<PAGE>
Evergreen
Southern State
Municipal
Bond Funds
August 31, 1998
Annual Report
[LOGO OF EVERGREEN FUNDS APPEARS HERE]
<PAGE>
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Table of Contents
- --------------------------------------------------------------------------------
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 Maryland Municipal Bond Fund .................................. 8
Evergreen North Carolina
Municipal Bond Fund ................................................... 10
Evergreen South Carolina
Municipal Bond Fund ................................................... 12
Evergreen Virginia Municipal Bond Fund .................................. 14
Financial Highlights
Evergreen Florida High Income
Municipal Bond Fund ................................................... 16
Evergreen Florida Municipal Bond Fund ................................... 18
Evergreen Georgia Municipal Bond Fund ................................... 20
Evergreen Maryland Municipal Bond Fund .................................. 22
Evergreen North Carolina
Municipal Bond Fund ................................................... 24
Evergreen South Carolina
Municipal Bond Fund ................................................... 26
Evergreen Virginia Municipal Bond Fund .................................. 28
Schedule of Investments
Evergreen Florida High Income
Municipal Bond Fund ................................................... 30
Evergreen Florida Municipal Bond Fund ................................... 35
Evergreen Georgia Municipal Bond Fund ................................... 40
Evergreen Maryland Municipal Bond Fund .................................. 43
Evergreen North Carolina
Municipal Bond Fund ................................................... 44
Evergreen South Carolina
Municipal Bond Fund ................................................... 47
Evergreen Virginia Municipal Bond Fund .................................. 49
Statements of Assets and Liabilities ...................................... 53
Statements of Operations .................................................. 55
Statements of Changes in Net Assets --
Year Ended August 31, 1998 .............................................. 57
Year Ended August 31, 1997 .............................................. 59
Prior Fiscal Years ...................................................... 61
Combined Notes to Financial Statements .................................... 62
Report of Independent Accountants ......................................... 72
Independent Auditors' Reports ............................................. 73
Additional Information .................................................... 74
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Evergreen Funds
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Evergreen Funds is one of the nation's fastest growing investment companies with
approximately $50 billion in assets under management.
With over 70 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 annual 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 . Are not bank guaranteed
------------------------------------------------------------------
Evergreen Distributor, Inc.
Evergreen(SM) is a Service Mark of Evergreen Investment Services, Inc.
<PAGE>
Letter to Shareholders
----------------------
October 1998
[PHOTO OF WILLIAM M. ENNIS APPEARS HERE]
William M. Ennis
Managing Director
Dear Shareholders:
The following report covers the Evergreen Southern State Municipal Bond Funds
for the 12-month period ended August 31, 1998. These funds continue to provide
investors highly competitive returns, especially on an after-tax basis. Nearly
all of the funds in this report have earned rankings within the top quartile of
their respective peer groups, as measured by Lipper Analytical Services, Inc.,
an independent monitor of mutual fund performance.
Market Review
At the writing of this report -- after the fiscal period ended August 31, 1998
- -- the markets have experienced increased volatility, mainly due to financial
and currency crises in the Asian and Russian economies. We encourage investors
to remain focused on their long-term goals, and to keep short-term volatility in
perspective.
Although no one can accurately predict either the timing or the degree, one
thing is certain: the stock market will continue to experience ups and downs. At
this time, we still believe the domestic economy is strong with low inflation,
low unemployment and moderate, yet sustainable growth. We are confident that the
opportunity remains to participate in the continued, dynamic growth of both U.S.
and international companies.
Cost Savings
In an effort to achieve efficiencies and cost savings, we have changed the way
we mail your funds' information. Wherever possible, we are trying to combine
your funds' required mailings so you only receive one per household, based on
the registration last name and exact address./1/ This reduces the mailing costs,
not to mention the amount of paper needed to print, which in turn benefits your
funds by reducing the overall expenses. If you prefer to receive separate copies
of reports and prospectuses for each registered holder in your household, please
notify us by calling the number on your statement and we will adjust our records
accordingly.
Evergreen Service
Evergreen remains committed to providing investment choices which match a range
of investment objectives, as well as clear and accurate information on all the
Evergreen Funds. We recommend you consult with your financial advisor to
evaluate your asset allocation and ensure you are on target with your investment
time horizon. If you have any questions or need additional information, please
contact one of our service representatives at 800.343.2898. We will be happy
to assist you.
Thank you for your continued investment with Evergreen Funds.
Sincerely,
/s/ William M. Ennis
William M. Ennis
Managing Director
Evergreen Funds
/1/ If you purchased your shares through a financial representative, we may not
be able to consolidate your mailings by last name and address, because that
institution controls the mailings.
1
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EVERGREEN
Florida High Income Municipal Bond Fund
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Fund at a Glance as of August 31, 1998
Portfolio
Characteristics
---------------
Total Net Assets $412,638,013
.......................................
Average Credit Quality BB+
.......................................
Average Maturity 22.9 years
.......................................
Average Duration 9.2 years
.......................................
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PERFORMANCE AND RETURNS*
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Class A Class B Class Y
Inception Date 6/17/92 7/10/95 9/20/95
................................................................................
Average Annual Returns
................................................................................
1 year with sales charge 3.77% 3.13% n/a
................................................................................
1 year w/o sales charge 8.94% 8.13% 9.22%
................................................................................
5 years 6.34% -- --
................................................................................
Since Inception 7.60% 6.90% 8.72%
................................................................................
Maximum Sales Charge 4.75% 5.00% n/a
Front End CDSC
................................................................................
30-day SEC Yield 4.87% 4.37% 5.37%
................................................................................
Taxable Equivalent Yield** 8.06% 7.24% 8.89%
................................................................................
12-month distributions per share $0.58 $0.50 $0.61
................................................................................
Lipper Ranking out of 62 Florida Municipal #13 #38 #6
Debt Funds/1/
(for the 1 year period ending 9/30/98)
................................................................................
* Adjusted for maximum applicable sales charge.
** Assumes maximum 39.6% federal tax rate. Results for investors subject to
lower tax rates would not be as advantageous.
/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 September 30, 1998,
the Fund's Class A shares ranked 1 out of 27 Florida Municipal Debt funds
tracked by Lipper Analytical Services, Inc. Past performance is no
guarantee of future results.
Class C shares were introduced in March 1998 and have no average annual returns
at this reporting period.
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LONG TERM GROWTH
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[LINE GRAPH APPEARS HERE]
6/30/92 9,525 10,000 10,000
Aug-93 10,997 11,444 10,328
Aug-94 11,218 11,460 10,628
Aug-95 12,224 12,476 10,906
Aug-96 13,009 13,129 11,218
Aug-97 14,410 14,342 11,469
Aug-98 15,698 15,583 11,655
Comparison of a $10,000 investment in Evergreen Florida High Income Municipal
Bond Fund, Class A, 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 LBMBI is an unmanaged index. The index does not
include transaction costs associated with buying and selling securities nor any
management fees. The CPI is a commonly used measure of inflation and does not
represent an investment return. It is not possible to invest directly in an
index.
5-star by Morningstar/2/
(For overall period ended September 30, 1998)
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CURRENT INVESTMENT STYLE/3/
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[CHART APPEARS HERE]
Morningstar's Style Box is based on a portfolio date as of 9/30/98.
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.
/3/ Source: 1998 Morningstar, Inc.
/2/ Source: Morningstar, Inc. Morningstar's proprietary ratings reflect
historical risk-adjusted performance as of September 30, 1998 for Class A
and B shares. These ratings are subject to change monthly and are
calculated from the Fund's 3-, 5-, and 10-year average annual returns in
excess of 90-day Treasury bill returns with appropriate fee adjustments,
and a risk factor that reflects fund performance below 90-day T-bill
returns. The Fund's Class A shares received 5 stars for the overall, 3-,
and 5-year periods ended September 30, 1998. The Fund's Class B shares
received 5 stars for the overall and 3-year periods ended September 30,
1998. The Fund was rated among 1,581 municipal bond funds for the 3-year
period ended September 30, 1998 and 943 municipal bond funds for the 5-year
period ended September 30, 1998. The top 10% of rated funds in an
investment category receive five stars. Past performance is no guarantee of
future results.
2
<PAGE>
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EVERGREEN
Florida High Income Municipal Bond Fund
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Portfolio
Management
- --------------------
[PHOTO OF RICHARD K.
MARRONE APPEARS HERE]
Richard K. Marrone
Tenure: January 1995
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
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(based on 8/31/98 portfolio assets)
[PIE CHART APPEARS HERE]
Multifamily/Single-family Housing 32.70%
Community Development 16.80%
Residential Care 10.90%
Other 9.20%
Hospital 8.80%
Industrial Development 7.60%
Airlines 4.90%
Education 4.20%
Water & Sewer 2.80%
Special Care 2.10%
The Evergreen Florida High Income Municipal Bond Fund experienced another strong
fiscal year. For the 12 months ended August 31, 1998, the Class Y shares posted
a total return of 9.22%, while Class A and B shares returned 8.94% and 8.13%,
respectively, unadjusted for applicable sales charges. The Fund continues to be
a top performer against its peer group as measured by Lipper Analytical
Services, Inc., an independent mutual fund performance monitoring company/1/. It
is also worth noting that the Evergreen Florida High Income Municipal Bond Fund
Class A and B shares maintain the prestigious five-star ranking from
Morningstar, Inc./2/
Due to strong performance and increased sales within the state of Florida, net
assets more than doubled during the 12 months. These inflows were used to
purchase higher-yielding securities aimed at increasing the Fund's current
yield. Duration also increased through the reinvestment of cash inflows,
contributing to performance and allowing the Fund to outperform the vast
majority of its peers during the year, as evidenced by Lipper ratings./1/
- --------------------------------------------------------------------------------
PORTFOLIO QUALITY
- --------------------------------------------------------------------------------
(based on 8/31/98 portfolio assets)
[PIE CHART APPEARS HERE]
AAA 23.70%
AA 0.60%
A 7.20%
BBB 22.20%
B 0.20%
Not Rated 46.10%
3
<PAGE>
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EVERGREEN
Florida Municipal Bond Fund
- --------------------------------------------------------------------------------
Fund at a Glance as of August 31, 1998
Portfolio
Characteristics
---------------
Total Net Assets $658,207,142
...........................................
Average Credit Quality AA
...........................................
Average Maturity 14.5 years
...........................................
Average Duration 8.7 years
...........................................
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PERFORMANCE AND RETURNS*
- --------------------------------------------------------------------------------
Class A Class B Class Y
Inception Date 5/11/88 6/30/95 6/30/95
................................................................................
Average Annual Returns
................................................................................
1 year with sales charge 3.79% 2.97% n/a
................................................................................
1 year w/o sales charge 8.96% 7.97% 9.05%
................................................................................
5 years 5.25% -- --
................................................................................
10 years 7.64% -- --
................................................................................
Since Inception 7.61% 6.01% 7.90%
................................................................................
Maximum Sales Charge 4.75% 5.00% n/a
Front End CDSC
................................................................................
30-day SEC Yield 4.36% 3.67% 4.66%
................................................................................
Taxable Equivalent Yield** 7.22% 6.08% 7.72%
................................................................................
12-month distributions per share $0.69 $0.60 $0.70
................................................................................
Lipper Ranking out of 62 Florida Municipal #8 #37 #5
Debt Funds/1/
(for the 1 year period ending 9/30/98)
................................................................................
* Adjusted for maximum applicable sales charge.
** Assumes maximum 39.6% federal tax rate. Results for investors subject to
lower tax rates would not be as advantageous.
/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 September 30, 1998,
the Fund's Class A shares ranked 4 out of 27 Florida Municipal Debt funds
tracked by Lipper Analytical Services, Inc. For the 10-year period ending
September 30, 1998, the Fund's Class A shares ranked 2 out of 4 Florida
Municipal Debt funds tracked by Lipper. Past performance is no guarantee of
future results.
Class C shares were introduced in January 1998 and have no average annual
returns at this reporting period.
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LONG TERM GROWTH
- --------------------------------------------------------------------------------
[LINE GRAPH APPEARS HERE]
Class A
Date Shares LBMBI CPI
May-88 9,525 10,000 10,000
Aug-89 10,577 11,344 10,604
Aug-90 11,018 12,073 11,200
Aug-91 12,467 13,497 11,626
Aug-92 13,935 15,004 11,991
Aug-93 15,672 16,835 12,323
Aug-94 15,678 16,858 12,681
Aug-95 17,006 18,353 13,013
Aug-96 17,882 19,314 13,385
Aug-97 19,502 21,099 13,685
Aug-98 21,249 22,924 13,906
Comparison of a $10,000 investment in Evergreen Florida Municipal Bond Fund,
Class A, 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 LBMBI is an unmanaged index. The index does not include
transaction costs associated with buying and selling securities nor any
management fees. The CPI is a commonly used measure of inflation and does not
represent an investment return. It is not possible to invest directly in an
index.
- --------------------------------------------------------------------------------
CURRENT INVESTMENT STYLE/2/
- --------------------------------------------------------------------------------
[CHART APPEARS HERE]
Morningstar's Style Box is based on a portfolio date as of 9/30/98.
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.
/2/ Source: 1998 Morningstar, Inc.
4
<PAGE>
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EVERGREEN
Florida Municipal Bond Fund
- --------------------------------------------------------------------------------
Portfolio
Management
- --------------------
[PHOTO OF RICHARD K.
MARRONE APPEARS HERE]
Richard K. Marrone
Tenure: January 1997
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
(based on 8/31/98 portfolio assets)
[PIE CHART APPEARS HERE]
Other 22.70%
Escrow 12.00%
Miscellaneous Revenue 11.00%
Hospital 10.10%
Housing 9.90%
Public Facilities 8.50%
Local General Obligation 7.40%
Water & Sewer 6.50%
Electric Revenue 6.20%
Transportation 5.70%
The Evergreen Florida Municipal Bond Fund weathered a turbulent fiscal year and
posted solid returns. For the 12 months ended August 31, 1998, the Fund's Class
Y shares returned 9.05%, while Class A and B shares returned 8.96% and 7.97%,
respectively, unadjusted for applicable sales charges. The Fund performed well
against its peers, as measured by Lipper Analytical Services, an independent
mutual fund performance monitoring company./1/
The Fund experienced strong asset growth during the period due to price
appreciation, increased sales, a conversion of common trust fund assets in
November, and a merger in late January. Throughout the period we sought to
increase the Fund's duration while bolstering the portfolio's current yield. A
modest duration extension during the final six months of the period also helped
performance within the declining interest rate environment.
- --------------------------------------------------------------------------------
PORTFOLIO QUALITY
- --------------------------------------------------------------------------------
(based on 8/31/98 portfolio assets)
[PIE CHART APPEARS HERE]
AAA 70.80%
AA 12.80%
A 6.10%
BBB 10.20%
Not Rated 0.10%
5
<PAGE>
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EVERGREEN
Georgia Municipal Bond Fund
- --------------------------------------------------------------------------------
Fund at a Glance as of August 31, 1998
Portfolio
Characteristics
---------------
Total Net Assets $84,120,482
.....................................
Average Credit Quality AA
.....................................
Average Maturity 14.1 years
.....................................
Average Duration 8.3 years
.....................................
- --------------------------------------------------------------------------------
PERFORMANCE AND RETURNS*
- --------------------------------------------------------------------------------
Class A Class B Class Y
Inception Date 7/2/93 7/2/93 2/28/94
................................................................................
Average Annual Returns
................................................................................
1 year with sales charge 4.46% 3.86% n/a
................................................................................
1 year w/o sales charge 9.67% 8.86% 9.94%
................................................................................
5 years 4.55% 4.51% --
................................................................................
Since Inception 4.77% 4.89% 6.65%
................................................................................
Maximum Sales Charge 4.75% 5.00% n/a
Front End CDSC
................................................................................
30-day SEC Yield 4.30% 3.77% 4.77%
................................................................................
Taxable Equivalent Yield** 7.12% 6.24% 7.90%
................................................................................
12-month distributions per share $0.49 $0.41 $0.51
................................................................................
Lipper Ranking out of 34 Georgia Municipal #3 #10 #2
Debt Funds/1/
(for the 1 year period ending 9/30/98)
................................................................................
* Adjusted for maximum applicable sales charge.
** Assumes maximum 39.6% federal tax rate. Results for investors subject to
lower tax rates would not be as advantageous.
/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 September 30, 1998,
the Fund's Class A and B shares ranked 6 and 9, respectively, out of 12
Georgia Municipal Debt funds tracked by Lipper Analytical Services, Inc.
Past performance is no guarantee of future results.
- --------------------------------------------------------------------------------
LONG TERM GROWTH
- --------------------------------------------------------------------------------
[LINE GRAPH APPEARS HERE]
Class A Shares LBMBI LBGMBI CPI
7/2/93 9,525 10,000 10,000 10,000
Aug-94 9,338 10,236 10,178 10,319
Aug-95 10,047 11,143 11,095 10,589
Aug-96 10,672 11,727 11,643 10,891
Aug-97 11,604 12,811 12,685 11,136
Aug-98 12,726 13,919 13,767 11,316
Comparison of a $10,000 investment in Evergreen Georgia Municipal Bond Fund,
Class A, 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 LBMBI and LBGMBI are unmanaged indices. These indices do
not include transaction costs associated with buying and selling securities nor
any management fees. The CPI is a commonly used measure of inflation and does
not represent an investment return. It is not possible to invest directly in an
index.
- --------------------------------------------------------------------------------
CURRENT INVESTMENT STYLE/2/
- --------------------------------------------------------------------------------
[CHART APPEARS HERE]
Morningstar's Style Box is based on a portfolio date as of 9/30/98.
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.
/2/ Source: 1998 Morningstar, Inc.
6
<PAGE>
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EVERGREEN
Georgia Municipal Bond Fund
- --------------------------------------------------------------------------------
Portfolio
Management
- ---------------------
Charles Jeanne
Tenure: November 1997
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
(based on 8/31/98 portfolio assets)
[PIE CHART APPEARS HERE]
Local General Obligation 19.40%
Industrial Development 15.00%
Hospital 14.80%
Water & Sewer 12.50%
Public Facilities 8.50%
Utility 8.30%
Other 7.40%
Airport 5.20%
Housing 4.50%
State General Obligation 4.40%
For the 12 months ended August 31, 1998, Class Y shares had an annual return of
9.94%, and Class A and B shares returned 9.67% and 8.86%, respectively,
unadjusted for any sales charges. The Fund performed well against its peer group
as measured by Lipper Analytical Services, Inc., an independent mutual fund
performance monitoring company./1/
The volatility over the past 12 months made it an extremely challenging
environment for portfolio managers. Our primary strategy, especially during the
final months of the fiscal year, has been to emphasize higher-yielding
securities in order to bolster the Fund's current yield. Consistent with this
strategy, we purchased bonds--some of which were higher-yielding investment
grade--that rewarded our investors with a strong return. These include
industrial development authority bonds and hospital bonds. We were pleased that
our strategy provided investors a degree of protection from the fluctuating
market, and allowed the Fund to outperform the majority of its peers./1/
- --------------------------------------------------------------------------------
PORTFOLIO QUALITY
- --------------------------------------------------------------------------------
(based on 8/31/98 portfolio assets)
[PIE CHART APPEARS HERE]
AAA 56.80%
AA 10.80%
A 8.30%
BBB 19.60%
Not Rated 4.50%
7
<PAGE>
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EVERGREEN
Maryland Municipal Bond Fund
- --------------------------------------------------------------------------------
Fund at a Glance as of August 31, 1998
Portfolio
Characteristics
---------------
Total Net Assets $30,973,273
.....................................
Average Credit Quality AA
.....................................
Average Maturity 13.7 years
.....................................
Average Duration 6.7 years
.....................................
- --------------------------------------------------------------------------------
PERFORMANCE AND RETURNS*
- --------------------------------------------------------------------------------
Class A Class Y
Inception Date 10/16/90 10/16/90
................................................................................
Average Annual Returns
................................................................................
1 year with sales charge 1.88% n/a
................................................................................
1 year w/o sales charge 6.96% 7.22%
................................................................................
5 years 3.28% 4.55%
................................................................................
Since Inception 5.37% 6.21%
................................................................................
Maximum Sales Charge 4.75% n/a
Front End
................................................................................
30-day SEC Yield 3.90% 4.35%
................................................................................
Taxable Equivalent** 6.46% 7.20%
................................................................................
12-month distributions per share $0.39 $0.41
................................................................................
* Adjusted for maximum applicable sales charge.
** Assumes maximum 39.6% federal tax rate. Results for investors subject to
lower tax rates would not be as advantageous.
Class B shares were introduced in March 1998 and have no average annual returns
at this reporting period.
- --------------------------------------------------------------------------------
LONG TERM GROWTH
- --------------------------------------------------------------------------------
[LINE GRAPH APPEARS HERE]
Oct-90 9,525 10,000 10,000
Aug-91 10,031 10,952 10,232
Aug-92 10,912 12,150 10,554
Aug-93 12,220 13,715 10,846
Aug-94 12,127 15,142 11,161
Aug-95 13,001 15,814 11,453
Aug-96 13,327 17,277 11,781
Aug-97 14,096 18,759 12,045
Aug-98 15,077 19,314 12,240
Comparison of a $10,000 investment in Evergreen Maryland Municipal Bond Fund,
Class A, versus a similar investment in the Lehman Brothers Municipal 10-year
Bond Index (LBM10YBI) 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 LBM10YBI is an unmanaged index. The index does not
include transaction costs associated with buying and selling securities nor any
management fees. The CPI is a commonly used measure of inflation and does not
represent an investment return. It is not possible to invest directly in an
index.
- --------------------------------------------------------------------------------
CURRENT INVESTMENT STYLE/2/
- --------------------------------------------------------------------------------
[CHART APPEARS HERE]
Morningstar's Style Box is based on a portfolio date as of 9/30/98.
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.
/2/ Source: 1998 Morningstar, Inc.
8
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Maryland Municipal Bond Fund
- --------------------------------------------------------------------------------
Portfolio
Management
- ------------------
Charles Jeanne
Tenure: March 1998
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
(based on 8/31/98 portfolio assets)
[PIE CHART APPEARS HERE]
General Obligation 17.70%
Water & Sewer 13.80%
Other 12.70%
Lease 11.10%
Education 9.00%
Hospital 8.50%
Transportation 7.90%
Housing 7.30%
Public Facilities 6.90%
Industrial Development 5.10%
Despite a turbulent 12 months for municipal bond investors, the Evergreen
Maryland Municipal Bond Fund posted solid returns. For the fiscal period ended
August 31, 1998, the Fund's Class Y shares posted an annual return of 7.22%,
while Class A shares returned 6.96%, unadjusted for applicable sales charges.
After taking over management responsibilities of the Fund in early 1998, our
main focus was to bolster the portfolio's current yield. In keeping with this
strategy, we sold shorter, lower-yielding securities and replaced them with
higher-yielding issues. Purchases typically included economic development
authority, healthcare and housing bonds. We also emphasized securities with
non-callable features, a move that benefited the portfolio, especially during
the final part of the fiscal year as interest rates plummeted.
- --------------------------------------------------------------------------------
PORTFOLIO QUALITY
- --------------------------------------------------------------------------------
(based on 8/31/98 portfolio assets)
[PIE CHART APPEARS HERE]
AAA 36.70%
AA 36.50%
A 15.00%
BBB 9.90%
Not Rated 1.90%
9
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
North Carolina Municipal Bond Fund
- --------------------------------------------------------------------------------
Fund at a Glance as of August 31, 1998
Portfolio
Characteristics
---------------
Total Net Assets $321,319,098
.....................................
Average Credit Quality A+
.....................................
Average Maturity 15.0 years
.....................................
Average Duration 8.8 years
.....................................
- --------------------------------------------------------------------------------
PERFORMANCE AND RETURNS*
- --------------------------------------------------------------------------------
Class A Class B Class Y
Inception Date 1/11/93 1/11/93 2/28/94
................................................................................
Average Annual Returns
................................................................................
1 year with sales charge 4.45% 3.85% n/a
................................................................................
1 year w/o sales charge 9.66% 8.85% 9.93%
................................................................................
5 years 4.73% 4.69% --
................................................................................
Since Inception 5.64% 5.71% 6.48%
................................................................................
Maximum Sales Charge 4.75% 5.00% n/a
Front End CDSC
................................................................................
30-day SEC Yield 4.28% 3.77% 4.77%
................................................................................
Taxable Equivalent Yield** 7.09% 6.24% 7.90%
................................................................................
12-month distributions per share $0.51 $0.43 $0.54
................................................................................
Lipper Ranking out of 40 North Carolina #4 #13 #2
Municipal Debt Funds/1/
(for the 1 year period ending 9/30/98)
................................................................................
* Adjusted for maximum applicable sales charge.
** Assumes maximum 39.6% federal tax rate. Results for investors subject to
lower tax rates would not be as advantageous.
/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 September 30, 1998,
the Fund's Class A shares ranked 4 and Class B shares ranked 15 out of 19
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]
1/3/93 9,525 10,000 10,000 10,000
Aug-93 10,250 10,822 10,893 10,154
Aug-94 9,878 10,837 10,920 10,449
Aug-95 10,769 11,796 11,896 10,722
Aug-96 11,330 12,416 12,475 11,029
Aug-97 12,362 13,564 13,528 11,276
Aug-98 13,556 14,737 14,628 11,459
Comparison of a $10,000 investment in Evergreen North Carolina Municipal Bond
Fund, Class A, 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 LBMBI and the LBSGOBI are unmanaged indices. These
indices do not include transaction costs associated with buying and selling
securities nor any management fees. The CPI is a commonly used measure of
inflation and does not represent an investment return. It is not possible to
invest directly in an index.
- --------------------------------------------------------------------------------
CURRENT INVESTMENT STYLE/2/
- --------------------------------------------------------------------------------
[CHART APPEARS HERE]
Morningstar's Style Box is based on a portfolio date as of 9/30/98.
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.
/2/ Source: 1998 Morningstar, Inc.
10
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
North Carolina Municipal Bond Fund
- --------------------------------------------------------------------------------
Portfolio
Management
- --------------------
Richard K. Marrone
Tenure: January 1993
Despite a volatile 12-month period stemming from problems in overseas markets,
the Evergreen North Carolina Municipal Bond Fund had solid performance. For the
fiscal period ended August 31, 1998, the Fund's Class Y shares returned 9.93%,
while Class A and B shares returned 9.66% and 8.85%, respectively, unadjusted
for applicable sales charges. The Fund continued to perform extremely well
against its peer group as measured by Lipper Analytical Services, Inc. an
independent mutual fund performance monitoring company./1/
We sought to improve performance and provide a cushion from market volatility by
bolstering the portfolio's current yield. The decision to bolster the
portfolio's yield through the reinvestment of cash inflows effectively
contributed to performance and allowed the Fund to outperform the vast majority
of peer funds during the year./1/
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
(based on 8/31/98 portfolio assets)
[PIE CHART APPEARS HERE]
Local General Obligation 17.00%
Hospital 16.20%
Other 15.60%
Electric 9.50%
State General Obligation 9.10%
Education 8.90%
Lease 6.40%
Escrow 6.30%
Industrial Development 5.80%
Airlines 5.20%
- --------------------------------------------------------------------------------
PORTFOLIO QUALITY
- --------------------------------------------------------------------------------
(based on 8/31/98 portfolio assets)
[PIE CHART APPEARS HERE]
AAA 44.20%
AA 21.30%
A 16.10%
Not Rated 10.20%
BBB 8.20%
11
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
South Carolina Municipal Bond Fund
- --------------------------------------------------------------------------------
Fund at a Glance as of August 31, 1998
Portfolio
Characteristics
---------------
Total Net Assets $72,588,618
....................................
Average Credit Quality AA
....................................
Average Maturity 14.4 years
....................................
Average Duration 8.6 years
....................................
- --------------------------------------------------------------------------------
PERFORMANCE AND RETURNS*
- --------------------------------------------------------------------------------
Class A Class B Class Y
Inception Date 1/3/94 1/3/94 2/28/94
................................................................................
Average Annual Returns
................................................................................
1 year with sales charge 3.44% 2.79% n/a
................................................................................
1 year w/o sales charge 8.60% 7.79% 8.87%
................................................................................
3 years 6.30% 6.36% 8.31%
................................................................................
Since Inception 5.02% 5.02% 7.12%
................................................................................
Maximum Sales Charge 4.75% 5.00% n/a
Front End CDSC
................................................................................
30-day SEC Yield 4.01% 3.47% 4.46%
................................................................................
Taxable Equivalent Yield** 6.64% 5.75% 7.38%
................................................................................
12-month distributions per share $0.49 $0.41 $0.52
................................................................................
Lipper Ranking out of 15 South Carolina #2 #7 #1
Municipal Debt Funds/1/
(for the 1 year period ending 9/30/98)
................................................................................
* Adjusted for maximum applicable sales charge.
** Assumes maximum 39.6% federal tax rate. Results for investors subject to
lower tax rates would not be as advantageous.
/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]
1/3/94 9,525 10,000 10,000 10,000
Aug-94 8,984 9,764 9,655 10,220
Aug-95 9,962 10,630 10,569 10,487
Aug-96 10,583 11,186 11,082 10,787
Aug-97 11,570 12,220 12,076 11,029
Aug-98 12,565 13,277 13,122 11,207
Comparison of a $10,000 investment in Evergreen South Carolina Municipal Bond
Fund, Class A, 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 LBMBI and LBSCMBI are unmanaged indices. These
indices do not include transaction costs associated with buying and selling
securities nor any management fees. The CPI is a commonly used measure of
inflation and does not represent an investment return. It is not possible to
invest directly in an index.
- --------------------------------------------------------------------------------
CURRENT INVESTMENT STYLE/2/
- --------------------------------------------------------------------------------
[CHART APPEARS HERE]
Morningstar's Style Box is based on a portfolio date as of 9/30/98.
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.
/2/ Source: 1998 Morningstar, Inc.
12
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
South Carolina Municipal Bond Fund
- --------------------------------------------------------------------------------
Portfolio
Management
- --------------------
Charles Jeanne
Tenure: January 1997
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
(based on 8/31/98 portfolio assets)
[PIE CHART APPEARS HERE]
Electric 20.40%
Hospital 19.80%
Local General Obligation 19.00%
Industrial Development 11.40%
Resource Recovery 8.60%
Housing 7.00%
Water & Sewer 4.80%
Public Facilities 3.30%
Sales Tax 2.90%
Other 2.80%
The Evergreen South Carolina Municipal Bond Fund endured a volatile fiscal year,
and managed to post strong relative returns during the period. For the 12-month
period ended August 31, 1998, the Fund's Class Y shares had an annual return of
8.87%, while Class A and B shares returned 8.60% and 7.79%, respectively,
unadjusted for applicable sales charges. The Fund continued to be a top
performer against its peer group as measured by Lipper Analytical Services, an
independent mutual fund performance monitoring company./1/
In managing the portfolio, we sought to temper market volatility by emphasizing
higher-yielding securities in order to bolster the Fund's current yield.
Consistent with this strategy, during the final half of the fiscal year we
purchased several bonds including industrial development authority, housing and
healthcare bonds. Another strategy, which paid off due to declining interest
rates, was the decision to extend duration, from 8.1 years to 8.6 years during
the final six months. These two strategies allowed us to outperform the majority
of peer funds and we believe we have positioned the Fund for solid performance
going forward./1/
- --------------------------------------------------------------------------------
PORTFOLIO QUALITY
- --------------------------------------------------------------------------------
(based on 8/31/98 portfolio assets)
[PIE CHART APPEARS HERE]
AAA 58.20%
AA 19.50%
A 10.20%
BBB 8.30%
Not Rated 3.80%
13
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Virginia Municipal Bond Fund
- --------------------------------------------------------------------------------
Fund at a Glance as of August 31, 1998
Portfolio
Characteristics
---------------
Total Net Assets $169,163,162
....................................
Average Credit Quality AA
....................................
Average Maturity 14.2 years
....................................
Average Duration 8.3 years
....................................
- --------------------------------------------------------------------------------
PERFORMANCE AND RETURNS*
- --------------------------------------------------------------------------------
Class A Class B Class Y
Inception Date 7/2/93 7/2/93 2/28/94
................................................................................
Average Annual Returns
................................................................................
1 year with sales charge 3.94% 3.31% n/a
................................................................................
1 year w/o sales charge 9.12% 8.31% 9.39%
................................................................................
5 years 4.72% 4.68% --
................................................................................
Since Inception 4.88% 4.99% 6.79%
................................................................................
Maximum Sales Charge 4.75% 5.00% n/a
Front End CDSC
................................................................................
30-day SEC Yield 4.30% 3.76% 4.76%
................................................................................
Taxable Equivalent Yield** 7.12% 6.23% 7.88%
................................................................................
12-month distributions per share $0.49 $0.41 $0.51
................................................................................
Lipper Ranking out of 34 Virginia Municipal #3 #14 #1
Debt Funds/1/
(for the 1 year period ending 9/30/98)
................................................................................
* Adjusted for maximum applicable sales charge.
** Assumes maximum 39.6% federal tax rate. Results for investors subject to
lower tax rates would not be as advantageous.
/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 September 30, 1998,
the Fund's Class A and B shares ranked 7 and 11, respectively, out of 16
Virginia Municipal Debt funds tracked by Lipper Analytical Services, Inc.
Past performance is no guarantee of future results.
- --------------------------------------------------------------------------------
LONG TERM GROWTH
- --------------------------------------------------------------------------------
[LINE GRAPH APPEARS HERE]
Class A Shares LBMBI LBVMBI CPI
7/2/93 9,525 10,000 10,000 10,000
Aug-94 9,355 10,236 10,239 10,319
Aug-95 10,228 11,143 11,149 10,589
Aug-96 10,752 11,727 11,664 10,891
Aug-97 11,725 12,811 12,693 11,136
Aug-98 12,794 13,919 13,714 11,316
Comparison of a $10,000 investment in Evergreen Virginia Municipal Bond Fund,
Class A, 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 LBMBI and LBVMBI are unmanaged indices. These
indices do not include transaction costs associated with buying and selling
securities nor any management fees. The CPI is a commonly used measure of
inflation and does not represent an investment return. It is not possible to
invest directly in an index.
- --------------------------------------------------------------------------------
CURRENT INVESTMENT STYLE/2/
- --------------------------------------------------------------------------------
[CHART APPEARS HERE]
Morningstar's Style Box is based on a portfolio date as of 9/30/98.
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.
/2/ Source: 1998 Morningstar, Inc.
14
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Virginia Municipal Bond Fund
- --------------------------------------------------------------------------------
Portfolio
Management
- -----------------
Charles Jeanne
Tenure: July 1993
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
(based on 8/31/98 portfolio assets)
[PIE CHART APPEARS HERE]
Local General Obligation 22.00%
Public Facilities 13.90%
Housing 12.70%
Hospital 11.00%
Transportation 9.90%
Water & Sewer 7.60%
Other 7.10%
Education 6.90%
Industrial Development 4.80%
Lease 4.10%
The Evergreen Virginia Municipal Bond Fund weathered a volatile 12-month period.
For the 12-month period ended August 31, 1998, the Fund's Class Y shares had an
annual return of 9.39%, while Class A and B shares returned 9.12% and 8.31%,
respectively, unadjusted for applicable sales charges. The Fund continued to
perform well against its peer group as measured by Lipper Analytical Services,
an independent mutual fund performance monitoring company./1/
Our strategy during the period has been to bolster the Fund's high coupon
structure. Throughout the year we sold some general obligation bonds and
purchased higher yielding issues such as industrial development authority,
healthcare and housing bonds. In addition, duration was slightly extended, from
8.2 years to 8.3 years, during the final six months of the period to take
advantage of the declining interest rate environment. This strategy also
contributed to the total return and allowed us to outperform over 85% of peer
funds./1/
- --------------------------------------------------------------------------------
PORTFOLIO QUALITY
- --------------------------------------------------------------------------------
(based on 8/31/98 portfolio assets)
[PIE CHART APPEARS HERE]
AAA 33.00%
AA 46.00%
A 6.70%
BBB 8.20%
Not Rated 6.10%
15
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Florida High Income Municipal Bond Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout each year)
<TABLE>
<CAPTION>
Year Ended
Year Ended August 31, Four Months April 30,
--------------------------- Ended ----------------
1998 1997 1996 August 31, 1995* 1995 1994
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CLASS A SHARES
- --------------------------------------------------------------------------------------------
NET ASSET VALUE,
BEGINNING OF YEAR $ 10.89 $ 10.42 $ 10.40 $ 10.16 $ 10.08 $ 10.36
-------- -------- ------- ------- ------- -------
............................................................................................
INCOME FROM INVESTMENT
OPERATIONS
............................................................................................
Net investment income 0.58 0.62 0.63 0.21 0.65 0.68
............................................................................................
Net gains or losses on
securities (both
realized and
unrealized) 0.37 0.47 0.02 0.24 0.08 (0.26)
-------- -------- ------- ------- ------- -------
Total from investment
operations 0.95 1.09 0.65 0.45 0.73 0.42
-------- -------- ------- ------- ------- -------
............................................................................................
LESS DISTRIBUTIONS
............................................................................................
Distributions (from
capital gains) 0 0 0 0 0 (0.02)
-------- -------- ------- ------- ------- -------
Dividends (from net
investment income) (0.58) (0.62) (0.63) (0.21) (0.65) (0.68)
............................................................................................
Total distributions (0.58) (0.62) (0.63) (0.21) (0.65) (0.70)
-------- -------- ------- ------- ------- -------
............................................................................................
NET ASSET VALUE, END OF
YEAR $ 11.26 $ 10.89 $ 10.42 $ 10.40 $ 10.16 $ 10.08
-------- -------- ------- ------- ------- -------
............................................................................................
TOTAL RETURN (B) 8.94% 10.77% 6.42% 4.43% 7.56% 3.94%
............................................................................................
RATIOS/SUPPLEMENTAL DATA
............................................................................................
NET ASSETS, END OF YEAR
(THOUSANDS) $279,079 $119,942 $76,267 $59,551 $65,043 $72,683
............................................................................................
RATIOS TO AVERAGE NET
ASSETS
Expenses 0.89% 0.88% 0.85% 1.07%(a) 0.60% 0.14%
............................................................................................
Expenses, excluding
indirectly paid
expenses 0.89% 0.87% -- -- -- --
............................................................................................
Expenses, excluding
waivers and
reimbursements 1.06% 1.12% 1.15% 1.42%(a) 1.26% 1.12%
............................................................................................
Net investment income 5.15% 5.86% 6.02% 5.92%(a) 6.52% 6.16%
............................................................................................
PORTFOLIO TURNOVER RATE 70% 32% 42% 14% 28% 31%
............................................................................................
</TABLE>
<TABLE>
<CAPTION>
July 10, 1995
(Commencement of
Year Ended August 31, Class Operations)
-------------------------- through
1998 1997 1996 August 31, 1995
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS B SHARES
- ----------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF
YEAR $ 10.89 $ 10.42 $ 10.40 $10.41
-------- ------- ------- ------
..................................................................................
INCOME FROM INVESTMENT
OPERATIONS
..................................................................................
Net investment income 0.50 0.54 0.55 0.08
..................................................................................
Net gains or losses on
securities (both realized and
unrealized) 0.37 0.47 0.02 (0.01)
-------- ------- ------- ------
Total from investment
operations 0.87 1.01 0.57 0.07
-------- ------- ------- ------
..................................................................................
LESS DIVIDENDS (FROM NET
INVESTMENT INCOME) (0.50) (0.54) (0.55) (0.08)
-------- ------- ------- ------
..................................................................................
NET ASSET VALUE, END OF YEAR $ 11.26 $ 10.89 $ 10.42 $10.40
-------- ------- ------- ------
..................................................................................
TOTAL RETURN (B) 8.13% 9.95% 5.63% 0.64%
..................................................................................
RATIOS/SUPPLEMENTAL DATA
..................................................................................
NET ASSETS, END OF YEAR
(THOUSANDS) $103,309 $63,475 $19,219 $3,137
..................................................................................
RATIOS TO AVERAGE NET ASSETS
Expenses 1.64% 1.63% 1.59% 1.09%(a)
..................................................................................
Expenses, excluding indirectly
paid expenses 1.64% 1.63% -- --
..................................................................................
Expenses, excluding waivers and
reimbursements 1.81% 1.87% 1.89% --
..................................................................................
Net investment income 4.46% 5.09% 5.27% 3.40%(a)
..................................................................................
PORTFOLIO TURNOVER RATE 70% 32% 42% 14%
..................................................................................
</TABLE>
* The Fund changed its fiscal year end from April 30 to August 31.
(a) Annualized.
(b) Excluding applicable sales charges.
See Combined Notes to Financial Statements.
16
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Florida High Income Municipal Bond Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout each year)
<TABLE>
<CAPTION>
March 6, 1998
(Commencement of
Class Operations)
through
August 31, 1998
- --------------------------------------------------------------------------------
<S> <C>
CLASS C SHARES
- --------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $11.11
------
................................................................................
INCOME FROM INVESTMENT OPERATIONS
................................................................................
Net investment income 0.24
................................................................................
Net gains or losses on securities (both realized and
unrealized) 0.15
------
................................................................................
Total from investment operations 0.39
------
................................................................................
LESS DIVIDENDS (FROM NET INVESTMENT INCOME) (0.24)
------
................................................................................
NET ASSET VALUE, END OF PERIOD $11.26
------
................................................................................
TOTAL RETURN (B) 3.50%
................................................................................
RATIOS/SUPPLEMENTAL DATA
................................................................................
NET ASSETS, END OF PERIOD (THOUSANDS) $1,098
................................................................................
RATIOS TO AVERAGE NET ASSETS
Expenses 1.65%(a)
................................................................................
Expenses, excluding indirectly paid expenses 1.65%(a)
................................................................................
Expenses, excluding waivers and reimbursements 1.81%(a)
................................................................................
Net investment income 4.21%(a)
................................................................................
PORTFOLIO TURNOVER RATE 70%
................................................................................
</TABLE>
<TABLE>
<CAPTION>
September 20, 1995
(Commencement of
Year Ended August 31, Class Operations)
----------------------- through
1998 1997 August 31, 1996
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
CLASS Y SHARES
- --------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF
YEAR $ 10.89 $ 10.42 $10.48
----------- ---------- ------
.................................................................................
INCOME FROM INVESTMENT OPERATIONS
.................................................................................
Net investment income 0.61 0.65 0.63
.................................................................................
Net gains or losses on securities
(both realized and unrealized) 0.37 0.47 (0.06)
----------- ---------- ------
.................................................................................
Total from investment operations 0.98 1.12 0.57
----------- ---------- ------
.................................................................................
LESS DIVIDENDS (FROM NET
INVESTMENT INCOME) (0.61) (0.65) (0.63)
----------- ---------- ------
.................................................................................
NET ASSET VALUE, END OF YEAR $ 11.26 $ 10.89 $10.42
----------- ---------- ------
.................................................................................
TOTAL RETURN 9.22% 11.04% 5.54%
.................................................................................
RATIOS/SUPPLEMENTAL DATA
.................................................................................
NET ASSETS, END OF YEAR
(THOUSANDS) $ 29,152 $ 6,326 $1,970
.................................................................................
RATIOS TO AVERAGE NET ASSETS
Expenses 0.65% 0.63% 0.59%(a)
.................................................................................
Expenses, excluding indirectly
paid expenses 0.65% 0.63% --
.................................................................................
Expenses, excluding waivers and
reimbursements 0.82% 0.87% 0.89%(a)
.................................................................................
Net investment income 5.47% 6.08% 6.27%(a)
.................................................................................
PORTFOLIO TURNOVER RATE 70% 32% 42%
.................................................................................
</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 year)
<TABLE>
<CAPTION>
Year Ended Year Ended
August 31, Four Months April 30,
---------------------------- Ended ------------------
1998 1997 1996 August 31, 1995 (c)* 1995 (c) 1994 (c)
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CLASS A SHARES
- ---------------------------------------------------------------------------------------------------
NET ASSET VALUE,
BEGINNING OF YEAR $ 9.98 $ 9.70 $ 9.74 $ 9.61 $ 9.52 $ 9.95
-------- -------- -------- -------- -------- --------
...................................................................................................
INCOME FROM INVESTMENT
OPERATIONS
...................................................................................................
Net investment income 0.48 0.51 0.54 0.19 0.54 0.56
...................................................................................................
Net gains or losses on
securities (both
realized and
unrealized) 0.38 0.35 (0.04) 0.22 0.11 (0.36)
-------- -------- -------- -------- -------- --------
Total from investment
operations 0.86 0.86 0.50 0.41 0.65 0.20
-------- -------- -------- -------- -------- --------
...................................................................................................
LESS DISTRIBUTIONS
...................................................................................................
Dividends (from net
investment income) (0.48) (0.52) (0.54) (0.22) (0.54) (0.56)
...................................................................................................
Distributions (from
capital gains) (0.21) (0.06) 0 (0.06) (0.02) (0.07)
-------- -------- -------- -------- -------- --------
Total distributions (0.69) (0.58) (0.54) (0.28) (0.56) (0.63)
-------- -------- -------- -------- -------- --------
...................................................................................................
NET ASSET VALUE, END OF
YEAR $ 10.15 $ 9.98 $ 9.70 $ 9.74 $ 9.61 $ 9.52
-------- -------- -------- -------- -------- --------
...................................................................................................
TOTAL RETURN (B) 8.96% 9.06% 5.15% 4.20% 7.05% 1.87%
...................................................................................................
RATIOS/SUPPLEMENTAL DATA
...................................................................................................
NET ASSETS, END OF YEAR
(THOUSANDS) $164,255 $105,673 $115,723 $136,449 $168,542 $199,612
...................................................................................................
RATIOS TO AVERAGE NET
ASSETS
Expenses 0.46% 0.74% 0.63% 0.82%(a) 0.61% 0.56%
...................................................................................................
Expenses, excluding
indirectly paid
expenses 0.46% 0.74% -- -- -- --
...................................................................................................
Expenses, excluding
waivers and
reimbursements 0.97% 0.91% 0.95% 1.05%(a) -- --
...................................................................................................
Net investment income 4.79% 5.22% 5.46% 4.89%(a) 5.73% 5.37%
...................................................................................................
PORTFOLIO TURNOVER RATE 64% 41% 30% 29% 53% 32%
...................................................................................................
</TABLE>
<TABLE>
<CAPTION>
June 30, 1995
(Commencement of
Year Ended August 31, Class Operations)
------------------------- through
1998 1997 1996 August 31, 1995
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS B SHARES
- ----------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF
YEAR $ 9.98 $ 9.70 $ 9.74 $ 9.67
------- ------- ------- -------
..................................................................................
INCOME FROM INVESTMENT
OPERATIONS
..................................................................................
Net investment income 0.38 0.42 0.44 0.07
..................................................................................
Net gains or losses on
securities (both realized and
unrealized) 0.39 0.35 (0.04) 0.10
------- ------- ------- -------
Total from investment operations 0.77 0.77 0.40 0.17
------- ------- ------- -------
..................................................................................
LESS DISTRIBUTIONS
..................................................................................
Dividends (from net investment
income) (0.39) (0.43) (0.44) (0.07)
Distributions (from capital
gains) (0.21) (0.06) 0 (0.03)
------- ------- ------- -------
..................................................................................
Total distributions (0.60) (0.49) (0.44) (0.10)
------- ------- ------- -------
..................................................................................
NET ASSET VALUE, END OF YEAR $ 10.15 $ 9.98 $ 9.70 $ 9.74
------- ------- ------- -------
..................................................................................
TOTAL RETURN (B) 7.97% 8.06% 4.17% 1.49%
..................................................................................
RATIOS/SUPPLEMENTAL DATA
..................................................................................
NET ASSETS, END OF YEAR
(THOUSANDS) $66,142 $31,281 $28,849 $27,351
..................................................................................
RATIOS TO AVERAGE NET ASSETS
Expenses 1.36% 1.66% 1.56% 1.44%(a)
..................................................................................
Expenses, excluding indirectly
paid expenses 1.36% 1.66% -- --
..................................................................................
Expenses, excluding waivers and
reimbursements 1.70% 1.84% 1.76% 1.64%(a)
..................................................................................
Net investment income 3.88% 4.29% 4.52% 3.22%(a)
..................................................................................
PORTFOLIO TURNOVER RATE 64% 41% 30% 29%
..................................................................................
</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.
18
<PAGE>
- -------------------------------------------------------------------------------
EVERGREEN
Florida Municipal Bond Fund
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout each year)
<TABLE>
<CAPTION>
January 26, 1998
(Commencement of
Class Operations)
through
August 31, 1998
- ----------------------------------------------------------------------------
<S> <C>
CLASS C SHARES
- ----------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $10.06
------
............................................................................
INCOME FROM INVESTMENT OPERATIONS
............................................................................
Net investment income 0.23
............................................................................
Net gains or losses on securities (both realized and
unrealized) 0.09
------
............................................................................
Total from investment operations 0.32
------
............................................................................
LESS DIVIDENDS (FROM NET INVESTMENT INCOME) (0.23)
------
............................................................................
NET ASSET VALUE, END OF PERIOD $10.15
------
............................................................................
TOTAL RETURN (B) 3.25%
............................................................................
RATIOS/SUPPLEMENTAL DATA
............................................................................
NET ASSETS, END OF PERIOD (THOUSANDS) $8,963
............................................................................
RATIOS TO AVERAGE NET ASSETS
Expenses 1.29%(a)
............................................................................
Expenses, excluding indirectly paid expenses 1.29%(a)
............................................................................
Expenses, excluding waivers and reimbursements 1.62%(a)
............................................................................
Net investment income 3.86%(a)
............................................................................
PORTFOLIO TURNOVER RATE 64%
............................................................................
</TABLE>
<TABLE>
<CAPTION>
June 30, 1995
(Commencement of
Year Ended August 31, Class Operations)
-------------------------- through
1998 1997 1996 August 31, 1995
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS Y SHARES
- -----------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF
YEAR $ 9.98 $ 9.70 $ 9.74 $ 9.67
-------- ------- ------- ------
...................................................................................
INCOME FROM INVESTMENT
OPERATIONS
...................................................................................
Net investment income 0.48 0.52 0.53 0.09
...................................................................................
Net gains or losses on
securities (both realized and
unrealized) 0.39 0.35 (0.03) 0.10
-------- ------- ------- ------
Total from investment
operations 0.87 0.87 0.50 0.19
-------- ------- ------- ------
...................................................................................
LESS DISTRIBUTIONS
...................................................................................
Dividends (from net investment
income) (0.49) (0.53) (0.54) (0.09)
...................................................................................
Distributions (from capital
gains) (0.21) (0.06) 0 (0.03)
-------- ------- ------- ------
Total distributions (0.70) (0.59) (0.54) (0.12)
-------- ------- ------- ------
...................................................................................
NET ASSET VALUE, END OF YEAR $ 10.15 $ 9.98 $ 9.70 $ 9.74
-------- ------- ------- ------
...................................................................................
TOTAL RETURN 9.05% 9.14% 5.22% 1.67%
...................................................................................
RATIOS/SUPPLEMENTAL DATA
...................................................................................
NET ASSETS, END OF YEAR
(THOUSANDS) $418,847 $24,850 $12,259 $3,602
...................................................................................
RATIOS TO AVERAGE NET ASSETS
Expenses 0.33% 0.67% 0.57% 0.59%(a)
...................................................................................
Expenses, excluding indirectly
paid expenses 0.33% 0.67% -- --
...................................................................................
Expenses, excluding waivers and
reimbursements 0.66% 0.84% 0.77% 0.79%(a)
...................................................................................
Net investment income 4.85% 5.27% 5.55% 4.93%(a)
...................................................................................
PORTFOLIO TURNOVER RATE 64% 41% 30% 29%
...................................................................................
</TABLE>
(a) Annualized.
(b) Excluding applicable sales charges.
See Combined Notes to Financial Statements.
19
<PAGE>
- -------------------------------------------------------------------------------
EVERGREEN
Georgia Municipal Bond Fund
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout each year)
<TABLE>
<CAPTION>
July 2, 1993
(Commencement of
Year Ended August 31, Eight Months Class Operations)
------------------------- Ended Year Ended through
1998 1997 1996 August 31, 1995* December 31, 1994 December 31, 1993
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CLASS A SHARES
- ------------------------------------------------------------------------------------------------------------
NET ASSET VALUE,
BEGINNING OF YEAR $ 9.90 $ 9.57 $ 9.47 $ 8.74 $10.19 $10.00
------- ------- ------- ------ ------ ------
............................................................................................................
INCOME FROM INVESTMENT
OPERATIONS
...........................................................................................................
Net investment income 0.49 0.49 0.48 0.33 0.48 0.20
...........................................................................................................
Net gains or losses on
securities (both
realized and
unrealized) 0.45 0.33 0.10 0.73 (1.45) 0.19
------- ------- ------- ------ ------ ------
Total from investment
operations 0.94 0.82 0.58 1.06 (0.97) 0.39
------- ------- ------- ------ ------ ------
...........................................................................................................
LESS DIVIDENDS (FROM NET
INVESTMENT INCOME) (0.49) (0.49) (0.48) (0.33) (0.48) (0.20)
------- ------- ------- ------ ------ ------
...........................................................................................................
NET ASSET VALUE, END OF
YEAR $ 10.35 $ 9.90 $ 9.57 $ 9.47 $ 8.74 $10.19
------- ------- ------- ------ ------ ------
...........................................................................................................
TOTAL RETURN (B) 9.67% 8.73% 6.22% 12.28% (9.64%) 3.96%
...........................................................................................................
RATIOS/SUPPLEMENTAL DATA
...........................................................................................................
NET ASSETS, END OF YEAR
(THOUSANDS) $ 3,932 $ 2,201 $ 1,954 $2,098 $1,387 $ 817
...........................................................................................................
RATIOS TO AVERAGE NET
ASSETS
Expenses 0.57% 0.94% 0.88% 0.71%(a) 0.53% 0.25%(a)
...........................................................................................................
Expenses, excluding
indirectly paid
expenses 0.57% 0.94% -- -- -- --
...........................................................................................................
Expenses, excluding
waivers and
reimbursements 1.03% 1.83% 2.82% 2.83%(a) 3.61% 6.82%(a)
...........................................................................................................
Net investment income 4.81% 5.00% 4.96% 5.39%(a) 5.26% 4.71%(a)
...........................................................................................................
PORTFOLIO TURNOVER RATE 50% 32% 21% 91% 147% 15%
...........................................................................................................
</TABLE>
<TABLE>
<CAPTION>
July 2, 1993
(Commencement of
Year Ended August 31, Eight Months Class Operations
------------------------ Ended Year Ended through
1998 1997 1996 August 31, 1995* December 31, 1994 December 31, 1993
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------
CLASS B SHARES
- -----------------------------------------------------------------------------------------------------------
NET ASSET VALUE,
BEGINNING OF YEAR $ 9.90 $ 9.57 $ 9.47 $ 8.74 $10.19 $10.00
------- ------- ------ ------ ------ ------
...........................................................................................................
INCOME FROM INVESTMENT
OPERATIONS
...........................................................................................................
Net investment income 0.41 0.41 0.41 0.28 0.43 0.18
...........................................................................................................
Net gains or losses on
securities (both
realized and
unrealized) 0.45 0.33 0.10 0.73 (1.45) 0.19
------- ------- ------ ------ ------ ------
Total from investment
operations 0.86 0.74 0.51 1.01 (1.02) 0.37
------- ------- ------ ------ ------ ------
...........................................................................................................
LESS DIVIDENDS (FROM NET
INVESTMENT INCOME) (0.41) (0.41) (0.41) (0.28) (0.43) (0.18)
------- ------- ------ ------ ------ ------
...........................................................................................................
NET ASSET VALUE, END OF
YEAR $ 10.35 $ 9.90 $ 9.57 $ 9.47 $ 8.74 $10.19
------- ------- ------ ------ ------ ------
...........................................................................................................
TOTAL RETURN (B) 8.86% 7.93% 5.44% 11.72% (10.15%) 3.74%
...........................................................................................................
RATIOS/SUPPLEMENTAL DATA
...........................................................................................................
NET ASSETS, END OF YEAR
(THOUSANDS) $12,559 $10,870 $9,271 $7,538 $6,912 $3,692
...........................................................................................................
RATIOS TO AVERAGE NET
ASSETS
Expenses 1.34% 1.69% 1.63% 1.46%(a) 1.13% 0.75%(a)
...........................................................................................................
Expenses, excluding
indirectly paid
expenses 1.34% 1.69% -- -- -- --
...........................................................................................................
Expenses, excluding
waivers and
reimbursements 1.80% 2.58% 3.54% 3.58%(a) 4.21% 7.32%(a)
...........................................................................................................
Net investment income 4.06% 4.25% 4.21% 4.64%(a) 4.66% 4.15%(a)
...........................................................................................................
PORTFOLIO TURNOVER RATE 50% 32% 21% 91% 147% 15%
...........................................................................................................
</TABLE>
* The Fund changed its fiscal year end from December 31 to August 31.
(a) Annualized.
(b) Excluding applicable sales charges.
See Combined Notes to Financial Statements.
20
<PAGE>
- -------------------------------------------------------------------------------
EVERGREEN
Georgia Municipal Bond Fund
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout each year)
<TABLE>
<CAPTION>
February 28, 1994
(Commencement of
Year Ended August 31, Eight Months Class Operations)
----------------------- Ended through
1998 1997 1996 August 31, 1995* December 31, 1994
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CLASS Y SHARES
- ----------------------------------------------------------------------------------------
NET ASSET VALUE,
BEGINNING OF YEAR $ 9.90 $ 9.57 $ 9.47 $ 8.74 $ 9.83
------- ------ ------ ------ ------
........................................................................................
INCOME FROM INVESTMENT
OPERATIONS
........................................................................................
Net investment income 0.51 0.51 0.50 0.35 0.42
........................................................................................
Net gains or losses on
securities (both
realized and
unrealized) 0.45 0.33 0.10 0.73 (1.09)
------- ------ ------ ------ ------
........................................................................................
Total from investment
operations 0.96 0.84 0.60 1.08 (0.67)
------- ------ ------ ------ ------
........................................................................................
LESS DIVIDENDS (FROM NET
INVESTMENT INCOME) (0.51) (0.51) (0.50) (0.35) (0.42)
------- ------ ------ ------ ------
........................................................................................
NET ASSET VALUE, END OF
YEAR $ 10.35 $ 9.90 $ 9.57 $ 9.47 $ 8.74
------- ------ ------ ------ ------
........................................................................................
TOTAL RETURN 9.94% 9.00% 6.48% 12.47% (6.86%)
........................................................................................
RATIOS/SUPPLEMENTAL DATA
........................................................................................
NET ASSETS, END OF YEAR
(THOUSANDS) $67,630 $1,180 $1,620 $1,339 $ 284
........................................................................................
RATIOS TO AVERAGE NET
ASSETS
Expenses 0.24% 0.69% 0.63% 0.46%(a) 0.31%(a)
........................................................................................
Expenses, excluding
indirectly paid
expenses 0.24% 0.69% -- -- --
........................................................................................
Expenses, excluding
waivers and
reimbursements 0.70% 1.58% 2.51% 2.58%(a) 3.39%(a)
........................................................................................
Net investment income 5.09% 5.25% 5.21% 5.64%(a) 5.68%(a)
........................................................................................
PORTFOLIO TURNOVER RATE 50% 32% 21% 91% 147%
........................................................................................
</TABLE>
* The Fund changed its fiscal year end from December 31 to August 31.
(a) Annualized.
See Combined Notes to Financial Statements.
21
<PAGE>
- -------------------------------------------------------------------------------
EVERGREEN
Maryland Municipal Bond Fund
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Eleven Months Year Ended September 30,
Ended ------------------------------------------------
August 31, 1998* (c) 1997 (c) 1996 (c) 1995 (c) 1994 (c) 1993 (c)
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CLASS A SHARES
- ---------------------------------------------------------------------------------------------------
NET ASSET VALUE,
BEGINNING OF PERIOD $ 10.91 $ 10.56 $ 10.69 $ 10.17 $ 11.24 $ 10.39
------- ------- ------- ------- ------- -------
...................................................................................................
INCOME FROM INVESTMENT
OPERATIONS
...................................................................................................
Net investment income 0.36 0.37 0.38 0.40 0.45 0.49
...................................................................................................
Net gains or losses on
securities (both
realized and
unrealized) 0.25 0.35 (0.13) 0.54 (0.97) 0.85
------- ------- ------- ------- ------- -------
...................................................................................................
Total from investment
operations 0.61 0.72 0.25 0.94 (0.52) 1.34
------- ------- ------- ------- ------- -------
...................................................................................................
LESS DISTRIBUTIONS
...................................................................................................
Dividends (from net
investment income) (0.36) (0.37) (0.38) (0.40) (0.45) (0.49)
...................................................................................................
Distributions (from
capital gains) 0 0 0 (0.02) (0.10) 0
------- ------- ------- ------- ------- -------
...................................................................................................
Total distributions (0.36) (0.37) (0.38) (0.42) (0.55) (0.49)
------- ------- ------- ------- ------- -------
...................................................................................................
NET ASSET VALUE, END OF
PERIOD $ 11.16 $ 10.91 $ 10.56 $ 10.69 $ 10.17 $ 11.24
------- ------- ------- ------- ------- -------
...................................................................................................
TOTAL RETURN (B) 5.70% 6.92% 2.36% 9.81% (4.74%) 13.24%
...................................................................................................
RATIOS/SUPPLEMENTAL DATA
...................................................................................................
NET ASSETS, END OF
PERIOD (THOUSANDS) $24,754 $27,786 $31,284 $32,172 $34,580 $33,907
...................................................................................................
RATIOS TO AVERAGE NET
ASSETS
...................................................................................................
Expenses 1.52%(a) 1.69% 1.43% 1.24% 1.17% 1.00%
...................................................................................................
Expenses, excluding
indirectly paid
expenses 1.52%(a) -- -- -- -- --
...................................................................................................
Expenses, excluding
waivers and
reimbursements 1.76%(a) 1.69% 1.68% 1.68% 1.68% 1.77%
...................................................................................................
Net investment income 3.56%(a) 3.45% 3.57% 4.24% 4.22% 4.50%
...................................................................................................
PORTFOLIO TURNOVER RATE 37% 13% 138% 21% 27% 23%
...................................................................................................
</TABLE>
<TABLE>
<CAPTION>
March 27,1998
(Commencement of
Class Operations)
through
August 31, 1998
- --------------------------------------------------------------------------
<S> <C>
CLASS B SHARES
- --------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $10.99
------
..........................................................................
INCOME FROM INVESTMENT OPERATIONS
..........................................................................
Net investment income 0.16
..........................................................................
Net gains or losses on securities (both realized and
unrealized) 0.17
------
..........................................................................
Total from investment operations 0.33
------
..........................................................................
LESS DIVIDENDS (FROM NET INVESTMENT INCOME) (0.16)
------
..........................................................................
NET ASSET VALUE, END OF PERIOD $11.16
------
..........................................................................
TOTAL RETURN (B) 2.99%
..........................................................................
RATIOS/SUPPLEMENTAL DATA
..........................................................................
NET ASSETS, END OF PERIOD (THOUSANDS) $ 990
..........................................................................
RATIOS TO AVERAGE NET ASSETS
..........................................................................
Expenses 1.49%(a)
..........................................................................
Expenses, excluding indirectly paid expenses 1.49%(a)
..........................................................................
Expenses, excluding waivers and reimbursements 1.98%(a)
..........................................................................
Net investment income 3.41%(a)
..........................................................................
PORTFOLIO TURNOVER RATE 37%
..........................................................................
</TABLE>
(a) Annualized.
(b) Excluding applicable sales charges.
(c) On February 28, 1998, Virtus Maryland Municipal Bond Fund sold substan-
tially all of its net assets to Evergreen Maryland Municipal Bond Fund. As
Virtus Maryland Municipal Bond Fund is the accounting survivor, its basis
of accounting for assets and liabilities and its operating results for the
periods prior to February 28, 1998 have been carried forward in these fi-
nancial highlights.
* The Fund changed its fiscal year end from September 30 to August 31 during
the current period.
See Combined Notes to Financial Statements.
22
<PAGE>
- -------------------------------------------------------------------------------
EVERGREEN
Maryland Municipal Bond Fund
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Eleven Months Year Ended September 30,
Ended ----------------------------------------------
August 31, 1998* (b) 1997 (b) 1996 (b) 1995 (b) 1994 (b) 1993 (b)
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CLASS Y SHARES
- -------------------------------------------------------------------------------------------------
NET ASSET VALUE,
BEGINNING OF PERIOD $10.91 $10.56 $10.69 $10.17 $ 11.24 $ 10.39
------ ------ ------ ------ ------- -------
.................................................................................................
INCOME FROM INVESTMENT
OPERATIONS
.................................................................................................
Net investment income 0.39 0.40 0.41 0.42 0.48 0.50
.................................................................................................
Net gains or losses on
securities (both
realized and
unrealized) 0.25 0.35 (0.13) 0.54 (0.97) 0.85
------ ------ ------ ------ ------- -------
.................................................................................................
Total from investment
operations 0.64 0.75 0.28 0.96 (0.49) 1.35
------ ------ ------ ------ ------- -------
.................................................................................................
LESS DISTRIBUTIONS
.................................................................................................
Dividends (from net
investment income) (0.39) (0.40) (0.41) (0.42) (0.48) (0.50)
.................................................................................................
Distributions (from
capital gains) 0 0 0 (0.02) (0.10) 0
------ ------ ------ ------ ------- -------
.................................................................................................
Total distributions (0.39) (0.40) (0.41) (0.44) (0.58) (0.50)
------ ------ ------ ------ ------- -------
.................................................................................................
NET ASSET VALUE, END OF
PERIOD $11.16 $10.91 $10.56 $10.69 $ 10.17 $ 11.24
------ ------ ------ ------ ------- -------
.................................................................................................
TOTAL RETURN 5.94% 7.19% 2.61% 10.09% (4.50%) 13.37%
.................................................................................................
RATIOS/SUPPLEMENTAL DATA
.................................................................................................
NET ASSETS, END OF
PERIOD (THOUSANDS) $5,229 $5,683 $8,889 $9,447 $11,301 $12,014
.................................................................................................
RATIOS TO AVERAGE NET
ASSETS
Expenses 1.25%(a) 1.44% 1.18% 0.99% 0.92% 0.86%
.................................................................................................
Expenses, excluding
indirectly paid
expenses 1.25%(a) -- -- -- -- --
.................................................................................................
Expenses, excluding
waivers and
reimbursements 1.50%(a) 1.44% 1.43% 1.43% 1.43% 1.63%
.................................................................................................
Net investment income 3.83%(a) 3.70% 3.82% 4.49% 4.46% 4.64%
.................................................................................................
PORTFOLIO TURNOVER RATE 37% 13% 138% 21% 27% 23%
.................................................................................................
</TABLE>
(a) Annualized.
(b) On February 28, 1998, Virtus Maryland Municipal Bond Fund sold substan-
tially all of its net assets to Evergreen Maryland Municipal Bond Fund. As
Virtus Maryland Municipal Bond Fund is the accounting survivor, its basis
of accounting for assets and liabilities and its operating results for the
periods prior to February 28, 1998 have been carried forward in these fi-
nancial highlights.
* The Fund changed its fiscal year end from September 30 to August 31 during
the current period.
See Combined Notes to Financial Statements.
23
<PAGE>
- -------------------------------------------------------------------------------
EVERGREEN
North Carolina Municipal Bond Fund
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout each year)
<TABLE>
<CAPTION>
January 11, 1993
(Commencement of
Year Ended August 31, Eight Months Class Operations)
----------------------- Ended Year Ended through
1998 1997 1996 August 31, 1995* December 31, 1994 December 31, 1993
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CLASS A SHARES
- ----------------------------------------------------------------------------------------------------------
NET ASSET VALUE,
BEGINNING OF YEAR $ 10.37 $ 9.98 $ 9.95 $ 9.16 $10.61 $ 10.00
------- ------ ------ ------ ------ -------
..........................................................................................................
INCOME FROM INVESTMENT
OPERATIONS
..........................................................................................................
Net investment income 0.51 0.49 0.49 0.33 0.49 0.46
..........................................................................................................
Net gains or losses on
securities (both
realized and
unrealized) 0.47 0.40 0.02 0.79 (1.45) 0.64
------- ------ ------ ------ ------ -------
..........................................................................................................
Total from investment
operations 0.98 0.89 0.51 1.12 (0.96) 1.10
------- ------ ------ ------ ------ -------
..........................................................................................................
LESS DISTRIBUTIONS
..........................................................................................................
Dividends (from net
investment income) (0.51) (0.50) (0.48) (0.33) (0.49) (0.46)
..........................................................................................................
Distributions (from
capital gains) 0 0 0 0 0 (0.03)
------- ------ ------ ------ ------ -------
..........................................................................................................
Total distributions (0.51) (0.50) (0.48) (0.33) (0.49) (0.49)
------- ------ ------ ------ ------ -------
..........................................................................................................
NET ASSET VALUE, END OF
YEAR $ 10.84 $10.37 $ 9.98 $ 9.95 $ 9.16 $ 10.61
------- ------ ------ ------ ------ -------
..........................................................................................................
TOTAL RETURN (B) 9.66% 9.11% 5.21% 12.34% (9.12%) 11.28%
..........................................................................................................
RATIOS/SUPPLEMENTAL DATA
..........................................................................................................
NET ASSETS, END OF YEAR
(THOUSANDS) $15,768 $8,115 $7,989 $8,279 $7,979 $12,739
..........................................................................................................
RATIOS TO AVERAGE NET
ASSETS
Expenses 0.56% 1.11% 1.08% 0.92%(a) 0.79% 0.32%(a)
..........................................................................................................
Expenses, excluding
indirectly paid
expenses 0.56% 1.11% -- -- -- --
..........................................................................................................
Expenses, excluding
waivers and
reimbursements 0.97% 1.11% 1.35% 1.27%(a) 1.18% 1.25%(a)
..........................................................................................................
Net investment income 4.81% 4.77% 4.81% 5.09%(a) 5.11% 4.91%(a)
..........................................................................................................
PORTFOLIO TURNOVER RATE 53% 50% 86% 117% 126% 57%
..........................................................................................................
</TABLE>
<TABLE>
<CAPTION>
January 11, 1993
(Commencement of
Year Ended August 31, Eight Months Class Operations)
------------------------- Ended Year Ended through
1998 1997 1996 August 31, 1995* December 31, 1994 December 31, 1993
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CLASS B SHARES
- ----------------------------------------------------------------------------------------------------------
NET ASSET VALUE,
BEGINNING OF YEAR $ 10.37 $ 9.98 $ 9.95 $ 9.16 $ 10.61 $ 10.00
------- ------- ------- ------- ------- -------
..........................................................................................................
INCOME FROM INVESTMENT
OPERATIONS
..........................................................................................................
Net investment income 0.43 0.41 0.42 0.28 0.44 0.42
..........................................................................................................
Net gains or losses on
securities (both
realized and
unrealized) 0.47 0.40 0.02 0.79 (1.45) 0.64
------- ------- ------- ------- ------- -------
..........................................................................................................
Total from investment
operations 0.90 0.81 0.44 1.07 (1.01) 1.06
------- ------- ------- ------- ------- -------
..........................................................................................................
LESS DISTRIBUTIONS
..........................................................................................................
Dividends (from net
investment income) (0.43) (0.42) (0.41) (0.28) (0.44) (0.42)
..........................................................................................................
Distributions (from
capital gains) 0 0 0 0 0 (0.03)
------- ------- ------- ------- ------- -------
..........................................................................................................
Total distributions (0.43) (0.42) (0.41) (0.28) (0.44) (0.45)
------- ------- ------- ------- ------- -------
..........................................................................................................
NET ASSET VALUE, END OF
YEAR $ 10.84 $ 10.37 $ 9.98 $ 9.95 $ 9.16 $ 10.61
------- ------- ------- ------- ------- -------
..........................................................................................................
TOTAL RETURN (B) 8.85% 8.30% 4.42% 11.78% (9.64%) 10.80%
..........................................................................................................
RATIOS/SUPPLEMENTAL DATA
..........................................................................................................
NET ASSETS, END OF YEAR
(THOUSANDS) $49,320 $48,198 $49,382 $49,040 $44,616 $45,168
..........................................................................................................
RATIOS TO AVERAGE NET
ASSETS
Expenses 1.33% 1.86% 1.83% 1.67%(a) 1.37% 0.79%(a)
..........................................................................................................
Expenses, excluding
indirectly paid
expenses 1.33% 1.86% -- -- -- --
..........................................................................................................
Expenses, excluding
waivers and
reimbursements 1.74% 1.86% 2.10% 2.02%(a) 1.76% 1.74%(a)
..........................................................................................................
Net investment income 4.07% 4.02% 4.06% 4.34%(a) 4.53% 4.47%(a)
..........................................................................................................
PORTFOLIO TURNOVER RATE 53% 50% 86% 117% 126% 57%
..........................................................................................................
</TABLE>
* The Fund changed its fiscal year end from December 31 to August 31.
(a) Annualized.
(b) Excluding applicable sales charges.
See Combined Notes to Financial Statements.
24
<PAGE>
- -------------------------------------------------------------------------------
EVERGREEN
North Carolina Municipal Bond Fund
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout each year)
<TABLE>
<CAPTION>
February 28, 1994
(Commencement of
Year Ended August 31, Eight Months Class Operations)
------------------------ Ended through
1998 1997 1996 August 31, 1995* December 31, 1994
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------
CLASS Y SHARES
- ----------------------------------------------------------------------------------------
NET ASSET VALUE,
BEGINNING OF YEAR $ 10.37 $ 9.98 $ 9.95 $ 9.16 $10.31
-------- ------ ------ ------ ------
...................................................................................
INCOME FROM INVESTMENT
OPERATIONS
...................................................................................
Net investment income 0.54 0.51 0.51 0.35 0.43
...................................................................................
Net gains or losses on
securities (both
realized and
unrealized) 0.47 0.41 0.03 0.79 (1.15)
-------- ------ ------ ------ ------
Total from investment
operations 1.01 0.92 0.54 1.14 (0.72)
-------- ------ ------ ------- ------
LESS DIVIDENDS (FROM NET
INVESTMENT INCOME) (0.54) (0.53) (0.51) (0.35) (0.43)
-------- ------ ------ ------ ------
...................................................................................
NET ASSET VALUE, END OF
YEAR $ 10.84 $10.37 $ 9.98 $ 9.95 $ 9.16
-------- ------ ------ ------ ------
...................................................................................
...................................................................................
TOTAL RETURN 9.93% 9.39% 5.47% 12.52% (7.01%)
...................................................................................
RATIOS/SUPPLEMENTAL DATA
...................................................................................
NET ASSETS, END OF YEAR
(THOUSANDS) $256,231 $4,042 $3,771 $1,006 $ 642
...................................................................................
RATIOS TO AVERAGE NET
ASSETS
Expenses 0.20% 0.86% 0.84% 0.67%(a) 0.59%(a)
.....................................................................................
Expenses, excluding
indirectly paid
expenses 0.20% 0.86% -- -- --
.....................................................................................
Expenses, excluding
waivers and
reimbursements 0.61% 0.86% 1.07% 1.02%(a) 0.98%(a)
.....................................................................................
Net investment income 5.04% 5.02% 5.05% 5.34%(a) 5.58%(a)
.....................................................................................
PORTFOLIO TURNOVER RATE 53% 50% 86% 117% 126%
.....................................................................................
</TABLE>
* The Fund changed its fiscal year end from December 31 to August 31.
(a) Annualized.
See Combined Notes to Financial Statements.
25
<PAGE>
- -------------------------------------------------------------------------------
EVERGREEN
South Carolina Municipal Bond Fund
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout each year)
<TABLE>
<CAPTION>
January 3, 1994
(Commencement of
Year Ended August 31, Eight Months Class Operations)
------------------------- Ended through
1998 1997 1996 August 31, 1995* December 31, 1994
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------
CLASS A SHARES
- -------------------------------------------------------------------------------------------
NET ASSET VALUE,
BEGINNING OF YEAR $ 10.08 $ 9.69 $ 9.59 $ 8.62 $10.00
------- ------- ------- ------ ------
....................................................................................
INCOME FROM INVESTMENT
OPERATIONS
....................................................................................
Net investment income 0.46 0.48 0.49 0.34 0.46
....................................................................................
Net gains or losses on
securities (both
realized and
unrealized) 0.39 0.40 0.10 0.97 (1.38)
------- ------- ------- ------ ------
Total from investment
operations 0.85 0.88 0.59 1.31 (0.92)
------- ------- ------- ------ ------
....................................................................................
....................................................................................
LESS DISTRIBUTIONS
....................................................................................
Distributions (from
capital gains) (0.03) (0.01) 0 0 0
------- ------- ------- ------ ------
Dividends (from net
investment income) (0.46) (0.48) (0.49) (0.34) (0.46)
....................................................................................
Total distributions (0.49) (0.49) (0.49) (0.34) (0.46)
------- ------- ------- ------ ------
....................................................................................
NET ASSET VALUE, END OF
YEAR $ 10.44 $ 10.08 $ 9.69 $ 9.59 $ 8.62
------- ------- ------- ------ ------
....................................................................................
....................................................................................
TOTAL RETURN (B) 8.60% 9.33% 6.23% 15.35% (9.32%)
....................................................................................
....................................................................................
RATIOS/SUPPLEMENTAL DATA
....................................................................................
NET ASSETS, END OF YEAR
(THOUSANDS) $ 1,744 $ 1,025 $ 841 $ 610 $ 312
....................................................................................
RATIOS TO AVERAGE NET
ASSETS
Expenses 0.77% 0.98% 0.86% 0.53%(a) 0.25%(a)
....................................................................................
Expenses, excluding
indirectly paid
expenses 0.77% 0.98% -- -- --
....................................................................................
Expenses, excluding
waivers and
reimbursements 1.02% 2.16% 4.00% 6.50%(a) 10.71%(a)
....................................................................................
Net investment income 4.56% 4.87% 4.98% 5.41%(a) 5.57%(a)
....................................................................................
PORTFOLIO TURNOVER RATE 31% 62% 37% 66% 23%
....................................................................................
</TABLE>
<TABLE>
<CAPTION>
Year Ended August 31,
-------------------------
January 3, 1994
(Commencement of
Eight Months Class Operations)
Ended through
1998 1997 1996 August 31, 1995* December 31, 1994
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------
CLASS B SHARES
- -----------------------------------------------------------------------------------------
NET ASSET VALUE,
BEGINNING OF YEAR $ 10.08 $ 9.69 $ 9.59 $ 8.62 $10.00
------- ------- ------- ------ ------
.........................................................................
....................................................................................
INCOME FROM INVESTMENT
OPERATIONS
.........................................................................
....................................................................................
Net investment income 0.38 0.41 0.41 0.29 0.41
.........................................................................
....................................................................................
Net gains or losses on
securities (both
realized and
unrealized) 0.39 0.40 0.10 0.97 (1.38)
------- ------- ------- ------ ------
Total from investment
operations 0.77 0.81 0.51 1.26 (0.97)
------- ------- ------- ------ ------
.........................................................................
....................................................................................
.........................................................................
....................................................................................
LESS DISTRIBUTIONS
.........................................................................
....................................................................................
Distributions (from
capital gains) (0.03) (0.01) 0 0 0
------- ------- ------- ------ ------
Dividends (from net
investment income) (0.38) (0.41) (0.41) (0.29) (0.41)
.........................................................................
....................................................................................
Total distributions (0.41) (0.42) (0.41) (0.29) (0.41)
------- ------- ------- ------ ------
.........................................................................
....................................................................................
NET ASSET VALUE, END OF
YEAR $ 10.44 $ 10.08 $ 9.69 $ 9.59 $ 8.62
------- ------- ------- ------ ------
.........................................................................
....................................................................................
.........................................................................
....................................................................................
TOTAL RETURN (B) 7.79% 8.52% 5.43% 14.77% (9.83%)
.........................................................................
....................................................................................
RATIOS/SUPPLEMENTAL DATA
.........................................................................
....................................................................................
NET ASSETS, END OF YEAR
(THOUSANDS) $ 4,542 $ 4,734 $ 4,282 $3,542 $2,456
.........................................................................
....................................................................................
RATIOS TO AVERAGE NET
ASSETS
Expenses 1.53% 1.73% 1.61% 1.28%(a) 0.87%(a)
.........................................................................
....................................................................................
Expenses, excluding
indirectly paid
expenses 1.53% 1.73% -- -- --
.........................................................................
....................................................................................
Expenses, excluding
waivers and
reimbursements 1.78% 2.91% 4.76% 7.25%(a) 11.33%(a)
.........................................................................
....................................................................................
Net investment income 3.76% 4.13% 4.23% 4.66%(a) 4.88%(a)
.........................................................................
....................................................................................
PORTFOLIO TURNOVER RATE 31% 62% 37% 66% 23%
.........................................................................
</TABLE>
* The Fund changed its fiscal year end from December 31 to August 31.
(a) Annualized.
(b) Excluding applicable sales charges.
See Combined Notes to Financial Statements.
26
<PAGE>
- -------------------------------------------------------------------------------
EVERGREEN
South Carolina Municipal Bond Fund
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout each year)
<TABLE>
<CAPTION>
February 28, 1994
(Commencement of
Year Ended August 31, Eight Months Class Operations)
----------------------- Ended through
1998 1997 1996 August 31, 1995* December 31, 1994
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------
CLASS Y SHARES
- ----------------------------------------------------------------------------------------
NET ASSET VALUE,
BEGINNING OF YEAR $ 10.08 $ 9.69 $ 9.59 $ 8.62 $ 9.74
------- ------ ------ ------ ------
..................................................................................
INCOME FROM INVESTMENT
OPERATIONS
..................................................................................
Net investment income 0.48 0.51 0.51 0.35 0.43
..................................................................................
Net gains or losses on
securities (both
realized and
unrealized) 0.40 0.40 0.10 0.97 (1.12)
------- ------ ------ ------ ------
Total from investment
operations 0.88 0.91 0.61 1.32 (0.69)
------- ------ ------ ------ ------
..................................................................................
..................................................................................
LESS DISTRIBUTIONS
Distributions (from
capital gains) (0.03) (0.01) 0 0 0
------- ------ ------ ------ ------
..................................................................................
Dividends (from net
investment income) (0.49) (0.51) (0.51) (0.35) (0.43)
..................................................................................
Total distributions (0.52) (0.52) (0.51) (0.35) (0.43)
------- ------ ------ ------ ------
NET ASSET VALUE, END OF
YEAR $ 10.44 $10.08 $ 9.69 $ 9.59 $ 8.62
------- ------ ------ ------ ------
..................................................................................
..................................................................................
..................................................................................
TOTAL RETURN 8.87% 9.60% 6.49% 15.54% (7.12%)
..................................................................................
RATIOS/SUPPLEMENTAL DATA
..................................................................................
NET ASSETS, END OF YEAR
(THOUSANDS) $66,303 $7,012 $4,555 $1,673 $ 92
..................................................................................
RATIOS TO AVERAGE NET
ASSETS
Expenses 0.46% 0.73% 0.62% 0.28%(a) 0.00%(a)
..................................................................................
Expenses, excluding
indirectly paid
expenses 0.46% 0.73% -- -- --
..................................................................................
Expenses, excluding
waivers and
reimbursements 0.71% 1.91% 3.70% 6.25%(a) 10.46%(a)
..................................................................................
Net investment income 4.71% 5.12% 5.22% 5.66%(a) 5.92%(a)
..................................................................................
PORTFOLIO TURNOVER RATE 31% 62% 37% 66% 23%
..................................................................................
</TABLE>
* The Fund changed its fiscal year end from December 31 to August 31.
(a) Annualized.
See Combined Notes to Financial Statements.
27
<PAGE>
- -------------------------------------------------------------------------------
EVERGREEN
Virginia Municipal Bond Fund
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout each year)
<TABLE>
<CAPTION>
July 2, 1993
(Commencement of
Year Ended August 31, Eight Months Class Operations)
----------------------- Ended Year Ended through
1998 1997 1996 August 31, 1995* December 31, 1994 December 31, 1993
<S> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------
CLASS A SHARES
- ----------------------------------------------------------------------------------------------------------
NET ASSET VALUE,
BEGINNING OF YEAR $ 10.05 $ 9.68 $ 9.67 $ 8.85 $10.19 $10.00
------- ------ ------ ------ ------ ------
.....................................................................................................
INCOME FROM INVESTMENT
OPERATIONS
.....................................................................................................
Net investment income 0.48 0.50 0.48 0.33 0.47 0.20
.....................................................................................................
Net gains or losses on
securities (both
realized and
unrealized) 0.42 0.37 0.01 0.82 (1.34) 0.19
------- ------ ------ ------ ------ ------
Total from investment
operations 0.90 0.87 0.49 1.15 (0.87) 0.39
------- ------ ------ ------ ------ ------
.....................................................................................................
LESS DIVIDENDS (FROM NET
INVESTMENT INCOME) (0.49) (0.50) (0.48) (0.33) (0.47) (0.20)
------- ------ ------ ------ ------ ------
.....................................................................................................
NET ASSET VALUE, END OF
YEAR $ 10.46 $10.05 $ 9.68 $ 9.67 $ 8.85 $10.19
------- ------ ------ ------ ------ ------
.....................................................................................................
.....................................................................................................
TOTAL RETURN (B) 9.12% 9.05% 5.12% 13.09% (8.60%) 3.89%
.....................................................................................................
RATIOS/SUPPLEMENTAL DATA
.....................................................................................................
NET ASSETS, END OF YEAR
(THOUSANDS) $54,298 $2,934 $2,892 $1,983 $1,606 $1,306
.....................................................................................................
RATIOS TO AVERAGE NET
ASSETS
Expenses 0.50% 1.03% 0.93% 0.72%(a) 0.53% 0.25%(a)
.....................................................................................................
Expenses, excluding
indirectly paid
expenses 0.50% 1.02% -- -- -- --
.....................................................................................................
Expenses, excluding
waivers and
reimbursements 0.95% 1.84% 3.47% 3.83%(a) 5.14% 7.75%(a)
.....................................................................................................
Net investment income 4.71% 4.95% 4.83% 5.17%(a) 5.11% 4.64%(a)
.....................................................................................................
PORTFOLIO TURNOVER RATE 46% 72% 68% 87% 59% 0%
.....................................................................................................
</TABLE>
<TABLE>
<CAPTION>
July 2, 1993
(Commencement of
Year Ended August 31, Eight Months Class Operations)
------------------------- Ended Year Ended through
1998 1997 1996 August 31, 1995* December 31, 1994 December 31, 1993
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------
CLASS B SHARES
- --------------------------------------------------------------------------------
NET ASSET VALUE,
BEGINNING OF YEAR $ 10.05 $ 9.68 $ 9.67 $ 8.85 $10.19 $10.00
------- ------- ------- ------ ------ ------
.........................................................................
INCOME FROM INVESTMENT
OPERATIONS
.........................................................................
Net investment income 0.41 0.41 0.41 0.28 0.42 0.17
.........................................................................
Net gains or losses on
securities (both
realized and
unrealized) 0.41 0.37 0.01 0.82 (1.34) 0.19
------- ------- ------- ------ ------ ------
Total from investment
operations 0.82 0.78 0.42 1.10 (0.92) 0.36
------- ------- ------- ------ ------ ------
.........................................................................
LESS DIVIDENDS (FROM NET
INVESTMENT INCOME) (0.41) (0.41) (0.41) (0.28) (0.42) (0.17)
------- ------- ------- ------ ------ ------
.........................................................................
NET ASSET VALUE, END OF
YEAR $ 10.46 $ 10.05 $ 9.68 $ 9.67 $ 8.85 $10.19
------- ------- ------- ------ ------ ------
.........................................................................
.........................................................................
TOTAL RETURN (B) 8.31% 8.24% 4.34% 12.53% (9.13%) 3.66%
.........................................................................
RATIOS/SUPPLEMENTAL DATA
.........................................................................
NET ASSETS, END OF YEAR
(THOUSANDS) $ 8,935 $ 6,695 $ 5,963 $5,083 $3,817 $2,235
.........................................................................
RATIOS TO AVERAGE NET
ASSETS
Expenses 1.35% 1.79% 1.68% 1.47%(a) 1.12% 0.75%(a)
.........................................................................
Expenses, excluding
indirectly paid
expenses 1.35% 1.78% -- -- -- --
.........................................................................
Expenses, excluding
waivers and
reimbursements 1.79% 2.59% 4.23% 4.58%(a) 5.73% 8.25%(a)
.........................................................................
Net investment income 3.99% 4.21% 4.09% 4.42%(a) 4.54% 4.25%(a)
.........................................................................
PORTFOLIO TURNOVER RATE 46% 72% 68% 87% 59% 0%
.........................................................................
</TABLE>
* The Fund changed its fiscal year end from December 31 to August 31.
(a) Annualized.
(b) Excluding applicable sales charges.
See Combined Notes to Financial Statements.
28
<PAGE>
- -------------------------------------------------------------------------------
EVERGREEN
Virginia Municipal Bond Fund
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout each year)
<TABLE>
<CAPTION>
February 28, 1994
(Commencement of
Year Ended August 31, Eight Months Class Operations)
------------------------ Ended through
1998 1997 1996 August 31, 1995* December 31, 1994
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------
CLASS Y SHARES
- ------------------------------------------------------------------------------------------
NET ASSET VALUE,
BEGINNING OF YEAR $ 10.05 $ 9.68 $ 9.67 $ 8.85 $ 9.83
-------- ------ ------ ------ ------
....................................................................................
INCOME FROM INVESTMENT
OPERATIONS
....................................................................................
Net investment income 0.51 0.51 0.50 0.34 0.41
....................................................................................
Net gains or losses on
securities (both
realized and
unrealized) 0.41 0.37 0.01 0.82 (0.98)
-------- ------ ------ ------ ------
Total from investment
operations 0.92 0.88 0.51 1.16 (0.57)
-------- ------ ------ ------ ------
....................................................................................
LESS DIVIDENDS (FROM NET
INVESTMENT INCOME) (0.51) (0.51) (0.50) (0.34) (0.41)
-------- ------ ------ ------ ------
....................................................................................
NET ASSET VALUE, END OF
YEAR $ 10.46 $10.05 $ 9.68 $ 9.67 $ 8.85
-------- ------ ------ ------ ------
....................................................................................
....................................................................................
TOTAL RETURN 9.39% 9.32% 5.38% 13.28% (5.80%)
....................................................................................
RATIOS/SUPPLEMENTAL DATA
....................................................................................
NET ASSETS, END OF YEAR
(THOUSANDS) $105,931 $6,195 $4,266 $ 965 $ 344
....................................................................................
RATIOS TO AVERAGE NET
ASSETS
Expenses 0.25% 0.79% 0.70% 0.47%(a) 0.28%(a)
....................................................................................
Expenses, excluding
indirectly paid
expenses 0.25% 0.78% -- -- --
....................................................................................
Expenses, excluding
waivers and
reimbursements 0.70% 1.60% 3.24% 3.58%(a) 4.89%(a)
....................................................................................
Net investment income 4.98% 5.27% 5.05% 5.42%(a) 5.54%(a)
....................................................................................
PORTFOLIO TURNOVER RATE 46% 72% 68% 87% 59%
....................................................................................
</TABLE>
* The Fund changed its fiscal year end from December 31 to August 31.
(a) Annualized.
See Combined Notes to Financial Statements.
29
<PAGE>
- -------------------------------------------------------------------------------
EVERGREEN
Florida High Income Municipal Bond Fund
- -------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
August 31, 1998
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal
Amount Value
- --------------------------------------------------------------------------------
<C> <S> <C>
MUNICIPAL OBLIGATIONS - 97.3%
FLORIDA - 80.7%
$ 710,000 Alachua County, Florida,
Health Facilities Authority Revenue, Beverly
Enterprises Project
10.125%, 4/1/10.................................... $ 746,416
Arbor Greene, Florida,
Community Development District, Special Assessment
Revenue:
1,100,000 5.75%, 5/1/06...................................... 1,108,096
500,000 6.30%, 5/1/19...................................... 508,265
750,000 7.60%, 5/1/18...................................... 816,945
Bayside, Florida,
Community Development District, Capital
Improvement Revenue, WCI Communities Property,
Inc.:
1,720,000 Series A
5.95%, 5/1/08...................................... 1,737,458
Series B:
2,760,000 6.05%, 5/1/08...................................... 2,787,876
2,700,000 6.375%, 5/1/18..................................... 2,730,726
100,000 Baytree, Florida,
Community Development District, Special Assessment
Revenue
8.75%, 5/1/12...................................... 110,180
Bobcat Trail, Florida,
Community Development District Revenue:
1,100,000 Series A
7.50%, 5/1/19...................................... 1,136,322
1,550,000 Series B
6.75%, 5/1/04...................................... 1,574,537
750,000 Boynton Beach, Florida,
Multifamily Housing Revenue, Clipper Cove
Apartments
6.35%, 7/1/16...................................... 799,935
Brevard County, Florida,
Health Facilities Authority Revenue, Courtenay
Springs Village:
820,000 7.375%, 11/15/04................................... 892,455
1,875,000 7.50%, 11/15/12.................................... 2,058,506
1,000,000 Brevard County, Florida,
Tourist Development Tax Revenue, Marlins Spring
6.875%, 3/1/13..................................... 1,085,260
925,000 Broward County, Florida,
Housing Finance Authority Revenue, Series A
7.35%, 3/1/23, (GNMA).............................. 977,503
Broward County, Florida,
Multifamily Housing Revenue:
1,770,000 Cross Keys Apartments Project, Series A
5.80%, 10/1/33..................................... 1,806,922
Pembroke Park Apartments Project:
1,200,000 5.65%, 10/1/28..................................... 1,219,920
1,035,000 5.70%, 10/1/33..................................... 1,052,129
Stirling Apartments Project:
2,090,000 5.65%, 10/1/28..................................... 2,124,694
1,580,000 5.70%, 10/1/33..................................... 1,606,149
8,395,000 Cape Canaveral, Florida,
Hospital District Revenue
5.25%, 1/1/28...................................... 8,258,581
Cape Coral, Florida,
Health Facilities Authority Revenue, First
Mortgage Gulf Care Inc. Project:
1,000,000 5.50%, 10/1/17..................................... 1,038,650
1,400,000 5.625%, 10/1/27.................................... 1,479,800
1,740,000 Clay County, Florida,
Housing Finance Authority Revenue, Single Family
Mortgage, Multi-County Program
5.95%, 10/1/19..................................... 1,836,396
Collier County, Florida,
Housing Finance Authority,
Saxon Manor Project:
2,000,000 Series A1
5.45%, 3/1/30...................................... 2,023,920
1,000,000 Series B
5.45%, 3/1/30...................................... 1,011,960
2,850,000 Cory Lakes, Florida,
Community Development District Revenue
8.375%, 5/1/17..................................... 3,054,459
1,080,000 Crossings at Fleming Island, Florida,
Community Development District,
Utility Revenue
7.375%, 10/1/19.................................... 1,149,152
Dade County, Florida,
Multifamily Mortgage Revenue,
Golden Lakes Apartments Project,
Series A:
1,370,000 5.90%, 11/1/22..................................... 1,424,430
500,000 6.00%, 11/1/32..................................... 519,765
3,986,410 Dade County, Florida,
Single Family Mortgage Revenue,
Variable Rate, Series B1,
5.895%, 4/1/27..................................... 4,273,989
2,310,000 Duval County, Florida,
Housing Finance Authority Revenue, Saint Augustine
Apartments Project
6.00%, 3/1/21...................................... 2,401,522
1,465,000 Eastlake Oaks, Florida,
Community Development District Revenue
7.75%, 5/1/17...................................... 1,574,465
Escambia County, Florida,
Health Facilities Authority Revenue:
Azalea Trace Inc.:
2,905,000 6.00%, 1/1/15...................................... 3,015,768
2,250,000 6.10%, 1/1/19...................................... 2,353,320
9,000,000 Baptist Hospital and Baptist Manor
5.125%, 10/1/19.................................... 8,868,420
1,500,000 Baptist Hospital Inc., Series B
6.00%, 10/1/14..................................... 1,575,255
4,400,000 Escambia County, Florida,
Housing Finance Authority Revenue, Single Family
Mortgage, Multi-County Program
6.85%, 10/1/17 (b)................................. 4,709,540
</TABLE>
30
<PAGE>
- -------------------------------------------------------------------------------
EVERGREEN
Florida High Income Municipal Bond Fund
- -------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS(continued)
August 31, 1998
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal
Amount Value
- --------------------------------------------------------------------------------
<C> <S> <C>
MUNICIPAL OBLIGATIONS - CONTINUED
FLORIDA - CONTINUED
Escambia County, Florida,
Pollution Control Revenue, Champion International
Corporate Project:
$ 3,000,000 6.40%, 9/1/30...................................... $ 3,300,990
2,000,000 6.90%, 8/1/22...................................... 2,227,220
Florida State, Housing Finance Agency Revenue:
2,360,000 8.00%, 12/1/20..................................... 2,441,798
4,500,000 Barrington Place, Series K1
5.45%, 12/1/37..................................... 4,563,855
1,600,000 Glen Oaks Apartments Project
5.80%, 8/1/17...................................... 1,680,480
2,945,000 Mar Logo Village Apartments Project, Series F
6.00%, 6/1/39...................................... 3,120,286
2,100,000 Single Family Mortgage, Series A
6.65%, 1/1/24...................................... 2,254,938
St. Cloud Village Project:
4,905,000 Series D
5.95%, 2/1/30...................................... 5,181,593
1,395,000 Series E
8.00%, 2/1/30...................................... 1,212,283
1,000,000 The Vineyards Project, Series H
6.50%, 11/1/25..................................... 1,064,340
3,500,000 Wentworth Apartments Project, Series I1
5.45%, 10/1/37..................................... 3,543,400
6,000,000 Willow Lake Apartments,
Series J1
5.45%, 1/1/38...................................... 6,095,940
3,160,000 Florida State, Housing
Finance Corporation Revenue, Kendall Court
Apartments, Series D
5.375%, 8/1/28, (FNMA)............................. 3,193,117
Grand Haven, Florida,
Community Development District, Special Assessment
Revenue, Series A:
11,640,000 6.30%, 5/1/02...................................... 11,969,528
3,850,000 6.90%, 5/1/19...................................... 3,999,919
5,170,000 Halifax, Florida,
Health Care Facilities Revenue, Halifax Hospital
Medical Center
5.20%, 4/1/18...................................... 5,182,305
3,000,000 Heritage Harbor, Florida,
Community Development District Revenue
7.75%, 5/1/19...................................... 3,025,860
2,600,000 Heritage Isles, Florida,
Community Development District Revenue, Series A
5.75%, 5/1/05...................................... 2,629,432
3,610,000 Hernando County, Florida,
Industrial Development Authority Revenue, Crushed
Stone Company
8.50%, 12/1/14..................................... 4,122,873
3,680,000 Hialeah Gardens, Florida,
Housing Authority Revenue, GNMA Affordable Housing
Program
5.80%, 6/20/33..................................... 3,899,806
1,545,000 Hialeah Gardens, Florida,
Industrial Development Authority Revenue,
Waterford Convalescent, Series A
7.875%, 12/1/07.................................... 1,688,577
600,000 Hillsborough County, Florida,
Aviation Authority Revenue,
US Air Project, Series 2
8.60%, 1/15/22..................................... 675,672
1,000,000 Hillsborough County, Florida,
Housing Finance Agency Revenue, Single Family
Mortgage
5.875%, 10/1/30.................................... 1,047,680
3,350,000 Homestead, Florida,
Industrial Development Authority Revenue,
Community Rehabilitation Providers Program, Series
A
7.95%, 11/1/18..................................... 3,666,709
2,500,000 Indian Trace, Florida,
Community Water Management, Special Benefit,
General Obligation, Subseries B
8.25%, 5/1/11...................................... 2,911,900
Jacksonville, Florida,
Health Facilities Authority Revenue, National
Benevolent Association, Cypress Village Project:
750,000 7.00%, 12/1/14..................................... 817,673
1,020,000 7.00%, 12/1/22..................................... 1,120,266
500,000 8.00%, 12/1/15..................................... 585,920
2,445,000 Lake Bernadette, Florida,
Community Development District, Special Assessment
Revenue,
Series A
8.00%, 5/1/17...................................... 2,620,527
3,200,000 Lake County, Florida,
Resources Recovery Industrial Development,
NRG/Recovery
Group Inc., Series 1993A
5.85%, 10/1/09..................................... 3,362,368
Lee County, Florida,
Housing Finance Authority Revenue, Single Family
Mortgage, Multi-County Program, Series A:
2,010,000 7.20%, 3/1/27...................................... 2,281,491
2,795,000 When-issued
6.45%, 3/1/31...................................... 3,123,832
2,475,000 Step Bond, Subseries 2
(Eff. Yield 4.80%) (a)
6.85%, 3/1/29...................................... 2,808,036
2,605,000 Subseries 2
7.45%, 9/1/27...................................... 2,956,076
5,370,000 Subseries 3
7.50%, 9/1/27...................................... 6,131,895
Lee County, Florida,
Industrial Development Authority Revenue:
Cypress Cove Healthpark:
Class A:
1,005,000 5.80%, 10/1/06..................................... 1,030,336
3,840,000 6.25%, 10/1/17..................................... 3,998,746
4,025,000 6.375%, 10/1/25.................................... 4,214,054
</TABLE>
31
<PAGE>
- -------------------------------------------------------------------------------
EVERGREEN
Florida High Income Municipal Bond Fund
- -------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS(continued)
August 31, 1998
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Principal
Amount Value
- -------------------------------------------------------------------------------
<C> <S> <C>
MUNICIPAL OBLIGATIONS - CONTINUED
FLORIDA - CONTINUED
Lee County, Florida,
Industrial Development Authority Revenue -
continued:
$ 1,155,000 Cypress Cove Healthpark, Class B
5.88%, 10/1/27..................................... $ 1,189,096
830,000 Encore Nursing Center
8.125%, 12/1/07.................................... 921,283
2,710,000 Leon County, Florida,
Educational Facilities Authority Revenue, Series A
8.25%, 5/1/14, (GNMA).............................. 2,877,234
Manatee County, Florida,
Housing Finance Authority Revenue:
1,125,000 Multifamily Housing, Conquistador,
Series A
6.25%, 10/1/22..................................... 1,218,589
2,375,000 Single Family Mortgage,
Subseries 1
7.45%, 5/1/27...................................... 2,703,628
Martin County, Florida,
Industrial Development Authority Revenue,
Indiantown Cogeneration Project:
2,175,000 Series A
7.875%, 12/15/25................................... 2,556,930
650,000 Series B
8.05%, 12/15/25.................................... 764,381
1,245,000 Meadow Point II, Florida,
Community Development District,
Capital Improvement Revenue
7.75%, 5/1/18...................................... 1,331,789
Miami Beach, Florida,
Redevelopment Agency Tax Increment Revenue, City
Center Historic Convention:
1,000,000 6.25%, 12/1/16..................................... 1,071,830
500,000 6.35%, 12/1/22..................................... 536,150
North Springs, Florida,
Improvement District, Special Assessment Revenue:
1,950,000 Heron Bay Project
7.00%, 5/1/19...................................... 2,054,111
Parkland Isles Project:
300,000 Series A
7.00%, 5/1/19...................................... 311,520
3,750,000 Series B
6.25%, 5/1/05...................................... 3,842,662
1,270,000 Water Management, Series A
8.20%, 5/1/24...................................... 1,408,455
3,800,000 Northern Palm Beach County, Florida,
Water Control and Improvement Revenue, Unit
Development 9A, Series A
7.20%, 8/1/16...................................... 4,167,232
500,000 Northern Palm Beach County, Florida,
Water Control District, Special Assessment Revenue
7.00%, 8/1/15...................................... 551,855
1,465,000 Northwood, Florida,
Community Development District Revenue
7.60%, 5/1/17...................................... 1,559,112
2,605,000 Ocean Highway and Port Authority, Florida,
Pollution Control Revenue, Solid Waste, Jefferson
Smurfit Corp.
6.50%, 11/1/06..................................... 2,748,874
Orange County, Florida,
Health Facilities Authority Revenue:
1,040,000 Lakeside Apartments, Inc.
6.50%, 7/1/13...................................... 1,148,337
395,000 Orlando Lutheran Tower
8.40%, 7/1/14...................................... 460,017
Orange County, Florida,
Housing Finance Authority Revenue:
10,140,000 Brentwood Park Apartments,
Series G
6.40%, 7/1/32...................................... 10,206,823
Single Family Mortgage,
Series B:
1,000,000 5.80%, 9/1/17, (GNMA/FNMA)......................... 1,048,930
2,500,000 5.875%, 3/1/28, (GNMA/FNMA)........................ 2,631,450
1,095,000 6.85%, 10/1/27, (GNMA/FNMA)........................ 1,181,505
1,975,000 8.10%, 11/1/21..................................... 2,060,853
1,050,000 Osceola County, Florida,
Housing Finance Authority Revenue,
Tierra Vista Apartments Project,
Series A
5.75%, 12/1/22..................................... 1,085,616
2,000,000 Osceola County, Florida,
Industrial Development Authority Revenue,
Community Provider Pooled Loan Project, Series A
7.75%, 7/1/17...................................... 2,176,100
565,000 Overoaks, Florida,
Community Development District, Capital
Improvement Revenue
8.25%, 5/1/17...................................... 588,159
Palm Beach County, Florida,
Health Facilities Authority Revenue: Abbey Delray
2,750,000 South Project
5.50%, 10/1/11..................................... 2,775,300
2,500,000 Waterford Project
5.50%, 10/1/15..................................... 2,517,200
Palm Beach County, Florida,
Housing Finance Authority Revenue:
4,240,000 Daughters of Charity, Series A
7.60%, 3/1/23, (GNMA).............................. 4,487,446
665,000 Single Family Mortgage, Series A
6.50%, 10/1/21, (GNMA)............................. 713,971
1,100,000 Winsor Park Apartments Project,
Series A
5.85%, 12/1/33..................................... 1,137,708
1,500,000 Palm Beach County, Florida,
Industrial Development Authority Revenue,
Geriatric Care Inc. Project
6.55%, 12/1/16..................................... 1,648,620
8,200,000 Pasco County, Florida,
Housing Finance Authority Revenue, Multifamily
Mortgage,
Park Richey Apartments,
Series A
5.95%, 9/1/31...................................... 8,575,478
</TABLE>
32
<PAGE>
- -------------------------------------------------------------------------------
EVERGREEN
Florida High Income Municipal Bond Fund
- -------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS(continued)
August 31, 1998
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Principal
Amount Value
- -------------------------------------------------------------------------------
<C> <S> <C>
MUNICIPAL OBLIGATIONS - CONTINUED
FLORIDA - CONTINUED
Pinellas County, Florida,
Educational Facilities Authority Revenue:
$ 6,370,000 Barry University Project
5.37%, 10/1/28..................................... $ 6,397,837
3,100,000 Clearwater Christian College
8.00%, 2/1/11...................................... 3,357,052
685,000 Eckerd College
7.75%, 7/1/14...................................... 747,150
Pinellas County, Florida,
Health Facilities Authority Revenue,
Sunshine Village Nursing Home:
150,000 6.75%, 10/1/00..................................... 152,473
100,000 7.00%, 10/1/01..................................... 103,039
200,000 7.25%, 10/1/02..................................... 210,692
1,100,000 8.00%, 10/1/08..................................... 1,192,246
1,770,000 Pinellas County, Florida,
Housing Finance Authority Revenue, Multi-County
Program, Series C1
5.45%, 9/1/29...................................... 1,787,505
1,000,000 Plantation, Florida,
Health Facilities Authority Revenue, Covenant
Village of Florida Inc.
5.00%, 12/1/14..................................... 997,720
740,000 Polk County, Florida,
Housing Finance Authority Revenue, Single Family
Mortgage, Series A
7.00%, 9/1/15...................................... 771,783
5,000,000 Polk County, Florida,
Industrial Development Authority Revenue, IMC
Fertilizer, Series A
7.525%, 1/1/15..................................... 5,383,300
1,580,000 Quantum, Florida,
Community Development District, Special Assessment
Revenue
7.75%, 3/1/14...................................... 1,711,567
4,000,000 River Ridge, Florida,
Community Development District
5.75%, 5/1/08...................................... 3,982,080
985,000 Riverwood, Florida,
Community Development District, Sewer Systems
Revenue
7.75%, 10/1/14..................................... 1,066,046
Sarasota County, Florida,
Health Facilities Authority Revenue:
1,000,000 Jewish Housing Council
7.375%, 7/1/16..................................... 1,092,810
1,500,000 Manatee Jewish Housing Council
6.70%, 7/1/25...................................... 1,587,840
1,000,000 Sunnyside Properties
6.00%, 5/15/10..................................... 1,042,850
1,830,000 Seminole, Florida,
Water Control District, Special Assessment, Unit
of Development No. 2
7.25%, 8/1/22...................................... 1,960,680
St. John's County, Florida,
Industrial Development Authority Revenue:
Bayview Project, Series A
1,125,000 7.00%, 10/1/12..................................... 1,222,571
2,500,000 Bayview Project, Series A
7.10%, 10/1/26..................................... 2,729,350
2,000,000 Pro Golf Hall of Fame, Series A
5.50%, 3/1/17...................................... 2,084,240
2,500,000 Vicars Landing Project, Series A
6.75%, 2/15/12..................................... 2,671,075
1,000,000 Tarpon Springs, Florida,
Health Facilities Authority Revenue, Helen Ellis
Memorial Hospital Project
7.50%, 5/1/11...................................... 1,073,790
Volusia County, Florida,
Educational Facilities Authority Revenue, Embry-
Riddle Aero, Series A:
1,025,000 6.125%, 10/15/16................................... 1,102,162
5,000,000 6.125%, 10/15/26................................... 5,356,000
2,000,000 Volusia County, Florida,
Industrial Development Authority, First Mortgage
Revenue,
Bishops Glen Project
7.625%, 11/1/26.................................... 2,231,180
Westchase East, Florida,
Community Development District,
Capital Improvement Revenue:
1,350,000 7.30%, 5/1/18...................................... 1,439,775
1,735,000 7.50%, 5/1/17...................................... 1,845,190
1,000,000 Winter Garden, Florida,
Industrial Development Authority Revenue, Beverly
Enterprises
8.75%, 7/1/12...................................... 1,125,170
Winter Haven, Florida,
Housing Authority Revenue, Multifamily Mortgage,
Abbey Lane Apartments, Series C:
1,100,000 7.00%, 7/1/12, (FNMA).............................. 1,180,014
2,000,000 7.00%, 7/1/24, (FNMA).............................. 2,141,880
------------
333,206,718
------------
GEORGIA - 0.4%
1,500,000 Coffee County, Georgia,
Hospital Authority Revenue, Anticipation
Certificates, Coffee Regional Medical Center,
Series A
6.75%, 12/1/26..................................... 1,560,555
------------
INDIANA - 1.1%
4,000,000 Wabash, Indiana,
Solid Waste Disposal Revenue, Jefferson Smurfit
Corp. Project
7.50%, 6/1/26...................................... 4,501,280
------------
NORTH CAROLINA - 4.7%
19,110,000 Charlotte, North Carolina,
Special Facilities Revenue, Charles Douglas
International Airport
5.60%, 7/1/27...................................... 19,206,888
------------
</TABLE>
33
<PAGE>
- -------------------------------------------------------------------------------
EVERGREEN
Florida High Income Municipal Bond Fund
- -------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS(continued)
August 31, 1998
See Combined Notes to Financial Statements.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal
Amount Value
- --------------------------------------------------------------------------------
<C> <S> <C>
MUNICIPAL OBLIGATIONS - CONTINUED
UTAH - 0.4%
$ 1,555,000 Utah State, Housing Finance Agency Revenue, Single
Family Mortgage, Senior Series G1
7.35%, 7/1/18...................................... $ 1,677,456
------------
VIRGINIA - 1.1%
1,000,000 Chesapeake, Virginia,
Redevelopment and Housing Authority Revenue,
Residential Rental, Series A
6.20%, 4/1/28...................................... 1,009,280
James City County, Virginia,
Residential Care Facilities Revenue:
1,500,000 6.625%, 3/1/23..................................... 1,572,645
1,750,000 First Mortgage, Williamsburg Landing
6.625%, 3/1/19..................................... 1,834,753
------------
4,416,678
------------
PUERTO RICO - 0.6%
990,000 Commonwealth of Puerto Rico,
Industrial, Tourist, Educational, Medical and
Environmental Control Facilities Revenue,
Mennonite General Hospital Project, Series A
6.50%, 7/1/12...................................... 1,080,080
1,475,000 Commonwealth of Puerto Rico,
Port Authority Revenue, American Airlines Project,
Series A
6.25%, 6/1/26...................................... 1,603,782
------------
2,683,862
------------
U.S. VIRGIN ISLANDS - 8.3%
Virgin Islands, Public Finance Authority, Senior
Lien, Series A:
5,000,000 5.50%, 10/1/18..................................... 5,124,050
15,000,000 5.50%, 10/1/22..................................... 15,319,500
10,500,000 5.625%, 10/1/25.................................... 10,793,580
2,950,000 Virgin Islands, Water and Power Authority Revenue
5.30%, 7/1/21...................................... 2,967,818
------------
34,204,948
------------
Total Municipal Obligations
(cost $386,826,644)............................... 401,458,385
------------
SHORT-TERM MUNICIPAL OBLIGATIONS - 1.2%
FLORIDA - 1.2%
1,000,000 Heritage Oak Park, Florida,
Community Development District Revenue, Bond
Anticipation Notes
6.50%, 12/15/98.................................... 1,003,790
4,200,000 Heritage Pines, Florida,
Community Development District Revenue, Bond
Anticipation Notes
6.25%, 12/15/98.................................... 4,200,000
------------
Total Short-Term Municipal Obligations
(cost $5,200,000)................................. 5,203,790
------------
- --------------------------------------------------------------------------------
Shares
- --------------------------------------------------------------------------------
MUTUAL FUND SHARES - 0.3% (COST $1,156,000)
1,156,000 Federated Municipal Obligations Fund............... 1,156,000
------------
TOTAL INVESTMENTS -
(COST $393,182,644)......................... 98.8% 407,818,175
OTHER ASSETS AND LIABILITIES - NET........... 1.2 4,819,838
----- ------------
NET ASSETS -................................. 100.0% $412,638,013
===== ============
</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.
(b) This security has been segregated to cover securities purchased on a
when-issued basis.
LEGEND OF ABBREVIATIONS:
FNMA Insured by Federal National Mortgage Association
GNMA Insured by Government National Mortgage Association
34
<PAGE>
- -------------------------------------------------------------------------------
EVERGREEN
Florida Municipal Bond Fund
- -------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
August 31, 1998
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal
Amount Value
- --------------------------------------------------------------------------------
<C> <S> <C>
MUNICIPAL OBLIGATIONS - 99.5%
FLORIDA - 96.3%
$ 4,000,000 Alachua County, Florida,
Health Facilities Authority, Shands Teaching
Hospital, Series A
6.25%, 12/1/16, (MBIA)............................. $ 4,686,120
3,750,000 Brevard County, Florida,
Housing Finance Authority Revenue, Multifamily
Housing, Windover Oaks, Series A
6.90%, 2/1/27, (FNMA).............................. 4,270,275
3,000,000 Broward County, Florida,
General Obligation, Series C
6.00%, 1/1/04...................................... 3,235,950
1,450,000 Broward County, Florida,
Housing Finance Authority Revenue, Series B
7.125%, 3/1/17, (GNMA)............................. 1,530,011
Broward County, Florida,
Port Facilities Revenue, Series C:
9,205,000 5.375%, 9/1/10..................................... 9,887,091
3,700,000 5.375%, 9/1/11..................................... 3,955,263
2,220,000 5.375%, 9/1/12..................................... 2,359,349
Broward County, Florida,
School District, Refunding Revenue Bond:
3,000,000 5.40%, 2/15/05..................................... 3,216,270
3,350,000 5.60%, 2/15/07, (AMBAC)............................ 3,598,637
4,045,000 Cape Canaveral, Florida,
Hospital District Revenue
5.25%, 1/1/18...................................... 4,015,593
1,000,000 Charlotte County, Florida,
Utility Revenue Bond
6.75%, 10/1/13, (FGIC)............................. 1,147,910
Clearwater, Florida,
Housing Authority Revenue:
10,500,000 Affordable Housing Acquisition Program
4.95%, 6/1/07, (FSA)............................... 10,761,555
Hamptons At Clearwater:
500,000 5.35%, 5/1/24...................................... 506,055
1,350,000 5.40%, 5/1/13...................................... 1,394,185
500,000 Collier County, Florida,
Health Facilities Authority Revenue, The Moorings
Inc. Project
7.00%, 12/1/19..................................... 556,550
1,765,000 Dade County, Florida,
Aviation Revenue,
Miami International Airport, Series B
5.00%, 10/1/07..................................... 1,852,968
Dade County, Florida,
Educational Facilities Authority Revenue, St.
Thomas University, (LOC: Sun Bank Miami):
2,000,000 6.00%, 1/1/10...................................... 2,165,300
2,000,000 6.00%, 1/1/14...................................... 2,153,460
1,000,000 6.125%, 1/1/19..................................... 1,081,580
40,000 Dade County, Florida,
School District, General Obligation
7.375%, 7/1/08..................................... 42,059
185,000 Dade County, Florida,
Single Family Mortgage Revenue, Series E
7.00%, 3/1/24...................................... 194,675
5,000,000 Dade County, Florida,
Solid Waste Systems, Special Obligation Revenue
6.00%, 10/1/06, (AMBAC)............................ 5,596,750
2,845,000 Delray Beach, Florida,
Water & Sewer Revenue Refunding, Series A
5.50%, 10/1/10, (AMBAC)............................ 3,127,366
840,000 Duval County, Florida,
Housing Finance Authority Revenue, Single Family
Mortgage
7.35%, 7/1/24, (GNMA).............................. 893,987
3,000,000 Duval County, Florida,
School District Refunding
5.90%, 8/1/02, (AMBAC)............................. 3,192,330
75,000 Duval County, Florida,
Single Family Mortgage Revenue
7.30%, 7/1/11...................................... 79,739
Escambia County, Florida,
Health Facilities Authority Revenue:
Azalea Trace Inc.:
2,560,000 6.00%, 1/1/15...................................... 2,657,613
1,250,000 6.10%, 1/1/19...................................... 1,307,400
2,750,000 Baptist Hospital Inc., Series B
6.00%, 10/1/14..................................... 2,887,968
5,000,000 Baptist Hospital, Baptist Manor
5.125%, 10/1/14.................................... 5,002,000
Escambia County, Florida,
Pollution Control Revenue, Champion International
Corp. Project:
5,455,000 5.875%, 6/1/22..................................... 5,699,657
2,650,000 6.40%, 9/1/30...................................... 2,915,874
4,015,000 Everglades, Florida,
Port Authority Revenue
7.125%, 11/1/16.................................... 4,973,742
2,500,000 Flagler County, Florida,
School District, Refunding
5.85%, 9/1/02...................................... 2,689,500
Florida State, Board of Education Capital Outlay:
Public Education:
5,850,000 Refunding, Series A
5.75%, 6/1/10...................................... 6,556,680
1,000,000 Series F
5.30%, 6/1/08...................................... 1,077,240
1,250,000 Series C
7.00%, 6/1/04...................................... 1,269,300
4,000,000 Florida State, Broward County
Expressway Authority
9.875%, 7/1/09..................................... 5,711,480
</TABLE>
35
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Florida Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS(continued)
August 31, 1998
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal
Amount Value
- --------------------------------------------------------------------------------
<C> <S> <C>
MUNICIPAL OBLIGATIONS - CONTINUED
FLORIDA - CONTINUED
Florida State, Division Bond Finance Department,
Department of Environmental Preservation 2000:
Series A:
$ 8,555,000 5.25%, 7/1/07, (MBIA).............................. $ 9,228,450
2,000,000 5.75%, 7/1/13, (AMBAC)............................. 2,160,280
5,600,000 6.00%, 7/1/06, (MBIA).............................. 6,298,376
3,000,000 6.10%, 7/1/04, (MBIA).............................. 3,268,650
Series B:
6,500,000 6.00%, 7/1/09, (AMBAC)............................. 7,418,255
19,600,000 6.00%, 7/1/10, (AMBAC)............................. 22,428,476
Florida State, Housing Finance Agency Revenue:
1,790,000 6.35%, 5/1/26, (GNMA).............................. 1,930,587
130,000 Homeownership Mortgage
7.50%, 9/1/14...................................... 136,789
Landings At Sea Forest:
560,000 5.85%, 12/1/18, (AMBAC)............................ 590,867
805,000 6.05%, 12/1/36, (AMBAC)............................ 851,553
2,000,000 Multifamily Housing, Series C
6.20%, 8/1/16...................................... 2,163,000
5,200,000 Refunding, Multifamily Park Colony, Series D
5.10%, 4/1/13...................................... 5,308,212
1,895,000 Series A
6.875%, 10/1/12.................................... 1,962,538
Florida State, Housing Finance Corporation Revenue:
2,300,000 Homeowner Mortgage, Series 2
4.75%, 7/1/19...................................... 2,322,241
2,990,000 Housing Kendall Court Apartments, Series D
5.35%, 8/1/24...................................... 3,021,365
Florida State, Turnpike Authority, Turnpike
Revenue, Department of Transportation,
2,000,000 Series A
6.90%, 7/1/02, (AMBAC)............................. 2,196,200
Series B:
5,475,000 5.25%, 7/1/10...................................... 5,864,929
5,950,000 5.25%, 7/1/11, (MBIA).............................. 6,339,427
4,370,000 5.25%, 7/1/12...................................... 4,632,899
Gainesville, Florida,
Utilities Systems Revenue, Series B:
4,800,000 6.50%, 10/1/13..................................... 5,737,392
3,000,000 7.50%, 10/1/08..................................... 3,801,180
3,000,000 7.50%, 10/1/09..................................... 3,836,100
3,000,000 Greater Orlando, Florida,
Aviation Authority
5.75%, 10/1/10..................................... 3,316,950
29,750,000 Gulf Breeze, Florida,
Capital Funding, Series B
4.50%, 10/1/27..................................... 27,519,940
1,240,000 Halifax, Florida,
Hospital Medical Center, Health Care Facilities
Revenue, Halifax Management System, Series A
4.50%, 4/1/05...................................... 1,255,463
1,000,000 Hialeah, Florida,
Capital Improvement Revenue
5.50%, 10/1/13..................................... 1,019,910
Hialeah, Florida,
Housing Authority Revenue:
2,020,000 Affordable Housing Program
4.60%, 12/20/08.................................... 2,048,038
12,505,000 Municipal Housing Revenue
9.50%, 11/1/21..................................... 17,333,055
3,250,000 Hillsborough County, Florida,
Industrial Development Authority, University
Community Hospital,
Series 1994
6.50%, 8/15/19, (MBIA)............................. 3,935,978
8,945,000 Hillsborough County, Florida,
School Board Master Lease Program
5.50%, 7/1/10...................................... 9,801,215
Jacksonville, Florida,
Electric Authority Revenue:
1,140,000 Capital Appreciation, Series 7
(Eff. Yield 6.20%) (b)
0.00%, 10/1/11, (MBIA)............................. 624,765
6,500,000 Refunding, St. John's River
Power Park Systems
6.00%, 10/1/05..................................... 7,260,760
St. John's River, Issue 2, Series 16:
3,000,000 5.00%, 10/1/08..................................... 3,112,890
3,645,000 5.00%, 10/1/09..................................... 3,762,442
2,500,000 Jacksonville, Florida,
Excise Taxes Revenue
6.00%, 10/1/01, (AMBAC)............................ 2,666,000
3,000,000 Jacksonville, Florida,
Health Facilities Hospital Revenue,
St. Luke's Hospital Association Project
7.125%, 11/15/20................................... 3,294,810
1,245,000 Jacksonville, Florida,
Health Industrial Development, National
Benevolent-Cypress Village, Series A
6.25%, 12/1/26..................................... 1,335,960
4,975,000 Key West, Florida,
Utility Board, Electric Revenue
(Eff. Yield 6.92%) (b)
0.00%, 10/1/14..................................... 2,309,047
Lakeland, Florida,
Electric & Water Revenue:
4,670,000 6.25%, 1/1/04...................................... 5,176,975
5,000,000 Refunding and Improvement,
Jr. Subord. Lien, Series B
6.00%, 10/1/10, (FGIC)............................. 5,733,250
Refunding, Jr. Subord. Lien
4,000,000 6.50%, 10/1/07..................................... 4,678,760
</TABLE>
36
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Florida Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS(continued)
August 31, 1998
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal
Amount Value
- --------------------------------------------------------------------------------
<C> <S> <C>
MUNICIPAL OBLIGATIONS - CONTINUED
FLORIDA - CONTINUED
Lee County, Florida,
Housing Authority, Single Family Mortgage Revenue,
Series A 7:
$ 1,500,000 5.05%, 9/1/29...................................... $ 1,515,660
2,800,000 6.40%, 3/1/29...................................... 3,130,232
Lee County, Florida,
Passanger Facility, Charge Revenue:
2,225,000 4.60%, 10/1/07..................................... 2,270,657
2,495,000 4.80%, 10/1/09..................................... 2,552,460
2,445,000 4.90%, 10/1/10..................................... 2,497,592
2,065,000 5.00%, 10/1/11..................................... 2,114,890
4,890,000 Leesburg, Florida,
Hospital Revenue, Leesburg Regional Medical Center
Project, Series B
5.70%, 7/1/18...................................... 5,114,500
Leon County, Florida,
Educational Facilities Authority, Certificates
Partners, Southgate:
1,145,000 8.50%, 9/1/17...................................... 1,634,671
1,045,000 9.00%, 9/1/04...................................... 1,311,381
1,140,000 9.00%, 9/1/05...................................... 1,466,108
1,245,000 9.00%, 9/1/06...................................... 1,636,938
1,355,000 9.00%, 9/1/07...................................... 1,817,407
1,475,000 9.00%, 9/1/08...................................... 2,017,048
1,610,000 9.00%, 9/1/09...................................... 2,235,646
1,755,000 9.00%, 9/1/10...................................... 2,466,214
1,915,000 9.00%, 9/1/11...................................... 2,718,266
2,085,000 9.00%, 9/1/12...................................... 2,978,944
2,275,000 9.00%, 9/1/13...................................... 3,281,346
2,480,000 9.00%, 9/1/14...................................... 3,655,545
730,000 Leon County, Florida,
Housing Finance Authority Revenue, Single Family
Mortgage, Multicounty Program, Series B
6.25%, 7/1/19, (GNMA).............................. 777,370
1,675,000 Manatee County, Florida,
Housing Finance Authority Revenue, Single Family
Mortgage, Subseries 1
7.20%, 5/1/28...................................... 1,903,487
Miami Beach, Florida,
Redevelopment Agency Tax Increment Revenue, City
Center Historic Convention Village:
2,000,000 5.625%, 12/1/09.................................... 2,116,740
3,000,000 5.80%, 12/1/13..................................... 3,111,090
2,000,000 5.875%, 12/1/22.................................... 2,055,680
1,470,000 Miami Beach, Florida,
Resort Tax Revenue
6.25%, 10/1/22, (AMBAC)............................ 1,756,915
Miami Dade County, Florida,
School District:
8,225,000 5.375%, 8/1/10..................................... 8,946,250
7,525,000 5.375%, 8/1/11..................................... 8,172,075
Miami Dade County, Florida,
Special Obligation:
50,500,000 Series B (Eff. Yield 5.65%) (b)
0.00%, 10/1/30..................................... 9,156,660
Miami Dade County, Florida,
17,515,000 Series C (Eff. Yield 5.68%) (b)
0.00%, 10/1/28..................................... 3,538,030
3,000,000 Miami, Florida,
General Obligation
5.60%, 12/1/03, (FGIC)............................. 3,238,350
5,000,000 Miami, Florida,
Health Facilities Authority Revenue
5.25%, 8/15/15, (AMBAC)............................ 5,123,850
1,000,000 Miramar, Florida,
Wastewater Improvements
6.75%, 10/1/16..................................... 1,138,750
1,000,000 North Miami, Florida,
Health Facility Authority Revenue, Catholic Health
Services Obligation Group
6.00%, 8/15/16..................................... 1,069,550
1,335,000 North Springs, Florida,
Water & Sewer Revenue, Series B
6.50%, 10/1/16, (MBIA)............................. 1,514,371
1,000,000 North Tampa, Florida,
Housing Development Corp.
Revenue, Country Oaks Apartments, Series A
6.90%, 1/1/24, (FNMA).............................. 1,057,370
1,000,000 Okaloosa County, Florida,
Water & Sewer Revenue
6.00%, 7/1/11, (AMBAC)............................. 1,144,960
Orange County, Florida,
Health Facilities Authority Revenue:
3,000,000 Lakeside Alternatives Inc.
6.50%, 7/1/13...................................... 3,312,510
2,000,000 Orlando Regional Healthcare,
Series C
6.25%, 10/1/21..................................... 2,362,940
Series 3:
5,225,000 5.30%, 10/1/06..................................... 5,648,016
5,785,000 5.50%, 10/1/08..................................... 6,377,789
2,000,000 5.70%, 10/1/11..................................... 2,231,100
Orlando & Orange County, Florida,
Expressway Authority Revenue:
40,000 8.25%, 7/1/15, (FGIC).............................. 56,200
4,550,000 Jr. Lien
6.50%, 7/1/11, (FGIC).............................. 5,434,429
10,000,000 Refunding, Sr. Lien
5.375%, 7/1/10, (AMBAC)............................ 10,560,400
Orlando, Florida,
Utilities Commission, Water & Electric Revenue:
4,000,000 6.00%, 10/1/10..................................... 4,594,680
4,000,000 Linked SAVRs/RIBs
5.60%, 10/6/17, (a)................................ 4,231,720
3,000,000 Series 78A
6.25%, 4/1/05...................................... 3,381,630
Palm Beach County, Florida,
Criminal Justice Facilities Revenue:
15,195,000 5.75%, 6/1/12, (FGIC).............................. 17,009,435
3,000,000 7.20%, 6/1/15, (FGIC).............................. 3,852,780
</TABLE>
37
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Florida Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS(continued)
August 31, 1998
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal
Amount Value
- --------------------------------------------------------------------------------
<C> <S> <C>
MUNICIPAL OBLIGATIONS - CONTINUED
FLORIDA - CONTINUED
$ 1,880,000 Palm Beach County, Florida,
General Obligation, Series B
6.50%, 7/1/10.................................... $ 2,248,706
Palm Beach County, Florida,
Health Facilities Authority Revenue:
975,000 Abbey Delray South Project
5.20%, 10/1/06................................... 1,001,530
Good Samaritan Health Systems:
3,695,000 6.20%, 10/1/11................................... 4,177,382
6,000,000 6.30%, 10/1/22................................... 6,819,900
1,000,000 Waterford Project
5.50%, 10/1/15................................... 1,006,880
2,000,000 Palm Beach County, Florida,
Industrial Development Resource, Geriatric Care
Inc. Project
6.55%, 12/1/16................................... 2,198,160
5,500,000 Palm Beach County, Florida,
Solid Waste Authority Revenue, Refunding and
Improvement
5.75%, 12/1/04, (MBIA)........................... 5,972,120
5,000,000 Pasco County, Florida,
Health Facilities Authority, Hospital Revenue,
Series 2
5.60%, 10/1/10................................... 5,345,150
3,695,000 Pasco County, Florida,
Housing Finance Authority Revenue, Multifamily
Housing, Oak Trail Apartments Project, Series A
5.35%, 6/1/27.................................... 3,880,858
2,500,000 Pembroke Pines, Florida,
Consolidated Utility Systems Revenue
6.25%, 9/1/04, (FGIC)............................ 2,707,125
Pinellas County, Florida,
Educational Facilities Authority Revenue, Barry
University Project:
7,685,000 5.375%, 10/1/23.................................. 7,735,568
2,890,000 5.50%, 10/1/13................................... 3,041,638
Pinellas County, Florida,
Housing Finance Authority:
3,240,000 Multifamily Revenue, Emerald Bay Apartments,
Series A
5.00%, 4/1/28.................................... 3,285,652
Single Family Housing Revenue,
Series C 1:
1,800,000 5.375%, 9/1/19................................... 1,817,874
1,790,000 5.40%, 9/1/22.................................... 1,807,757
5,455,000 6.30%, 3/1/29.................................... 5,891,127
8,350,000 Polk County, Florida,
Industrial Development Authority, Tampa Electric
Co. Project
5.85%, 12/1/30................................... 8,926,901
5,500,000 Reedy Creek, Florida,
Improvement District, Series A
6.15%, 6/1/03, (MBIA)............................ 5,864,375
1,500,000 Saint Lucie County, Florida,
School District
6.00%, 7/1/04, (AMBAC)........................... 1,629,645
Saint Petersburg, Florida,
Public Utility Revenue:
2,000,000 6.40%, 10/1/01................................... 2,096,720
Saint Petersburg, Florida,
Public Utility Revenue - continued:
3,000,000 Utility Tax
5.95%, 6/1/04, (AMBAC)............................. 3,256,650
1,800,000 Sarasota County, Florida,
Health Facilities Authority Revenue, Sunnyside
Property
6.00%, 5/15/10..................................... 1,877,130
3,590,000 Seacoast, Florida,
Utility Authority Revenue, Water & Sewer System,
Series A
5.50%, 3/1/18, (FGIC).............................. 3,896,406
3,000,000 Seminole County, Florida,
School District
6.00%, 8/1/03, (MBIA).............................. 3,281,700
1,250,000 St. John's County, Florida,
Industrial Development Authority Revenue, Series A
5.25%, 3/1/11...................................... 1,292,837
7,505,000 Sunrise, Florida,
Utility Systems Revenue
5.50%, 10/1/18..................................... 8,146,527
2,000,000 Tallahassee, Florida,
Health Facilities Revenue, Tallahassee Memorial
Regional Medical
6.625%, 12/1/13, (MBIA)............................ 2,269,980
6,355,000 Tampa, Florida,
Capital Improvements Program Revenue, Series B
8.375%, 10/1/18.................................... 6,380,484
45,000 Tampa, Florida,
Guaranteed Entitlement Revenue, Series B
8.50%, 10/1/18..................................... 45,184
Tampa, Florida,
Health Systems, Catholic Health Revenue, Series A
1:
5,000,000 5.50%, 11/15/13.................................... 5,453,550
2,000,000 5.50%, 11/15/14, (MBIA)............................ 2,179,920
Tampa, Florida,
Utility Tax Improvement:
2,940,000 5.25%, 10/1/10..................................... 3,163,587
3,090,000 5.25%, 10/1/11..................................... 3,317,177
2,160,000 Tampa-Hillsborough County, Florida,
Expressway Authority Revenue
5.25%, 7/1/09...................................... 2,317,637
1,000,000 Tarpon Springs, Florida,
Health Facilities Authority Revenue, Ellen
Memorial Hospital
7.625%, 5/1/21..................................... 1,076,870
Volusia County, Florida,
Educational Facilities Authority Revenue, Embry-
Riddle Aero, Series A:
3,500,000 6.125%, 10/15/16................................... 3,763,480
2,600,000 6.125%, 10/15/26................................... 2,785,120
1,800,000 Volusia County, Florida,
General Obligation
5.85%, 7/1/03, (AMBAC)............................. 1,955,628
3,000,000 Volusia County, Florida,
School District
6.00%, 8/1/01, (FGIC).............................. 3,189,000
------------
634,328,023
------------
</TABLE>
38
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Florida Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS(continued)
August 31, 1998
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Amount Value
- --------------------------------------------------------------------------------
<C> <S> <C>
MUNICIPAL OBLIGATIONS - CONTINUED
PUERTO RICO - 0.9%
$ 1,000,000 Commonwealth of Puerto Rico,
Aquaduct & Sewer Authority Revenue
6.25%, 7/1/12...................................... $ 1,157,380
3,000,000 Commonwealth of Puerto Rico,
Linked Bond Payment Obligation
7.00%, 7/1/10, (MBIA) (a).......................... 3,716,430
870,000 Commonwealth of Puerto Rico,
Industrial Tourist, Educational, Medical and
Environmental Control Facilities, Hospital Auxilio
Mutuo Obligation, Series A
6.25%, 7/1/24...................................... 975,896
------------
5,849,706
------------
U.S. VIRGIN ISLANDS - 2.3%
Virgin Islands, Public Finance Authority, Series A:
5,335,000 5.20%, 10/1/10..................................... 5,497,131
6,250,000 5.50%, 10/1/18..................................... 6,405,063
2,945,000 Virgin Islands, Water & Power Authority
5.375%, 7/1/10..................................... 3,089,334
------------
14,991,528
------------
Total Municipal Obligations
(cost $619,501,951)............................... 655,169,257
------------
MUTUAL FUND SHARES - 1.8% (COST $11,874,000)
11,874,000 Federated Municipal Obligations Fund................ 11,874,000
------------
TOTAL INVESTMENTS -
(COST $631,375,951)......................... 101.3% 667,043,257
OTHER ASSETS AND LIABILITIES - NET........... (1.3) (8,836,115)
----- ------------
NET ASSETS -................................. 100.0% $658,207,142
===== ============
</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.
LEGEND OF ABBREVIATIONS:
AMBAC Insured by American Municipal Bond Assurance Corporation
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 Letter of Credit
MBIA Insured by Municipal Bond Investors Assurance Corporation
RIBs Residual Interest Bonds
SAVRs Select Auction Variable Rate Securities
See Combined Notes to Financial Statements.
39
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Georgia Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
August 31, 1998
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal
Amount Value
- --------------------------------------------------------------------------------
<C> <S> <C>
MUNICIPAL OBLIGATIONS - 98.0%
GEORGIA - 91.7%
$1,000,000 Albany Dougherty, Georgia, Development Authority,
Solid Waste Disposal Revenue, Procter & Gamble Paper
Products 5.30%, 5/15/26............................. $ 1,012,980
2,000,000 Americus Sumpter County, Georgia, Hospital Revenue,
Sumpter Regional Hospital Project, Anticipation
Certificates 5.25%, 12/1/14, (AMBAC)................ 2,093,340
Appling County, Georgia,
Development Authority, Pollution Control Revenue,
Oglethorpe Power Corp., Hatch Project:
1,055,000 7.125%, 1/1/15, (MBIA)............................... 1,192,720
500,000 7.15%, 1/1/21, (MBIA)................................ 565,855
Atlanta, Georgia,
Airport Facilities Revenue:
1,500,000 Capital Appreciation,
(Eff. Yield 6.33%) (a)
0.00%, 1/1/10, (MBIA)................................ 840,195
Series A:
2,000,000 6.50%, 1/1/06, (AMBAC)............................... 2,284,900
1,000,000 6.50%, 1/1/10, (AMBAC)............................... 1,179,870
Baldwin County, Georgia,
Hospital Authority Revenue,
Oconee Regional Medical Center:
1,465,000 5.25%, 12/1/12....................................... 1,491,092
2,000,000 5.25%, 12/1/22....................................... 1,956,880
4,000,000 Brunswick & Glynn County, Georgia, Development
Authority Revenue, Georgia Pacific Corp. Project
5.55%, 3/1/26....................................... 4,050,920
300,000 Butts County, Georgia,
Certificates of Participation
6.75%, 12/1/14, (MBIA).............................. 341,640
1,320,000 Cartersville, Georgia,
Development Authority Revenue, Water & Waste
Facilities 7.40%, 11/1/10........................... 1,648,957
120,000 Cartersville, Georgia,
General Obligation
6.70%, 1/1/12....................................... 143,965
500,000 Clayton County, Georgia,
Housing Authority Mortgage Revenue 7.125%, 12/1/25,
(FHA/VA)............................................ 548,990
1,600,000 Coffee County, Georgia,
Hospital Authority, Revenue Anticipation
Certificates, Coffee Regional Medical Center, Series
A 6.75%, 12/1/16.................................... 1,676,960
College Park, Georgia,
Business and Industrial Development Authority, Civic
Center Project Revenue, Series A:
1,435,000 5.70%, 9/1/09, (FSA)................................. 1,585,015
1,470,000 5.75%, 9/1/10, (FSA)................................. 1,621,807
1,000,000 Conyers, Georgia,
Water & Sewer Revenue, Series A
6.60%, 7/1/15, (AMBAC) (ETM)........................ 1,143,850
DeKalb County, Georgia,
Housing Authority Revenue:
1,465,000 Multi-Family, North Hill
Apartments Project
6.625%, 1/1/05, (FNMA)................................. 1,606,065
500,000 The Lakes at Indian Creek Project
7.15%, 1/1/25, (FSA)................................... 548,125
500,000 DeKalb County, Georgia,
School District, Series A
6.25%, 7/1/11......................................... 585,630
1,000,000 Effingham County, Georgia,
Development Authority, Solid Waste Disposal Revenue,
Fort James Project
5.625%, 7/1/18........................................ 1,009,300
Effingham County, Georgia,
School District:
1,260,000 6.25%, 2/1/07, (MBIA)................................. 1,439,575
1,160,000 6.25%, 2/1/08, (MBIA)................................. 1,334,569
500,000 6.25%, 2/1/09, (MBIA)................................. 578,420
Fayette County, Georgia,
School District:
600,000 6.125%, 3/1/15........................................ 658,902
2,200,000 6.25%, 3/1/06......................................... 2,492,138
1,000,000 Forsyth County, Georgia,
School District
6.75%, 7/1/16........................................ 1,233,180
3,000,000 Fulton County, Georgia,
Development Authority,
Special Facilities Revenue,
Delta Airlines Inc. Project
5.45%, 5/1/23........................................ 3,002,070
600,000 Fulton County, Georgia,
Housing Authority, Multifamily Housing Revenue,
Concorde Place Apartments
Project, Series C
6.90%, 1/1/28........................................ 628,260
Fulton County, Georgia,
Water & Sewer Revenue:
1,600,000 5.25%, 1/1/13, (FGIC)................................. 1,689,040
1,420,000 6.25%, 1/1/06, (FGIC)................................. 1,604,870
1,500,000 6.25%, 1/1/09, (FGIC)................................. 1,733,730
390,000 6.375%, 1/1/14, (FGIC) (ETM).......................... 463,148
10,000 6.375%, 1/1/14, (FGIC)................................ 11,851
Gainesville, Georgia,
Water & Sewer Revenue:
1,000,000 5.25%, 11/15/10, (FGIC)................................ 1,076,600
1,000,000 Series B, Prerefunded
7.20%, 11/15/10, (FGIC)................................ 1,092,740
500,000 George L. Smith II, Georgia,
World Congress Center Authority Revenue, Domed Stadium
Project
7.875%, 7/1/20, (MBIA)................................ 542,530
Georgia State,
General Obligation:
1,000,000 Series B
7.00%, 11/1/08......................................... 1,087,600
2,000,000 Series C
2.25%, 8/1/17.......................................... 1,372,580
</TABLE>
40
<PAGE>
- -------------------------------------------------------------------------------
EVERGREEN
Georgia Municipal Bond Fund
- -------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS(continued)
August 31, 1998
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal
Amount Value
- --------------------------------------------------------------------------------
<C> <S> <C>
MUNICIPAL OBLIGATIONS - CONTINUED
GEORGIA - CONTINUED
$ 395,000 Georgia State,
Housing & Finance Authority Revenue, Series A
6.55%, 12/1/27, (FHA/VA).............................. $ 424,988
Georgia State,
Municipal Electric Authority Power Revenue:
Project One Subordinated,
Series A:
100,000 5.25%, 1/1/09, (AMBAC)................................. 106,207
1,000,000 6.00%, 1/1/07, (MBIA).................................. 1,120,170
Series B:
500,000 6.20%, 1/1/10.......................................... 564,810
1,000,000 6.25%, 1/1/17, (MBIA).................................. 1,169,340
400,000 Series EE
7.25%, 1/1/24, (AMBAC)................................. 534,096
1,000,000 Series Z
5.50%, 1/1/12, (MBIA).................................. 1,085,770
500,000 Glynn-Brunswick, Georgia,
Memorial Hospital Authority,
Revenue Anticipation Certificates
6.00%, 8/1/16, (MBIA)................................. 545,980
500,000 Griffin Spalding County, Georgia,
School System
7.50%, 2/1/02, (FSA).................................. 557,290
2,500,000 Gwinnett County, Georgia,
Water & Sewer Revenue,
Certificates of Participation
8.60%, 8/1/03......................................... 3,020,225
Hall County, Georgia,
School District, Prerefunded:
1,210,000 6.45%, 12/1/09, (AMBAC)................................ 1,392,032
500,000 6.70%, 12/1/14, (AMBAC)................................ 582,075
Metro Atlanta, Georgia,
Rapid Transit Authority, Georgia
Sales Tax Revenue:
830,000 Series D
7.00%, 7/1/11, (FGIC) (ETM)............................ 1,029,632
1,000,000 Series P
6.25%, 7/1/11, (AMBAC)................................. 1,169,130
1,000,000 Middle, Georgia,
Coliseum Authority, Georgia Coliseum Revenue, Series A
5.375%, 7/1/14........................................ 1,041,080
Monroe County, Georgia,
Development Authority,
Pollution Control Revenue, Oglethorpe Power
Corporation,
Series A:
1,000,000 6.45%, 1/1/05.......................................... 1,125,690
1,000,000 6.70%, 1/1/09.......................................... 1,177,590
525,000 Peach County, Georgia,
School District
6.50%, 2/1/06, (MBIA)................................. 602,327
1,500,000 Richmond County, Georgia, Development Authority
Revenue, Southern Care,Series C,
(Eff. Yield 5.72%) (a)
0.00%, 12/1/21, (ETM)................................. 426,780
Savannah, Georgia,
Economic Development Authority
Revenue:
Mighty Eighth Air Force:
1,000,000 5.875%, 1/1/12........................................ 1,068,930
860,000 5.875%, 1/1/15........................................ 910,800
775,000 Southern Care, Series C,
(Eff. Yield 5.72%)(a)
0.00%, 12/1/21, (ETM)................................. 220,503
Savannah, Georgia,
Hospital Authority Revenue,
St. Joseph's Hospital Project:
800,000 6.00%, 7/1/00......................................... 829,400
3,000,000 6.125%, 7/1/12........................................ 3,237,390
500,000 6.20%, 7/1/23......................................... 532,650
1,300,000 Washington, Georgia,
County School District,
6.875%, 1/1/14, (AMBAC)............................... 1,523,431
-----------
77,169,175
-----------
PUERTO RICO - 1.4%
1,000,000 Commonwealth of Puerto Rico,
General Obligation
6.25%, 7/1/08, (MBIA)................................. 1,163,680
-----------
U. S. VIRGIN ISLANDS - 4.9%
2,000,000 Virgin Islands, Public Finance Authority,
Senior Lien, Series A
5.50%, 10/1/22......................................... 2,042,600
2,000,000 Virgin Islands, Water & Power
Authority, Electric Systems Revenue
5.25%, 7/1/09......................................... 2,084,640
-----------
4,127,240
-----------
Total Municipal Obligations (cost $77,019,269)......... 82,460,095
-----------
</TABLE>
41
<PAGE>
- -------------------------------------------------------------------------------
EVERGREEN
Georgia Municipal Bond Fund
- -------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS(continued)
August 31, 1998
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
<C> <S> <C>
MUTUAL FUND SHARES - 1.0% (COST $843,000)
843,000 Federated Municipal Obligations Fund.................. $ 843,000
-----------
TOTAL INVESTMENTS -
(COST $77,862,269)........................... 99.0% 83,303,095
OTHER ASSETS AND LIABILITIES - NET............ 1.0 817,387
------ -----------
NET ASSETS - ................................. 100.00% $84,120,482
====== ===========
</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 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.
42
<PAGE>
- -------------------------------------------------------------------------------
EVERGREEN
Maryland Municipal Bond Fund
- -------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
August 31, 1998
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal
Amount Value
- --------------------------------------------------------------------------------
<C> <S> <C>
MUNICIPAL OBLIGATIONS - 97.4%
DISTRICT OF COLUMBIA - 4.7%
$1,300,000 District of Columbia,
Metropolitan Area Transit Authority Revenue
6.00%, 7/1/08, (FGIC)............................... $ 1,474,499
-------------
MARYLAND - 86.9%
1,230,000 Annapolis, Maryland,
Economic Development Revenue, St. John's College
Facility
5.50%, 10/1/18...................................... 1,257,638
1,000,000 Baltimore County, Maryland,
Auto Parking Revenue
5.25%, 7/1/08....................................... 1,050,840
1,000,000 Baltimore, Maryland,
Baltimore City Parking
Systems Revenue, Series A
5.25%, 7/1/17....................................... 1,055,310
1,000,000 Calvert County, Maryland,
Economic Development Revenue, Asbury Solomons Inc.
5.00%, 1/1/17, (MBIA)............................... 999,930
1,500,000 Calvert County, Maryland,
Pollution Control Revenue, Baltimore Gas & Electric
Company Project
5.55%, 7/15/14...................................... 1,580,775
1,400,000 Carroll County, Maryland,
County Commissoners,
Consolidated Public Improvement,
General Obligation
5.35%, 12/1/16...................................... 1,465,590
1,430,000 Howard County, Maryland,
Consolidated Public Improvement, General
Obligation, Series A
5.25%, 8/15/11...................................... 1,498,626
Maryland State, Community Development
Administration:
720,000 Series B
5.30%, 9/1/23....................................... 724,313
1,470,000 Single Family Program, 5th Series
5.40%, 4/1/08....................................... 1,532,916
Maryland State, Health and Higher
Education Facilities:
Calvert Memorial Hospital Revenue:
100,000 4.60%, 7/1/07....................................... 101,211
500,000 5.00%, 7/1/19....................................... 493,595
1,000,000 Francis Scott Key Medical Center
5.30%, 7/1/08....................................... 1,056,790
450,000 University of Maryland
Medical Systems
4.80%, 7/1/10....................................... 453,857
500,000 Upper Chesapeake Hospital
5.50%, 1/1/20....................................... 522,410
1,800,000 Maryland State, Stadium Authority,
Lease Revenue, Convention Center Expansion Project
5.875%, 12/15/11.................................... 1,983,240
1,000,000 Maryland State, State and Local Facilities
Loan, 1st Series
5.70%, 3/15/10....................................... 1,093,590
850,000 Maryland State, Transportation Authority
Facilities Revenue
5.80%, 7/1/06........................................ 941,128
Maryland State, Washington Suburban
Sanitation District, Water Supply
Revenue:
1,600,000 5.375%, 6/1/11....................................... 1,670,192
1,700,000 5.50%, 6/1/10........................................ 1,817,215
500,000 Montgomery County, Maryland, Consolidated Public
Improvement, General Obligation, Series A
5.75%, 7/1/06........................................ 555,475
1,000,000 Ocean City, Maryland,
General Obligation
5.50%, 3/15/09, (MBIA)............................... 1,069,760
Prince Georges County, Maryland, Maryland National
Park and Planning Commission, Series S-2:
805,000 Pre-refunded
5.125%, 7/1/10....................................... 841,410
195,000 Unrefunded Balance
5.125%, 7/1/10....................................... 208,755
1,300,000 Prince Georges County, Maryland, Stormwater
Management Revenue, Hyattsville District Court
Facility, Series A
6.00%, 7/1/09........................................ 1,441,700
1,400,000 University of Maryland, Systems Auxiliary Revenue,
Series A
5.40%, 4/1/09........................................ 1,501,402
-----------
26,917,668
-----------
U. S. VIRGIN ISLANDS - 5.8%
1,000,000 Virgin Islands, Public Finance Authority
Revenue, Senior Lien, Series A
5.625%, 10/1/25...................................... 1,027,960
750,000 Virgin Islands, Water and Power
Authority Revenue
5.30%, 7/1/18........................................ 756,510
-----------
1,784,470
-----------
Total Municipal Obligations
(cost $28,734,829)................................... 30,176,637
-----------
- --------------------------------------------------------------------------------
Shares
- --------------------------------------------------------------------------------
MUTUAL FUND SHARES - 1.9% (COST $585,000)
585,000 Federated Municipal Obligations Fund ................. 585,000
-----------
TOTAL INVESTMENTS -
(COST $29,319,829)............................ 99.3% 30,761,637
OTHER ASSETS AND
LIABILITIES - NET............................. 0.7 211,636
----- -----------
NET ASSETS - .................................. 100.0% $30,973,273
===== ===========
</TABLE>
LEGEND OF ABBREVIATIONS:
FGIC Insured by Federal Guaranty Insurance Company
MBIA Insured by Municipal Bond Investors Assurance Corporation
See Combined Notes to Financial Statements.
43
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
North Carolina Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
August 31, 1998
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal
Amount Value
- --------------------------------------------------------------------------------
<C> <S> <C>
MUNICIPAL OBLIGATIONS - 98.2%
NORTH CAROLINA - 91.6%
Appalachian State University, North
Carolina, Revenue Refunding:
$1,510,000 Student Fee
5.00%, 5/15/12, (MBIA)................................. $ 1,575,489
1,135,000 Utility Systems
5.00%, 5/15/12, (MBIA)................................. 1,179,526
1,435,000 Asheville, North Carolina,
Housing Authority Revenue, Multifamily Housing,
Woodridge Apartments
5.80%, 11/20/39, (GNMA)............................... 1,488,812
1,000,000 Buncombe County, North Carolina, General Obligation
5.10%, 3/1/10......................................... 1,065,440
1,240,000 Burlington, North Carolina,
Burlington Homes, Section 8,
Series A
6.00%, 8/1/09......................................... 1,317,029
2,480,000 Cabarrus County, North Carolina, General Obligation
5.30%, 2/1/11, (MBIA)................................. 2,656,452
1,000,000 Chapel Hill, North Carolina,
Parking Facilities Revenue, Certificates of
Participation
6.35%, 12/1/18........................................ 1,103,380
Charlotte, North Carolina,
Certificates of Participation:
1,735,000 Cityfair Parking Facility Project,
Series A
6.125%, 6/1/10......................................... 1,898,541
1,000,000 Convention Facility Project
6.65%, 12/1/03, (AMBAC)................................ 1,098,810
Stadium Parking Facilities Project,
Series C:
1,245,000 6.00%, 6/1/10.......................................... 1,355,220
1,475,000 6.00%, 6/1/14.......................................... 1,600,891
5,000,000 Charlotte, North Carolina,
General Obligation
5.00%, 2/1/10......................................... 5,294,450
1,435,000 Charlotte, North Carolina,
Housing Development Corp., Mortgage Revenue,
Vantage 78 Apartments
6.60%, 7/15/21........................................ 1,501,670
Charlotte, North Carolina,
Mecklenberg Hospital, Unrefunded Balance:
1,050,000 5.75%, 1/1/12.......................................... 1,120,046
1,495,000 6.00%, 1/1/05.......................................... 1,611,117
15,000,000 Charlotte, North Carolina,
Special Facilities Revenue, Charlotte Douglas
International Airport
5.60%, 7/1/27......................................... 15,076,050
3,850,000 Charlotte, North Carolina,
Water & Sewer Revenue
5.70%, 2/1/09......................................... 4,231,881
1,000,000 Coastal Regional North Carolina Solid Waste Management
Authority Revenue, Disposal Systems
6.50%, 6/1/08......................................... 1,078,300
2,000,000 Craven County, North Carolina,
General Obligation
6.40%, 6/1/00......................................... 2,092,980
4,000,000 Craven County, North Carolina,
Industrial Facilities and Pollution Control
Financing Authority Revenue, Weyerhaeuser Company
Project
6.35%, 1/1/10....................................... 4,330,880
2,390,000 Cumberland County, North Carolina, Certificates of
Participation, Civic Center Project, Series A
6.40%, 12/1/24, (AMBAC)............................. 2,744,437
Cumberland County, North Carolina,
General Obligation:
2,100,000 5.90%, 2/1/10........................................ 2,307,837
2,100,000 5.90%, 2/1/11........................................ 2,307,837
2,100,000 5.90%, 2/1/12........................................ 2,307,837
1,075,000 5.90%, 2/1/13........................................ 1,181,393
Durham County, North Carolina,
Certificates of Participation, Hospital
and Office Facilities Project:
1,235,000 5.60%, 5/1/06........................................ 1,340,173
1,305,000 5.70%, 5/1/07........................................ 1,419,892
1,375,000 5.75%, 5/1/08........................................ 1,499,479
Durham County, North Carolina, Certificates of
Participation,
New Durham Corporation:
1,160,000 Series A
5.25%, 12/1/10....................................... 1,249,100
1,485,000 Series B
5.25%, 12/1/11....................................... 1,595,142
800,000 Durham County, North Carolina,
General Obligation
7.10%, 5/1/09....................................... 859,696
2,750,000 Durham County, North Carolina, Multifamily Housing
Revenue, Ivy Commons Project
8.00%, 3/1/29....................................... 2,846,140
Durham County, North Carolina,
Public Improvement Bonds,
Series 95:
2,400,000 5.80%, 2/1/10........................................ 2,640,720
2,400,000 5.80%, 2/1/11........................................ 2,629,344
Fayetteville, North Carolina,
Public Works Commission Revenue,
Series A:
2,000,000 6.00%, 3/1/12, (FSA)................................. 2,156,760
1,360,000 6.75%, 3/1/03, (AMBAC)............................... 1,514,999
1,305,000 6.75%, 3/1/04, (AMBAC)............................... 1,476,490
1,380,000 6.75%, 3/1/05, (AMBAC)............................... 1,585,979
1,025,000 Franklin County, North Carolina, Certificates of
Participation, Jail and School Projects, Prerefunded
Balance
6.20%, 6/1/04, (FGIC)............................... 1,140,846
915,000 Fremont, North Carolina, Housing Development
Corporation Revenue, First Lien, Torhunta Apartments
6.75%, 7/15/22, (FHA)............................... 964,428
Gastonia, North Carolina, Combined
Utilities Systems Revenue:
1,000,000 6.00%, 5/1/14, (MBIA)................................ 1,117,510
1,505,000 6.10%, 5/1/19, (MBIA)................................ 1,689,423
</TABLE>
44
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
North Carolina Municipal Bond Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS(continued)
August 31, 1998
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal
Amount Value
- --------------------------------------------------------------------------------
<C> <S> <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...................................... $ 1,079,670
1,100,000 6.65%, 12/1/04...................................... 1,205,149
Greensboro, North Carolina,
Combined Enterprise Systems Revenue, Series A:
1,615,000 5.20%, 6/1/10....................................... 1,700,692
880,000 6.50%, 6/1/02....................................... 960,643
1,050,000 6.50%, 6/1/03....................................... 1,165,332
1,300,000 6.50%, 6/1/05....................................... 1,483,066
500,000 Guilford County, North Carolina,
Various Purpose Revenue
6.10%, 2/1/02...................................... 529,410
1,000,000 Harnett County, North Carolina, Certificates of
Participation
6.40%, 12/1/14, (AMBAC)............................ 1,131,630
Haywood County, North Carolina, Industrial
Facilities and Pollution Control Finance Authority
Revenue, Champion International Corporation
Project:
2,500,000 6.00%, 3/1/20....................................... 2,653,625
1,750,000 6.25%, 9/1/25....................................... 1,894,532
Martin County, North Carolina,
Industrial Facilities and Pollution Control
Financing Authority Revenue, Weyerhaeuser Company
Project:
1,100,000 8.50%, 6/15/99...................................... 1,141,470
4,750,000 Solid Waste Disposal Revenue
6.80%, 5/1/24....................................... 5,282,380
6,500,000 Mecklenburg County, North Carolina, General
Obligation
5.00%, 4/1/09...................................... 6,911,840
Mecklenburg County, North Carolina, Public
Improvement Revenue:
4,095,000 5.40%, 4/1/08....................................... 4,410,602
5,000,000 5.40%, 4/1/09....................................... 5,359,950
North Carolina Medical Care Commission:
5,035,000 5.25%, 12/1/10...................................... 5,301,704
1,000,000 5.25%, 1/1/12....................................... 999,920
2,630,000 5.375%, 2/15/11..................................... 2,746,667
1,600,000 5.375%, 1/1/22...................................... 1,591,456
North Carolina State, Eastern Municipal
Power Agency, Power Systems Revenue:
Series A:
1,700,000 4.50%, 1/1/24....................................... 1,615,034
1,200,000 5.00%, 1/1/17....................................... 1,222,368
5,000,000 5.00%, 1/1/21....................................... 5,072,000
5,000,000 5.70%, 1/1/13, (MBIA)............................... 5,432,900
1,415,000 6.00%, 1/1/26....................................... 1,638,556
3,750,000 6.50%, 1/1/18, (ETM)................................ 4,279,987
650,000 7.50%, 1/1/10....................................... 823,576
5,440,000 Series B
6.00%, 1/1/22....................................... 5,900,006
6,500,000 Series C
6.00%, 1/1/18, (AMBAC).............................. 7,395,115
5,500,000 North Carolina State, Educational
Facilities, Finance Authority
Revenue, Wake Forest University
5.00%, 11/1/17...................................... 5,527,665
15,600,000 North Carolina State, Highway Revenue, Series A
5.00%, 5/1/11....................................... 16,446,612
North Carolina State, Housing Finance and Development
Authority Revenue, Single Family Mortgage:
1,060,000 Series EE
5.90%, 9/1/13....................................... 1,128,147
3,835,000 Series JJ
6.15%, 3/1/11....................................... 4,120,286
1,225,000 Series T
7.05%, 9/1/20....................................... 1,304,968
970,000 Series W
6.20%, 9/1/09....................................... 1,039,675
North Carolina State, Medical Care Commission
Hospital Revenue:
920,000 Carolina Medicorp Project
6.30%, 5/1/01....................................... 978,466
10,000,000 Firsthealth of The Carolinas
4.75%, 10/1/26...................................... 9,494,400
Grace Hospital Incorporated:
3,825,000 5.25%, 10/1/13...................................... 3,935,083
1,110,000 6.50%, 10/1/05...................................... 1,267,898
1,180,000 6.50%, 10/1/06...................................... 1,359,974
High Point Regional Health Systems:
1,605,000 5.50%, 10/1/08...................................... 1,751,569
1,445,000 5.50%, 10/1/09...................................... 1,577,810
900,000 Presbyterian Health Services
Corp. Project
6.125%, 10/1/14..................................... 990,612
925,000 Presbyterian Hospital Project
7.30%, 10/1/15...................................... 1,009,314
Rex Hospital Project:
2,500,000 6.125%, 6/1/10...................................... 2,779,350
3,700,000 6.25%, 6/1/17....................................... 4,133,307
Transylvania Community Hospital Inc.:
1,130,000 5.50%, 10/1/12...................................... 1,140,215
1,090,000 5.75%, 10/1/19...................................... 1,104,203
North Carolina State, Medical
Care Commission, Health Care
Facilities Revenue:
3,100,000 5.75%, 7/1/19....................................... 3,117,453
First Mortgage:
2,155,000 Deerfield Episcopal
5.30%, 11/1/04...................................... 2,218,788
3,550,000 Glenaire Project
5.85%, 7/1/27....................................... 3,579,252
500,000 Southminster Inc.
6.875%, 10/1/09..................................... 531,055
5,000,000 Stanly Memorial Hospital Project
5.375%, 10/1/14, (AMBAC)............................ 5,280,700
North Carolina State, Municipal Power Agency,
Electric Revenue:
Catawba:
5,000,000 7.25%, 1/1/07, (AMBAC).............................. 5,995,200
</TABLE>
45
<PAGE>
- -------------------------------------------------------------------------------
EVERGREEN
North Carolina Municipal Bond Fund
- -------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS(continued)
August 31, 1998
See Combined Notes to Financial Statements.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal
Amount Value
- --------------------------------------------------------------------------------
<C> <S> <C>
MUNICIPAL OBLIGATIONS - CONTINUED
NORTH CAROLINA - CONTINUED
North Carolina State, Municipal Power Agency,
Electric Revenue - continued:
Catawba - continued:
$2,000,000 (Eff. Yield 6.70%) (a)
0.00%, 1/1/10........................................ $ 1,181,340
5,500,000 Series B
5.00%, 1/1/20........................................ 5,542,350
North Carolina State, Student Educational Assistance
Authority Revenue:
1,000,000 Series A:
6.05%, 7/1/10........................................ 1,072,680
2,000,000 6.30%, 7/1/15........................................ 2,162,780
2,375,000 Series C
6.35%, 7/1/16........................................ 2,585,282
1,000,000 Onslow County, North Carolina,
General Obligation
5.70%, 3/1/10, (MBIA)............................... 1,088,590
1,000,000 Pitt County, North Carolina,
Certificates of Participation,
Pitt County Public Facilities Revenue, Series A
5.55%, 4/1/12, (MBIA)............................... 1,084,440
1,180,000 Randolph County, North Carolina, General Obligation
6.40%, 4/1/03....................................... 1,266,683
University of North Carolina, Chapel Hill, Revenue
Refunding Utilities Systems:
3,600,000 (Eff. Yield 5.11%) (a)
0.00%, 8/1/12........................................ 1,870,596
6,760,000 (Eff. Yield 5.16%) (a)
0.00%, 8/1/21........................................ 2,203,895
6,410,000 (Eff. Yield 5.25%) (a)
0.00%, 8/1/17........................................ 2,551,244
1,835,000 University of North Carolina, Chapel Hill, Parking
Systems Revenue, Series A
5.60%, 5/15/17...................................... 1,947,687
University of North Carolina, Chapel Hill, Utilities
Systems Revenue:
4,100,000 (Eff. Yield 5.38%) (a)
0.00%, 8/1/14........................................ 1,909,206
4,500,000 (Eff. Yield 5.45%) (a)
0.00%, 8/1/16........................................ 1,883,700
1,400,000 (Eff. Yield 5.45%) (a)
0.00%, 8/1/18........................................ 529,690
3,100,000 (Eff. Yield 5.50%) (a)
0.00%, 8/1/19........................................ 1,117,023
410,000 (Eff. Yield 5.50%) (a)
0.00%, 8/1/20........................................ 140,700
1,950,000 Wake County North Carolina,
Hospital Revenue Crossover Refunding Systems,
(Eff. Yield 4.95%) (a)
0.00%, 10/1/10, (MBIA).............................. 1,132,248
3,000,000 Wake County, North Carolina,
Industrial Facilities and Pollution Control,
Carolina Power and Light
6.90%, 4/1/09....................................... 3,179,340
1,500,000 Wilmington, North Carolina,
Water Revenue
5.60%, 6/1/07....................................... 1,623,105
3,865,000 Winston Salem, North Carolina,
General Obligation
8.875%, 6/1/00...................................... 4,204,733
-----------
294,271,020
-----------
PUERTO RICO - 5.0%
Commonwealth of Puerto Rico,
General Obligation:
2,535,000 6.25%, 7/1/09, (MBIA)................................ 2,959,334
5,750,000 (Eff. Yield 7.50%) (a)
0.00%, 7/1/04........................................ 4,519,730
3,350,000 Pre-refunded
6.25%, 7/1/10, (MBIA)................................ 3,926,836
Commonwealth of Puerto Rico,
Industrial Tourist Educational Authority:
1,425,000 5.625%, 7/1/17....................................... 1,457,034
500,000 5.625%, 7/1/27....................................... 508,170
1,000,000 Commonwealth of Puerto Rico,
Municipal Finance Agency, Series A
5.70%, 7/1/03....................................... 1,070,350
1,400,000 Commonwealth of Puerto Rico,
Port Authority Revenue, American Airlines Project,
Series A
6.25%, 6/1/26....................................... 1,522,234
-----------
15,963,688
-----------
U. S. VIRGIN ISLANDS - 1.6%
5,000,000 Virgin Islands,
Public Finance Authority
5.20%, 10/1/10...................................... 5,151,950
-----------
Total Municipal Obligations
(cost $294,589,037)................................. 315,386,658
-----------
- --------------------------------------------------------------------------------
Shares
- --------------------------------------------------------------------------------
MUTUAL FUND SHARES - 2.5% (COST $8,142,000)
8,142,000 Federated Municipal Obligations Fund................. 8,142,000
------------
TOTAL INVESTMENTS -(COST $302,731,037)........ 100.7% 323,528,658
OTHER ASSETS AND
LIABILITIES - NET............................ (0.7) (2,209,560)
----- ------------
NET ASSETS - ................................. 100.0% $321,319,098
===== ============
</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 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
46
<PAGE>
- -------------------------------------------------------------------------------
EVERGREEN
South Carolina Municipal Bond Fund
- -------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
August 31, 1998
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal
Amount Value
- --------------------------------------------------------------------------------
<C> <S> <C>
MUNICIPAL OBLIGATIONS - 98.8%
SOUTH CAROLINA - 89.6%
$1,245,000 Beaufort County, South Carolina,
Hospital Facilities Revenue, Beaufort County Memorial
Hospital
5.25%, 12/1/06, (AMBAC)............................... $ 1,329,897
400,000 Calhoun County, South Carolina,
Solid Waste Disposal Facilities Revenue, Eastman Kodak
Company Project
6.75%, 5/1/17......................................... 488,140
400,000 Camden, South Carolina,
Public Utilities Revenue, Refunding and Improvement
5.50%, 3/1/17......................................... 423,900
675,000 Charleston County, South Carolina,
General Obligation
7.00%, 4/1/11......................................... 722,419
Charleston County, South Carolina,
Health Facilities Revenue, First Mortgage Episcopal
Church:
300,000 7.125%, 4/1/20......................................... 314,547
750,000 Series A
6.25%, 4/1/19.......................................... 784,252
Charleston County, South Carolina,
Resources Recovery Revenue,
Foster Wheeler:
3,000,000 5.10%, 1/1/08, (AMBAC)................................. 3,156,810
2,835,000 5.25%, 1/1/10, (AMBAC)................................. 3,006,461
3,750,000 Columbia, South Carolina,
Waterworks and Sewer Systems Revenue
5.70%, 2/1/10......................................... 4,173,000
Darlington County, South Carolina,
Industrial Development Authority Revenue:
500,000 Nucor Corp. Project, Series A
5.75%, 8/1/23.......................................... 522,270
750,000 Sonoco Products Co. Project
6.00%, 4/1/26.......................................... 804,157
1,000,000 Florence County, South Carolina,
Hospital Facilities Revenue, McLeod Regional, Medical
Center Project,
Series A
5.00%, 11/1/18, (MBIA)................................. 997,410
Florence County, South Carolina,
School District Number 001:
1,150,000 5.80%, 5/1/07, (FGIC).................................. 1,248,670
1,175,000 5.80%, 5/1/08, (FGIC).................................. 1,275,815
1,200,000 5.80%, 5/1/09, (FGIC).................................. 1,300,296
200,000 Georgetown County, South Carolina,
Water and Sewer District Revenue
6.50%, 6/1/17......................................... 230,054
750,000 Grand Strand, South Carolina,
Water and Sewer Authority,
South Carolina Waterworks and Sewer Systems Revenue
6.375%, 6/1/12, (MBIA)................................ 886,170
Greenville, South Carolina,
Hospital Facilities Systems Revenue:
1,000,000 Series A
5.40%, 5/1/07.......................................... 1,073,580
Series B:
500,000 5.25%, 5/1/17.......................................... 505,250
3,500,000 5.60%, 5/1/10.......................................... 3,758,545
600,000 5.70%, 5/1/12.......................................... 640,182
400,000 Greenville, South Carolina,
Memorial Auditorium District,
General Obligation, Bi-Lo Center Project
5.75%, 4/1/18, (AMBAC) ............................... 429,216
1,000,000 Greenwood, South Carolina,
Combined Public Utility Revenue
5.50%, 12/1/08, (AMBAC)............................... 1,072,270
300,000 Horry County, South Carolina,
Airport Revenue, Series A
5.60%, 7/1/17......................................... 314,229
1,000,000 Horry County, South Carolina,
School District, Series B
5.50%, 1/1/12, (FGIC)................................. 1,059,600
400,000 Marion County, South Carolina,
Hospital District Revenue
5.375%, 11/1/25....................................... 412,080
Medical University, South Carolina,
Hospital Facilities Revenue:
1,000,000 5.50%, 7/1/08, (MBIA).................................. 1,095,340
1,000,000 5.50%, 7/1/09, (MBIA).................................. 1,095,720
Myrtle Beach, South Carolina,
General Obligation, State Aid Withholding:
500,000 5.40%, 3/1/12.......................................... 526,230
525,000 5.40%, 3/1/13.......................................... 551,182
Piedmont, South Carolina,
Municipal Power Agency, South Carolina Electric
Revenue:
1,000,000 6.10%, 1/1/06.......................................... 1,126,850
1,150,000 6.25%, 1/1/09.......................................... 1,337,519
2,000,000 6.25%, 1/1/21.......................................... 2,356,380
Series A:
500,000 5.50%, 1/1/13.......................................... 544,070
500,000 5.75%, 1/1/24.......................................... 500,080
1,000,000 Richland County, South Carolina,
General Obligation
6.25%, 3/1/11......................................... 1,055,850
250,000 South Carolina State,
Educational Assistance Revenue, Guaranteed Student
Loan, Series C
5.875%, 9/1/07........................................ 268,693
South Carolina State,
Housing Authority Revenue, Multifamily Housing:
265,000 Hunting Ridge Apartments
6.75%, 6/1/25.......................................... 284,162
300,000 Runaway Bay Apartments
6.125%, 12/1/15........................................ 312,099
100,000 Series A
6.80%, 11/15/11, (FNMA & FHA).......................... 106,728
</TABLE>
47
<PAGE>
- -------------------------------------------------------------------------------
EVERGREEN
South Carolina Municipal Bond Fund
- -------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS(continued)
August 31, 1998
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal
Amount Value
- --------------------------------------------------------------------------------
<C> <S> <C>
MUNICIPAL OBLIGATIONS - CONTINUED
SOUTH CAROLINA - CONTINUED
South Carolina State,
Housing Finance and Development Authority Revenue,
Series A:
$ 500,000 5.95%, 7/1/29, (AMBAC & FHA)......................... $ 526,180
675,000 6.35%, 7/1/25, (FHA)................................. 720,117
100,000 6.55%, 7/1/15........................................ 107,530
Heritage Court Apartments:
680,000 5.85%, 7/1/10........................................ 711,668
595,000 6.15%, 7/1/25, (FHA)................................. 619,847
200,000 Homeownership Mortgage
7.55%, 7/1/11........................................ 208,912
500,000 Single Family Mortgage
5.50%, 7/1/18, (FHA)................................. 531,905
South Carolina State,
Jobs Economic Development Authority Revenue:
2,000,000 Westminster Presbyterian
5.375%, 11/15/24..................................... 1,949,080
Hospital Facilities Revenue:
1,410,000 Georgetown Memorial Hospital
5.00%, 11/1/10....................................... 1,465,300
200,000 Oconee Memorial Hospital
6.15%, 3/1/15, (Connie Lee).......................... 218,238
Plasti Line Inc. Project
(LOC: Keybank, N.A.):
220,000 5.50%, 7/1/06........................................ 231,508
200,000 5.65%, 7/1/08........................................ 210,794
200,000 5.70%, 7/1/09........................................ 210,398
190,000 5.80%, 7/1/10........................................ 199,988
230,000 5.90%, 7/1/11........................................ 242,515
400,000 6.25%, 7/1/17........................................ 415,368
South Carolina State,
Public Service Authority Revenue:
Series A:
500,000 5.75%, 1/1/22, (MBIA)................................ 535,750
1,000,000 6.25%, 1/1/05, (MBIA)................................ 1,119,970
Series B:
1,000,000 5.70%, 1/1/08, (FGIC)................................ 1,101,170
1,250,000 6.50%, 1/1/06, (FGIC)................................ 1,428,912
Spartanburg County, South Carolina,
Health Services District Revenue, Series B:
500,000 5.50%, 4/15/27....................................... 523,315
1,755,000 6.00%, 4/15/07, (MBIA)............................... 1,966,618
Three Rivers, South Carolina,
Solid Waste Disposal Facilities Authority Revenue:
600,000 5.15%, 1/1/04, (MBIA)................................ 627,822
870,000 5.25%, 1/1/05, (MBIA)................................ 919,294
Capital Appreciation,
(Eff. Yield 6.12%) (a):
1,015,000 0.00%, 1/1/16, (MBIA)................................ 433,415
1,015,000 0.00%, 1/1/17, (MBIA)................................ 411,918
1,000,000 York County, South Carolina,
General Obligation
5.00%, 6/1/11, (AMBAC).............................. 1,018,100
3,085,000 York County, South Carolina,
Industrial Development Revenue, Exempt Facilities,
Hoechst Celanese
5.70%, 1/1/24....................................... 3,176,871
1,000,000 York County, South Carolina,
School District Number 004, Fort Mill
7.00%, 3/1/05, (FGIC)............................... 1,162,150
-----------
65,084,776
-----------
PUERTO RICO - 4.6%
3,000,000 Commonwealth of Puerto Rico
Public Improvement, General Obligation, Series 1995
5.65%, 7/1/15, (MBIA)............................... 3,336,180
-----------
U. S. VIRGIN ISLANDS - 4.6%
2,000,000 Virgin Islands,
Public Finance Authority
5.625%, 10/1/25..................................... 2,055,920
1,250,000 Virgin Islands,
Water and Power Authority, Electric Systems Revenue
5.30%, 7/1/18....................................... 1,260,850
-----------
3,316,770
-----------
Total Municipal Obligations
(cost $67,258,850).................................. 71,737,726
-----------
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
MUTUAL FUND SHARES - 3.8% (COST $2,715,000)
2,715,000 Federated Municipal Obligations Fund................... $ 2,715,000
-----------
TOTAL INVESTMENTS -
(COST $69,973,850)........................... 102.6% 74,452,726
OTHER ASSETS AND
LIABILITIES - NET ........................... (2.6) (1,864,108)
----- -----------
NET ASSETS - ................................. 100.0% $72,588,618
===== ===========
</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 ABBREVIATIONS:
AMBAC Insured by American Municipal Bond Assurance Corporation
FGIC Insured by Financial Guaranty Insurance Company
FHA Insured by Federal Housing Authority
FNMA Insured by Federal National Mortgage Association
LOC Letter of Credit
MBIA Insured by Municipal Bond Investors Assurance Corporation
See Combined Notes to Financial Statements.
48
<PAGE>
- -------------------------------------------------------------------------------
EVERGREEN
Virginia Municipal Bond Fund
- -------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
August 31, 1998
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal
Amount Value
- --------------------------------------------------------------------------------
<C> <S> <C>
MUNICIPAL OBLIGATIONS - 99.4%
DISTRICT OF COLUMBIA - 3.7%
District of Columbia,
Airports Authority Revenue:
$1,000,000 Series A
5.38%, 10/1/17....................................... $ 1,035,880
Series B:
150,000 5.50%, 10/1/16....................................... 156,186
250,000 5.50%, 10/1/23....................................... 257,947
District of Columbia,
Metropolitan Area Transit Authority Revenue:
2,975,000 6.00%, 7/1/07, (FGIC)................................ 3,350,237
600,000 6.00%, 7/1/08, (FGIC)................................ 680,538
600,000 6.00%, 7/1/09, (FGIC)................................ 682,536
-----------
6,163,324
-----------
VIRGINIA - 90.9%
Albemarle County, Virginia,
Industrial Development Authority Revenue:
1,000,000 Martha Jefferson Hospital
5.75%, 10/1/08....................................... 1,070,250
Residential Care Facility, Our Lady of Peace Inc.:
500,000 5.75%, 7/1/19........................................ 502,705
100,000 6.45%, 7/1/15........................................ 104,539
145,000 6.625%, 7/1/21....................................... 153,255
1,000,000 Amherst, Virginia,
Industrial Development Authority Revenue, Georgia
Pacific Corp. Project
5.25%, 2/1/11....................................... 1,031,290
1,000,000 Arlington County, Virginia,
General Obligation
5.90%, 8/1/10....................................... 1,115,010
4,800,000 Bedford County, Virginia,
Industrial Development Authority Revenue, Nekoosa
Packaging Corp. Project, Georgia Pacific Corp.
5.60%, 12/1/25...................................... 4,864,416
3,675,000 Big Stone Gap, Virginia,
Redevelopment & Housing Authority,
Correctional Facility Lease Revenue,
Wallens Ridge Development Project
6.00%, 9/1/07....................................... 4,113,280
1,500,000 Blue Ridge, Virginia,
Regional Jail Authority Revenue
5.20%, 12/1/17, (MBIA).............................. 1,533,630
Brunswick City, Virginia,
Industrial Development Authority,
Correctional Facility Lease Revenue:
1,000,000 5.50%, 7/1/07, (MBIA)................................ 1,091,970
2,215,000 5.65%, 7/1/09, (MBIA)................................ 2,431,250
200,000 5.75%, 7/1/11, (MBIA)................................ 219,858
390,000 Buena Vista, Virginia,
Industrial Development Authority Revenue, Water &
Sewer Facility,
Route 60 Project
6.25%, 7/15/11...................................... 409,726
250,000 Charlottesville-Albemarle, Virginia, Airport
Authority Revenue,
6.125%, 12/1/13..................................... 263,730
2,890,000 Chesapeake Bay, Virginia,
District Revenue, Bridge & Tunnel Commission
5.875%, 7/1/10, (FGIC)................................ 3,177,439
3,000,000 Chesapeake, Virginia,
Public Improvement,
General Obligation
5.375%, 5/1/10........................................ 3,221,490
Chesapeake, Virginia,
Redevelopment & Housing Authority Revenue, Multifamily
Housing:
500,000 Cedar Association, Series A
7.75%, 6/1/20.......................................... 538,835
Residential Rental, Chesapeake Crossing Seniors, Series
A:
570,000 5.75%, 4/1/09.......................................... 575,404
250,000 6.00%, 4/1/13.......................................... 252,342
3,750,000 6.20%, 4/1/28.......................................... 3,784,800
1,000,000 Chesapeake, Virginia,
Water & Sewer Facility,
General Obligation, Series A
7.00%, 12/1/04........................................ 1,161,370
Chesterfield County, Virginia,
General Obligation:
1,980,000 5.25%, 3/1/10.......................................... 2,075,773
700,000 Series A:
6.60%, 1/15/02......................................... 740,950
Series B:
500,000 6.60%, 1/1/03.......................................... 540,690
1,000,000 6.70%, 1/1/06.......................................... 1,083,590
500,000 Chesterfield County, Virginia,
Health Center, Community Mortgage Revenue, Lucy Corr
Nursing Home Project
5.875%, 12/1/21, (GNMA)............................... 539,710
500,000 Chesterfield County, Virginia,
Water & Sewer Revenue
6.375%, 11/1/07....................................... 551,775
2,545,000 Danville, Virginia,
Industrial Development Authority, Hospital Revenue,
Prerefunded, Danville Regional Medical Center
6.20%, 10/1/09, (FGIC)................................ 2,860,198
1,000,000 Dinwindle County, Virginia,
Industrial Development Authority Revenue, County
Courthouse Project, Series C
5.00%, 2/1/17......................................... 994,010
3,000,000 Dulles Town, Virginia,
Center Community Development Authority
6.25%, 3/1/26......................................... 3,060,420
Fairfax County, Virginia,
Industrial Development Authority Revenue, Inova Health
Systems Project:
1,250,000 5.00%, 8/15/13, (FSA).................................. 1,299,488
1,025,000 5.00%, 8/15/23......................................... 1,041,123
1,120,000 5.20%, 8/15/05......................................... 1,192,486
370,000 5.875%, 8/15/16........................................ 402,394
</TABLE>
49
<PAGE>
- -------------------------------------------------------------------------------
EVERGREEN
Virginia Municipal Bond Fund
- -------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS(continued)
August 31, 1998
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal
Amount Value
- --------------------------------------------------------------------------------
<C> <S> <C>
MUNICIPAL OBLIGATIONS - CONTINUED
VIRGINIA - CONTINUED
$3,000,000 Fairfax County, Virginia,
Public Improvement,
General Obligation, Series A
5.25%, 6/1/09......................................... $ 3,190,020
250,000 Fairfax County, Virginia,
Redevelopment & Housing Authority Lease Revenue, Mott
& Gum Springs Community Centers
5.35%, 6/1/06......................................... 267,128
500,000 Fairfax County, Virginia,
Redevelopment & Housing Authority Mortgage Revenue,
Housing for the Elderly
6.00%, 9/1/16, (FHA).................................. 528,885
2,605,000 Fairfax County, Virginia,
Sewer Revenue
5.625%, 7/15/11....................................... 2,843,097
1,685,000 Fairfax County, Virginia,
Water Authority Revenue, Unrefunded Balance
6.00%, 4/1/22......................................... 1,863,324
Giles County, Virginia,
Industrial Development Authority Revenue, Hoechst
Celanese
Corp. Project:
250,000 5.95%, 12/1/25......................................... 264,830
500,000 6.45%, 5/1/26.......................................... 556,235
250,000 Greensville County, Virginia,
Industrial Development Authority Revenue, Georgia
Pacific Corp. Project
5.30%, 8/1/14......................................... 256,825
Halifax County, Virginia,
Industrial Development Authority Revenue, Halifax
Regional Hospital, Inc.:
300,000 4.80%, 9/1/09.......................................... 301,737
1,000,000 5.00%, 9/1/11.......................................... 1,005,870
400,000 5.25%, 9/1/17.......................................... 402,092
500,000 Hampton, Virginia,
General Obligation
6.00%, 1/15/08........................................ 555,720
Hanover County, Virginia,
Industrial Development Authority Revenue:
960,000 Bon Secours Health System Project
6.00%, 8/15/08, (MBIA)................................. 1,088,525
1,360,000 Memorial Regional Medical Center Project
6.50%, 8/15/08, (MBIA)................................. 1,599,006
500,000 Harrisonburg, Virginia,
Redevelopment & Housing Authority Revenue, Multifamily
Housing, Greens of Salem Run Project
(LOC: PNC Bank)
6.20%, 4/1/17, (FSA).................................. 531,485
700,000 Henrico County, Virginia,
Industrial Development Authority Lease Revenue, Public
Facility
7.00%, 8/1/13......................................... 819,679
2,000,000 Henrico County, Virginia,
Industrial Development Authority Revenue, Bon Secours
Health System Project
5.60%, 8/15/10....................................... 2,164,240
1,000,000 Henrico County, Virginia,
Water & Sewer Revenue
5.70%, 5/1/08........................................ 1,084,340
500,000 Isle Wright County, Virginia,
Industrial Development Authority Revenue, Solid Waste
Disposal Facility, Union Camp Corp. Project
6.55%, 4/1/24........................................ 549,930
600,000 James City County, Virginia,
Industrial Development Authority Revenue, Residential
Care Facility, Williamsburg Landing Inc.
6.625%, 3/1/23....................................... 629,058
1,000,000 King & Queen County, Virginia,
Industrial Development Authority Lease Revenue,
Public Facility, King & Queen Courts Complex, Series
A
5.625%, 7/15/17...................................... 1,047,590
700,000 King George County, Virginia,
Industrial Development Authority Lease Revenue, King
George County School Project
6.40%, 8/1/16........................................ 745,969
1,000,000 Loudoun County, Virginia,
General Obligation, Series A
5.50%, 10/1/07....................................... 1,074,630
600,000 Loudoun County, Virginia,
Industrial Development Authority Lease Revenue,
Northern Virginia Criminal Justice Academy
5.50%, 6/1/08........................................ 639,060
1,550,000 Loudoun County, Virginia,
Sanitation Authority,
Water & Sewer Revenue
6.25%, 1/1/10, (FGIC)................................ 1,700,474
1,160,000 Lynchburg, Virginia,
Industrial Development Authority Revenue, Centra
Health, Inc.
5.20%, 1/1/18........................................ 1,164,849
4,440,000 Newport News, Virginia,
General Obligation
5.75%, 1/15/17........................................ 4,784,944
Norfolk, Virginia,
General Obligation:
3,000,000 5.25%, 6/1/11......................................... 3,156,600
2,000,000 5.70%, 6/1/08, (MBIA)................................. 2,178,620
Norfolk, Virginia,
Redevelopment & Housing Authority Revenue, Merrimack
Landing Project:
275,000 5.00%, 12/1/05........................................ 283,236
340,000 5.10%, 12/1/06........................................ 350,690
1,300,000 Northampton County, Virginia,
General Obligation, Series A, AMT
5.30%, 7/15/18, (FSA)................................. 1,326,351
</TABLE>
50
<PAGE>
- -------------------------------------------------------------------------------
EVERGREEN
Virginia Municipal Bond Fund
- -------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS(continued)
August 31, 1998
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal
Amount Value
- --------------------------------------------------------------------------------
<C> <S> <C>
MUNICIPAL OBLIGATIONS - CONTINUED
VIRGINIA - CONTINUED
$1,300,000 Peumansend Creek, Virginia,
Regional Jail Authority Revenue
5.75%, 6/1/17, (MBIA)................................ $ 1,404,585
1,000,000 Portsmouth, Virginia,
General Obligation
6.40%, 8/1/00, (FNMA)................................ 1,049,610
Portsmouth, Virginia,
Redevelopment & Housing Authority Revenue:
500,000 Chowan Apartments, Series A
5.85%, 12/20/30, (GNMA).............................. 520,955
640, 000 Multifamily Housing, January 16th Association, Series
A
6.30%, 9/1/26, (FNMA)................................ 683,552
700,000 Prince William County, Virginia,
General Obligation, Series A
6.20%, 12/1/11....................................... 744,996
500,000 Prince William County, Virginia,
Industrial Development Authority Lease Revenue, ATCC
Project
6.00%, 2/1/14........................................ 536,775
Prince William County, Virginia,
Industrial Development Authority Revenue,
Potomac Hospital Corp.:
1,000,000 5.00%, 10/1/25, (FSA)................................ 982,480
500,000 6.75%, 10/1/15....................................... 589,580
Prince William County, Virginia,
Park Authority Revenue:
500,000 6.30%, 10/15/06...................................... 558,135
1,300,000 6.875%, 10/15/16..................................... 1,475,838
Richmond, Virginia,
Metropolitan Authority Expressway Revenue:
605,000 5.25%, 7/15/11, (FGIC)............................... 648,324
520,000 5.25%, 7/15/12, (FGIC)............................... 554,902
425,000 5.25%, 7/15/17, (FGIC)............................... 447,997
2,000,000 Richmond, Virginia,
Public Improvement, General Obligation,
Series B
6.50%, 1/15/06....................................... 2,151,220
Riverside, Virginia,
Regional Jail Authority Revenue:
3,375,000 5.625%, 7/1/07, (MBIA)............................... 3,700,249
1,000,000 5.875%, 7/1/14, (MBIA)............................... 1,092,330
400,000 6.00%, 7/1/25, (MBIA)................................ 438,848
1,185,000 Roanoke, Virginia,
Industrial Development Authority Revenue, Roanoke
Memorial Hospital, Series B
6.00%, 7/1/07, (AMBAC)............................... 1,270,320
2,005,000 Spotsylvania County, Virginia,
General Obligation
5.00%, 7/15/10, (FSA)................................ 2,109,541
Suffolk, Virginia,
General Obligation:
250,000 5.70%, 6/1/10, (AMBAC)............................... 274,765
750,000 5.90%, 6/1/13, (AMBAC)............................... 829,462
Virginia Beach, Virginia,
General Obligation:
1,575,000 5.40%, 7/15/09........................................ 1,712,702
1,000,000 6.00%, 9/1/09......................................... 1,119,810
Virginia College, Virginia,
Educational Facilities Building Authority Revenue:
3,510,000 21st Century College Program
5.40%, 8/1/15......................................... 3,668,827
805,000 Hampden-Sydney College Project
4.90%, 9/1/10......................................... 824,320
700,000 Hampton University Project
5.75%, 4/1/14......................................... 741,867
Virginia State Housing
Development Authority Revenue,
Commonwealth Mortgage:
Series A:
100,000 7.10%, 1/1/17......................................... 105,136
1,000,000 Subseries A-1
6.20%, 7/1/11......................................... 1,058,680
500,000 Series B, Subseries B-2
6.65%, 1/1/13......................................... 538,085
100,000 Series C:
Subseries C-1
5.50%, 7/1/06......................................... 105,252
1,000,000 Subseries C-2
5.75%, 7/1/07......................................... 1,062,490
500,000 Subseries C-6
6.25%, 1/1/15......................................... 523,665
1,300,000 Series D, Subseries D-1
6.10%, 1/1/19......................................... 1,381,913
Series E:
1,180,000 Subseries E-3
4.80%, 7/1/09......................................... 1,189,853
1,000,000 Subseries E-4
4.90%, 1/1/10......................................... 1,008,600
300,000 Series F, Subseries F-1
6.25%, 7/1/12......................................... 318,180
Virginia State Housing
Development Authority Revenue,
Multifamily Housing:
1,430,000 Series B, AMT
4.95%, 11/1/10........................................ 1,439,781
Series H:
500,000 6.00%, 5/1/10......................................... 517,005
1,000,000 6.10%, 11/1/11........................................ 1,071,430
300,000 6.35%, 11/1/11........................................ 323,670
1,000,000 Series I
5.45%, 5/1/18......................................... 1,022,850
400,000 Series K
5.90%, 5/1/11......................................... 428,612
500,000 Series O
6.05%, 11/1/17........................................ 532,780
500,000 Virginia State Industrial
Development Authority Revenue,
Small Business Financing,
Hodges Farm Associates II
4.75%, 11/1/12........................................ 507,605
</TABLE>
51
<PAGE>
- -------------------------------------------------------------------------------
EVERGREEN
Virginia Municipal Bond Fund
- -------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS(continued)
August 31, 1998
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal
Amount Value
- --------------------------------------------------------------------------------
<C> <S> <C>
MUNICIPAL OBLIGATIONS - CONTINUED
VIRGINIA - CONTINUED
Virginia State Port Authority:
$ 750,000 Commonwealth Revenue
5.90%, 7/1/16........................................ $ 807,945
400,000 Facility Revenue
5.60%, 7/1/27........................................ 419,524
7,000,000 Virginia State Public Building Authority Revenue
5.20%, 8/1/10........................................ 7,346,500
Virginia State Public School Authority Revenue:
1,000,000 School Financing, Series I
5.25%, 8/1/10........................................ 1,074,290
200,000 Series A
6.20%, 8/1/14........................................ 223,212
850,000 Special Obligation, York County
5.90%, 7/15/13....................................... 928,931
1,000,000 Virginia State Resources Authority Revenue,
Harrisonburg Rockingham Project
5.00%, 5/1/18........................................ 991,280
Virginia State Transportation Board Revenue:
Northern Virginia Transportation District, Series A:
2,030,000 6.00%, 5/15/08....................................... 2,230,625
2,160,000 6.75%, 5/15/05....................................... 2,489,724
1,000,000 U.S. Route 58 Corridor Program,
Series A
5.375%, 5/15/07...................................... 1,064,310
Virginia State University, Commonwealth University
Revenue:
Series A:
200,000 5.25%, 5/1/08........................................ 214,722
350,000 5.625%, 5/1/16....................................... 368,501
2,325,000 5.75%, 5/1/21........................................ 2,490,354
1,000,000 Series B
5.35%, 5/1/09........................................ 1,073,920
100,000 Virginia State, Biotechnology Research, Park
Authority Lease Revenue, Biotech Two Project
5.05%, 9/1/08........................................ 105,813
1,000,000 Virginia State,
General Obligation
6.10%, 6/1/06........................................ 1,108,360
550,000 West Point, Virginia,
Industrial Development Authority Revenue, Solid
Waste Disposal, Chesapeake Corporate Project,
Series B
6.25%, 3/1/19........................................ 589,991
-----------
153,749,814
-----------
PUERTO RICO - 0.8%
1,200,000 Puerto Rico Commonwealth,
General Obligation
6.25%, 7/1/13, (MBIA)................................ 1,416,792
-----------
U.S. VIRGIN ISLANDS - 4.0%
Virgin Islands,
Public Finance Authority Revenue,
Senior Lien, Series A:
1,000,000 5.20%, 10/1/09....................................... 1,037,170
2,000,000 5.50%, 10/1/13....................................... 2,080,580
250,000 5.625%, 10/1/25...................................... 256,990
Virgin Islands,
Water & Power Authority Revenue:
2,585,000 5.25%, 7/1/08........................................ 2,705,073
620,000 5.25%, 7/1/09........................................ 646,239
-----------
6,726,052
-----------
Total Municipal Obligations
(cost $158,806,111)................................. 168,055,982
-----------
- --------------------------------------------------------------------------------
Shares
- --------------------------------------------------------------------------------
MUTUAL FUND SHARES - 0.8% (COST $1,367,000)
1,367,000 Federated Municipal Obligations Fund................. 1,367,000
------------
TOTAL INVESTMENTS -
(COST $160,173,111)......................... 100.2% 169,422,982
OTHER ASSETS AND
LIABILITIES - NET........................... (0.2) (259,820)
----- ------------
NET ASSETS - ................................ 100.0% $169,163,162
===== ============
</TABLE>
LEGEND OF ABBREVIATIONS:
AMBAC Insured by American Municipal Bond Assurance Corporation
AMT Alternative Minimum Tax
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
LOC Letter of Credit
MBIA Insured by Municipal Bond Investors Assurance Corporation
See Combined Notes to Financial Statements.
52
<PAGE>
- -------------------------------------------------------------------------------
EVERGREEN
Southern State Municipal Bond Funds
- -------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
August 31, 1998
<TABLE>
<CAPTION>
FLORIDA
HIGH INCOME FLORIDA GEORGIA MARYLAND
FUND FUND FUND FUND
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS
Investments at market
value (identified cost-
$393,182,644
$631,375,951,
$77,862,269 and
$29,319,829,
respectively)........... $407,818,175 $667,043,257 $83,303,095 $30,761,637
Cash..................... 454 263 826 852
Interest receivable...... 7,604,477 10,248,216 1,043,997 392,462
Receivable for Fund
shares sold............. 1,821,694 1,058,808 90,012 95
Unamortized organization
expenses................ 10,899 0 0 0
Prepaid expenses and
other assets............ 59,986 61,375 14,249 32,573
- -------------------------------------------------------------------------------
Total assets........... 417,315,685 678,411,919 84,452,179 31,187,619
- -------------------------------------------------------------------------------
LIABILITIES
Payable for investments
purchased............... 3,099,198 17,061,894 0 0
Dividends payable........ 787,503 2,005,798 278,222 40,021
Payable for Fund shares
redeemed................ 225,638 761,162 5,290 150,209
Distribution fee
payable................. 216,421 107,984 13,874 15,080
Due to related parties... 142,822 37,701 4,948 581
Accrued Trustees' fees
and expenses............ 13,886 14,609 1,910 75
Accrued expenses and
other liabilities....... 192,204 215,629 27,453 8,380
- -------------------------------------------------------------------------------
Total liabilities...... 4,677,672 20,204,777 331,697 214,346
- -------------------------------------------------------------------------------
NET ASSETS................ $412,638,013 $658,207,142 $84,120,482 $30,973,273
- -------------------------------------------------------------------------------
NET ASSETS REPRESENTED BY
Paid-in capital.......... $398,102,922 $611,464,528 $78,480,621 $29,409,459
Undistributed net
investment income....... 71,519 55,126 3,588 5,491
Accumulated net realized
gains or losses on
investments............. (171,959) 11,020,182 195,447 116,515
Net unrealized gains on
investments............. 14,635,531 35,667,306 5,440,826 1,441,808
- -------------------------------------------------------------------------------
TOTAL NET ASSETS......... $412,638,013 $658,207,142 $84,120,482 $30,973,273
- -------------------------------------------------------------------------------
NET ASSETS CONSIST OF
Class A.................. $279,078,509 $164,254,865 $ 3,931,985 $24,753,791
Class B.................. 103,309,427 66,141,686 12,558,976 990,461
Class C.................. 1,098,046 8,963,303 0 0
Class Y.................. 29,152,031 418,847,288 67,629,521 5,229,021
- -------------------------------------------------------------------------------
$412,638,013 $658,207,142 $84,120,482 $30,973,273
- -------------------------------------------------------------------------------
SHARES OUTSTANDING
Class A.................. 24,792,915 16,184,394 379,765 2,217,677
Class B.................. 9,177,850 6,517,059 1,212,995 88,712
Class C.................. 97,549 883,176 0 0
Class Y.................. 2,589,757 41,270,172 6,532,075 468,342
- -------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
Class A.................. $ 11.26 $ 10.15 $ 10.35 $ 11.16
- -------------------------------------------------------------------------------
Class A -- Offering price
(based on sales charge
of 4.75%)............... $ 11.82 $ 10.66 $ 10.87 $ 11.72
- -------------------------------------------------------------------------------
Class B.................. $ 11.26 $ 10.15 $ 10.35 $ 11.16
- -------------------------------------------------------------------------------
Class C.................. $ 11.26 $ 10.15 -- --
- -------------------------------------------------------------------------------
Class Y.................. $ 11.26 $ 10.15 $ 10.35 $ 11.16
- -------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
53
<PAGE>
- -------------------------------------------------------------------------------
EVERGREEN
Southern State Municipal Bond Funds
- -------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
August 31, 1998
<TABLE>
<CAPTION>
NORTH SOUTH
CAROLINA CAROLINA VIRGINIA
FUND FUND FUND
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Investments at market value (identified
cost - $302,731,037, $69,973,850 and
$160,173,111, respectively)............ $323,528,658 $74,452,726 $169,422,982
Cash.................................... 476 94 450
Interest receivable..................... 4,393,641 917,314 2,206,513
Receivable for Fund shares sold......... 63,559 0 97,063
Prepaid expenses and other assets....... 12,804 17,956 13,737
- --------------------------------------------------------------------------------
Total assets.......................... 327,999,138 75,388,090 171,740,745
- --------------------------------------------------------------------------------
LIABILITIES
Payable for investments purchased....... 5,287,270 2,476,433 1,987,545
Dividends payable....................... 1,036,704 245,461 459,143
Payable for Fund shares redeemed........ 176,615 29,697 13,034
Distribution fee payable................ 58,563 5,200 33,407
Due to related parties.................. 2,218 31,501 3,054
Accrued Trustees' fees and expenses..... 6,497 704 26,958
Accrued expenses and other
liabilities............................ 112,173 10,476 54,442
- --------------------------------------------------------------------------------
Total liabilities..................... 6,680,040 2,799,472 2,577,583
- --------------------------------------------------------------------------------
NET ASSETS.............................. $321,319,098 $72,588,618 $169,163,162
- --------------------------------------------------------------------------------
NET ASSETS REPRESENTED BY
Paid-in capital......................... $299,752,443 $67,446,888 $158,861,853
Undistributed net investment income..... 0 2,439 5,783
Accumulated net realized gains or
losses on investments.................. 769,034 660,415 1,045,655
Net unrealized gains on investments..... 20,797,621 4,478,876 9,249,871
- --------------------------------------------------------------------------------
TOTAL NET ASSETS...................... $321,319,098 $72,588,618 $169,163,162
- --------------------------------------------------------------------------------
NET ASSETS CONSIST OF
Class A................................. $ 15,768,040 $ 1,744,054 $ 54,297,669
Class B................................. 49,319,571 4,541,886 8,934,865
Class Y................................. 256,231,487 66,302,678 105,930,628
- --------------------------------------------------------------------------------
$321,319,098 $72,588,618 $169,163,162
- --------------------------------------------------------------------------------
SHARES OUTSTANDING
Class A................................. 1,454,631 166,998 5,192,353
Class B................................. 4,550,009 434,903 854,430
Class Y................................. 23,639,048 6,348,718 10,129,955
- --------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
Class A................................. $ 10.84 $ 10.44 $ 10.46
- --------------------------------------------------------------------------------
Class A -- Offering price (based on
sales charge of 4.75%)................. $ 11.38 $ 10.96 $ 10.98
- --------------------------------------------------------------------------------
Class B................................. $ 10.84 $ 10.44 $ 10.46
- --------------------------------------------------------------------------------
Class Y................................. $ 10.84 $ 10.44 $ 10.46
- --------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
54
<PAGE>
- -------------------------------------------------------------------------------
EVERGREEN
Southern State Municipal Bond Funds
- -------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
Year Ended August 31, 1998
<TABLE>
<CAPTION>
FLORIDA NORTH SOUTH
HIGH INCOME FLORIDA GEORGIA MARYLAND CAROLINA CAROLINA VIRGINIA
FUND FUND FUND FUND* FUND FUND FUND
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Interest................ $17,552,979 $26,125,957 $3,486,002 $1,429,847 $13,664,124 $2,917,306 $5,915,928
- ------------------------------------------------------------------------------------------------------------------
EXPENSES
Management fee.......... 1,737,325 2,509,498 326,000 173,896 1,294,225 281,276 565,473
Distribution Plan
expenses............... 1,299,759 914,915 124,535 61,025 512,227 48,732 150,707
Transfer agent fees..... 161,205 171,130 15,803 68,604 55,819 5,681 47,012
Registration and filing
fees................... 115,710 239,450 49,741 38,026 105,382 28,641 63,726
Custodian fees.......... 94,134 160,533 21,190 39,178 81,615 17,983 41,219
Administrative services
fees................... 84,521 142,921 18,861 35,341 75,012 17,804 32,229
Shareholder reports
expense................ 75,809 124,273 9,342 34,981 20,226 3,510 10,417
Professional fees....... 30,713 31,974 16,768 32,246 19,916 16,515 20,955
Trustees' fees and
expenses............... 11,263 13,318 2,132 1,119 6,448 587 1,829
Organization expenses... 3,544 11,093 10,013 0 0 30,466 9,569
Other................... 27,318 17,442 2,798 848 6,748 3,081 3,899
Fee waivers............. (489,599) (1,913,088) (300,583) (67,938) (1,063,800) (141,314) (504,686)
- ------------------------------------------------------------------------------------------------------------------
Total expenses......... 3,151,702 2,423,459 296,600 417,326 1,113,818 312,962 442,349
Less: Indirectly paid
expenses............... (3,612) (2,097) (296) (223) (2,569) (1,032) (596)
- ------------------------------------------------------------------------------------------------------------------
Net expenses........... 3,148,090 2,421,362 296,304 417,103 1,111,249 311,930 441,753
- ------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME... 14,404,889 23,704,595 3,189,698 1,012,744 12,552,875 2,605,376 5,474,175
- ------------------------------------------------------------------------------------------------------------------
NET REALIZED AND
UNREALIZED GAIN ON
INVESTMENTS
Net realized gain on
investments............ 1,107,906 12,984,133 798,034 473,737 4,283,776 665,438 1,255,000
Net change in unrealized
gains on investments... 7,663,569 2,891,671 1,366,421 252,397 4,838,736 1,416,843 1,986,232
- ------------------------------------------------------------------------------------------------------------------
Net realized and
unrealized gain on
investments............ 8,771,475 15,875,804 2,164,455 726,134 9,122,512 2,082,281 3,241,232
- ------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET
ASSETS RESULTING FROM
OPERATIONS............. $23,176,364 $39,580,399 $5,354,153 $1,738,878 $21,675,387 $4,687,657 $8,715,407
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
* Eleven months ended August 31, 1998. The Fund changed its fiscal year end from
September 30 to August 31 during the current period.
See Combined Notes to Financial Statements.
55
<PAGE>
- -------------------------------------------------------------------------------
EVERGREEN
Southern State Municipal Bond Funds
- -------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
Year Ended September 30, 1997
<TABLE>
<CAPTION>
MARYLAND
FUND
- --------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME
Interest........................................................... $1,875,016
- --------------------------------------------------------------------------------
EXPENSES
Management fee..................................................... 273,851
Distribution Plan expenses......................................... 73,620
Transfer agent fees................................................ 60,084
Registration and filing fees....................................... 9,626
Custodian fees..................................................... 12,079
Administrative services fees....................................... 75,000
Shareholder reports expense........................................ 20,995
Professional fees.................................................. 14,037
Trustees' fees and expenses........................................ 2,202
Other.............................................................. 57,659
- --------------------------------------------------------------------------------
Total expenses.................................................... 599,153
- --------------------------------------------------------------------------------
NET INVESTMENT INCOME.............................................. 1,275,863
- --------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investments................................... 163,436
Net change in unrealized gains on investments...................... 982,703
- --------------------------------------------------------------------------------
Net realized and unrealized gain on investments.................... 1,146,139
- --------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............... $2,422,002
- --------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
56
<PAGE>
- -------------------------------------------------------------------------------
EVERGREEN
Southern State Municipal Bond Funds
- -------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
Year Ended August 31, 1998
<TABLE>
<CAPTION>
FLORIDA
HIGH INCOME FLORIDA GEORGIA MARYLAND
FUND FUND FUND FUND*
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATIONS
Net investment income... $ 14,404,889 $ 23,704,595 $ 3,189,698 $ 1,012,744
Net realized gain on
investments............ 1,107,906 12,984,133 798,034 473,737
Net change in unrealized
gains on investments... 7,663,569 2,891,671 1,366,421 252,397
- ----------------------------------------------------------------------------------
Net increase in net
assets resulting from
operations............ 23,176,364 39,580,399 5,354,153 1,738,878
- ----------------------------------------------------------------------------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM
Net investment income
Class A................ (9,795,895) (6,351,997) (126,250) (844,382)
Class B................ (3,663,854) (2,070,906) (479,386) (5,731)
Class C................ (16,057) (203,430) 0 0
Class Y................ (929,083) (15,156,341) (2,584,062) (162,631)
Net realized gains on
investments
Class A................ 0 (2,150,248) 0 0
Class B................ 0 (663,807) 0 0
Class Y................ 0 (621,250) 0 0
- ----------------------------------------------------------------------------------
Total distributions to
shareholders.......... (14,404,889) (27,217,979) (3,189,698) (1,012,744)
- ----------------------------------------------------------------------------------
CAPITAL SHARE
TRANSACTIONS
Proceeds from shares
sold................... 252,388,854 136,308,252 15,601,172 4,430,552
Shares issued in
connection with the
acquisition of:
Evergreen Florida Tax
Free Fund............. 0 72,741,942 0 0
Common Trust Funds..... 0 347,033,202 61,853,254 0
Proceeds from
reinvestment of
distributions.......... 6,665,061 4,934,697 485,610 595,369
Payment for shares
redeemed............... (44,930,558) (76,976,941) (10,236,086) (8,247,563)
- ----------------------------------------------------------------------------------
Net increase (decrease)
in net assets
resulting from capital
share transactions.... 214,123,357 484,041,152 67,703,950 (3,221,642)
- ----------------------------------------------------------------------------------
Total increase
(decrease) in net
assets............... 222,894,832 496,403,572 69,868,405 (2,495,508)
NET ASSETS
Beginning of period..... 189,743,181 161,803,570 14,252,077 33,468,781
- ----------------------------------------------------------------------------------
END OF PERIOD........... $412,638,013 $658,207,142 $ 84,120,482 $30,973,273
- ----------------------------------------------------------------------------------
Undistributed net
investment income...... $ 71,519 $ 55,126 $ 3,588 $ 5,491
- ----------------------------------------------------------------------------------
</TABLE>
* Eleven months ended August 31, 1998. The Fund changed its fiscal year end
from September 30 to August 31 during the current period.
See Combined Notes to Financial Statements.
57
<PAGE>
- -------------------------------------------------------------------------------
EVERGREEN
Southern State Municipal Bond Funds
- -------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
Year Ended August 31, 1998
<TABLE>
<CAPTION>
NORTH SOUTH
CAROLINA CAROLINA VIRGINIA
FUND FUND FUND
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
OPERATIONS
Net investment income................ $ 12,552,875 $ 2,605,376 $ 5,474,175
Net realized gain on investments..... 4,283,776 665,438 1,255,000
Net change in unrealized gains on
investments......................... 4,838,736 1,416,843 1,986,232
- --------------------------------------------------------------------------------
Net increase in net assets
resulting from operations.......... 21,675,387 4,687,657 8,715,407
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM
Net investment income
Class A............................. (497,824) (59,104) (1,390,153)
Class B............................. (1,978,289) (170,455) (307,250)
Class Y............................. (10,076,762) (2,375,817) (3,781,622)
Net realized gains on investments
Class A............................. 0 (2,456) 0
Class B............................. 0 (12,377) 0
Class Y............................. 0 (21,740) 0
- --------------------------------------------------------------------------------
Total distributions to
shareholders....................... (12,552,875) (2,641,949) (5,479,025)
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold............ 150,840,381 19,131,622 25,373,266
Shares issued in connection with the
acquisition of:
Common Trust Funds.................. 255,143,064 51,591,389 74,432,035
Virtus Virginia Municipal Bond
Fund............................... 0 0 72,717,737
Proceeds from reinvestment of
distributions....................... 1,925,293 267,827 1,324,197
Payment for shares redeemed.......... (156,067,198) (13,218,458) (23,745,276)
- --------------------------------------------------------------------------------
Net increase in net assets
resulting from capital share
transactions....................... 251,841,540 57,772,380 150,101,959
- --------------------------------------------------------------------------------
Total increase in net assets....... 260,964,052 59,818,088 153,338,341
NET ASSETS
Beginning of period.................. 60,355,046 12,770,530 15,824,821
- --------------------------------------------------------------------------------
END OF PERIOD........................ $321,319,098 $72,588,618 $169,163,162
- --------------------------------------------------------------------------------
Undistributed net investment income.. $ 0 $ 2,439 $ 5,783
- --------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
58
<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 gains or
losses 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 dis-
tributions......................... 3,354,164 2,877,333 422,287
Payment for shares redeemed......... (19,605,169) (30,281,998) (2,738,013)
- -------------------------------------------------------------------------------
Net increase in net assets resulting
from capital share transactions.... 86,133,797 419,551 969,627
- -------------------------------------------------------------------------------
Total increase 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
- -------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
59
<PAGE>
- -------------------------------------------------------------------------------
EVERGREEN
Southern State Municipal Bond Funds
- -------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
Year Ended August 31, 1997
<TABLE>
<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 gains or
losses 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 distri-
butions.............................. 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.
60
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Southern State Municipal Bond Funds
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
Prior Fiscal Years
<TABLE>
<CAPTION>
MARYLAND FUND
--------------------------
Year ended September 30,
--------------------------
1997 1996
- -------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS
Net investment income............................. $ 1,275,863 $ 1,527,863
Net realized gain on investments.................. 163,436 186,173
Net change in unrealized gains or losses on
investments...................................... 982,703 (739,639)
- -------------------------------------------------------------------------------
Net increase in net assets resulting from
operations...................................... 2,422,002 974,397
- -------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM
Net investment income
Class A*......................................... (1,015,074) (1,175,552)
Class Y*......................................... (261,815) (352,284)
- -------------------------------------------------------------------------------
Total distributions to shareholders.............. (1,276,889) (1,527,836)
- -------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold......................... 2,708,043 8,364,014
Proceeds from reinvestment of distributions....... 770,265 989,879
Payment for shares redeemed....................... (11,327,459) (10,247,633)
- -------------------------------------------------------------------------------
Net decrease in net assets resulting from
capital share transactions...................... (7,849,151) (893,740)
- -------------------------------------------------------------------------------
Total decrease in net assets.................... (6,704,038) (1,447,179)
NET ASSETS
Beginning of year................................ 40,172,819 41,619,998
- -------------------------------------------------------------------------------
END OF YEAR...................................... $ 33,468,781 $ 40,172,819
- -------------------------------------------------------------------------------
Undistributed net investment income............... $ 0 $ 1,026
- -------------------------------------------------------------------------------
</TABLE>
* On February 28, 1998, in conjunction with the acquisition of the Virtus Mary-
land Municipal Bond Fund by the Maryland Fund, shareholders of Investment
Shares and Trust Shares in the Virtus Maryland Municipal Bond Fund became
owners of that number of full and fractional shares of Class A and Class Y,
respectively, of the Maryland Fund. See Note 9.
See Combined Notes to Financial Statements.
61
<PAGE>
- --------------------------------------------------------------------------------
[LOGO]
- --------------------------------------------------------------------------------
COMBINED NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION
The Evergreen Southern State 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 Maryland Municipal Bond Fund ("Maryland 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 18, 1997. The Trust is an open end
management investment company registered under the Investment Company Act of
1940, as amended (the "1940 Act").
The Florida High Income and Florida Funds offer Class A, Class B, Class C and
Class Y Shares. The Georgia, Maryland, North Carolina, South Carolina and Vir-
ginia Funds offer Class A, Class B, 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 sub-
ject 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 share-
holders of record of certain other funds managed by First Union and its affili-
ates as of December 30, 1994.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently fol-
lowed by the Funds in the preparation of their financial statements. The poli-
cies are in conformity with generally accepted accounting principles, which re-
quire 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 re-
stricted securities, are valued at fair value as determined in good faith ac-
cording 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. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS
The Funds record when-issued or delayed delivery transactions on the trade date
and will establish and maintain a segregated account with the custodian con-
taining qualifying assets having a value sufficient to make payment for the se-
curities purchased. Securities purchased on a when-issued or delayed delivery
basis are marked to market daily and begin earning interest on the settlement
date. Losses may arise due to changes in the market value of the underlying se-
curities or if the counterparty does not perform under the contract.
C. 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.
62
<PAGE>
- --------------------------------------------------------------------------------
[LOGO]
- --------------------------------------------------------------------------------
COMBINED NOTES TO FINANCIAL STATEMENTS(continued)
D. FEDERAL TAXES
The Funds have qualified and intend to continue to qualify as regulated invest-
ment 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 dis-
tributions under the Code. Accordingly, no provision for federal taxes is re-
quired. 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.
E. DISTRIBUTIONS
Distributions from net investment income are declared daily and paid monthly.
Distributions from net realized capital gains, if any, are paid at least annu-
ally. 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 accor-
dance with income tax regulations, which may differ from generally accepted ac-
counting principles. The differences between financial statement amounts avail-
able for distributions and distributions made in accordance with income tax
regulations are primarily due to differing treatment of market discount on se-
curities.
F. CLASS ALLOCATIONS
Income, expenses (other than class specific expenses) and realized and
unrealized gains and losses are prorated among the classes based on the rela-
tive net assets of each class. Currently, class specific expenses are limited
to expenses incurred under the Distribution Plans for each class.
G. ORGANIZATION EXPENSES
Organization expenses for the Florida High Income Fund are amortized to opera-
tions 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 out-
standing 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 August 31, 1998, all organization expenses for these Funds have been fully
amortized.
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 cur-
rently divided into Class A, Class B, Class Y and Class C. Transactions in
shares of the Funds were as follows:
Florida High Income Fund
<TABLE>
<CAPTION>
Year Ended Year Ended
August 31, 1998 August 31, 1997
------------------------ ------------------------
Shares Amount Shares Amount
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS A
Shares sold............... 15,959,354 $177,761,562 4,908,227 $ 52,353,817
Shares issued in
reinvestment of
distributions............ 418,144 4,657,114 218,163 2,333,137
Shares redeemed........... (2,598,089) (28,920,489) (1,431,303) (15,236,336)
- ------------------------------------------------------------------------------
Net increase.............. 13,779,409 $153,498,187 3,695,087 $ 39,450,618
- ------------------------------------------------------------------------------
CLASS B
Shares sold............... 4,149,563 $ 46,073,049 4,247,193 $ 45,291,821
Shares issued in
reinvestment of
distributions............ 168,013 1,869,633 89,841 961,874
Shares redeemed........... (968,277) (10,761,818) (352,500) (3,764,886)
- ------------------------------------------------------------------------------
Net increase.............. 3,349,299 $ 37,180,864 3,984,534 $ 42,488,809
- ------------------------------------------------------------------------------
</TABLE>
63
<PAGE>
- --------------------------------------------------------------------------------
[LOGO]
- --------------------------------------------------------------------------------
COMBINED NOTES TO FINANCIAL STATEMENTS(continued)
- --------------------------------------------------------------------------------
Florida High Income Fund (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
March 6, 1998
(Commencement of Class
Operations) through
August 31, 1998
------------------------
Shares Amount
- ------------------------------------------------------
<S> <C> <C>
CLASS C
Shares sold............... 96,347 $ 1,073,544
Shares issued in
reinvestment of
distributions............ 1,202 13,443
Shares redeemed........... 0 0
- ------------------------------------------------------
Net increase.............. 97,549 $ 1,086,987
- ------------------------------------------------------
<CAPTION>
Year Ended Year Ended
August 31, 1998 August 31, 1997
------------------------ ------------------------
Shares Amount Shares Amount
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS Y
Shares sold............... 2,468,047 $ 27,480,699 443,071 $ 4,739,164
Shares issued in
reinvestment of
distributions............ 11,222 124,871 5,518 59,153
Shares redeemed........... (470,406) (5,248,251) (56,700) (603,947)
- ------------------------------------------------------------------------------
Net increase.............. 2,008,863 $ 22,357,319 391,889 $ 4,194,370
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Florida Fund
- ------------------------------------------------------------------------------
<CAPTION>
Year Ended Year Ended
August 31, 1998 August 31, 1997
------------------------ ------------------------
Shares Amount Shares Amount
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS A
Shares sold............... 5,507,078 $ 54,971,741 680,065 $ 6,676,415
Shares issued in
connection with the
acquisition of
Evergreen Florida Tax
Free Fund................ 2,449,486 24,653,786 0 0
Shares issued in
reinvestment of
distributions............ 321,220 3,210,363 200,942 1,980,889
Shares redeemed........... (2,683,254) (26,904,074) (2,225,426) (21,851,674)
- ------------------------------------------------------------------------------
Net increase (decrease)... 5,594,530 $ 55,931,816 (1,344,419) $(13,194,370)
- ------------------------------------------------------------------------------
CLASS B
Shares sold............... 551,773 $ 5,530,645 586,099 $ 5,756,602
Shares issued in
connection with the
acquisition of
Evergreen Florida Tax
Free Fund................ 3,887,072 39,122,963 0 0
Shares issued in
reinvestment of
distributions............ 134,648 1,345,190 77,038 759,420
Shares redeemed........... (1,191,215) (11,944,047) (503,356) (4,943,204)
- ------------------------------------------------------------------------------
Net increase.............. 3,382,278 $ 34,054,751 159,781 $ 1,572,818
- ------------------------------------------------------------------------------
<CAPTION>
January 26, 1998
(Commencement of Class
Operations) through
August 31, 1998
------------------------
Shares Amount
- ------------------------------------------------------
<S> <C> <C>
CLASS C
Shares sold............... 68,683 $ 690,529
Shares issued in
connection with the
acquisition of
Evergreen Florida Tax
Free Fund................ 890,735 8,965,193
Shares issued in
reinvestment of
distributions............ 6,601 66,138
Shares redeemed........... (82,843) (830,261)
- ------------------------------------------------------
Net increase.............. 883,176 $ 8,891,599
- ------------------------------------------------------
<CAPTION>
Year Ended Year Ended
August 31, 1998 August 31, 1997
------------------------ ------------------------
Shares Amount Shares Amount
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS Y
Shares sold............... 7,493,445 $ 75,115,337 1,566,132 $ 15,391,199
Shares issued in
connection with the
acquisition of Common
trust funds.............. 34,976,141 347,033,202 0 0
Shares issued in
reinvestment of
distributions............ 31,324 313,006 13,894 137,024
Shares redeemed........... (3,720,951) (37,298,559) (353,969) (3,487,120)
- ------------------------------------------------------------------------------
Net increase.............. 38,779,959 $385,162,986 1,226,057 $ 12,041,103
- ------------------------------------------------------------------------------
</TABLE>
64
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- --------------------------------------------------------------------------------
Georgia Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended Year Ended
August 31, 1998 August 31, 1997
---------------------- ---------------------
Shares Amount Shares Amount
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS A
Shares sold.................... 215,335 $ 2,200,069 58,988 $ 571,356
Shares issued in reinvestment
of distributions.............. 8,134 83,109 7,041 68,727
Shares redeemed................ (66,115) (669,683) (47,699) (464,268)
- -------------------------------------------------------------------------------
Net increase................... 157,354 $ 1,613,495 18,330 $ 175,815
- -------------------------------------------------------------------------------
CLASS B
Shares sold.................... 284,927 $ 2,895,888 234,534 $ 2,292,070
Shares issued in reinvestment
of distributions.............. 33,988 346,944 30,017 293,086
Shares redeemed................ (204,318) (2,088,089) (134,483) (1,307,027)
- -------------------------------------------------------------------------------
Net increase................... 114,597 $ 1,154,743 130,068 $ 1,278,129
- -------------------------------------------------------------------------------
CLASS Y
Shares sold.................... 1,025,227 $10,505,215 43,212 $ 421,927
Shares issued in connection
with the acquisition of Common
trust funds................... 6,111,899 61,853,254 0 0
Shares issued in reinvestment
of distributions.............. 5,439 55,557 6,202 60,474
Shares redeemed................ (729,756) (7,478,314) (99,306) (966,718)
- -------------------------------------------------------------------------------
Net increase (decrease)........ 6,412,809 $64,935,712 (49,892) $ (484,317)
- -------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
Maryland Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Eleven Months Ended Year Ended Year Ended
August 31, 1998 September 30, 1997 September 30, 1996
--------------------- --------------------- --------------------
Shares Amount Shares Amount Shares Amount
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CLASS A*
Shares sold............. 200,179 $ 2,197,755 192,865 $ 2,067,713 574,103 $6,142,806
Shares issued in
reinvestment of
distributions.......... 53,687 590,817 71,862 770,265 92,527 989,879
Shares redeemed......... (584,040) (6,428,043) (679,110) (7,269,728) (712,478) (7,557,624)
- --------------------------------------------------------------------------------------------
Net decrease............ (330,174) $(3,639,471) (414,383) $(4,431,750) (45,848) $ (424,939)
- --------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
March 27, 1998
(Commencement of Class
Operations) through
August 31, 1998
-----------------------
Shares Amount
- ---------------------------------------------------------
<S> <C> <C>
CLASS B
Shares sold...................... 88,301 $ 972,888
Shares issued in reinvestment of
distributions................... 411 4,552
Shares redeemed.................. 0 0
- ---------------------------------------------------------
Net increase..................... 88,712 $ 977,440
- ---------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Eleven Months Ended Year Ended Year Ended
August 31, 1998 September 30, 1997 September 30, 1996
--------------------- --------------------- ---------------------
Shares Amount Shares Amount Shares Amount
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CLASS Y*
Shares sold............. 114,329 $ 1,259,909 59,419 $ 640,330 209,103 $ 2,221,208
Shares issued in
reinvestment of
distributions.......... 0 0 0 0 0 0
Shares redeemed......... (167,074) (1,819,520) (380,036) (4,057,731) (252,990) (2,690,009)
- ---------------------------------------------------------------------------------------------
Net decrease............ (52,745) $ (559,611) (320,617) $(3,417,401) (43,887) $ (468,801)
- ---------------------------------------------------------------------------------------------
</TABLE>
* On February 28, 1998, in conjunction with the acquisition of the Virtus
Maryland Municipal Bond Fund by the Maryland Fund, shareholders of Investment
Shares and Trust Shares in the Virtus Maryland Municipal Bond Fund became
owners of that number of full and fractional shares of Class A and Class Y,
respectively, of the Maryland Fund. See Note 9.
65
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- --------------------------------------------------------------------------------
North Carolina Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended Year Ended
August 31, 1998 August 31, 1997
-------------------------- ---------------------
Shares Amount Shares Amount
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS A
Shares sold................ 906,792 $ 9,704,553 104,597 $ 1,069,375
Shares issued in
reinvestment of
distributions............. 32,895 351,292 27,845 283,991
Shares redeemed............ (267,487) (2,855,066) (150,887) (1,540,570)
- -------------------------------------------------------------------------------
Net increase (decrease).... 672,200 $ 7,200,779 (18,445) $ (187,204)
- -------------------------------------------------------------------------------
CLASS B
Shares sold................ 411,810 $ 4,390,935 387,839 $ 3,937,543
Shares issued in
reinvestment of
distributions............. 138,795 1,480,873 148,184 1,511,443
Shares redeemed............ (647,645) (6,889,422) (839,134) (8,524,353)
- -------------------------------------------------------------------------------
Net decrease............... (97,040) $ (1,017,614) (303,111) $(3,075,367)
- -------------------------------------------------------------------------------
CLASS Y
Shares sold................ 12,832,868 $ 136,744,893 84,295 $ 853,799
Shares issued in connection
with the acquisition of
Common trust funds........ 24,134,747 255,143,064 0 0
Shares issued in
reinvestment of
distributions............. 8,699 93,128 2,138 21,878
Shares redeemed............ (13,727,028) (146,322,710) (74,420) (757,802)
- -------------------------------------------------------------------------------
Net increase............... 23,249,286 $ 245,658,375 12,013 $ 117,875
- -------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
South Carolina Fund
- --------------------------------------------------------------------------------
<CAPTION>
Year Ended Year Ended
August 31, 1998 August 31, 1997
-------------------------- ---------------------
Shares Amount Shares Amount
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS A
Shares sold................ 91,036 $ 940,429 41,892 $ 414,564
Shares issued in
reinvestment of
distributions............. 3,523 36,197 2,239 22,308
Shares redeemed............ (29,261) (298,275) (29,248) (286,768)
- -------------------------------------------------------------------------------
Net increase............... 65,298 $ 678,351 14,883 $ 150,104
- -------------------------------------------------------------------------------
CLASS B
Shares sold................ 61,561 $ 634,986 55,162 $ 544,288
Shares issued in
reinvestment of
distributions............. 12,822 131,600 14,381 142,689
Shares redeemed............ (109,281) (1,123,248) (41,753) (410,305)
- -------------------------------------------------------------------------------
Net increase (decrease).... (34,898) $ (356,662) 27,790 $ 276,672
- -------------------------------------------------------------------------------
CLASS Y
Shares sold................ 1,713,385 $ 17,556,207 400,553 $ 3,977,215
Shares issued in connection
with the acquisition of
Common trust fund......... 5,075,749 51,591,389 0 0
Shares issued in
reinvestment of
distributions............. 9,773 100,030 18,276 181,369
Shares redeemed............ (1,145,988) (11,796,935) (193,151) (1,917,807)
- -------------------------------------------------------------------------------
Net increase............... 5,652,919 $ 57,450,691 225,678 $ 2,240,777
- -------------------------------------------------------------------------------
</TABLE>
66
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- --------------------------------------------------------------------------------
Virginia Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended Year Ended
August 31, 1998 August 31, 1997
------------------------ --------------------
Shares Amount Shares Amount
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS A
Shares sold.................... 532,512 $ 5,479,932 52,270 $ 516,653
Shares issued in connection
with the acquisition of
Virtus Virginia Municipal Bond
Fund.......................... 5,187,357 53,681,427 0 0
Shares issued in reinvestment
of distributions.............. 99,072 1,023,118 12,391 122,884
Shares redeemed................ (918,424) (9,485,982) (71,543) (705,708)
- -------------------------------------------------------------------------------
Net increase (decrease)........ 4,900,517 $ 50,698,495 (6,882) $ (66,171)
- -------------------------------------------------------------------------------
CLASS B
Shares sold.................... 239,158 $ 2,460,495 127,982 $1,276,030
Shares issued in reinvestment
of distributions.............. 22,646 233,301 18,384 182,440
Shares redeemed................ (73,319) (755,073) (96,368) (959,225)
- -------------------------------------------------------------------------------
Net increase................... 188,485 $ 1,938,723 49,998 $ 499,245
- -------------------------------------------------------------------------------
CLASS Y
Shares sold.................... 1,691,800 $ 17,432,839 284,030 $2,807,674
Shares issued in connection
with the acquisition of:
Common trust funds............ 7,286,001 74,432,035 0 0
Virtus Virginia Municipal Bond
Fund......................... 1,839,517 19,036,310 0 0
Shares issued in reinvestment
of distributions.............. 6,584 67,778 6,490 64,419
Shares redeemed................ (1,310,177) (13,504,221) (114,905) (1,139,362)
- -------------------------------------------------------------------------------
Net increase................... 9,513,725 $ 97,464,741 175,615 $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 year ended August 31, 1998:
<TABLE>
<CAPTION>
Cost of Proceeds
Purchases from Sales
------------ ------------
<S> <C> <C>
Florida High Income Fund.............. $410,381,423 $197,169,328
Florida Fund.......................... 393,314,190 317,166,679
Georgia Fund.......................... 37,384,651 32,139,580
Maryland Fund......................... 10,845,827 11,839,297
North Carolina Fund................... 133,921,501 132,629,460
South Carolina Fund................... 25,400,727 17,340,115
Virginia Fund......................... 54,289,037 50,002,661
</TABLE>
On August 31, 1998, the tax cost and composition of gross unrealized gains and
losses on investment securities based on the aggregate cost of investments for
federal income tax purposes were as follows:
<TABLE>
<CAPTION>
Gross Gross
Tax Unrealized Unrealized Net Unrealized
Cost Gains Losses Gains
------------ ----------- ---------- --------------
<S> <C> <C> <C> <C>
Florida High
Income Fund.... $393,182,644 $14,701,797 $66,266 $14,635,531
Florida Fund.... 631,375,951 35,667,306 0 35,667,306
Georgia Fund.... 77,862,269 5,440,826 0 5,440,826
Maryland Fund... 29,319,829 1,441,808 0 1,441,808
North Carolina
Fund........... 302,731,037 20,797,621 0 20,797,621
South Carolina
Fund........... 69,973,850 4,481,391 2,515 4,478,876
Virginia Fund... 160,175,331 9,247,651 0 9,247,651
</TABLE>
As of August 31, 1998, the Funds had capital loss carryovers for federal income
tax purposes as follows:
<TABLE>
<CAPTION>
Expiration
------------------------------------
2001 2002 2003 2004
-------- -------- -------- ---------
<S> <C> <C> <C> <C>
Florida High Income
Fund.................... -- -- $108,000 $ 64,000
Florida Fund............. $810,000 -- -- 1,089,000
</TABLE>
Florida Fund's capital loss carryforward was created as a result of the January
26, 1998 acquisition of substantially all the assets and assumption of certain
liabilities of Evergreen Florida Tax Free Fund in exchange for Florida Fund
shares. In accordance with income tax regulations, certain Florida Fund gains
may not be used to offset this capital loss carryforward.
67
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5. DISTRIBUTION PLANS
Evergreen Distributor, Inc. ("EDI"), 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 an annual rate of
0.25% of the average daily net assets of the class. Class B and Class C also
pay distribution fees equal to an annual rate of 0.75% of the average daily net
assets of the class. Distribution Plan expenses are calculated daily and paid
monthly.
During the year ended August 31, 1998, amounts paid or accrued to EDI 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... $475,289 $820,651 $ 3,819 --
Florida Fund............... 330,600 531,728 52,587 $224,808
Georgia Fund............... 6,559 117,976 -- --
Maryland Fund.............. 59,345 1,680 -- --
North Carolina Fund........ 25,891 486,336 -- --
South Carolina Fund........ 3,277 45,455 -- --
Virginia Fund.............. 73,823 76,884 -- --
</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 per-
mitted to pay under the Distribution Plans.
Each of the Distribution Plans may be terminated at any time by vote of the In-
dependent 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 Car-
olina, a subsidiary of First Union, serves as the investment advisor 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 Flor-
ida Fund, Georgia Fund, Maryland 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. Prior to March 1, 1998, the Mary-
land Fund paid its prior investment advisor, Virtus Capital Management Inc., an
advisory fee at an annual rate of 0.75% of the Maryland Fund's average daily
net assets. During the eleven months ended August 31, 1998, the Maryland Fund
paid or accrued $74,528 to CMG for management fees.
Evergreen Investment Services, Inc. ("EIS"), 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 adminis-
tered by EIS for which First Union or its investment advisory subsidiaries are
also the investment advisors. 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-ad-
ministration fee is calculated by applying percentage rates, which start at
0.01% and decline to 0.004% per annum as net assets increase, to the average
daily net asset value of each Fund. Prior to March 1, 1998, Federated Adminis-
trative Services provided the Maryland Fund with administrative personnel and
services and was paid a fee based on the level of average daily net assets of
the Virtus Funds, the Blanchard Funds and the Blanchard Precious Metals Fund,
Inc. but not less than $50,000 per year.
68
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For the year ended August 31, 1998, investment management fees and administra-
tion fees were waived and/or expenses reimbursed as follows:
<TABLE>
<CAPTION>
Management Administration
Fees Waived Fees Waived
----------- --------------
<S> <C> <C>
Florida High Income Fund............. $ 489,599 --
Florida Fund......................... 1,688,280 --
Georgia Fund......................... 300,583 --
Maryland Fund........................ 67,938 --
North Carolina Fund.................. 1,063,800 --
South Carolina Fund.................. 136,669 $4,645
Virginia Fund........................ 504,686 --
</TABLE>
During the year ended August 31, 1998, the Funds paid or accrued to EIS the
following amounts for certain administrative services:
<TABLE>
<S> <C>
Florida High Income Fund................................ $ 68,387
Florida Fund............................................ 113,481
Georgia Fund............................................ 15,259
Maryland Fund........................................... 34,663
North Carolina Fund..................................... 60,701
South Carolina Fund..................................... 14,705
Virginia Fund........................................... 25,945
</TABLE>
Evergreen Service Company ("ESC"), an indirect, fully-owned subsidiary of First
Union, serves as the transfer and dividend disbursing agent for the Funds.
Prior to March 1, 1998, Federated Shareholder Services Company served as the
Maryland Fund's transfer and dividend disbursing agent. Total transfer agent
fees paid by the Maryland Fund to ESC for the period from March 1, 1998 to Au-
gust 31, 1998 were $15,827.
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. 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 the Fund's Trustees' fees and
expenses. Trustees will be paid either in one lump sum or in quarterly install-
ments 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.
9. 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.
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.
Effective on the close of business on February 28, 1998, the Maryland Fund ac-
quired all of the assets and certain liabilities of the Virtus Maryland Munici-
pal Bond Fund (the "Virtus Maryland Fund"). Shareholders of Investment Shares
and Trust Shares in the Virtus Maryland Fund became owners of that number of
full and
69
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COMBINED NOTES TO FINANCIAL STATEMENTS(continued)
fractional shares of Class A and Class Y, respectively, of the Maryland Fund
having an aggregate net asset value equal to the aggregate net asset value of
their shares of the Virtus Maryland Fund immediately prior to the close of
business on February 28, 1998. The Maryland Fund had no operations prior to the
merger. Since both the Maryland Fund and the Virtus Maryland Fund were similar
funds, and the Virtus Maryland Fund contributed the majority of the net assets
and shareholders, its basis of accounting for assets and liabilities and its
operating results for prior periods are carried forward as the accounting sur-
vivor. Also on February 28, 1998, the Virginia Fund acquired all of the assets
and certain liabilities of the Virtus Virginia Municipal Bond Fund in exchange
for Class A and Class Y shares of the Virginia Fund.
These conversions and acquisitions 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 were as follows:
<TABLE>
<CAPTION>
Value of Net Number of Unrealized Net Assets
Acquiring Fund Acquired Fund Assets Acquired Shares Issued Appreciation After Acquisition
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Florida Fund............ Common trust funds* $347,033,202 34,976,141 $19,854,472 $511,659,015
Florida Fund............ Evergreen Florida Tax Free Fund 72,741,942 7,227,293 4,750,737 594,416,755
Georgia Fund............ Common trust funds* 61,853,254 6,111,899 3,242,590 76,999,760
Maryland Fund........... Virtus Maryland Fund 30,432,133 2,755,733 1,454,944 30,432,133
North Carolina Fund..... Common trust funds* 255,143,064 24,134,747 12,288,139 317,434,059
South Carolina Fund..... Common trust fund 51,591,389 5,075,749 2,534,925 59,786,494
Virginia Fund........... Common trust funds* 74,432,035 7,286,001 2,846,313 81,525,759
Virginia Fund........... Virtus Virginia Municipal Bond Fund 72,717,737 7,026,874 3,850,319 167,168,666
</TABLE>
- -------
* The Acquiring Fund may have acquired net assets of more than one common trust
fund or portion of a common trust fund.
10. FINANCING AGREEMENTS
On October 31, 1996, a financing agreement among certain of the Evergreen
Funds, State Street Bank & Trust ("State Street") and a group of banks (collec-
tively, 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 partici-
pating funds. State Street served as agent for the Banks, and as agent was en-
titled 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 pro-
vided 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 mil-
lion ($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 pur-
poses only and is subject to each Fund's borrowing restrictions. Borrowings un-
der 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 por-
tion 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 year ended August 31, 1998, the Florida High Income Fund had average
borrowings outstanding of $346,134 at a rate of 6.01% and paid interest of
$21,070. As of August 31, 1998, the Funds had no borrowings outstanding under
these agreements.
70
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COMBINED NOTES TO FINANCIAL STATEMENTS(continued)
11. CONCENTRATION OF CREDIT RISK
Each Fund invests a substantial portion of its assets in issuers located in a
single state, therefore, it may be more affected by economic and political de-
velopments in that state or region than would be a comparable general tax-ex-
empt mutual fund.
12. YEAR 2000 (UNAUDITED)
Like other investment companies, the Funds could be adversely affected if the
computer systems used by the Funds' investment advisors and the Funds' other
service providers are not able to perform their intended functions effectively
after 1999 because of the inability of computer software to distinguish the
year 2000 from the year 1900. The Funds' investment advisors are taking steps
to address this potential year 2000 problem with respect to the computer sys-
tems that they use and to obtain satisfactory assurances that comparable steps
are being taken by the Funds' other major service providers. At this time, how-
ever, there can be no assurance that these steps will be sufficient to avoid
any adverse impact on the Funds from this problem.
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REPORT OF INDEPENDENT ACCOUNTANTS
TO THE TRUSTEES AND SHAREHOLDERS OF
EVERGREEN FLORIDA HIGH INCOME MUNICIPAL BOND FUND
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all mate-
rial respects, the financial position of Evergreen Florida High Income Munici-
pal Bond Fund (the "Fund"), a series of the Evergreen Municipal Trust, at Au-
gust 31, 1998, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period then ended
and the financial highlights for each of the three years in the period ended
August 31, 1998 and for the four month period ended August 31, 1995, in confor-
mity with generally accepted accounting principles. These financial statements
and financial highlights (hereafter referred to as "financial statements") are
the responsibility of the Fund's management; our responsibility is to express
an opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted au-
diting standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of mate-
rial misstatement. An audit includes examining, on a test basis, evidence sup-
porting the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at August 31, 1998 by corre-
spondence with the custodian, provide a reasonable basis for the opinion ex-
pressed above. The financial statements of the Fund for each of the two years
in the period ended April 30, 1995 were audited by other independent accoun-
tants whose report dated June 2, 1995 expressed an unqualified opinion.
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, NY 10036
October 14, 1998
72
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INDEPENDENT AUDITORS' REPORT
The Trustees and Shareholders
Evergreen Municipal Trust
We have audited the accompanying statements of assets and liabilities, includ-
ing the schedules of investments, of six of the Funds comprising Evergreen Mu-
nicipal Trust listed below as of August 31, 1998, and the related statements of
operations, statements of changes in net assets, and financial highlights for
each of the years or periods listed below:
Evergreen Florida Municipal Bond Fund -- statement of operations for the
year ended August 31, 1998, statements of changes in net assets for each of
the years in the two-year period ended August 31, 1998 and the financial
highlights for the periods presented on pages 18 and 19.
Evergreen Georgia Municipal Bond Fund -- statement of operations for the
year ended August 31, 1998, statements of changes in net assets for each of
the years in the two-year period ended August 31, 1998 and the financial
highlights for the periods presented on pages 20 and 21.
Evergreen Maryland Municipal Bond Fund -- statement of operations and
statements of changes in net assets for the eleven-month period ended Au-
gust 31, 1998, and the financial highlights for the periods presented on
pages 22 and 23. The statement of operations for the year ended September
30, 1997, statements of changes in net assets for each of the years in the
two-year period ended September 30, 1997 and financial highlights for the
periods ended prior to August 31, 1998 were audited by other auditors,
whose opinion thereon dated November 7, 1997 was unqualified.
Evergreen North Carolina Municipal Bond Fund -- statement of operations for
the year ended August 31, 1998, statements of changes in net assets for
each of the years in the two-year period ended August 31, 1998 and the fi-
nancial highlights for the periods presented on pages 24 and 25.
Evergreen South Carolina Municipal Bond Fund -- statement of operations for
the year ended August 31, 1998, statements of changes in net assets for
each of the years in the two-year period ended August 31, 1998 and the fi-
nancial highlights for the periods presented on pages 26 and 27.
Evergreen Virginia Municipal Bond Fund -- statement of operations for the
year ended August 31, 1998, statements of changes in net assets for each of
the years in the two-year period ended August 31, 1998 and the financial
highlights for the periods presented on pages 28 and 29.
These financial statements and financial highlights are the responsibility of
the Funds' management. Our responsibility is to express an opinion on these fi-
nancial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing stan-
dards. Those standards require that we plan and perform our audit to obtain
reasonable assurance about whether the financial statements and financial high-
lights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures included confirmation of
securities owned as of August 31, 1998 by correspondence with the custodian and
brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall fi-
nancial statement presentation. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Ever-
green Florida Municipal Bond Fund, Evergreen Georgia Municipal Bond Fund, Ever-
green Maryland Municipal Bond Fund, Evergreen North Carolina Municipal Bond
Fund, Evergreen South Carolina Municipal Bond Fund and Evergreen Virginia Mu-
nicipal Bond Fund as of August 31, 1998, the results of their operations, the
changes in their net assets and financial highlights for each of the years or
periods specified in the first paragraph above in conformity with generally ac-
cepted accounting principles.
KPMG Peat Marwick LLP
Boston, Massachusetts
October 9, 1998
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FEDERAL INCOME TAX STATUS OF DISTRIBUTIONS (UNAUDITED)
For the fiscal period ended August 31, 1998, the following percent-
ages represent the portion of dividends from net investment income
which are exempt from federal income tax, other than alternative min-
imum tax:
<TABLE>
<S> <C>
Florida High Income Fund................................. 99.93%
Florida Fund............................................. 99.41%
Georgia Fund............................................. 99.90%
Maryland Fund............................................ 100.00%
North Carolina Fund...................................... 99.55%
South Carolina Fund...................................... 99.80%
Virginia Fund............................................ 99.77%
</TABLE>
Pursuant to section 852 of the Internal Revenue Code, the Funds have
designated the following amounts as long-term 28% capital gain dis-
tributions and long-term 20% capital gain distributions for the fis-
cal year ended August 31, 1998:
<TABLE>
<CAPTION>
Aggregate Per Share
------------------- -------------
28% 20% 28% 20%
---------- -------- ------ ------
<S> <C> <C> <C> <C>
Florida Fund................ $2,447,482 $757,707 $0.038 $0.012
South Carolina Fund......... 23,270 13,303 0.003 0.002
</TABLE>
Shareholders are advised to use information received on Form 1099 to
determine their taxable long-term capital gain distributions rather
than the per share amounts as presented above.
74
<PAGE>
Evergreen Funds
Money Market
Treasury Money Market Fund
Money Market Fund
Municipal Money Market Fund
Pennsylvania Municipal Money Market Fund
Tax Exempt
Short Intermediate Municipal Fund
High Grade Tax Free Fund
Tax Free Fund
California Tax Free Fund
Connecticut Municipal Bond Fund
Florida Municipal Bond Fund
Florida High Income Municipal Bond Fund
Georgia Municipal Bond Fund
Maryland Municipal Bond Fund
Massachusetts Tax Free Fund
Missouri Tax Free Fund
New Jersey Tax Free Income Fund
New York Tax Free Fund
North Carolina Municipal Bond Fund
Pennsylvania Tax Free Fund
South Carolina Municipal Bond Fund
Virginia Municipal Bond Fund
Income
Capital Preservation and Income Fund
Short Intermediate Bond Fund
Intermediate Term Government Securities Fund
Intermediate Term Bond Fund
U.S. Government Fund
Diversified Bond Fund
Strategic Income Fund
High Yield Bond Fund
Balanced
American Retirement Fund
Balanced Fund
Tax Strategic Foundation Fund
Foundation Fund
Growth & Income
Utility Fund
Income and Growth Fund
Fund for Total Return
Value Fund
Blue Chip Fund
Growth and Income Fund
Small Cap Equity Income Fund
Domestic Growth
Strategic Growth Fund
Stock Selector Fund
Evergreen Fund
Omega Fund
Small Company Growth Fund
Aggressive Growth Fund
Micro Cap Fund
Global International
Global Leaders Fund
International Growth Fund
Global Opportunities Fund
Precious Metals Fund
Emerging Markets Growth Fund
Latin America Fund
Express Line
800.346.3858
Investor Services
800.343.2898
Retirement Plan Services
800.247.4075
www.evergreenfunds.com
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PAID
PERMIT NO. 19
HUDSON, MA
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200 Berkeley Street
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