<PAGE>
Evergreen
Southern State
Municipal Bond
Funds
February 28, 1998
Semiannual Report
[EVERGREEN LOGO APPEARS HERE]
EVERGREEN FUNDS(SM)
SINCE 1932
<PAGE>
Table of Contents
<TABLE>
<S> <C>
Letter to Shareholders ........................ 1
Fund at a Glance
Evergreen Florida High Income Municipal
Bond Fund ............................... 2
Evergreen Florida Municipal Bond Fund ...... 4
Evergreen Georgia Municipal Bond Fund ...... 6
Evergreen North Carolina Municipal Bond
Fund .................................... 8
Evergreen South Carolina Municipal Bond
Fund .................................... 10
Evergreen Virginia Municipal Bond Fund ..... 12
Financial Highlights
Evergreen Florida High Income Municipal
Bond Fund ............................... 14
Evergreen Florida Municipal Bond Fund ...... 16
Evergreen Georgia Municipal Bond Fund ...... 19
Evergreen North Carolina Municipal Bond
Fund .................................... 21
Evergreen South Carolina Municipal Bond
Fund .................................... 23
Evergreen Virginia Municipal Bond Fund ..... 25
</TABLE>
<TABLE>
<S> <C>
Schedule of Investments
Evergreen Florida High Income Municipal
Bond Fund ............................... 27
Evergreen Florida Municipal Bond Fund ...... 31
Evergreen Georgia Municipal Bond Fund ...... 36
Evergreen North Carolina Municipal Bond
Fund .................................... 38
Evergreen South Carolina Municipal Bond
Fund .................................... 41
Evergreen Virginia Municipal Bond Fund ..... 43
Statements of Assets and Liabilities .......... 46
Statements of Operations ...................... 47
Statements of Changes in Net Assets -
Period ended February 28, 1998 ............. 48
Period ended August 31, 1997 ............... 49
Combined Notes to Financial
Statements ................................. 50
Additional Information ........................ 58
</TABLE>
- --------------------------------------------------------------------------------
Evergreen Funds
Evergreen Funds is one of the nation's fastest growing investment companies
with more than $47 billion in assets under management.
With over 80 mutual funds to choose among and acclaimed service and operations
capabilities, investors enjoy a broad range of quality investment products and
services designed to meet their needs.
The Evergreen Funds employ intensive, research-driven investment strategies
executed by over 90 research analysts and portfolio managers. The fund company
remains dedicated to meeting the needs of investors and their advisors in a
global economy. Look to the Evergreen Funds to provide a distinctive level of
service and excellence in investment management.
This semiannual report must be preceded or accompanied by a prospectus of an
Evergreen fund contained herein. The prospectus contains more complete
information, including fees and expenses, and should be read carefully before
investing or sending money.
----------------------------------------------------------------
Mutual Funds: ARE NOT FDIC INSURED May lose value o Are not bank guaranteed
----------------------------------------------------------------
Evergreen Distributor, Inc.
Evergreen(SM) is a Service Mark of Evergreen Investment Services, Inc.
Copyright 1998.
<PAGE>
Letter to Shareholders
----------------------
April 1998
Dear Shareholders:
The six-month period that ended on February 28,
(Photo of 1998, proved to be an especially rewarding one
William M. Ennis) for shareholders of the Evergreen Southern
State Municipal Bond Funds, as investors
received generous returns made even
more impressive on an after-tax basis.
William M. Ennis
Managing Director
The six months encompassed a period when the
U.S. economy showed stubborn resilience. Despite some international market
uncertainty brought on by the Asian crisis, the economy in the United States
continued to grow at a moderate rate, with restrained inflation. These factors,
combined with a declining federal budget deficit, allowed interest rates to
fall and bond prices to increase. The yields on longer-maturity bonds tended to
decrease more than the yields on shorter-maturity bonds. For example, the yield
on the 30-year Treasury fell during the six months from 6.61% to 5.92%, while
the yield on the three-month Treasury actually rose, from 5.22% to 5.30%.
Competitive Performance
In this favorable economic and interest rate environment, the emphasis of the
Evergreen Southern State Municipal Bond Funds on investments in securities with
higher yields and longer maturities proved especially rewarding on both an
absolute and after-tax basis.
Positive Outlook
Going forward, Evergreen portfolio managers believe there will be a generally
supportive economic environment. With this scenario, the Southern State
Municipal Bond Funds are emphasizing a strategy of careful security selection
among higher-yielding, longer-maturity bonds. We believe this strategy gives
continued opportunity for the funds to provide competitive performance for
tax-conscious shareholders.
The Evergreen Funds Commitment
At Evergreen Funds, we are committed to providing a strong array of funds with
a variety of investment objectives to help investors pursue their goals,
consistent with their needs and risk tolerances. If you have any questions
about this fund or any other Evergreen Fund, please consult your financial
advisor or call us at 800-343-2898.
Thank you for your investment in Evergreen Funds.
Sincerely,
/s/ William M. Ennis
William M. Ennis
Managing Director
Evergreen Funds
Some portion of the Funds' income may be subject to the Federal Alternative
Minimum Tax.
1
<PAGE>
EVERGREEN
Florida High Income Municipal Bond Fund
Fund at a Glance as of February 28, 1998
(Graphic of 5 stars)
Overall 5 star Morningstar(2)
The Fund's Class A was rated 5 stars among 1,525
municipal funds for the 3-year period ending 3/31/98.
Portfolio
Characteristics
---------------
Total Net Assets $251,902,767
Average Credit Quality A+
Average Duration 8.5 years
Average Maturity 20.8 years
-------------------------------------------------------
CURRENT INVESTMENT STYLE
(GRAPHIC SHOWS LOW QUALITY, LONG DURATION)
Morningstar's Style Box is based on a
portfolio date as of 3/31/98.
The Fixed-Income Style Box placement is
based on a fund's average effective maturity
or duration and the average credit rating of
the bond portfolio.
Source: 1998 Morningstar, Inc.
- --------------------------------------------------------------------------------
PERFORMANCE AND RETURNS*
<TABLE>
<CAPTION>
Class A Class B Class Y
<S> <C> <C> <C>
Inception Date 6/17/92 7/10/95 9/20/95
Average Annual Returns
6 months with sales charge 0.27% (0.12%) N/A
6 months w/o sales charge 5.40% 4.88% 5.40%
One year with sales charge 5.42% 4.86% N/A
One year w/o sales charge 10.68% 9.86% 10.95%
3 years 7.94% - -
5 years 6.69% - -
Since Inception 7.65% 7.00% 9.02%
Cumulative Total Return
since inception 52.27% 19.58% 9.02%
Maximum Sales Charge 4.75% 5.00% N/A
Front End CDSC
30-day SEC Yield 5.12% 4.63% 5.64%
6-month distributions per share $ 0.30 $ 0.26 $ 0.31
Lipper Ranking out of 63 Florida Municipal
Debt Funds(1)
(for the 1-year period ending 3/31/98) #9 #20 #6
</TABLE>
* Adjusted for maximum applicable sales charge.
(1) Source: Lipper Analytical Services, Inc., an independent mutual fund rating
company. The rankings are based on total return and do not include the
effect of a sales charge. For the 5-year period ending March 31,998, the
Fund's Class A shares ranked 1 out of 23 Flordia Municipal Debt funds
tracked by Lipper Analytical Services, Inc. Past performance is no guarantee
of future results.
- --------------------------------------------------------------------------------
LONG TERM GROWTH
(Graph appears here. See the table below for the plot points.)
<TABLE>
<CAPTION>
<S><C>
6/17/92 2/93 2/94 2/95 2/96 2/97 2/98
Class A Shares 9525.00 10490.00 11332.00 11534.00 12909.0 13759.00 15229.00
LBMBI 10000.00 10957.00 11563.00 11781.00 13083.00 13804.00 15065.00
CPI 10000.00 10207.00 10464.00 10763.00 11040.00 11384.00 11548.00
</TABLE>
Comparison of a $10,000 investment in Evergreen Florida High Income Municipal
Bond Fund, Class A shares, versus a similar investment in the Lehman Brothers
Municipal Bond Index (LBMBI) and the Consumer Price Index (CPI).
Past performance is no guarantee of future results. The performance of each
class may vary based on differences in loads and fees paid by the shareholders
investing in each class. The investment return and principal value will
fluctuate so that an investor's shares, when redeemed, may be worth more or
less than original cost. The Lehman Brothers Municipal Bond Index is an
unmanaged index. The index does not include transaction costs associated with
buying and selling securities nor any management fees. The Consumer Price
Index, a measure of inflation, is through February 28, 1998.
2
<PAGE>
EVERGREEN
Florida High Income Municipal Bond Fund
Portfolio
Management
----------
(Photo of Richard K. Marrone)
Richard K. Marrone
Capital Management Group
Tenure: July 1995
Due to strong relative performance and an attractive yield, the Evergreen
Florida High Income Municipal Bond Fund continues to experience strong cash
inflows. In the first two months of 1998 alone, net assets have increased
nearly 15%. These inflows have been invested in higher-yielding bonds,
consistent with our high-coupon strategy. Conversely, we have eliminated
positions in some shorter, lower-yielding bonds. For the 12-month period ending
March 31, 1998, the Fund's class Y shares ranked in the top 10%, number 6 out
of 63 Florida Municipal Dept Funds tracked by Lipper Analytical Services. Class
A shares ranked number 9 out of the 63 funds. Additionally, Class A shares are
rated 5-stars by Morningstar, an independent monitor of mutual fund
performance.(2) Class A shares were rated among 1,525 municipal funds for the
3-year period ending March 31, 1998.
(2) Source: Morningstar, Inc. Morningstar's proprietary ratings reflect the
Fund's historical risk-adjusted performance as of 3/31/98. Ratings are
subject to change monthly and are calculated from the Fund's 3, 5, and 10
year average annual returns (if available) in excess of the 90 day Treasury
Bill return with appropriate fee adjustments and a risk factor that reflects
fund performance below 90 day T-bill returns. The Fund's Class A shares were
rated 5 star among 782 municipal funds for the 5 year period ending 3/31/98.
Ratings are not adjusted for sales charges, but are adjusted for other fees.
The top 10% of the funds in an investment category receive five stars, and
the next 22.5% receive four stars. Past performance is no guarantee of
future results.
----------------------------------------------------------------
PORTFOLIO COMPOSITION
(as a percentage of portfolio assets)
Housing--21.9%
Community Development--19.8%
Residential Care--16.9%
Industrial Development--11.7%
Hospital--8.7%
Utility--4.2%
Education--4.2%
Special Care--3.5%
Other--9.1%
----------------------------------------------------------------
PORTFOLIO QUALITY
(as a percentage of portfolio assets)
[PIE CHART APPEARS HERE WITH THE FOLLOWING VALUES]
AAA--20.7%
AA--2.6%
A--4.7%
BBB--24.3%
BB--0.9%
B--0.3%
Not Rated--46.5%
3
<PAGE>
EVERGREEN
Florida Municipal Bond Fund
Fund at a Glance as of February 28, 1998
Portfolio
Characteristics
Total Net Assets $594,865,776
Average Credit Quality AA+
Average Maturity 14.8 years
Average Duration 8.7 years
-------------------------------------------------------
CURRENT INVESTMENT STYLE
[GRAPHIC SHOWS LONG DURATION, HIGH QUALITY]
Morningstar's Style Box is based on a
portfolio date as of 3/31/98.
The Fixed-Income Style Box placement is
based on a fund's average effective maturity
or duration and the average credit rating of
the bond portfolio.
Source: 1998 Morningstar, Inc.
- --------------------------------------------------------------------------------
PERFORMANCE AND RETURNS*
<TABLE>
<CAPTION>
Class A Class B Class C Class Y
<S> <C> <C> <C> <C>
Inception Date 5/11/88 6/30/95 1/26/98 6/30/95
Average Annual Returns
6 months with sales charge 0.35% (0.12%) - N/A
6 months w/o sales charge 5.35% 4.88% - 5.39%
One year with sales charge 4.63% 3.85% - N/A
One year w/o sales charge 9.85% 8.85% - 9.94%
3 years 6.37% - -
5 years 5.37% - -
Since Inception 7.65% 6.00% 0.29% 8.08%
Cumulative Total Return
since inception 106.08% 16.83% 0.29% 23.05%
Maximum Sales Charge 4.75% 5.00% 1.00% N/A
Front End CDSC CDSC
30-day SEC Yield 4.17% 3.45% 3.45% 4.46%
6-month distributions per
share $ 0.45 $ 0.41 $ 0.04 $ 0.46
Lipper Ranking out of 63 Florida
Municipal Debt Funds(1)
(for the 1-year period ending
3/31/98) #14 #38 N/A #13
</TABLE>
* Adjusted for maximum applicable sales charge.
1 Source: Lipper Analytical Services, Inc., an independent mutual fund rating
company. The rankings are based on total return and do not include the effect
of a sales charge. For the 5-year period ending March 31, 1998, the Fund's
Class A shares ranked 5 out of 23 Florida Municipal Debt Funds tracked by
Lipper Analytical Services, Inc. Past performance is no guarantee of future
results.
- --------------------------------------------------------------------------------
LONG TERM GROWTH
[GRAPHIC APPEARS HERE WITH THE FOLLOWING PLOT POINTS]
<TABLE>
<CAPTION>
<S><C>
5/11/88 2/90 2/94 2/94 2/96 2/98
CLASS A 9525.00 10882.00 13170.00 15867.00 17893.00 20609.00
LBMBI 10000.00 11760.00 14127.00 16962.00 19190.00 22097.00
CPI 10000.00 10931.00 11836.00 12528.00 13218.00 13826.00
</TABLE>
Comparison of a $10,000 investment in Evergreen Florida Municipal Bond Fund,
Class A shares, versus a similar investment in the Lehman Brothers Municipal
Bond Index (LBMBI) and the Consumer Price Index (CPI).
Past performance is no guarantee of future results. The performance of each
class may vary based on differences in loads and fees paid by the shareholders
investing in each class. The investment return and principal value will
fluctuate so that an investor's shares, when redeemed, may be worth more or
less than original cost. The Lehman Brothers Municipal Bond Index is an
unmanaged index. The index does not include transaction costs associated with
buying and selling securities nor any management fees. The Consumer Price Index
is a measure of inflation, is through February 28, 1998.
4
<PAGE>
EVERGREEN
Florida Municipal Bond Fund
Portfolio
Management
[PHOTOGRAPH APPEARS HERE OF RICHARD K. MARRONE]
Richard K. Marrone
Capital Management Group
Tenure: January 1997
Net assets in the portfolio increased significantly during the fiscal period as
a result of a merger with the Evergreen Florida Tax Free Fund on January 26,
1998. Because the merger slightly altered the Fund's profile, we spent the
fiscal period repositioning the portfolio, utilizing two particular strategies.
First, we sought to increase the Fund's duration by purchasing several issues
with longer maturities. Secondly, we bolstered the portfolio's current yield by
selectively adding higher-yielding issues, specifically those with non-callable
features. For the 12-month period ending March 31, 1998, the Fund's Class Y
shares ranked 13 out of 63 Florida Municipal Debt Funds as measured by Lipper
Analytical Services, an independent mutual fund ranking company. Class A shares
ranked number 14 out of the 63 funds.
----------------------------------------------------------------
PORTFOLIO COMPOSITION
(as a percentage of portfolio assets)
[PIE GRAPH APPEARS HERE WITH THE FOLLOWING VALUES]
Utility--19.5%
Other--19.5%
Public Facility--11.8%
Hospital--11.7%
Housing--9.3%
Miscellaneous Revenue--8.3%
Local General Obligation--6.9%
Escrow--4.8%
Transportation--4.6%
Special Obligation--3.6%
----------------------------------------------------------------
PORTFOLIO QUALITY
(as a percentage of portfolio assets)
[PIE GRAPH APPEARS HERE WITH THE FOLLOWING VALUES]
AAA--68.4%
AA--17.4%
A--4.4%
BBB--5.8%
BB--0.2%
Not Rated--3.8%
5
<PAGE>
EVERGREEN
Georgia Municipal Bond Fund
Fund at a Glance as of February 28, 1998
Portfolio
Characteristics
Total Net Assets $78,693,040
Average Credit Quality AA+
Average Maturity 11.9 years
Average Duration 7.6 years
-------------------------------------------------------
CURRENT INVESTMENT STYLE
[GRAPHIC SHOWS LONG DURATION, HIGH QUALITY]
Morningstar's Style Box is based on a
portfolio date as of 3/31/98.
The Fixed-Income Style Box placement is
based on a fund's average effective maturity
or duration and the average credit rating of
the bond portfolio.
Source: 1998 Morningstar, Inc.
- --------------------------------------------------------------------------------
PERFORMANCE AND RETURNS*
<TABLE>
<CAPTION>
Class A Class B Class Y
<S> <C> <C> <C>
Inception Date 7/2/93 7/2/93 2/28/94
Average Annual Returns
6 months with sales charge 1.09% 0.74% N/A
6 months w/o sales charge 6.13% 5.74% 6.26%
One year with sales charge 5.26% 4.69% N/A
One year w/o sales charge 10.50% 9.69% 10.78%
3 years 6.75% 6.83% 8.77%
Since Inception 4.56% 4.59% 6.60%
Cumulative Total Return since inception 23.16% 23.30% 29.18%
Maximum Sales Charge 4.75% 5.00% N/A
Front End CDSC
30-day SEC Yield 4.19% 3.65% 4.66%
6-month distributions per share $ 0.24 $ 0.21 $ 0.26
Lipper Ranking out of 34 Georgia
Municipal Debt Funds(1)
(for the 1-year period ending 3/31/98) #10 #15 #9
</TABLE>
* Adjusted for maximum applicable sales charge.
1 Source: Lipper Analytical Services, Inc., an independent mutual fund rating
company. The rankings are based on total return and do not include the effect
of a sales charge. Past performance is no guarantee of future results.
- --------------------------------------------------------------------------------
LONG TERM GROWTH
[LINE GRAPH APPEARS HERE WITH THE FOLLOWING PLOT POINTS]
<TABLE>
<CAPTION>
7/2/93 2/94 2/95 2/96 2/97 2/98
<S><C>
CLASS A SHARES 9525.00 9629.00 9642.00 10666.00 11145.00 12315.00
LBMBI 10000.00 10315.00 10509.00 11670.00 12314.00 13438.00
CPI 10000.00 10159.00 10450.00 10719.00 11053.00 11212.00
LBGMBI 10000.00 10274.00 10455.00 11629.00 12246.00 13323.00
</TABLE>
Comparison of a $10,000 investment in Evergreen Georgia Municipal Bond Fund,
Class A shares, versus a similar investment in the Lehman Brothers Municipal
Bond Index (LBMBI), the Lehman Brothers Georgia Municipal Bond Index (LBGMBI),
and the Consumer Price Index (CPI).
Past performance is no guarantee of future results. The performance of each
class may vary based on differences in loads and fees paid by the shareholders
investing in each class. The investment return and principal value will
fluctuate so that an investor's shares, when redeemed, may be worth more or
less than original cost. The Lehman Brothers Municipal Bond Index and the
Lehman Brothers Georgia Municipal Bond Index are both unmanaged indices. The
index does not include transaction costs associated with buying and selling
securities nor any management fees. The Consumer Price Index, a measure of
inflation, is through February 28, 1998.
6
<PAGE>
EVERGREEN
Georgia Municipal Bond Fund
Portfolio
Management
[PHOTGRAPH APPEARS HERE OF CHARLES JEANNE]
Charles Jeanne
Capital Management Group
Tenure: November 1997
We continue to emphasize a portfolio of higher-yielding securities which offers
investors a strong current yield and income exempt from federal and Georgia
state taxes. Consistent with this strategy, shorter bonds with lower yields
were replaced with higher-yielding issues such as hospital bonds. Our emphasis
on current yield contributed to especially strong performance. The portfolio's
higher coupon structure provided a stable stream of income as well as a
relative degree of stability amid fluctuating interest rates and a volatile
market environment which was initiated by financial problems in Southeast Asia.
We believe our income-oriented strategy has the potential to enhance the Fund's
performance as we enter the second half of the fiscal year. For the 12-month
period ending March 31, 1998, the Fund's Class Y shares ranked number 9 out of
the 34 Georgia Municipal Debt Funds tracked by Lipper Analytical Services.
Class A shares ranked number 10 out of the 34 funds.
----------------------------------------------------------------
PORTFOLIO COMPOSITION
(as a percentage of portfolio assets)
[PIE CHART APPEARS HERE WITH THE FOLLOWING VALUES]
Local General Obligation--21.2%
Hospital--19.3%
Utility--12.5%
Water and Sewer--9.1%
Public Facility--9.0%
Industrial Development--8.5%
Other--5.7%
Airport--5.4%
Housing--4.8%
State General Obligation--4.5%
----------------------------------------------------------------
PORTFOLIO QUALITY
(as a percentage of portfolio assets)
[PIE CHART APPEARS HERE WITH THE FOLLOWING VALUES]
AAA--66.3%
AA--11.4%
A--14.7%
BBB--4.0%
Not Rated--3.6%
7
<PAGE>
EVERGREEN
North Carolina Municipal Bond Fund
Fund at a Glance as of February 28, 1998
Portfolio
Characteristics
Total Net Assets $319,960,609
Average Credit Quality AA
Average Maturity 15.5 years
Average Duration 8.7 years
-------------------------------------------------------
CURRENT INVESTMENT STYLE
[GRAPHIC SHOWS LONG DURATION, HIGH QUALITY]
Morningstar's Style Box is based on a
portfolio date as of 3/31/98.
The Fixed-Income Style Box placement is
based on a fund's average effective maturity
or duration and the average credit rating of
the bond portfolio.
Source: 1998 Morningstar, Inc.
- --------------------------------------------------------------------------------
PERFORMANCE AND RETURNS*
<TABLE>
<CAPTION>
Class A Class B Class Y
<S> <C> <C> <C>
Inception Date 1/11/93 1/11/93 2/28/94
Average Annual Returns
6 months with sales charge 0.88% 0.52% N/A
6 months w/o sales charge 5.91% 5.52% 6.04%
One year with sales charge 5.17% 4.60% N/A
One year w/o sales charge 10.42% 9.60% 10.70%
3 years 6.46% 6.52% 8.47%
5 years 5.11% 5.11% -
Since Inception 5.49% 5.64% 6.36%
Cumulative Total Return since inception 31.56% 32.54% 28.01%
Maximum Sales Charge 4.75% 5.00% N/A
Front End CDSC
30-day SEC Yield 4.36% 3.82% 4.83%
6-month distributions per share $ 0.26 $ 0.22 $ 0.27
Lipper Ranking out of 39 North Carolina
Municipal Debt Funds(1)
(for the 1-year period ending 3/31/98) #4 #14 #3
</TABLE>
* Adjusted for maximum applicable sales charge.
1 Source: Lipper Analytical Services, Inc., an independent mutual fund rating
company. The rankings are based on total return and do not include the effect
of a sales charge. For the 5-year period ending March 31, 1998, the Fund's
Class A shares ranked 4 and Class B shares ranked 14 out of 16 North Carolina
Municipal Debt Funds tracked by Lipper Analytical Services, Inc. Past
performance is no guarantee of future results.
- --------------------------------------------------------------------------------
LONG TERM GROWTH
[LINE GRAPH APPEARS HERE WITH THE FOLLOWING PLOT POINTS]
<TABLE>
<CAPTION>
1/11/93 2/93 2/94 2/95 2/96 2/97 2/98
<S><C>
Class A Shares 9525.00 9767.00 10382.00 10386.00 11522.00 11915.00 13157.00
LBMBI 10000.00 10362.00 10935.00 11141.00 12372.00 13054.00 14246.00
CPI 10000.00 10035.00 10288.00 10582.00 10854.00 11192.00 11354.00
LBSGOBI 10000.00 10477.00 10983.00 11216.00 12452.00 13084.00 14165.00
</TABLE>
Comparison of a $10,000 investment in Evergreen North Carolina Municipal Bond
Fund, Class A shares, versus a similar investment in the Lehman Brothers
Municipal Bond Index (LBMBI), the Lehman Brothers State General Obligation Bond
Index (LBSGOBI), and the Consumer Price Index (CPI).
Past performance is no guarantee of future results. The performance of each
class may vary based on differences in loads and fees paid by the shareholders
investing in each class. The investment return and principal value will
fluctuate so that an investor's shares, when redeemed, may be worth more or
less than original cost. The Lehman Brothers Municipal Bond Index and the
Lehman Brothers State General Obligation Bond Index are both unmanaged indices.
The index does not include transaction costs associated with buying and selling
securities nor any management fees. The Consumer Price Index, a measure of
inflation, is through February 28, 1998.
8
<PAGE>
EVERGREEN
North Carolina Municipal Bond Fund
Portfolio
Management
[PHOTOGRAPH APPEARS HERE OF RICHARD K. MARRONE]
Richard K. Marrone
Capital Management Group
Tenure: January 1993
Fixed income investors experienced a rather volatile six-month period which was
marked by fluctuating interest rates. Our primary strategy during the period
was to bolster the Fund's current yield. The portfolio's high coupon structure
provides a steady stream of income and offers a degree of stability during
periods of volatility. We also selectively purchased some zero coupon bonds in
order to take advantage of a potential rally in the municipal bond market. For
the 12-month period ending March 31, 1998, the Fund's Class Y shares ranked
number 3 out of the 39 North Carolina Municipal Debt Funds tracked by Lipper
Analytical Services. Class A shares ranked number 4 out of the 39 funds.
----------------------------------------------------------------
PORTFOLIO COMPOSITION
(as a percentage of portfolio assets)
[PIE CHART APPEARS HERE WITH THE FOLLOWING VALUES]
Local General Obligation--18.4%
Hospital--17.8%
Utility--14.1%
State General Obligation--10.6%
Other--8.8%
Lease--7.0%
Education--6.5%
Escrow--5.9%
Industrial Development--5.9%
Housing--5.0%
----------------------------------------------------------------
PORTFOLIO QUALITY
(as a percentage of portfolio assets)
[PIE CHART APPEARS HERE WITH THE FOLLOWING VALUES]
AAA--44.8%
AA--22.6%
A--17.3%
Not Rated--9.6%
BBB--5.7%
9
<PAGE>
EVERGREEN
South Carolina Municipal Bond Fund
Fund at a Glance as of February 28, 1998
Portfolio
Characteristics
Total Net Assets $67,752,503
Average Credit Quality AAA-
Average Maturity 12.7 years
Average Duration 8.1 years
-------------------------------------------------------
CURRENT INVESTMENT STYLE
[GRAPHIC SHOWS LONG DURATION, HIGH QUALITY]
Morningstar's Style Box is based on a
portfolio date as of 3/31/98.
The Fixed-Income Style Box placement is
based on a fund's average effective maturity
or duration and the average credit rating of
the bond portfolio.
Source: 1998 Morningstar, Inc.
- --------------------------------------------------------------------------------
PERFORMANCE AND RETURNS*
<TABLE>
<CAPTION>
Class A Class B Class Y
<S> <C> <C> <C>
Inception Date 1/3/94 1/3/94 2/28/94
Average Annual Returns
6 months with sales charge 0.11% (0.28%) N/A
6 months w/o sales charge 5.11% 4.72% 5.24%
One year with sales charge 4.40% 3.79% N/A
One year w/o sales charge 9.60% 8.79% 9.87%
3 years 7.22% 7.30% 9.24%
Since Inception 4.82% 4.90% 7.14%
Cumulative Total Return since inception 21.61% 21.99% 31.80%
Maximum Sales Charge 4.75% 5.00% N/A
Front End CDSC
30-day SEC Yield 3.95% 3.39% 4.40%
6-month distributions per share $ 0.26 $ 0.22 $ 0.28
Lipper Ranking out of 19 South Carolina
Municipal Debt Funds(1)
(for the 1-year period ending 3/31/98) #5 #11 #3
</TABLE>
* Adjusted for maximum applicable sales charge.
1 Source: Lipper Analytical Services, Inc., an independent mutual fund rating
company. The rankings are based on total return and do not include the effect
of a sales charge. Past performance is no guarantee of future results.
- --------------------------------------------------------------------------------
LONG TERM GROWTH
[LINE GRAPH APPEARS HERE WITH THE FOLLOWING PLOT POINTS]
<TABLE>
<CAPTION>
1/3/94 2/94 2/95 2/96 2/97 2/98
<S><C>
CLASS A 9525.00 9320.00 9398.00 10510.00 11096.00 12161.00
LBMBI 10000.00 9741.00 9925.00 11021.00 11628.00 12690.00
CPI 10000.00 10034.00 10321.00 10587.00 10917.00 11074.00
LBSCMBI 10000.00 9795.00 9968.00 11082.00 11659.00 12689.00
</TABLE>
Comparison of a $10,000 investment in Evergreen South Carolina Municipal Bond
Fund, Class A shares, versus a similar investment in the Lehman Brothers
Municipal Bond Index (LBMBI), the Lehman Brothers South Carolina Municipal Bond
Index (LBSCMBI), and the Consumer Price Index (CPI).
Past performance is no guarantee of future results. The performance of each
class may vary based on differences in loads and fees paid by the shareholders
investing in each class. The investment return and principal value will
fluctuate so that an investor's shares, when redeemed, may be worth more or
less than original cost. The Lehman Brothers Municipal Bond Index and the
Lehman Brothers South Carolina Municipal Bond Index are both unmanaged indices.
The index does not include transaction costs associated with buying and selling
securities nor any management fees. The Consumer Price Index, a measure of
inflation, is through February 28, 1998.
10
<PAGE>
EVERGREEN
South Carolina Municipal Bond Fund
Portfolio
Management
[PHOTGRAPH APPEARS HERE OF CHARLES JEANNE]
Charles Jeanne
Capital Management Group
Tenure: January 1994
The Evergreen South Carolina Municipal Bond Fund endured a turbulent fiscal
period with strong performance for the six months ending February 28, 1998. Our
strategy during the six-month period was to strengthen the portfolio's current
yield, seeking to provide somewhat of a cushion from volatility and fluctuating
interest rates. We sold shorter, lower-yielding general obligation bonds and
replaced them with higher-yielding issues which included industrial development
authority and hospital bonds. We feel the key to the Fund's consistent
performance was its higher coupon structure. The portfolio adjustments
undertaken during this period have bolstered the Fund's current yield and we
believe they should positively impact performance going forward. For the
12-month period ending March 31, 1998, the Fund's Class Y shares ranked number
3 out of 19 South Carolina Municipal Debt Funds tracked by Lipper Analytical
Services. Class A shares ranked number 5 out of the 19 funds.
----------------------------------------------------------------
PORTFOLIO COMPOSITION
(as a percentage of portfolio assets)
[PIE CHART APPEARS HERE WITH THE FOLLOWING VALUES]
Utility--25.9%
Hospital--24.9%
Local General Obligation--21.9%
Other--10.3%
Housing--6.5%
Resource Recovery--5.7%
Industrial Development--4.8%
----------------------------------------------------------------
PORTFOLIO QUALITY
(as a percentage of portfolio assets)
[PIE CHART APPEARS HERE WITH THE FOLLOWING VALUES]
AAA--64.9%
AA--22.3%
A--7.5%
BBB--1.2%
Not Rated--4.1%
11
<PAGE>
EVERGREEN
Virginia Municipal Bond Fund
Fund at a Glance as of February 28, 1998
Portfolio
Characteristics
Total Net Assets $94,450,431
Average Credit Quality AA
Average Maturity 14.1 years
Average Duration 8.2 years
-------------------------------------------------------
CURRENT INVESTMENT STYLE
[GRAPHIC SHOWS LONG DURATION, HIGH QUALITY]
Morningstar's Style Box is based on a
portfolio date as of 3/31/98.
The Fixed-Income Style Box placement is
based on a fund's average effective maturity
or duration and the average credit rating of
the bond portfolio.
Source: 1998 Morningstar, Inc.
- --------------------------------------------------------------------------------
PEFORMANCE AND RETURNS*
<TABLE>
<CAPTION>
Class A Class B Class Y
<S> <C> <C> <C>
Inception Date 7/2/93 7/2/93 2/28/94
Average Annual Returns
6 months with sales charge 0.45% 0.07% N/A
6 months w/o sales charge 5.46% 5.07% 5.59%
One year with sales charge 4.40% 3.79% N/A
One year w/o sales charge 9.60% 8.79% 9.87%
3 years 6.37% 6.43% 8.38%
Since Inception 4.66% 4.68% 6.73%
Cumulative Total Return since inception 23.65% 23.78% 29.80%
Maximum Sales Charge 4.75% 5.00% N/A
Front End CDSC
30-day SEC Yield 4.29% 3.75% 4.76%
6-month distributions per share $ 0.24 $ 0.21 $ 0.26
Lipper Ranking out of 34 Virginia Municipal
Debt Funds(1)
(for the 1-year period ending 3/31/98) #14 #24 #10
</TABLE>
* Adjusted for maximum applicable sales charge.
1 Source: Lipper Analytical Services, Inc., an independent mutual fund rating
company. The rankings are based on total return and do not include the effect
of a sales charge. Past performance is no guarantee of future results.
- --------------------------------------------------------------------------------
LONG TERM GROWTH
[LINE GRAPH APPREARS HERE WITH THE FOLLOWING PLOT POINTS]
<TABLE>
<CAPTION>
7/2/93 2/94 2/95 2/96 2/97 2/98
<S><C>
CLASS A SHARES 9525.00 9622.00 9786.00 10786.00 11282.00 12365.00
LBMBI 10000.00 10315.00 10509.00 11670.00 12314.00 13438.00
CPI 10000.00 10159.00 10450.00 10719.00 11053.00 11212.00
LBVMBI 10000.00 10291.00 10527.00 11635.00 12239.00 13280.00
</TABLE>
Comparison of a $10,000 investment in Evergreen Virginia Municipal Bond Fund,
Class A shares, versus a similar investment in the Lehman Brothers Municipal
Bond Index (LBMBI), the Lehman Brothers Virginia Municipal Bond Index (LBVMBI),
and the Consumer Price Index (CPI).
Past performance is no guarantee of future results. The performance of each
class may vary based on differences in loads and fees paid by the shareholders
investing in each class. The investment return and principal value will
fluctuate so that an investor's shares, when redeemed, may be worth more or
less than original cost. The Lehman Brothers Municipal Bond Index and the
Lehman Brothers Virginia Municipal Bond Index are both unmanaged indices. The
index does not include transaction costs associated with buying and selling
securities nor any management fees. The Consumer Price Index, a measure of
inflation, is through February 28, 1998.
12
<PAGE>
EVERGREEN
Virginia Municipal Bond Fund
Portfolio
Management
[PHOTOGRAPH APPEARS HERE OF CHARLES JEANNE]
Charles Jeanne
Capital Management Group
Tenure: July 1993
Despite a volatile market environment initiated by turmoil in Southeast Asia,
the Evergreen Virginia Municipal Bond fared well during the first half of the
fiscal year. Since a substantial portion of the total return in the portfolio
is produced by higher income, we continue to emphasize a high coupon structure.
We sold some general obligation bonds and purchased higher-yielding issues such
as industrial development authority, hospital and housing bonds. For the
12-month period ending March 31, 1998, the Fund's Class Y shares ranked number
10 out of the 34 Virginia Municipal Debt Funds tracked by Lipper Analytical
Services. Class A shares ranked number 14 out of the 34 funds.
----------------------------------------------------------------
PORTFOLIO COMPOSITION
(as a percentage of portfolio assets)
[PIE CHART APPEARS HERE WITH THE FOLLOWING VALUES]
Local General Obligation--20.2%
Housing--13.7%
Hospital--12.4%
Public Facilities--9.9%
Education--9.6%
Transportation--8.8%
Other--6.9%
Industrial Development--6.7%
Lease--6.4%
Water and Sewer--5.4%
----------------------------------------------------------------
PORTFOLIO QUALITY
(as a percentage of portfolio assets)
AAA--34.7%
AA--47.6%
A-8.4%
BBB--5.5%
Not Rated--3.8%
13
<PAGE>
EVERGREEN
Florida High Income Municipal Bond Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Six Months
Ended
February 28, 1998 Year Ended August 31,
----------------------
(Unaudited) 1997 1996
<S> <C> <C> <C>
CLASS A SHARES
Net asset value beginning of
period $ 10.89 $ 10.42 $ 10.40
=========== ======== ========
Income from investment
operations
Net investment income 0.30 (c) 0.62 0.63
Net realized and unrealized gain (loss)
on investments 0.27 0.47 0.02
----------- -------- --------
Total from investment operations 0.57 1.09 0.65
----------- -------- --------
Less distributions from
Net investment income (0.30) (0.62) (0.63)
Net realized gains on investments 0 0 0
----------- -------- ---------
Total distributions (0.30) (0.62) (0.63)
----------- -------- ---------
Net asset value end of period $ 11.16 $ 10.89 $ 10.42
=========== ======== =========
Total return (b) 5.40% 10.77% 6.42%
Ratios/supplemental data
Ratios to average net assets
Expenses 0.88%(a) 0.88% 0.85%
Expenses excluding indirectly paid
expenses 0.88%(a) 0.87% -
Expenses excluding waivers and
reimbursements 1.07%(a) 1.12% 1.15%
Net investment income 5.44%(a) 5.86% 6.02%
Portfolio turnover rate 14% 32% 42%
Net assets end of period
(thousands) $ 149,718 $119,942 $ 76,267
<CAPTION>
June 17, 1992
Four Months (Commencement of
Ended Class Operations)
August 31, Year Ended April 30, through
---------------------
1995* 1995 1994 April 30, 1993
<S> <C> <C> <C> <C>
CLASS A SHARES
Net asset value beginning of
period $ 10.16 $ 10.08 $ 10.36 $ 10.00
========== ======== ======== ===========
Income from investment
operations
Net investment income 0.21 0.65 0.68 0.61
Net realized and unrealized gain (loss)
on investments 0.24 0.08 (0.26) 0.39
---------- -------- --------- -----------
Total from investment operations 0.45 0.73 0.42 1.00
---------- -------- --------- -----------
Less distributions from
Net investment income (0.21) (0.65) (0.68) (0.61)
Net realized gains on investments 0 0 (0.02) (0.03)
---------- --------- --------- -----------
Total distributions (0.21) (0.65) (0.70) (0.64)
---------- --------- --------- -----------
Net asset value end of period $ 10.40 $ 10.16 $ 10.08 $ 10.36
========== ========= ========= ===========
Total return (b) 4.43% 7.56% 3.94% 10.33%
Ratios/supplemental data
Ratios to average net assets
Expenses 1.07%(a) 0.60% 0.14% 0.00%(a)
Expenses excluding indirectly paid
expenses - - - -
Expenses excluding waivers and
reimbursements 1.42%(a) 1.26% 1.12% 1.12%(a)
Net investment income 5.92%(a) 6.52% 6.16% 5.92%(a)
Portfolio turnover rate 14% 28% 31% 50%
Net assets end of period
(thousands) $ 59,551 $ 65,043 $ 72,683 $ 33,541
</TABLE>
<TABLE>
<CAPTION>
July 10, 1995
Six Months (Commencement of
Ended Class Operations)
February 28, 1998 Year Ended August 31, through
---------------------
(Unaudited) 1997 1996 August 31, 1995
<S> <C> <C> <C> <C>
CLASS B SHARES
Net asset value beginning of period $ 10.89 $ 10.42 $ 10.40 $ 10.41
========== ======== ======== ==========
Income from investment operations
Net investment income 0.26 (c) 0.54 0.55 0.08
Net realized and unrealized gain (loss) on investments 0.27 0.47 0.02 (0.01)
---------- -------- -------- ----------
Total from investment operations 0.53 1.01 0.57 0.07
Less distributions from net investment income (0.26) (0.54) (0.55) (0.08)
---------- --------- --------- ----------
Net asset value end of period $ 11.16 $ 10.89 $ 10.42 $ 10.40
========== ========= ========= ==========
Total return (b) 4.88% 9.95% 5.63% 0.64%
Ratios to average net assets
Expenses 1.63%(a) 1.63% 1.59% 1.09%(a)
Expenses excluding indirectly paid expenses 1.63%(a) 1.63% - -
Expenses excluding waivers and reimbursements 1.82%(a) 1.87% 1.89% -
Net investment income 4.68%(a) 5.09% 5.27% 3.40%(a)
Portfolio turnover rate 14% 32% 42% 14%
Net assets end of period (thousands) $ 81,249 $ 63,475 $ 19,219 $ 3,137
</TABLE>
* The Fund changed its fiscal year end from April 30 to August 31.
(a) Annualized.
(b) Excluding applicable sales charges.
(c) Calculation based on average shares outstanding.
See Combined Notes to Financial Statements.
14
<PAGE>
EVERGREEN
Florida High Income Municipal Bond Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
September 20, 1995
Six Months (Commencement of
Ended Class Operations)
February 28, 1998 Year Ended through
(Unaudited) August 31, 1997 August 31, 1996
<S> <C> <C> <C>
CLASS Y SHARES
Net asset value beginning of period $ 10.89 $ 10.42 $ 10.48
========== ========= ===========
Income from investment operations
Net investment income 0.28 (b) 0.65 0.63
Net realized and unrealized gain (loss) on investments 0.30 0.47 (0.06)
---------- --------- -----------
Total from investment operations 0.58 1.12 0.57
Less distributions from net investment income (0.31) (0.65) (0.63)
---------- ---------- -----------
Net asset value end of period $ 11.16 $ 10.89 $ 10.42
========== ========== ===========
Total return 5.40% 11.04% 5.54%
Ratios/supplemental data
Ratios to average net assets
Expenses 0.64%(a) 0.63% 0.59%(a)
Expenses excluding indirectly paid expenses 0.64%(a) 0.63% -
Expenses excluding waivers and reimbursements 0.83%(a) 0.87% 0.89%(a)
Net investment income 5.83%(a) 6.08% 6.27%(a)
Portfolio turnover rate 14% 32% 42%
Net assets end of period (thousands) $ 20,936 $ 6,326 $ 1,970
</TABLE>
(a) Annualized.
(b) Calculation based on average shares outstanding.
See Combined Notes to Financial Statements.
15
<PAGE>
EVERGREEN
Florida Municipal Bond Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Six Months
Ended
February 28, 1998 Year Ended August 31, Four Months Ended
-----------------------
(Unaudited) 1997 1996 August 31, 1995(c)*
<S> <C> <C> <C> <C>
CLASS A SHARES
Net asset value beginning of period $ 9.98 $ 9.70 $ 9.74 $ 9.61
========= ======== ======== =========
Income from investment operations
Net investment income 0.24 0.51 0.54 0.19
Net realized and unrealized gain (loss) on investments 0.28 0.35 (0.04) 0.22
--------- -------- -------- ---------
Total from investment operations 0.52 0.86 0.50 0.41
--------- -------- -------- ---------
Less distributions from
Net investment income (0.24) (0.52) (0.54) (0.19)
Distributions in excess of net investment income 0 0 0 (0.03)
Net realized gains on investments (0.21) (0.06) 0 (0.06)
Paid-in capital 0 0 0 0
--------- -------- -------- ---------
Total distributions (0.45) (0.58) (0.54) (0.28)
--------- -------- -------- ---------
Net asset value end of period $ 10.05 $ 9.98 $ 9.70 $ 9.74
========= ======== ======== =========
Total return (b) 5.35% 9.06% 5.15% 4.20%
Ratios/supplemental data
Ratios to average net assets
Expenses 0.65%(a) 0.74% 0.63% 0.82%(a)
Expenses excluding indirectly paid expenses 0.65%(a) 0.74% - -
Expenses excluding waivers and reimbursements 1.03%(a) 0.91% 0.95% 1.05%(a)
Net investment income 4.88%(a) 5.22% 5.46% 4.89%(a)
Portfolio turnover rate 35% 41% 30% 29%
Net assets end of period (thousands) $ 124,852 $105,673 $115,723 $ 136,449
</TABLE>
<TABLE>
<CAPTION>
Year Ended April 30,
1995(c) 1994(c) 1993(c) 1992(c) 1991(c) 1990(c)
<S> <C> <C> <C> <C> <C> <C>
CLASS A SHARES
Net asset value beginning of period $ 9.52 $ 9.95 $ 9.35 $ 9.21 $ 8.80 $ 9.09
======= ======= ======= ======= ======= =======
Income from investment operations
Net investment income 0.54 0.56 0.56 0.61 0.66 0.58
Net realized and unrealized gain (loss) on
investments 0.11 (0.36) 0.67 0.22 0.43 (0.24)
------- -------- ------- ------- ------- --------
Total from investment operations 0.65 0.20 1.23 0.83 1.09 0.34
------- -------- ------- ------- ------- --------
Less distributions from
Net investment income (0.54) (0.56) (0.56) (0.61) (0.68) (0.59)
Distributions in excess of net investment
income 0 0 0 0 0 0
Net realized gains on investments (0.02) (0.07) (0.07) (0.04) 0 (0.04)
Paid-in capital 0 0 0 (0.04) 0 0
-------- -------- -------- -------- ------- --------
Total distributions (0.56) (0.63) (0.63) (0.69) (0.68) (0.63)
-------- -------- -------- -------- ------- --------
Net asset value end of period $ 9.61 $ 9.52 $ 9.95 $ 9.35 $ 9.21 $ 8.80
======== ======== ======== ======== ======= ========
Total return (b) 7.05% 1.87% 13.63% 9.30% 12.87% 3.74%
Ratios/supplemental data
Ratios to average net assets
Expenses 0.61% 0.56% 0.58% 0.41% 0.10% 0.10%
Expenses excluding indirectly paid
expenses - - - - - -
Expenses excluding waivers and
reimbursements - - - 0.68% 0.88% 5.14%
Net investment income 5.73% 5.37% 5.66% 6.12% 6.55% 6.15%
Portfolio turnover rate 53% 32% 24% 24% 66% 82%
Net assets end of period (thousands) $168,542 $199,612 $198,286 $147,996 $75,791 $ 7,286
<CAPTION>
May 11, 1988
(Commencement of
Class Operations)
through
April 30, 1989(c)
<S> <C>
CLASS A SHARES
Net asset value beginning of period $ 8.82
==========
Income from investment operations
Net investment income 0.47
Net realized and unrealized gain (loss) on
investments 0.22
----------
Total from investment operations 0.69
----------
Less distributions from
Net investment income (0.42)
Distributions in excess of net investment
income 0
Net realized gains on investments 0
Paid-in capital 0
----------
Total distributions (0.42)
----------
Net asset value end of period $ 9.09
==========
Total return (b) 9.16%
Ratios/supplemental data
Ratios to average net assets
Expenses 0.30%(a)
Expenses excluding indirectly paid
expenses -
Expenses excluding waivers and
reimbursements 20.40%(a)
Net investment income 5.30%(a)
Portfolio turnover rate 30%
Net assets end of period (thousands) $ 717
</TABLE>
* The Fund changed its fiscal year end from April 30 to August 31.
(a) Annualized.
(b) Excluding applicable sales charges.
(c) On June 30, 1995, ABT Florida Tax-Free Fund sold substantially all of its
net assets to Evergreen Florida Municipal Bond Fund. As ABT Florida
Tax-Free Fund is the accounting survivor, its basis of accounting for
assets and liabilities and its operating results for periods prior to June
30, 1995 have been carried forward in these financial highlights.
See Combined Notes to Financial Statements.
16
<PAGE>
EVERGREEN
Florida Municipal Bond Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
June 30, 1995
Six Months (Commencement of
Ended Class Operations)
February 28, 1998 Year Ended August 31, through
----------------------
(Unaudited) 1997 1996 August 31, 1995
<S> <C> <C> <C> <C>
CLASS B SHARES
Net asset value beginning of period $ 9.98 $ 9.70 $ 9.74 $ 9.67
========= ======== ======== =========
Income from investment operations
Net investment income 0.19 0.42 0.44 0.07
Net realized and unrealized gain (loss) on investments 0.29 0.35 (0.04) 0.10
--------- -------- --------- ---------
Total from investment operations 0.48 0.77 0.40 0.17
--------- -------- --------- ---------
Less distributions from
Net investment income (0.20) (0.43) (0.44) (0.07)
Net realized gains on investments (0.21) (0.06) 0 (0.03)
--------- --------- --------- ---------
Total distributions (0.41) (0.49) (0.44) (0.10)
--------- --------- --------- ---------
Net asset value end of period $ 10.05 $ 9.98 $ 9.70 $ 9.74
========= ========= ========= =========
Total return (b) 4.88% 8.06% 4.17% 1.49%
Ratios/supplemental data
Ratios to average net assets
Expenses 1.55%(a) 1.66% 1.56% 1.44%(a)
Expenses excluding indirectly paid expenses 1.55%(a) 1.66% - -
Expenses excluding waivers and reimbursements 1.76%(a) 1.84% 1.76% 1.64%(a)
Net investment income 3.97%(a) 4.29% 4.52% 3.22%(a)
Portfolio turnover rate 35% 41% 30% 29%
Net assets end of period (thousands) $ 69,447 $ 31,281 $ 28,849 $ 27,351
</TABLE>
<TABLE>
<CAPTION>
January 26, 1998
(Commencement of Class
Operations) through
February 28, 1998
(Unaudited)
<S> <C>
CLASS C SHARES
Net asset value beginning of period $ 10.06
===========
Income from investment operations
Net investment income 0.04
Net realized and unrealized loss on investments (0.01)
-----------
Total from investment operations 0.03
-----------
Less distributions from net investment income (0.04)
-----------
Net asset value end of period $ 10.05
===========
Total return (b) 0.29%
Ratios/supplemental data
Ratios to average net assets
Expenses 1.45%(a)
Expenses excluding indirectly paid expenses 1.45%(a)
Expenses excluding waivers and reimbursements 1.66%(a)
Net investment income 4.03%(a)
Portfolio turnover rate 35%
Net assets end of period (thousands) $ 8,979
</TABLE>
(a) Annualized.
(b) Excluding applicable sales charges.
See Combined Notes to Financial Statements.
17
<PAGE>
EVERGREEN
Florida Municipal Bond Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
June 30, 1995
Six Months (Commencement of
Ended Class Operations)
February 28, 1998 Year Ended August 31, through
----------------------
(Unaudited) 1997 1996 August 31, 1995
<S> <C> <C> <C> <C>
CLASS Y SHARES
Net asset value beginning of period $ 9.98 $ 9.70 $ 9.74 $ 9.67
========= ======== ======== ==========
Income from investment operations
Net investment income 0.24 0.52 0.53 0.09
Net realized and unrealized gain (loss) on investments 0.29 0.35 (0.03) 0.10
--------- -------- --------- ----------
Total from investment operations 0.53 0.87 0.50 0.19
--------- -------- --------- ----------
Less distributions from
Net investment income (0.25) (0.53) (0.54) (0.09)
Net realized gains on investments (0.21) (0.06) 0 (0.03)
--------- --------- --------- ----------
Total distributions (0.46) (0.59) (0.54) (0.12)
--------- --------- --------- ----------
Net asset value end of period $ 10.05 $ 9.98 $ 9.70 $ 9.74
========= ========= ========= ==========
Total return 5.39% 9.14% 5.22% 1.67%
Ratios/supplemental data
Ratios to average net assets
Expenses 0.47%(a) 0.67% 0.57% 0.59%(a)
Expenses excluding indirectly paid expenses 0.47%(a) 0.67% - -
Expenses excluding waivers and reimbursements 0.68%(a) 0.84% 0.77% 0.79%(a)
Net investment income 4.88%(a) 5.27% 5.55% 4.93%(a)
Portfolio turnover rate 35% 41% 30% 29%
Net assets end of period (thousands) $ 391,588 $ 24,850 $ 12,259 $ 3,602
</TABLE>
(a) Annualized.
See Combined Notes to Financial Statements.
18
<PAGE>
EVERGREEN
Georgia Municipal Bond Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Six Months
Ended
February 28, 1998 Year Ended Agust 31,
---------------------
(Unaudited) 1997 1996
<S> <C> <C> <C>
CLASS A SHARES
Net asset value beginning of period $ 9.90 $ 9.57 $ 9.47
========== ======== ========
Income from investment operations
Net investment income 0.24 (c) 0.49 0.48
Net realized and unrealized gain (loss) on
investments 0.36 0.33 0.10
---------- -------- --------
Total from investment operations 0.60 0.82 0.58
---------- -------- --------
Less distributions from net investment
income (0.24) (0.49) (0.48)
---------- --------- ---------
Net asset value end of period $ 10.26 $ 9.90 $ 9.57
========== ========= =========
Total return (b) 6.13% 8.73% 6.22%
Ratios/supplemental data
Ratios to average net assets
Expenses 0.70%(a) 0.94% 0.88%
Expenses excluding indirectly paid
expenses 0.70%(a) 0.94% -
Expenses excluding waivers and
reimbursements 1.17%(a) 1.83% 2.82%
Net investment income 4.83%(a) 5.00% 4.96%
Portfolio turnover rate 26% 32% 21%
Net assets end of period (thousands) $ 2,123 $ 2,201 $ 1,954
<CAPTION>
July 2, 1993
(Commencement of
Eight Months Class Operations)
Ended Year Ended through
August 31, 1995* December 31, 1994 December 31, 1993
<S> <C> <C> <C>
CLASS A SHARES
Net asset value beginning of period $ 8.74 $ 10.19 $ 10.00
========== ========== ===========
Income from investment operations
Net investment income 0.33 0.48 0.20
Net realized and unrealized gain (loss) on
investments 0.73 (1.45) 0.19
---------- ---------- -----------
Total from investment operations 1.06 (0.97) 0.39
---------- ---------- -----------
Less distributions from net investment
income (0.33) (0.48) (0.20)
---------- ---------- -----------
Net asset value end of period $ 9.47 $ 8.74 $ 10.19
========== ========== ===========
Total return (b) 12.28% (9.64%) 3.96%
Ratios/supplemental data
Ratios to average net assets
Expenses 0.71%(a) 0.53% 0.25%(a)
Expenses excluding indirectly paid
expenses - - -
Expenses excluding waivers and
reimbursements 2.83%(a) 3.61% 6.82%(a)
Net investment income 5.39%(a) 5.26% 4.71%(a)
Portfolio turnover rate 91% 147% 15%
Net assets end of period (thousands) $ 2,098 $ 1,387 $ 817
</TABLE>
<TABLE>
<CAPTION>
Six Months
Ended
February 28, 1998 Year Ended August 31,
----------------------
(Unaudited) 1997 1996
<S> <C> <C> <C>
CLASS B SHARES
Net asset value beginning of period $ 9.90 $ 9.57 $ 9.47
========== ======== ========
Income from investment operations
Net investment income 0.20 (c) 0.41 0.41
Net realized and unrealized gain (loss) on
investments 0.37 0.33 0.10
---------- -------- --------
Total from investment operations 0.57 0.74 0.51
---------- -------- --------
Less distributions from net investment
income (0.21) (0.41) (0.41)
---------- --------- ---------
Net asset value end of period $ 10.26 $ 9.90 $ 9.57
========== ========= =========
Total return (b) 5.74% 7.93% 5.44%
Ratios/supplemental data
Ratios to average net assets
Expenses 1.44%(a) 1.69% 1.63%
Expenses excluding indirectly paid
expenses 1.44%(a) 1.69% -
Expenses excluding waivers and
reimbursements 1.91%(a) 2.58% 3.54%
Net investment income 4.07%(a) 4.25% 4.21%
Portfolio turnover rate 26% 32% 21%
Net assets end of period (thousands) $ 11,943 $ 10,870 $ 9,271
<CAPTION>
July 2, 1993
(Commencement of
Eight Months Class Operations)
Ended Year Ended through
August 31, 1995* December 31, 1994 December 31, 1993
<S> <C> <C> <C>
CLASS B SHARES
Net asset value beginning of period $ 8.74 $ 10.19 $ 10.00
========== ========== ===========
Income from investment operations
Net investment income 0.28 0.43 0.18
Net realized and unrealized gain (loss) on
investments 0.73 (1.45) 0.19
---------- ---------- -----------
Total from investment operations 1.01 (1.02) 0.37
---------- ---------- -----------
Less distributions from net investment
income (0.28) (0.43) (0.18)
---------- ---------- -----------
Net asset value end of period $ 9.47 $ 8.74 $ 10.19
========== ========== ===========
Total return (b) 11.72% (10.15%) 3.74%
Ratios/supplemental data
Ratios to average net assets
Expenses 1.46%(a) 1.13% 0.75%(a)
Expenses excluding indirectly paid
expenses - - -
Expenses excluding waivers and
reimbursements 3.58%(a) 4.21% 7.32%(a)
Net investment income 4.64%(a) 4.66% 4.15%(a)
Portfolio turnover rate 91% 147% 15%
Net assets end of period (thousands) $ 7,538 $ 6,912 $ 3,692
</TABLE>
* The Fund changed its fiscal year end from December 31 to August 31.
(a) Annualized.
(b) Excluding applicable sales charges.
(c) Calculation based on average shares outstanding.
See Combined Notes to Financial Statements.
19
<PAGE>
EVERGREEN
Georgia Municipal Bond Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Six Months
Ended
February 28, 1998 Year Ended August 31,
----------------------
(Unaudited) 1997 1996
<S> <C> <C> <C>
CLASS Y SHARES
Net asset value beginning of period $ 9.90 $ 9.57 $ 9.47
========== ======== ========
Income from investment operations
Net investment income 0.25 (b) 0.51 0.50
Net realized and unrealized gain (loss) on investments 0.37 0.33 0.10
---------- -------- --------
Total from investment operations 0.62 0.84 0.60
---------- -------- --------
Less distributions from net investment income (0.26) (0.51) (0.50)
---------- --------- ---------
Net asset value end of period $ 10.26 $ 9.90 $ 9.57
========== ========= =========
Total return 6.26% 9.00% 6.48%
Ratios/supplemental data
Ratios to average net assets
Expenses 0.25%(a) 0.69% 0.63%
Expenses excluding indirectly paid expenses 0.25%(a) 0.69% -
Expenses excluding waivers and reimbursements 0.72%(a) 1.58% 2.51%
Net investment income 5.13%(a) 5.25% 5.21%
Portfolio turnover rate 26% 32% 21%
Net assets end of period (thousands) $ 64,627 $ 1,180 $ 1,620
<CAPTION>
February 28, 1994
(Commencement of
Eight Months Class Operations)
Ended through
August 31, 1995* December 31, 1994
<S> <C> <C>
CLASS Y SHARES
Net asset value beginning of period $ 8.74 $ 9.83
========== ==========
Income from investment operations
Net investment income 0.35 0.42
Net realized and unrealized gain (loss) on investments 0.73 (1.09)
---------- ----------
Total from investment operations 1.08 (0.67)
---------- ----------
Less distributions from net investment income (0.35) (0.42)
---------- ----------
Net asset value end of period $ 9.47 $ 8.74
========== ==========
Total return 12.47% (6.86%)
Ratios/supplemental data
Ratios to average net assets
Expenses 0.46%(a) 0.31%(a)
Expenses excluding indirectly paid expenses - -
Expenses excluding waivers and reimbursements 2.58%(a) 3.39%(a)
Net investment income 5.64%(a) 5.68%(a)
Portfolio turnover rate 91% 147%
Net assets end of period (thousands) $ 1,339 $ 284
</TABLE>
* The Fund changed its fiscal year end from December 31 to August 31.
(a) Annualized.
(b) Calculation based on average shares outstanding.
See Combined Notes to Financial Statements.
20
<PAGE>
EVERGREEN
North Carolina Municipal Bond Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Six Months
Ended
February 28, 1998 Year Ended August 31,
----------------------
(Unaudited) 1997 1996
<S> <C> <C> <C>
CLASS A SHARES
Net asset value beginning of period $ 10.37 $ 9.98 $ 9.95
=========== ======== ========
Income from investment operations
Net investment income 0.26 (c) 0.49 0.49
Net realized and unrealized gain (loss) on
investments 0.35 0.40 0.02
----------- -------- --------
Total from investment operations 0.61 0.89 0.51
----------- -------- --------
Less distributions from
Net investment income (0.26) (0.50) (0.48)
Net realized gains on investments 0 0 0
----------- --------- ---------
Total distributions (0.26) (0.50) (0.48)
----------- --------- ---------
Net asset value end of period $ 10.72 $ 10.37 $ 9.98
=========== ========= =========
Total return (b) 5.91% 9.11% 5.21%
Ratios/supplemental data
Ratios to average net assets
Expenses 0.72%(a) 1.11% 1.08%
Expenses excluding indirectly paid
expenses 0.72%(a) 1.11% -
Expenses excluding waivers and
reimbursements 1.09%(a) 1.11% 1.35%
Net investment income 4.91%(a) 4.77% 4.81%
Portfolio turnover rate 39% 50% 86%
Net assets end of period (thousands) $ 8,505 $ 8,115 $ 7,989
<CAPTION>
January 11, 1993
(Commencement of
Eight Months Class Operations)
Ended Year Ended through
August 31, 1995* December 31, 1994 December 31, 1993
<S> <C> <C> <C>
CLASS A SHARES
Net asset value beginning of period $ 9.16 $ 10.61 $ 10.00
========== ========== ===========
Income from investment operations
Net investment income 0.33 0.49 0.46
Net realized and unrealized gain (loss) on
investments 0.79 (1.45) 0.64
---------- ---------- -----------
Total from investment operations 1.12 (0.96) 1.10
---------- ---------- -----------
Less distributions from
Net investment income (0.33) (0.49) (0.46)
Net realized gains on investments 0 0 (0.03)
---------- ---------- -----------
Total distributions (0.33) (0.49) (0.49)
---------- ---------- -----------
Net asset value end of period $ 9.95 $ 9.16 $ 10.61
========== ========== ===========
Total return (b) 12.34% (9.12%) 11.28%
Ratios/supplemental data
Ratios to average net assets
Expenses 0.92%(a) 0.79% 0.32%(a)
Expenses excluding indirectly paid
expenses - - -
Expenses excluding waivers and
reimbursements 1.27%(a) 1.18% 1.25%(a)
Net investment income 5.09%(a) 5.11% 4.91%(a)
Portfolio turnover rate 117% 126% 57%
Net assets end of period (thousands) $ 8,279 $ 7,979 $ 12,739
</TABLE>
<TABLE>
<CAPTION>
Six Months
Ended
February 28, 1998 Year Ended August
------------------
(Unaudited) 1997 1996
<S> <C> <C> <C>
CLASS B SHARES
Net asset value beginning of period $ 10.37 $ 9.98 $ 9.95
=========== ======== ========
Income from investment operations
Net investment income 0.22 (c) 0.41 0.42
Net realized and unrealized gain (loss) on
investment 0.35 0.40 0.02
----------- -------- --------
Total from investment operations 0.57 0.81 0.44
----------- -------- --------
Less distributions from
Net investment income (0.22) (0.42) (0.41)
Net realized gains on investments 0 0 0
----------- --------- ---------
Total distributions (0.22) (0.42) (0.41)
----------- --------- ---------
Net asset value end of period $ 10.72 $ 10.37 $ 9.98
=========== ========= =========
Total return (b) 5.52% 8.30% 4.42%
Ratios/supplemental data
Ratios to average net assets
Expenses 1.47%(a) 1.86% 1.83%
Expenses excluding indirectly paid
expenses 1.47%(a) 1.86% -
Expenses excluding waivers and
reimbursements 1.83%(a) 1.86% 2.10%
Net investment income 4.15%(a) 4.02% 4.06%
Portfolio turnover rate 39% 50% 86%
Net assets end of period (thousands) $ 48,974 $ 48,198 $ 49,382
<CAPTION>
January 11, 1993
(Commencement of
Eight Months Class Operations)
Ended Year Ended through
August 31, 1995* December 31, 1994 December 31, 1993
<S> <C> <C> <C>
CLASS B SHARES
Net asset value beginning of period $ 9.16 $ 10.61 $ 10.00
========== ========== ===========
Income from investment operations
Net investment income 0.28 0.44 0.42
Net realized and unrealized gain (loss) on
investment 0.79 (1.45) 0.64
---------- ---------- -----------
Total from investment operations 1.07 (1.01) 1.06
---------- ---------- -----------
Less distributions from
Net investment income (0.28) (0.44) (0.42)
Net realized gains on investments 0 0 (0.03)
---------- ---------- -----------
Total distributions (0.28) (0.44) (0.45)
---------- ---------- -----------
Net asset value end of period $ 9.95 $ 9.16 $ 10.61
========== ========== ===========
Total return (b) 11.78% (9.64%) 10.80%
Ratios/supplemental data
Ratios to average net assets
Expenses 1.67%(a) 1.37% 0.79%(a)
Expenses excluding indirectly paid
expenses - - -
Expenses excluding waivers and
reimbursements 2.02%(a) 1.76% 1.74%(a)
Net investment income 4.34%(a) 4.53% 4.47%(a)
Portfolio turnover rate 117% 126% 57%
Net assets end of period (thousands) $ 49,040 $ 44,616 $ 45,168
</TABLE>
* The Fund changed its fiscal year end from December 31 to August 31.
(a) Annualized.
(b) Excluding applicable sales charges.
(c) Calculation based on average shares outstanding.
See Combined Notes to Financial Statements.
21
<PAGE>
EVERGREEN
North Carolina Municipal Bond Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Six Months
Ended
February 28, 1998 Year Ended August 31,
-----------------------
(Unaudited) 1997 1996
<S> <C> <C> <C>
CLASS Y SHARES
Net asset value beginning of period $ 10.37 $ 9.98 $ 9.95
=========== ======== ========
Income from investment operations
Net investment income 0.22 (b) 0.51 0.51
Net realized and unrealized gain (loss) on investments 0.40 0.41 0.03
----------- -------- --------
Total from investment operations 0.62 0.92 0.54
----------- -------- --------
Less distributions from net investment income (0.27) (0.53) (0.51)
----------- --------- ---------
Net asset value end of period $ 10.72 $ 10.37 $ 9.98
=========== ========= =========
Total return 6.04% 9.39% 5.47%
Ratios/supplemental data
Ratios to average net assets
Expenses 0.21%(a) 0.86% 0.84%
Expenses excluding indirectly paid expenses 0.21%(a) 0.86% -
Expenses excluding waivers and reimbursements 0.58%(a) 0.86% 1.07%
Net investment income 5.15%(a) 5.02% 5.05%
Portfolio turnover rate 39% 50% 86%
Net assets end of period (thousands) $ 262,482 $ 4,042 $ 3,771
<CAPTION>
February 28, 1994
(Commencement of
Eight Months Class Operations)
Ended through
August 31, 1995* December 31, 1994
<S> <C> <C>
CLASS Y SHARES
Net asset value beginning of period $ 9.16 $ 10.31
========== ===========
Income from investment operations
Net investment income 0.35 0.43
Net realized and unrealized gain (loss) on investments 0.79 (1.15)
---------- -----------
Total from investment operations 1.14 (0.72)
---------- -----------
Less distributions from net investment income (0.35) (0.43)
---------- -----------
Net asset value end of period $ 9.95 $ 9.16
========== ===========
Total return 12.52% (7.01%)
Ratios/supplemental data
Ratios to average net assets
Expenses 0.67%(a) 0.59%(a)
Expenses excluding indirectly paid expenses - -
Expenses excluding waivers and reimbursements 1.02%(a) 0.98%(a)
Net investment income 5.34%(a) 5.58%(a)
Portfolio turnover rate 117% 126%
Net assets end of period (thousands) $ 1,006 $ 642
</TABLE>
* The Fund changed its fiscal year end from December 31 to August 31.
(a) Annualized.
(b) Calculation based on average shares outstanding.
See Combined Notes to Financial Statements.
22
<PAGE>
EVERGREEN
South Carolina Municipal Bond Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
January 3, 1994
Six Months (Commencement of
Ended Eight Months Class Operations)
February 28, 1998 Year Ended August 31, Ended through
----------------------
(Unaudited) 1997 1996 August 31, 1995* December 31, 1994
<S> <C> <C> <C> <C> <C>
CLASS A SHARES
Net asset value beginning of period $ 10.08 $ 9.69 $ 9.59 $ 8.62 $ 10.00
=========== ======== ======== ========= ===========
Income from investment operations
Net investment income 0.23 (c) 0.48 0.49 0.34 0.46
Net realized and unrealized gain (loss) on
investments 0.28 0.40 0.10 0.97 (1.38)
----------- -------- -------- --------- -----------
Total from investment operations 0.51 0.88 0.59 1.31 (0.92)
----------- -------- -------- --------- -----------
Less distributions from
Net investment income (0.23) (0.48) (0.49) (0.34) (0.46)
Net realized gains on investments (0.03) (0.01) 0 0 0
----------- --------- --------- --------- -----------
Total distributions (0.26) (0.49) (0.49) (0.34) (0.46)
----------- --------- --------- --------- -----------
Net asset value end of period $ 10.33 $ 10.08 $ 9.69 $ 9.59 $ 8.62
=========== ========= ========= ========= ===========
Total return (b) 5.11% 9.33% 6.23% 15.35% (9.32%)
Ratios/supplemental data
Ratios to average net assets
Expenses 0.86%(a) 0.98% 0.86% 0.53%(a) 0.25%(a)
Expenses excluding indirectly paid
expenses 0.85%(a) 0.98% - - -
Expenses excluding waivers and
reimbursements 1.22%(a) 2.16% 4.00% 6.50%(a) 10.71%(a)
Net investment income 4.63%(a) 4.87% 4.98% 5.41%(a) 5.57%(a)
Portfolio turnover rate 13% 62% 37% 66% 23%
Net assets end of period (thousands) $ 1,288 $ 1,025 $ 841 $ 610 $ 312
</TABLE>
<TABLE>
<CAPTION>
January 3, 1994
Six Months (Commencement of
Ended Eight Months Class Operations)
February 28, 1998 Year Ended August 31, Ended through
----------------------
(Unaudited) 1997 1996 August 31, 1995* December 31, 1994
<S> <C> <C> <C> <C> <C>
CLASS B SHARES
Net asset value beginning of period $ 10.08 $ 9.69 $ 9.59 $ 8.62 $ 10.00
=========== ======== ======== ========= ===========
Income from investment operations
Net investment income 0.19 (c) 0.41 0.41 0.29 0.41
Net realized and unrealized gain (loss) on
investments 0.28 0.40 0.10 0.97 (1.38)
----------- -------- -------- --------- -----------
Total from investment operations 0.47 0.81 0.51 1.26 (0.97)
----------- -------- -------- --------- -----------
Less distributions from
Net investment income (0.19) (0.41) (0.41) (0.29) (0.41)
Net realized gains on investments (0.03) (0.01) 0 0 0
----------- --------- --------- --------- -----------
Total distributions (0.22) (0.42) (0.41) (0.29) (0.41)
----------- --------- --------- --------- -----------
Net asset value end of period $ 10.33 $ 10.08 $ 9.69 $ 9.59 $ 8.62
=========== ========= ========= ========= ===========
Total return (b) 4.72% 8.52% 5.43% 14.77% (9.83%)
Ratios/supplemental data
Ratios to average net assets
Expenses 1.61%(a) 1.73% 1.61% 1.28%(a) 0.87%(a)
Expenses excluding indirectly paid
expenses 1.60%(a) 1.73% - - -
Expenses excluding waivers and
reimbursements 1.98%(a) 2.91% 4.76% 7.25%(a) 11.33%(a)
Net investment income 3.83%(a) 4.13% 4.23% 4.66%(a) 4.88%(a)
Portfolio turnover rate 13% 62% 37% 66% 23%
Net assets end of period (thousands) $ 4,579 $ 4,734 $ 4,282 $ 3,542 $ 2,456
</TABLE>
* The Fund changed its fiscal year end from December 31 to August 31.
(a) Annualized.
(b) Excluding applicable sales charges.
(c) Calculation based on average shares outstanding.
See Combined Notes to Financial Statements.
23
<PAGE>
EVERGREEN
South Carolina Municipal Bond Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Six Months
Ended
February 28, 1998 Year Ended August 31,
-----------------------
(Unaudited) 1997 1996
<S> <C> <C> <C>
CLASS Y SHARES
Net asset value beginning of period $ 10.08 $ 9.69 $ 9.59
=========== ======== ========
Income from investment operations
Net investment income 0.20 (b) 0.51 0.51
Net realized and unrealized gain (loss) on investments 0.33 0.40 0.10
----------- -------- --------
Total from investment operations 0.53 0.91 0.61
----------- -------- --------
Less distributions from
Net investment income (0.25) (0.51) (0.51)
Net realized gains on investments (0.03) (0.01) 0
----------- --------- ---------
Total distributions (0.28) (0.52) (0.51)
----------- --------- ---------
Net asset value end of period $ 10.33 $ 10.08 $ 9.69
=========== ========= =========
Total return 5.24% 9.60% 6.49%
Ratios/supplemental data
Ratios to average net assets
Expenses 0.49%(a) 0.73% 0.62%
Expenses excluding indirectly paid expenses 0.48%(a) 0.73% -
Expenses excluding waivers and reimbursements 0.75%(a) 1.91% 3.70%
Net investment income 4.79%(a) 5.12% 5.22%
Portfolio turnover rate 13% 62% 37%
Net assets end of period (thousands) $ 61,885 $ 7,012 $ 4,555
<CAPTION>
February 28, 1994
(Commencement of
Eight Months Class Operations)
Ended through
August 31, 1995* December 31, 1994
<S> <C> <C>
CLASS Y SHARES
Net asset value beginning of period $ 8.62 $ 9.74
========== ==========
Income from investment operations
Net investment income 0.35 0.43
Net realized and unrealized gain (loss) on investments 0.97 (1.12)
---------- ----------
Total from investment operations 1.32 (0.69)
---------- ----------
Less distributions from
Net investment income (0.35) (0.43)
Net realized gains on investments 0 0
---------- ----------
Total distributions (0.35) (0.43)
---------- ----------
Net asset value end of period $ 9.59 $ 8.62
========== ==========
Total return 15.54% (7.12%)
Ratios/supplemental data
Ratios to average net assets
Expenses 0.28%(a) 0.00%(a)
Expenses excluding indirectly paid expenses - -
Expenses excluding waivers and reimbursements 6.25%(a) 10.46%(a)
Net investment income 5.66%(a) 5.92%(a)
Portfolio turnover rate 66% 23%
Net assets end of period (thousands) $ 1,673 $ 92
</TABLE>
* The Fund changed its fiscal year end from December 31 to August 31.
(a) Annualized.
(b) Calculation based on average shares outstanding.
See Combined Notes to Financial Statements.
24
<PAGE>
EVERGREEN
Virginia Municipal Bond Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Six Months
Ended
February 28, 1998 Year Ended August 31,
----------------------
(Unaudited) 1997 1996
<S> <C> <C> <C>
CLASS A SHARES
Net asset value beginning of period $ 10.05 $ 9.68 $ 9.67
=========== ======== ========
Income from investment operations
Net investment income 0.24 (c) 0.50 0.48
Net realized and unrealized gain (loss) on
investments 0.30 0.37 0.01
----------- -------- --------
Total from investment operations 0.54 0.87 0.49
----------- -------- --------
Less distributions from net investment
income (0.24) (0.50) (0.48)
----------- --------- ---------
Net asset value end of period $ 10.35 $ 10.05 $ 9.68
=========== ========= =========
Total return (b) 5.46% 9.05% 5.12%
Ratios/supplemental data
Ratios to average net assets
Expenses 0.72%(a) 1.03% 0.93%
Expenses excluding indirectly paid
expenses 0.72%(a) 1.02% -
Expenses excluding waivers and
reimbursements 1.14%(a) 1.84% 3.47%
Net investment income 4.80%(a) 4.95% 4.83%
Portfolio turnover rate 18% 72% 68%
Net assets end of period (thousands) $ 3,189 $ 2,934 $ 2,892
<CAPTION>
July 2, 1993
(Commencement of
Eight Months Class Operations)
Ended Year Ended through
August 31, 1995* December 31, 1994 December 31, 1993
<S> <C> <C> <C>
CLASS A SHARES
Net asset value beginning of period $ 8.85 $ 10.19 $ 10.00
========== ========== ===========
Income from investment operations
Net investment income 0.33 0.47 0.20
Net realized and unrealized gain (loss) on
investments 0.82 (1.34) 0.19
---------- ---------- -----------
Total from investment operations 1.15 (0.87) 0.39
---------- ---------- -----------
Less distributions from net investment
income (0.33) (0.47) (0.20)
---------- ---------- -----------
Net asset value end of period $ 9.67 $ 8.85 $ 10.19
========== ========== ===========
Total return (b) 13.09% (8.60%) 3.89%
Ratios/supplemental data
Ratios to average net assets
Expenses 0.72%(a) 0.53% 0.25%(a)
Expenses excluding indirectly paid
expenses - - -
Expenses excluding waivers and
reimbursements 3.83%(a) 5.14% 7.75%(a)
Net investment income 5.17%(a) 5.11% 4.64%(a)
Portfolio turnover rate 87% 59% 0%
Net assets end of period (thousands) $ 1,983 $ 1,606 $ 1,306
</TABLE>
<TABLE>
<CAPTION>
Six Months
Ended
February 28, 1998 Year Ended August 31,
---------------------
(Unaudited) 1997 1996
<S> <C> <C> <C>
CLASS B SHARES
Net asset value beginning of period $ 10.05 $ 9.68 $ 9.67
=========== ======== ========
Income from investment operations
Net investment income 0.21 (c) 0.41 0.41
Net realized and unrealized gain (loss) on
investments 0.30 0.37 0.01
----------- -------- --------
Total from investment operations 0.51 0.78 0.42
----------- -------- --------
Less distributions from net investment
income (0.21) (0.41) (0.41)
----------- --------- ---------
Net asset value end of period $ 10.35 $ 10.05 $ 9.68
=========== ========= =========
Total return (b) 5.07% 8.24% 4.34%
Ratios/supplemental data
Ratios to average net assets
Expenses 1.47%(a) 1.79% 1.68%
Expenses excluding indirectly paid
expenses 1.47%(a) 1.78% -
Expenses excluding waivers and
reimbursements 1.89%(a) 2.59% 4.23%
Net investment income 4.05%(a) 4.21% 4.09%
Portfolio turnover rate 18% 72% 68%
Net assets end of period (thousands) $ 7,643 $ 6,695 $ 5,963
<CAPTION>
July 2, 1993
(Commencement of
Eight Months Class Operations)
Ended Year Ended through
August 31, 1995* December 31, 1994 December 31, 1993
<S> <C> <C> <C>
CLASS B SHARES
Net asset value beginning of period $ 8.85 $ 10.19 $ 10.00
========== ========== ===========
Income from investment operations
Net investment income 0.28 0.42 0.17
Net realized and unrealized gain (loss) on
investments 0.82 (1.34) 0.19
---------- ---------- -----------
Total from investment operations 1.10 (0.92) 0.36
---------- ---------- -----------
Less distributions from net investment
income (0.28) (0.42) (0.17)
---------- ---------- -----------
Net asset value end of period $ 9.67 $ 8.85 $ 10.19
========== ========== ===========
Total return (b) 12.53% (9.13%) 3.66%
Ratios/supplemental data
Ratios to average net assets
Expenses 1.47%(a) 1.12% 0.75%(a)
Expenses excluding indirectly paid
expenses - - -
Expenses excluding waivers and
reimbursements 4.58%(a) 5.73% 8.25%(a)
Net investment income 4.42%(a) 4.54% 4.25%(a)
Portfolio turnover rate 87% 59% 0%
Net assets end of period (thousands) $ 5,083 $ 3,817 $ 2,235
</TABLE>
* The Fund changed its fiscal year end from December 31 to August 31.
(a) Annualized.
(b) Excluding applicable sales charges.
(c) Calculation based on average shares outstanding.
See Combined Notes to Financial Statements.
25
<PAGE>
EVERGREEN
Virginia Municipal Bond Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Six Months
Ended
February 28, 1998 Year Ended August 31,
----------------------
(Unaudited) 1997 1996
<S> <C> <C> <C>
CLASS Y SHARES
Net asset value beginning of period $ 10.05 $ 9.68 $ 9.67
=========== ======== ========
Income from investment operations
Net investment income 0.21 (b) 0.51 0.50
Net realized and unrealized gain (loss) on investments 0.35 0.37 0.01
----------- -------- --------
Total from investment operations 0.56 0.88 0.51
----------- -------- --------
Less distributions from net investment income (0.26) (0.51) (0.50)
----------- --------- ---------
Net asset value end of period $ 10.35 $ 10.05 $ 9.68
=========== ========= =========
Total return 5.59% 9.32% 5.38%
Ratios/supplemental data
Ratios to average net assets
Expenses 0.28%(a) 0.79% 0.70%
Expenses excluding indirectly paid expenses 0.27%(a) 0.78% -
Expenses excluding waivers and reimbursements 0.70%(a) 1.60% 3.24%
Net investment income 5.03%(a) 5.27% 5.05%
Portfolio turnover rate 18% 72% 68%
Net assets end of period (thousands) $ 83,618 $ 6,195 $ 4,266
<CAPTION>
February 28, 1994
(Commencement of
Eight Months Class Operations)
Ended through
August 31, 1995* December 31, 1994
<S> <C> <C>
CLASS Y SHARES
Net asset value beginning of period $ 8.85 $ 9.83
========== ==========
Income from investment operations
Net investment income 0.34 0.41
Net realized and unrealized gain (loss) on investments 0.82 (0.98)
---------- ----------
Total from investment operations 1.16 (0.57)
---------- ----------
Less distributions from net investment income (0.34) (0.41)
---------- ----------
Net asset value end of period $ 9.67 $ 8.85
========== ==========
Total return 13.28% (5.80%)
Ratios/supplemental data
Ratios to average net assets
Expenses 0.47%(a) 0.28%(a)
Expenses excluding indirectly paid expenses - -
Expenses excluding waivers and reimbursements 3.58%(a) 4.89%(a)
Net investment income 5.42%(a) 5.54%(a)
Portfolio turnover rate 87% 59%
Net assets end of period (thousands) $ 965 $ 344
</TABLE>
* The Fund changed its fiscal year end from December 31 to August 31.
(a) Annualized.
(b) Calculation based on average shares outstanding.
See Combined Notes to Financial Statements.
26
<PAGE>
EVERGREEN
Florida High Income Municipal Bond Fund
Schedule of Investments
February 28, 1998 (unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
MUNICIPAL OBLIGATIONS - 97.4%
California - 6.5%
$16,250,000 California Statewide Communities
Development Authority, Special
Assessment, United Air Lines
Incorporated
5.63%, 10/1/34 ................... $16,477,175
-----------
Florida - 88.9%
745,000 Alachua County, Florida,
Health Facilities Authority
Revenue, Beverly Enterprises
Project
10.13%, 4/1/10 ................... 795,474
750,000 Arbor Greene, Florida,
Community Development
District, Special Assessment
Revenue
7.60%, 5/1/18 .................... 808,478
1,000,000 Bay County, Florida, Hospital
Systems Revenue, Bay Medical
Center Project
8.00%, 10/1/12 ................... 1,193,310
100,000 Baytree, Florida, Community
Development District, Special
Assessment Revenue,
8.75%, 5/1/12 .................... 110,270
Bobcat Trail, Florida,
Community Development District
Revenue:
2,000,000 6.75%, 5/1/04 ................... 2,016,280
1,100,000 7.50%, 5/1/19 ................... 1,126,026
750,000 Boynton Beach, Florida,
Housing Mortgage, Clipper Cove
Apartments
6.35%, 7/1/16 .................... 793,808
Brevard County, Florida,
Health Facilities Authority
Revenue, Courtenay Springs Village:
820,000 7.38%, 11/15/04 ................. 890,233
1,875,000 7.50%, 11/15/12 ................. 2,047,575
1,000,000 Brevard County, Florida,
Tourist Development Tax Revenue,
Marlins Spring
6.88%, 3/1/13 .................... 1,085,050
965,000 Broward County, Florida,
Housing Finance Authority Revenue,
Series A
7.35%, 3/1/23, (GNMA) ............ 1,022,022
Cape Coral, Florida, Health
Facilities Authority Revenue:
1,000,000 5.50%, 10/1/17 .................. 1,015,370
1,400,000 5.63%, 10/1/27 .................. 1,445,094
2,000,000 Clay County, Florida, Housing
Finance Authority Revenue,
Single Family Mortgage,
Multi-County Program
5.95%, 10/1/19 ................... 2,087,400
2,850,000 Cory Lakes, Florida,
Community Development
District Revenue
8.38%, 5/1/17 .................... 3,023,793
1,080,000 Crossings at Fleming Island,
Florida, Community
Development District, Utility
Revenue
7.38%, 10/1/19 ................... 1,141,301
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
MUNICIPAL OBLIGATIONS - continued
Florida - continued
$ 500,000 Dade County, Florida,
Multifamily Mortgage Revenue
6.00%, 11/1/32 ................... $ 508,775
4,000,000 Dade County, Florida, Single
Family Mortgage Revenue, Step
Bond (Eff. Yield 5.19%) (a)
5.60%, 4/1/27 .................... 4,247,840
2,310,000 Duval County, Florida,
Housing Finance Authority Revenue,
Saint Augustine Apartments Project
6.00%, 3/1/21 .................... 2,380,062
1,500,000 Eastlake Oaks, Florida,
Community Development
District Revenue
7.75%, 5/1/17 .................... 1,603,080
Escambia County, Florida,
Health Facilities Authority Revenue:
Azalea Trace Incorporated:
2,905,000 6.00%, 1/1/15 ................... 3,000,633
2,250,000 6.10%, 1/1/19 ................... 2,342,182
535,000 9.25%, 1/1/06 ................... 569,973
1,500,000 Baptist Hospital Incorporated,
Series B
6.00%, 10/1/14 ................... 1,580,670
4,400,000 Escambia County, Florida,
Housing Finance Authority
Revenue, Single Family
Mortgage, Multi-County Program
6.85%, 10/1/17 ................... 4,681,072
Escambia County, Florida,
Pollution Control Revenue, Champion
International Corporate Project:
3,000,000 6.40%, 9/1/30 ................... 3,303,450
2,000,000 6.90%, 8/1/22 ................... 2,242,780
Florida State Housing Finance
Agency Revenue:
1,600,000 5.80%, 8/1/17 ................... 1,648,464
4,905,000 5.95%, 2/1/30 ................... 5,088,349
2,945,000 6.00%, 6/1/39 ................... 3,070,987
1,395,000 8.00%, 2/1/30 ................... 1,193,241
1,000,000 The Vineyards Project, Series H
6.50%, 11/1/25 ................... 1,042,160
Grand Haven, Florida,
Community Development District,
Special Assessment Revenue,
Series A:
3,700,000 6.30%, 5/1/02 ................... 3,791,649
3,850,000 6.90%, 5/1/19 ................... 3,963,228
2,000,000 Greater Orlando, Florida,
Aviation Authority Revenue
5.13%, 10/1/17 ................... 1,996,220
5,170,000 Halifax, Florida, Health Care
Facilities Revenue
5.20%, 4/1/18 .................... 5,080,559
3,000,000 Heritage Harbor, Florida,
Community Development
District Revenue
7.75%, 5/1/19 .................... 2,965,710
4,200,000 Heritage Pines, Florida,
Community Development
District Revenue
6.25%, 5/15/98 ................... 4,218,984
</TABLE>
27
<PAGE>
EVERGREEN
Florida High Income Municipal Bond Fund
Schedule of Investments (continued)
February 28, 1998 (unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
MUNICIPAL OBLIGATIONS - continued
Florida - continued
$3,610,000 Hernando County, Florida,
Industrial Development Authority
Revenue, Crushed Stone Company
8.50%, 12/1/14 ................... $ 4,131,464
1,545,000 Hialeah Gardens, Florida,
Industrial Development Authority
Revenue, Waterford Convalescent,
Series A
7.88%, 12/1/07 ................... 1,684,838
600,000 Hillsborough County, Florida,
Aviation Authority Revenue,
US Air Project, Series 2
8.60%, 1/15/22 ................... 680,904
1,000,000 Hillsborough County, Florida,
Housing Finance Agency Revenue
5.88%, 10/1/30 ................... 1,035,250
3,350,000 Homestead, Florida,
Industrial Development Authority
Revenue, Community Rehabilitation
Providers Program, Series A
7.95%, 11/1/18 ................... 3,662,120
2,500,000 Indian Trace, Florida,
Community Water Management,
Special Benefit, General Obligation,
Subseries B
8.25%, 5/1/11 .................... 2,877,675
Jacksonville, Florida, Health
Facilities Authority Revenue,
National Benevolent Association,
Cypress Village Project:
750,000 7.00%, 12/1/14 .................. 818,287
1,020,000 7.00%, 12/1/22 .................. 1,112,647
500,000 8.00%, 12/1/15 .................. 586,425
2,500,000 Lake Bernadette, Florida,
Community Development
District, Special Assessment
Revenue, Series A
8.00%, 5/1/17 .................... 2,664,000
3,200,000 Lake County, Florida,
Resources Recovery Industrial
Development, NRG/Recovery Group
Incorporated, Series 1993A
5.85%, 10/1/09 ................... 3,348,352
2,295,000 Largo, Florida, Sun Coast
Health Systems Revenue
6.20%, 3/1/13 .................... 2,325,294
Lee County, Florida, Housing
Finance Authority Revenue,
Single Family Mortgage, Multi-
County Program, Series A:
895,000 7.20%, 3/1/27 ................... 1,008,432
2,780,000 Subseries 2, Step Bond,
(Eff. Yield 4.80%)(a)
0.00%, 3/1/29 .................... 3,072,150
965,000 Subseries 2
7.45%, 9/1/27 .................... 1,087,362
1,685,000 Subseries 3
7.50%, 9/1/27 .................... 1,912,762
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
MUNICIPAL OBLIGATIONS - continued
Florida - continued
Lee County, Florida,
Industrial Development Authority
Revenue:
$1,005,000 5.80%, 10/1/06 .................. $ 1,030,899
1,155,000 5.88%, 10/1/27 .................. 1,180,537
3,840,000 6.25%, 10/1/17 .................. 3,987,418
3,275,000 6.38%, 10/1/25 .................. 3,432,134
830,000 Lee County, Florida,
Industrial Development Authority
Revenue, Encore Nursing Center
8.13%, 12/1/07 ................... 922,728
2,790,000 Leon County, Florida,
Educational Facilities Authority
Revenue, Series A
8.25%, 5/1/14, (GNMA) ............ 2,934,689
950,000 Manatee County, Florida,
Housing Finance Authority Revenue,
Single Family Mortgage, Subseries 1
7.45%, 5/1/27 .................... 1,075,058
1,125,000 Manatee County, Florida,
Housing Finance Authority
Revenue, Multifamily Housing,
Conquistador, Series A
6.25%, 10/1/22 ................... 1,203,165
Martin County, Florida,
Industrial Development Authority
Revenue, Indiantown Cogeneration
Project:
2,175,000 Series A
7.88%, 12/15/25 .................. 2,552,515
650,000 Series B
8.05%, 12/15/25 .................. 769,002
1,245,000 Meadow Point II, Florida,
Community Development District,
Capital Improvement Revenue
7.75%, 5/1/18 .................... 1,326,523
Miami Beach, Florida,
Redevelopment Agency Tax
Increment Revenue, City
Center Historic Convention:
1,000,000 6.25%, 12/1/16 .................. 1,060,200
500,000 6.35%, 12/1/22 .................. 530,365
North Springs, Florida,
Improvement District, Special
Assessment Revenue:
300,000 7.00%, 5/1/19 ................... 308,016
1,950,000 Heron Bay Project
7.00%, 5/1/19 .................... 2,031,549
3,750,000 Parkland Isles Project, Series B
6.25%, 5/1/05 .................... 3,809,512
1,285,000 Water Management, Series A
8.20%, 5/1/24 .................... 1,419,501
2,500,000 Northern Palm Beach County,
Florida, Water Control and
Improvement Revenue, Unit
Development 9A, Series A
7.20%, 8/1/16 .................... 2,718,775
Northern Palm Beach County,
Florida, Water Control District,
Special Assessment Revenue:
500,000 6.88%, 11/1/13 .................. 549,960
500,000 7.00%, 8/1/15 ................... 551,630
</TABLE>
28
<PAGE>
EVERGREEN
Florida High Income Municipal Bond Fund
Schedule of Investments (continued)
February 28, 1998 (unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
MUNICIPAL OBLIGATIONS - continued
Florida - continued
$1,500,000 Northwood, Florida, Community
Development District Revenue
7.60%, 5/1/17 ..................... $ 1,589,025
2,605,000 Ocean Highway and Port
Authority, Florida, Pollution
Control Revenue, Solid Waste,
Jefferson Smurfit Corporation
6.50%, 11/1/06 .................... 2,729,493
Orange County, Florida,
Health Facilities Authority Revenue:
1,040,000 Lakeside Apartments, Incorporated
6.50%, 7/1/13 ..................... 1,141,639
395,000 Orlando Lutheran Tower
8.40%, 7/1/14 ..................... 454,926
Orange County, Florida,
Housing Finance Authority Revenue,
Single Family Mortgage, Series B:
1,000,000 5.80%, 9/1/17 .................... 1,036,560
2,500,000 5.88%, 3/1/28 .................... 2,592,125
600,000 6.85%, 10/1/27 ................... 644,358
2,125,000 8.10%, 11/1/21 ................... 2,234,799
1,050,000 Osceola County, Florida,
Housing Finance Authority Revenue,
Tierra Vista Apartments Project,
Series A
5.75%, 12/1/22 .................... 1,073,331
2,000,000 Osceola County, Florida,
Industrial Development Authority
Revenue, Community Provider,
Pooled Loan Project, Series A
7.75%, 7/1/17 ..................... 2,174,020
565,000 Overoaks, Florida, Community
Development District, Capital
Improvement Revenue
8.25%, 5/1/17 ..................... 582,933
Palm Beach County, Florida,
Health Facilities Authority Revenue,
Abbey Delray South Project:
975,000 5.20%, 10/1/06 ................... 990,171
500,000 5.30%, 10/1/07 ................... 508,875
2,750,000 5.50%, 10/1/11 ................... 2,786,987
2,500,000 5.50%, 10/1/15 ................... 2,524,625
1,500,000 Palm Beach County, Florida,
Industrial Development Authority
Revenue, Geriatric Care Incorporated
Project
6.55%, 12/1/16 .................... 1,640,010
3,695,000 Pasco County, Florida,
Housing Finance Authority Revenue,
Multifamily, Oak Trail Apartments
Project, Series A
5.35%, 6/1/27 ..................... 3,845,719
Pinellas County, Florida,
Educational Facilities Authority
Revenue:
3,100,000 Clearwater Christian College
8.00%, 2/1/11 ..................... 3,324,440
685,000 Eckerd College
7.75%, 7/1/14 ..................... 748,719
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
MUNICIPAL OBLIGATIONS - continued
Florida - continued
Pinellas County, Florida,
Health Facilities Authority Revenue:
$ 150,000 6.75%, 10/1/00 ................... $ 152,496
100,000 7.00%, 10/1/01 ................... 102,232
200,000 7.25%, 10/1/02 ................... 210,630
1,100,000 8.00%, 10/1/08 ................... 1,195,469
1,000,000 Plantation, Florida, Health
Facilities Authority Revenue
5.00%, 12/1/14 .................... 982,770
5,000,000 Polk County, Florida,
Industrial Development Authority
Revenue, IMC Fertilizer, Series A
7.53%, 1/1/15 ..................... 5,413,550
1,000,000 Port Everglades, Florida,
Port Authority Revenue, Series A
7.50%, 9/1/12 ..................... 1,060,230
1,580,000 Quantum, Florida, Community
Development District, Special
Assessment Revenue
7.75%, 3/1/14 ..................... 1,709,449
985,000 Riverwood, Florida, Community
Development District, Sewer
Systems Revenue
7.75%, 10/1/14 .................... 1,059,722
Sarasota County, Florida,
Health Facilities Authority Revenue:
1,000,000 Jewish Housing Council
7.38%, 7/1/16 ..................... 1,081,450
1,500,000 Manatee Jewish Housing Council
6.70%, 7/1/25 ..................... 1,573,410
1,000,000 Sunnyside Properties
6.00%, 5/15/10 .................... 1,038,190
1,830,000 Seminole, Florida, Water Control
District, Special Assessment, Unit of
Development No. 2
7.25%, 8/1/22 ..................... 1,939,343
St. John's County, Florida,
Industrial Development
Authority Revenue:
1,250,000 5.25%, 3/1/11 .................... 1,283,662
2,000,000 5.50%, 3/1/17 .................... 2,068,460
2,500,000 Bayview Project, Series A
7.10%, 10/1/26 .................... 2,703,950
2,500,000 Vicars Landing Project, Series A
6.75%, 2/15/12 .................... 2,658,750
2,500,000 Tampa, Florida, Health
Systems Revenue, Catholic
Health, Series A-3
4.75%, 11/15/28, (MBIA) ........... 2,320,950
1,000,000 Tarpon Springs, Health
Facilities Authority Revenue,
Helen Ellis Memorial Hospital Project
7.50%, 5/1/11 ..................... 1,078,720
1,715,000 Village, Florida, Community
Development District Revenue
5.20%, 5/1/19 ..................... 1,717,332
Volusia County, Florida,
Educational Facilities Authority
Revenue, Embry-Riddle Aero,
Series A:
1,025,000 6.13%, 10/15/16 .................. 1,091,276
5,000,000 6.13%, 10/15/26 .................. 5,302,450
</TABLE>
29
<PAGE>
EVERGREEN
Florida High Income Municipal Bond Fund
Schedule of Investments (continued)
February 28, 1998 (unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
MUNICIPAL OBLIGATIONS - continued
Florida - continued
$ 2,000,000 Volusia County, Florida,
Industrial Development Authority,
First Mortgage Revenue
7.63%, 11/1/26 .................. $ 2,168,740
Westchase East, Florida,
Community Development District,
Capital Improvement Revenue:
1,350,000 7.30%, 5/1/18 .................. 1,426,181
1,775,000 7.50%, 5/1/17 .................. 1,878,624
1,000,000 Winter Garden, Florida,
Industrial Development Authority
Revenue, Beverly Enterprises
8.75%, 7/1/12 ................... 1,130,170
Winter Haven, Florida,
Housing Authority Revenue,
Multi-Family Mortgage, Abbey
Lane Apartments, Series C:
250,000 7.00%, 7/1/12, (FNMA) .......... 267,040
250,000 7.00%, 7/1/24, (FNMA) .......... 266,243
------------
224,027,934
------------
U.S. Virgin Islands - 0.9%
2,000,000 Virgin Islands, Water and Power
Authority Revenue, Series B
7.60%, 1/1/12 ................... 2,245,420
------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
MUNICIPAL OBLIGATIONS - continued
Puerto Rico - 1.1%
$ 1,475,000 Commonwealth of Puerto Rico,
Port Authority Revenue,
American Airlines Project, Series A
6.25%, 6/1/26 ................... $ 1,599,696
1,000,000 Puerto Rico Industrial
Tourist Educational Medical
and Environmental Control
Facilities Revenue, Mennonite
General Hospital Project, Series A
6.50%, 7/1/12 ................... 1,089,020
------------
2,688,716
------------
Total Municipal Obligations
(cost $234,558,969).............. 245,439,245
============
</TABLE>
<TABLE>
<CAPTION>
Shares
<S> <C> <C> <C>
MUTUAL FUND SHARES - 0.5% (cost $1,113,000)
1,113,000 Federated Municipal Obligation Fund 1,113,000
---------
Total Investments -
(cost $235,671,969) ..... 97.9% 246,552,245
Other Assets and
Liabilities - Net ....... 2.1 5,350,522
----- -----------
Net Assets - ............ 100.0% $251,902,767
===== ============
</TABLE>
(a) Effective Yield (calculated at the date of purchase) is the yield at which
the bond accretes on an annual basis until maturity date.
Legend of Portfolio Abbreviations:
FNMA Insured by Federal National Mortgage Association
GNMA Insured by Government National Mortgage Association
MBIA Insured by Municipal Bond Investors Assurance Corporation
See Combined Notes to Financial Statements.
30
<PAGE>
EVERGREEN
Florida Municipal Bond Fund
Schedule of Investments
February 28, 1998 (unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
MUNICIPAL OBLIGATIONS - 96.8%
Florida - 95.8%
$4,000,000 Alachua County, Florida,
Health Facilities Authority,
Shands Teaching Hospital, Series A
6.25%, 12/1/16, (MBIA) .............. $4,591,480
3,750,000 Brevard County, Florida,
Housing Finance Authority
Revenue Bond, Multifamily
Housing, Windover Oaks, Series A
6.90%, 2/1/27, (FNMA) ............... 4,255,237
3,000,000 Broward County, Florida,
General Obligation, Series C
6.00%, 1/1/04 ....................... 3,235,260
1,515,000 Broward County, Florida,
Housing Finance Authority
Revenue Bond, Series B
7.13%, 3/1/17, (GNMA) ............... 1,601,688
Broward County, Florida,
School District, Refunding
Revenue Bond:
3,000,000 5.40%, 2/15/05 ..................... 3,200,250
3,350,000 5.60%, 2/15/07, (AMBAC) ............ 3,590,865
3,000,000 5.70%, 2/15/01 ..................... 3,145,140
1,000,000 Charlotte County, Florida,
Utility Revenue Bond
6.75%, 10/1/13, (FGIC) .............. 1,146,630
10,500,000 Clearwater Florida, Housing
Authority Revenue, Affordable
Housing Acquisition Program
4.95%, 6/1/07, (FSA) ................ 10,647,210
Clearwater Florida, Housing
Authority Revenue, Hamptons
At Clearwater:
500,000 5.35%, 5/1/24 ...................... 498,560
500,000 5.40%, 5/1/13 ...................... 509,315
500,000 Collier County, Florida
Health Facilities Authority
Revenue, The Moorings Inc. Project
7.00%, 12/1/19 ...................... 555,190
5,775,000 Dade County, Florida,
Aviation Revenue, Series C
5.00%, 10/1/02 ...................... 6,012,526
Dade County, Florida,
Educational Facilities Authority
Revenue, St. Thomas University:
2,000,000 6.00%, 1/1/10 ...................... 2,140,620
(LOC: Sun Bank Miami):
2,000,000 6.00%, 1/1/14, ..................... 2,128,320
1,000,000 6.13%, 1/1/19, ..................... 1,068,160
1,370,000 Dade County, Florida,
Multifamily Mortgage Revenue,
Golden Lakes Apartments
Project, Series A
5.90%, 11/1/22 ...................... 1,394,167
40,000 Dade County, Florida, School
District, General Obligation
7.38%, 7/1/08 ....................... 42,664
185,000 Dade County, Florida, Single
Family Mortgage Revenue, Series E
7.00%, 3/1/24 ....................... 194,953
5,000,000 Dade County, Florida, Solid
Waste Systems, Special
Obligation Refunding
6.00%, 10/1/06, (AMBAC) ............. 5,574,700
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
MUNICIPAL OBLIGATIONS - continued
Florida - continued
$2,845,000 Delray Beach Florida, Water &
Sewer Revenue Refunding, Series A
5.50%, 10/1/10, (AMBAC) ............. $3,093,255
840,000 Duval County, Florida,
Housing Finance Authority
Revenue, Single Family Mortgage
7.35%, 7/1/24, (GNMA) ............... 896,162
3,000,000 Duval County, Florida, School
District Refunding
5.90%, 8/1/02, (AMBAC) .............. 3,212,760
80,000 Duval County, Florida, Single
Family Mortgage Revenue
7.30%, 7/1/11 ....................... 85,246
Escambia County, Florida,
Health Facilities Authority Revenue,
Azalea Trace Incorporated:
2,560,000 6.00%, 1/1/15 ...................... 2,644,275
1,250,000 6.10%, 1/1/19 ...................... 1,301,213
2,750,000 Escambia County, Florida,
Health Facilities Authority Revenue,
Baptist Hospital Inc., Series B
6.00%, 10/1/14 ...................... 2,897,895
Escambia County, Florida,
Pollution Control Revenue,
Champion International Corp. Project:
5,230,000 5.88%, 6/1/22 ...................... 5,459,388
1,650,000 6.40%, 9/1/30 ...................... 1,816,897
4,015,000 Everglades Port Authority, Florida Port
7.13%, 11/1/16 ...................... 4,896,855
2,500,000 Flagler County, Florida,
School District, Refunding Revenue
5.85%, 9/1/02 ....................... 2,688,100
Florida Ports, Financing
Community Revenue, State
Transportation Trust Fund:
2,000,000 5.38%, 6/1/16, (MBIA) .............. 2,049,960
6,500,000 5.38%, 6/1/27, (MBIA) .............. 6,545,890
1,250,000 Florida State, Board of Education
Capital Outlay, Series C
7.00%, 6/1/04 ....................... 1,322,300
Florida State, Board of Education
Capital Outlay, Public Education:
7,700,000 Series E
5.00%, 6/1/10 ....................... 7,877,254
1,000,000 Series F
5.30%, 6/1/08 ....................... 1,063,870
5,850,000 Florida State, Board of Education
Capital Outlay, Refunding Public
Education, Series A
5.75%, 6/1/10 ....................... 6,497,888
Florida State, Division Bond
Finance Department,
Department Environmental
Preservation 2000, Series A:
8,555,000 5.25%, 7/1/07, (MBIA) .............. 9,147,348
2,000,000 5.75%, 7/1/13, (AMBAC) ............. 2,140,580
5,600,000 6.00%, 7/1/06, (MBIA) .............. 6,265,392
3,000,000 Florida State, Division Bond
Finance Department,
Department National Research
& Preservation 2000, Series A
6.10%, 7/1/04, (MBIA) ............... 3,266,520
</TABLE>
31
<PAGE>
EVERGREEN
Florida Municipal Bond Fund
Schedule of Investments (continued)
February 28, 1998 (unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
MUNICIPAL OBLIGATIONS - continued
Florida - continued
Florida State, Division Bond
Finance Department, Refunding
Department Environmental
Protection, Series B:
$6,500,000 6.00%, 7/1/09, (AMBAC) .............. $7,370,805
19,600,000 6.00%, 7/1/10, (AMBAC) .............. 22,240,512
2,000,000 Florida State, Turnpike
Authority, Turnpike Revenue, Series A
6.90%, 7/1/02, (AMBAC) ............... 2,211,320
Florida, Housing Finance Agency
Revenue:
1,860,000 6.35%, 5/1/26, (GNMA) ............... 1,983,281
2,610,000 8.00%, 12/1/20 ...................... 2,723,196
Series A
1,895,000 6.88%, 10/1/12 ...................... 1,966,024
Florida, Housing Finance Agency
Revenue, Landings At Sea Forest:
560,000 5.85%, 12/1/18, (AMBAC) ............. 584,489
805,000 6.05%, 12/1/36, (AMBAC) ............. 840,517
140,000 Florida, Housing Finance Agency,
Homeownership Mortgage
7.50%, 9/1/14 ........................ 147,844
2,000,000 Florida, Housing Finance Agency,
Multifamily Housing, Series C
6.20%, 8/1/16 ........................ 2,131,140
5,200,000 Florida, Housing Finance Agency,
Refunding, Multifamily Park Colony,
Series D
5.10%, 7/1/05 ........................ 5,308,472
Gainesville, Florida,
Utilities Systems Revenue, Series B:
4,800,000 6.50%, 10/1/13 ...................... 5,682,528
3,000,000 7.50%, 10/1/08 ...................... 3,789,360
3,000,000 7.50%, 10/1/09 ...................... 3,821,640
Greater Orlando, Florida,
Aviation Authority:
11,170,000 5.13%, 10/1/16 ...................... 11,109,793
2,525,000 5.13%, 10/1/17 ...................... 2,520,228
3,000,000 5.75%, 10/1/10 ...................... 3,296,700
23,450,000 Gulf Breeze, Florida, Capital Funding,
Series B
4.50%, 10/1/27 ....................... 21,179,336
1,000,000 Hialeah, Florida, Capital
Improvement Revenue
5.50%, 10/1/13 ....................... 1,011,070
2,000,000 Hillsborough County, Florida,
Hospital Authority, Hospital
Revenue, Tampa General
Hospital Project
6.38%, 10/1/13, (FSA) ................ 2,190,960
3,250,000 Hillsborough County, Florida,
Industrial Development
Authority, University
Community Hospital, Series 1994
6.50%, 8/15/19, (MBIA) ............... 3,856,060
6,500,000 Jacksonville, Florida,
Electric Authority Revenue
Refunding, St. John's River
Power Park Systems
6.00%, 10/1/05 ....................... 7,231,445
2,500,000 Jacksonville, Florida, Excise
Taxes Revenue
6.00%, 10/1/01, (AMBAC) .............. 2,668,325
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
MUNICIPAL OBLIGATIONS - continued
Florida - continued
$3,000,000 Jacksonville, Florida, Health Facilities
Hospital Revenue, St. Luke's Hospital
Association Project
7.13%, 11/15/20 ...................... $3,312,990
1,245,000 Jacksonville, Florida, Health
Industrial Development,
National Benevolent-Cypress
Village, Series A
6.25%, 12/1/26 ....................... 1,335,125
105,000 Jacksonville, Florida,
Industrial Development Revenue
Refunding, TTX Company Project
5.40%, 3/1/01 ........................ 108,920
Lakeland, Florida, Electric &
Water Revenue:
2,500,000 5.50%, 10/1/03 ...................... 2,673,300
4,670,000 6.25%, 1/1/04 ....................... 5,158,716
Lakeland, Florida, Electric &
Water Revenue Refunding,
Junior Subordinated Lien:
2,470,000 6.25%, 10/1/03, (FGIC) .............. 2,734,265
4,000,000 6.50%, 10/1/07 ...................... 4,668,520
5,000,000 Lakeland, Florida, Electric &
Water Revenue, Refunding and
Improvement, Junior
Subordinated Lien, Series B
6.00%, 10/1/10, (FGIC) .............. 5,683,850
Lee County, Florida, Housing
Finance Authority Revenue,
Single Family Mortgage,
Multi-County Program, Series A:
1,115,000 7.20%, 3/1/27 ....................... 1,256,315
1,640,000 7.45%, 9/1/27 ....................... 1,847,952
3,685,000 7.50%, 9/1/27 ....................... 4,183,102
4,890,000 Leesburg, Florida, Hospital
Revenue, Leesburg Regional
Medical Center Project, Series B
5.70%, 7/1/18 ........................ 5,066,284
755,000 Leon County, Florida, Housing
Finance Authority Revenue,
Single Family Mortgage,
Multi-County Program, Series B
6.25%, 7/1/19, (GNMA) ................ 796,714
1,425,000 Manatee County, Florida,
Housing Finance Authority,
Mortgage Revenue, Subseries 1
7.45%, 5/1/27 ........................ 1,612,587
1,715,000 Manatee County, Florida,
Housing Finance Authority
Revenue, Single Family, Subseries 1
7.20%, 5/1/28 ........................ 1,934,297
Miami Beach, Florida,
Redevelopment Agency Tax
Increment Revenue, City
Center Historic Convention Village:
2,000,000 5.63%, 12/1/09 ...................... 2,089,080
3,000,000 5.80%, 12/1/13 ...................... 3,099,510
2,000,000 5.88%, 12/1/22 ...................... 2,036,080
1,470,000 Miami Beach, Florida, Resort
Tax Revenue
6.25%, 10/1/22, (AMBAC) .............. 1,720,694
</TABLE>
32
<PAGE>
EVERGREEN
Florida Municipal Bond Fund
Schedule of Investments (continued)
February 28, 1998 (unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
MUNICIPAL OBLIGATIONS - continued
Florida - continued
$17,515,000 Miami Dade County, Florida,
Special Obligation, Series C
(Eff. Yield 5.68%) (b)
0.00%, 10/1/28 ...................... $3,334,331
Miami Dade County, Florida,
Special Obligation, Series B:
50,500,000 (Eff. Yield 5.65%) (b)
0.00%, 10/1/30 ...................... 8,632,975
16,925,000 (Eff. Yield 5.65%) (b)
0.00%, 10/1/31 ...................... 2,736,942
10,000,000 (Eff. Yield 5.66%) (b)
0.00%, 10/1/32 ...................... 1,527,000
25,510,000 (Eff. Yield 5.66%) (b)
0.00%, 10/1/33 ...................... 3,684,664
7,690,000 (Eff. Yield 5.66%) (b)
0.00%, 10/1/34 ...................... 1,050,454
4,750,000 Miami, Florida, General Obligation
5.60%, 12/1/03, (FGIC) .............. 5,109,480
5,000,000 Miami, Florida, Health
Facilities Authority Revenue
5.25%, 8/15/15, (AMBAC) ............. 5,074,800
1,000,000 Miramar, Florida, Wastewater
Improvements
6.75%, 10/1/16 ...................... 1,131,500
1,500,000 North Miami, Florida, Health Facility
Authority Revenue, Catholic Health
Services Obligation Group
6.00%, 8/15/16 ...................... 1,579,800
1,335,000 North Springs, Florida, Water & Sewer
Revenue, Series B
6.50%, 10/1/16, (MBIA) .............. 1,501,648
1,000,000 North Tampa, Florida, Housing
Development Corp. Revenue,
Country Oaks Apartments, Series A
6.90%, 1/1/24, (FNMA) ............... 1,054,420
1,300,000 Northern Palm Beach County,
Florida, Improvements
Revenue, Water Control &
Improvements, Unit
Development 9A, Series A
7.20%, 8/1/16 ....................... 1,413,763
1,500,000 Okaloosa County, Florida, Gas
District Revenue, Refunding
and Improvement
6.85%, 10/1/14, (MBIA) .............. 1,747,920
1,000,000 Okaloosa County, Florida,
Water & Sewer Revenue
6.00%, 7/1/11, (AMBAC) .............. 1,135,180
3,000,000 Orange County, Florida,
Health Facilities Authority
Revenue, Lakeside Alternatives Inc.
6.50%, 7/1/13 ....................... 3,293,190
Orange County, Florida,
Health Facilities Authority
Revenue, Series 3:
5,225,000 5.30%, 10/1/06 ..................... 5,594,564
5,785,000 5.50%, 10/1/08 ..................... 6,303,625
2,000,000 5.70%, 10/1/11 ..................... 2,209,760
2,000,000 Orange County, Florida,
Hospital Orlando Regional
Healthcare, Health Facilities
Authority, Series B
6.25%, 10/1/21 ...................... 2,324,660
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
MUNICIPAL OBLIGATIONS - continued
Florida - continued
$ 495,000 Orange County, Florida,
Housing Finance Authority
6.85%, 10/1/27, (GNMA/FNMA) ......... $ 531,596
10,000,000 Orlando & Orange County,
Florida, Expressway Authority
Revenue Refunding, Senior Lien
5.38%, 7/1/10, (AMBAC) .............. 10,458,700
4,550,000 Orlando & Orange County,
Florida, Expressway Authority
Revenue, Junior Lien
6.50%, 7/1/11, (FGIC) ............... 5,394,617
40,000 Orlando & Orange County,
Florida, Expressway Revenue
8.25%, 7/1/15, (FGIC) ............... 55,660
4,000,000 Orlando, Florida, Utilities
Commission Water & Electric
Revenue, Linked SAVRs/RIBs
5.60%, 10/6/17 (a) .................. 4,193,280
Orlando, Florida, Utilities Commission,
Water & Electric Revenue:
3,000,000 5.30%, 10/1/01 ..................... 3,129,240
2,500,000 5.40%, 10/1/02 ..................... 2,641,175
10,000,000 5.90%, 10/1/08 ..................... 11,313,200
4,000,000 6.00%, 10/1/10 ..................... 4,542,960
3,000,000 Series 78A
6.25%, 4/1/05 ...................... 3,362,070
Palm Beach County, Florida,
Criminal Justice Facilities Revenue:
11,985,000 5.38%, 6/1/09, (FGIC) .............. 12,924,624
15,195,000 5.75%, 6/1/12, (FGIC) .............. 16,821,473
3,000,000 7.20%, 6/1/15, (FGIC) .............. 3,809,460
1,880,000 Palm Beach County, Florida,
General Obligation, Series B
6.50%, 7/1/10 ....................... 2,233,026
Palm Beach County, Florida,
Health Facilities Authority
Revenue, Good Samaritan
Health Systems:
3,695,000 6.20%, 10/1/11 ..................... 4,132,895
6,000,000 6.30%, 10/1/22 ..................... 6,749,520
1,000,000 Palm Beach County, Florida,
Health Facilities, Waterford Project
5.50%, 10/1/15 ...................... 1,009,850
4,440,000 Palm Beach County, Florida,
Housing Finance Authority Revenue,
Daughters of Charity, Series A
7.60%, 3/1/23, (GNMA) ............... 4,711,772
665,000 Palm Beach County, Florida,
Housing Finance Authority
Revenue, Single Family
Mortgage, Series A
6.50%, 10/1/21, (GNMA) .............. 708,405
2,000,000 Palm Beach County, Florida,
Industrial Development
Authority Revenue, Industrial
Development Resource,
Geriatric Care Inc. Project
6.55%, 12/1/16 ...................... 2,186,680
5,500,000 Palm Beach County, Florida,
Solid Waste Authority Revenue
Refunding and Improvement
5.75%, 12/1/04, (MBIA) .............. 5,956,775
</TABLE>
33
<PAGE>
EVERGREEN
Florida Municipal Bond Fund
Schedule of Investments (continued)
February 28, 1998 (unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
MUNICIPAL OBLIGATIONS - continued
Florida - continued
$ 5,000,000 Pasco County, Florida, Health
Facilities Authority,
Hospital Revenue, Series 2
5.60%, 10/1/10 ........................ $ 5,216,250
2,500,000 Pembroke Pines, Florida,
Consolidated Utility Systems
Revenue
6.25%, 9/1/04, (FGIC) ................. 2,709,750
5,000,000 Pensacola, Florida, Health Facilities
Authority Revenue, Daughters of
Charity National Health
5.25%, 1/1/11 ......................... 5,103,300
825,000 Polk County, Florida, Housing
Finance Authority Revenue,
Single Family Mortgage, Series A
7.00%, 9/1/15 ......................... 859,881
8,350,000 Polk County, Florida,
Industrial Development
Authority, Tampa Electric Co. Project
5.85%, 12/1/30 ........................ 8,743,869
6,650,000 Reedy Creek, Florida,
Improvement District, Series A
6.15%, 6/1/03, (MBIA) ................. 7,101,003
1,500,000 Saint Lucie County, Florida,
School District
6.00%, 7/1/04, (AMBAC) ................ 1,628,025
2,000,000 Saint Petersburg, Florida,
Public Utility Revenue
6.40%, 10/1/01 ........................ 2,114,880
3,000,000 Saint Petersburg, Florida,
Utility Tax Revenue
5.95%, 6/1/04, (AMBAC) ................ 3,254,160
1,800,000 Sarasota County, Florida,
Health Facilities Authority
Revenue, Sunnyside Property
6.00%, 5/15/10 ........................ 1,868,742
2,000,000 Sarasota, Florida, Water &
Sewer Utility Revenue
6.13%, 10/1/06, (FGIC) ................ 2,187,900
3,590,000 Seacoast, Florida, Utility
Authority Revenue, Water &
Sewer System, Series A
5.50%, 3/1/18, (FGIC) ................. 3,824,750
3,000,000 Seminole County, Florida,
School District
6.00%, 8/1/03, (MBIA) ................. 3,276,270
1,000,000 St. John's County, Florida,
Industrial Development
Authority, Bayview Project, Series A
7.00%, 10/1/12 ........................ 1,073,190
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
MUNICIPAL OBLIGATIONS - continued
Florida - continued
$ 2,000,000 Tallahassee, Florida, Health
Facilities Revenue,
Tallahassee Memorial Regional
Medical Project
6.63%, 12/1/13, (MBIA) ................ $ 2,262,280
1,250,000 Tampa, Florida, Capital
Improvements Program Revenue,
Series B
8.38%, 10/1/18 ........................ 1,277,275
Tampa, Florida, Health Systems,
Catholic Health Revenue Series A 1:
4,075,000 4.70%, 11/15/10 ...................... 4,072,392
1,000,000 5.00%, 11/15/09 ...................... 1,035,850
4,575,000 5.25%, 11/15/11 ...................... 4,777,810
3,000,000 5.50%, 11/15/13 ...................... 3,240,030
10,675,000 Series A 3
4.75%, 11/15/28, (MBIA) ............... 9,910,456
45,000 Tampa, Florida, Subordinate
Guaranteed Entitlement
Revenue, Series B
8.50%, 10/1/18, (ETM) ................. 46,288
Tampa, Florida, Utility Tax Improvement:
2,940,000 5.25%, 10/1/10 ....................... 3,126,808
3,090,000 5.25%, 10/1/11 ....................... 3,281,549
2,160,000 Tampa-Hillsborough County,
Florida, Expressway Authority
Revenue
5.25%, 7/1/09 ......................... 2,283,530
1,000,000 Tarpon Springs, Florida,
Health Facilities Authority
Revenue, Ellen Memorial Hospital
7.63%, 5/1/21 ......................... 1,082,320
Volusia County, Florida,
Educational Facilities
Authority Revenue,
Embry-Riddle Aero, Series A:
3,500,000 6.13%, 10/15/16 ...................... 3,726,310
2,600,000 6.13%, 10/15/26 ...................... 2,757,274
1,800,000 Volusia County, Florida, General
Obligation
5.85%, 7/1/03, (AMBAC) ................ 1,950,588
Volusia County, Florida, School District:
4,000,000 5.13%, 6/1/00, (FSA) ................. 4,111,800
3,000,000 6.00%, 8/1/01, (FGIC) ................ 3,193,290
1,000,000 West Melbourne, Florida,
Water & Sewer Revenue
6.75%, 10/1/14 ........................ 1,131,500
Winter Haven, Florida,
Housing Authority Revenue,
Multifamily Mortgage, Abbey
Lane Apartments:
850,000 7.00%, 7/1/12, (FNMA) ................ 907,936
1,750,000 7.00%, 7/1/24, (FNMA) ................ 1,863,697
-----------
570,193,936
-----------
</TABLE>
34
<PAGE>
EVERGREEN
Florida Municipal Bond Fund
Schedule of Investments (continued)
February 28, 1998 (unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
MUNICIPAL OBLIGATIONS - continued
Puerto Rico - 1.0%
$ 1,000,000 Commonwealth of Puerto Rico,
Aquaduct & Sewer Authority
Revenue
6.25%, 7/1/12 .............. $ 1,145,660
3,000,000 Commonwealth of Puerto Rico,
Linked Bond Payment Obligation
7.00%, 7/1/10, (MBIA) (a) .. 3,700,980
870,000 Puerto Rico, Industrial
Tourist, Educational, Medical
and Environmental Control
Facilities, Hospital Auxilio
Mutuo Obligation, Series A
6.25%, 7/1/24 .............. 963,986
------------
5,810,626
------------
Total Municipal Obligations
(cost $542,311,128) ........ 576,004,562
------------
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C> <C>
MUTUAL FUND SHARES - 0.3% (cost $1,688,000)
1,688,000 Federated Municipal Obligation Fund $ 1,688,000
------------
Total Investments -
(cost $543,999,128)..... 97.1% 577,692,562
Other Assets and
Liabilities - Net ....... 2.9 17,173,214
----- ------------
Net Assets - ............ 100.0% $594,865,776
===== ============
</TABLE>
(a) At the discretion of the portfolio manager, these securities may be
separated into securities with interest or principal payments that are
linked to another rate or index and therefore would be considered
derivative securities.
(b) Effective Yield (calculated at the date of purchase) is the yield at which
the bond accretes on an annual basis until maturity date.
Summary of Abbreviations:
AMBAC Insured by American Municipal Bond Assurance Corporation
ETM Escrowed to Maturity
FGIC Insured by Federal Guaranty Insurance Company
FNMA Insured by Federal National Mortgage Association
FSA Insured by Financial Security Assurance Company
GNMA Insured by Government National Mortgage Association
LOC Line of Credit
MBIA Insured by Municipal Bond Investors Assurance
RIBs Residual Interest Bond
SAVRs Select Auction Variable Rate Securities
See Combined Notes to Financial Statements.
35
<PAGE>
EVERGREEN
Georgia Municipal Bond Fund
Schedule of Investments
February 28, 1998 (unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
MUNICIPAL OBLIGATIONS - 97.6%
Georgia - 96.1%
$ 2,000,000 Americus Sumpter County,
Georgia, Hospital Revenue,
Sumpter Regional Hospital
Project, Anticipation Certificates
5.25%, 12/1/14 .......................... $ 2,056,440
Appling County, Georgia,
Development Authority,
Pollution Control Revenue:
500,000 7.15%, 1/1/21, (MBIA) .................. 564,375
1,055,000 Oglethorpe Power Corporation,
Hatch Project
7.13%, 1/1/15, (MBIA) ................... 1,189,491
1,500,000 Atlanta, Georgia, Airport
Facilities Revenue, Capital Appreciation,
(Eff. Yield 6.33%) (a)
0.00%, 1/1/10, (MBIA) ................... 804,465
Atlanta, Georgia, Airport
Facilities Revenue, Series A:
2,000,000 6.50%, 1/1/06, (AMBAC) ................. 2,283,060
1,000,000 6.50%, 1/1/10, (AMBAC) ................. 1,170,940
1,000,000 Atlanta, Georgia, Water & Sewer Revenue
5.00%, 1/1/11, (FGIC) ................... 1,019,240
2,465,000 Baldwin County, Georgia,
Hospital Authority Revenue
5.25%, 12/1/12 .......................... 2,464,803
300,000 Butts County, Georgia,
Certificates of Participation
6.75%, 12/1/14, (MBIA) .................. 339,624
1,120,000 Cartersville, Georgia,
Development Authority
Revenue, Water & Waste Facilities
7.40%, 11/1/10 .......................... 1,389,450
120,000 Cartersville, Georgia,
General Obligation
6.70%, 1/1/12 ........................... 143,263
500,000 Clayton County, Georgia,
Housing Authority Mortgage Revenue
7.13%, 12/1/25, (FHA/VA) ................ 546,885
1,600,000 Coffee County, Georgia,
Hospital Authority Revenue
6.75%, 12/1/16 .......................... 1,660,512
College Park, Georgia,
Business and Industrial
Development Authority, Civic
Center Project Revenue,
Series A:
1,435,000 5.70%, 9/1/09, (FSA) ................... 1,568,125
1,470,000 5.75%, 9/1/10, (FSA) ................... 1,604,637
1,000,000 Conyers, Georgia, Water &
Sewer Revenue, Series A
6.60%, 7/1/15, (AMBAC) .................. 1,149,040
DeKalb County, Georgia,
Housing Authority Revenue:
1,470,000 Multifamily, North Hill
Apartments Project
6.63%, 1/1/05, (FNMA) ................... 1,607,783
500,000 The Lakes at Indian Creek Project
7.15%, 1/1/25, (FSA) .................... 544,990
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
MUNICIPAL OBLIGATIONS - continued
Georgia - continued
$ 500,000 DeKalb County, Georgia,
School District, Series A
6.25%, 7/1/11 ........................... $ 578,300
Effingham County, Georgia, School District:
1,260,000 6.25%, 2/1/07, (MBIA) .................. 1,434,510
1,160,000 6.25%, 2/1/08, (MBIA) .................. 1,328,049
500,000 6.25%, 2/1/09, (MBIA) .................. 574,395
Fayette County, Georgia, School District :
600,000 6.13%, 3/1/15 .......................... 650,760
2,200,000 6.25%, 3/1/06 .......................... 2,486,550
1,000,000 Forsyth County, Georgia,
School District, General Obligation
6.75%, 7/1/16 ........................... 1,213,890
2,000,000 Fulco, Georgia, Hospital
Authority, Health Systems
Revenue, Catholic Health,
Anticipation Certificates
5.50%, 11/15/08 ......................... 2,168,420
1,000,000 Fulton County, Georgia,
Hospital Authority Revenue,
Northside Hospital, Project B,
Anticipation Certificates
6.63%, 10/1/16, (MBIA) .................. 1,120,420
600,000 Fulton County, Georgia,
Housing Authority Revenue, Series C
6.90%, 1/1/28 ........................... 618,258
Fulton County, Georgia, Water
& Sewer Revenue:
1,420,000 6.25%, 1/1/06, (FGIC) .................. 1,601,618
1,500,000 6.25%, 1/1/09, (FGIC) .................. 1,721,805
400,000 6.38%, 1/1/14, (FGIC) .................. 467,852
Gainesville, Georgia, Water &
Sewer Revenue:
1,000,000 5.25%, 11/15/10, (FGIC) ................ 1,062,980
1,000,000 Series B
7.20%, 11/15/10, (FGIC) ................ 1,102,760
500,000 George L. Smith II, Georgia, World
Congress Center Authority Revenue,
Domed Stadium Project
7.88%, 7/1/20 ........................... 545,060
Georgia State, General Obligation:
1,000,000 Series B
7.00%, 11/1/08 .......................... 1,096,600
2,000,000 Series C
2.25%, 8/1/17 ........................... 1,321,380
395,000 Georgia State, Housing &
Finance Authority Revenue, Series A
6.55%, 12/1/27 .......................... 422,421
Georgia State, Municipal
Electric Authority Power Revenue:
1,000,000 Series B
6.25%, 1/1/17, (MBIA) ................... 1,149,610
400,000 Series EE
7.25%, 1/1/24, (AMBAC) .................. 523,192
1,000,000 Series Z
5.50%, 1/1/12 ........................... 1,060,770
</TABLE>
36
<PAGE>
EVERGREEN
Georgia Municipal Bond Fund
Schedule of Investments (continued)
February 28, 1998 (unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C> <C>
MUNICIPAL OBLIGATIONS - continued
Georgia - continued
Georgia State, Municipal Electric
Authority Power Revenue, Project
One Subordinated, Series A:
$ 1,000,000 5.00%, 1/1/02, (AMBAC) ......... $ 1,033,450
100,000 5.25%, 1/1/09, (AMBAC) ......... 105,336
1,000,000 6.00%, 1/1/07, (MBIA) .......... 1,116,890
2,005,000 Glynn County, Georgia, Board
of Education
5.00%, 7/1/09 ................... 2,079,706
500,000 Glynn-Brunswick, Georgia,
Memorial Hospital Authority Revenue
6.00%, 8/1/16, (MBIA) ........... 536,440
500,000 Griffin Spalding County,
Georgia, School System
7.50%, 2/1/02 ................... 561,210
2,500,000 Gwinnett County, Georgia,
Water & Sewer Revenue,
Certificates of Participation
8.60%, 8/1/03 ................... 3,035,850
Hall County, Georgia, School
District:
1,210,000 6.45%, 12/1/09, (AMBAC) ........ 1,384,664
500,000 General Obligation
6.70%, 12/1/14 .................. 579,455
330,000 Heard County, Georgia, Development
Authority Pollution Control,
Oglethorpe Power Corporation
5.00%, 1/1/07 ................... 338,808
Metro Atlanta, Georgia, Rapid
Transit Authority:
1,000,000 Georgia Tax Revenue, Series P
6.25%, 7/1/11 ................... 1,156,600
830,000 Sales Tax Revenue
7.00%, 7/1/11, (FGIC) ........... 1,021,315
1,000,000 Middle, Georgia, Coliseum
Authority, Georgia Coliseum
Revenue,
Series A
5.38%, 7/1/14 ................... 1,028,010
Monroe County, Georgia, Development
Authority, Pollution Control
Revenue,
Oglethorpe Power Corporation:
1,000,000 6.45%, 1/1/05 .................. 1,111,340
1,000,000 6.70%, 1/1/09 .................. 1,164,620
1,335,000 Municipal Electric Authority,
Georgia, General Resolution
Projects, Subordinated, Series A
6.00%, 1/1/06, (MBIA) ........... 1,481,863
525,000 Peach County, Georgia, School
District
6.50%, 2/1/06, (MBIA) ........... 601,120
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C> <C>
MUNICIPAL OBLIGATIONS - continued
Georgia - continued
$ 500,000 Putnam County, Georgia,
School District, General Obligation
6.90%, 2/1/14, (AMBAC) .......... $ 586,840
1,500,000 Richmond County, Georgia,
Development Authority
Revenue, Southern Care, Series C,
(Eff. Yield 5.72%)(a)
0.00%, 12/1/21 .................. 429,810
Savannah, Georgia, Economic
Development Authority Revenue:
Mighty Eighth Air Force:
1,000,000 5.88%, 1/1/12 .................. 1,064,130
860,000 5.88%, 1/1/15 .................. 902,579
775,000 Southern Care, Series C
(Eff. Yield 5.72%) (a)
0.00%, 12/1/21 .................. 222,068
Savannah, Georgia, Hospital
Authority
Revenue, St. Joseph's Hospital
Project:
755,000 6.00%, 7/1/99 .................. 775,128
800,000 6.00%, 7/1/00 .................. 832,144
845,000 6.00%, 7/1/01 .................. 889,515
3,000,000 6.13%, 7/1/12 .................. 3,218,520
500,000 6.20%, 7/1/23 .................. 528,285
1,300,000 Washington, Georgia, County
School District, General Obligation
6.88%, 1/1/14, (AMBAC) .......... 1,490,918
===========
75,633,337
-----------
Puerto Rico - 1.5%
1,000,000 Commonwealth of Puerto Rico,
General Obligation
6.25%, 7/1/08, (MBIA) ........... 1,152,350
-----------
Total Municipal Obligations
(cost $71,733,437) .............. 76,785,687
-----------
Shares
MUTUAL FUND SHARES - 1.5% (Cost $1,202,000)
1,202,000 Federated Municipal Obligation Fund 1,202,000
-----------
Total Investments -
(cost $72,935,437)..... 99.1% 77,987,687
Other Assets and
Liabilities - Net ..... 0.9 705,353
----- -----------
Net Assets ............. 100.0% $78,693,040
===== ===========
</TABLE>
(a) Effective Yield (calculated at the date of purchase) is the yield at which
the bond accretes on an annual basis until maturity date.
Legend of Portfolio Abbreviations:
AMBAC Insured by American Municipal Bond Assurance Corporation
ETM Escrowed to Maturity
FGIC Insured by Federal Guaranty Insurance Company
FHA/VA Insured by Federal Housing Authority/Veterans Administration
FNMA Insured by Federal National Mortgage Association
FSA Insured by Financial Security Assurance Company
MBIA Insured by Municipal Bond Investors Assurance Corporation
See Combined Notes to Financial Statements.
37
<PAGE>
EVERGREEN
North Carolina Municipal Bond Fund
Schedule of Investments
February 28, 1998 (unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
MUNICIPAL OBLIGATIONS - 95.7%
North Carolina - 89.7%
$ 1,435,000 Asheville, North Carolina,
Housing Authority Revenue,
Multifamily Housing,
Woodridge Apartments
5.80%, 11/20/39, (GNMA) ................ $1,455,592
1,000,000 Buncombe County, North
Carolina, General Obligation
5.10%, 3/1/10 .......................... 1,053,300
1,280,000 Burlington, North Carolina,
Burlington Homes, Section 8, Series A
6.00%, 8/1/09 .......................... 1,346,829
2,480,000 Cabarrus County, North
Carolina, General Obligation
5.30%, 2/1/11, (MBIA) .................. 2,614,193
3,260,000 Centennial Authority, North
Carolina, Hotel Tax Revenue,
Arena Project
5.00%, 9/1/11, (FSA) ................... 3,322,918
1,000,000 Chapel Hill, North Carolina,
Parking Facilities Revenue,
Certificates of Participation
6.35%, 12/1/18 ......................... 1,089,690
Charlotte, North Carolina,
Certificates of Participation:
1,735,000 Cityfair Parking Facility
Project, Series A
6.13%, 6/1/10 .......................... 1,883,689
1,000,000 Convention Facility Project
6.65%, 12/1/03, (AMBAC) ................ 1,100,710
Charlotte, North Carolina, Certificates of
Participation, Stadium Parking
Facilities Project, Series C:
1,245,000 6.00%, 6/1/10 ......................... 1,337,753
1,475,000 6.00%, 6/1/14 ......................... 1,579,873
5,000,000 Charlotte, North Carolina,
General Obligation
5.00%, 2/1/10 .......................... 5,228,650
1,445,000 Charlotte, North Carolina,
Housing Development
Corporation, Mortgage
Revenue, Vantage 78 Apartments
6.60%, 7/15/21 ......................... 1,508,941
Charlotte, North Carolina,
Mecklenberg Hospital,
Unrefunded Balance:
1,050,000 5.75%, 1/1/12 ......................... 1,120,413
1,495,000 6.00%, 1/1/05 ......................... 1,610,578
2,260,000 Charlotte, North Carolina,
Special Facilities Revenue,
Charlotte Douglas International
Airport
5.60%, 7/1/27 .......................... 2,237,310
3,850,000 Charlotte, North Carolina,
Water & Sewer Revenue
5.70%, 2/1/09 .......................... 4,179,367
1,000,000 Coastal Regional North
Carolina Solid Waste
Management Authority Revenue,
Disposal Systems
6.50%, 6/1/08 .......................... 1,076,240
2,000,000 Craven County, North
Carolina, General Obligation
6.40%, 6/1/00 .......................... 2,111,240
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
MUNICIPAL OBLIGATIONS - continued
North Carolina - continued
$ 4,000,000 Craven County, North Carolina,
Industrial Facilities and Pollution
Control Financing Authority Revenue,
Weyerhaeuser Company Project
6.35%, 1/1/10 .......................... $4,322,040
2,390,000 Cumberland County, North Carolina,
Certificates of Participation, Civic
Center Project, Series A
6.40%, 12/1/24, (AMBAC) ................ 2,665,089
Cumberland County, North Carolina,
General Obligation:
2,100,000 5.90%, 2/1/10 ......................... 2,236,332
2,100,000 5.90%, 2/1/11 ......................... 2,228,709
2,100,000 5.90%, 2/1/12 ......................... 2,229,654
1,075,000 5.90%, 2/1/13 ......................... 1,139,425
Durham County, North Carolina,
Certificates of Participation, Hospital
and Office Facilities Project:
1,980,000 5.00%, 5/1/14 ......................... 1,969,011
1,235,000 5.60%, 5/1/06 ......................... 1,336,690
1,305,000 5.70%, 5/1/07 ......................... 1,412,362
1,375,000 5.75%, 5/1/08 ......................... 1,491,476
Durham County, North Carolina,
Certificates of Participation, New
Durham Corporation:
1,160,000 Series A
5.25%, 12/1/10 ......................... 1,233,242
1,485,000 Series B
5.25%, 12/1/11 ......................... 1,576,268
800,000 Durham County, North Carolina,
General Obligation
7.10%, 5/1/09 .......................... 868,304
2,750,000 Durham County, North Carolina,
Multifamily Housing Revenue,
Ivy Commons Project
8.00%, 3/1/29 .......................... 2,816,028
Durham County, North Carolina,
Public Improvement Bonds, Series 95:
2,400,000 5.80%, 2/1/10 ......................... 2,607,120
2,400,000 5.80%, 2/1/11 ......................... 2,595,192
Fayetteville, North Carolina,
Public Works Commission
Revenue, Series A:
2,000,000 6.00%, 3/1/12, (FSA) .................. 2,153,920
1,360,000 6.75%, 3/1/03, (AMBAC) ................ 1,519,800
1,305,000 6.75%, 3/1/04, (AMBAC) ................ 1,477,939
1,505,000 6.75%, 3/1/05, (AMBAC) ................ 1,728,101
1,025,000 Franklin County, North Carolina,
Certificates of Participation, Jail and
School Projects, Prerefunded Balance
6.20%, 6/1/04, (FGIC) .................. 1,136,161
915,000 Fremont, North Carolina,
Housing Development
Corporation Revenue, First Lien,
Torhunta Apartments
6.75%, 7/15/22, (FHA) .................. 959,789
Gastonia, North Carolina,
Combined Utilities Systems Revenue:
1,000,000 6.00%, 5/1/14, (MBIA) ................. 1,092,400
1,505,000 6.10%, 5/1/19, (MBIA) ................. 1,636,778
</TABLE>
38
<PAGE>
EVERGREEN
North Carolina Municipal Bond Fund
Schedule of Investments (continued)
February 28, 1998 (unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
MUNICIPAL OBLIGATIONS - continued
North Carolina - continued
Greensboro, North Carolina,
Certificates of Participation,
Colliseum Arena Expansion Project:
$ 1,000,000 6.40%, 12/1/01 ................... $1,083,100
1,100,000 6.65%, 12/1/04 ................... 1,206,733
Greensboro, North Carolina,
Combined Enterprise Systems
Revenue, Series A:
1,615,000 5.20%, 6/1/10 .................... 1,681,845
880,000 6.50%, 6/1/02 .................... 964,260
1,050,000 6.50%, 6/1/03 .................... 1,167,558
1,300,000 6.50%, 6/1/05 .................... 1,480,128
500,000 Guilford County, North Carolina,
Various Purpose Revenue
6.10%, 2/1/02 ..................... 531,135
1,000,000 Harnett County, North Carolina,
Certificates of Participation
6.40%, 12/1/14, (AMBAC) ........... 1,121,300
Haywood County, North Carolina,
Industrial Facilities and Pollution
Control Financing Authority Revenue,
Champion International Corporation
Project:
2,500,000 6.00%, 3/1/20 .................... 2,652,875
1,750,000 6.25%, 9/1/25 .................... 1,893,675
Martin County, North Carolina,
Industrial Facilities and Pollution
Control Financing Authority Revenue,
Weyerhaeuser Company Project:
1,100,000 8.50%, 6/15/99 ................... 1,164,768
4,750,000 Solid Waste Disposal Revenue
6.80%, 5/1/24 .................... 5,285,848
Mecklenburg County, North Carolina,
General Obligation:
6,500,000 5.00%, 4/1/09 .................... 6,827,535
5,000,000 Series B
4.40%, 2/1/13 .................... 4,781,200
Mecklenburg County, North Carolina,
Public Improvement Revenue:
4,095,000 5.40%, 4/1/08 .................... 4,381,281
5,000,000 5.40%, 4/1/09 .................... 5,327,950
North Carolina State, Eastern
Municipal Power Agency, Power
Systems Revenue:
Series A:
1,700,000 4.50%, 1/1/24 .................... 1,602,148
1,175,000 5.00%, 1/1/17 .................... 1,165,342
5,000,000 5.00%, 1/1/21 .................... 4,973,350
5,000,000 5.70%, 1/1/13, (MBIA) ............ 5,353,900
1,415,000 6.00%, 1/1/26 .................... 1,599,176
3,750,000 6.50%, 1/1/18, (ETM) ............. 4,233,413
650,000 7.50%, 1/1/10 .................... 820,606
5,440,000 Series B
6.00%, 1/1/22 ..................... 5,813,510
6,500,000 Series C
6.00%, 1/1/18, (AMBAC) ............ 7,259,070
5,500,000 North Carolina State,
Educational Facilities,
Finance Authority Revenue,
Wake Forest University
5.00%, 11/1/17 .................... 5,438,510
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
MUNICIPAL OBLIGATIONS - continued
North Carolina - continued
$ 5,000,000 North Carolina State, General
Obligation, Series A
5.20%, 3/1/15 ..................... $5,188,450
15,600,000 North Carolina State, Highway
Revenue, Series A
5.00%, 5/1/11 ..................... 16,148,028
North Carolina State, Housing Finance
and Development Authority Revenue,
Single Family Mortgage:
1,060,000 Series EE
5.90%, 9/1/13 ..................... 1,118,183
3,890,000 Series JJ
6.15%, 3/1/11 ..................... 4,144,289
1,310,000 Series T
7.05%, 9/1/20 ..................... 1,395,949
970,000 Series W
6.20%, 9/1/09 ..................... 1,035,504
North Carolina State, Medical
Care Commission, Health Care
Facilities Revenue:
3,100,000 5.75%, 7/1/19 .................... 3,081,648
2,155,000 First Mortgage, Deerfield Episcopal
5.30%, 11/1/04 .................... 2,201,397
3,550,000 First Mortgage, Glenaire Project
5.85%, 7/1/27 ..................... 3,549,184
500,000 First Mortgage, Southminster
Incorporated
6.88%, 10/1/09 .................... 532,605
5,000,000 Stanley Memorial Hospital Project
5.38%, 10/1/14, (AMBAC) ........... 5,173,300
North Carolina State, Medical Care
Commission, Hospital Revenue:
920,000 Carolina Medicorp Project
6.30%, 5/1/01 ..................... 982,716
5,250,000 Duke University Hospital
Project, Series C
5.25%, 6/1/17 ..................... 5,263,493
15,000,000 Firsthealth of The Carolinas
4.75%, 10/1/26 .................... 14,042,700
Grace Hospital Incorporated:
3,825,000 5.25%, 10/1/13 ................... 3,878,703
1,110,000 6.50%, 10/1/05 ................... 1,259,817
1,180,000 6.50%, 10/1/06 ................... 1,351,135
High Point Regional Health Systems:
1,605,000 5.50%, 10/1/08 ................... 1,731,972
1,445,000 5.50%, 10/1/09 ................... 1,555,398
900,000 Presbyterian Health Services
Corporation Project
6.13%, 10/1/14 .................... 966,159
925,000 Presbyterian Hospital Project
7.30%, 10/1/15 .................... 1,019,544
Rex Hospital Project:
2,500,000 6.13%, 6/1/10 .................... 2,689,925
3,700,000 6.25%, 6/1/17 .................... 3,984,419
Transylvania Community
Hospital Incorporated:
1,130,000 5.50%, 10/1/12 ................... 1,132,814
1,090,000 5.75%, 10/1/19 ................... 1,090,850
</TABLE>
39
<PAGE>
EVERGREEN
North Carolina Municipal Bond Fund
Schedule of Investments (continued)
February 28, 1998 (unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
MUNICIPAL OBLIGATIONS - continued
North Carolina - continued
North Carolina State,
Municipal Power
Agency, Electric
Revenue:
Catawba:
$ 5,000,000 7.25%, 1/1/07, (AMBAC) $ 5,999,800
2,000,000 (Eff. Yield 6.70%) (a)
0.00%, 1/1/10 ....... 1,145,640
5,500,000 Series B
5.00%, 1/1/20 ....... 5,471,070
North Carolina State,
Student Educational
Assistance Authority
Revenue:
Series A:
1,000,000 6.05%, 7/1/10 ...... 1,074,460
2,000,000 6.30%, 7/1/15 ...... 2,169,100
2,375,000 Series C
6.35%, 7/1/16 ....... 2,592,146
1,000,000 Onslow County, North
Carolina,
General Obligation
5.70%, 3/1/10, (MBIA) . 1,080,200
1,000,000 Pitt County, North
Carolina,
Certificates of
Participation, Pitt
County Public
Facilities Revenue,
Series A
5.55%, 4/1/12, (MBIA) . 1,064,420
1,180,000 Randolph County, North
Carolina,
General Obligation
6.40%, 4/1/03 ....... 1,264,205
4,220,000 University of North
Carolina
Chapel Hill, Hospital
Revenue
5.00%, 2/15/29 ...... 4,103,359
1,835,000 University of North
Carolina
Chapel Hill, Parking
Systems
Revenue, Series A
5.60%, 5/15/17 ...... 1,920,603
University of North
Carolina
Chapel Hill, Utilities
Systems
Revenue:
4,100,000 (Eff. Yield 5.38%) (a)
0.00%, 8/1/14 ....... 1,836,226
4,500,000 (Eff. Yield 5.45%) (a)
0.00%, 8/1/16 ....... 1,795,050
1,400,000 (Eff. Yield 5.45%) (a)
0.00%, 8/1/18 ....... 499,436
3,100,000 (Eff. Yield 5.50%) (a)
0.00%, 8/1/19 ....... 1,044,917
410,000 (Eff. Yield 5.50%) (a)
0.00%, 8/1/20 ....... 131,360
3,000,000 Wake County, North
Carolina,
Industrial Facilities
and Pollution
Control, Carolina Power
and Light
6.90%, 4/1/09 ....... 3,206,220
1,500,000 Wilmington, North
Carolina, Water
Revenue
5.60%, 6/1/07 ....... 1,618,875
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
MUNICIPAL OBLIGATIONS - continued
North Carolina - continued
$ 3,865,000 Winston Salem, North
Carolina,
General Obligation
8.88%, 6/1/00 ....... $ 4,288,063
------------
286,922,664
------------
Virginia - 1.1%
1,750,000 James City County,
North
Carolina, Residential
Care
Facilities, First
Mortgage,
Williamsburg Landing
6.63%, 3/1/19 ....... 1,827,787
1,500,000 James City County,
Residential Care
Facilities Revenue
6.63%, 3/1/23 ....... 1,566,675
------------
3,394,462
------------
Puerto Rico - 4.9%
Commonwealth of Puerto
Rico,
General Obligation:
2,535,000 6.25%, 7/1/09, (MBIA) 2,947,673
3,350,000 Prerefunded
6.25%, 7/1/10, (MBIA) 3,903,856
5,750,000 Public Improvement
Revenue
(Eff. Yield 7.50%) (a)
0.00%, 7/1/04 ....... 4,370,747
Commonwealth of Puerto
Rico,
Industrial Tourist
Educational
Authority:
1,425,000 5.63%, 7/1/17 ...... 1,463,204
500,000 5.63%, 7/1/27 ...... 511,135
1,000,000 Commonwealth of Puerto
Rico,
Municipal Finance
Agency,
Series A
5.70%, 7/1/03 ....... 1,065,660
1,400,000 Commonwealth of Puerto
Rico,
Port Authority Revenue,
American Airlines
Project, Series A
6.25%, 6/1/26 ....... 1,518,356
------------
15,780,631
------------
Total Municipal
Obligations
(cost $288,495,377) . 306,097,757
------------
</TABLE>
<TABLE>
<CAPTION>
Shares
<S> <C> <C> <C>
MUTUAL FUND SHARES - 2.5% (cost $8,030,000)
8,030,000 Federated Municipal Obligation Fund 8,030,000
------------
Total Investments -
(cost $296,525,377) ..... 98.2% 314,127,757
Other Assets and
Liabilities - Net ....... 1.8 5,832,852
----- -----------
Net Assets - ............ 100.0% $319,960,609
===== ============
</TABLE>
(a) Effective Yield (calculated at the date of purchase) is the yield at which
the bond accretes on an annual basis until maturity date.
Legend of Portfolio Abbreviations:
AMBAC Insured by American Municipal Bond Assurance Corporation
ETM Escrowed to Maturity
FGIC Insured by Federal Guaranty Insurance Company
FHA Insured by Federal Housing Authority
FSA Insured by Financial Security Assurance Company
GNMA Insured by Government National Mortgage Association
MBIA Insured by Municipal Bond Investors Assurance Corporation
See Combined Notes to Financial Statements.
40
<PAGE>
EVERGREEN
South Carolina Municipal Bond Fund
Schedule of Investments
February 28, 1998 (unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
MUNICIPAL OBLIGATIONS - 97.9%
South Carolina - 93.0%
$ 1,245,000 Beaufort County, South Carolina,
Hospital Facilities Revenue, Beaufort
County Memorial Hospital
5.25%, 12/1/06 ...................... $1,320,235
400,000 Calhoun County, South Carolina, Solid
Waste Disposal Facilities Revenue,
Eastman Kodak Company Project
6.75%, 5/1/17 ....................... 480,108
400,000 Camden, South Carolina,
Public Utilities Revenue,
Refunding and Improvement
5.50%, 3/1/17 ....................... 416,776
Charleston County, South Carolina,
Health Facilities Revenue, First
Mortgage Episcopal Church:
300,000 7.13%, 4/1/20 ...................... 315,324
500,000 Series A
6.25%, 4/1/19 ...................... 518,930
Charleston County, South Carolina,
Resources Recovery Revenue,
Foster Wheeler:
1,000,000 5.10%, 1/1/08, (AMBAC) ............. 1,028,790
2,835,000 5.25%, 1/1/10, (AMBAC) ............. 2,946,444
675,000 Charleston, South Carolina,
General Obligation
7.00%, 4/1/11 ....................... 729,108
3,750,000 Columbia, South Carolina,
Waterworks and Sewer Systems
Revenue
5.70%, 2/1/10 ....................... 4,128,937
Darlington County, South Carolina,
Industrial Development Authority
Revenue:
500,000 Nucor Corporation Project, Series A
5.75%, 8/1/23 ....................... 516,120
750,000 Sonoco Products Company Project
6.00%, 4/1/26 ....................... 797,227
1,000,000 Florence County, South Carolina,
Hospital Facilities Revenue, McLeod
Regional Medical Center Project,
Series A
5.00%, 11/1/18 ...................... 974,770
Florence County, South Carolina, School
District Number 001:
1,150,000 5.80%, 5/1/07, (FGIC) .............. 1,245,117
1,175,000 5.80%, 5/1/08, (FGIC) .............. 1,272,184
1,200,000 5.80%, 5/1/09, (FGIC) .............. 1,296,336
200,000 Georgetown County, South Carolina,
Water and Sewer District Revenue
6.50%, 6/1/17 ....................... 207,290
750,000 Grand Strand, South Carolina,
Water and Sewer Authority,
South Carolina Waterworks and
Sewer Systems Revenue
6.38%, 6/1/12, (MBIA) ............... 876,000
Greenville, South Carolina,
Hospital Facilities Systems Revenue:
1,000,000 Series A
5.40%, 5/1/07 ....................... 1,062,350
Series B:
3,500,000 5.60%, 5/1/10 ...................... 3,708,075
600,000 5.70%, 5/1/12 ...................... 631,962
500,000 Series B, Greenville Hospital
5.25%, 5/1/17 ....................... 497,570
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
MUNICIPAL OBLIGATIONS - continued
South Carolina - continued
$ 400,000 Greenville, South Carolina,
Memorial Auditorium District
General Obligation, Bi Lo Center
Project
5.75%, 4/1/18, (AMBAC) .............. $ 424,836
Greenwood, South Carolina,
Combined Public Utility Revenue:
1,400,000 5.25%, 12/1/04, (AMBAC) ............ 1,483,118
1,000,000 5.50%, 12/1/08, (AMBAC) ............ 1,066,850
820,000 Greer, South Carolina,
Combined Public Utility Revenue
6.00%, 9/1/06, (AMBAC) .............. 916,621
300,000 Horry County, South Carolina,
Airport Revenue, Series A
5.60%, 7/1/17 ....................... 310,581
1,000,000 Lancaster County, South Carolina,
School District
4.80%, 3/1/06 ....................... 1,041,140
400,000 Marion County, South Carolina,
Hospital District Revenue
5.38%, 11/1/25 ...................... 404,328
Medical University, South Carolina,
Hospital Facilities Revenue:
1,000,000 5.50%, 7/1/08 ...................... 1,084,500
1,000,000 5.50%, 7/1/09 ...................... 1,085,240
Myrtle Beach, South Carolina,
General Obligation:
500,000 5.40%, 3/1/12 ...................... 518,005
525,000 5.40%, 3/1/13 ...................... 542,567
Piedmont, South Carolina,
Municipal Power Agency, South
Carolina Electric Revenue:
1,000,000 6.10%, 1/1/06 ...................... 1,118,010
1,150,000 6.25%, 1/1/09 ...................... 1,325,398
2,000,000 6.25%, 1/1/21 ...................... 2,319,100
Series A:
500,000 5.50%, 1/1/13 ...................... 536,820
500,000 5.75%, 1/1/24 ...................... 494,650
1,000,000 Richland County, South Carolina,
General Obligation
6.25%, 3/1/11 ....................... 1,062,930
Richland County, South Carolina,
Hospital Facilities Revenue,
Providence Hospital:
1,000,000 5.20%, 10/1/07, (FSA) .............. 1,069,870
1,500,000 5.25%, 10/1/10, (FSA) .............. 1,608,525
1,000,000 Richland County, South
Carolina, Pollution Control
Revenue, Union Camp
Corporation, Series C
5.88%, 11/1/02 ...................... 1,067,770
500,000 Richland County, South Carolina,
School District Number 001
5.70%, 5/1/03 ....................... 532,210
250,000 South Carolina State
Educational Assistance
Revenue, Guaranteed Student
Loan, Series C
5.88%, 9/1/07 ....................... 267,335
</TABLE>
41
<PAGE>
EVERGREEN
South Carolina Municipal Bond Fund
Schedule of Investments (continued)
February 28, 1998 (unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
MUNICIPAL OBLIGATIONS - continued
South Carolina - continued
South Carolina State Housing
Authority Revenue, Multifamily
Housing:
$ 265,000 Hunting Ridge Apartments,
(Eff. Yield 6.75%) (a)
0.00%, 6/1/25 ..................... $ 281,091
300,000 Runaway Bay Apartments
6.13%, 12/1/15 .................... 309,414
100,000 Series A
6.80%, 11/15/11 ................... 106,374
South Carolina State Housing
Finance and Development
Authority Revenue, Series A:
500,000 5.95%, 7/1/29 .................... 520,675
675,000 6.35%, 7/1/25, (FHA) ............. 714,339
100,000 6.55%, 7/1/15 .................... 106,765
Heritage Court Apartments:
680,000 5.85%, 7/1/10 .................... 706,350
595,000 6.15%, 7/1/25, (FHA) ............. 615,492
200,000 Homeownership Mortgage
7.55%, 7/1/11 ..................... 210,484
South Carolina State Jobs Economic
Development Authority Revenue,
Plasti Line Incorporated Project:
200,000 5.65%, 7/1/08 .................... 209,300
200,000 5.70%, 7/1/09 .................... 208,730
150,000 5.80%, 7/1/10 .................... 156,576
200,000 5.90%, 7/1/11 .................... 209,026
400,000 6.25%, 7/1/17 .................... 410,256
200,000 South Carolina State Jobs Economic
Development Authority, Hospital
Facilities Revenue, Oconee
Memorial Hospital
6.15%, 3/1/15 ..................... 217,532
South Carolina State Public
Service Authority Revenue:
Series A:
500,000 5.75%, 1/1/22, (MBIA) ............ 529,635
1,000,000 6.25%, 1/1/05, (MBIA) ............ 1,115,750
Series B:
1,000,000 5.70%, 1/1/08, (FGIC) ............ 1,091,920
1,250,000 6.50%, 1/1/06, (FGIC) ............ 1,424,237
Spartanburg County, South Carolina,
Health Services District Revenue,
Series B:
500,000 5.50%, 4/15/27 ................... 515,080
1,755,000 6.00%, 4/15/07, (MBIA) ........... 1,955,825
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
MUNICIPAL OBLIGATIONS - continued
South Carolina - continued
Three Rivers, South Carolina,
Solid Waste Disposal
Facilities Authority Revenue:
$ 600,000 5.15%, 1/1/04, (MBIA) ............ $ 623,562
870,000 5.25%, 1/1/05, (MBIA) ............ 910,629
1,015,000 Capital Appreciation
(Eff. Yield 6.12%) (a)
0.00%, 1/1/16 ..................... 409,644
1,015,000 Capital Appreciation
(Eff. Yield 6.12%) (a)
0.00%, 1/1/17 ..................... 385,771
1,000,000 York County, South Carolina,
General Obligation
5.00%, 6/1/11, (AMBAC) ............ 1,010,050
585,000 York County, South Carolina,
Industrial Development
Revenue, Exempt Facilities,
Hoechst Celanese
5.70%, 1/1/24 ..................... 603,983
1,000,000 York County, South Carolina,
School District Number 003,
Rock Hill, Series A
5.30%, 3/1/07, (FSA) .............. 1,067,890
1,000,000 York County, South Carolina,
School District Number 004, Fort Mill
7.00%, 3/1/05, (FGIC) ............. 1,161,280
-----------
63,037,717
-----------
Puerto Rico - 4.9%
3,000,000 Commonwealth of Puerto Rico
Public Improvement, General
Obligation, Series 1995
5.65%, 7/1/15, (MBIA) ............. 3,293,970
-----------
Total Municipal Obligations
(cost $62,303,193) ................ 66,331,687
-----------
</TABLE>
<TABLE>
<CAPTION>
Shares
<S> <C> <C> <C>
MUTUAL FUND SHARES - 1.1% (cost $769,000)
769,000 Federated Municipal
Obligation Fund ................. 769,000
-------
Total Investments -
(cost $63,072,193) .... 99.0% 67,100,687
Other Assets and
Liabilities - Net ..... 1.0 651,816
----- ----------
Net Assets - ........... 100.0% $67,752,503
===== ===========
</TABLE>
(a) Effective Yield (calculated at the date of purchase) is the yield at which
the bond accretes on an annual basis until maturity date.
Legend of Portfolio Abbreviations:
AMBAC Insured by American Municipal Bond Assurance Corporation
FGIC Insured by Federal Guaranty Insurance Company
FHA Insured by Federal Housing Authority
FSA Insured by Financial Security Assurance Company
MBIA Insured by Municipal Bond Investors Assurance Corporation
See Combined Notes to Financial Statements.
42
<PAGE>
EVERGREEN
Virginia Municipal Bond Fund
Schedule of Investments
February 28, 1998 (unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
MUNICIPAL OBLIGATIONS - 99.9%
District of Columbia - 6.6%
District of Columbia Airports
Authority Revenue:
Series A:
$ 100,000 5.25%, 10/1/11, (FGIC) ............. $ 104,232
1,000,000 5.38%, 10/1/17 ..................... 1,022,920
Series B:
150,000 5.50%, 10/1/16 ..................... 154,401
250,000 5.50%, 10/1/23 ..................... 256,238
District of Columbia Metropolitan Area
Transit Authority Revenue:
2,575,000 6.00%, 7/1/07 ...................... 2,889,819
1,000,000 6.00%, 7/1/08, (FGIC) .............. 1,125,550
600,000 6.00%, 7/1/09, (FGIC) .............. 677,526
---------
6,230,686
---------
Virginia - 91.8%
Albemarle County, Virginia,
Industrial Development Authority
Revenue, Residential Care Facility,
Our Lady of Peace Incorporated:
100,000 6.45%, 7/1/15 ...................... 104,080
145,000 6.63%, 7/1/21 ...................... 152,019
1,000,000 Amherst, Virginia, Industrial
Development Authority Revenue
5.25%, 2/1/11 ....................... 996,620
Arlington County, Virginia, General
Obligation:
1,000,000 5.90%, 8/1/10 ...................... 1,100,170
500,000 6.00%, 8/1/12 ...................... 549,840
415,000 Arlington County, Virginia, Industrial
Development Authority Revenue, The
Nature Conservancy, Series A
5.40%, 7/1/17 ....................... 425,595
3,300,000 Bedford County, Virginia, Industrial
Development Authority Revenue,
Georgia Pacific Corporation
5.60%, 12/1/25 ...................... 3,329,865
1,500,000 Blue Ridge, Virginia,
Regional Jail Authority Revenue
5.20%, 12/1/17, (MBIA) .............. 1,506,690
Brunswick City, Virginia,
Industrial Development Authority
Correctional Facility Revenue:
1,000,000 5.50%, 7/1/07 ...................... 1,084,270
2,215,000 5.65%, 7/1/09, (MBIA) .............. 2,412,888
200,000 5.75%, 7/1/11, (MBIA) .............. 217,494
390,000 Buena Vista, Virginia,
Industrial Development
Authority, Water & Sewer Facility
Revenue
6.25%, 7/15/11 ...................... 406,481
250,000 Charlottesville-Albemarle, Virginia,
Airport Authority Revenue
6.13%, 12/1/13 ...................... 261,195
500,000 Chesapeake, Virginia,
Redevelopment and Housing
Authority Revenue, Cedar
Association, Multifamily
Housing, Series A
7.75%, 6/1/20 ....................... 533,840
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
MUNICIPAL OBLIGATIONS - continued
Virginia - continued
Chesterfield County,
Virginia, General Obligation:
$ 500,000 6.60%, 1/1/03 ...................... $ 543,525
700,000 Series A
6.60%, 1/15/02 ...................... 747,838
1,000,000 Series B
6.70%, 1/1/06 ....................... 1,089,710
500,000 Chesterfield County,
Virginia, Health Center,
Community Mortgage Revenue,
Lucy Corr Nursing Home Project
5.88%, 12/1/21 ...................... 531,315
500,000 Chesterfield County,
Virginia, Water & Sewer Revenue
6.38%, 11/1/07 ...................... 551,475
Fairfax County, Virginia, Industrial
Development Authority Revenue,
Inova Health Systems Project:
1,250,000 5.00%, 8/15/13, (FSA) .............. 1,279,800
1,000,000 5.00%, 8/15/18 ..................... 973,740
1,025,000 5.00%, 8/15/23 ..................... 1,022,048
2,120,000 5.20%, 8/15/05 ..................... 2,236,558
370,000 5.88%, 8/15/16 ..................... 397,687
500,000 Fairfax County, Virginia,
Redevelopment and Housing
Authority Mortgage Revenue
6.00%, 9/1/16, (FHA) ................ 523,820
250,000 Fairfax County, Virginia,
Redevelopment and Housing
Authority Revenue, Mott And
Gum Springs Community Centers
5.35%, 6/1/06 ....................... 265,218
1,005,000 Fairfax County, Virginia, Sewer Revenue
5.40%, 11/15/07 ..................... 1,070,767
Giles County, Virginia, Industrial
Development Authority Revenue,
Hoechst Celanese Project:
250,000 5.95%, 12/1/25 ..................... 262,820
500,000 6.45%, 5/1/26 ...................... 549,490
250,000 Greensville County, Virginia,
Industrial Development Authority
Revenue, Pacific Corporation Project
5.30%, 8/1/14 ....................... 249,095
Halifax County, Virginia,
Industrial Development Authority
Revenue, Halifax Regional Hospital,
Incorporated:
300,000 4.80%, 9/1/09 ...................... 297,123
1,000,000 5.00%, 9/1/11 ...................... 990,600
400,000 5.25%, 9/1/17 ...................... 392,816
500,000 Hampton, Virginia, General Obligation
6.00%, 1/15/08 ...................... 552,560
Hanover County, Virginia,
Industrial Development
Authority Revenue:
960,000 Bon Secours Health System Project
6.00%, 8/15/08, (MBIA) .............. 1,079,136
1,360,000 Memorial Regional Medical
Center Project
6.50%, 8/15/08, (MBIA) .............. 1,589,990
</TABLE>
43
<PAGE>
EVERGREEN
Virginia Municipal Bond Fund
Schedule of Investments (continued)
February 28, 1998 (unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
MUNICIPAL OBLIGATIONS - continued
Virginia - continued
$ 500,000 Harrisonburg, Virginia,
Redevelopment and Housing
Authority Revenue, Multifamily
Housing, Greens of Salem Run
Project
6.20%, 4/1/17 ...................... $ 526,200
700,000 Henrico County, Virginia,
Industrial Development Authority,
Public Facility Revenue
7.00%, 8/1/13 ...................... 813,687
1,000,000 Henrico County, Virginia,
Water & Sewer Revenue
5.70%, 5/1/08 ...................... 1,079,780
500,000 Isle Wright County, Virginia,
Industrial Development
Authority Revenue, Solid
Waste Disposal Facility
6.55%, 4/1/24 ...................... 545,860
600,000 James City County,
Residential Care Facilities Revenue,
6.63%, 3/1/23 ...................... 626,670
1,000,000 King and Queen County,
Virginia, Industrial Development
Authority Revenue
5.63%, 7/15/17 ..................... 1,035,240
700,000 King George County, Virginia,
Industrial Development
Authority Revenue, King
George County School Project
6.40%, 8/1/16 ...................... 739,214
1,000,000 Loudoun County, Virginia,
Sanitation Authority, Water
& Sewer Revenue
6.25%, 1/1/10 ...................... 1,095,590
755,000 Manassas, Virginia, General Obligation
5.00%, 1/1/14 ...................... 756,291
500,000 Newport News, Virginia,
General Obligation
5.75%, 1/15/17 ..................... 528,140
Norfolk, Virginia,
Redevelopment and Housing
Authority Revenue, Merrimack
Landing Project:
275,000 5.00%, 12/1/05 .................... 281,911
340,000 5.10%, 12/1/06 .................... 349,108
250,000 Pamunkey, Virginia, Regional
Jail Authority Revenue
5.35%, 7/1/06, (MBIA) .............. 267,503
1,300,000 Peumansend Creek, Virginia,
Regional Jail Authority Revenue
5.75%, 6/1/17, (MBIA) .............. 1,387,659
Portsmouth, Virginia,
General Obligation:
1,000,000 5.00%, 8/1/13, (FGIC) ............. 1,005,620
1,000,000 6.40%, 8/1/00, (FNMA) ............. 1,058,150
Portsmouth, Virginia,
Redevelopment and Housing
Authority Revenue, Multi
Family Housing, Series A:
640,000 6.30%, 9/1/26, (GNMA) ............. 677,312
500,000 Chowan Apartments
5.85%, 12/20/30 .................... 514,745
700,000 Prince William County, Virginia,
General Obligation
6.20%, 12/1/11 ..................... 747,999
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
MUNICIPAL OBLIGATIONS - continued
Virginia - continued
Prince William County,
Virginia, Industrial Development
Authority Revenue,:
ATCC Project
$ 500,000 6.00%, 2/1/14 ..................... $ 535,095
Potomac Hospital Corporation:
1,000,000 5.00%, 10/1/25 .................... 965,140
500,000 6.75%, 10/1/15 .................... 581,965
Prince William County,
Virginia, Park Authority Revenue:
500,000 6.30%, 10/15/06 ................... 555,180
1,250,000 6.88%, 10/15/16 ................... 1,407,925
Richmond, Virginia,
General Obligation, Series B:
2,000,000 6.50%, 1/15/06 .................... 2,161,000
1,000,000 6.60%, 1/15/07 .................... 1,083,190
Riverside, Virginia,
Regional Jail Authority Revenue:
1,000,000 5.88%, 7/1/14 ..................... 1,082,510
400,000 6.00%, 7/1/25, (MBIA) ............. 433,476
Suffolk, Virginia,
General Obligation:
1,000,000 5.00%, 12/1/17 .................... 999,920
250,000 5.70%, 6/1/10, (AMBAC) ............ 272,245
750,000 5.90%, 6/1/13, (AMBAC) ............ 820,755
Virginia Beach, Virginia,
General Obligation:
1,600,000 5.40%, 7/15/08 .................... 1,723,824
1,575,000 5.40%, 7/15/09 .................... 1,697,204
1,000,000 6.00%, 9/1/09 ..................... 1,104,190
100,000 Virginia Biotechnology
Research Park Authority
Revenue, Biotech Two Project
5.05%, 9/1/08 ...................... 104,682
Virginia College, Virginia,
Building Authority Educational
Facilities Revenue:
100,000 21st Century College Program
5.50%, 8/1/06 ...................... 108,332
700,000 Hampton University Project
5.75%, 4/1/14 ...................... 733,124
2,000,000 Public Higher Education
Financing, Series A
5.00%, 9/1/17 ...................... 1,970,600
Virginia State Housing Development
Authority Revenue, Commonwealth
Mortgage:
100,000 Series A
7.10%, 1/1/17 ...................... 104,848
1,000,000 Series A, Subseries A-1
6.20%, 7/1/11 ...................... 1,054,540
95,000 Series A, Subseries A-6
6.95%, 1/1/10 ...................... 98,724
500,000 Series B, Subseries B-2
6.65%, 1/1/13 ...................... 545,405
100,000 Series C, Subseries C-1
5.50%, 7/1/06 ...................... 104,550
1,000,000 Series C, Subseries C-2
5.75%, 7/1/07 ...................... 1,055,370
500,000 Series C, Subseries C-6
6.25%, 1/1/15 ...................... 522,035
</TABLE>
44
<PAGE>
EVERGREEN
Virginia Municipal Bond Fund
Schedule of Investments (continued)
February 28, 1998 (unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C> <C>
MUNICIPAL OBLIGATIONS - continued
Virginia - continued
Virginia State Housing Development
Authority Revenue, Commonwealth
Mortgage: - continued
$ 1,300,000 Series D, Subseries D-1
6.10%, 1/1/19 ..................... $ 1,371,838
300,000 Series F, Subseries F-1
6.25%, 7/1/12 ..................... 317,214
Virginia State Housing
Development Authority, Multifamily
Housing Revenue:
Series H:
500,000 6.00%, 5/1/10 .................... 511,990
1,000,000 6.10%, 11/1/11 ................... 1,057,460
300,000 6.35%, 11/1/11 ................... 318,231
1,000,000 Series I
5.45%, 5/1/18 ..................... 1,010,360
400,000 Series K
5.90%, 5/1/11 ..................... 418,568
500,000 Series O
6.05%, 11/1/17 .................... 520,950
1,120,000 Virginia State Polytechnic Institute
and
State University Revenue, Series A
5.50%, 6/1/05 ..................... 1,202,981
750,000 Virginia State Port Authority,
Commonwealth Revenue
5.90%, 7/1/16 ..................... 794,708
400,000 Virginia State Port
Authority, Facility Revenue
5.60%, 7/1/27 ..................... 414,592
Virginia State Public School
Authority Revenue:
Series A:
200,000 6.20%, 8/1/14 .................... 220,964
1,100,000 6.50%, 8/1/06 .................... 1,204,577
2,000,000 Series B
5.50%, 8/1/02 ..................... 2,116,400
1,000,000 Series I
5.25%, 8/1/10 ..................... 1,060,970
850,000 Special Obligation, York County
5.90%, 7/15/13 .................... 922,105
1,000,000 Virginia State Resources
Authority, Sewer Systems Revenue
5.00%, 5/1/18 ..................... 973,900
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C> <C>
MUNICIPAL OBLIGATIONS - continued
Virginia - continued
$ 500,000 Virginia State Small Business
Financing Authority Revenue
4.38%, 11/1/02 .................... $ 506,190
2,160,000 Virginia State Transportation
Board Revenue, Northern
Virginia Transportation
District, Series A
6.75%, 5/15/05 .................... 2,485,166
Virginia State University,
Commonwealth University Revenue:
Series A:
200,000 5.25%, 5/1/08 .................... 212,296
350,000 5.63%, 5/1/16 .................... 365,267
1,000,000 Series B
5.35%, 5/1/09 ..................... 1,062,010
1,000,000 Virginia State, General Obligation
6.10%, 6/1/06 ..................... 1,104,350
400,000 West Point, Virginia,
Industrial Development Authority
Revenue, Solid Waste Disposal
Factory, Chesapeake Corporate
Project, Series B
6.25%, 3/1/19 ..................... 430,372
------------
86,744,145
------------
Puerto Rico - 1.5%
1,200,000 Puerto Rico Commonwealth,
General Obligation
6.25%, 7/1/13, (MBIA) ............. 1,400,196
------------
Total Municipal Obligations
(cost $89,824,734) ................ 94,375,027
------------
Shares
MUTUAL FUND SHARES - 2.7% (cost $2,534,000)
2,534,000 Federated Municipal Obligation Fund . 2,534,000
------------
Total Investments -
(cost $92,358,734) ..... 102.6% 96,909,027
Other Assets and
Liabilities - Net ...... ( 2.6) (2,458,596)
----- ------------
Net Assets - ............ 100.0% $ 94,450,431
===== ============
</TABLE>
Legend of Portfolio Abbreviations:
AMBAC Insured by American Municipal Bond Assurance Corporation
FGIC Insured by Federal Guaranty Insurance Company
FHA Insured by Federal Housing Authority
FNMA Insured by Federal National Mortgage Association
FSA Insured by Financial Security Assurance Company
GNMA Insured by Government National Mortgage Association
MBIA Insured by Municipal Bond Investors Assurance Corporation
See Combined Notes to Financial Statements.
45
<PAGE>
EVERGREEN
Southern State Municipal Bond Funds
Statements of Assets and Liabilities
February 28,1998 (Unaudited)
<TABLE>
<CAPTION>
Florida
High Income Florida Georgia
Fund Fund Fund
--------------- ----------------- --------------
<S> <C> <C> <C>
Assets
Investments at market value (identified
cost-$235,671,969, $543,999,128,
$72,935,437, $296,525,377, $63,072,193
and $92,358,734, respectively)................. $246,552,245 $ 577,692,562 $77,987,687
Cash ........................................... 0 0 7
Interest receivable ............................ 4,678,473 8,319,627 880,019
Receivable for Fund shares sold ................ 1,516,190 769,321 118,764
Unamortized organization expenses .............. 12,685 0 0
Receivable for investments sold ................ 0 11,013,217 0
Prepaid expenses and other assets .............. 21,207 140,268 16,683
- ------------------------------------------------- ------------ ------------- -----------
Total assets .................................. 252,780,800 597,934,995 79,003,160
- ------------------------------------------------- ------------ ------------- -----------
Liabilities
Dividends payable .............................. 573,103 1,927,584 269,660
Distribution fee payable ....................... 133,764 89,464 12,620
Due to related parties ......................... 74,965 61,209 3,960
Payable for Fund shares redeemed ............... 56,307 863,241 10,088
Due to custodian ............................... 11,690 222 0
Accrued Trustees' fees and expenses ............ 7,370 11,849 1,540
Payable for investments purchased .............. 0 0 0
Accrued expenses and other liabilities ......... 20,834 115,650 12,252
- ------------------------------------------------- ------------ ------------- -----------
Total liabilities ............................. 878,033 3,069,219 310,120
- ------------------------------------------------- ------------ ------------- -----------
Net assets ...................................... $251,902,767 $ 594,865,776 $78,693,040
================================================= ============ ============= ===========
Net assets represented by
Paid-in capital ................................ $241,166,329 $ 552,894,345 $73,828,554
Undistributed net investment income ............ 71,079 24,164 3,588
Accumulated net realized gain (loss) on
investments ................................... (214,917) 8,253,833 (191,352)
Net unrealized appreciation on investments ..... 10,880,276 33,693,434 5,052,250
- ------------------------------------------------- ------------ ------------- -----------
Total net assets .............................. $251,902,767 $ 594,865,776 $78,693,040
================================================= ============ ============= ===========
Net assets consist of
Class A ........................................ $149,717,835 $ 124,851,774 $ 2,122,582
Class B ........................................ 81,248,965 69,446,753 11,943,368
Class C ........................................ 0 8,978,798 0
Class Y ........................................ 20,935,967 391,588,451 64,627,090
- ------------------------------------------------- ------------ ------------- -----------
$251,902,767 $ 594,865,776 $78,693,040
============ ============= ===========
Shares outstanding
Class A ........................................ 13,420,996 12,423,330 206,854
Class B ........................................ 7,282,977 6,906,698 1,163,926
Class C ........................................ 0 893,280 0
Class Y ........................................ 1,876,787 38,953,930 6,298,063
- ------------------------------------------------- ------------ ------------- -----------
Net asset value per share
Class A ........................................ $ 11.16 $ 10.05 $ 10.26
================================================= ============ ============= ===========
Class A - Offering price (based on sales
charge of 4.75%) .............................. $ 11.72 $ 10.55 $ 10.77
================================================= ============ ============= ===========
Class B ........................................ $ 11.16 $ 10.05 $ 10.26
================================================= ============ ============= ===========
Class C ........................................ - $ 10.05 -
================================================= ============ ============= ===========
Class Y ........................................ $ 11.16 $ 10.05 $ 10.26
================================================= ============ ============= ===========
<CAPTION>
North South
Carolina Carolina Virginia
Fund Fund Fund
----------------- ---------------- -----------------
<S> <C> <C> <C>
Assets
Investments at market value (identified
cost-$235,671,969, $543,999,128,
$72,935,437, $296,525,377, $63,072,193
and $92,358,734, respectively)................. $ 314,127,757 $ 67,100,687 $ 96,909,027
Cash ........................................... 0 406 301
Interest receivable ............................ 4,684,303 944,796 1,051,562
Receivable for Fund shares sold ................ 221,648 0 68,149
Unamortized organization expenses .............. 0 0 0
Receivable for investments sold ................ 18,738,584 0 0
Prepaid expenses and other assets .............. 23,529 26,948 20,806
- -------------------------------------------------- ------------- ------------ -------------
Total assets .................................. 337,795,821 68,072,837 98,049,845
- -------------------------------------------------- ------------- ------------ -------------
Liabilities
Dividends payable .............................. 1,092,488 233,245 334,938
Distribution fee payable ....................... 51,556 5,198 4,259
Due to related parties ......................... 7,103 18,061 6,607
Payable for Fund shares redeemed ............... 181,227 39,319 9,495
Due to custodian ............................... 206 0 0
Accrued Trustees' fees and expenses ............ 4,137 1,067 2,249
Payable for investments purchased .............. 16,450,192 0 3,220,215
Accrued expenses and other liabilities ......... 48,303 23,444 21,651
- -------------------------------------------------- ------------- ------------ -------------
Total liabilities ............................. 17,835,212 320,334 3,599,414
- -------------------------------------------------- ------------- ------------ -------------
Net assets ...................................... $ 319,960,609 $ 67,752,503 $ 94,450,431
================================================== ============= ============ =============
Net assets represented by
Paid-in capital ................................ $ 302,045,638 $ 63,466,775 $ 89,775,908
Undistributed net investment income ............ 0 2,439 1,301
Accumulated net realized gain (loss) on
investments ................................... 312,591 254,795 122,929
Net unrealized appreciation on investments ..... 17,602,380 4,028,494 4,550,293
- -------------------------------------------------- ------------- ------------ -------------
Total net assets .............................. $ 319,960,609 $ 67,752,503 $ 94,450,431
================================================== ============= ============ =============
Net assets consist of
Class A ........................................ $ 8,505,174 $ 1,288,291 $ 3,188,919
Class B ........................................ 48,973,700 4,579,014 7,643,297
Class C ........................................ 0 0 0
Class Y ........................................ 262,481,735 61,885,198 83,618,215
- -------------------------------------------------- ------------- ------------ -------------
$ 319,960,609 $ 67,752,503 $ 94,450,431
============= ============ =============
Shares outstanding
Class A ........................................ 793,756 124,696 308,155
Class B ........................................ 4,570,565 443,222 738,589
Class C ........................................ 0 0 0
Class Y ........................................ 24,494,063 5,990,147 8,080,291
- -------------------------------------------------- ------------- ------------ -------------
Net asset value per share
Class A ........................................ $ 10.72 $ 10.33 $ 10.35
================================================== ============= ============ =============
Class A - Offering price (based on sales
charge of 4.75%) .............................. $ 11.25 $ 10.85 $ 10.87
================================================== ============= ============ =============
Class B ........................................ $ 10.72 $ 10.33 $ 10.35
================================================== ============= ============ =============
Class C ........................................ - - -
================================================== ============= ============ =============
Class Y ........................................ $ 10.72 $ 10.33 $ 10.35
================================================== ============= ============ =============
</TABLE>
See Combined Notes to Financial Statements.
46
<PAGE>
EVERGREEN
Southern State Municipal Bond Funds
Statements of Operations
Six Months Ended February 28, 1998 (Unaudited)
<TABLE>
<CAPTION>
Florida
High Income Florida
Fund Fund
--------------- ---------------
<S> <C> <C>
Investment income
Interest ............................................... $ 6,677,502 $ 9,909,517
- --------------------------------------------------------- ----------- -----------
Expenses
Management fee ......................................... 633,743 914,304
Distribution Plan expenses ............................. 518,158 335,212
Transfer agent fees .................................... 81,330 69,013
Registration and filing fees ........................... 43,749 102,703
Administrative services fees ........................... 33,854 59,074
Custodian fees ......................................... 33,321 60,398
Shareholder reports expense ............................ 17,956 77,887
Professional fees ...................................... 12,715 14,620
Trustees' fees and expenses ............................ 3,169 5,592
Organization expenses .................................. 1,758 5,943
Other .................................................. 3,439 7,869
Fee waivers and/or expense reimbursements .............. (197,970) (481,980)
- --------------------------------------------------------- ----------- -----------
Total expenses ........................................ 1,185,222 1,170,635
Less: Indirectly paid expenses ......................... (1,634) (1,392)
- --------------------------------------------------------- ----------- -----------
Net expenses .......................................... 1,183,588 1,169,243
- --------------------------------------------------------- ----------- -----------
Net investment income .................................. 5,493,914 8,740,274
- --------------------------------------------------------- ----------- -----------
Net realized and unrealized gain on investments
Net realized gain on investments ....................... 1,064,508 8,287,081
Net change in unrealized appreciation (depreciation)
on investments ........................................ 3,908,314 917,799
- --------------------------------------------------------- ----------- -----------
Net realized and unrealized gain on investments ........ 4,972,822 9,204,880
- --------------------------------------------------------- ----------- -----------
Net increase in net assets resulting operations ........ $10,466,736 $17,945,154
========================================================= =========== ===========
<CAPTION>
North South
Georgia Carolina Carolina Virginia
Fund Fund Fund Fund
------------- --------------- ------------- -------------
<S> <C> <C> <C> <C>
Investment income
Interest ............................................... $1,309,095 $ 5,378,859 $1,105,252 $1,537,859
- ---------------------------------------------------------- ---------- ----------- ---------- ----------
Expenses
Management fee ......................................... 120,807 494,887 104,430 143,960
Distribution Plan expenses ............................. 60,829 251,376 24,576 39,845
Transfer agent fees .................................... 8,122 28,770 2,884 6,316
Registration and filing fees ........................... 22,596 37,221 19,364 16,647
Administrative services fees ........................... 7,532 30,862 6,502 9,044
Custodian fees ......................................... 6,567 31,856 7,613 10,167
Shareholder reports expense ............................ 5,465 6,318 7,341 8,604
Professional fees ...................................... 7,837 9,829 8,538 8,606
Trustees' fees and expenses ............................ 1,313 1,624 564 1,871
Organization expenses .................................. 5,364 0 15,709 5,126
Other .................................................. 1,176 2,249 1,068 1,026
Fee waivers and/or expense reimbursements .............. (113,460) (363,784) (69,198) (122,105)
- ---------------------------------------------------------- ---------- ----------- ---------- ----------
Total expenses ........................................ 134,148 531,208 129,391 129,107
Less: Indirectly paid expenses ......................... (43) (546) (779) (542)
- ---------------------------------------------------------- ---------- ----------- ---------- ----------
Net expenses .......................................... 134,105 530,662 128,612 128,565
- ---------------------------------------------------------- ---------- ----------- ---------- ----------
Net investment income .................................. 1,174,990 4,848,197 976,640 1,409,294
- ---------------------------------------------------------- ---------- ----------- ---------- ----------
Net realized and unrealized gain on investments
Net realized gain on investments ....................... 411,235 3,827,333 259,818 327,791
Net change in unrealized appreciation (depreciation)
on investments ........................................ 977,845 1,643,495 966,461 1,136,973
- ---------------------------------------------------------- ---------- ----------- ---------- ----------
Net realized and unrealized gain on investments ........ 1,389,080 5,470,828 1,226,279 1,464,764
- ---------------------------------------------------------- ---------- ----------- ---------- ----------
Net increase in net assets resulting operations ........ $2,564,070 $10,319,025 $2,202,919 $2,874,058
========================================================== ========== =========== ========== ==========
</TABLE>
See Combined Notes to Financial Statements.
47
<PAGE>
EVERGREEN
Southern State Municipal Bond Funds
Statements of Changes in Net Assets
Six Months Ended February 28, 1998 (Unaudited)
<TABLE>
<CAPTION>
Florida
High Income Florida
Fund Fund
--------------- ---------------
<S> <C> <C>
Operations
Net investment income .......................... $ 5,493,914 $ 8,740,274
Net realized gain on investments ............... 1,064,508 8,287,081
Net change in unrealized appreciation
(depreciation) on investments ................. 3,908,314 917,799
- ------------------------------------------------- ------------- -------------
Net increase in net assets resulting from
operations ................................... 10,466,736 17,945,154
- ------------------------------------------------- ------------- -------------
Distributions to shareholders from
Net investment income
Class A ....................................... (3,552,429) (2,628,768)
Class B ....................................... (1,661,610) (772,462)
Class C ....................................... 0 (34,071)
Class Y ....................................... (279,875) (5,383,053)
Net realized gains on investments
Class A ....................................... 0 (2,150,248)
Class B ....................................... 0 (663,807)
Class Y ....................................... 0 (621,250)
- ------------------------------------------------- ------------- -------------
Total distributions to shareholders ........... (5,493,914) (12,253,659)
- ------------------------------------------------- ------------- -------------
Capital share transactions
Proceeds from shares sold ...................... 69,672,842 29,344,173
Shares issued in connection with the
acquisition of:
Evergreen Florida Tax Free Fund ............... 0 72,741,942
Common trust funds ............................ 0 347,033,202
Proceeds from reinvestment of distributions..... 2,503,918 2,679,401
Payment for shares redeemed .................... (14,989,996) (24,428,007)
- ------------------------------------------------- ------------- -------------
Net increase in net assets resulting from
capital share transactions ................... 57,186,764 427,370,711
- ------------------------------------------------- ------------- -------------
Total increase in net assets ................. 62,159,586 433,062,206
Net assets
Beginning of period ............................ 189,743,181 161,803,570
- ------------------------------------------------- ------------- -------------
End of period .................................. $ 251,902,767 $ 594,865,776
================================================= ============= =============
Undistributed net investment income ............. $ 71,079 $ 24,164
================================================= ============= =============
<CAPTION>
North South
Georgia Carolina Carolina Virginia
Fund Fund Fund Fund
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Operations
Net investment income .......................... $ 1,174,990 $ 4,848,197 $ 976,640 $ 1,409,294
Net realized gain on investments ............... 411,235 3,827,333 259,818 327,791
Net change in unrealized appreciation
(depreciation) on investments ................. 977,845 1,643,495 966,461 1,136,973
- -------------------------------------------------- ------------ ------------- ------------ ------------
Net increase in net assets resulting from
operations ................................... 2,564,070 10,319,025 2,202,919 2,874,058
- -------------------------------------------------- ------------ ------------- ------------ ------------
Distributions to shareholders from
Net investment income
Class A ....................................... (49,795) (201,398) (24,364) (73,056)
Class B ....................................... (237,073) (1,001,767) (89,062) (146,388)
Class C ....................................... 0 0 0 0
Class Y ....................................... (888,122) (3,645,032) (863,214) (1,194,699)
Net realized gains on investments
Class A ....................................... 0 0 (2,456) 0
Class B ....................................... 0 0 (12,377) 0
Class Y ....................................... 0 0 (21,740) 0
- -------------------------------------------------- ------------ ------------- ------------ ------------
Total distributions to shareholders ........... (1,174,990) (4,848,197) (1,013,213) (1,414,143)
- -------------------------------------------------- ------------ ------------- ------------ ------------
Capital share transactions
Proceeds from shares sold ...................... 4,794,343 9,745,892 5,701,106 5,372,238
Shares issued in connection with the
acquisition of:
Evergreen Florida Tax Free Fund ............... 0 0 0 0
Common trust funds ............................ 61,853,254 255,143,064 51,591,389 74,432,035
Proceeds from reinvestment of distributions..... 227,754 930,857 181,953 208,872
Payment for shares redeemed .................... (3,823,468) (11,685,078) (3,682,181) (2,847,450)
- -------------------------------------------------- ------------ ------------- ------------ ------------
Net increase in net assets resulting from
capital share transactions ................... 63,051,883 254,134,735 53,792,267 77,165,695
- -------------------------------------------------- ------------ ------------- ------------ ------------
Total increase in net assets ................. 64,440,963 259,605,563 54,981,973 78,625,610
Net assets
Beginning of period ............................ 14,252,077 60,355,046 12,770,530 15,824,821
- -------------------------------------------------- ------------ ------------- ------------ ------------
End of period .................................. $ 78,693,040 $ 319,960,609 $ 67,752,503 $ 94,450,431
================================================== ============ ============= ============ ============
Undistributed net investment income ............. $ 3,588 $ 0 $ 2,439 $ 1,301
================================================== ============ ============= ============ ============
</TABLE>
See Combined Notes to Financial Statements.
48
<PAGE>
EVERGREEN
Southern State Municipal Bond Funds
Statements of Changes in Net Assets
Year Ended August 31, 1997
<TABLE>
<CAPTION>
Florida
High Income Florida Georgia
Fund Fund Fund
--------------- --------------- ---------------
<S> <C> <C> <C>
Operations
Net investment income ........................... $ 7,660,202 $ 7,985,201 $ 593,498
Net realized gain on investments ................ 145,751 4,253,020 84,767
Net change in unrealized appreciation
(depreciation) on investments .................. 6,008,472 1,314,673 354,644
- -------------------------------------------------- ------------- ------------- ------------
Net increase in net assets resulting from
operations .................................... 13,814,425 13,552,894 1,032,909
- -------------------------------------------------- ------------- ------------- ------------
Distributions to shareholders from
Net investment income
Class A ........................................ (5,491,178) (5,824,608) (110,152)
Class B ........................................ (1,956,616) (1,295,519) (408,815)
Class Y ........................................ (212,408) (960,612) (75,880)
Net realized gains on investments
Class A ........................................ 0 (665,344) 0
Class B ........................................ 0 (171,649) 0
Class Y ........................................ 0 (81,865) 0
- -------------------------------------------------- ------------- ------------- ------------
Total distributions to shareholders ............ (7,660,202) (8,999,597) (594,847)
- -------------------------------------------------- ------------- ------------- ------------
Capital share transactions
Proceeds from shares sold ....................... 102,384,802 27,824,216 3,285,353
Proceeds from reinvestment of distributions ..... 3,354,164 2,877,333 422,287
Payment for shares redeemed ..................... (19,605,169) (30,281,998) (2,738,013)
- -------------------------------------------------- ------------- ------------- ------------
Net increase (decrease) in net assets
resulting from capital share transactions ..... 86,133,797 419,551 969,627
- -------------------------------------------------- ------------- ------------- ------------
Total increase (decrease) in net assets ....... 92,288,020 4,972,848 1,407,689
Net assets .......................................
Beginning of year ............................... 97,455,161 156,830,722 12,844,388
- -------------------------------------------------- ------------- ------------- ------------
End of year ..................................... $ 189,743,181 $ 161,803,570 $ 14,252,077
================================================== ============= ============= ============
Undistributed net investment income .............. $ 71,079 $ 102,244 $ 3,588
================================================== ============= ============= ============
<CAPTION>
North South
Carolina Carolina Virginia
Fund Fund Fund
---------------- --------------- ---------------
<S> <C> <C> <C>
Operations
Net investment income ........................... $ 2,558,908 $ 549,116 $ 670,419
Net realized gain on investments ................ 297,379 42,822 177,142
Net change in unrealized appreciation
(depreciation) on investments .................. 2,148,174 396,963 361,929
- --------------------------------------------------- -------------- ------------ ------------
Net increase in net assets resulting from
operations .................................... 5,004,461 988,901 1,209,490
- --------------------------------------------------- -------------- ------------ ------------
Distributions to shareholders from
Net investment income
Class A ........................................ (403,703) (44,289) (142,824)
Class B ........................................ (2,042,140) (187,294) (257,414)
Class Y ........................................ (201,277) (318,010) (271,563)
Net realized gains on investments
Class A ........................................ 0 (1,178) 0
Class B ........................................ 0 (5,778) 0
Class Y ........................................ 0 (7,006) 0
- --------------------------------------------------- -------------- ------------ ------------
Total distributions to shareholders ............ (2,647,120) (563,555) (671,801)
- --------------------------------------------------- -------------- ------------ ------------
Capital share transactions
Proceeds from shares sold ....................... 5,860,717 4,936,067 4,600,357
Proceeds from reinvestment of distributions ..... 1,817,312 346,366 369,743
Payment for shares redeemed ..................... (10,822,725) (2,614,880) (2,804,295)
- --------------------------------------------------- -------------- ------------ ------------
Net increase (decrease) in net assets
resulting from capital share transactions ..... (3,144,696) 2,667,553 2,165,805
- --------------------------------------------------- -------------- ------------ ------------
Total increase (decrease) in net assets ....... (787,355) 3,092,899 2,703,494
Net assets .......................................
Beginning of year ............................... 61,142,401 9,677,631 13,121,327
- --------------------------------------------------- -------------- ------------ ------------
End of year ..................................... $ 60,355,046 $ 12,770,530 $ 15,824,821
=================================================== ============== ============ ============
Undistributed net investment income .............. $ 0 $ 2,439 $ 6,150
=================================================== ============== ============ ============
</TABLE>
See Combined Notes to Financial Statements.
49
<PAGE>
Combined Notes to Financial Statements (Unaudited)
1. ORGANIZATION
The Evergreen Southern Municipal Bond Funds consist of Evergreen Florida High
Income Municipal Bond Fund ("Florida High Income Fund"), Evergreen Florida
Municipal Bond Fund ("Florida Fund"), Evergreen Georgia Municipal Bond Fund
("Georgia Fund"), Evergreen North Carolina Municipal Bond Fund ("North Carolina
Fund"), Evergreen South Carolina Municipal Bond Fund ("South Carolina Fund")
and Evergreen Virginia Municipal Bond Fund ("Virginia Fund"), (collectively,
the "Funds"). Each Fund, except Florida High Income Fund which is diversified,
is a non-diversified series of Evergreen Municipal Trust (the "Trust"), a
Delaware business trust organized on September 17, 1997. The Trust is an open
end management investment company registered under the Investment Company Act
of 1940, as amended (the "1940 Act").
The Funds offer Class A, Class B, Class C and Class Y shares. Class A shares
are sold with a maximum front-end sales charge of 4.75%. Class B and Class C
shares are sold without a front-end sales charge, but pay a higher ongoing
distribution fee than Class A. Class B shares are sold subject to a contingent
deferred sales charge that is payable upon redemption and decreases depending
on how long the shares have been held. Class C shares are sold subject to a
contingent deferred sales charge payable on shares redeemed within one year
after the month of purchase. Class Y shares are sold at net asset value and are
not subject to contingent deferred sales charges or distribution fees. Class Y
shares are sold only to investment advisory clients of First Union Corporation
("First Union") and its affiliates, certain institutional investors or Class Y
shareholders of record of certain other funds managed by First Union and its
affiliates as of December 30, 1994.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their financial statements. The
policies are in conformity with generally accepted accounting principles, which
require management to make estimates and assumptions that affect amounts
reported herein. Actual results could differ from these estimates.
A. Valuation of Securities
An independent pricing service values each Fund's municipal bonds at fair value
using a variety of factors which may include yield, liquidity, interest rate
risk, credit quality, coupon, maturity and type of issue. Securities for which
valuations are not available from an independent pricing service, including
restricted securities, are valued at fair value as determined in good faith
according to procedures established by the Board of Trustees.
Short-term investments with remaining maturities of 60 days or less are carried
at amortized cost, which approximates market value.
B. Security Transactions and Investment Income
Securities transactions are accounted for no later than one business day after
the trade date. Realized gains and losses are computed on the identified cost
basis. Interest income is recorded on the accrual basis and includes accretion
of discounts and amortization of premiums.
C. Federal Taxes
The Funds have qualified and intend to continue to qualify as regulated
investment companies under the Internal Revenue Code of 1986, as amended (the
"Code"). Thus, the Funds will not incur any federal tax liability since they
are expected to distribute all of their net investment company taxable income,
net tax-exempt income and net capital gains, if any, to their shareholders. The
Funds also intend to avoid any excise tax liability by making the required
distributions under the Code. Accordingly, no provision for federal taxes is
required. To the extent that realized capital gains can be offset by capital
loss carryforwards, it is each Fund's policy not to distribute such gains.
D. Distributions
Distributions from net investment income for the Funds are declared daily and
paid monthly. Distributions from net realized capital gains, if any, are paid
at least annually. Distributions to shareholders are recorded at the close of
business on the ex-dividend date.
Income and capital gains distributions to shareholders are determined in
accordance with income tax regulations, which may differ from generally
accepted accounting principles. The significant differences between financial
statement amounts available for distributions and distributions made in
accordance with income tax regulations are primarily due to differing treatment
of market discount on securities.
50
<PAGE>
Combined Notes to Financial Statements (Unaudited) (continued)
E. Class Allocations
Income, expenses (other than class specific expenses) and realized and
unrealized gains and losses are prorated among the classes based on the
relative net assets of each class. Currently, class specific expenses are
limited to expenses incurred under the Distribution Plans for each class.
F. Organization Expenses
Organization expenses for the Florida High Income Fund are amortized to
operations over a five-year period beginning June 30, 1995 on a straight-line
basis. In the event any of the initial shares of the Fund are redeemed by any
holder during the five-year amortization period, redemption proceeds will be
reduced by any unamortized organization expenses in the same proportion as the
number of initial shares being redeemed bears to the number of initial shares
outstanding at the time of the redemption.
Organization expenses of the Florida, Georgia, North Carolina, South Carolina
and Virginia Funds were initially borne by the Funds' prior administrator. As a
result of a change in the administration agreement, First Union purchased the
remaining unreimbursed organizational expenses from the prior administrator. As
of and for the six months ended February 28, 1998, the Funds paid and have a
remaining liability to First Union as follows:
<TABLE>
<CAPTION>
Remaining
Payments Liability
---------- ----------
<S> <C> <C>
Florida Fund ................ $ 5,943 $ 5,150
Georgia Fund ................ 5,364 4,156
South Carolina Fund ......... 15,709 14,757
Virginia Fund ............... 5,126 4,443
</TABLE>
3. CAPITAL SHARE TRANSACTIONS
Each Fund has an unlimited number of shares of beneficial interest with a par
value of $0.001 authorized. Shares of beneficial interest of the Funds are
currently divided into Class A, Class B, Class C and Class Y. Transactions in
shares of the Funds were as follows:
- --------------------------------------------------------------------------------
FLORIDA HIGH INCOME FUND
<TABLE>
<CAPTION>
Six Months Ended Year Ended
February 28, 1998 August 31, 1997
----------------------------- --------------------------------
Shares Amount Shares Amount
------------- --------------- --------------- ----------------
<S> <C> <C> <C> <C>
Class A
Shares sold ................................... 3,099,308 $ 34,323,459 4,908,227 $ 52,353,817
Shares issued in reinvestment of distributions 144,930 1,604,967 218,163 2,333,137
Shares redeemed ............................... (836,748) (9,248,730) (1,431,303) (15,236,336)
- ----------------------------------------------- ----------- ------------- ------------- --------------
Net increase .................................. 2,407,490 $ 26,679,696 3,695,087 $ 39,450,618
- ----------------------------------------------- ----------- ------------- ------------- --------------
Class B
Shares sold ................................... 1,818,973 $ 20,116,982 4,247,193 $ 45,291,821
Shares issued in reinvestment of distributions 75,625 837,724 89,841 961,874
Shares redeemed ............................... (440,171) (4,868,684) (352,500) (3,764,886)
- ----------------------------------------------- ----------- ------------- ------------- --------------
Net increase .................................. 1,454,427 $ 16,086,022 3,984,534 $ 42,488,809
- ----------------------------------------------- ----------- ------------- ------------- --------------
Class Y
Shares sold ................................... 1,368,689 $ 15,232,401 443,071 $ 4,739,164
Shares issued in reinvestment of distributions 5,526 61,227 5,518 59,153
Shares redeemed ............................... (78,322) (872,582) (56,700) (603,947)
- ----------------------------------------------- ----------- ------------- ------------- --------------
Net increase .................................. 1,295,893 $ 14,421,046 391,889 $ 4,194,370
=============================================== =========== ============= ============= ==============
</TABLE>
51
<PAGE>
Combined Notes to Financial Statements (Unaudited) (continued)
- --------------------------------------------------------------------------------
FLORIDA FUND
<TABLE>
<CAPTION>
Six Months Ended
February 28, 1998
-----------------------------
Shares Amount
------------- ---------------
<S> <C> <C>
Class A
Shares sold ........................................................................ 165,932 $ 1,668,066
Shares issued in connection with the acquisition of Evergreen Florida Tax Free Fund 2,449,486 24,653,786
Shares issued in reinvestment of distributions ..................................... 172,505 1,719,388
Shares redeemed .................................................................... (954,457) (9,590,603)
- ------------------------------------------------------------------------------------ ----------- -------------
Net increase (decrease) ............................................................ 1,833,466 $ 16,782,571
- ------------------------------------------------------------------------------------ ----------- -------------
Class B
Shares sold ........................................................................ 239,896 $ 2,407,582
Shares issued in reinvestment ......................................................
Shares issued in connection with the acquisition of Evergreen Florida Tax Free Fund 3,887,072 39,122,963
Shares issued in reinvestment of distributions ..................................... 76,802 765,631
Shares redeemed .................................................................... (431,853) (4,342,072)
- ------------------------------------------------------------------------------------ ----------- -------------
Net increase ....................................................................... 3,771,917 $ 37,954,104
==================================================================================== =========== =============
<CAPTION>
Year Ended
August 31, 1997
--------------------------------
Shares Amount
--------------- ----------------
<S> <C> <C>
Class A
Shares sold ........................................................................ 680,065 $ 6,676,415
Shares issued in connection with the acquisition of Evergreen Florida Tax Free Fund 0 0
Shares issued in reinvestment of distributions ..................................... 200,942 1,980,889
Shares redeemed .................................................................... (2,225,426) (21,851,674)
- -------------------------------------------------------------------------------------------------- --------------
Net increase (decrease) ............................................................ (1,344,419) $ (13,194,370)
- -------------------------------------------------------------------------------------------------- --------------
Class B
Shares sold ........................................................................ 586,099 $ 5,756,602
Shares issued in reinvestment ......................................................
Shares issued in connection with the acquisition of Evergreen Florida Tax Free Fund 0 0
Shares issued in reinvestment of distributions ..................................... 77,038 759,420
Shares redeemed .................................................................... (503,356) (4,943,204)
- -------------------------------------------------------------------------------------------------- --------------
Net increase ....................................................................... 159,781 $ 1,572,818
================================================================================================== ==============
</TABLE>
<TABLE>
<CAPTION>
January 26, 1998
(Commencement
of Class Operations)
through
February 28, 1998
--------------------------
Shares Amount
------------ -------------
<S> <C> <C>
Class C
Shares sold ........................................................................ 14,525 $ 146,377
Shares issued in connection with the acquisition of Evergreen Florida Tax Free Fund 890,735 8,965,193
Shares issued in reinvestment of distributions ..................................... 785 7,893
Shares redeemed .................................................................... (12,765) (128,618)
- ------------------------------------------------------------------------------------ ---------- -----------
Net increase ....................................................................... 893,280 $8,990,845
==================================================================================== ========== ===========
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended
February 28, 1998
--------------------------------
Shares Amount
--------------- ----------------
<S> <C> <C>
Class Y
Shares sold ..................................................................... 2,500,104 $ 25,122,148
Shares issued in connection with the acquisition of common trust fund net assets 34,976,141 347,033,202
Shares issued in reinvestment of distributions .................................. 18,697 186,489
Shares redeemed ................................................................. (1,031,225) (10,366,714)
- --------------------------------------------------------------------------------- ------------- --------------
Net increase .................................................................... 36,463,717 $ 361,975,125
================================================================================= ============= ==============
<CAPTION>
Year Ended
August 31, 1997
----------------------------
Shares Amount
------------- --------------
<S> <C> <C>
Class Y
Shares sold ..................................................................... 1,566,132 $ 15,391,199
Shares issued in connection with the acquisition of common trust fund net assets 0 0
Shares issued in reinvestment of distributions .................................. 13,894 137,024
Shares redeemed ................................................................. (353,969) (3,487,120)
- --------------------------------------------------------------------------------------------- -------------
Net increase .................................................................... 1,226,057 $ 12,041,103
============================================================================================= =============
</TABLE>
52
<PAGE>
Combined Notes to Financial Statements (Unaudited) (continued)
- --------------------------------------------------------------------------------
GEORGIA FUND
<TABLE>
<CAPTION>
Six Months Ended
February 28, 1998
----------------------------
Shares Amount
------------- --------------
<S> <C> <C>
Class A
Shares sold ..................................................................... 13,628 $ 140,192
Shares issued in reinvestment of distributions .................................. 2,932 29,833
Shares redeemed ................................................................. (32,117) (322,769)
- --------------------------------------------------------------------------------- ----------- -------------
Net increase (decrease) ......................................................... (15,557) $ (152,744)
- --------------------------------------------------------------------------------- ----------- -------------
Class B
Shares sold ..................................................................... 114,674 $ 1,153,320
Shares issued in reinvestment of distributions .................................. 16,833 171,392
Shares redeemed ................................................................. (65,979) (672,044)
- --------------------------------------------------------------------------------- ----------- -------------
Net increase .................................................................... 65,528 $ 652,668
- --------------------------------------------------------------------------------- ----------- -------------
Class Y
Shares sold ..................................................................... 339,703 $ 3,500,831
Shares issued in connection with the acquisition of common trust fund net assets 6,111,899 61,853,254
Shares issued in reinvestment of distributions .................................. 2,602 26,529
Shares redeemed ................................................................. (275,407) (2,828,655)
- --------------------------------------------------------------------------------- ----------- -------------
Net increase (decrease) ......................................................... 6,178,797 $ 62,551,959
================================================================================= =========== =============
<CAPTION>
Year Ended
August 31, 1997
----------------------------
Shares Amount
------------ ---------------
<S> <C> <C>
Class A
Shares sold ..................................................................... 58,988 $ 571,356
Shares issued in reinvestment of distributions .................................. 7,041 68,727
Shares redeemed ................................................................. (47,699) (464,268)
- -------------------------------------------------------------------------------------------- --------------
Net increase (decrease) ......................................................... 18,330 $ 175,815
- -------------------------------------------------------------------------------------------- --------------
Class B
Shares sold ..................................................................... 234,534 $ 2,292,070
Shares issued in reinvestment of distributions .................................. 30,017 293,086
Shares redeemed ................................................................. (134,483) (1,307,027)
- -------------------------------------------------------------------------------------------- --------------
Net increase .................................................................... 130,068 $ 1,278,129
- -------------------------------------------------------------------------------------------- --------------
Class Y
Shares sold ..................................................................... 43,212 $ 421,927
Shares issued in connection with the acquisition of common trust fund net assets 0 0
Shares issued in reinvestment of distributions .................................. 6,202 60,474
Shares redeemed ................................................................. (99,306) (966,718)
- -------------------------------------------------------------------------------------------- --------------
Net increase (decrease) ......................................................... (49,892) $ (484,317)
============================================================================================ ==============
</TABLE>
- --------------------------------------------------------------------------------
NORTH CAROLINA FUND
<TABLE>
<CAPTION>
Six Months Ended
February 28, 1998
------------------------------
Shares Amount
-------------- ---------------
<S> <C> <C>
Class A
Shares sold ..................................................................... 43,268 $ 462,565
Shares issued in reinvestment of distributions .................................. 13,440 142,951
Shares redeemed ................................................................. (45,383) (482,144)
- --------------------------------------------------------------------------------- ------------ -------------
Net increase (decrease) ......................................................... 11,325 $ 123,372
- --------------------------------------------------------------------------------- ------------ -------------
Class B
Shares sold ..................................................................... 159,396 $ 1,693,776
Shares issued in reinvestment of distributions .................................. 71,036 755,584
Shares redeemed ................................................................. (306,916) (3,250,126)
- --------------------------------------------------------------------------------- ------------ -------------
Net decrease .................................................................... (76,484) $ (800,766)
- --------------------------------------------------------------------------------- ------------ -------------
Class Y
Shares sold ..................................................................... 709,458 $ 7,589,551
Shares issued in connection with the acquisition of common trust fund net assets 24,134,747 255,143,064
Shares issued in reinvestment of distributions .................................. 3,027 32,322
Shares redeemed ................................................................. (742,931) (7,952,808)
- --------------------------------------------------------------------------------- ------------ -------------
Net increase .................................................................... 24,104,301 $254,812,129
================================================================================= ============ =============
<CAPTION>
Year Ended
August 31, 1997
-----------------------------
Shares Amount
------------- ---------------
<S> <C> <C>
Class A
Shares sold ..................................................................... 104,597 $ 1,069,375
Shares issued in reinvestment of distributions .................................. 27,845 283,991
Shares redeemed ................................................................. (150,887) (1,540,570)
- --------------------------------------------------------------------------------------------- -------------
Net increase (decrease) ......................................................... (18,445) $ (187,204)
- --------------------------------------------------------------------------------------------- -------------
Class B
Shares sold ..................................................................... 387,839 $ 3,937,543
Shares issued in reinvestment of distributions .................................. 148,184 1,511,443
Shares redeemed ................................................................. (839,134) (8,524,353)
- --------------------------------------------------------------------------------------------- -------------
Net decrease .................................................................... (303,111) $ (3,075,367)
- --------------------------------------------------------------------------------------------- -------------
Class Y
Shares sold ..................................................................... 84,295 $ 853,799
Shares issued in connection with the acquisition of common trust fund net assets 0 0
Shares issued in reinvestment of distributions .................................. 2,138 21,878
Shares redeemed ................................................................. (74,420) (757,802)
- --------------------------------------------------------------------------------------------- -------------
Net increase .................................................................... 12,013 $ 117,875
============================================================================================= =============
</TABLE>
53
<PAGE>
Combined Notes to Financial Statements (Unaudited) (continued)
- --------------------------------------------------------------------------------
SOUTH CAROLINA FUND
<TABLE>
<CAPTION>
Six Months Ended
February 28, 1998
-----------------------------
Shares Amount
------------- ---------------
<S> <C> <C>
Class A
Shares sold ..................................................................... 47,255 $ 489,869
Shares issued in reinvestment of distributions .................................. 1,418 14,505
Shares redeemed ................................................................. (25,677) (261,058)
- --------------------------------------------------------------------------------- ----------- -------------
Net increase .................................................................... 22,996 $ 243,316
- --------------------------------------------------------------------------------- ----------- -------------
Class B
Shares sold ..................................................................... 15,516 $ 160,268
Shares issued in reinvestment of distributions .................................. 7,293 74,612
Shares redeemed ................................................................. (49,388) (506,843)
- --------------------------------------------------------------------------------- ----------- -------------
Net increase (decrease) ......................................................... (26,579) $ (271,963)
- --------------------------------------------------------------------------------- ----------- -------------
Class Y
Shares sold ..................................................................... 491,637 $ 5,050,969
Shares issued in connection with the acquisition of common trust fund net assets 5,075,749 51,591,389
Shares issued in reinvestment of distributions .................................. 9,075 92,836
Shares redeemed ................................................................. (282,113) (2,914,280)
- --------------------------------------------------------------------------------- ----------- -------------
Net increase .................................................................... 5,294,348 $ 53,820,914
================================================================================= =========== =============
<CAPTION>
Year Ended
August 31, 1997
----------------------------
Shares Amount
------------ ---------------
<S> <C> <C>
Class A
Shares sold ..................................................................... 41,892 $ 414,564
Shares issued in reinvestment of distributions .................................. 2,239 22,308
Shares redeemed ................................................................. (29,248) (286,768)
- -------------------------------------------------------------------------------------------- --------------
Net increase .................................................................... 14,883 $ 150,104
- -------------------------------------------------------------------------------------------- --------------
Class B
Shares sold ..................................................................... 55,162 $ 544,288
Shares issued in reinvestment of distributions .................................. 14,381 142,689
Shares redeemed ................................................................. (41,753) (410,305)
- -------------------------------------------------------------------------------------------- --------------
Net increase (decrease) ......................................................... 27,790 $ 276,672
- -------------------------------------------------------------------------------------------- --------------
Class Y
Shares sold ..................................................................... 400,553 $ 3,977,215
Shares issued in connection with the acquisition of common trust fund net assets 0 0
Shares issued in reinvestment of distributions .................................. 18,276 181,369
Shares redeemed ................................................................. (193,151) (1,917,807)
- -------------------------------------------------------------------------------------------- --------------
Net increase .................................................................... 225,678 $ 2,240,777
============================================================================================ ==============
</TABLE>
- --------------------------------------------------------------------------------
VIRGINIA FUND
<TABLE>
<CAPTION>
Six Months Ended
February 28, 1998
-----------------------------
Shares Amount
------------- ---------------
<S> <C> <C>
Class A
Shares sold ..................................................................... 16,491 $ 168,378
Shares issued in reinvestment of distributions .................................. 5,809 59,623
Shares redeemed ................................................................. (5,981) (61,337)
- --------------------------------------------------------------------------------- ----------- -------------
Net increase (decrease) ......................................................... 16,319 $ 166,664
- --------------------------------------------------------------------------------- ----------- -------------
Class B
Shares sold ..................................................................... 83,295 $ 851,884
Shares issued in reinvestment of distributions .................................. 11,010 113,054
Shares redeemed ................................................................. (21,661) (222,852)
- --------------------------------------------------------------------------------- ----------- -------------
Net increase .................................................................... 72,644 $ 742,086
- --------------------------------------------------------------------------------- ----------- -------------
Class Y
Shares sold ..................................................................... 423,385 $ 4,351,976
Shares issued in connection with the acquisition of common trust fund net assets 7,286,001 74,432,035
Shares issued in reinvestment of distributions .................................. 3,526 36,195
Shares redeemed ................................................................. (248,852) (2,563,261)
- --------------------------------------------------------------------------------- ----------- -------------
Net increase .................................................................... 7,464,060 $ 76,256,945
================================================================================= =========== =============
<CAPTION>
Year Ended
August 31, 1997
----------------------------
Shares Amount
------------ ---------------
<S> <C> <C>
Class A
Shares sold ..................................................................... 52,270 $ 516,653
Shares issued in reinvestment of distributions .................................. 12,391 122,884
Shares redeemed ................................................................. (71,543) (705,708)
- -------------------------------------------------------------------------------------------- -------------
Net increase (decrease) ......................................................... (6,882) $ (66,171)
- -------------------------------------------------------------------------------------------- -------------
Class B
Shares sold ..................................................................... 127,982 $ 1,276,030
Shares issued in reinvestment of distributions .................................. 18,384 182,440
Shares redeemed ................................................................. (96,368) (959,225)
- -------------------------------------------------------------------------------------------- -------------
Net increase .................................................................... 49,998 $ 499,245
- -------------------------------------------------------------------------------------------- -------------
Class Y
Shares sold ..................................................................... 284,030 $ 2,807,674
Shares issued in connection with the acquisition of common trust fund net assets 0 0
Shares issued in reinvestment of distributions .................................. 6,490 64,419
Shares redeemed ................................................................. (114,905) (1,139,362)
- -------------------------------------------------------------------------------------------- -------------
Net increase .................................................................... 175,615 $ 1,732,731
============================================================================================ =============
</TABLE>
4. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of investment securities (excluding
short-term securities) were as follows for the six months ended February 28,
1998:
<TABLE>
<CAPTION>
Cost of Proceeds
Purchases from Sales
-------------- --------------
<S> <C> <C>
Florida High Income Fund ......... $ 79,163,726 $ 29,027,086
Florida Fund ..................... 136,885,256 134,471,096
Georgia Fund ..................... 13,126,548 12,832,249
North Carolina Fund .............. 80,879,279 85,038,113
South Carolina Fund .............. 9,181,837 5,694,823
Virginia Fund .................... 12,567,752 10,636,906
</TABLE>
54
<PAGE>
Combined Notes to Financial Statements (Unaudited) (continued)
As of August 31, 1997, the Funds had capital loss carryovers for federal income
tax purposes as follows:
<TABLE>
<CAPTION>
Expiration
-----------------------------------
2002 2003 2004
------------ ----------- ----------
<S> <C> <C> <C>
Florida High Income Fund $ 577,000 $635,000 $64,000
Georgia Fund ........... - 603,000 -
North Carolina Fund .... 3,515,000 - -
Virginia Fund .......... 175,000 30,000 -
</TABLE>
5. DISTRIBUTION PLANS
Evergreen Distributor, Inc. ("EDI") (formerly, Evergreen Keystone Distributor,
Inc.), a wholly-owned subsidiary of The BISYS Group Inc. ("BISYS"), serves as
principal underwriter to each of the Funds.
Each Fund has adopted Distribution Plans for each class of shares, except Class
Y, as allowed by Rule 12b-1 of the 1940 Act. Distribution plans permit a fund
to reimburse its principal underwriter for costs related to selling shares of
the fund and for various other services. These costs, which consist primarily
of commissions and service fees to broker-dealers who sell shares of the fund,
are paid by the fund through expenses called "Distribution Plan expenses". Each
class, except Class Y, currently pays a service fee equal to 0.25% of the
average daily net asset of the class. Class B and Class C also pay distribution
fees equal to 0.75% of the average daily net assets of the class. Distribution
Plan expenses are calculated daily and paid monthly.
During the six months ended February 28, 1998, amounts paid to EKD pursuant to
each Fund's Class A, Class B and Class C Distribution Plans were as follows:
<TABLE>
<CAPTION>
Fees
Waived
Class A Class B Class C Class A
------------ ----------- --------- ----------
<S> <C> <C> <C> <C>
Florida High Income Fund ......... $ 163,349 $354,809 - -
Florida Fund ..................... 133,899 193,272 $8,402 $91,051
Georgia Fund ..................... 2,578 58,251 - -
North Carolina Fund .............. 10,263 241,113 - -
South Carolina Fund .............. 1,317 23,259 - -
Virginia Fund .................... 3,793 36,052 - -
</TABLE>
With respect to Class B and Class C shares, the principal underwriter may pay
distribution fees greater than the allowable annual amounts the Funds are
permitted to pay under the Distribution Plans.
Each of the Distribution Plans may be terminated at any time by vote of the
Independent Trustees or by vote of a majority of the outstanding voting shares
of the respective class.
6. INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT AND OTHER AFFILIATED
TRANSACTIONS
The Capital Management Group ("CMG") of First Union National Bank of North
Carolina, a subsidiary of First Union, serves as the investment adviser to each
Fund and is paid a management fee that is computed daily and paid monthly. CMG
is paid at an annual rate of 0.50% of the average daily net assets of the
Florida Fund, Georgia Fund, North Carolina Fund, South Carolina Fund and
Virginia Fund. CMG is paid at an annual rate of 0.60% of the average daily net
assets of the Florida High Income Fund.
Evergreen Investment Services, Inc. ("EIS") (formerly, Evergreen Keystone
Investment Services, Inc.), a subsidiary of First Union, is the administrator
and BISYS Fund Services is sub-administrator to the Funds. As sub-administrator
to the Funds, BISYS Fund Services provides the officers of the Funds. The
administrator and sub-administrator for each Fund are entitled to an annual fee
based on the average daily net assets of the funds administered by EIS for
which First Union or its investment advisory subsidiaries are also the
investment advisers. The administration fee is calculated by applying
percentage rates, which start at 0.05% and decline to 0.01% per annum as net
assets increase, to the average daily net asset value of each Fund. The
sub-administration fee is calculated by applying percentage rates, which start
at 0.01% and decline to .004% per annum as net assets increase, to the average
daily net asset value of each Fund.
55
<PAGE>
Combined Notes to Financial Statements (Unaudited) (continued)
For the six months ended February 28, 1998, investment management fees and
administration fees were waived and/or expenses reimbursed as follows:
<TABLE>
<CAPTION>
Management Administration
Fees Waived Fees Waived
------------- ---------------
<S> <C> <C>
Florida High Income Fund ....... $197,970 -
Florida Fund ................... 390,929 -
Georgia Fund ................... 113,460 -
North Carolina Fund ............ 363,784 -
South Carolina Fund ............ 65,665 $3,533
Virginia Fund .................. 122,105 -
</TABLE>
During the six months ended February 28, 1998, the Funds paid or accrued to EIS
the following amounts for certain administrative services:
<TABLE>
<S> <C>
Florida High Income ......... $27,725
Florida Fund ................ 47,044
Georgia Fund ................ 6,170
North Carolina Fund ......... 25,282
South Carolina Fund ......... 5,334
Virginia Fund ............... 7,346
</TABLE>
Evergreen Service Company ("ESC") (formerly, Evergreen Keystone Service
Company), a wholly-owned subsidiary of Keystone, serves as the transfer and
dividend disbursing agent for the Funds. Officers of the Funds and affiliated
Trustees receive no compensation directly from the Funds.
7. EXPENSE OFFSET ARRANGEMENT
The Funds have entered into an expense offset arrangement with their custodian.
The assets deposited with the custodian under this expense offset arrangement
could have been invested in income-producing assets.
8. ACQUISITIONS
On November 24, 1997, as a result of the conversion of various common trust
funds managed by First Union National Bank ("FUNB"), a subsidiary of First
Union, the Florida Fund, Georgia Fund, North Carolina Fund, South Carolina Fund
and Virginia Fund each acquired substantially all of the net assets of
comparable common trusts in exchange for Class Y shares of the respective
Funds.
Also, on January 26, 1998, the Florida Fund acquired substantially all the
assets and assumed certain liabilities of Evergreen Florida Tax Free Fund in
exchange for Class A, Class B and Class C shares of Florida Fund.
These conversions and acquisition were accomplished by a tax-free exchange of
the respective shares of each Fund. The value of net assets acquired, number of
shares issued, unrealized appreciation acquired and the aggregate net assets of
each Fund immediately after the acquisition are as follows:
<TABLE>
<CAPTION>
Acquiring Fund Acquired Fund/ Common Trust Fund
- ------------------------- ----------------------------------
<S> <C>
Florida Fund ............ Common trust funds*
Florida Fund ............ Evergreen Florida Tax Free Fund
Georgia Fund ............ Common trust funds*
North Carolina Fund ..... Common trust funds*
South Carolina Fund ..... Common trust fund
Virginia Fund ........... Common trust funds*
<CAPTION>
Unrealized
Value of Net Number of Appreciation Net Assets
Acquiring Fund Assets Acquired Shares Issued (Depreciation) After Acquisitions
- ------------------------- ----------------- --------------- ---------------- -------------------
<S> <C> <C> <C> <C>
Florida Fund ............ $347,033,202 34,976,141 $19,854,472 $511,659,015
Florida Fund ............ 72,741,942 7,227,293 2,487,024 594,416,755
Georgia Fund ............ 61,853,254 6,111,899 3,242,590 76,999,760
North Carolina Fund ..... 255,143,064 24,134,747 12,288,139 317,434,059
South Carolina Fund ..... 51,591,389 5,075,749 2,534,925 59,786,494
Virginia Fund ........... 74,432,035 7,286,001 2,846,313 81,525,759
</TABLE>
* The Acquiring Fund may have acquired net assets of more than one common trust
fund or portions of a common trust fund.
56
<PAGE>
Combined Notes to Financial Statements (Unaudited) (continued)
9. DEFERRED TRUSTEES' FEES
Each Independent Trustee of each Fund may defer any or all compensation related
to performance of their duties as Trustees. The Trustees' deferred balances are
allocated to deferral accounts, which are included in the accrued expenses for
the Fund. The investment performance of the deferral accounts are based on the
investment performance of certain Evergreen Funds. Any gains earned or losses
incurred in the deferral accounts are reported in each Fund's Trustees' fees
and expenses. Trustees will be paid either in one lump sum or in quarterly
installments for up to ten years at their election, not earlier than either the
year in which the Trustee ceases to be a member of the Board of Trustees or
January 1, 2000.
10. FINANCING AGREEMENT
On October 31, 1996, a financing agreement among certain of the Evergreen
Funds, State Street Bank & Trust ("State Street") and a group of banks
(collectively, the "Banks") became effective. Under this agreement, the Banks
provided an unsecured credit facility in the aggregate amount of $225 million
($112.5 million committed and $112.5 million uncommitted) allocated evenly
among the Banks. Borrowings under this facility bore interest at 0.75% per
annum above the Federal Funds rate. A commitment fee of 0.10% per annum was
incurred on the unused portion of the committed facility, which was allocated
to all participating funds. State Street served as agent for the Banks, and as
agent was entitled to a fee of $15,000 which was allocated to all of the
participating Funds. This agreement was terminated on October 31, 1997.
On October 31, 1997, a temporary financing agreement between the participating
Funds and First Union became effective. Under this agreement, First Union
provided a fully committed unsecured credit facility in the aggregate amount of
$300 million. Borrowings under this facility bore interest at 1.00% per annum
above the Federal Funds rate. State Street served as administrative agent under
this agreement, but received no compensation for its services. This agreement
was terminated on December 22, 1997.
On December 22, 1997, a financing agreement among all of the Evergreen Funds,
State Street and a group of Banks became effective. Under this agreement, the
Banks provide an unsecured credit facility in the aggregate amount of $400
million ($275 million committed and $125 million uncommitted). The credit
facility is allocated, under the terms of the financing agreement, among the
Banks. The credit facility is to be accessed by the Funds for temporary or
emergency purposes only and is subject to each Fund's borrowing restrictions.
Borrowings under this facility bear interest at 0.50% per annum above the
Federal Funds rate. A commitment fee of 0.065% per annum will be incurred on
the unused portion of the committed facility, which will be allocated to all
funds. For its assistance in arranging this financing agreement, the Capital
Market Group of First Union was paid a one-time arrangement fee of $27,500.
State Street serves as administrative agent for the Banks, and as
administrative agent is entitled to a fee of $20,000 per annum which is
allocated to all of the Funds.
During the six months ended February 28, 1998, the Funds had no borrowings
under these agreements.
11. CONCENTRATION OF CREDIT RISK
Each Fund invests a substantial portion of its assets in issuers located in a
single state, therefore, may be more affected by economic and political
developments in that state or region than would be a comparable general
tax-exempt mutual fund.
57
<PAGE>
ADDITIONAL INFORMATION (Unaudited)
On December 15, 1997, a special meeting of shareholders for the Funds was held
to consider a number of proposals. On October 16, 1997, the record date for the
meeting, the Funds had the following shares outstanding and number of shares
represented at the meeting:
<TABLE>
<CAPTION>
Florida High Georgia
Income Fund Fund
-------------- -------------
<S> <C> <C>
Record Date Shares Outstanding ........................................... 18,208,038 1,474,373
Shares represented at meeting ............................................ 12,075,110 916,769
Percentage of record date shares represented at meeting .................. 66.32% 62.18%
The votes recorded at the meeting, by proposal, were as follows:
Proposal 1 - The proposed reorganization of the Fund as a series
of the Evergreen Municipal Trust, a Delaware business trust:
Shares voted "For" ................................................. 11,274,454 830,913
Shares voted "Against" ............................................. 90,588 19,266
Shares voted "Abstain" ............................................. 710,068 66,590
Proposal 2 - Reclassification as non-fundamental investment
objective of this Fund whose investment objective is currently
classified as fundamental:
Shares voted "For" ................................................. 11,102,317 829,740
Shares voted "Against" ............................................. 244,273 20,014
Shares voted "Abstain" ............................................. 728,520 67,015
Proposal 3 - Changes to fundamental investment restrictions:
To amend the fundamental restriction concerning diversification of
investments:
Shares voted "For" ................................................. 11,142,557 824,343
Shares voted "Against" ............................................. 178,663 20,014
Shares voted "Abstain" ............................................. 753,890 72,412
To amend the fundamental restriction concerning concentration of a
Fund's assets in a particular industry:
Shares voted "For" ................................................. 11,142,557 824,343
Shares voted "Against" ............................................. 178,663 20,014
Shares voted "Abstain" ............................................. 753,890 72,412
To amend the fundamental restriction concerning the issuance of
senior securities:
Shares voted "For" ................................................. 11,142,557 824,343
Shares voted "Against" ............................................. 178,663 20,014
Shares voted "Abstain" ............................................. 753,890 72,412
To amend the fundamental restriction concerning borrowing:
Shares voted "For" ................................................. 11,142,557 824,343
Shares voted "Against" ............................................. 178,663 20,014
Shares voted "Abstain" ............................................. 753,890 72,412
To amend the fundamental restriction concerning underwriting:
Shares voted "For" ................................................. 11,142,557 824,343
Shares voted "Against" ............................................. 178,663 20,014
Shares voted "Abstain" ............................................. 753,890 72,412
To amend the fundamental restriction concerning investments in Real
Estate:
Shares voted "For" ................................................. 11,142,557 824,343
Shares voted "Against" ............................................. 178,663 20,014
Shares voted "Abstain" ............................................. 753,890 72,412
To amend the fundamental restriction concerning commodities:
Shares voted "For" ................................................. 11,142,557 824,343
Shares voted "Against" ............................................. 178,663 20,014
Shares voted "Abstain" ............................................. 753,890 72,412
To amend the fundamental restriction concerning lending:
Shares voted "For" ................................................. 11,142,557 824,343
Shares voted "Against" ............................................. 178,663 20,014
Shares voted "Abstain" ............................................. 753,890 72,412
To amend the fundamental restriction concerning control or
management:
Shares voted "For" ................................................. 11,142,557 N/A
Shares voted "Against" ............................................. 178,663 N/A
Shares voted "Abstain" ............................................. 753,890 N/A
<CAPTION>
North Carolina South Carolina Virginia
Fund Fund Fund
---------------- ---------------- -------------
<S> <C> <C> <C>
Record Date Shares Outstanding ........................................... 5,772,693 1,319,410 1,685,079
Shares represented at meeting ............................................ 3,115,100 1,062,255 1,290,534
Percentage of record date shares represented at meeting .................. 53.96% 80.51% 76.59%
The votes recorded at the meeting, by proposal, were as follows:
Proposal 1 - The proposed reorganization of the Fund as a series
of the Evergreen Municipal Trust, a Delaware business trust:
Shares voted "For" ................................................. 2,937,410 1,022,047 1,234,439
Shares voted "Against" ............................................. 46,998 1,856 14,235
Shares voted "Abstain" ............................................. 130,693 38,352 41,860
Proposal 2 - Reclassification as non-fundamental investment
objective of this Fund whose investment objective is currently
classified as fundamental:
Shares voted "For" ................................................. 2,928,048 1,019,599 1,235,047
Shares voted "Against" ............................................. 54,036 1,856 13,949
Shares voted "Abstain" ............................................. 133,017 40,800 41,538
Proposal 3 - Changes to fundamental investment restrictions:
To amend the fundamental restriction concerning diversification of
investments:
Shares voted "For" ................................................. 2,931,146 1,015,216 1,231,302
Shares voted "Against" ............................................. 56,847 6,239 13,949
Shares voted "Abstain" ............................................. 127,108 40,800 45,283
To amend the fundamental restriction concerning concentration of a
Fund's assets in a particular industry:
Shares voted "For" ................................................. 2,931,146 1,015,216 1,231,302
Shares voted "Against" ............................................. 56,847 6,239 13,949
Shares voted "Abstain" ............................................. 127,108 40,800 45,283
To amend the fundamental restriction concerning the issuance of
senior securities:
Shares voted "For" ................................................. 2,931,146 1,015,216 1,231,302
Shares voted "Against" ............................................. 56,847 6,239 13,949
Shares voted "Abstain" ............................................. 127,108 40,800 45,283
To amend the fundamental restriction concerning borrowing:
Shares voted "For" ................................................. 2,931,146 1,015,216 1,231,302
Shares voted "Against" ............................................. 56,847 6,239 13,949
Shares voted "Abstain" ............................................. 127,108 40,800 45,283
To amend the fundamental restriction concerning underwriting:
Shares voted "For" ................................................. 2,931,146 1,015,216 1,231,302
Shares voted "Against" ............................................. 56,847 6,239 13,949
Shares voted "Abstain" ............................................. 127,108 40,800 45,283
To amend the fundamental restriction concerning investments in Real
Estate:
Shares voted "For" ................................................. 2,931,146 1,015,216 1,231,302
Shares voted "Against" ............................................. 56,847 6,239 13,949
Shares voted "Abstain" ............................................. 127,108 40,800 45,283
To amend the fundamental restriction concerning commodities:
Shares voted "For" ................................................. 2,931,146 1,015,216 1,231,302
Shares voted "Against" ............................................. 56,847 6,239 13,949
Shares voted "Abstain" ............................................. 127,108 40,800 45,283
To amend the fundamental restriction concerning lending:
Shares voted "For" ................................................. 2,931,146 1,015,216 1,231,302
Shares voted "Against" ............................................. 56,847 6,239 13,949
Shares voted "Abstain" ............................................. 127,108 40,800 45,283
To amend the fundamental restriction concerning control or
management:
Shares voted "For" ................................................. N/A N/A 1,231,302
Shares voted "Against" ............................................. N/A N/A 13,949
Shares voted "Abstain" ............................................. N/A N/A 45,283
</TABLE>
58
<PAGE>
ADDITIONAL INFORMATION (Unaudited) (continued)
<TABLE>
<CAPTION>
Florida High Georgia
Income Fund Fund
-------------- ---------
<S> <C> <C>
To amend the fundamental restriction concerning oil, gas or other
mineral exploration or development program:
Shares voted "For" .............................................. 11,142,557 N/A
Shares voted "Against" .......................................... 178,663 N/A
Shares voted "Abstain" .......................................... 753,890 N/A
To amend the fundamental restriction concerning joint trading:
Shares voted "For" .............................................. 11,142,557 N/A
Shares voted "Against" .......................................... 178,663 N/A
Shares voted "Abstain" .......................................... 753,890 N/A
To amend the fundamental restriction concerning investment in
federally tax exempt securities:
Shares voted "For" .............................................. N/A 824,343
Shares voted "Against" .......................................... N/A 20,014
Shares voted "Abstain" .......................................... N/A 72,412
To amend the fundamental restriction concerning short sales:
Shares voted "For" .............................................. N/A 824,343
Shares voted "Against" .......................................... N/A 20,014
Shares voted "Abstain" .......................................... N/A 72,412
To amend the fundamental restriction concerning other investment
companies:
Shares voted "For" .............................................. N/A 824,343
Shares voted "Against" .......................................... N/A 20,014
Shares voted "Abstain" .......................................... N/A 72,412
To amend the fundamental restriction concerning investment in
municipal securities:
Shares voted "For" .............................................. 11,142,557 824,343
Shares voted "Against" .......................................... 178,663 20,014
Shares voted "Abstain" .......................................... 753,890 72,412
<CAPTION>
North Carolina South Carolina Virginia
Fund Fund Fund
---------------- ---------------- ------------
<S> <C> <C> <C>
To amend the fundamental restriction concerning oil, gas or other
mineral exploration or development program:
Shares voted "For" .............................................. N/A N/A N/A
Shares voted "Against" .......................................... N/A N/A N/A
Shares voted "Abstain" .......................................... N/A N/A N/A
To amend the fundamental restriction concerning joint trading:
Shares voted "For" .............................................. N/A N/A N/A
Shares voted "Against" .......................................... N/A N/A N/A
Shares voted "Abstain" .......................................... N/A N/A N/A
To amend the fundamental restriction concerning investment in
federally tax exempt securities:
Shares voted "For" .............................................. 2,931,146 1,015,216 1,231,302
Shares voted "Against" .......................................... 56,847 6,239 13,949
Shares voted "Abstain" .......................................... 127,108 40,800 45,283
To amend the fundamental restriction concerning short sales:
Shares voted "For" .............................................. 2,931,146 1,015,216 1,231,302
Shares voted "Against" .......................................... 56,847 6,239 13,949
Shares voted "Abstain" .......................................... 127,108 40,800 45,283
To amend the fundamental restriction concerning other investment
companies:
Shares voted "For" .............................................. 2,931,146 1,015,216 N/A
Shares voted "Against" .......................................... 56,847 6,239 N/A
Shares voted "Abstain" .......................................... 127,108 40,800 N/A
To amend the fundamental restriction concerning investment in
municipal securities:
Shares voted "For" .............................................. 2,931,146 1,015,216 1,231,302
Shares voted "Against" .......................................... 56,847 6,239 13,949
Shares voted "Abstain" .......................................... 127,108 40,800 45,283
</TABLE>
On January 6, 1998, a special meeting of shareholders for the Florida Fund was
held to consider and act upon the proposal listed below. On November 10, 1997,
the record date for the meeting, the Fund had 16,454,693 shares outstanding, of
which 10,704,141 shares (65.05% of record date shares) were represented at the
meeting:
The votes recorded at the meeting were as follows:
<TABLE>
<S> <C>
Proposal - To approve the acquisition of all the assets and
certain liabilities of the Fund by a new fund, Evergreen Florida
Municipal Bond Fund, a series of Evergreen Municipal Trust
(a Delaware business trust):
Shares voted "For" ........................................... 10,021,967
Shares voted "Against" ....................................... 271,202
Shares voted "Abstain" ....................................... 410,972
</TABLE>
59
<PAGE>
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<PAGE>
Evergreen Funds
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800-346-3858
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800-343-2898
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800-247-4075
www.evergreenfunds.com
67422 540712 RV00 4/98
- --------------------------------------------------------------------------------
BULK RATE
U.S. POSTAGE
PAID
CHARLOTTE, NC
PERMIT NO. 136
[EVERGREEN LOGO APPEARS HERE]
EVERGREEN FUNDS(SM)
SINCE 1932
201 South College St.
Charlotte, NC 28288
