
---------- ------------- ----------
Total distributions................................................................... (0.37) (0.02) (0.03)
---------- ------------- ----------
Net asset value, end of period........................................................ $ 10.26 $ 9.60 $ 1.00
---------- ------------- ----------
---------- ------------- ----------
Total return (2)...................................................................... 6.30% (3.80%) 3.31%
---------- ------------- ----------
---------- ------------- ----------
RATIOS AND SUPPLEMENTAL DATA:

Net assets, end of period............................................................. $5,606,687 $9,804,265 $2,361,341

Ratio of operating expenses to average net assets (3)................................. 0.90% 1.15% 0.65%

Ratio of operating expenses to average net assets before voluntary expense
reimbursement (1)(3)................................................................. 1.57% 1.68% 2.67%

Ratio of net investment income to average net assets (3).............................. 5.13% 1.04% 5.03%

Ratio of net investment income to average net assets before voluntary expense
reimbursement (1)(3)................................................................. 4.46% 0.51% 3.01%

Portfolio turnover rate (4)........................................................... 157% 61% N/A

Average commission rate paid per equity share traded N/A $ 0.0125 N/A
</TABLE>

- ------------------------

(3) Annualized for periods less than one year.

(4) Portfolio turnover rates are not annualized.

THE NOTES TO THE FINANCIALS ARE AN INTEGRAL PART OF THIS REPORT.
36
<PAGE>
PB SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997

NOTE 1 -- ORGANIZATION

PB Series Trust (the "Trust"), formerly Providian Series Trust, was organized as
a Massachusetts business trust on October 22, 1996 and is registered under the
Investment Company Act of 1940 and the Securities Act of 1933 as a diversified,
no-load, open-end management investment company. The Trust is a "series type" of
mutual fund which issues separate classes (or series) of stock, each of which
represents a separate diversified portfolio of investments. The Trust is
currently composed of nine series which consist of five investment portfolios
(Capital Preservation Portfolio, Income Oriented Portfolio, Growth and Income
Portfolio, Capital Growth Portfolio, and Maximum Appreciation
Portfolio-collectively, the "Portfolios") and four underlying funds (High
Quality Stock Fund, Fixed Income Fund, International Active Fund, and Money
Market Fund - collectively the "Funds").

The Portfolios seek to achieve their investment objectives by investing within
specific ranges among the Funds. Each Fund has differing investment objectives
and policies. Shares of the Portfolios are offered to separate accounts of
insurance companies to fund variable annuity contracts. The shares of the Funds
are purchased by the Portfolios. The Portfolios are offered to qualified plans
and separate accounts of insurance companies to fund variable annuity contracts.

On February 3, 1997, Providian Life and Health Separate Account V (the "Separate
Account") made an initial purchase of shares of beneficial interest in the
amount of 5,000 shares of the Money Market Fund. On May 9, 1997, the Separate
Account purchased an additional 1,995,000 shares of the Money Market Fund, and
purchased 1,000,000 shares of the High Quality Stock Fund and International
Active Fund, and 500,000 shares of the Fixed Income Fund. The Separate Account
is a separate account of Providian Life and Health Insurance Company, an
indirect, wholly owned subsidiary of Providian Corporation which, on June 10,
1997, became a direct, wholly owned subsidiary of AEGON International N.V., a
direct, wholly owned subsidiary of AEGON N.V., an international insurance
organization headquartered in The Hague, The Netherlands. Effective October 15,
1997, Providian Corporation's name was changed to Commonwealth General
Corporation ("CGC"). Effective December 31, 1997, ownership of CGC was
transferred to AEGON USA, Inc., an indirect, wholly owned subsidiary of AEGON
N.V..

NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of significant accounting policies followed by the
Trust in the preparation of its financial statements.

VALUATION OF INVESTMENTS -- Securities held by the Funds (other than the Money
Market Fund) that are traded on a national securities exchange are valued on the
basis of the last sale price as of the close of business on the day the
securities are being valued, or lacking any sales, at the last quoted bid price.
Bonds and other fixed income securities with maturities greater than 60 days at
the time of purchase are valued by a pricing service. Securities and assets for
which market quotations are not readily available are valued at fair value as
determined in good faith by or under the direction of the Board of Trustees of
the Trust. Short-term securities and debt securities with a remaining maturity
of 60 days or less are valued at amortized cost which approximates market value.
The Money Market Fund by the approval of the Board of Trustees utilizes the
amortized cost method for valuing securities, whereby all investments are valued
by reference to their acquisition cost as adjusted for amortization of premium
or accretion of discount.

FOREIGN SECURITIES -- Foreign securities traded on a recognized securities
exchange are valued at the last sale price in the principal market where they
are traded, or if closing prices are unavailable, at the last bid price
available prior to the time a Fund's net asset value is determined. Foreign
prices are furnished by quotation services expressed in the local currency's
value and translated into the U.S. dollars at the current rate of exchange.

37
<PAGE>
NOTE 2 (CONTINUED)

REPURCHASE AGREEMENTS -- The Trust may enter into repurchase agreements with
institutions that the Trust's investment advisor, PB Investment Advisors, Inc.,
(formerly Providian Investment Advisors, Inc.,) has determined are creditworthy
pursuant to criteria adopted by the Board of Trustees. In connection with
transactions in repurchase agreements, the Trust's custodian takes possession of
the underlying collateral securities, the value of which is at least equal to
102 percent of the principal amount, including interest, of the repurchase
agreement. The value of the collateral is marked-to-market on a daily basis to
ensure the adequacy of the collateral. In the event of default of the obligation
to repurchase, the Trust has the right to liquidate the collateral and apply the
proceeds in satisfaction of the obligation. Under certain circumstances, in the
event of default or bankruptcy by the other party to the agreement, realization
and or retention of the collateral or proceeds may be subject to legal
proceedings.

The Trust may enter into a Joint Repurchase Agreement whereby its uninvested
cash balance is deposited into a joint cash account to be used to invest in one
or more repurchase agreements with government securities dealers recognized by
the Federal Reserve Board and/or member banks of the Federal Reserve System. The
value and face amount of the Joint Repurchase Agreement are allocated to the
Funds based on their pro-rata interest.

INVESTMENT TRANSACTIONS -- Investment security transactions are accounted for on
the date the securities are purchased or sold. Realized gains and losses from
security transactions are determined on an identified cost basis, which is also
used for tax purpose.

INVESTMENT INCOME -- Dividend income is recorded on the ex-dividend date, except
that certain dividends from foreign securities are recorded as soon as the Fund
is informed of the ex-dividend date. Interest income is accrued as earned.
Premiums and discounts (including original issue discounts) on debt securities
are amortized. Investment income is recorded net of foreign taxes withheld if
recovery of such taxes is uncertain.

FOREIGN CURRENCY TRANSLATIONS -- The accounting records of the Trust are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S. dollars
based on current exchange rates supplied by a quotation service. The effects of
changes in foreign currency exchange rates on investments in securities are
included in net realized and unrealized gain or loss on investments in the
statement of operations.

Reported net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of forward currency
contracts, disposition of foreign currencies, currency gains and losses realized
between the trade and settlement dates on security transactions, and the
difference between the amount of net investment income accrued and the U.S.
dollar amount actually received. Net unrealized foreign currency exchange gains
and losses arise from changes in the value of receivables and payables due to
changes in exchange rates.

FORWARD CURRENCY CONTRACTS -- A forward foreign currency contract ("Forward") is
an agreement between two parties to buy and sell a currency at a set price on a
future date. The market value of the Forward fluctuates with changes in currency
exchange rates. The Forward is marked-to-market daily and the change in the
market value is recorded by a Fund as an unrealized gain or loss. Realized gains
and losses are recognized when contracts are settled and are reflected in the
statement of operations. The Fund could be exposed to risk if a counter party is
unable to meet the terms of the contract (such risk is limited to the unrealized
gain, if any) or if the value of the currency changes unfavorably. The
International Active Fund may enter into these contracts for the purpose of
hedging against foreign exchange risk arising from the Fund's investment or
anticipated investment in securities denominated in foreign currencies. The Fund
also may enter into these contracts for the purpose of increasing exposure to a
foreign currency to hedge against adverse changes in the value of another
currency when exchange rates between the two currencies are positively
correlated.

EXPENSES -- Expenses directly attributable to a Portfolio or Fund are charged to
that Portfolio or Fund. Expenses not directly attributable to a Portfolio or
Fund are allocated among the affected Portfolios and Funds based on relative net
assets of each Portfolio and Fund. Costs related to the organization and
registration of the

38
<PAGE>
NOTE 2 (CONTINUED)

Trust have been funded by CGC and its subsidiaries. The Trust will not reimburse
CGC for these organizational costs.

ESTIMATES -- The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to make certain
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of these financial statements and the reported amounts
of increases and decreases in net assets from operations during the reporting
period. Actual results could differ from those estimates.

DISTRIBUTIONS TO SHAREHOLDERS -- Each of the Portfolios and Funds (except the
Money Market Fund) declares and distributes dividends from net investment income
and distributes its net realized capital gains, if any, at least annually. The
Money Market Fund declares dividends daily and distributes monthly. All
distributions are reinvested in the shares of the relevant Portfolio/Fund at net
asset value. Income and capital gain distributions are determined in accordance
with income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments for
market discount, foreign currency transactions, losses deferred due to wash
sales and "post October 31 losses." Distributions are recorded on the
ex-dividend date.

FEDERAL INCOME TAXES -- Each Portfolio and Fund is treated as a separate entity
for federal tax purposes. Each Portfolio and Fund intends to qualify each year
as a regulated investment company under Subchapter M of the Internal Revenue
Code of 1986. By so qualifying, each Portfolio and Fund will not be subject to
federal income taxes to the extent that they distribute all of their taxable
income, including realized capital gains, for the fiscal year. In addition, by
distributing substantially all of their net investment income, capital gains and
certain other amounts during the calendar year, the Portfolios and Funds will
not be subject to a federal excise tax. As of December 31, 1997, the
International Active Fund has a capital loss carryforward, for Federal income
tax purposes, of $232,745 expiring in December 31, 2005.

On the Statement of Assets and Liabilities, as a result of permanent book-tax
differences, reclassifications have been made between the paid in capital,
undistributed (distribution in excess of) net investment income, and accumulated
net realized gain (loss) on investments and foreign currency transactions
accounts. These reclassifications have no impact on the net asset value of the
Portfolios and Funds.

NOTE 3 -- AGREEMENTS AND FEES

PB Investment Advisors, Inc. (the "Advisor"), a wholly-owned subsidiary of CGC,
which is a wholly owned indirect subsidiary of AEGON N.V., has been retained
under an Investment Advisory Agreement (the "Agreement") with the Trust, to
supervise the management and investment program of the Trust. The Advisor
manages the affairs of the Trust subject to the supervision of the Board of
Trustees. The Advisor does not receive an investment management fee for the
advisory and asset allocation services it provides to the Portfolios.

As full compensation for its services under the Agreement, each Fund will pay
the Advisor a monthly fee at the following annual rates based on the average
daily net assets of each Fund:

<TABLE>
<S> <C>
High Quality Stock Fund 0.65%
Fixed Income Fund 0.65%
International Active Fund 0.90%
Money Market Fund 0.40%
</TABLE>

Under the Agreement, the Advisor has agreed to waive and absorb all operating
expenses of each Portfolio and to limit the operating expenses of each Fund so
that the ratio of expenses (excluding Advisory fees) to net assets on an annual
basis does not exceed 0.25%. Expenses in excess of such amount will be assumed
by the Advisor until the earlier of the end of three years after commencement of
operations or the termination by the Trustees but not the Advisor of the
Agreement. For the period ended December 31, 1997, the Advisor agreed

39
<PAGE>
NOTE 3 (CONTINUED)

to reimburse the Trust $153,693 for expenses in excess of the voluntary expense
limitations. As of December 31, 1997, $41,458 was owed to the Trust by the
Advisor.

The Advisor has entered into a Sub-Advisory Agreement with Atlanta Capital
Management Company, L.L.C. ("Atlanta Capital"), wherein Atlanta Capital will
serve as sub-advisor to the Portfolios. Subject to the supervision and direction
of the Board of Trustees, Atlanta Capital will determine how each Portfolio's
assets will be invested in the Funds. Atlanta Capital also serves as sub-advisor
of the High Quality Stock Fund and the Fixed Income Fund. As compensation for
its services, with respect to the High Quality Stock Fund and the Fixed Income
Fund, the Advisor pays Atlanta Capital a fee equal to 0.50% annually on assets
up to $25 million, 0.40% annually on assets above $25 million and up to $50
million, and 0.30% annually on assets above $50 million.

The Advisor has entered into a Sub-Advisory Agreement with Blairlogie Capital
Management ("Blairlogie"), wherein Blairlogie will serve as sub-advisor to the
International Active Fund. As compensation for its services, the Advisor pays
Blairlogie a fee equal to 0.65% annually on assets up to $50 million, and 0.50%
annually on assets above $50 million.

The Advisor has entered into a Sub-Advisory Agreement with Federated Investment
Counseling ("Federated"), wherein Federated will serve as sub-advisor to the
Money Market Fund. As compensation for its services, the Advisor pays Federated
a fee equal to 0.25% annually on assets up to $75 million, and 0.20% annually on
assets above $75 million.

Each Trustee of the Trust who is not an interested person of the Trust, Advisor
or Sub-Advisors receives $1,500 for each Trustees' meeting in which he
participates.

40
<PAGE>
NOTE 4 -- INVESTMENT TRANSACTIONS

Purchases and proceeds from sales and maturities of investments, excluding
short-term securities, for the period ended December 31, 1997 were as follows:

<TABLE>
<CAPTION>
Non-U.S. U.S. Non-U.S. U.S.
Government Government Government Government
Purchases Purchases Sales Sales
<S> <C> <C> <C> <C>
--------------------------------------------------
Capital Preservation
Portfolio...................... $ 15,327 $ -- $ 1,763 $ --
Income Oriented Portfolio....... 7,110 -- 4 --
Growth & Income Portfolio....... 174,364 -- 13,030 --
Capital Growth Portfolio........ 722,250 -- 3,127 --
Maximum Appreciation
Portfolio...................... 243,135 -- 4,389 --
High Quality Stock Fund......... 11,346,269 -- 1,303,199 --
Fixed Income Fund............... 99,500 9,395,764 -- 5,511,641
International Active Fund....... 14,444,121 -- 5,047,494 --
Money Market Fund............... -- -- -- --
</TABLE>

Gross unrealized appreciation and depreciation at December 31, 1997, based on
the identified cost for income tax purposes, is as follows:

<TABLE>
<CAPTION>
Net
Gross Gross Unrealized
Identified Unrealized Unrealized Appreciation
Cost Appreciation (Depreciation) (Depreciation)
<S> <C> <C> <C> <C>
----------------------------------------------------
Capital Preservation
Portfolio.................. $ 26,964 $ -- $ (191) $ (191)
Income Oriented Portfolio... 8,331 45 (120) (75)
Growth & Income Portfolio... 179,988 2,447 (1,608) 839
Capital Growth Portfolio.... 812,120 6,333 (2,104) 4,229
Maximum Appreciation
Portfolio.................. 239,126 6,373 (761) 5,612
High Quality Stock Fund..... 10,722,726 1,907,032 (237,053) 1,669,979
Fixed Income Fund........... 5,382,260 128,025 -- 128,025
International Active Fund... 9,386,898 779,773 (495,306) 284,467
Money Market Fund........... 2,328,304 -- -- --
</TABLE>

41
<PAGE>
NOTE 5 -- SHAREHOLDER TRANSACTIONS

Transactions in shares and dollars were as follows for the period May 9, 1997*
through December 31, 1997:
<TABLE>
<CAPTION>
CAPITAL PRESERVATION INCOME ORIENTED
PORTFOLIO PORTFOLIO
SHARES DOLLARS SHARES DOLLARS
--------- --------- --------- ----------
<S> <C> <C> <C> <C>
Shares sold............................. 2,897 $ 29,813 759 $ 8,139
Shares issued to shareholders in
reinvestment of dividends.............. 66 676 18 192
Shares redeemed......................... (345) (3,526) -- --
--------- --------- --------- ----------
Net increase............................ 2,618 $ 26,963 777 $ 8,331
--------- --------- --------- ----------
--------- --------- --------- ----------

GROWTH & INCOME CAPITAL GROWTH
PORTFOLIO PORTFOLIO
SHARES DOLLARS SHARES DOLLARS
--------- --------- --------- ----------
<S> <C> <C> <C> <C>
Shares sold............................. 17,738 $ 189,436 73,664 $ 809,314
Shares issued to shareholders in
reinvestment of dividends.............. 468 5,015 538 5,933
Shares redeemed......................... (1,337) (14,478) (282) (3,127)
--------- --------- --------- ----------
Net increase............................ 16,869 $ 179,973 73,920 $ 812,120
--------- --------- --------- ----------
--------- --------- --------- ----------
<CAPTION>

MAXIMUM APPRECIATION HIGH QUALITY STOCK
PORTFOLIO FUND
SHARES DOLLARS SHARES DOLLARS
--------- --------- --------- ----------
<S> <C> <C> <C> <C>
Shares sold............................. 21,714 $ 239,372 1,065,710 $10,755,139
Shares issued to shareholders in
reinvestment of dividends.............. 365 4,111 19,722 227,423
Shares redeemed......................... (400) (4,389) (19,810) (224,971)
--------- --------- --------- ----------
Net increase............................ 21,679 $ 239,094 1,065,622 $10,757,591
--------- --------- --------- ----------
--------- --------- --------- ----------
<CAPTION>

INTERNATIONAL ACTIVE
FIXED INCOME FUND FUND
SHARES DOLLARS SHARES DOLLARS
--------- --------- --------- ----------
<S> <C> <C> <C> <C>
Shares sold............................. 528,711 $5,297,080 1,019,442 $10,188,787
Shares issued to shareholders in
reinvestment of dividends.............. 18,554 190,282 1,860 17,693
Shares redeemed......................... (798) (8,338) (292) (2,795)
--------- --------- --------- ----------
Net increase............................ 546,467 $5,479,024 1,021,010 $10,203,685
--------- --------- --------- ----------
--------- --------- --------- ----------
<CAPTION>

MONEY MARKET FUND
SHARES DOLLARS
--------- ---------
<S> <C> <C> <C> <C>
Shares sold............................. 2,378,461 $2,378,461
Shares issued to shareholders in
reinvestment of dividends.............. 66,964 66,964
Shares redeemed......................... (89,084) (89,084)
--------- ---------
Net increase............................ 2,356,341 $2,356,341
--------- ---------
--------- ---------
</TABLE>

* Commencement of investment operations.

42
<PAGE>
NOTE 6 -- FORWARD FOREIGN CURRENCY CONTRACTS

At December 31, 1997, the outstanding forward exchange currency contracts, which
contractually obligate the Trust to deliver currencies at a specified date, were
as follows:

INTERNATIONAL ACTIVE FUND

<TABLE>
<CAPTION>
U.S. DOLLAR
COST ON U.S. DOLLAR
CURRENCY CURRENCY SETTLEMENT ORIGINATION CURRENT UNREALIZED
PURCHASED SOLD DATE DATE VALUE APPRECIATION
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
GBP USD 1/16/1998 $ 654,560 $ 657,640 $ 3,080
</TABLE>

GBP - Great Britain Pound
USD - United States Dollar

43
<PAGE>
PB SERIES TRUST

------------------------

TRUSTEES AND EXECUTIVE OFFICERS

Thomas J. Hartlage, TRUSTEE, CHIEF EXECUTIVE OFFICER AND PRESIDENT *
David L. Eager, TRUSTEE
Jesse A. Holshouser III, TRUSTEE
William T. Mills III, TRUSTEE
Kirk W. Buese, TRUSTEE *
Michael G. Ayers, CHIEF FINANCIAL OFFICER
Kimberly A. Scouller, SECRETARY
Stephen L. Zeitz, TREASURER
Michael G. Herp, VICE PRESIDENT
* INTERESTED TRUSTEE

------------------------

Ernst & Young LLP, INDEPENDENT AUDITORS
Jorden Burt Berenson & Johnson LLP, LEGAL COUNSEL
PB Investment Advisors, Inc., INVESTMENT ADVISOR

The information contained in this report is intended for general informational
purposes only. This report is not authorized for distribution to prospective
investors unless preceded or accompanied by current Trust and Separate Account
prospectuses which contain important information concerning the Trust, the
Company, and its current public offering of variable annuity contracts.