<PAGE>
Annual Report
as of March 31, 1999
Evergreen
State Municipal Bond Funds
[LOGO OF EVERGREEN FUNDS/SM/ APPEARS HERE]
<PAGE>
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Table of Contents
- --------------------------------------------------------------------------------
Letter to Shareholders .................................................. 1
Evergreen California Municipal Bond Fund
Fund at a Glance........................................................ 2
Portfolio Manager Interview............................................. 3
Evergreen Connecticut Municipal
Bond Fund
Fund at a Glance........................................................ 4
Portfolio Manager Interview............................................. 5
Evergreen Massachusetts Municipal
Bond Fund
Fund at a Glance........................................................ 6
Portfolio Manager Interview............................................. 7
Evergreen Missouri Municipal Bond Fund
Fund at a Glance........................................................ 8
Portfolio Manager Interview............................................. 9
Evergreen New Jersey Municipal
Bond Fund
Fund at a Glance........................................................ 10
Portfolio Manager Interview............................................. 11
Evergreen New York Municipal Bond Fund
Fund at a Glance........................................................ 12
Portfolio Manager Interview............................................. 13
Evergreen Pennsylvania Municipal Bond Fund
Fund at a Glance........................................................ 14
Portfolio Manager Interview............................................. 15
Financial Highlights
Evergreen California Municipal Bond Fund................................ 16
Evergreen Connecticut Municipal
Bond Fund............................................................... 18
Evergreen Massachusetts Municipal
Bond Fund............................................................... 20
Evergreen Missouri Municipal Bond Fund.................................. 22
Evergreen New Jersey Municipal
Bond Fund............................................................... 24
Evergreen New York Municipal Bond Fund.................................. 26
Evergreen Pennsylvania Municipal
Bond Fund............................................................... 28
Schedule of Investments
Evergreen California Municipal Bond Fund................................ 30
Evergreen Connecticut Municipal
Bond Fund............................................................... 32
Evergreen Massachusetts Municipal
Bond Fund............................................................... 34
Evergreen Missouri Municipal Bond Fund.................................. 36
Evergreen New Jersey Municipal
Bond Fund............................................................... 38
Evergreen New York Municipal Bond Fund.................................. 42
Evergreen Pennsylvania Municipal
Bond Fund............................................................... 44
Statements of Assets and Liabilities..................................... 49
Statements of Operations................................................. 50
Statements of Changes in Net Assets...................................... 51
Combined Notes to Financial Statements................................... 53
Independent Auditors' Report............................................. 63
Additional Information................................................... 64
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Evergreen Funds
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Evergreen Funds is one of the nation's fastest growing investment companies with
over $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
----------------------
May 1999
[PHOTO OF WILLIAM ENNIS APPEARS HERE]
William Ennis
Managing Director
Dear Evergreen Shareholders,
We are pleased to provide the Evergreen State Municipal Bond Funds annual
report, which covers the twelve-month period ended March 31, 1999.
Shift in the Interest Rate Environment
Healthy economic growth and low inflation kept interest rates low throughout the
first half of the period and pushed bond prices higher. In the latter half of
the period, lingering concerns about inflation affected the fixed-income markets
and produced a shift in the interest-rate environment. Fears about the robust
U.S. economy and high levels of consumer spending drove interest rates steadily
upward during the second half of the period, despite three separate cuts in the
Fed Funds rate by the Federal Reserve in the final months of 1998. As a result,
bond prices fell in response to the rising interest rates. In the near future,
we believe interest rates will remain in their current trading range; the
underlying fundamentals in the fixed income markets support continued low rates
and minimal inflation.
Year 2000 Preparation/1/
At Evergreen, we continue to prepare ourselves to provide uninterrupted service
and communication with all our shareholders throughout the end of 1999 and right
through the date change into the Year 2000 and beyond. As of the end of April,
when this report was finalized, we have completed 75% of the testing of internal
systems and are rapidly moving through the remaining systems. In March, we
successfully participated in industry-wide testing with the Securities Industry
Association. We are confident that our efforts will enable our shareholders to
receive the same Evergreen products and services we deliver today.
As always, we encourage all shareholders to diversify their mutual fund
portfolios and we suggest you consult with your financial advisor for an
allocation strategy that helps you meet your investment goals and objectives.
Evergreen Funds offers a wide range of funds that includes multiple investment
styles to help you find one that is appropriate in your portfolio.
Thank you for your continued investment in Evergreen Funds.
Sincerely,
/s/ William M. Ennis
William M. Ennis
Managing Director
Evergreen Funds
/1/The information above constitutes Year 2000 readiness disclosure.
1
<PAGE>
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E V E R G R E E N
California Municipal Bond Fund
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Fund at a Glance as of March 31, 1999
Portfolio
Characteristics
---------------
Total Net Assets $25,171,269
................................................................................
Average Credit Quality AAA
................................................................................
Effective Maturity 10.8 years
................................................................................
Average Duration 8.1 years
................................................................................
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CURRENT INVESTMENT STYLE/1/
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[STYLE BOX APPEARS HERE]
Morningstar's Style Box is based on a portfolio date as of 3/31/99.
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.
/1/Source: 1999 Morningstar, Inc.
/2/Past performance is no guarantee of future results. The performance of each
class may vary based on differences in the 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.
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PERFORMANCE AND RETURNS/2/
- --------------------------------------------------------------------------------
Portfolio Inception Date: 2/1/94 Class A Class B Class C
Class Inception Date 2/1/94 2/1/94 2/1/94
................................................................................
Average Annual Returns*
................................................................................
One year with sales charge 0.83% 0.20% 4.31%
................................................................................
One year w/o sales charge 5.88% 5.20% 5.31%
................................................................................
3 years 5.18% 5.27% 6.17%
................................................................................
5 years 5.84% 5.80% 6.06%
................................................................................
Since Portfolio Inception 4.40% 4.59% 4.71%
................................................................................
Maximum Sales Charge 4.75% 5.00% 1.00%
Front End CDSC CDSC
................................................................................
30-day SEC Yield 3.79% 3.23% 3.23%
................................................................................
Taxable Equivalent Yield** 6.27% 5.35% 5.35%
................................................................................
12-month distributions per share $0.55 $0.48 $0.48
................................................................................
Lipper Ranking out of
26 California/3/
Municipal Debt Funds
(for the 1 year period ended 3/31/99) 7 20 16
................................................................................
* 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.
/3/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.
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LONG TERM GROWTH
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[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Consumer Price Index - US Lehman Brothers Municipals Evergreen CA MUNI A
<S> <C> <C> <C>
2/1/94 10,000 10,000 9,524
3/31/94 10,034 9,593 8,962
3/31/95 10,320 10,305 9,462
3/31/96 10,601 11,169 10,219
3/31/97 10,907 11,779 10,669
3/31/98 11,057 13,039 11,794
3/31/99 11,247 13,856 12,488
</TABLE>
Comparison of a $10,000 investment in Evergreen California Municipal Bond Fund
Class A shares/2/, versus a similar investment in the Lehman Brothers Municipal
Bond Index (LBMBI) and the Consumer Price Index (CPI). The LBMBI is an unmanaged
index. It 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.
2
<PAGE>
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E V E R G R E E N
California Municipal Bond Fund
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Portfolio Manager Interview
Portfolio
Management
--------------
[PHOTO OF GEORGE KIMBALL APPEARS HERE]
George Kimball, CFA
Tenure: January 1996
Your Fund's Class A shares produced a total return of 5.88%, unadjusted for
sales charges, for the 12 months ended March 31, 1999. This performance
surpassed the average return of 5.51% generated by the California insured
municipal funds followed by Lipper Analytical Services for the same period.
Municipal bond yields fluctuated over the past year before closing the year
relatively unchanged. On the national front, sound economic growth and low
inflation created a favorable environment for fixed-income investors. Price
appreciation was limited by heavy new supply, driving the yields of "AAA"-rated
municipal bonds to nearly 100% of U.S. Treasuries. In California, economic
prosperity and solid fiscal conditions reigned. The state's unemployment rate
fell to an 8-year low and revenues exceeded budget projections, enabling the
state to eliminate its deficit. This contributed to solid demand for the state's
municipal bonds, resulting in California municipal bonds outperforming the
national market.
We emphasized yield and total return in managing the Fund. We maximized the
Fund's investment in uninsured bonds, particularly "BBB"-rated and non-rated
bonds, which provided higher yields and greater potential for price
appreciation. Healthcare and Lease bonds, as well as zero coupon bonds with
15-year maturities, contributed considerably to the Fund's performance.
Our outlook is cautiously optimistic. We expect the investment environment in
California to remain healthy and interest rates to be stable. In that
environment, our management strategies will continue to emphasize maximizing the
Fund's yield.
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PORTFOLIO COMPOSITION
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(based on portfolio assets)
[PIE CHART APPEARS HERE]
Lease Revenue 23.8%
Special Feature Revenue 22.7%
Hospitals 13.5%
Housing - Single-Family 10.3%
Housing - Multifamily 8.4%
Airport 4.6%
Industrial Development 4.1%
General Obligation - State 4.1%
General Obligation - Local 2.4%
Other 6.1%
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PORTFOLIO QUALITY
- --------------------------------------------------------------------------------
(based on portfolio assets)
[PIE CHART APPEARS HERE]
AAA 83.4%
AA 1.5%
A 8.3%
BBB 2.0%
Not rated 4.8%
3
<PAGE>
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E V E R G R E E N
Connecticut Municipal Bond Fund
- --------------------------------------------------------------------------------
Fund at a Glance as of March 31, 1999
Portfolio
Characteristics
---------------
Total Net Assets $75,639,074
................................................................................
Average Credit Quality AA
................................................................................
Effective Maturity 9.3 years
................................................................................
Average Duration 8.1 years
................................................................................
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CURRENT INVESTMENT STYLE/1/
- --------------------------------------------------------------------------------
[STYLE BOX APPEARS HERE]
Morningstar's Style Box is based on a portfolio date as of 3/31/99.
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.
/1/Source: 1999 Morningstar, Inc.
/2/Past performance is no guarantee of future results. The performance of each
class may vary based on differences in the 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. Historical performance shown for Classes A and B from
11/24/97 through their respective inception dates is based on the performance of
Class Y and has not been adjusted to reflect the effect of each Class' 12b-1
fees. These fees for Classes A and B are 0.25% and 1.00%, respectively. Class Y
pays no 12b-1 fees. If these fees had been reflected, returns for Classes A and
B would have been lower. Prior to 11/24/97 performance for Classes A, B and Y
are based on the Fund's predecessor common trust fund's (CTF) performance,
adjusted for estimated mutual fund expenses. The CTF was not registered under
the 1940 Act and was not subject to certain investment restrictions. If the CTF
had been registered, its performance might have been adversely affected.
Performance for the CTF has been adjusted to include the effect of estimated
mutual fund class gross expense ratios at the time the Fund was converted to a
mutual fund. If fee waivers and expense reimbursements had been calculated into
the mutual fund class expense ratio the total returns would be as follows: Class
A - 3 year =3.75%, 5 year =4.48%, 10 year =5.45% and since portfolio inception
of 1/31/81 =6.56%; Class B - 3 year =3.75%, 5 year =4.40%, 10 year =5.17% and
since portfolio inception of 1/31/81 =6.05%; Class Y - 3 year =5.70%, 5 year
=5.77%, 10 year =6.22% and since portfolio inception of 1/31/81 =7.11%.
- --------------------------------------------------------------------------------
PERFORMANCE AND RETURNS/2/
- --------------------------------------------------------------------------------
Portfolio Inception Date: 1/31/81 Class A Class B Class Y
Class Inception Date 12/30/97 1/9/98 11/24/97
................................................................................
Average Annual Returns*
................................................................................
One year with sales charge 0.11% -0.65% n/a
................................................................................
One year w/o sales charge 5.14% 4.35% 5.56%
................................................................................
3 years 3.60% 3.59% 5.54%
................................................................................
5 years 4.27% 4.19% 5.56%
................................................................................
10 years 5.20% 4.92% 5.97%
................................................................................
Since Portfolio Inception 6.30% 5.79% 6.84%
................................................................................
Maximum Sales Charge 4.75% 5.00% n/a
Front End CDSC
................................................................................
30-day SEC Yield 3.55% 2.97% 3.98%
................................................................................
Taxable Equivalent** 5.88% 4.92% 6.59%
................................................................................
12-month distributions per share $0.32 $0.27 $0.34
................................................................................
Lipper Ranking out of 28 Connecticut
Municipal Debt Funds/3/
(for the 1 year period ended 3/31/99) 15 26 9
................................................................................
* 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.
/3/ 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.
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LONG TERM GROWTH
- --------------------------------------------------------------------------------
[LINE GRAPH APPEARS HERE]
Consumer Price Index - US Lehman Brothers Municipals Ct Muni A
3/31/89 10,000 10,000 9,525
3/31/90 10,523 11,056 10,278
3/31/91 11,038 12,076 11,116
3/31/92 11,390 13,282 11,854
3/31/93 11,742 14,946 12,686
3/31/94 12,036 15,292 12,816
3/31/95 12,379 16,428 13,323
3/31/96 12,717 17,806 14,219
3/31/97 13,083 18,777 14,591
3/31/98 13,262 20,787 15,762
3/31/99 13,491 22,089 16,602
Comparison of a $10,000 investment in Evergreen Connecticut Municipal Bond Fund,
Class A shares/2/, versus a similar investment in the Lehman Brothers Municipal
Bond Index (LBMBI) and the Consumer Price Index (CPI). The LBMBI is an unmanaged
index. It 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.
4
<PAGE>
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E V E R G R E E N
Connecticut Municipal Bond Fund
- --------------------------------------------------------------------------------
Portfolio Manager Interview
Portfolio
Management
--------------
[PHOTO OF JOCELYN TURNER APPEARS HERE]
Jocelyn Turner
Tenure: November 1997
&
Joseph R. Baxter
(not pictured)
Tenure: November 1998*
The Evergreen Connecticut Municipal Bond (Class A shares) posted a 5.14% total
return for the fiscal year ended March 31, 1999, unadjusted for any sales
charges. In fact, during that period the fund outperformed over two-thirds of
all Connecticut municipal bond funds tracked by Lipper Analytical Services, an
independent mutual fund rating company. Strong performance relative to our peers
can be attributed to a favorable duration stance throughout the period. Duration
was kept modestly long as interest rates declined during the first nine months,
then was shortened (from 8.1 years to 7.7 years in February) as interest rates
trended upward. We also actively increased the Fund's current yield during the
final months of the period. This was achieved by purchasing primarily
higher-yielding bonds, many of them from the housing sector, while eliminating
several zero-coupon bonds and non-callable issues, since these two areas
traditionally have higher price volatility and a lower yield.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
(based on portfolio assets)
[PIE CHART APPEARS HERE]
General Obligation-Local 20.4%
Hospital 20.2%
General Obligation-State 8.1%
Industrial Development 6.1%
Residential Care 5.4%
Utility 5.1%
Housing 4.8%
Water & Sewer 4.4%
Sales Tax 4.3%
Other 21.2%
- --------------------------------------------------------------------------------
PORTFOLIO QUALITY
- --------------------------------------------------------------------------------
(based on portfolio assets)
[PIE CHART APPEARS HERE]
AAA 55.7%
AA 17.5%
A 15.9%
BBB 10.9%
* Effective November 1998, Joseph R. Baxter (not pictured) is co-managing the
Fund. Mr. Baxter has 14 years of institutional investment experience and has
been with Evergreen Funds since April 1998. Prior to that he was Head of the Tax
Advantaged Unit at Corestates Investment Advisers from 1990-1998.
5
<PAGE>
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E V E R G R E E N
Massachusetts Municipal Bond Fund
- --------------------------------------------------------------------------------
Fund at a Glance as of March 31, 1999
Portfolio
Characteristics
---------------
Total Net Assets $9,430,074
................................................................................
Average Credit Quality AA
................................................................................
Effective Maturity 11.7 years
................................................................................
Average Duration 7.9 years
................................................................................
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CURRENT INVESTMENT STYLE/1/
- --------------------------------------------------------------------------------
[STYLE BOX APPEARS HERE]
Morningstar's Style Box is based on a portfolio date as of 3/31/99.
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.
/1/Source: 1999 Morningstar, Inc.
/2/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.
- --------------------------------------------------------------------------------
PERFORMANCE AND RETURNS/2/
- --------------------------------------------------------------------------------
Portfolio Inception Date: 2/4/94 Class A Class B Class C
Class Inception Date 2/4/94 2/4/94 2/4/94
................................................................................
Average Annual Returns*
................................................................................
One year with sales charge 0.05% -0.21% 3.84%
................................................................................
One year w/o sales charge 5.07% 4.72% 4.83%
................................................................................
3 years 5.09% 5.27% 6.17%
................................................................................
5 years 5.62% 5.61% 5.92%
................................................................................
Since Portfolio Inception 3.89% 4.07% 4.21%
................................................................................
Maximum Sales Charge 4.75% 5.00% 1.00%
Front End CDSC CDSC
................................................................................
30-day SEC Yield 3.56% 2.99% 2.99%
................................................................................
Taxable Equivalent** 5.89% 4.95% 4.95%
................................................................................
12-month distributions per share $ 0.66 $ 0.59 $ 0.59
................................................................................
Lipper Ranking out of 57
Massachusetts Municipal Debt Funds/3/
(for the 1 year period ending 3/31/99) 24 38 36
................................................................................
* 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.
/3/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]
<TABLE>
<CAPTION>
Consumer Price Index - US Lehman Brothers Municipals Evergreen MA MUNI A
<S> <C> <C> <C>
2/04/94 10,000 10,000 9,526
3/31/94 10,034 9,593 8,924
3/31/95 10,320 10,305 9,481
3/31/96 10,601 11,169 10,111
3/31/97 10,907 11,779 10,609
3/31/98 11,057 13,039 11,723
3/31/99 11,247 13,856 12,317
</TABLE>
Comparison of a $10,000 investment in Evergreen Massachusetts Municipal Bond
Fund, Class A shares/2/, versus a similar investment in the Lehman Brothers
Municipal Bond Index (LBMBI) and the Consumer Price Index (CPI). The LBMBI is an
unmanaged index. It 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.
6
<PAGE>
- --------------------------------------------------------------------------------
E V E R G R E E N
Massachusetts Municipal Bond Fund
- --------------------------------------------------------------------------------
Portfolio Manager Interview
Portfolio
Management
--------------
[PHOTO OF GEORGE KIMBALL APPEARS HERE]
George Kimball, CFA
Tenure: January 1996
Your Fund's Class A shares generated a total return of 5.07%, unadjusted for
sales charges, for the 12 months ended March 31, 1999. The Fund outperformed the
average total return of 4.96% produced by the Massachusetts Municipal Debt Funds
followed by Lipper Analytical Services during the same period.
Municipal bonds closed the fiscal year relatively unchanged after fluctuating
earlier in the period. Healthy economic growth and negligible inflation kept
interest rates low and pushed bond prices higher. In the tax-exempt sector,
however, heavy supply dampened price appreciation causing municipal bond yields
to reach levels rivaling those of U.S. Treasuries. Massachusetts municipal bonds
performed well, reflecting favorable economic and fiscal conditions in the
Commonwealth. Supply was heavy due to the many infrastructure projects that will
continue to take place in Massachusetts. As of February 1999, the 2.9%
unemployment rate in Massachusetts was the lowest in New England and income
levels stood at 123% of the national average. The Commonwealth's revenue
collections have been well above last year's and are expected to generate
another year of surpluses.
Our strategies emphasized total return and yield. We enhanced the Fund's yield
by selling lower-yielding bonds and investing in bonds with coupons that were
higher than the Fund's average yield. We often selected bonds in the Education
sector. We also invested in bonds that were rated "BBB" or bonds that were non-
rated. These bonds provided more generous yields and greater potential for price
appreciation. General obligation bonds, which represent the Fund's largest
position, enabled the Fund to take advantage of the positive investment
conditions in the state.
Our outlook is cautiously optimistic. We anticipate the combination of positive
economic growth and low inflation to allow interest rates to remain steady. In
that environment, we expect our management strategies to continue to emphasize
yield.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
(based on portfolio assets)
[PIE CHART APPEARS HERE]
General Obligation-Local 24.1%
General Obligation-State 13.3%
Industrial Development 12.1%
Education 11.3%
Hospital 10.1%
Special Feature Revenue 7.6%
Water & Sewer 4.7%
Transportation 4.6%
Utility 4.3%
Other 7.9%
- --------------------------------------------------------------------------------
PORTFOLIO QUALITY
- --------------------------------------------------------------------------------
(based on portfolio assets)
[PIE CHART APPEARS HERE]
AAA 63.4%
AA 11.7%
A 6.5%
BBB 15.1%
BB 3.3%
7
<PAGE>
- --------------------------------------------------------------------------------
E V E R G R E E N
Missouri Municipal Bond Fund
- --------------------------------------------------------------------------------
Fund at a Glance as of March 31, 1999
Portfolio
Characteristics
---------------
Total Net Assets $23,047,665
................................................................................
Average Credit Quality AA
................................................................................
Effective Maturity 12.1 years
................................................................................
Average Duration 8.4 years
................................................................................
- --------------------------------------------------------------------------------
CURRENT INVESTMENT STYLE/1/
- --------------------------------------------------------------------------------
[STYLE BOX APPEARS HERE]
Morningstar's Style Box is based on a portfolio date as of 3/31/99. 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.
/1/Source: 1999 Morningstar, Inc.
/2/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.
- --------------------------------------------------------------------------------
PERFORMANCE AND RETURNS/2/
- --------------------------------------------------------------------------------
Portfolio Inception Date: 2/1/94 Class A Class B Class C
Class Inception Date 2/1/94 2/1/94 2/1/94
................................................................................
Average Annual Returns*
................................................................................
One year with sales charge 0.06% -0.16% 3.82%
................................................................................
One year w/o sales charge 5.06% 4.69% 4.79%
................................................................................
3 years 5.34% 5.56% 6.45%
................................................................................
5 years 5.88% 5.87% 6.17%
................................................................................
Since Portfolio Inception 4.69% 4.81% 4.94%
................................................................................
Maximum Sales Charge 4.75% 5.00% 1.00%
Front End CDSC CDSC
................................................................................
30-day SEC Yield 4.29% 3.76% 3.76%
................................................................................
Taxable Equivalent** 7.10% 6.23% 6.23%
................................................................................
12-month distributions per share $ 0.84 $ 0.76 $ 0.77
................................................................................
Lipper Ranking out of 23
Missouri Municipal Debt Funds/3/
(for the 1 year period ending 3/31/99) 10 17 14
................................................................................
* 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.
/3/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]
<TABLE>
<CAPTION>
Consumer Price Index - US Lehman Brothers Municipals Evergreen MO MUNI A
<S> <C> <C> <C>
2/01/94 10,000 10,000 9,528
3/31/94 10,034 9,593 9,131
3/31/95 10,320 10,305 9,611
3/31/96 10,601 11,169 10,398
3/31/97 10,907 11,779 10,940
3/31/98 11,057 13,039 12,144
3/31/99 11,247 13,856 12,758
</TABLE>
Comparison of a $10,000 investment in Evergreen Missouri Municipal Bond Fund,
Class A shares/2/, versus a similar investment in the Lehman Brothers Municipal
Bond Index (LBMBI) and the Consumer Price Index (CPI). The LBMBI is an unmanaged
index. It does not include transaction costs associated with buying or 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.
8
<PAGE>
- --------------------------------------------------------------------------------
E V E R G R E E N
Missouri Municipal Bond Fund
- --------------------------------------------------------------------------------
Portfolio Manager Interview
Portfolio
Management
--------------
[PHOTO OF GEORGE KIMBALL APPEARS HERE]
George Kimball, CFA
Tenure: January 1996
Your Fund's Class A shares delivered a total return of 5.06%, unadjusted for
sales charges, for the 12 months ended March 31, 1999. This performance outpaced
the 4.94% average total return produced by the Missouri municipal funds followed
by Lipper Analytical Services.
Municipal bond prices ended the fiscal year relatively unchanged, despite
experiencing fluctuations earlier in the period. Solid economic growth and
minimal inflation set the stage for continued low interest rates, creating a
favorable atmosphere for fixed-income investors. In the municipal sector,
however, heavy new supply curbed price appreciation, causing yields to reach
nearly 100% of U.S. Treasuries. Missouri's sound economic and fiscal conditions
remained a benefit to the state's municipal bondholders. Missouri's economy
continues to diversify from its manufacturing roots, particularly in healthcare,
computer services and retail. As of January 1999, the state's unemployment level
reached a 20-year low of 2.6%. Missouri's conservative fiscal management was
still reflected in its low debt burden.
Our management strategies focused on yield. We sold higher-quality, lower-
yielding positions and replaced them with lower-quality bonds having yields
higher than the average yield in the Fund. We emphasized Healthcare and Senior
Care bonds, which provided the Fund with more generous income. During the
period, the Fund also benefited from the pre-refunding of its single largest
position, a situation that generated additional total return.
We are cautiously optimistic in our outlook for municipal bonds. We anticipate
economic fundamentals to remain positive and interest rates to be stable. With
that as a backdrop, we intend to remain focused on maximizing yield.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
(based on portfolio assets)
[PIE CHART APPEARS HERE]
Water & Sewer 17.4%
Hospital 15.3%
Lease Revenue 12.6%
Residential Care 10.6%
Housing 9.6%
Airport 7.0%
Utility 6.8%
Education 6.6%
Pre-refunded/Escrowed 3.5%
Other 10.6%
- --------------------------------------------------------------------------------
PORTFOLIO QUALITY
- --------------------------------------------------------------------------------
(based on portfolio assets)
[PIE CHART APPEARS HERE]
AAA 48.5%
AA 25.5%
A 11.6%
BBB 8.6%
Not Rated 5.8%
9
<PAGE>
- --------------------------------------------------------------------------------
E V E R G R E E N
New Jersey Municipal Bond Fund
- --------------------------------------------------------------------------------
Fund at a Glance as of March 31, 1999
Portfolio
Characteristics
---------------
Total Net Assets $177,274,800
................................................................................
Average Credit Quality AA
................................................................................
Effective Maturity 10.3 years
................................................................................
Average Duration 8.3 years
................................................................................
- --------------------------------------------------------------------------------
CURRENT INVESTMENT STYLE/1/
- --------------------------------------------------------------------------------
[STYLE BOX APPEARS HERE]
Morningstar's Style Box is based on a portfolio date as of 3/31/99.
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.
/1/Source: 1999 Morningstar, Inc.
/2/Past performance is no guarantee of future results. The performance of each
class may vary based on differences in the 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. Historical performance shown for Classes B and Y prior
to their inception is based on the performance of Class A, the original class
offered. These historical returns for Classes B and Y have not been adjusted to
reflect the effect of each Class' 12b-1 fees. These fees for Classes A and B are
0.25% and 1.00%, respectively. Class Y does not pay a 12b-1 fee. If these fees
had been reflected, returns for Class B would have been lower while returns for
Class Y would have been higher.
- --------------------------------------------------------------------------------
PERFORMANCE AND RETURNS/2/
- --------------------------------------------------------------------------------
Portfolio Inception Date: 7/16/91 Class A Class B Class Y
Class Inception Date 7/16/91 1/30/96 2/8/96
................................................................................
Average Annual Returns*
................................................................................
One year with sales charge 0.68% -0.29% n/a
................................................................................
One year w/o sales charge 5.66% 4.71% 5.76%
................................................................................
3 years 4.82% 4.67% 6.63%
................................................................................
5 years 5.70% 5.83% 6.78%
................................................................................
Since Portfolio Inception 6.41% 6.71% 7.12%
................................................................................
Maximum Sales Charge 4.75% 5.00% n/a
Front End CDSC
................................................................................
30-day SEC Yield 4.09% 3.38% 4.39%
................................................................................
Taxable Equivalent** 6.77% 5.60% 7.27%
................................................................................
12-month distributions per share $0.57 $0.46 $0.58
................................................................................
Lipper Ranking out of 55
New Jersey Municipal Debt Funds/3/
(for the 1 year period ending 3/31/99) 15 43 12
................................................................................
* 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.
/3/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]
<TABLE>
<CAPTION>
Consumer Price Index - US Lehman Brothers Municipals Evergreen NJ MUNI A
<S> <C> <C> <C>
7/16/91 10,000 10,000 9,524
3/31/92 10,228 10,639 10,044
3/31/93 10,543 11,972 11,386
3/31/94 10,808 12,249 11,624
3/31/95 11,116 13,160 12,404
3/31/96 11,419 14,263 13,306
3/31/97 11,747 15,041 13,928
3/31/98 11,909 16,651 15,230
3/31/99 12,114 17,694 16,092
</TABLE>
Comparison of a $10,000 investment in Evergreen New Jersey Municipal Bond Fund,
Class A shares/2/, versus a similar investment in the Lehman Brothers Municipal
Bond Index (LBMBI) and the Consumer Price Index (CPI). The LBMBI is an unmanaged
index. It does not include transaction costs associated with buying or 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.
10
<PAGE>
- --------------------------------------------------------------------------------
E V E R G R E E N
New Jersey Municipal Bond Fund
- --------------------------------------------------------------------------------
Portfolio Manager Interview
Portfolio
Management
--------------
[PHOTO OF JOCELYN TURNER APPEARS HERE]
Jocelyn Turner
Tenure: November 1992
&
Joseph R. Baxter
(not pictured)
Tenure: November 1998*
The Evergreen New Jersey Municipal Bond's 5.66% total return (Class A shares)
ranked 15 out of 55 (top 22%) New Jersey municipal bond funds tracked by Lipper
Analytical Services, an independent mutual fund rating company, for the fiscal
year ended March 31, 1999, unadjusted for any sales charges. Strong performance
during the period can be attributed to our favorable duration strategy. Duration
was extended in the first six months (from 8.6 years to 8.9 years) as interest
rates fell, then was reduced (from 8.0 years to 7.7 years in February) as rates
trended upward in the final months of the period. We also sought to increase the
Fund's current yield in the final months by purchasing higher-yielding bonds
(typically in the housing sector), while reducing more volatile zero-coupon
bonds. Going forward, we will look to extend duration modestly in the coming
months in order to further increase the Fund's yield as well as take advantage
of potentially declining interest rates.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
(based on portfolio assets)
[PIE CHART APPEARS HERE]
General Obligation-Local 14.1%
Water & Sewer 13.4%
Port Authority 11.5%
Transportation 10.5%
Prerefunded/Escrowed 9.4%
Residential Care 7.6%
General Obligation-State 4.6%
Hospital 4.2%
Education 2.8%
Other 21.9%
- --------------------------------------------------------------------------------
PORTFOLIO QUALITY
- --------------------------------------------------------------------------------
(based on portfolio assets)
[PIE CHART APPEARS HERE]
AAA 57.1%
AA 22.1%
A 8.3%
BBB 7.1%
Not Rated 5.4%
* Effective November 1998, Joseph R. Baxter (not pictured) is co-managing the
Fund. Mr. Baxter has 14 years of institutional investment experience and has
been with Evergreen Funds since April 1998. Prior to that he was Head of the Tax
Advantaged Unit at Corestates Investment Advisers from 1990-1998.
11
<PAGE>
- --------------------------------------------------------------------------------
E V E R G R E E N
New York Municipal Bond Fund
- --------------------------------------------------------------------------------
Fund at a Glance as of March 31, 1999
Portfolio
Characteristics
---------------
Total Net Assets $22,708,920
................................................................................
Average Credit Quality AAA
................................................................................
Effective Maturity 11.6 years
................................................................................
Average Duration 8.4 years
................................................................................
- --------------------------------------------------------------------------------
CURRENT INVESTMENT STYLE/1/
- --------------------------------------------------------------------------------
[STYLE BOX APPEARS HERE]
Morningstar's Style Box is based on a portfolio date as of 3/31/99.
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.
/1/Source: 1999 Morningstar, Inc.
/2/Past performance is no guarantee of future results. The performance of each
class may vary based on differences in the 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. Historical performance shown for Class Y prior to it's
inception is based on the performance of Class A, one of the original classes
offered along with Classes B and C. These historical returns for Class Y have
not been adjusted to reflect the effect of 12b-1 fees. These fees for Classes A,
B, and C are 0.25%, 1.00%, and 1.00%, respectively. Class Y does not pay a 12b-1
fee. If these fees had not been reflected, returns for Class Y would have been
higher.
- --------------------------------------------------------------------------------
PERFORMANCE AND RETURNS/2/
- --------------------------------------------------------------------------------
Portfolio Inception Date: 2/4/94 Class A Class B Class C Class Y
Class Inception Date 2/4/94 2/4/94 2/4/94 10/29/98
................................................................................
Average Annual Returns*
................................................................................
One year with sales charge 0.75% 0.06% 4.07% n/a
................................................................................
One year w/o sales charge 5.73% 4.95% 5.05% 5.84%
................................................................................
3 years 5.31% 5.34% 6.27% 7.06%
................................................................................
5 years 6.13% 6.08% 6.40% 7.20%
................................................................................
Since Portfolio Inception 4.71% 4.79% 4.93% 5.72%
................................................................................
Maximum Sales Charge 4.75% 5.00% 1.00% n/a
Front End CDSC CDSC
................................................................................
30-day SEC Yield 3.92% 3.36% 3.36% 4.37%
................................................................................
Taxable Equivalent** 6.49% 5.56% 5.56% 7.24%
................................................................................
12-month distributions per share $0.78 $0.70 $0.70 $0.53
................................................................................
Lipper Ranking out of 15
New York Insured Funds/3/
(for the 1 year period ending 3/31/99) 3 9 8 n/a
................................................................................
* 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.
/3/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]
<TABLE>
<CAPTION>
Consumer Price Index - US Lehman Brothers Municipals Evergreen NY MUNI A
<S> <C> <C> <C>
2/04/94 10,000 10,000 9,525
3/31/94 10,034 9,593 9,078
3/31/95 10,320 10,305 9,720
3/31/96 10,601 11,169 10,473
3/31/97 10,907 11,779 10,983
3/31/98 11,057 13,039 12,143
3/31/99 11,247 13,856 12,838
</TABLE>
Comparison of a $10,000 investment in Evergreen New York Municipal Bond Fund,
Class A shares/2/, versus a similar investment in the Lehman Brothers Municipal
Bond Index (LBMBI) and the Consumer Price Index (CPI). The LBMBI is an unmanaged
index. It 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.
12
<PAGE>
- --------------------------------------------------------------------------------
E V E R G R E E N
New York Municipal Bond Fund
- --------------------------------------------------------------------------------
Portfolio Manager Interview
Portfolio
Management
--------------
[PHOTO OF GEORGE KIMBALL APPEARS HERE]
George Kimball, CFA
Tenure: January 1996
Your Fund's Class A shares generated a total return of 5.73%, unadjusted for
sales charges, for the 12 months ended March 31, 1999. This performance exceeded
the 5.08% average total return produced by the New York Insured Municipal Debt
Funds followed by Lipper Analytical Services for the same period.
Healthy economic growth and low inflation created a favorable environment for
fixed-income investors, during the fiscal year. However, heavy supply in the
municipal sector offset some of the potential for price appreciation and caused
tax-exempt yields to reach nearly 100% of U.S. Treasuries. New York continued to
benefit from sound economic growth and fiscal conditions.
Strong growth in personal income-particularly in New York City-led to higher-
than-expected state revenues, enabling the state to close the year with a $567
million surplus. The state's debt burden remained relatively high, but
manageable.
Our investment strategies emphasized yield. We generated higher income by
selling lower-yielding insured, non-callable bonds and maximizing the Fund's
uninsured holdings. We also built up the Fund's position in bonds that fund
Education, Housing and Hospitals, because of the higher yields currently
available in those sectors.
Our outlook is cautiously optimistic going forward. We believe positive economic
growth and low inflation will allow interest rates to remain stable. In that
environment, we will continue our emphasis on maximizing income.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
(based on portfolio assets)
[PIE CHART APPEARS HERE]
Water & Sewer 15.2%
General Obligation-Local 14.6%
Transportation 13.5%
Education 12.7%
General Obligation-State 8.1%
Housing-Single Family 6.8%
General Obligation-State 5.2%
Electric & Power 4.5%
Housing-Multifamily 4.1%
Other 15.3%
- --------------------------------------------------------------------------------
PORTFOLIO QUALITY
- --------------------------------------------------------------------------------
(based on portfolio assets)
[PIE CHART APPEARS HERE]
AAA 80.4%
AA 6.4%
A 1.1%
BBB 9.5%
Not Rated 2.6%
13
<PAGE>
- --------------------------------------------------------------------------------
E V E R G R E E N
Pennsylvania Municipal Bond Fund
- --------------------------------------------------------------------------------
Fund at a Glance as of March 31, 1999
Portfolio
Characteristics
---------------
Total Net Assets $255,332,603
................................................................................
Average Credit Quality AA
................................................................................
Effective Maturity 10.9 years
................................................................................
Average Duration 8.8 years
................................................................................
- --------------------------------------------------------------------------------
CURRENT INVESTMENT STYLE/1/
- --------------------------------------------------------------------------------
[STYLE BOX APPEARS HERE]
Morningstar's Style Box is based on a portfolio date as of 3/31/99.
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.
/1/Source: 1999 Morningstar, Inc.
/2/Past performance is no guarantee of future results. The performance of each
class may vary based on differences in the 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. Historical performance shown for Classes B, C, and Y
prior to their inception is based on the performance of Class A, the original
class offered. These historical returns for Classes B, C, and Y have not been
adjusted to reflect the effect of each Class' 12b-1 fees. These fees for Classes
A, B, and C are 0.25%, 1.00%, 1.00%, respectively. Class Y does not pay a 12b-1
fee. If these fees had been reflected, returns for Classes B and C would have
been lower while returns for Class Y would have been higher.
- --------------------------------------------------------------------------------
PERFORMANCE AND RETURNS/2/
- --------------------------------------------------------------------------------
Portfolio Inception Date: 12/27/90 Class A Class B Class C Class Y
Class Inception Date 12/27/90 2/1/93 2/1/93 11/24/97
................................................................................
Average Annual Returns*
................................................................................
One year with sales charge 0.39% -0.31% 3.59% n/a
................................................................................
One year w/o sales charge 5.36% 4.68% 4.59% 5.63%
................................................................................
3 years 5.14% 5.23% 6.11% 7.00%
................................................................................
5 years 5.60% 5.55% 5.86% 6.71%
................................................................................
Since Portfolio Inception 7.27% 7.30% 7.30% 7.95%
................................................................................
Maximum Sales Charge 4.75% 5.00% 1.00% n/a
Front End CDSC CDSC
................................................................................
30-day SEC Yield 4.11% 3.56% 3.56% 4.57%
................................................................................
Taxable Equivalent ** 6.80% 5.89% 5.89% 7.57%
................................................................................
12-month distributions per share $0.65 $0.56 $0.56 $0.68
................................................................................
Lipper Ranking out of 62
Pennsylvania Municipal Debt Funds/3/
(for the 1 year period ending 3/31/99) 15 37 42 10
................................................................................
* 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.
/3/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]
<TABLE>
<CAPTION>
Consumer Price Index - US Lehman Brothers Municipals Evergreen PA MUNI A
<S> <C> <C> <C>
12/27/90 10,000 10,000 9,524
3/31/91 10,090 10,226 9,738
3/31/92 10,411 11,247 10,913
3/31/93 10,733 12,656 12,364
3/31/94 11,002 12,950 12,683
3/31/95 11,315 13,912 13,305
3/31/96 11,624 15,078 14,327
3/31/97 11,958 15,901 15,086
3/31/98 12,123 17,603 16,598
3/31/99 12,331 18,705 17,488
</TABLE>
Comparison of a $10,000 investment in Evergreen Pennsylvania Municipal Bond
Fund, Class A shares/2/, versus a similar investment in the Lehman Brothers
Municipal Bond Index (LBMBI) and the Consumer Price Index (CPI). The LBMBI is an
unmanaged index. It 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.
14
<PAGE>
- --------------------------------------------------------------------------------
E V E R G R E E N
Pennsylvania Municipal Bond Fund
- --------------------------------------------------------------------------------
Portfolio Manager Interview
Portfolio
Management
--------------
[PHOTO OF JOCELYN TURNER APPEARS HERE]
Jocelyn Turner
Tenure: November 1992
&
Joseph R. Baxter
(not pictured)
Tenure: November 1998*
Amid a shifting interest rate environment, the Evergreen Pennsylvania Municipal
Bond Fund, Class A, posted a 5.36% total return, unadjusted for any sales
charges and ranked number 15 out of 62 (top 17%) Pennsylvania municipal debt
funds tracked by Lipper Analytical Services, an independent mutual fund rating
company, for the 12 months ended March 31, 1999. Our duration strategy played a
big role in the Fund's strong performance. Duration was kept modestly long
during the first six months as interest rates declined, then was shortened (from
8.6 years to 8.1 years in February) as rates trended higher. From a sector
standpoint, we purchased a number of bonds from the housing sector that served
to bolster the Fund's yield. Consistent with this income-oriented strategy, we
sold several zero-coupon bonds and non-callable issues since both of these areas
traditionally have higher price volatility and a lower yield.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
(based on portfolio assets)
[PIE CHART APPEARS HERE]
Hospital 18.0%
Industrial Development 12.5%
General Obligation-Local 12.3%
Prerefunded/Escrowed 10.4%
Housing 9.6%
Education 7.9%
Water & Sewer 4.9%
Residential Care 2.3%
Transportation 1.6%
Other 20.5%
- --------------------------------------------------------------------------------
PORTFOLIO QUALITY
- --------------------------------------------------------------------------------
(based on portfolio assets)
[PIE CHART APPEARS HERE]
AAA 47.4%
AA 20.8%
A 8.9%
BBB 12.4%
Not Rated 10.5%
* Effective November 1998, Joseph R. Baxter (not pictured) is co-managing the
Fund. Mr. Baxter has 14 years of institutional investment experience and has
been with Evergreen Funds since April 1998. Prior to that he was Head of the Tax
Advantaged Unit at Corestates Investment Advisers from 1990-1998.
15
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
California Municipal Bond Fund
- --------------------------------------------------------------------------------
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended March 31, Year Ended November 30,
------------------------- -------------------------
1997 1994
1999 1998 (a) 1996 1995 (b)
<S> <C> <C> <C> <C> <C> <C>
CLASS A SHARES
Net asset value,
beginning of period $ 9.98 $ 9.44 $ 9.73 $ 9.86 $ 8.70 $ 10.00
------- ------- ------- ------- ------- -------
.........................................................................
Income from investment
operations
.........................................................................
Net investment income 0.42 0.45 0.16 0.48 0.49 0.44
.........................................................................
Net realized and
unrealized gains or
losses on securities 0.15 0.53 (0.28) (0.11) 1.17 (1.30)
------- ------- ------- ------- ------- -------
Total from investment
operations 0.57 0.98 (0.12) 0.37 1.66 (0.86)
------- ------- ------- ------- ------- -------
.........................................................................
.........................................................................
Less distributions to
shareholders from
Net investment income (0.42) (0.44) (0.17) (0.50) (0.50) (0.44)
.........................................................................
Net realized gains (0.13) 0 0 0 0 0
------- ------- ------- ------- ------- -------
.........................................................................
Total distributions to
shareholders (0.55) (0.44) (0.17) (0.50) (0.50) (0.44)
------- ------- ------- ------- ------- -------
.........................................................................
Net asset value, end of
period $ 10.00 $ 9.98 $ 9.44 $ 9.73 $ 9.86 $ 8.70
------- ------- ------- ------- ------- -------
.........................................................................
.........................................................................
Total return* 5.88% 10.55% (1.29%) 3.99% 19.63% (8.78%)
.........................................................................
Ratios and supplemental
data
.........................................................................
Net assets, end of
period (thousands) $ 6,231 $ 6,420 $ 4,192 $ 4,759 $ 4,555 $ 3,006
.........................................................................
Ratios to average net
assets
Expenses# 0.96% 0.78% 0.77%+ 0.77% 0.72% 0.41%+
.........................................................................
Net investment income 4.20% 4.60% 4.91%+ 5.06% 5.37% 5.53%+
.........................................................................
Portfolio turnover rate 33% 74% 39% 120% 119% 104%
.........................................................................
<CAPTION>
Year Ended March 31, Year Ended November 30,
------------------------- -------------------------
1997 1994
1999 1998 (a) 1996 1995 (b)
<S> <C> <C> <C> <C> <C> <C>
CLASS B SHARES
Net asset value,
beginning of period $ 9.94 $ 9.40 $ 9.69 $ 9.82 $ 8.68 $ 10.00
------- ------- ------- ------- ------- -------
.........................................................................
Income from investment
operations
.........................................................................
Net investment income 0.35 0.37 0.13 0.41 0.44 0.40
.........................................................................
Net realized and
unrealized gains or
losses on securities 0.16 0.53 (0.28) (0.11) 1.17 (1.28)
------- ------- ------- ------- ------- -------
.........................................................................
Total from investment
operations 0.51 0.90 (0.15) 0.30 1.61 (0.88)
------- ------- ------- ------- ------- -------
.........................................................................
Less distributions to
shareholders from
.........................................................................
Net investment income (0.35) (0.36) (0.14) (0.43) (0.47) (0.44)
.........................................................................
Net realized gains (0.13) 0 0 0 0 0
------- ------- ------- ------- ------- -------
Total distributions to
shareholders (0.48) (0.36) (0.14) (0.43) (0.47) (0.44)
------- ------- ------- ------- ------- -------
Net asset value, end of
period $ 9.97 $ 9.94 $ 9.40 $ 9.69 $ 9.82 $ 8.68
------- ------- ------- ------- ------- -------
.........................................................................
Total return* 5.20% 9.75% (1.54%) 3.23% 18.95% (9.00%)
.........................................................................
Ratios and supplemental
data
.........................................................................
Net assets, end of
period (thousands) $17,297 $18,967 $21,794 $22,719 $22,743 $11,415
.........................................................................
Ratios to average net
assets
Expenses# 1.70% 1.52% 1.52%+ 1.52% 1.48% 1.16%+
.........................................................................
Net investment income 3.45% 3.87% 4.16%+ 4.31% 4.57% 4.83%+
.........................................................................
Portfolio turnover rate 33% 74% 39% 120% 119% 104%
.........................................................................
</TABLE>
(a) For the four months ended March 31, 1997. The Fund changed its fiscal year
end from November 30 to March 31, effective March 31, 1997.
(b) For the period from February 1, 1994 (commencement of class operations) to
November 30, 1994.
* Excluding applicable sales charges.
+ Annualized.
# The ratio of expenses to average net assets excludes fee credits and includes
fee waivers.
See Combined Notes to Financial Statements.
16
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
California Municipal Bond Fund
- --------------------------------------------------------------------------------
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended November
Year Ended March 31, 30,
------------------------ ------------------------
1999 1998 1997 (a) 1996 1995 1994 (b)
<S> <C> <C> <C> <C> <C> <C>
CLASS C SHARES
Net asset value, beginning
of period $ 9.92 $ 9.38 $ 9.68 $ 9.80 $ 8.68 $10.00
------ ------ ------ ------ ------ ------
.........................................................................
Income from investment
operations
.........................................................................
Net investment income 0.34 0.37 0.14 0.41 0.43 0.39
.........................................................................
Net realized and
unrealized gains or
losses on securities 0.18 0.53 (0.30) (0.10) 1.15 (1.29)
------ ------ ------ ------ ------ ------
Total from investment
operations 0.52 0.90 (0.16) 0.31 1.58 (0.90)
------ ------ ------ ------ ------ ------
.........................................................................
.........................................................................
Less distributions to
shareholders from
.........................................................................
Net investment income (0.35) (0.36) (0.14) (0.43) (0.46) (0.42)
.........................................................................
Net realized gains (0.13) 0 0 0 0 0
------ ------ ------ ------ ------ ------
.........................................................................
Total distributions to
shareholders (0.48) (0.36) (0.14) (0.43) (0.46) (0.42)
------ ------ ------ ------ ------ ------
.........................................................................
Net asset value, end of
period $ 9.96 $ 9.92 $ 9.38 $ 9.68 $ 9.80 $ 8.68
------ ------ ------ ------ ------ ------
.........................................................................
.........................................................................
Total return* 5.31% 9.77% (1.64%) 3.34% 18.69% (9.08%)
.........................................................................
Ratios and supplemental
data
.........................................................................
Net assets, end of period
(thousands) $1,644 $1,735 $1,849 $1,521 $1,535 $ 624
.........................................................................
Ratios to average net
assets
Expenses# 1.70% 1.52% 1.52%+ 1.52% 1.49% 1.16%+
.........................................................................
Net investment income 3.46% 3.87% 4.16%+ 4.31% 4.51% 4.96%+
.........................................................................
Portfolio turnover rate 33% 74% 39% 120% 119% 104%
.........................................................................
</TABLE>
(a) For the four months ended March 31, 1997. The Fund changed its fiscal year
end from November 30 to March 31, effective March 31, 1997.
(b) For the period from February 1, 1994 (commencement of class operations) to
November 30, 1994.
* Excluding applicable sales charges.
+ Annualized.
# The ratio of expenses to average net assets excludes fee credits and includes
fee waivers.
See Combined Notes to Financial Statements.
17
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Connecticut Municipal Bond Fund
- --------------------------------------------------------------------------------
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended
March 31,
----------------
1999 1998 (a)
<S> <C> <C>
CLASS A SHARES
Net asset value, beginning of period $ 6.38 $ 6.40
------ ------
.........................................................................
Income from investment operations
.........................................................................
Net investment income 0.26 0.07
.........................................................................
Net realized and unrealized gains or losses on securities 0.06 (0.02)
------ ------
.........................................................................
Total from investment operations 0.32 0.05
------ ------
.........................................................................
Less distributions to shareholders from
.........................................................................
Net investment income (0.26) (0.07)
.........................................................................
Net realized gains (0.06) 0
------ ------
.........................................................................
Total distributions to shareholders (0.32) (0.07)
------ ------
.........................................................................
Net asset value, end of period $ 6.38 $ 6.38
------ ------
.........................................................................
Total return* 5.14% 0.77%
.........................................................................
Ratios and supplemental data
.........................................................................
Net assets, end of period (thousands) $ 570 $ 146
.........................................................................
Ratios to average net assets
Expenses# 0.84% 0.86%+
.........................................................................
Net investment income 4.04% 4.38%+
.........................................................................
Portfolio turnover rate 42% 17%
.........................................................................
</TABLE>
<TABLE>
<CAPTION>
Year Ended
March 31,
----------------
1999 1998 (b)
<S> <C> <C>
CLASS B SHARES
Net asset value, beginning of period $ 6.38 $ 6.44
------ ------
.........................................................................
Income from investment operations
.........................................................................
Net investment income 0.21 0.05
.........................................................................
Net realized and unrealized gains or losses on securities 0.06 (0.06)
------ ------
.........................................................................
Total from investment operations 0.27 (0.01)
------ ------
.........................................................................
Less distributions to shareholders from
.........................................................................
Net investment income (0.21) (0.05)
.........................................................................
Net realized gains (0.06) 0
------ ------
.........................................................................
Total distributions to shareholders (0.27) (0.05)
------ ------
.........................................................................
Net asset value, end of period $ 6.38 $ 6.38
------ ------
.........................................................................
Total return* 4.35% (0.21%)
.........................................................................
Ratios and supplemental data
.........................................................................
Net assets, end of period (thousands) $1,180 $ 331
.........................................................................
Ratios to average net assets
Expenses# 1.58% 1.61%+
.........................................................................
Net investment income 3.25% 3.36%+
.........................................................................
Portfolio turnover rate 42% 17%
.........................................................................
</TABLE>
(a) For the period from December 30, 1997 (commencement of class operations) to
March 31, 1998.
(b) For the period from January 9, 1998 (commencement of class operations) to
March 31, 1998.
* Excluding applicable sales charges.
+ Annualized.
# The ratio of expenses to average net assets excludes fee credits and includes
fee waivers.
See Combined Notes to Financial Statements.
18
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Connecticut Municipal Bond Fund
- --------------------------------------------------------------------------------
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended
March 31,
----------------
1998
1999 (a)
<S> <C> <C>
CLASS Y SHARES
Net asset value, beginning of period $ 6.37 $ 6.32
------- -------
.........................................................................
Income from investment operations
.........................................................................
Net investment income 0.28 0.10
.........................................................................
Net realized and unrealized gains or losses on securities 0.07 0.05
------- -------
.........................................................................
Total from investment operations 0.35 0.15
------- -------
.........................................................................
Less distributions to shareholders from
.........................................................................
Net investment income (0.28) (0.10)
.........................................................................
Net realized gains (0.06) 0
------- -------
.........................................................................
Total distributions to shareholders (0.34) (0.10)
------- -------
.........................................................................
Net asset value, end of period $ 6.38 $ 6.37
------- -------
.........................................................................
Total return 5.56% 2.39%
.........................................................................
Ratios and supplemental data
.........................................................................
Net assets, end of period (thousands) $73,890 $67,675
.........................................................................
Ratios to average net assets
Expenses# 0.58% 0.61%+
.........................................................................
Net investment income 4.33% 4.50%+
.........................................................................
Portfolio turnover rate 42% 17%
.........................................................................
</TABLE>
(a) For the period from November 24, 1997 (commencement of class operations) to
March 31, 1998.
+ Annualized.
# The ratio of expenses to average net assets excludes fee credits and includes
fee waivers.
See Combined Notes to Financial Statements.
19
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Massachusetts Municipal Bond Fund
- --------------------------------------------------------------------------------
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended March 31,
--------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
CLASS A SHARES
Net asset value, beginning of period $ 9.76 $ 9.23 $ 9.29 $ 9.19 $ 9.17
------ ------ ------ ------ ------
.........................................................................
Income from investment operations
.........................................................................
Net investment income 0.42 0.45 0.47 0.51 0.53
.........................................................................
Net realized and unrealized gains or
losses on securities 0.06 0.50 (0.03) 0.09 0.02
------ ------ ------ ------ ------
.........................................................................
Total from investment operations 0.48 0.95 0.44 0.60 0.55
------ ------ ------ ------ ------
.........................................................................
Less distributions to shareholders
from
.........................................................................
Net investment income (0.42) (0.42) (0.50) (0.50) (0.53)
.........................................................................
Net realized gains (0.24) 0 0 0 0
------ ------ ------ ------ ------
.........................................................................
Total distributions to shareholders (0.66) (0.42) (0.50) (0.50) (0.53)
------ ------ ------ ------ ------
.........................................................................
Net asset value, end of period $ 9.58 $ 9.76 $ 9.23 $ 9.29 $ 9.19
------ ------ ------ ------ ------
.........................................................................
Total return* 5.07% 10.50% 4.92% 6.64% 6.23%
.........................................................................
Ratios and supplemental data
.........................................................................
Net assets, end of period (thousands) $2,186 $2,076 $2,063 $1,786 $1,974
.........................................................................
Ratios to average net assets
Expenses# 0.91% 0.77% 0.76% 0.75% 0.46%
.........................................................................
Net investment income 4.31% 4.64% 5.19% 5.36% 5.90%
.........................................................................
Portfolio turnover rate 85% 97% 110% 165% 77%
.........................................................................
</TABLE>
<TABLE>
<CAPTION>
Year Ended March 31,
--------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
CLASS B SHARES
Net asset value, beginning of period $ 9.69 $ 9.17 $ 9.22 $ 9.15 $ 9.19
------ ------ ------ ------ ------
.........................................................................
Income from investment operations
.........................................................................
Net investment income 0.34 0.36 0.41 0.43 0.48
.........................................................................
Net realized and unrealized gains or
losses on securities 0.11 0.51 (0.03) 0.09 (0.01)
------ ------ ------ ------ ------
.........................................................................
Total from investment operations 0.45 0.87 0.38 0.52 0.47
------ ------ ------ ------ ------
.........................................................................
Less distributions to shareholders
from
.........................................................................
Net investment income (0.35) (0.35) (0.43) (0.45) (0.51)
.........................................................................
Net realized gains (0.24) 0 0 0 0
------ ------ ------ ------ ------
.........................................................................
Total distributions to shareholders (0.59) (0.35) (0.43) (0.45) (0.51)
------ ------ ------ ------ ------
.........................................................................
Net asset value, end of period $ 9.55 $ 9.69 $ 9.17 $ 9.22 $ 9.15
------ ------ ------ ------ ------
.........................................................................
Total return* 4.72% 9.60% 4.25% 5.77% 5.41%
.........................................................................
Ratios and supplemental data
.........................................................................
Net assets, end of period (thousands) $5,528 $6,384 $7,803 $7,274 $6,169
.........................................................................
Ratios to average net assets
Expenses# 1.66% 1.52% 1.51% 1.49% 1.24%
.........................................................................
Net investment income 3.56% 3.89% 4.45% 4.60% 5.15%
.........................................................................
Portfolio turnover rate 85% 97% 110% 165% 77%
.........................................................................
</TABLE>
* Excluding applicable sales charges.
# The ratio of expenses to average net assets excludes fee credits and includes
fee waivers.
See Combined Notes to Financial Statements.
20
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Massachusetts Municipal Bond Fund
- --------------------------------------------------------------------------------
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended March 31,
--------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
CLASS C SHARES
Net asset value, beginning of period $ 9.68 $ 9.16 $ 9.22 $ 9.14 $ 9.19
------ ------ ------ ------ ------
.........................................................................
Income from investment operations
.........................................................................
Net investment income 0.35 0.36 0.41 0.43 0.48
.........................................................................
Net realized and unrealized gains or
losses on securities 0.11 0.51 (0.04) 0.10 (0.02)
------ ------ ------ ------ ------
.........................................................................
Total from investment operations 0.46 0.87 0.37 0.53 0.46
------ ------ ------ ------ ------
.........................................................................
Less distributions to shareholders
from
.........................................................................
Net investment income (0.35) (0.35) (0.43) (0.45) (0.51)
.........................................................................
Net realized gains (0.24) 0 0 0 0
------ ------ ------ ------ ------
.........................................................................
Total distributions to shareholders (0.59) (0.35) (0.43) (0.45) (0.51)
------ ------ ------ ------ ------
.........................................................................
Net asset value, end of period $ 9.55 $ 9.68 $ 9.16 $ 9.22 $ 9.14
------ ------ ------ ------ ------
.........................................................................
Total return* 4.83% 9.62% 4.14% 5.89% 5.20%
.........................................................................
Ratios and supplemental data
.........................................................................
Net assets, end of period (thousands) $1,717 $1,639 $2,066 $2,303 $1,971
.........................................................................
Ratios to average net assets
Expenses# 1.66% 1.54% 1.51% 1.49% 1.23%
.........................................................................
Net investment income 3.55% 3.94% 4.46% 4.60% 5.11%
.........................................................................
Portfolio turnover rate 85% 97% 110% 165% 77%
.........................................................................
</TABLE>
* Excluding applicable sales charges.
# The ratio of expenses to average net assets excludes fee credits and includes
fee waivers.
See Combined Notes to Financial Statements.
21
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Missouri Municipal Bond Fund
- --------------------------------------------------------------------------------
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended November
Year Ended March 31, 30,
------------------------- ------------------------
1999 1998 1997 (a) 1996 1995 1994 (b)
<S> <C> <C> <C> <C> <C> <C>
CLASS A SHARES
Net asset value,
beginning of period $10.21 $ 9.64 $ 9.86 $ 9.91 $ 8.72 $10.00
------ ------ ------ ------ ------ ------
.........................................................................
Income from investment
operations
.........................................................................
Net investment income 0.47++ 0.46 0.16 0.50 0.50 0.44
.........................................................................
Net realized and
unrealized gains or
losses on securities 0.03 0.58 (0.22) (0.06) 1.19 (1.28)
------ ------ ------ ------ ------ ------
Total from investment
operations 0.50 1.04 (0.06) 0.44 1.69 (0.84)
------ ------ ------ ------ ------ ------
.........................................................................
.........................................................................
Less distributions to
shareholders from
.........................................................................
Net investment income (0.46) (0.47) (0.16) (0.49) (0.50) (0.44)
.........................................................................
Net realized gains (0.38) 0 0 0 0 0
------ ------ ------ ------ ------ ------
.........................................................................
Net investment income (0.46) (0.47) (0.16) (0.49) (0.50) (0.44)
.........................................................................
Total distributions to
shareholders (0.84) (0.47) (0.16) (0.49) (0.50) (0.44)
------ ------ ------ ------ ------ ------
.........................................................................
Net asset value, end of
period $ 9.87 $10.21 $ 9.64 $ 9.86 $ 9.91 $ 8.72
------ ------ ------ ------ ------ ------
.........................................................................
.........................................................................
Total return* 5.06% 11.01% (0.57%) 4.66% 19.86% (8.55%)
.........................................................................
Ratios and supplemental
data
.........................................................................
Net assets, end of
period (thousands) $4,407 $4,897 $2,627 $2,610 $4,848 $3,581
.........................................................................
Ratios to average net
assets
.........................................................................
Expenses# 0.87% 0.78% 0.76%+ 0.76% 0.72% 0.43%+
.........................................................................
Net investment income 4.59% 4.83% 5.05%+ 4.93% 5.26% 5.38%+
.........................................................................
Portfolio turnover rate 85% 42% 12% 126% 74% 25%
.........................................................................
</TABLE>
<TABLE>
<CAPTION>
Year Ended March 31, Year Ended November 30,
--------------------------- --------------------------
1999 1998 1997 (a) 1996 1995 1994 (b)
<S> <C> <C> <C> <C> <C> <C>
CLASS B SHARES
Net asset value,
beginning of period $ 10.09 $ 9.52 $ 9.74 $ 9.80 $ 8.67 $ 10.00
------- ------- ------- ------- ------- -------
.........................................................................
Income from investment
operations
.........................................................................
Net investment income 0.38++ 0.40 0.13 0.40 0.44 0.40
.........................................................................
Net realized and
unrealized gains or
losses on securities 0.08 0.56 (0.21) (0.04) 1.15 (1.29)
------- ------- ------- ------- ------- -------
Total from investment
operations 0.46 0.96 (0.08) 0.36 1.59 (0.89)
------- ------- ------- ------- ------- -------
.........................................................................
Less distributions to
shareholders from
.........................................................................
Net investment income (0.38) (0.39) (0.14) (0.42) (0.46) (0.44)
.........................................................................
Net realized gains (0.38) 0 0 0 0 0
------- ------- ------- ------- ------- -------
.........................................................................
Total distributions to
shareholders (0.76) (0.39) (0.14) (0.42) (0.46) (0.44)
------- ------- ------- ------- ------- -------
.........................................................................
Net asset value, end of
period $ 9.79 $ 10.09 $ 9.52 $ 9.74 $ 9.80 $ 8.67
------- ------- ------- ------- ------- -------
.........................................................................
Total return* 4.69% 10.26% (0.83%) 3.83% 18.79% (9.06%)
.........................................................................
Ratios and supplemental
data
.........................................................................
Net assets, end of
period (thousands) $18,007 $19,552 $20,127 $21,925 $21,231 $12,906
.........................................................................
Ratios to average net
assets
Expenses# 1.62% 1.53% 1.51%+ 1.52% 1.47% 1.16%+
.........................................................................
Net investment income 3.84% 4.12% 4.31%+ 4.20% 4.56% 4.70%+
.........................................................................
Portfolio turnover rate 85% 42% 12% 126% 74% 25%
.........................................................................
</TABLE>
(a) For the four months ended March 31, 1997. The Fund changed its fiscal year
end from November 30 to March 31, effective March 31, 1997.
(b) For the period from February 1, 1994 (commencement of class operations) to
November 30, 1994.
* Excluding applicable sales charges.
+ Annualized.
++ Calculation based on average shares outstanding.
# The ratio of expenses to average net assets excludes fee credits and includes
fee waivers.
See Combined Notes to Financial Statements.
22
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Missouri Municipal Bond Fund
- --------------------------------------------------------------------------------
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended November
Year Ended March 31, 30,
------------------------- ------------------------
1999 1998 1997 (a) 1996 1995 1994 (b)
<S> <C> <C> <C> <C> <C> <C>
CLASS C SHARES
Net asset value,
beginning of period $10.08 $ 9.52 $ 9.73 $ 9.79 $ 8.66 $10.00
------ ------ ------ ------ ------ ------
.........................................................................
Income from investment
operations
.........................................................................
Net investment income 0.39++ 0.38 0.13 0.39 0.43 0.39
.........................................................................
Net realized and
unrealized gains or
losses on securities 0.09 0.57 (0.20) (0.03) 1.16 (1.29)
------ ------ ------ ------ ------ ------
Total from investment
operations 0.48 0.95 (0.07) 0.36 1.59 (0.90)
------ ------ ------ ------ ------ ------
.........................................................................
Less distributions to
shareholders from
.........................................................................
Net investment income (0.39) (0.39) (0.14) (0.42) (0.46) (0.44)
.........................................................................
Net realized gains (0.38) 0 0 0 0 0
------ ------ ------ ------ ------ ------
.........................................................................
Total distributions to
shareholders (0.77) (0.39) (0.14) (0.42) (0.46) (0.44)
------ ------ ------ ------ ------ ------
.........................................................................
Net asset value, end of
period $ 9.79 $10.08 $ 9.52 $ 9.73 $ 9.79 $ 8.66
------ ------ ------ ------ ------ ------
.........................................................................
.........................................................................
Total return* 4.79% 10.15% (0.73%) 3.83% 18.78% (9.25%)
.........................................................................
Ratios and supplemental
data
.........................................................................
Net assets, end of
period (thousands) $ 634 $ 990 $1,306 $1,387 $1,788 $1,045
.........................................................................
Ratios to average net
assets
Expenses# 1.62% 1.52% 1.51%+ 1.52% 1.46% 1.15%+
.........................................................................
Net investment income 3.86% 4.10% 4.30%+ 4.18% 4.56% 4.72%+
.........................................................................
Portfolio turnover rate 85% 42% 12% 126% 74% 25%
.........................................................................
</TABLE>
(a) For the four months ended March 31, 1997. The Fund changed its fiscal year
end from November 30 to March 31, effective March 31, 1997.
(b) For the period from February 1, 1994 (commencement of class operations) to
November 30, 1994.
* Excluding applicable sales charges.
+ Annualized.
++ Calculation based on average shares outstanding.
# The ratio of expenses to average net assets excludes fee credits and includes
fee waivers.
See Combined Notes to Financial Statements.
23
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
New Jersey Municipal Bond Fund
- --------------------------------------------------------------------------------
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended March 31, Year Ended February 28,
-------------------------- Period Ended ------------------------
1999 1998 1997 (a) August 31, 1996 (b) 1996 1995
<S> <C> <C> <C> <C> <C> <C>
CLASS A SHARES
Net asset value,
beginning of period $ 11.11 $ 10.74 $ 10.75 $ 11.01 $ 10.53 $ 10.99
------- ------- ------- ------- ------- -------
.........................................................................
Income from investment
operations
.........................................................................
Net investment income 0.51 0.53 0.31 0.28 0.56 0.57
.........................................................................
Net realized and
unrealized gains or
losses on securities 0.11 0.46 (0.01) (0.26) 0.48 (0.46)
------- ------- ------- ------- ------- ------
.........................................................................
Total from investment
operations 0.62 0.99 0.30 0.02 1.04 0.11
------- ------- ------- ------- ------- ------
.........................................................................
Less distributions to
shareholders from
.........................................................................
Net investment income (0.51) (0.53) (0.31) (0.28) (0.56) (0.57)
.........................................................................
Net realized gains (0.06) (0.09) 0 0 0 0
------- ------- ------- ------- ------- ------
.........................................................................
Total distributions to
shareholders (0.57) (0.62) (0.31) (0.28) (0.56) (0.57)
------- ------- ------- ------- ------- ------
.........................................................................
Net asset value, end of
period $ 11.16 $ 11.11 $ 10.74 $ 10.75 $ 11.01 $ 10.53
------- ------- ------- ------- ------- -------
.........................................................................
.........................................................................
Total return* 5.66% 9.34% 2.83% 0.19% 10.08% 1.41%
.........................................................................
Ratios and supplemental
data
.........................................................................
Net assets, end of
period (thousands) $33,657 $31,614 $31,434 $32,377 $ 41,762 $ 34,852
.........................................................................
Ratios to average net
assets
Expenses# 0.50% 0.50% 0.44%+ 0.34%+ 0.36% 0.25%
.........................................................................
Net investment income 4.52% 4.77% 5.02%+ 5.08%+ 5.15% 5.52%
.........................................................................
Portfolio turnover rate 40% 37% 15% 0% 4% 8%
.........................................................................
</TABLE>
<TABLE>
<CAPTION>
Year Ended March 31,
-------------------------- Period Ended Period Ended
1999 1998 1997 (a) August 31, 1996 (b) February 29, 1996 (c)
<S> <C> <C> <C> <C> <C>
CLASS B SHARES
Net asset value,
beginning of period $ 11.11 $ 10.74 $10.75 $11.01 $11.08
------- ------- ------ ------ ------
.........................................................................
Income from investment
operations
.........................................................................
Net investment income 0.40 0.43 0.25 0.24 0.05
.........................................................................
Net realized and
unrealized gains or
losses on securities 0.11 0.46 0 (0.26) (0.07)
------- ------- ------ ------ ------
.........................................................................
Total from investment
operations 0.51 0.89 0.25 (0.02) (0.02)
------- ------- ------ ------ ------
.........................................................................
Less distributions to
shareholders from
.........................................................................
Net investment income (0.40) (0.43) (0.26) (0.24) (0.05)
.........................................................................
Net realized gains (0.06) (0.09) 0 0 0
------- ------- ------ ------ ------
.........................................................................
Total distributions to
shareholders (0.46) (0.52) (0.26) (0.24) (0.05)
------- ------- ------ ------ ------
.........................................................................
Net asset value, end of
period $ 11.16 $ 11.11 $10.74 $10.75 $11.01
------- ------- ------ ------ ------
.........................................................................
.........................................................................
Total return* 4.71% 8.35% 2.29% (0.20%) (0.22%)
.........................................................................
Ratios and supplemental
data
.........................................................................
Net assets, end of
period (thousands) $20,199 $13,645 $7,847 $2,709 $ 186
.........................................................................
Ratios to average net
assets
Expenses# 1.41% 1.41% 1.36%+ 1.28%+ 0.31%+
.........................................................................
Net investment income 3.59% 3.85% 4.07%+ 4.14%+ 5.23%+
.........................................................................
Portfolio turnover rate 40% 37% 15% 0% 4%
.........................................................................
</TABLE>
(a) For the seven months ended March 31, 1997. The Fund changed its fiscal year
end from August 31 to March 31, effective March 31, 1997.
(b) For the six months ended August 31, 1996. The Fund changed its fiscal year
end from February 28 to August 31, effective August 31, 1996.
(c) For the period from January 30, 1996 (commencement of class operations) to
February 29, 1996.
* Excluding applicable sales charges.
+ Annualized.
# The ratio of expenses to average net assets excludes fee credits and in-
cludes fee waivers.
See Combined Notes to Financial Statements.
24
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
New Jersey Municipal Bond Fund
- --------------------------------------------------------------------------------
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended March 31,
---------------------------- Period Ended Period Ended
1999 1998 1997 (a) August 31, 1996 (b) February 29, 1996 (c)
<S> <C> <C> <C> <C> <C>
CLASS Y SHARES
Net asset value,
beginning of period $ 11.11 $ 10.74 $10.75 $11.01 $11.14
-------- -------- ------ ------ ------
.........................................................................
Income from investment
operations
.........................................................................
Net investment income 0.52 0.54 0.32 0.28 0.03
.........................................................................
Net realized and
unrealized gains or
losses on securities 0.11 0.46 (0.01) (0.26) (0.13)
-------- -------- ------ ------ ------
.........................................................................
Total from investment
operations 0.63 1.00 0.31 0.02 (0.10)
-------- -------- ------ ------ ------
.........................................................................
Less distributions to
shareholders from
.........................................................................
Net investment income (0.52) (0.54) (0.32) (0.28) (0.03)
.........................................................................
Net realized gains (0.06) (0.09) 0 0 0
-------- -------- ------ ------ ------
.........................................................................
Total distributions to
shareholders (0.58) (0.63) (0.32) (0.28) (0.03)
-------- -------- ------ ------ ------
.........................................................................
Net asset value, end of
period $ 11.16 $ 11.11 $10.74 $10.75 $11.01
-------- -------- ------ ------ ------
.........................................................................
.........................................................................
Total return 5.76% 9.44% 2.88% 0.20% (0.87%)
.........................................................................
Ratios and supplemental
data
.........................................................................
Net assets, end of
period (thousands) $123,419 $105,331 $9,436 $9,076 $ 18
.........................................................................
Ratios to average net
assets
Expenses# 0.41% 0.41% 0.36%+ 0.31%+ 0.31%+
.........................................................................
Net investment income 4.61% 4.79% 5.08%+ 5.12%+ 5.28%+
.........................................................................
Portfolio turnover rate 40% 37% 15% 0% 4%
.........................................................................
</TABLE>
(a) For the seven months ended March 31, 1997. The Fund changed its fiscal year
end from August 31 to March 31, effective March 31, 1997.
(b) For the six months ended August 31, 1996. The Fund changed its fiscal year
end from February 28 to August 31, effective August 31, 1996.
(c) For the period from February 8, 1996 (commencement of class operations) to
February 29, 1996.
+ Annualized.
# The ratio of expenses to average net assets excludes fee credits and in-
cludes fee waivers.
See Combined Notes to Financial Statements.
25
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
New York Municipal Bond Fund
- --------------------------------------------------------------------------------
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended March 31,
--------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
CLASS A SHARES
Net asset value, beginning of period $10.12 $ 9.64 $ 9.67 $ 9.44 $ 9.32
------ ------ ------ ------ ------
.........................................................................
Income from investment operations
.........................................................................
Net investment income 0.44 0.48 0.49 0.48 0.52
.........................................................................
Net realized and unrealized gains or
losses on securities 0.12 0.52 (0.03) 0.24 0.12
------ ------ ------ ------ ------
.........................................................................
Total from investment operations 0.56 1.00 0.46 0.72 0.64
------ ------ ------ ------ ------
.........................................................................
Less distributions to shareholders
from
.........................................................................
Net investment income (0.44) (0.46) (0.49) (0.49) (0.52)
.........................................................................
Net realized gains (0.34) (0.06) 0 0 0
------ ------ ------ ------ ------
.........................................................................
Total distributions to shareholders (0.78) (0.52) (0.49) (0.49) (0.52)
------ ------ ------ ------ ------
.........................................................................
Net asset value, end of period $ 9.90 $10.12 $ 9.64 $ 9.67 $ 9.44
------ ------ ------ ------ ------
.........................................................................
Total return* 5.73% 10.56% 4.87% 7.73% 7.08%
.........................................................................
Ratios and supplemental data
.........................................................................
Net assets, end of period (thousands) $4,096 $3,559 $3,693 $3,947 $3,323
.........................................................................
Ratios to average net assets
Expenses# 0.88% 0.77% 0.76% 0.75% 0.50%
.........................................................................
Net investment income 4.38% 4.78% 5.00% 4.95% 5.48%
.........................................................................
Portfolio turnover rate 75% 41% 62% 53% 77%
.........................................................................
</TABLE>
<TABLE>
<CAPTION>
Year Ended March 31,
-------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
CLASS B SHARES
Net asset value, beginning of
period $ 10.03 $ 9.55 $ 9.59 $ 9.38 $ 9.32
------- ------- ------- ------- -------
.........................................................................
Income from investment
operations
.........................................................................
Net investment income 0.36 0.40 0.41 0.41 0.47
.........................................................................
Net realized and unrealized
gains or losses on securities 0.12 0.52 (0.03) 0.24 0.09
------- ------- ------- ------- -------
.........................................................................
Total from investment operations 0.48 0.92 0.38 0.65 0.56
------- ------- ------- ------- -------
.........................................................................
Less distributions to
shareholders from
.........................................................................
Net investment income (0.36) (0.38) (0.42) (0.44) (0.50)
.........................................................................
Net realized gains (0.34) (0.06) 0 0 0
------- ------- ------- ------- -------
.........................................................................
Total distributions to
shareholders (0.70) (0.44) (0.42) (0.44) (0.50)
------- ------- ------- ------- -------
.........................................................................
Net asset value, end of period $ 9.81 $ 10.03 $ 9.55 $ 9.59 $ 9.38
------- ------- ------- ------- -------
.........................................................................
.........................................................................
Total return* 4.95% 9.80% 4.03% 7.02% 6.28%
.........................................................................
Ratios and supplemental data
.........................................................................
Net assets, end of period
(thousands) $15,895 $17,245 $19,064 $17,151 $11,907
.........................................................................
Ratios to average net assets
Expenses# 1.63% 1.52% 1.51% 1.50% 1.25%
.........................................................................
Net investment income 3.63% 4.04% 4.25% 4.19% 4.78%
.........................................................................
Portfolio turnover rate 75% 41% 62% 53% 77%
.........................................................................
</TABLE>
* Excluding applicable sales charges.
# The ratio of expenses to average net assets excludes fee credits and includes
fee waivers.
See Combined Notes to Financial Statements.
26
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
New York Municipal Bond Fund
- --------------------------------------------------------------------------------
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended March 31,
--------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
CLASS C SHARES
Net asset value, beginning of period $10.02 $ 9.55 $ 9.58 $ 9.37 $ 9.31
------ ------ ------ ------ ------
.........................................................................
Income from investment operations
.........................................................................
Net investment income 0.36 0.39 0.40 0.41 0.48
.........................................................................
Net realized and unrealized gains or
losses on securities 0.13 0.52 (0.01) 0.24 0.07
------ ------ ------ ------ ------
.........................................................................
Total from investment operations 0.49 0.91 0.39 0.65 0.55
------ ------ ------ ------ ------
.........................................................................
Less distributions to shareholders
from
.........................................................................
Net investment income (0.36) (0.38) (0.42) (0.44) (0.49)
.........................................................................
Net realized gains (0.34) (0.06) 0 0 0
------ ------ ------ ------ ------
.........................................................................
Total distributions to shareholders (0.70) (0.44) (0.42) (0.44) (0.49)
------ ------ ------ ------ ------
.........................................................................
Net asset value, end of period $ 9.81 $10.02 $ 9.55 $ 9.58 $ 9.37
------ ------ ------ ------ ------
.........................................................................
Total return* 5.05% 9.69% 4.14% 7.02% 6.18%
.........................................................................
Ratios and supplemental data
.........................................................................
Net assets, end of period (thousands) $1,389 $1,465 $1,871 $2,296 $2,890
.........................................................................
Ratios to average net assets
Expenses# 1.63% 1.52% 1.51% 1.50% 1.26%
.........................................................................
Net investment income 3.63% 4.05% 4.25% 4.24% 4.88%
.........................................................................
Portfolio turnover rate 75% 41% 62% 53% 77%
.........................................................................
</TABLE>
<TABLE>
<CAPTION>
Period Ended
March 31, 1999 (a)
<S> <C>
CLASS Y SHARES
Net asset value, beginning of period $10.29
------
.........................................................................
Income from investment operations
.........................................................................
Net investment income 0.19
.........................................................................
Net realized and unrealized gains or losses on securities (0.05)++
------
.........................................................................
Total from investment operations 0.14
------
.........................................................................
Less distributions to shareholders from
.........................................................................
Net investment income (0.19)
.........................................................................
Net realized gains (0.34)
------
.........................................................................
Total distributions to shareholders (0.53)
------
.........................................................................
Net asset value, end of period $ 9.90
------
.........................................................................
Total return 1.44%
.........................................................................
Ratios and supplemental data
.........................................................................
Net assets, end of period (thousands) $1,329
.........................................................................
Ratios to average net assets
Expenses# 0.63%+
.........................................................................
Net investment income 4.59%+
.........................................................................
Portfolio turnover rate 75%
.........................................................................
</TABLE>
(a) For the period from October 29, 1998 (commencement of class operations) to
March 31, 1999.
* Excluding applicable sales charges.
+ Annualized.
++ The per share amount is not in accord with the net realized and unrealized
gains or losses for the period due to the timing of the sales of the Fund
shares and the amount of per share realized and unrealized gains or losses
at such time.
# The ratio of expenses to average net assets excludes fee credits and includes
fee waivers.
See Combined Notes to Financial Statements.
27
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Pennsylvania Municipal Bond Fund
- --------------------------------------------------------------------------------
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended March 31,
-------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
CLASS A SHARES
Net asset value, beginning of
period $ 11.70 $ 11.14 $ 11.15 $ 10.91 $ 11.01
------- ------- ------- ------- -------
.........................................................................
Income from investment
operations
.........................................................................
Net investment income 0.51 0.55 0.59 0.60 0.61
.........................................................................
Net realized and unrealized
gains or losses on securities 0.10 0.55 (0.01) 0.23 (0.09)
------- ------- ------- ------- -------
.........................................................................
Total from investment operations 0.61 1.10 0.58 0.83 0.52
------- ------- ------- ------- -------
.........................................................................
Less distributions to
shareholders from
.........................................................................
Net investment income (0.51) (0.54) (0.59) (0.59) (0.62)
.........................................................................
Net realized gains (0.14) 0 0 0 0
------- ------- ------- ------- -------
.........................................................................
Total distributions to
shareholders (0.65) (0.54) (0.59) (0.59) (0.62)
------- ------- ------- ------- -------
.........................................................................
Net asset value, end of period $ 11.66 $ 11.70 $ 11.14 $ 11.15 $ 10.91
------- ------- ------- ------- -------
.........................................................................
.........................................................................
Total return* 5.36% 10.02% 5.30% 7.66% 4.91%
.........................................................................
Ratios and supplemental data
.........................................................................
Net assets, end of period
(thousands) $28,646 $24,119 $24,535 $28,710 $30,450
.........................................................................
Ratios to average net assets
Expenses# 0.82% 0.76% 0.76% 0.76% 0.75%
.........................................................................
Net investment income 4.36% 4.79% 5.26% 5.29% 5.65%
.........................................................................
Portfolio turnover rate 69% 54% 84% 55% 97%
.........................................................................
</TABLE>
<TABLE>
<CAPTION>
Year Ended March 31,
-------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
CLASS B SHARES
Net asset value, beginning of
period $ 11.55 $ 10.99 $ 11.00 $ 10.81 $ 10.98
------- ------- ------- ------- -------
.........................................................................
Income from investment
operations
.........................................................................
Net investment income 0.42 0.46 0.49 0.51 0.54
.........................................................................
Net realized and unrealized
gains or losses on securities 0.11 0.54 (0.01) 0.22 (0.10)
------- ------- ------- ------- -------
.........................................................................
Total from investment operations 0.53 1.00 0.48 0.73 0.44
------- ------- ------- ------- -------
.........................................................................
Less distributions to
shareholders from
.........................................................................
Net investment income (0.42) (0.44) (0.49) (0.54) (0.61)
Net realized gains (0.14) 0 0 0 0
------- ------- ------- ------- -------
.........................................................................
Total distributions to
shareholders (0.56) (0.44) (0.49) (0.54) (0.61)
------- ------- ------- ------- -------
.........................................................................
Net asset value, end of period $ 11.52 $ 11.55 $ 10.99 $ 11.00 $ 10.81
------- ------- ------- ------- -------
.........................................................................
.........................................................................
Total return* 4.68% 9.27% 4.50% 6.84% 4.15%
.........................................................................
Ratios and supplemental data
.........................................................................
Net assets, end of period
(thousands) $37,823 $37,036 $37,215 $37,719 $30,657
.........................................................................
Ratios to average net assets
Expenses# 1.58% 1.52% 1.51% 1.48% 1.50%
.........................................................................
Net investment income 3.60% 4.04% 4.50% 4.55% 4.89%
.........................................................................
Portfolio turnover rate 69% 54% 84% 55% 97%
.........................................................................
</TABLE>
* Excluding applicable sales charges.
# The ratio of expenses to average net assets excludes fee credits and includes
fee waivers.
See Combined Notes to Financial Statements.
28
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Pennsylvania Municipal Bond Fund
- --------------------------------------------------------------------------------
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended March 31,
--------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
CLASS C SHARES
Net asset value, beginning of period $11.59 $11.02 $11.03 $10.83 $11.00
------ ------ ------ ------ ------
.........................................................................
Income from investment operations
.........................................................................
Net investment income 0.42 0.45 0.47 0.51 0.53
.........................................................................
Net realized and unrealized gains or
losses on securities 0.10 0.57 0.01 0.23 (0.10)
------ ------ ------ ------ ------
.........................................................................
Total from investment operations 0.52 1.02 0.48 0.74 0.43
------ ------ ------ ------ ------
.........................................................................
Less distributions to shareholders
from
.........................................................................
Net investment income (0.42) (0.45) (0.49) (0.54) (0.60)
.........................................................................
Net realized gains (0.14) 0 0 0 0
------ ------ ------ ------ ------
.........................................................................
Total distributions to shareholders (0.56) (0.45) (0.49) (0.54) (0.60)
------ ------ ------ ------ ------
.........................................................................
Net asset value, end of period $11.55 $11.59 $11.02 $11.03 $10.83
------ ------ ------ ------ ------
.........................................................................
Total return* 4.59% 9.34% 4.49% 6.92% 4.05%
.........................................................................
Ratios and supplemental data
.........................................................................
Net assets, end of period (thousands) $6,945 $6,414 $6,830 $9,675 $9,559
.........................................................................
Ratios to average net assets
Expenses# 1.58% 1.52% 1.51% 1.48% 1.50%
.........................................................................
Net investment income 3.60% 4.05% 4.52% 4.57% 4.90%
.........................................................................
Portfolio turnover rate 69% 54% 84% 55% 97%
.........................................................................
</TABLE>
<TABLE>
<CAPTION>
Year Ended March 31,
------------------------
1999 1998 (a)
<S> <C> <C>
CLASS Y SHARES
Net asset value, beginning of period $ 11.70 $ 11.60
---------- ----------
.........................................................................
Income from investment operations
.........................................................................
Net investment income 0.54 0.19
.........................................................................
Net realized and unrealized gains or losses on
securities 0.10 0.10
---------- ----------
.........................................................................
Total from investment operations 0.64 0.29
---------- ----------
.........................................................................
Less distributions to shareholders from
.........................................................................
Net investment income (0.54) (0.19)
.........................................................................
Net realized gains (0.14) 0
---------- ----------
.........................................................................
Total distributions to shareholders (0.68) (0.19)
---------- ----------
.........................................................................
Net asset value, end of period $ 11.66 $ 11.70
---------- ----------
.........................................................................
Total return 5.63% 2.54%
.........................................................................
Ratios and supplemental data
.........................................................................
Net assets, end of period (thousands) $ 181,919 $ 152,960
.........................................................................
Ratios to average net assets
Expenses# 0.57% 0.59%+
.........................................................................
Net investment income 4.61% 4.75%+
.........................................................................
Portfolio turnover rate 69% 54%
.........................................................................
</TABLE>
(a) For the period from November 24, 1997 (commencement of class operations) to
March 31, 1998.
* Excluding applicable sales charges.
+ Annualized.
# The ratio of expenses to average net assets excludes fee credits and in-
cludes fee waivers.
See Combined Notes to Financial Statements.
29
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
California Municipal Bond Fund
- --------------------------------------------------------------------------------
Schedule of Investments
March 31, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - 97.8%
California - 95.8%
$ 500,000 Abag, CA Fin. Auth. for Non-Profit Corporations, COP,
Rhoda Haas Goldman Plaza,
5.13%, 5/15/15....................................... $ 506,530
500,000 Alameda, CA Corridor Trans. Auth. RB,
Sr. Lien, Ser. A,
5.13%, 10/1/18....................................... 509,475
1,000,000 Alameda, CA Hsg. Auth. MHRB, Ser. A, (GNMA),
5.35%, 2/20/31....................................... 1,013,550
500,000 Bakersfield, CA COP, Convention Ctr. Expansion Proj.,
(MBIA),
5.80%, 4/1/17........................................ 545,650
1,000,000 California HFA MHRB, Ser. B,
(AMBAC/FHA),
6.05%, 8/1/16........................................ 1,065,870
California HFA RB, Home Mtge.:
1,000,000 Ser. A, (AMBAC/FHA/VA),
5.05%, 8/1/17........................................ 1,003,240
495,000 Ser. L, (MBIA),
6.40%, 8/1/27 (c).................................... 524,507
950,000 California HFA SFHRB, Ser. A-1, Class III, (MBIA),
5.70%, 8/1/11........................................ 995,021
California Hlth. Facs., Fin. Auth.
RB, Ser. A:
1,000,000 Catholic Hlth. Sys., (AMBAC),
5.75%, 7/1/15........................................ 1,084,100
1,000,000 Cedars Sinai Ctr., (MBIA),
5.13%, 8/1/17........................................ 1,019,610
500,000 Enloe Hlth. Sys., (FSA),
5.00%, 11/15/18...................................... 498,735
500,000 California PCRB, Financing Auth. & Solid Wst.
Disposal, Browning Ferris Inds. Inc., Ser. A,
5.80%, 12/1/16....................................... 498,860
California Pub. Works Board, Lease RB:
CA State Univ. Proj., Ser. A:
1,000,000 (AMBAC),
5.35%, 12/1/15....................................... 1,052,210
1,000,000 5.50%, 10/1/15....................................... 1,063,020
350,000 Univ. Proj., Ser. B,
5.50%, 6/1/19........................................ 364,598
700,000 California Statewide Communities Dev. Auth. RB COP,
John Muir/Mt. Diablo Hlth. Sys., (MBIA),
5.13%, 8/15/17....................................... 713,769
500,000 California Statewide Communities Dev. Auth., Spl.
Facs. RB, United Air Lines Inc., Los Angeles,
5.63%, 10/1/34....................................... 508,915
500,000 Elk Grove, CA Spl. Tax, Unified Sch. Dist. Spl. Tax
RB, Community Facs., Dist. No. 1, (AMBAC),
6.50%, 12/1/24....................................... 609,360
1,000,000 Los Angeles Cnty., CA Spl. Tax RB, Community Facs.,
Dist. No. 3, Impt. Area A, Ser. A, (FSA),
5.50%, 9/1/14........................................ 1,083,170
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
California - continued
$ 500,000 Los Angeles, CA Community Redev. Agcy., Tax
Allocation Bond, Bunker Hill, Ser. H, (FSA),
6.50%, 12/1/16....................................... $ 561,330
1,000,000 Los Angeles, CA Convention & Exhibition Ctr. Auth.,
Lease RB,
Ser. A, (MBIA/IBC),
6.00%, 8/15/10....................................... 1,146,590
500,000 Paramount, CA Unified Sch. Dist.
GO, Ser. A, (FSA),
5.13%, 9/1/19........................................ 504,925
750,000 Poway, CA Community Facs. Dist.,
Spl. Tax RB, Parkway Business Ctr., No. 88-1,
6.75%, 8/15/15....................................... 817,590
1,000,000 Sacramento Cnty., CA Arpt. Sys. RB,
Ser. A, (MBIA),
6.00%, 7/1/11........................................ 1,120,710
1,300,000 San Francisco, CA Bldg. Auth. Lease RB, San Francisco
Civic Ctr. Complex, Ser. A, (AMBAC),
5.25%, 12/1/16....................................... 1,346,722
1,100,000 San Jose, CA Redev. Agcy., Tax Allocation Bond,
Merged Area Redev. Proj., (MBIA),
6.00%, 8/1/15........................................ 1,271,182
100,000 San Mateo, CA Foster City Sch. Dist. GO, Capital
Appreciation, Ser. C
(Eff. Yield 5.60%), (b) (FGIC),
0.00%, 9/1/03........................................ 85,057
300,000 Santa Ana, CA Financing Auth., Lease RB, Police
Admin. & Holding Fac.,
Ser. A, (MBIA),
6.25%, 7/1/15........................................ 353,880
1,000,000 South Orange Cnty., CA Pub. Fin. Auth., Spl. Tax RB,
Sr. Lien, Ser. A, (MBIA),
7.00%, 9/1/09........................................ 1,226,380
1,000,000 Southern CA Pub. Pwr. Auth. RB, Southern Transmission
Proj., (Eff. Yield 7.30%), (b) (FGIC),
0.00%, 7/1/14........................................ 481,130
500,000 Watsonville, CA Solid Wst. RB, (MBIA),
5.50%, 5/15/16....................................... 532,005
-----------
24,107,691
-----------
Puerto Rico - 2.0%
1,000,000 Cmnwlth. of Puerto Rico GO, Capital Appreciation,
(Eff. Yield 4.85%), (b) (MBIA/IBC),
0.00%, 7/1/14........................................ 495,660
-----------
Total Municipal Obligations
(cost $23,161,361).................................. 24,603,351
-----------
SHORT-TERM INVESTMENTS (cost $405,000) - 1.6%
California - 1.6%
405,000 Irvine Ranch, CA Wtr. Dist. RB, Consolidated Bonds,
(LOC: Landesbank Hessen),
3.00%, 10/1/10 (a)................................... 405,000
-----------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments -
(cost $23,566,361)............................ 99.4% 25,008,351
Other Assets and
Liabilities - net............................. 0.6 162,918
----- -----------
Net Assets -................................... 100.0% $25,171,269
===== ===========
</TABLE>
30
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
California Municipal Bond Fund
- --------------------------------------------------------------------------------
Schedule of Investments (continued)
March 31, 1999
(a) Security is a variable or floating rate instrument with periodic de-
mand features. The Fund is entitled to full payment of principal and
accrued interest upon surrendering the security to the issuing agent.
(b) Effective yield (calculated at date of purchase) is the annual yield
at which the bond accretes until its maturity date.
(c) At March 31, 1999, $200,000 principal amount of this security was
pledged to cover margin requirements for open futures contracts.
Summary of Abbreviations:
AMBAC Insured by American Municipal Bond Assurance Corporation
COP Certificate of Participation
FGIC Insured by Federal Guaranty Insurance Company
FHA Insured by Federal Housing Authority
FSA Insured by Financial Security Assurance Corporation
GNMA Insured by Government National Mortgage Association
GO General Obligation
HFA Housing Finance Authority
IBC Insured Bond Certification
LOC Letter of Credit
MBIA Insured by Municipal Bond Investors Assurance Corporation
MHRB Multifamily Housing Revenue Bond
PCRB Pollution Control Revenue Bond
RB Revenue Bond
SFHRB Single Family Housing Revenue Bond
VA Guaranteed by Veteran's Authority
FUTURES CONTRACTS - SHORT POSITIONS
<TABLE>
<CAPTION>
Number Initial Contract Value at Unrealized
Expiration of Contracts Amount March 31, 1999 Appreciation
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
June 1999 1 Municipal Bond Index $123,940 $124,286 $346
</TABLE>
See Combined Notes to Financial Statements.
31
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Connecticut Municipal Bond Fund
- --------------------------------------------------------------------------------
Schedule of Investments
March 31, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - 96.5%
Connecticut - 71.8%
Bristol, CT GO:
$ 130,000 5.00%, 6/15/05....................................... $ 137,734
355,000 5.25%, 6/15/08....................................... 385,736
275,000 Cheshire, CT GO,
5.75%, 8/15/09....................................... 300,949
1,450,000 Connecticut Clean Wtr. Fund RB,
6.00%, 3/1/08........................................ 1,638,935
Connecticut Dev. Auth. Hlth. Care RB, Church Homes,
Inc. Proj.:
710,000 4.80%, 4/1/01........................................ 720,132
425,000 4.90%, 4/1/02........................................ 434,456
1,000,000 5.80%, 4/1/21........................................ 1,009,820
2,000,000 Connecticut Dev. Auth. PCRB,
United Illuminating,
4.35%, 6/1/26........................................ 1,992,140
1,500,000 Connecticut Dev. Auth. RB, Life Care Fac. Seabury
Proj.,
5.00%, 9/1/21........................................ 1,439,415
890,000 Connecticut Dev. Auth. Spl. Obl. RB, Ser. A, (FGIC),
5.50%, 5/1/08........................................ 969,824
1,000,000 Connecticut Dev. Auth. Wtr. Facs. RB, Bridgeport
Hydraulic Corp.,
6.15%, 4/1/35........................................ 1,084,390
1,000,000 Connecticut HFA RB:
Hsg. Mtge. Fin. Program, Ser. H 1,
5.10%, 5/15/17....................................... 991,770
100,000 Hsg. Mtge. Fin. Proj., Subseries C 1,
5.75%, 5/15/05....................................... 105,524
Connecticut Hlth. & Edl. Facs. Auth. RB:
225,000 Choate Rosemary Hall, Ser. A, (MBIA),
6.50%, 7/1/09........................................ 254,122
500,000 Greenwich Hosp. Assn., Ser. A,
5.40%, 7/1/09........................................ 537,230
500,000 Hebrew Home & Hosp., Ser. B,
5.15%, 8/1/28........................................ 490,320
2,000,000 Hosp. for Spl. Care, Ser. B,
5.125%, 7/1/07....................................... 2,057,420
1,000,000 Hosp. of St. Raphael, Ser. H, (AMBAC),
5.00%, 7/1/06........................................ 1,053,970
1,000,000 Kent Sch. Corp., Ser. B,
5.50%, 7/1/15........................................ 1,048,080
625,000 Lawrence & Mem. Hosp., Ser. D,
4.875%, 7/1/07....................................... 645,513
250,000 New Britain General Hosp., Ser. B, (AMBAC),
5.875%, 7/1/08....................................... 274,668
Newington Children's Hosp., Ser. A, (MBIA):
1,000,000 5.90%, 7/1/08........................................ 1,099,840
250,000 6.05%, 7/1/10........................................ 274,222
1,345,000 St. Mary's Hosp. Corp., Ser. E,
6.00%, 7/1/08........................................ 1,485,458
1,000,000 Stamford Hosp., Ser. F,
5.25%, 7/1/11........................................ 1,039,280
1,500,000 Suffield Academy, Ser. A,
5.40%, 7/1/27........................................ 1,546,320
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Connecticut - continued
Connecticut Hlth. & Edl. Facs. Auth. RB: - continued
$ 100,000 Trinity College, Ser. F, (MBIA),
5.00%, 7/1/15........................................ $ 101,281
Veteran's Mem. Med. Ctr., Ser. A:
1,000,000 5.375%, 7/1/14....................................... 1,037,170
2,000,000 5.50%, 7/1/26........................................ 2,068,680
1,500,000 Westminster Sch., Ser. A,
5.50%, 7/1/16........................................ 1,574,175
1,000,000 Yale New Haven Hosp.,
5.625%, 7/1/16....................................... 1,050,660
315,000 Connecticut Higher Ed. Loan Auth. RB, Ser. A,
7.00%, 11/15/00...................................... 322,122
2,500,000 Connecticut Muni. Elec. Energy Cooperative Pwr. RB,
Ser. A,
5.00%, 1/1/05........................................ 2,628,450
Connecticut Spl. Tax Obl. RB, Trans. Infrastructure:
Ser. A, (FGIC):
1,000,000 6.00%, 6/1/06........................................ 1,116,890
500,000 7.125%, 6/1/07....................................... 541,890
1,000,000 Ser. C,
6.00%, 10/1/09....................................... 1,138,800
Connecticut State GO:
Ser. A:
1,000,000 6.00%, 3/1/06........................................ 1,115,290
3,000,000 6.25%, 5/15/06....................................... 3,396,720
Ser. B:
1,000,000 5.30%, 9/15/07....................................... 1,081,290
500,000 6.00%, 11/15/02...................................... 539,680
200,000 Ser. C,
5.875%, 8/15/09...................................... 220,798
1,000,000 Darien, CT GO,
5.125%, 8/1/12....................................... 1,047,790
1,000,000 Fairfield, CT GO,
4.70%, 1/1/11........................................ 1,017,170
525,000 Guilford, CT GO,
5.00%, 11/15/07...................................... 549,827
Hamden, CT GO, (MBIA):
1,000,000 5.375%, 8/15/10...................................... 1,066,070
1,275,000 5.40%, 8/15/11....................................... 1,354,279
Middletown, CT GO:
445,000 5.60%, 4/15/00....................................... 456,392
1,000,000 6.00%, 4/15/07....................................... 1,121,710
500,000 Milford, CT GO,
5.20%, 1/15/13....................................... 528,775
Montville, CT GO:
250,000 5.15%, 12/1/07....................................... 269,350
300,000 5.25%, 12/1/08....................................... 326,538
250,000 Naugatuck, CT GO,
5.40%, 3/15/08....................................... 267,825
500,000 New Haven, CT GO, (FSA),
6.50%, 8/1/00........................................ 520,110
1,100,000 Newtown, CT GO, (MBIA),
5.125%, 6/15/15...................................... 1,123,254
385,000 Putnam, CT GO, (MBIA),
5.60%, 11/15/00...................................... 398,633
</TABLE>
32
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Connecticut Municipal Bond Fund
- --------------------------------------------------------------------------------
Schedule of Investments (continued)
March 31, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Connecticut - continued
$ 185,000 Stamford, CT GO,
6.25%, 1/15/00....................................... $ 189,593
2,500,000 Stamford, CT Hsg. Auth. MHRB, Fairfield Apts. Proj.,
4.75%, 12/1/28....................................... 2,492,175
Wallingford, CT GO, Lot B:
170,000 5.50%, 6/15/08....................................... 185,263
170,000 5.60%, 6/15/09....................................... 185,674
250,000 Woodstock, CT GO, (FGIC),
6.00%, 2/15/10....................................... 274,175
-----------
54,325,767
-----------
Guam - 0.4%
250,000 Guam Pwr. Auth. RB, Ser. A, (AMBAC),
5.90%, 10/1/08....................................... 276,740
-----------
Puerto Rico - 20.4%
Cmnwlth. of Puerto Rico, Aqueduct & Swr. Auth. RB,
(MBIA):
1,000,000 5.20%, 7/1/08........................................ 1,075,140
1,000,000 6.25%, 7/1/12........................................ 1,166,600
1,000,000 Cmnwlth. of Puerto Rico, Elec. Pwr. Auth. RB, Ser.
DD,
5.00%, 7/1/28........................................ 978,860
Cmnwlth. of Puerto Rico, GO:
1,000,000 5.375%, 7/1/25....................................... 1,021,620
1,250,000 5.40%, 7/1/25........................................ 1,283,775
205,000 5.50%, 7/1/08........................................ 225,074
1,000,000 6.50%, 7/1/14........................................ 1,195,520
5,000 Cmnwlth. of Puerto Rico, HFA SFHRB, (GNMA),
5.80%, 10/15/00...................................... 5,096
2,000,000 Cmnwlth. of Puerto Rico,
Hwy. & Trans. Auth. RB,
Ser. Z, (FSA),
6.00%, 7/1/18........................................ 2,282,820
1,000,000 Cmnwlth. of Puerto Rico,
Muni. Fin. Agcy., Ser. B,
5.00%, 7/1/99........................................ 1,004,440
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Puerto Rico - continued
Cmnwlth. of Puerto Rico,
Pub. Bldg. Auth. RB:
$1,800,000 Ser. L,
5.50%, 7/1/21........................................ $ 1,914,840
1,000,000 Pub. Ed. & Hlth. Facs., Ser. M, (AMBAC),
5.70%, 7/1/09........................................ 1,115,000
2,000,000 Cmnwlth. of Puerto Rico,
Pub. Fin. Corp. RB, Cmnwtlh. Appropriation,
Ser. A, (AMBAC),
5.375%, 6/1/19....................................... 2,126,000
-----------
15,394,785
-----------
South Carolina - 1.3%
1,000,000 Georgetown Cnty., SC PCRB, Int'l Paper Co. Proj.,
Ser. A,
5.125%, 2/1/12....................................... 1,023,100
-----------
U. S. Virgin Islands - 1.3%
1,000,000 Virgin Islands, Pub. Fin. Auth. RB, Ser. B,
7.00%, 10/1/99....................................... 1,019,400
-----------
West Virginia - 1.3%
1,000,000 Kanawha Cnty., WV PCRB, Union Carbide Corp. Proj.,
5.10%, 1/1/12........................................ 993,990
-----------
Total Municipal Obligations (cost $70,874,563)....... 73,033,782
-----------
<CAPTION>
Shares
<C> <S> <C>
MUTUAL FUND SHARES - 6.0%
1,008,639 Federated Connecticut
Municipal Cash Trust................................ 1,008,639
3,501,402 Federated Tax Free Obligations Fund.................. 3,501,402
-----------
Total Mutual Fund Shares (cost $4,510,041)........... 4,510,041
-----------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments - (cost $75,384,604)....... 102.5% 77,543,823
Other Assets and Liabilities - net............ (2.5) (1,904,749)
----- -----------
Net Assets -.................................. 100.0% $75,639,074
===== ===========
</TABLE>
Summary of Abbreviations:
AMBAC Insured by American Municipal Bond Assurance Corporation
FGIC Insured by Federal Guaranty Insurance Company
FSA Insured by Financial Security Assurance Corporation
GNMA Insured by Government National Mortgage Association
GO General Obligation
HFA Housing Finance Authority
MBIA Insured by Municipal Bond Investors Assurance Corporation
MHRB Multifamily Housing Revenue Bond
PCRB Pollution Control Revenue Bond
RB Revenue Bond
SFHRB Single Family Housing Revenue Bond
See Combined Notes to Financial Statements.
33
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Massachusetts Municipal Bond Fund
- --------------------------------------------------------------------------------
Schedule of Investments
March 31, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - 97.5%
Massachusetts - 91.8%
$305,000 Gloucester, MA GO, (MBIA),
5.25%, 7/15/15......................................... $ 316,282
250,000 Lowell, MA GO, Sch. Impt., (AMBAC),
5.50%, 12/15/15........................................ 265,808
500,000 Massachusetts College, Bldg. RB, Auth. Proj., Ser. A,
7.50%, 5/1/08.......................................... 616,550
Massachusetts Dev. Fin. Agcy. RB:
300,000 New England Ctr. For Children,
5.875%, 11/1/18........................................ 307,551
240,000 Regis College,
5.25%, 10/1/18......................................... 236,830
250,000 Massachusetts Ed. Loan Auth. RB,
Issue E, Ser. B, (AMBAC),
6.00%, 1/1/12.......................................... 263,760
400,000 Massachusetts Edl. Financing Auth. RB,
4.80%, 7/1/12.......................................... 397,264
Massachusetts Hlth. & Ed. Facs. Auth. RB:
350,000 Cape Cod Healthcare, Ser. B,
5.45%, 11/15/23........................................ 347,168
200,000 Jordan Hosp., Ser. D,
5.25%, 10/1/23......................................... 193,054
300,000 Partners Healthcare Sys., Ser. A,
5.375%, 7/1/24......................................... 304,815
100,000 Massachusetts Hlth. Ed. Facs. RB,
Milford Whitinsville Reg'l., Ser. C,
5.25%, 7/15/18......................................... 97,507
Massachusetts IFA RB:
700,000 Avon Associates LLC, Ser. A, (MBIA),
5.375%, 4/1/20......................................... 709,100
300,000 Belmont Hill Sch.,
5.625%, 9/1/20......................................... 308,766
250,000 Ogden Haverhill Proj., Ser. A,
5.60%, 12/1/19......................................... 252,325
300,000 Single Family Hsg., Ser. 52, (MBIA),
6.00%, 6/1/14 (b)...................................... 316,161
250,000 Wentworth Institute of Technology,
5.55%, 10/1/13......................................... 256,840
400,000 Massachusetts Muni. Wholesale Elec. Co. Pwr. Sys. RB,
5.308%, 7/1/18......................................... 410,376
400,000 Massachusetts Port Auth. RB, Spl. Facs., Boston Fuel
Proj.,
5.30%, 7/1/08.......................................... 425,492
250,000 Massachusetts State GO, Ser. A,
5.25%, 2/1/08.......................................... 262,490
800,000 Massachusetts Turnpike Auth.
Metro. RB, Capital Appreciation
Sr. Ser. C, (Eff. Yield 5.05%), (c)
0.00%, 1/1/22.......................................... 249,552
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Massachusetts - continued
Massachusetts Wtr. Pollution RB, Abatement Trust:
$ 45,000 New Bedford Loan Program, Ser. A,
5.70%, 2/1/12.......................................... $ 48,032
125,000 South Essex, Swr. Dist. Loan Program, Ser. A,
6.375%, 2/1/15......................................... 138,904
500,000 Methuen, MA GO, (FSA),
5.625%, 11/15/15....................................... 544,355
250,000 North Andover, MA GO,
5.00%, 8/15/18......................................... 250,200
400,000 North Attleborough, MA GO,
5.25%, 3/1/14.......................................... 416,848
400,000 Springfield, MA GO, Muni. Purpose Loan,
5.00%, 9/1/12.......................................... 408,776
300,000 Worcester, MA GO, Muni. Purpose Loan, Ser. A, (AMBAC),
5.25%, 8/1/12.......................................... 312,612
----------
8,657,418
----------
Puerto Rico - 5.7%
Cmnwlth. of Puerto Rico GO:
500,000 Capital Appreciation (Eff. Yield 4.85%), (c) (MBIA),
0.00%, 7/1/14.......................................... 247,830
100,000 Pub. Impt.,
5.50%, 7/1/11.......................................... 108,635
170,000 Cmnwlth. of Puerto Rico RB, Hwy. & Trans. Auth.,
5.50%, 7/1/15.......................................... 182,901
----------
539,366
----------
Total Municipal Obligations
(cost $8,863,459)..................................... 9,196,784
----------
SHORT-TERM MUNICIPAL SECURITIES - 1.6%
Massachusetts - 1.6%
100,000 Massachusetts Hlth. & Ed. Facs. Auth. RB, Capital
Assets Program, Ser. D,
3.20%, 1/1/35 (a)...................................... 100,000
50,000 Massachusetts Wtr. Resources Auth. RB, Multi-Modal Sub.
General Ser. B,
2.80%, 8/1/28 (a)...................................... 50,000
----------
Total Short-Term Municipal Securities
(cost $150,000)....................................... 150,000
----------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments -
(cost $9,013,459)................................ 99.1% 9,346,784
Other Assets and
Liabilities - net................................ 0.9 83,290
----- ----------
Net Assets -...................................... 100.0% $9,430,074
===== ==========
</TABLE>
(a) Security is a variable or floating rate instrument with periodic de-
mand features. The Fund is entitled to full payment of principal and
accrued interest upon surrendering the security to the issuing agent.
(b) At March 31, 1999, $100,000 principal amount of this security was
pledged to cover margin requirements for open futures contracts.
(c) Effective yield (calculated at date of purchase ) is the annual yield
at which the bond accretes until its maturity date.
34
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Massachusetts Municipal Bond Fund
- --------------------------------------------------------------------------------
Schedule of Investments (continued)
March 31, 1999
Summary of Abbreviations:
AMBAC Insured by American Municipal Bond Assurance Corporation
FSA Insured by Financial Security Assurance Corporation
GO General Obligation
IFA Industrial Finance Agency
MBIA Insured by Municipal Bond Investors Assurance Corporation
RB Revenue Bond
FUTURES CONTRACTS - SHORT POSITIONS
<TABLE>
<CAPTION>
Number of Initial Contract Value at Unrealized
Expiration Contracts Amount March 31, 1999 Appreciation
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
June
1999 1 Municipal Bond Index $123,940 $124,286 $346
</TABLE>
See Combined Notes to Financial Statements.
35
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Missouri Municipal Bond Fund
- --------------------------------------------------------------------------------
Schedule of Investments
March 31, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - 98.6%
Missouri - 95.1%
$ 750,000 Bridge, MO IDA, Sr. Hsg. RB, The Sarah Community
Proj.,
5.80%, 5/1/18........................................ $ 741,442
500,000 Independence, MO Wtr. Util. RB, (AMBAC),
4.80%, 11/1/13....................................... 502,870
500,000 Joplin, MO IDA RB, Catholic Hlth. Initiatives, Ser.
A,
5.125%, 12/1/15...................................... 502,210
600,000 Kansas City, MO Muni. Assistance Corp., Leasehold H
Roe Bartle, Ser. A,
5.125%, 4/15/15...................................... 609,306
Missouri Env. Impt. & Energy Resource Auth. PCRB,
Revolving Fund:
1,000,000 Ser. A,
5.75%, 1/1/16........................................ 1,060,720
Ser. B:
500,000 5.25%, 1/1/16........................................ 514,090
600,000 7.20%, 7/1/16........................................ 694,032
750,000 Ser. E,
5.125%, 1/1/19....................................... 738,502
1,000,000 Missouri Higher Ed. Loan Auth. Student Loan RB,
Subser. F,
6.75%, 2/15/09....................................... 1,063,090
Missouri Hlth. & Edl. Facs. Auth. RB:
Bethesda Hlth. Group Inc. Proj.,
1,000,000 Ser. A,
7.50%, 8/15/12....................................... 1,107,570
BJC Hlth. Sys.:
500,000 5.00%, 5/15/28....................................... 482,155
500,000 Ser. A,
6.50%, 5/15/20 (b)................................... 565,380
500,000 Children's Mercy Hosp.,
5.25%, 5/15/18....................................... 498,775
250,000 Jefferson Mem. Hosp. Obl. Group,
6.80%, 5/15/25....................................... 271,463
300,000 Lake of Ozarks Gen. Hosp.,
6.50%, 2/15/21....................................... 339,704
750,000 Maryville Univ. of St. Louis Proj.,
5.75%, 6/15/17....................................... 770,302
500,000 SSM Healthcare Sys., Ser. A,
5.00%, 6/1/18........................................ 496,315
700,000 St. Louis Univ.,
5.50%, 10/1/14....................................... 753,900
Missouri Hsg. Dev. Commission, Mtge. SFHRB:
215,000 Ser. A, (GNMA),
7.125%, 12/1/14...................................... 237,685
430,000 Ser. B, (GNMA/FNMA),
6.25%, 9/1/15........................................ 454,372
975,000 Ser. B-2, (GNMA/FNMA),
5.50%, 3/1/25........................................ 988,319
500,000 Ser. D-2, (GNMA/FNMA),
6.50%, 9/1/29........................................ 543,270
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Missouri - continued
$ 500,000 Missouri State COP,
Rehabilitation Ctr. Proj., Ser. A,
6.00%, 11/1/15....................................... $ 537,815
Sikeston, MO Elec. RB, (MBIA):
1,000,000 5.00%, 6/1/22........................................ 993,150
500,000 6.00%, 6/1/15........................................ 568,075
1,600,000 St. Louis, MO Arpt. RB, Lambert/St. Louis Int'l.
Arpt., Ser. B,
5.25%, 7/1/27........................................ 1,609,936
495,000 St. Louis, MO IDA Hlth. Facs. RB, Mother of Perpetual
Help, (GNMA),
6.40%, 8/1/35........................................ 544,317
700,000 St. Louis, MO Land Clearance Redev. Auth. Leasehold
RB, Kiel Site Lease, Ser. B, (MBIA),
5.125%, 7/1/13....................................... 719,320
950,000 St. Louis, MO Muni. Fin. Corp. RB, City Justice Ctr.,
Ser. A, (AMBAC),
5.75%, 2/15/11....................................... 1,025,145
500,000 St. Louis, MO Wtr. RB, (AMBAC),
4.75%, 7/1/14........................................ 497,820
600,000 Valley Park, MO IDA Sr. Hsg. RB, Cape Albeon Proj.,
6.15%, 12/1/33....................................... 586,326
300,000 Wentzville, MO GO, Sch. Dist. 4,
Ser. A, (FSA),
5.60%, 3/1/11........................................ 319,746
600,000 West Plains, MO IDA Hosp. RB, Ozarks Med. Ctr.,
5.65%, 11/15/22...................................... 588,468
-----------
21,925,590
-----------
Puerto Rico - 3.5%
1,600,000 Cmnwlth. of Puerto Rico, Capital Appreciation GO,
(Eff. Yield 5.01%), (c) (MBIA/IBC),
0.00%, 7/1/14........................................ 793,056
-----------
Total Municipal Obligations
(cost $21,959,824).................................. 22,718,646
-----------
SHORT-TERM MUNICIPAL SECURITIES - 0.0% (cost $10,000)
10,000 Kansas City, MO IDA Hosp. RB, Insured Research Hlth
Svcs. Sys., (MBIA),
3.20%, 4/15/15 (a)................................... 10,000
-----------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments -
(cost $21,969,824)............................ 98.6% 22,728,646
Other Assets and
Liabilities - net............................. 1.4 319,019
----- -----------
Net Assets -................................... 100.0% $23,047,665
===== ===========
</TABLE>
(a) Security is a variable rate or floating rate instrument with periodic
demand features. The Fund is entitled to full payment of principal
and accrued interest upon surrendering the security to the issuing
agent.
(b) At March 31, 1999, $100,000 principal amount of this security was
pledged to cover margin requirements for open futures contracts.
(c) Effective yield (calculated at date of purchase ) is the annual yield
at which the bond accretes until its maturity date.
36
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Missouri Municipal Bond Fund
- --------------------------------------------------------------------------------
Schedule of Investments (continued)
March 31, 1999
Summary of Abbreviations:
AMBAC Insured by American Municipal Bond Assurance Corporation
COP Certificate of Participation
FNMA Insured by Federal National Mortgage Association
FSA Insured by Financial Security Assurance Corporation
GNMA Insured by Government National Mortgage Association
GO General Obligation
IBC Insured Bond Certification
IDA Industrial Development Authority
MBIA Insured by Municipal Bond Investors Assurance Corporation
PCRB Pollution Control Revenue Bond
RB Revenue Bond
SFHRB Single Family Housing Revenue Bond
FUTURES CONTRACTS - SHORT POSITIONS
<TABLE>
<CAPTION>
Number of Initial Contract Value at Unrealized
Expiration Contracts Amount March 31,1999 Appreciation
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
June
1999 5 Municipal Bond Index $619,701 $621,434 $1,733
</TABLE>
See Combined Notes to Financial Statements.
37
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
New Jersey Municipal Bond Fund
- --------------------------------------------------------------------------------
Schedule of Investments
March 31, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - 98.6%
Delaware - 2.3%
Delaware River & Bay Auth. RB:
$2,000,000 4.80%, 1/1/07....................................... $ 2,063,840
1,000,000 5.00%, 1/1/17....................................... 992,950
1,000,000 5.40%, 1/1/16....................................... 1,040,060
------------
4,096,850
------------
Illinois - 1.4%
2,500,000 Chicago, IL O'Hare Int'l. Arpt. Spl. Facs. RB,
United Air Lines Inc., Proj., Ser. A,
5.35%, 9/1/16....................................... 2,481,700
------------
New Jersey - 71.9%
2,000,000 Atlantic City, NJ Board of Ed. GO,
5.875%, 12/1/11..................................... 2,246,700
150,000 Bayonne, NJ GO,
5.90%, 5/1/08....................................... 164,557
1,000,000 Bergen Cnty., NJ GO,
5.25%, 10/1/10...................................... 1,059,740
Bergen Cnty., NJ Util. Auth., Wtr. PCRB, (FGIC):
1,000,000 Ser. A,
5.50%, 12/15/06..................................... 1,090,940
500,000 Ser. B,
5.625%, 12/15/04.................................... 543,975
400,000 Bridgewater Township, NJ GO,
6.40%, 7/15/01...................................... 424,804
500,000 Brigantine, NJ GO, (MBIA),
6.35%, 8/1/04....................................... 542,470
Burlington Cnty., NJ Bridge Commission Sys. RB:
1,000,000 5.20%, 10/1/06...................................... 1,052,270
500,000 5.30%, 10/1/13...................................... 521,770
80,000 Burlington Cnty., NJ GO,
5.20%, 10/1/05...................................... 83,750
Camden Cnty., NJ Impt. Auth., Lease RB:
500,000 (MBIA),
5.625%, 10/1/15..................................... 530,305
1,270,000 Ser. A,
5.00%, 12/1/08...................................... 1,334,503
1,500,000 Camden Cnty., NJ Muni. Util. Auth. RB,
5.50%, 7/15/08...................................... 1,635,345
500,000 Camden Cnty., NJ Prop. & Equip. Prog. RB,
5.60%, 12/1/04...................................... 535,215
500,000 Cape May Cnty., NJ Impt. Auth. RB,
5.85%, 4/15/02...................................... 530,620
500,000 Cape May Cnty., NJ Muni. Util. Auth., Swr. RB, Ser.
A, (MBIA),
5.75%, 1/1/16....................................... 525,885
Cherry Hill Township, NJ GO:
50,000 5.90%, 6/1/05....................................... 53,927
500,000 6.00%, 6/1/06....................................... 539,970
Essex Cnty., NJ Impt. Auth. RB:
500,000 Ser. A,
5.80%, 11/1/07...................................... 554,475
2,705,000 Util. Sys. East Orange Franchise,
6.00%, 7/1/18....................................... 2,962,381
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
New Jersey - continued
$ 325,000 Essex Cnty., NJ RB, (AMBAC),
6.65%, 12/1/00...................................... $ 342,166
Essex Cnty., NJ Util. Auth. Solid Wst. RB, Ser. A,
(FSA):
4,000,000 5.00%, 4/1/22....................................... 3,962,240
250,000 5.50%, 4/1/11....................................... 267,380
250,000 5.60%, 4/1/16....................................... 265,040
50,000 Flemington Raritan, NJ Sch. Dist. GO,
5.70%, 5/1/06....................................... 55,032
500,000 Franklin Township, Somerset Cnty., NJ Sch. Dist. GO,
6.20%, 4/1/05....................................... 559,860
500,000 Gloucester Cnty., NJ GO, (MBIA),
6.25%, 2/1/08....................................... 543,360
1,600,000 Gloucester Cnty., NJ Solid Wst. RB,
Ser. A,
6.20%, 9/1/07....................................... 1,701,328
Gloucester Cnty., NJ Util. Auth., Swr. RB, (MBIA):
1,300,000 5.45%, 1/1/24....................................... 1,347,242
500,000 6.50%, 1/1/21....................................... 529,305
Gloucester Township, NJ GO, (AMBAC):
500,000 5.45%, 7/15/07...................................... 543,335
500,000 6.375%, 9/15/04..................................... 539,635
1,000,000 Gloucester Township, NJ Muni. Util. Auth. RB,
(AMBAC),
5.55%, 3/1/09....................................... 1,094,940
1,000,000 Hamilton Township, Atlantic Cnty., NJ Sch. Dist. GO,
(FGIC),
5.875%, 12/15/06.................................... 1,086,970
500,000 Hunterdon Cnty., NJ GO,
5.50%, 12/1/02...................................... 532,685
1,500,000 Jersey City, NJ Sch. Dist. GO, (MBIA),
5.50%, 3/15/16...................................... 1,576,230
225,000 Kearny, NJ GO,
6.30%, 2/1/02....................................... 240,622
400,000 Lakewood Township, NJ Sch. Dist. GO, (AMBAC),
6.25%, 2/15/12...................................... 466,100
40,000 Marlboro Township, NJ Board of Ed. GO,
5.50%, 7/15/09...................................... 42,527
500,000 Mercer Cnty., NJ Sch. Dist. GO, Ser. A,
5.40%, 12/15/03..................................... 534,810
Middlesex Cnty., NJ Util. Auth., Swr. RB, Ser. A:
70,000 5.125%, 12/1/16..................................... 71,531
1,150,000 5.375%, 9/15/15..................................... 1,198,737
Monmouth Cnty., NJ Impt. Auth. RB:
800,000 6.40%, 8/1/08....................................... 865,312
200,000 6.40%, 8/1/09....................................... 216,328
40,000 6.625%, 12/1/05..................................... 41,707
1,000,000 Morris Cnty., NJ GO,
6.00%, 7/15/04...................................... 1,101,930
1,000,000 New Brunswick, NJ Hsg. Auth. Lease RB, Rutgers State
Univ., (FGIC),
5.00%, 7/1/12....................................... 1,026,720
</TABLE>
38
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
New Jersey Municipal Bond Fund
- --------------------------------------------------------------------------------
Schedule of Investments (continued)
March 31, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
New Jersey - continued
New Jersey Edl. Facs. Auth. RB:
$ 150,000 4.60%, 7/1/08......................................... $ 150,440
200,000 5.00%, 7/1/09......................................... 205,478
2,000,000 Ser. A,
5.125%, 9/1/10........................................ 2,093,840
1,500,000 Ser. C,
6.375%, 7/1/22........................................ 1,649,310
500,000 Ser. D, (AMBAC),
6.20%, 7/1/17......................................... 541,970
100,000 Princeton Univ., Ser. A,
5.50%, 7/1/04......................................... 107,769
60,000 Univ. of Medicine & Dentistry, (AMBAC),
5.25%, 12/1/13........................................ 62,446
New Jersey EDA RB:
1,400,000 5.375%, 12/1/18....................................... 1,346,492
785,000 6.00%, 10/1/22........................................ 810,936
2,000,000 6.80%, 3/15/22........................................ 2,209,220
300,000 Ser. A,
6.60%, 8/1/21......................................... 319,950
First Mtge., Fellowship Village, Ser. A:
530,000 5.20%, 1/1/09......................................... 529,878
585,000 5.30%, 1/1/10......................................... 584,474
2,000,000 5.50%, 1/1/18......................................... 1,980,440
4,500,000 First Mtge., Franciscan Oaks Proj.,
5.75%, 10/1/23........................................ 4,536,495
3,550,000 First Mtge., Keswick Pines,
5.70%, 1/1/18......................................... 3,549,645
50,000 Peddie Sch. Proj., Ser. A,
5.40%, 2/1/06......................................... 52,664
500,000 Performing Arts Ctr. Proj., (AMBAC),
5.50%, 6/15/13........................................ 532,385
1,000,000 Pub. Sch. Small Proj. Loan Prog.,
5.40%, 8/15/13........................................ 1,051,020
55,000 Rutgers State Univ., Civic Square,
6.125%, 7/1/24........................................ 60,548
2,605,000 Trenton Office Complex,
5.25%, 6/15/12........................................ 2,763,045
955,000 New Jersey Higher Ed. Student Loan RB, Ser. A,
5.80%, 6/1/16......................................... 1,034,246
New Jersey Hlth. Care Facs. Fin. Auth. RB:
AHS Hosp. Corp., Ser. A:
2,375,000 5.00%, 7/1/27......................................... 2,346,476
1,345,000 6.00%, 7/1/11......................................... 1,513,018
750,000 Hackensack Med. Ctr., (FGIC),
6.625%, 7/1/17........................................ 812,745
500,000 Shore Memorial Hosp. Hlth. Care Sys., (MBIA),
5.00%, 7/1/12......................................... 508,170
1,000,000 St. Joseph's Hosp. & Med. Ctr., Ser. D,
5.70%, 7/1/11......................................... 1,075,790
New Jersey Hlth. Care Facs. RB:
50,000 Bridgeton Hosp.,
6.00%, 7/1/13......................................... 56,314
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
New Jersey - continued
New Jersey Hlth. Care Facs.
RB: - continued
$ 50,000 Burlington Cnty. Mem. Hosp.,
6.00%, 7/1/12....................................... $ 56,393
500,000 St. Barnabas Med. Center,
4.00%, 7/1/00....................................... 504,355
New Jersey Hsg. & Mtge. Fin. Agcy. MHRB, Ser. A,
(FSA):
1,000,000 5.05%, 11/1/18...................................... 1,000,850
5,700,000 5.15%, 11/1/30...................................... 5,664,489
1,500,000 New Jersey Hwy. Auth. RB,
6.25%, 1/1/14....................................... 1,613,445
New Jersey Sports & Exposition Auth. RB, Ser. A:
1,000,000 5.375%, 9/1/15...................................... 1,031,510
1,000,000 6.00%, 3/1/21....................................... 1,052,308
New Jersey State GO:
5,000,000 4.50%, 3/1/18....................................... 4,731,400
500,000 6.25%, 8/1/06....................................... 544,360
3,000,000 Ser. D,
5.75%, 2/15/06...................................... 3,295,560
New Jersey Trans. Sys. Trust Fund Auth. RB:
Ser. A, (MBIA):
100,000 5.00%, 6/15/15...................................... 100,998
1,000,000 6.00%, 6/15/02...................................... 1,068,230
Ser. B:
3,175,000 5.00%, 6/15/04...................................... 3,334,861
5,000,000 5.25%, 6/15/14...................................... 5,191,751
2,750,000 5.25%, 6/15/15...................................... 2,839,760
1,000,000 6.50%, 6/15/10...................................... 1,179,260
300,000 New Jersey Transit Corp., COP, (FSA),
6.50%, 10/1/16...................................... 342,255
New Jersey Univ. of Medicine & Dentistry RB, Ser. E:
400,000 5.75%, 12/1/21...................................... 421,868
500,000 6.50%, 12/1/18...................................... 545,885
New Jersey Wst. & Wtr. Treatment, Trust Loan, Ser.
A:
2,000,000 6.00%, 7/1/11....................................... 2,140,344
75,000 North Bergen Township, NJ GO,
5.00%, 8/15/09...................................... 78,775
1,000,000 North Bergen Township, NJ Muni. Util. Auth., Swr.
RB, (FGIC),
5.375%, 12/15/12.................................... 1,062,100
North Brunswick Township, NJ Board of Ed. GO:
100,000 5.00%, 2/1/12....................................... 102,578
150,000 6.30%, 2/1/12....................................... 167,533
24,000 North Brunswick Township, NJ GO,
6.125%, 5/15/04..................................... 25,987
1,000,000 North Hudson, NJ Swr. Auth. RB, (FGIC),
5.50%, 8/1/06....................................... 1,087,180
</TABLE>
39
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
New Jersey Municipal Bond Fund
- --------------------------------------------------------------------------------
Schedule of Investments (continued)
March 31, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
New Jersey - continued
North Jersey Dist. Wtr. Supply RB:
$ 350,000 Ser. B, (MBIA),
6.25%, 11/15/17..................................... $ 377,132
90,000 Wanaque North Proj.,
5.05%, 11/15/11..................................... 93,276
1,000,000 Northwest Bergen Cnty., NJ Util. Auth. Sys. RB,
(MBIA),
6.00%, 7/15/09...................................... 1,096,580
500,000 Ocean City., NJ GO, (MBIA),
5.90%, 3/15/03...................................... 538,370
75,000 Ocean Cnty., NJ GO,
5.65%, 7/1/03....................................... 80,576
Ocean Cnty., NJ Util. Auth. Wst. & Wtr. RB:
75,000 5.125%, 1/1/11...................................... 78,360
500,000 Ser. A,
5.75%, 1/1/18....................................... 526,005
300,000 Ocean Township, NJ Muni. Util. Auth. RB, (MBIA),
5.20%, 8/1/05....................................... 316,827
Old Bridge Township, NJ Muni. Util. Auth. RB,
(FGIC):
285,000 5.75%, 11/1/00...................................... 295,676
500,000 6.25%, 11/1/16...................................... 545,865
500,000 Orange Township, NJ GO, (FSA),
6.60%, 2/1/07....................................... 548,030
Passaic Cnty., NJ GO:
500,000 (MBIA),
5.40%, 12/1/02...................................... 529,220
1,295,000 Ser. A,
6.00%, 9/1/07....................................... 1,456,823
500,000 Passaic Valley, NJ Sewage Commissioners RB, Ser. D,
(AMBAC),
5.75%, 12/1/13...................................... 536,405
500,000 Patterson, NJ GO, (FSA),
6.20%, 2/15/02...................................... 533,035
Pleasantville, NJ Sch. Dist. GO:
1,050,000 4.75%, 2/15/07...................................... 1,086,897
550,000 5.00%, 2/15/10...................................... 571,131
500,000 Princeton, NJ Reg'l. Sch. Dist. GO,
6.05%, 4/15/07...................................... 567,655
500,000 Randolph Township, NJ Sch. Dist. GO, (FSA),
6.30%, 3/15/06...................................... 565,265
500,000 Rutgers State Univ. College & Univ. RB, Ser. 1,
5.25%, 5/1/12....................................... 516,785
60,000 Secaucus, NJ Muni. Util. Auth., Swr. RB, Ser. A,
6.10%, 12/1/10..................................... 66,608
785,000 Somerset Cnty., NJ GO, 5.90%, 8/1/99................ 792,371
100,000 South Brunswick Township, NJ Fire Dist. GO,
5.95%, 8/1/14...................................... 110,147
50,000 South Monmouth NJ, Reg'l. Sewage Auth. RB,
5.55%, 1/15/06..................................... 53,944
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
New Jersey - continued
$1,100,000 Sparta Township, NJ GO, (MBIA), 5.80%, 9/1/23....... $ 1,219,251
Stafford, NJ Muni. Util. Auth. RB:
130,000 6.20%, 6/1/07....................................... 142,017
370,000 6.20%, 6/1/07....................................... 402,342
375,000 6.25%, 6/1/14....................................... 405,870
500,000 Stony Brook, NJ Reg'l. Sewage Auth. RB, Ser. B,
5.45%, 12/1/12..................................... 541,145
1,000,000 Sussex Cnty., NJ Muni. Util. Auth. Solid Wst. RB.,
Ser. B, (MBIA), 5.50%, 12/1/13..................... 1,047,500
1,095,000 Toms River, NJ Board of Ed., Sch. Bond Reserve Act
GO, (FGIC), 5.75%, 7/15/19......................... 1,166,131
500,000 Trenton, NJ GO, (MBIA), 6.55%, 8/15/09.............. 553,935
200,000 West Morris, NJ Reg'l. High Sch. Dist. GO,
5.875%, 1/15/01.................................... 208,392
50,000 West Windsor Township, NJ Pkg. Auth. RB,
6.10%, 12/1/12..................................... 54,947
500,000 Winslow Township, NJ GO, (FGIC), 6.50%, 10/1/18..... 554,710
------------
127,535,136
------------
New York - 5.9%
Port Auth. NY & NJ, Port, Arpt. & Marine RB:
1,000,000 Ser. 104, (AMBAC), 5.20%, 7/15/15................... 1,024,590
3,000,000 Ser. 111,
5.00%, 10/1/27...................................... 2,950,740
Port Auth. NY & NJ, RB:
5,000,000 5.50%, 7/15/13...................................... 5,282,750
50,000 5.70%, 8/1/07....................................... 53,257
1,000,000 Port Auth. NY & NJ Spl. Obl.,
JFK Int'l. Arpt. Terminal,
5.75%, 12/1/25..................................... 1,059,360
------------
10,370,697
------------
Pennsylvania - 3.6%
100,000 Allegheny Cnty., PA, Hosp. Dev. RB, Presbyeterian
Univ. Hosp., 3.15%, 3/1/18 VRDN (a)................ 100,000
475,000 Delaware River, PA Joint Toll Brdg. Commission RB,
6.25%, 7/1/12...................................... 506,635
Delaware River, Port Auth., PA & NJ RB, (FGIC):
2,500,000 5.40%, 1/1/15....................................... 2,608,850
1,000,000 5.40%, 1/1/16....................................... 1,039,920
2,000,000 5.50%, 1/1/26....................................... 2,093,100
------------
6,348,505
------------
South Carolina - 5.2%
9,000,000 Georgetown Cnty., SC PCRB, Int'l. Paper Co.,
5.125%, 2/1/12..................................... 9,207,900
------------
</TABLE>
40
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
New Jersey Municipal Bond Fund
- --------------------------------------------------------------------------------
Schedule of Investments (continued)
March 31, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Puerto Rico - 6.6%
$1,000,000 Cmnwlth. of Puerto Rico, Capital Guaranty
Certificates, 6.50%, 7/1/23........................ $ 1,137,090
Cmnwlth. of Puerto Rico, Elec. Pwr. Auth. RB:
2,500,000 Ser. DD,
5.00%, 7/1/28....................................... 2,447,150
500,000 Ser. P,
7.00%, 7/1/21....................................... 547,105
Cmnwlth. of Puerto Rico, GO:
500,000 5.50%, 7/1/13....................................... 521,130
1,115,000 6.50%, 7/1/08....................................... 1,306,066
1,000,000 6.50%, 7/1/14....................................... 1,195,520
1,425,000 Cmnwlth. of Puerto Rico, Hwy. & Trans. Auth., Hwy.
RB, Ser. Y, (MBIA),
6.25%, 7/1/14...................................... 1,665,112
2,500,000 Cmnwlth. of Puerto Rico, Indl. Tourist Edl. Facs.
RB, Int'l. American Univ., Ser. A,
5.00%, 10/1/11..................................... 2,604,425
250,000 Cmnwlth. of Puerto Rico, Pub. Bldg. Auth., Gtd. RB,
(AMBAC), 6.25%, 7/1/09............................. 290,048
------------
11,713,646
------------
U. S. Virgin Islands - 1.7%
3,000,000 Virgin Islands, Pub. Fin. Auth. RB, Sr. Lien, Ser.
A,
5.50%, 10/1/13..................................... 3,082,410
------------
Total Municipal Obligations (cost $168,702,721)..... 174,836,844
------------
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
MUTUAL FUND SHARES - 3.4%
57,694 Dreyfus Municipal Money Market Fund.................. $ 57,694
316,265 Federated Municipal Cash Trust....................... 316,265
5,573,788 Federated Tax Free Obligations Fund.................. 5,573,788
------------
Total Mutual Fund Shares (cost $5,947,747)........... 5,947,747
------------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments - (cost $174,650,468)...... 102.0% 180,784,591
Other Assets and Liabilities - net........... (2.0) (3,509,791)
----- ------------
Net Assets - ................................ 100.0% $177,274,800
===== ============
</TABLE>
(a) Variable Rate Demand Notes are payable on demand on no more than seven cal-
endar days notice given by the Fund to the issuer or other parties not af-
filiated with the issuer. Interest rates are determined and reset by the
issuer daily, weekly, or monthly depending upon the terms of the security,
interest rates presented for these securities are those in effect at March
31, 1999.
Summary of Abbreviations:
AMBAC Insured by American Municipal Bond Assurance Corporation
COP Certificate of Participation
EDA Economic Development Authority
FGIC Insured by Federal Guaranty Insurance Company
FSA Insured by Financial Security Assurance Corporation
GO General Obligation
MBIA Insured by Municipal Bond Investors Assurance Corporation
MHRB Multifamily Housing Revenue Bond
PCRB Pollution Control Revenue Bond
RB Revenue Bond
VRDN Variable Rate Demand Note
See Combined Notes to Financial Statements.
41
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
New York Municipal Bond Fund
- --------------------------------------------------------------------------------
Schedule of Investments
March 31, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - 96.5%
New York - 91.2%
$ 400,000 Albany Cnty., NY Pub. Impt., GO
Ser. B, (FGIC),
5.60%, 3/15/14........................................ $ 425,120
500,000 Buffalo, NY Muni. Wtr. Fin. Auth.
RB, Ser. B, (FGIC),
5.00%, 7/1/18......................................... 497,515
550,000 Hempstead Town, NY GO
Ser. B, (FGIC),
5.63%, 2/1/15......................................... 585,937
100,000 Islip, NY Resources Recovery Agcy. RB, Ser. B, (AMBAC),
7.25%, 7/1/11......................................... 123,514
Long Island Pwr. Auth., NY Elec.
RB, Ser. A, (FSA):
500,000 5.00%, 12/1/18......................................... 497,490
500,000 5.13%, 12/1/16......................................... 507,825
400,000 Metro. Trans. Auth., NY Svcs. Contractor RB, Trans.
Facs., Ser. 7,
5.63%, 7/1/16......................................... 416,476
695,000 Nassau Cnty., NY Combined Swr. Dist., GO, Ser. B,
(FGIC),
6.00%, 5/1/14......................................... 786,914
600,000 New Rochelle, NY GO, Ser. B, (MBIA),
6.15%, 8/15/17........................................ 655,788
New York Dormitory Auth. RB:
900,000 5.10%, 2/15/12......................................... 942,777
500,000 5.13%, 7/1/15.......................................... 510,685
300,000 5.25%, 7/1/13.......................................... 315,486
500,000 Buenda Vida Nursing Home,
5.25%, 7/1/28.......................................... 491,155
250,000 State Univ. Edl. Facs. Ser. A, (AMBAC),
5.88%, 5/15/11......................................... 280,565
250,000 New York Env. Facs. Corp., Spl. Obl. RB, Riverbank
State Park, (AMBAC),
5.50%, 4/1/16......................................... 263,955
860,000 New York Hsg. Fin. Agcy. RB, Multifamily Mtge., Ser. B,
(AMBAC),
6.25%, 8/15/14........................................ 928,611
10,000 New York Med. Care Facs. Fin.
Auth. RB,
6.38%, 8/15/14........................................ 11,163
New York Mtge. Agcy. RB, Homeowner Mtge.:
1,000,000 Ser. 71,
5.35%, 10/1/18......................................... 1,006,630
525,000 Ser. 73 A,
5.30%, 10/1/28......................................... 526,307
250,000 New York Twy. Auth. Hwy. &
Bridge RB,
5.00%, 4/1/18......................................... 248,785
New York Twy. Auth. Svcs. Contract RB:
500,000 5.38%, 4/1/16.......................................... 520,420
700,000 5.75%, 4/1/16.......................................... 735,553
New York Urban Dev. Corp. RB:
500,000 6.00%, 4/1/10.......................................... 548,015
500,000 (Eff. Yield 5.63%), (a) (AMBAC),
0.00%, 1/1/10.......................................... 306,845
1,000,000 Ser. A, (FSA),
6.50%, 1/1/10.......................................... 1,171,520
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
New York - continued
$ 500,000 New York, NY Hlth. & Hosp. Corp.,
5.25%, 2/15/17...................................... $ 497,675
New York, NY IDA:
500,000 5.40%, 7/1/19........................................ 503,105
250,000 5.25%, 12/1/32....................................... 246,482
100,000 6.00%, 11/1/15....................................... 109,445
500,000 New York, NY Muni. Wtr. Fin.
Auth. RB:
8.12%, 4/7/99....................................... 568,750
400,000 Ser. A, (FGIC),
7.00%, 6/15/15 (b)................................... 428,404
Niagara Falls, NY Pub. Impt., GO (MBIA):
500,000 7.50%, 3/1/14........................................ 650,675
750,000 7.50%, 3/1/16........................................ 983,625
Niagara, NY Frontier Auth., Arpt. RB, Greater Buffalo
Int'l. Arpt:
500,000 5.00%, 4/1/28........................................ 482,210
100,000 Ser. A, (AMBAC),
6.13%, 4/1/14........................................ 109,069
250,000 St. Lawrence Cnty., NY Indl. Dev. Civic Facs. RB, St.
Lawrence Univ. Proj., Ser. A, (MBIA),
5.63%, 7/1/13....................................... 266,677
1,000,000 Suffolk Cnty., NY IDA, Southwest Swr. Sys. RB,
(FGIC),
6.00%, 2/1/08....................................... 1,123,620
1,370,000 Triborough Brdg. & Tunnel Auth., NY Spl. Obl., Ser.
A, (FGIC),
5.25%, 1/1/14....................................... 1,432,513
-----------
20,707,301
-----------
Puerto Rico - 5.3%
1,100,000 Cmnwlth. of Puerto Rico, Capital Appreciation, GO,
(Eff. Yield 4.85%) (a), (MBIA),
0.00%, 7/1/14....................................... 545,226
400,000 Cmnwlth. of Puerto Rico Hwy. & Trans. Auth. RB,
5.25%, 7/1/15....................................... 416,300
250,000 Cmnwlth. of Puerto Rico, Pub. Bldg. Auth. RB, Govt.
Facs., Ser. B, (MBIA),
5.00%, 7/1/12....................................... 258,488
-----------
1,220,014
-----------
Total Municipal Obligations
(cost $20,846,573).................................. 21,927,315
-----------
SHORT-TERM MUNICIPAL SECURITIES - 2.6%
New York - 2.6%
360,000 Long Island Pwr. Auth., NY Elec. RB,
3.15%, 5/1/33 (c)................................... 360,000
225,000 New York, NY Muni. Wtr. Fin. Auth. RB, Ser. G,
3.10%, 6/15/24 (c).................................. 225,000
-----------
Total Short-Term Municipal Securities
(cost $585,000)..................................... 585,000
-----------
</TABLE>
<TABLE>
<S> <C> <C> <C>
Total Investments -
(cost $21,431,573).. 99.1% 22,512,315
Other Assets and
Liabilities - net... 0.9 196,605
----- -----------
Net Assets........... 100.0% $22,708,920
===== ===========
</TABLE>
42
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
New York Municipal Bond Fund
- --------------------------------------------------------------------------------
Schedule of Investments (continued)
March 31, 1999
(a) Effective yield (calculated at date of purchase) is the annual yield
at which the bond accretes until its maturity date.
(b) At March 31, 1999, $100,000 principal amount of this security was
pledged to cover margin requirements for open futures contracts.
(c) Security is a variable or floating rate instrument with periodic de-
mand features. The Fund is entitled to full payment of principal and
accrued interest upon surrendering the security to the issuing agent.
Summary of Abbreviations:
AMBAC Insured by American Municipal Bond Assurance Corporation
FGIC Insured by Federal Guaranty Insurance Company
FSA Insured by Financial Security Assurance Corporation
GO General Obligation
IDA Industrial Development Authority
MBIA Insured by Municipal Bond Investors Assurance Corporation
RB Revenue Bond
FUTURES CONTRACTS - SHORT POSITIONS
<TABLE>
<CAPTION>
Number of Initial Contract Value at Unrealized
Expiration Contracts Amount March 31, 1999 Appreciation
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
June
1999 4 Municipal Bond Index $495,760 $497,145 $1,385
</TABLE>
See Combined Notes to Financial Statements.
43
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Pennsylvania Municipal Bond Fund
- --------------------------------------------------------------------------------
Schedule of Investments
March 31, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - 99.0%
Delaware - 0.4%
$ 1,000,000 Delaware River & Bay Auth. RB, (FGIC),
5.40%, 1/1/16..................................... $ 1,040,350
Pennsylvania - 89.8%
280,000 Abington, PA Sch. Dist., GO, (FGIC),
4.85%, 5/15/18.................................... 274,168
2,000,000 Albert Gallatin, PA Area Sch. Dist., GO, (MBIA),
5.30%, 9/1/17..................................... 2,038,160
60,000 Allegheny Cnty., PA GO, Ser. C-43, (MBIA),
5.875%, 9/15/10................................... 63,926
Allegheny Cnty., PA Higher Ed. Bldg. Auth. RB,
Duquesne Univ. Proj., (AMBAC):
3,350,000 5.50%, 3/1/16...................................... 3,594,885
1,750,000 5.50%, 3/1/20...................................... 1,876,945
Allegheny Cnty., PA Hosp. Dev. Auth. RB:
1,000,000 Children's Hosp. of Pittsburgh, (MBIA),
5.375%, 7/1/17..................................... 1,027,630
200,000 Mercy Hosp. of Pittsburgh,
6.45%, 4/1/01...................................... 211,224
90,000 Montefiore Hosp. Assn. of Western PA,
5.80%, 10/1/03..................................... 94,592
2,000,000 Pittsburgh Mercy Hlth. Sys., (AMBAC),
5.625%, 8/15/18.................................... 2,172,880
1,000,000 South Hills Hlth. Sys., Ser. A,
5.125%, 5/1/23..................................... 965,830
1,000,000 Univ. of Pittsburgh Med. Ctr. Hlth. Sys.,
Presbyterian Univ. Hosp., (MBIA),
5.30%, 12/1/12..................................... 1,051,110
1,000,000 Ser. A, (MBIA),
6.00%, 4/1/05...................................... 1,098,690
25,000 Ser. B, (MBIA),
6.00%, 11/1/12..................................... 26,899
2,295,000 Ser. B, (AMBAC),
5.50%, 12/15/14.................................... 2,404,012
Allegheny Cnty., PA IDA-RB, Env. Impt., USX Corp.:
10,000,000 5.50%, 12/1/29..................................... 9,930,900
2,000,000 Ser. A,
6.70%, 12/1/20..................................... 2,178,260
5,000 Allegheny Cnty., PA Redev. Auth. RB, Home Impt.
Loan, Ser. A, (FHA),
5.70%, 2/1/07..................................... 5,178
955,000 Allegheny Cnty., PA Residential Fin. Auth. SFHRB,
Ser. Y, (GNMA),
6.60%, 11/1/14.................................... 1,033,749
130,000 Allegheny Cnty., PA Sanitation Auth. Swr. RB, Ser.
B, (FGIC),
7.45%, 12/1/09.................................... 130,854
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Pennsylvania - continued
Allentown, PA Area Hosp. Auth. RB, Sacred Heart
Healthcare Sys., Ser. A:
$ 2,550,000 4.75%, 7/1/08........................................ $ 2,470,567
2,350,000 5.00%, 7/1/10........................................ 2,360,951
65,000 Berks Cnty., PA Muni. Auth. Hosp. RB, Reading Hosp. &
Med. Ctr. Proj.,
5.60%, 10/1/06...................................... 70,304
Bradford, PA Area Sch. Dist., GO, (FGIC):
1,525,000 5.50%, 10/1/14....................................... 1,605,947
2,000,000 5.75%, 10/1/15....................................... 2,200,600
2,095,000 Bucks Cnty., PA GO,
5.50%, 12/1/10...................................... 2,256,608
5,000,000 Bucks Cnty., PA St. Mary's Hosp. Auth. RB, Catholic
Hlth. Initiatives, Ser. A,
5.00%, 12/1/18...................................... 4,865,200
1,000,000 Bucks Cnty., PA Wtr. & Swr. Auth. RB, Neshaminy
Interceptor, (FGIC),
6.20%, 12/1/03...................................... 1,058,660
4,485,000 Cambria Cnty., PA GO, Ser. A, (FGIC),
6.625%, 8/15/12..................................... 5,060,964
60,000 Center City Dist., PA Bus. Impt. Spl. Assmt.,
(AMBAC),
5.60%, 12/1/08...................................... 65,590
Central Bucks, PA Sch. Dist., GO:
175,000 6.60%, 2/1/03........................................ 183,745
1,000,000 Ser. A,
6.90%, 11/15/13...................................... 1,145,430
1,000,000 Central Dauphin, PA Sch. Dist., GO,
5.90%, 6/1/00....................................... 1,028,550
Crawford, PA Central Sch. Dist., GO, (FGIC):
1,500,000 5.55%, 2/15/08....................................... 1,621,905
100,000 7.00%, 2/15/05....................................... 114,555
1,000,000 Dauphin Cnty., PA General Auth. Hlth. Sys. RB,
Pinnacle Hlth. Sys. Proj., (MBIA),
5.50%, 5/15/17...................................... 1,039,600
Dauphin Cnty., PA General Auth. RB:
15,000,000 Forum Pl. Office & Pkg., Ser. A,
6.00%, 1/15/25...................................... 15,083,850
6,300,000 Hyatt Regency Hotel & Conf. Ctr.,
6.00%, 1/1/10....................................... 6,323,184
6,750,000 Delaware Cnty., PA Hosp. Auth. RB, Riddle Memorial
Hosp.,
5.50%, 1/1/22....................................... 6,979,027
Delaware Cnty., PA GO:
445,000 5.50%, 10/1/15....................................... 462,382
1,130,000 Prerefunded,
5.50%, 10/1/15....................................... 1,223,971
1,350,000 Delaware Cnty., PA IDA-PCRB, Philadelphia Elec. Co.,
Ser. A,
7.375%, 4/1/21...................................... 1,443,393
200,000 Delaware Cnty., PA Univ. RB, Villanova Univ.,
5.40%, 8/1/08....................................... 215,086
</TABLE>
44
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Pennsylvania Municipal Bond Fund
- --------------------------------------------------------------------------------
Schedule of Investments (continued)
March 31, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Pennsylvania - continued
Delaware River Port Auth., PA & NJ RB, (FGIC):
$ 1,000,000 5.30%, 1/1/10........................................ $ 1,053,720
1,400,000 5.45%, 1/1/12........................................ 1,488,144
15,000 Dover Township, PA Swr. Auth. RB,
6.25%, 5/1/12....................................... 16,415
500,000 Easton, PA Area Joint Swr. Auth. RB, Ser. B, (FSA),
5.00%, 12/1/14...................................... 504,300
1,485,000 Elizabeth Forward, PA Sch. Dist., GO, Ser. B, (Eff.
Yield 6.70%), (a) (MBIA),
0.00%, 9/1/15....................................... 671,532
500,000 Erie Cnty., PA IDA-Env. Impt. RB, Int'l. Paper Co.
Proj., Ser. A,
7.625%, 11/1/18..................................... 573,755
1,000,000 Fox Chapel, PA Area Sch. Dist., GO,
5.50%, 8/15/09...................................... 1,045,920
1,000,000 Gettysburg, PA Muni. Auth. College RB, Gettysburg
College, (MBIA),
5.375%, 8/15/13..................................... 1,075,110
1,500,000 Greene Cnty., PA IDA-RB, Monongahela Power Co., Ser.
B,
5.10%, 2/1/12....................................... 1,515,435
75,000 Hampden Township, PA Swr. Auth., Spl. Obl. RB,
5.35%, 4/1/03....................................... 77,203
1,000,000 Harrisburg, PA Lease Auth. RB, (FSA),
6.25%, 6/1/01....................................... 1,056,490
2,500,000 Indiana Cnty., PA IDA-PCRB, PA Elec. Co. Proj.,
(MBIA),
5.35%, 11/1/10...................................... 2,693,850
500,000 Keystone Oaks, PA Sch. Dist., GO,
5.00%, 9/1/11....................................... 513,325
2,635,000 Latrobe, PA IDA College RB, St. Vincent College
Proj.,
5.375%, 5/1/18...................................... 2,602,194
Lehigh Cnty., PA General Purpose Auth. RB:
1,000,000 Good Shepherd Rehab. Hosp.,
7.50%, 11/15/21...................................... 1,114,440
1,250,000 Lehigh Valley Hosp. Inc., Ser. A, (MBIA),
7.00%, 7/1/16........................................ 1,546,438
Lower Merion Township, PA GO:
100,000 5.625%, 8/1/05....................................... 105,348
1,000,000 5.75%, 8/1/09........................................ 1,048,440
100,000 Manheim, PA Central Sch. Dist., GO, (FGIC),
6.10%, 5/15/14...................................... 108,046
150,000 Millcreek Township, PA Swr. Auth. RB,
6.00%, 11/1/06...................................... 152,475
1,305,000 Mon Valley, PA Swr. Auth. RB, (MBIA),
6.55%, 11/1/19...................................... 1,474,493
1,340,000 Montgomery Cnty., PA GO, Ser. B,
5.35%, 10/15/16..................................... 1,387,825
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Pennsylvania - continued
Montgomery Cnty., PA Higher Ed. & Hlth. Auth. RB:
$ 1,025,000 College Rev., Cnty. Cmnty. College Proj.,
6.75%, 11/1/02....................................... $ 1,077,019
1,000,000 Hosp. Rev., Abington Memorial Hosp., Ser. A, (AMBAC),
6.40%, 6/1/02........................................ 1,059,580
950,000 Montgomery Cnty., PA IDA-PCRB, Philadelphia Elec.
Co., Ser. A,
7.60%, 4/1/21....................................... 1,019,730
6,000,000 Montgomery Cnty., PA IDA Retirement Cmnty. RB,
5.25%, 11/15/28..................................... 5,782,620
500,000 Neshaminy, PA Sch. Dist., GO, (FGIC),
5.25%, 2/15/07...................................... 532,455
1,000,000 North Penn, PA Wtr. Auth. RB, (FGIC),
6.00%, 11/1/07...................................... 1,065,280
100,000 North Wales, PA Wtr. Auth. RB, (FGIC),
6.75%, 11/1/10...................................... 113,979
1,500,000 Northampton Cnty., PA Higher Ed. Auth. RB, Moravian
College,
5.125%, 7/1/19....................................... 1,468,585
2,000,000 Owen J. Roberts Sch. Dist., PA GO, Ser. A, (MBIA),
5.375%, 5/15/18..................................... 2,052,240
1,325,000 Parkland, PA Sch. Dist., GO, (MBIA),
5.75%, 9/1/14....................................... 1,423,063
1,000,000 Penn Hills, PA GO, (AMBAC),
5.60%, 12/1/05...................................... 1,064,310
1,000,000 Pennridge, PA Sch. Dist., GO, Ser. A, (AMBAC),
6.15%, 2/15/03...................................... 1,061,630
5,000,000 Pennsylvania Fin. Auth. RB, Muni. Capital Impts.
Prog.,
6.60%, 11/1/09...................................... 5,500,100
Pennsylvania Convention Ctr. Auth. RB, Ser. A:
(FGIC):
1,050,000 6.00%, 9/1/19 ....................................... 1,184,852
1,000,000 6.60%, 9/1/00........................................ 1,044,130
75,000 6.70%, 9/1/16 ....................................... 90,528
(MBIA):
1,000,000 6.75%, 9/1/19 ....................................... 1,130,550
2,000,000 (Eff. Yield 6.95%), (a) (FGIC),
0.00%, 9/1/08........................................ 1,324,660
Pennsylvania GO:
2nd Ser.:
25,000 6.00%, 7/1/05........................................ 27,659
60,000 6.25%, 7/1/11........................................ 69,044
350,000 3rd Ser.,
5.00%, 9/1/12........................................ 356,706
Pennsylvania HFA-SFHRB:
300,000 Rental Hsg., (FNMA),
6.40%, 7/1/12........................................ 319,626
695,000 Ser. 33,
6.90%, 4/1/17........................................ 737,617
2,000,000 Ser. 34A, (FHA),
6.85%, 4/1/16........................................ 2,106,860
</TABLE>
45
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Pennsylvania Municipal Bond Fund
- --------------------------------------------------------------------------------
Schedule of Investments (continued)
March 31, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Pennsylvania - continued
Pennsylvania HFA-SFHRB - continued:
$ 750,000 Ser. 40,
6.80%, 10/1/15..................................... $ 802,598
1,840,000 Ser. 50A,
6.00%, 10/1/13..................................... 1,941,347
6,205,000 Ser. 61A,
5.50%, 4/1/29...................................... 6,278,343
Ser. 65A:
5,000,000 4.80%, 10/1/22..................................... 5,010,150
5,000,000 5.20%, 10/1/18..................................... 4,995,200
Pennsylvania Higher Ed. Facs. Auth. RB:
500,000 State Sys. Higher Ed., Ser. P,
5.00%, 12/15/16.................................... 502,270
4,500,000 Univ. of PA Hlth. Svcs., Ser. A,
5.875%, 1/1/15..................................... 4,743,810
Pennsylvania Higher Edl. Facs. Auth. RB:
485,000 Ser. A, (MBIA),
6.625%, 8/15/09.................................... 527,971
400,000 Allegheny Delaware Valley Oblig. Hlth. Svcs., Ser.
A,
5.50%, 11/15/08.................................... 407,492
2,200,000 Drexel Univ., 2nd Ser., (MBIA),
5.375%, 5/1/16..................................... 2,269,696
1,095,000 Lasalle Univ., (MBIA),
5.25%, 5/1/13...................................... 1,162,047
Thomas Jefferson Univ., Ser. A, (MBIA):
285,000 5.15%, 11/1/10..................................... 292,946
150,000 6.00%, 7/1/19...................................... 153,363
1,115,000 Prerefunded,
6.625%, 8/15/09.................................... 1,233,022
100,000 Univ. of PA, Ser. B,
5.85%, 9/1/13...................................... 107,423
Univ. of PA Hlth. Svcs., Ser. A:
1,000,000 6.00%, 1/1/07...................................... 1,086,940
100,000 6.00%, 1/1/10...................................... 107,866
Univ. of PA Hlth. Svcs., Ser. B:
500,000 5.25%, 1/1/07...................................... 520,625
150,000 5.70%, 1/1/11...................................... 158,139
Pennsylvania IDA-RB, Econ. Dev.:
250,000 5.80%, 7/1/09...................................... 276,742
2,000,000 6.00%, 7/1/06...................................... 2,219,980
600,000 6.00%, 7/1/08...................................... 673,842
305,000 6.00%, 7/1/09...................................... 343,930
2,000,000 7.00%, 1/1/06...................................... 2,316,560
1,000,000 7.00%, 7/1/06...................................... 1,168,430
975,000 Ser. 1994,
6.00%, 1/1/12...................................... 1,053,868
400,000 Pennsylvania Infrastructure RB,
6.00%, 9/1/04..................................... 439,436
Pennsylvania Intergovernmental Cooperative Auth.
Spl. Tax RB, Philadelphia Funding Program, (FGIC):
3,000,000 5.00%, 6/15/21..................................... 2,948,490
1,650,000 6.75%, 6/15/21..................................... 1,893,639
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Pennsylvania - continued
Pennsylvania State Univ. RB:
$ 185,000 6.15%, 3/1/05....................................... $ 198,771
1,000,000 6.25%, 3/1/11....................................... 1,075,150
1,000,000 6.60%, 7/1/02....................................... 1,082,300
Pennsylvania Turnpike Commission RB:
1,000,000 Ser. L, (AMBAC),
6.45%, 6/1/03....................................... 1,072,020
Ser. P:
150,000 5.10%, 12/1/99...................................... 152,015
75,000 5.80%, 12/1/06...................................... 80,229
Philadelphia, PA Arpt. Pkg. Auth. RB:
400,000 5.75%, 9/1/07....................................... 441,508
1,000,000 5.75%, 9/1/08....................................... 1,109,880
Philadelphia, PA Hosp. & Higher Ed. Facs. Auth. RB:
500,000 Albert Einstein Med. Ctr.,
7.625%, 4/1/11...................................... 510,000
Chestnut Hill College:
1,565,000 5.35%, 10/1/07...................................... 1,562,136
1,000,000 6.00%, 10/1/29...................................... 997,490
2,140,000 Children's Hosp. of Philadelphia Proj.,
(SPA: Morgan Guaranty Trust),
3.05%, 3/1/27, VRDN (b)............................. 2,140,000
2,000,000 Temple Univ. Hosp.,
5.50%, 11/15/15..................................... 2,022,680
1,285,000 Philadelphia, PA IDA Arpt. RB, Philadelphia Arpt.
Sys. Proj., Ser. A,
5.125%, 7/1/28..................................... 1,265,083
4,000,000 Philadelphia, PA Wtr. & Wst. Wtr. RB, (MBIA),
6.25%, 8/1/12...................................... 4,664,000
500,000 Philadephia, PA IDA Indl. & Commercial RB, Girard
Estate Coal Mining Proj.,
5.25%, 11/15/09.................................... 522,955
25,000 Pittsburgh, PA GO, Ser. D, (AMBAC),
6.125%, 9/1/17..................................... 27,362
1,000,000 Pleasant Valley, PA Sch. Dist., GO, (FGIC),
5.60%, 11/15/14.................................... 1,066,870
1,000,000 Pocono Mtn., PA Sch. Dist., GO,
Ser. AA, (AMBAC),
6.10%, 10/1/03..................................... 1,062,890
1,500,000 Schuylkill Cnty., PA IDA-RB, Charity Oblig. Group,
Ser. A,
5.00%, 11/1/28..................................... 1,442,070
Scranton-Lackwanna, PA Hlth. & Welfare Auth. RB:
250,000 Mercy Hlth. Sys. Proj., Ser. B, (MBIA),
5.00%, 1/1/06....................................... 261,300
150,000 Univ. of Scranton Proj., Ser. A,
6.15%, 3/1/03....................................... 160,644
Seneca Valley, PA Sch. Dist., GO, (FGIC):
105,000 5.85%, 2/15/15...................................... 115,928
100,000 Ser. A,
4.65%, 7/1/09....................................... 101,749
</TABLE>
46
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
Pennsylvania Municipal Bond Fund
- --------------------------------------------------------------------------------
Schedule of Investments (continued)
March 31, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Pennsylvania - continued
$ 4,000,000 South Fork, PA Muni. Hosp. Auth. RB, Conemaugh
Valley Memorial Hosp., Ser. B, (MBIA),
5.375%, 7/1/22.................................... $ 4,081,000
Southeastern PA Trans. Auth. Spl. RB, Ser. A:
1,415,000 5.625%, 3/1/07..................................... 1,547,529
85,000 Prerefunded, (FGIC),
5.625%, 3/1/07..................................... 92,961
1,000,000 Unionville-Chadds Ford, PA Sch. Dist., GO,
5.80%, 6/1/13..................................... 1,076,110
Univ. of Pittsburgh, PA RB, (MBIA):
40,000 Ser. A,
6.125%, 6/1/21..................................... 42,963
5,000 Ser. B,
5.90%, 6/1/03...................................... 5,393
540,000 Upper Merion, PA Area Sch. Dist., GO,
5.00%, 7/15/12.................................... 555,449
Upper Merion, PA Muni. Util. Auth., Swr. RB:
1,000,000 6.00%, 8/15/12..................................... 1,062,330
2,325,000 6.00%, 8/15/16..................................... 2,465,174
1,000,000 Wallenpaupack, PA Area Sch. Dist., GO, Ser. B,
(FGIC),
6.00%, 9/1/03..................................... 1,029,730
1,000,000 West Mifflin, PA Muni. Sanitation Swr. Auth. RB,
(FGIC),
5.70%, 8/1/15..................................... 1,101,560
2,000,000 Westmoreland Cnty., PA IDA-RB, Citizens General
Hosp.,
5.00%, 7/1/08..................................... 1,990,040
1,000,000 York Cnty., PA GO, (FGIC),
6.00%, 10/1/04.................................... 1,056,340
2,000,000 York Cnty., PA Hosp. Auth. RB, York Hosp., (AMBAC),
5.25%, 7/1/17..................................... 2,037,020
75,000 York, PA City Sch. Dist., GO, (FGIC),
5.60%, 3/1/07..................................... 78,466
------------
229,490,942
------------
Puerto Rico - 5.5%
3,950,000 Cmnwlth. of Puerto Rico GO, Linked BPO, Ser. D,
(MBIA),
7.00%, 7/1/10 (c)................................. 4,862,331
Cmnwlth. of Puerto Rico, Hwy. & Trans. Auth. RB:
1,000,000 Ser. W, (MBIA),
5.50%, 7/1/13...................................... 1,098,530
100,000 Ser. Y, (FSA),
5.25%, 7/1/15...................................... 103,950
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Puerto Rico - continued
$ 3,250,000 Cmnwlth. of Puerto Rico, Indl., Tourist, Edl., Med.
& Env. Control Facs. RB, Hosp. Auxilio Mutuo Obl.,
Group A, (MBIA),
6.25%, 7/1/24..................................... $ 3,606,948
1,000,000 Cmnwlth. of Puerto Rico, Muni. Fin. Agcy. RB, Ser.
A, (FSA),
6.00%, 7/1/11..................................... 1,144,720
1,800,000 Cmnwlth. of Puerto Rico, Pub. Bldgs. Auth. RB, Gtd.
Pub. Ed. & Hlth. Facs., Ser. M,
5.70%, 7/1/09..................................... 1,985,670
1,000,000 Univ. of Puerto Rico, Univ. RB,
Ser. N, (MBIA),
6.25%, 6/1/07..................................... 1,141,940
------------
13,944,089
------------
U.S. Virgin Islands - 2.0%
5,000,000 Virgin Islands, Pub. Fin. Auth. RB,
Sr. Lien, Ser. A,
5.50%, 10/1/18.................................... 5,036,100
------------
Virginia - 0.4%
1,000,000 Arlington Cnty., VA IDA-MHRB, Woodbury Park Apts.,
Ser. B,
6.50%, 7/1/24..................................... 1,002,200
------------
West Virginia - 0.9%
2,450,000 Kanawha Cnty., WV PCRB, Union Carbide Corp. Proj.,
5.10%, 1/1/12..................................... 2,424,128
------------
Total Municipal Obligations
(cost $244,493,418)............................... 252,937,809
------------
<CAPTION>
Shares
<C> <S> <C>
MUTUAL FUND SHARES - 0.4%
749,345 Federated Tax Free Obligations Fund................ 749,345
153,001 Pennsylvania Municipal Cash Trust, Institutional
Service Shares.................................... 153,001
------------
Total Mutual Fund Shares
(cost $902,346)................................... 902,346
------------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments -
(cost $245,395,764)......................... 99.4% 253,840,155
Other Assets and
Liabilities - net........................... 0.6 1,492,448
----- ------------
Net Assets - ................................ 100.0% $255,332,603
===== ============
</TABLE>
47
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
State Municipal Bond Fund
- --------------------------------------------------------------------------------
Statements of Assets and Liabilities
March 31, 1999
(a) Effective yield (calculated at date of purchase) is the annual yield
at which the bond accretes until its maturity date.
(b) Variable Rate Demand Notes are payable on demand on no more than
seven calendar days notice given by the Fund to the issuer or other
parties not affiliated with the issuer. Interest rates are determined
and reset by the issuer daily, weekly, or monthly depending upon the
terms of the security. Interest rates presented for these securities
are those in effect at March 31, 1999.
(c) 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.
Summary of Abbreviations:
AMBAC Insured by American Municipal Bond Assurance Corporation
BPO Bond Payment Obligation
FGIC Insured by Federal Guaranty Insurance Company
FHA Insured by Federal Housing Authority
FNMA Federal National Mortgage Association
FSA Insured by Financial Security Assurance Corporation
GNMA Insured by Government National Mortgage Association
GO General Obligation
HFA Housing Finance Authority
IDA Industrial Development Authority
MBIA Insured by Municipal Bond Investors Assurance Corporation
MHRB Multifamily Housing Revenue Bond
PCRB Pollution Control Revenue Bond
RB Revenue Bond
SFHRB Single Family Housing Revenue Bond
SPA Securities Purchase Agreement
VRDN Variable Rate Demand Note
See Combined Notes to Financial Statements.
48
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
State Municipal Bond Fund
- --------------------------------------------------------------------------------
Statements of Operations
Year Ended March 31, 1999
<TABLE>
<CAPTION>
California Connecticut Massachusetts Missouri New Jersey New York Pennsylvania
Fund Fund Fund Fund Fund Fund Fund
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Assets
Identified cost of
securities............. $23,566,361 $75,384,604 $9,013,459 $21,969,824 $174,650,468 $21,431,573 $245,395,764
Net unrealized gains on
securities............. 1,441,990 2,159,219 333,325 758,822 6,134,123 1,080,742 8,444,391
- ------------------------------------------------------------------------------------------------------------------------
Market value of
securities............. 25,008,351 77,543,823 9,346,784 22,728,646 180,784,591 22,512,315 253,840,155
Cash.................... 1,945 0 3,793 382 0 174 14
Receivable for
securities sold........ 0 0 391,886 501,930 0 0 3,316,303
Receivable for Fund
shares sold............ 5,291 10,500 0 2,718 228,740 2,686 763,752
Interest receivable..... 295,026 1,019,124 133,347 317,187 2,316,559 320,566 3,803,446
Receivable for daily
variation margin on
open futures
contracts.............. 1,073 0 1,073 2,947 0 2,479 0
Prepaid expenses and
other assets........... 1,416 3,322 933 2,593 2,781 3,650 54,115
- ------------------------------------------------------------------------------------------------------------------------
Total assets........... 25,313,102 78,576,769 9,877,816 23,556,403 183,332,671 22,841,870 261,777,785
- ------------------------------------------------------------------------------------------------------------------------
Liabilities
Distributions payable... 52,487 282,778 12,912 51,044 542,402 34,806 853,316
Payable for securities
purchased.............. 0 2,626,197 399,515 398,630 5,278,675 71,435 5,372,015
Payable for Fund shares
redeemed............... 60,188 0 0 0 155,331 0 83,734
Advisory fee payable.... 3,449 19,665 4,084 13,575 45,421 16,387 62,546
Distribution Plan
expenses payable....... 10,592 357 5,089 8,136 12,712 7,814 20,320
Due to other related
parties................ 0 2,710 0 0 3,836 0 0
Accrued expenses and
other liabilities...... 15,117 5,988 26,142 37,353 19,494 2,508 53,251
- ------------------------------------------------------------------------------------------------------------------------
Total liabilities...... 141,833 2,937,695 447,742 508,738 6,057,871 132,950 6,445,182
- ------------------------------------------------------------------------------------------------------------------------
Net assets.............. $25,171,269 $75,639,074 $9,430,074 $23,047,665 $177,274,800 $22,708,920 $255,332,603
- ------------------------------------------------------------------------------------------------------------------------
Net assets represented
by
Paid-in capital......... $23,696,731 $73,269,054 $9,076,581 $21,954,477 $170,625,456 $21,459,263 $246,451,359
Undistributed
(overdistributed) net
investment income...... (52,814) (1,610) (10,877) (42,640) 3,635 (16,649) (109,513)
Accumulated net realized
gains on securities and
foreign currency
related transactions... 85,016 212,411 30,699 375,273 511,586 184,179 546,366
Net unrealized gains on
securities and futures
contracts.............. 1,442,336 2,159,219 333,671 760,555 6,134,123 1,082,127 8,444,391
- ------------------------------------------------------------------------------------------------------------------------
Total net assets........ $25,171,269 $75,639,074 $9,430,074 $23,047,665 $177,274,800 $22,708,920 $255,332,603
- ------------------------------------------------------------------------------------------------------------------------
Net assets consists of
Class A................. $ 6,230,832 $ 569,647 $2,185,575 $ 4,406,991 $ 33,657,446 $ 4,096,052 $ 28,645,847
Class B................. 17,296,755 1,179,611 5,527,930 18,006,806 20,198,770 15,894,743 37,823,451
Class C................. 1,643,682 0 1,716,569 633,868 0 1,389,049 6,944,696
Class Y................. 0 73,889,816 0 0 123,418,584 1,329,076 181,918,609
- ------------------------------------------------------------------------------------------------------------------------
Total net assets........ $25,171,269 $75,639,074 $9,430,074 $23,047,665 $177,274,800 $22,708,920 $255,332,603
- ------------------------------------------------------------------------------------------------------------------------
Shares outstanding
Class A................. 622,774 89,299 228,206 446,565 3,014,938 413,564 2,456,338
Class B................. 1,734,067 184,915 579,005 1,839,534 1,809,383 1,619,511 3,282,592
Class C................. 164,950 0 179,796 64,755 0 141,534 601,152
Class Y................. 0 11,583,398 0 0 11,055,534 134,235 15,599,257
- ------------------------------------------------------------------------------------------------------------------------
Net asset value per
share
Class A................. $ 10.00 $ 6.38 $ 9.58 $ 9.87 $ 11.16 $ 9.90 $ 11.66
- ------------------------------------------------------------------------------------------------------------------------
Class A--Offering price
(based on sales charge
of 4.75%).............. $ 10.50 $ 6.70 $ 10.06 $ 10.36 $ 11.72 $ 10.39 $ 12.24
- ------------------------------------------------------------------------------------------------------------------------
Class B................. $ 9.97 $ 6.38 $ 9.55 $ 9.79 $ 11.16 $ 9.81 $ 11.52
- ------------------------------------------------------------------------------------------------------------------------
Class C................. $ 9.96 -- $ 9.55 $ 9.79 -- $ 9.81 $ 11.55
- ------------------------------------------------------------------------------------------------------------------------
Class Y................. -- $ 6.38 -- -- $ 11.16 $ 9.90 $ 11.66
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
49
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
State Municipal Bond Fund
- --------------------------------------------------------------------------------
Statements of Operations
Year Ended March 31, 1999
<TABLE>
<CAPTION>
California Connecticut Massachusetts Missouri New Jersey New York Pennsylvania
Fund Fund Fund Fund Fund Fund Fund
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income
Interest................ $1,370,753 $3,482,480 $ 498,817 $1,333,411 $8,274,269 $1,141,438 $12,437,545
- -------------------------------------------------------------------------------------------------------------------
Expenses
Advisory fee............ 146,303 425,935 53,014 134,405 825,018 118,788 1,135,581
Distribution Plan
expenses............... 215,155 7,184 79,990 208,920 250,095 185,830 505,202
Transfer agent fee...... 16,736 1,074 8,532 16,684 35,892 20,062 72,812
Administrative services
fees................... 4,568 18,905 1,463 3,292 43,919 3,223 35,246
Trustees' fees and
expenses............... 529 1,081 290 305 2,459 440 5,119
Printing and postage
expenses............... 5,327 18,607 1,149 4,812 17,554 6,638 41,454
Custodian fee........... 8,020 20,570 3,231 4,598 52,648 5,360 60,325
Registration and filing
fees................... 2,071 13,194 11,035 3,036 12,734 3,469 7,649
Professional fees....... 21,733 23,683 19,969 15,772 30,938 17,529 20,931
Other................... 2,237 3,827 229 874 4,638 1,280 666
- -------------------------------------------------------------------------------------------------------------------
Total expenses......... 422,679 534,060 178,902 392,698 1,275,895 362,619 1,884,985
Less: Fee credits...... (816) (3,671) (346) (1,004) (5,606) (756) (9,302)
Fee waivers.......... (20,292) (116,474) (36,054) (32,169) (396,701) (39,788) 0
- -------------------------------------------------------------------------------------------------------------------
Net expenses........... 401,571 413,915 142,502 359,525 873,588 322,075 1,875,683
- -------------------------------------------------------------------------------------------------------------------
Net investment income... 969,182 3,068,565 356,315 973,886 7,400,681 819,363 10,561,862
- -------------------------------------------------------------------------------------------------------------------
Net realized and
unrealized gains or
losses on securities
and futures contracts
Net realized gains or
losses on:
Securities............. 375,979 446,743 235,752 1,194,059 1,059,203 781,525 2,213,443
Futures contracts...... (71,762) 0 (20,831) (42,993) 0 (49,269) 0
- -------------------------------------------------------------------------------------------------------------------
Net realized gains on
securities and futures
contracts.............. 304,217 446,743 214,921 1,151,066 1,059,203 732,256 2,213,443
- -------------------------------------------------------------------------------------------------------------------
Net change in unrealized
gains or losses on
securities and futures
contracts.............. 143,244 211,471 (124,905) (946,854) 500,469 (467,776) (103,155)
- -------------------------------------------------------------------------------------------------------------------
Net realized and
unrealized gains on
securities and futures
contracts.............. 447,461 658,214 90,016 204,212 1,559,672 264,480 2,110,288
- -------------------------------------------------------------------------------------------------------------------
Net increase in net
assets resulting from
operations............. $1,416,643 $3,726,779 $ 446,331 $1,178,098 $8,960,353 $1,083,843 $12,672,150
</TABLE>
- --------------------------------------------------------------------------------
See Combined Notes to Financial Statements.
50
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
State Municipal Bond Fund
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
Year Ended March 31, 1999
<TABLE>
<CAPTION>
California Connecticut Massachusetts Missouri New Jersey New York Pennsylvania
Fund Fund Fund Fund Fund Fund Fund
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Operations
Net investment income... $ 969,182 $ 3,068,565 $ 356,315 $ 973,886 $ 7,400,681 $ 819,363 $ 10,561,862
Net realized gains on
securities and futures
contracts.............. 304,217 446,743 214,921 1,151,066 1,059,203 732,256 2,213,443
Net change in unrealized
gains or losses on
securities and futures
contracts.............. 143,244 211,471 (124,905) (946,854) 500,469 (467,776) (103,155)
- --------------------------------------------------------------------------------------------------------------------------
Net increase in net
assets resulting from
operations............ 1,416,643 3,726,779 446,331 1,178,098 8,960,353 1,083,843 12,672,150
- --------------------------------------------------------------------------------------------------------------------------
Distributions to
shareholders from
Net investment income
Class A................ (285,065) (14,533) (90,621) (217,159) (1,503,706) (162,529) (1,183,965)
Class B................ (634,388) (20,474) (207,361) (726,426) (599,178) (590,347) (1,343,223)
Class C................ (50,375) 0 (59,630) (31,183) 0 (51,434) (232,806)
Class Y................ 0 (3,035,168) 0 0 (5,302,623) (16,306) (7,805,137)
Net realized gains
Class A................ (89,320) (3,518) (51,908) (151,406) (186,362) (120,120) (354,194)
Class B................ (243,537) (7,346) (142,595) (702,433) (96,217) (539,734) (459,774)
Class C................ (14,870) 0 (43,213) (26,997) 0 (48,859) (79,621)
Class Y................ 0 (648,594) 0 0 (645,270) (18,280) (2,122,788)
- --------------------------------------------------------------------------------------------------------------------------
Total distributions to
shareholders.......... (1,317,555) (3,729,633) (595,328) (1,855,604) (8,333,356) (1,547,609) (13,581,508)
- --------------------------------------------------------------------------------------------------------------------------
Capital share
transactions
Proceeds from shares
sold................... 3,639,960 16,967,545 1,329,900 2,082,099 43,862,993 4,659,660 51,920,065
Net asset value of
shares issued in
reinvestment of
distributions.......... 567,232 672,410 386,183 809,995 2,333,384 1,000,677 4,457,478
Payment for shares
redeemed............... (6,256,787) (10,150,268) (2,236,119) (4,606,121) (22,427,518) (4,756,259) (40,292,580)
Net asset value of
shares issued in
acquisitions........... 0 0 0 0 2,289,213 0 19,628,667
- --------------------------------------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets
resulting from capital
share transactions.... (2,049,595) 7,489,687 (520,036) (1,714,027) 26,058,072 904,078 35,713,630
- --------------------------------------------------------------------------------------------------------------------------
Total increase
(decrease) in net
assets............... (1,950,507) 7,486,833 (669,033) (2,391,533) 26,685,069 440,312 34,804,272
Net assets
Beginning of period..... 27,121,776 68,152,241 10,099,107 25,439,198 150,589,731 22,268,608 220,528,331
- --------------------------------------------------------------------------------------------------------------------------
End of period........... $25,171,269 $ 75,639,074 $ 9,430,074 $23,047,665 $177,274,800 $22,708,920 $255,332,603
- --------------------------------------------------------------------------------------------------------------------------
Undistributed
(overdistributed) net
investment income...... $ (52,814) $ (1,610) $ (10,877) $ (42,640) $ 3,635 $ (16,649) $ (109,513)
</TABLE>
- --------------------------------------------------------------------------------
See Combined Notes to Financial Statements.
51
<PAGE>
- --------------------------------------------------------------------------------
EVERGREEN
State Municipal Bond Fund
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
Year Ended March 31, 1999
<TABLE>
<CAPTION>
California Connecticut Massachusetts Missouri New Jersey New York Pennsylvania
Fund Fund* Fund Fund Fund Fund Fund
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Operations
Net investment income... $ 1,090,619 $ 1,056,216 $ 455,667 $ 1,063,630 $ 4,012,108 $ 998,824 $ 5,471,695
Net realized gains on
securities and futures
contracts.............. 236,358 425,126 369,554 235,429 1,015,421 489,113 3,407,989
Net change in unrealized
gains on securities and
futures contracts...... 1,295,323 55,361 258,124 1,157,948 1,915,701 822,112 1,218,774
- -------------------------------------------------------------------------------------------------------------------------
Net increase in net
assets resulting from
operations............ 2,622,300 1,536,703 1,083,345 2,457,007 6,943,230 2,310,049 10,098,458
- -------------------------------------------------------------------------------------------------------------------------
Distributions to
shareholders from
Net investment income
Class A................ (205,595) (953) (93,495) (185,708) (1,518,372) (163,491) (1,141,904)
Class B................ (781,308) (1,377) (270,195) (792,663) (419,808) (725,698) (1,487,712)
Class C................ (68,869) 0 (68,044) (47,861) 0 (60,327) (258,914)
Class Y................ 0 (1,053,886) 0 0 (2,083,453) 0 (2,490,364)
Net realized gains
Class A................ 0 0 0 0 (240,378) (21,835) 0
Class B................ 0 0 0 0 (86,039) (118,363) 0
Class C................ 0 0 0 0 0 (9,455) 0
Class Y................ 0 0 0 0 (81,674) 0 0
- -------------------------------------------------------------------------------------------------------------------------
Total distributions to
shareholders.......... (1,055,772) (1,056,216) (431,734) (1,026,232) (4,429,724) (1,099,169) (5,378,894)
- -------------------------------------------------------------------------------------------------------------------------
Capital share
transactions
Proceeds from shares
sold................... 4,372,062 6,576,391 1,120,126 6,597,008 16,729,270 2,516,417 17,158,377
Net asset value of
shares issued in
reinvestment of
distributions.......... 475,762 2,057 281,994 456,051 1,561,654 691,411 1,719,493
Payment for shares
redeemed............... (7,127,357) (4,232,114) (3,887,027) (7,105,076) (12,623,869) (6,778,220) (18,876,225)
Net asset value of
shares issued in
acquisitions........... 0 65,325,420 0 0 93,692,061 0 147,227,043
- -------------------------------------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets
resulting from capital
share transactions.... (2,279,533) 67,671,754 (2,484,907) (52,017) 99,359,116 (3,570,392) 147,228,688
- -------------------------------------------------------------------------------------------------------------------------
Total increase
(decrease) in net
assets............... (713,005) 68,152,241 (1,833,296) 1,378,758 101,872,622 (2,359,512) 151,948,252
Net assets
Beginning of period..... 27,834,781 0 11,932,403 24,060,440 48,717,109 24,628,120 68,580,079
- -------------------------------------------------------------------------------------------------------------------------
End of period........... $27,121,776 $68,152,241 $10,099,107 $25,439,198 $150,589,731 $22,268,608 $220,528,331
- -------------------------------------------------------------------------------------------------------------------------
Undistributed
(overdistributed) net
investment income...... $ (52,878) $ 0 $ (6,750) $ (46,006) $ 1,977 $ (14,383) $ (106,253)
</TABLE>
- --------------------------------------------------------------------------------
* The Fund commenced operations on November 24, 1997.
See Combined Notes to Financial Statements.
52
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Combined Notes to Financial Statements
1. ORGANIZATION
The Evergreen State Municipal Bond Funds consist of Evergreen California Munic-
ipal Bond Fund ("California Fund") (formerly, Evergreen California Tax Free
Fund), Evergreen Connecticut Municipal Bond Fund ("Connecticut Fund"), Ever-
green Massachusetts Municipal Bond Fund ("Massachusetts Fund") (formerly, Ever-
green Massachusetts Tax Free Fund), Evergreen Missouri Municipal Bond Fund
("Missouri Fund") (formerly, Evergreen Missouri Tax Free Fund), Evergreen New
Jersey Municipal Bond Fund ("New Jersey Fund") (formerly, Evergreen New Jersey
Tax Free Income Fund), Evergreen New York Municipal Bond Fund ("New York Fund")
(formerly, Evergreen New York Tax Free Fund) and Evergreen Pennsylvania Munici-
pal Bond Fund ("Pennsylvania Fund") (formerly, Evergreen Pennsylvania Tax Free
Fund), (collectively, the "Funds"). Each Fund 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 reg-
istered under the Investment Company Act of 1940, as amended (the "1940 Act").
The Funds offer Class A, Class B, Class C, and/or 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 on-
going distribution fee than Class A. Class B shares are sold subject to a con-
tingent deferred sales charge that is payable upon redemption and decreases de-
pending on how long the shares have been held. Class B shares purchased after
January 1, 1997 will automatically convert to Class A shares after seven years.
Class B shares purchased prior to January 1, 1997 retain their existing conver-
sion rights. Class C shares are sold subject to a contingent deferred sales
charge payable on shares redeemed within one year after the month of purchase.
Class Y shares are sold at net asset value and are not subject to contingent
deferred sales charges or distribution fees. Class Y shares are sold only to
investment advisory clients of First Union Corporation ("First Union") and its
affiliates, certain institutional investors or Class Y shareholders of record
of certain other funds managed by First Union and its affiliates as of December
30, 1994.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently 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 may be valued
by brokers which use prices provided by market makers or estimates of market
value obtained from yield data relating to investments or securities with simi-
lar characteristics. Otherwise, securities for which valuations are not avail-
able from an independent pricing service (including restricted securities) are
valued at fair value as determined in good faith according to procedures estab-
lished 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. Futures Contracts
In order to gain exposure to or protect against changes in security values, the
Funds may buy and sell futures contracts.
The initial margin deposited with a broker when entering into a futures trans-
action is subsequently adjusted by daily payments or receipts ("variation mar-
gin") as the value of the contract changes. Such changes are recorded as
unrealized gains or losses. Realized gains or losses are recognized on closing
the contract.
53
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Combined Notes to Financial Statements (continued)
Risks of entering into futures contracts include (i) the possibility of an il-
liquid market for the contract, (ii) the possibility that a change in the value
of the contract may not correlate with changes in the value of the underlying
instrument or index, and (iii) the credit risk that the other party will not
fulfill their obligations under the contract. Futures contracts also involve
elements of market risk in excess of the amount reflected in the statement of
assets and liabilities.
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.
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 income tax liability since
they are expected to distribute all of their net investment company taxable in-
come, net tax-exempt income and net capital gains, if any, to their sharehold-
ers. The Funds also intend to avoid any excise tax liability by making the re-
quired distributions under the Code. Accordingly, no provision for federal
taxes is required. To the extent that realized capital gains can be offset by
capital loss carryforwards, it is each Fund's policy not to distribute such
gains.
E. Distributions
Distributions from net investment income for the Funds are declared daily and
paid monthly. Distributions from net realized capital gains, if any, are paid
at least annually. Distributions to shareholders are recorded at the close of
business on the ex-dividend date.
Income and capital gains distributions to shareholders are determined in accor-
dance with income tax regulations, which may differ from generally accepted ac-
counting principles. Differences between financial statement amounts available
for distributions and distributions made in accordance with income tax regula-
tions are primarily due to differing treatment of market discount on securi-
ties.
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.
3. INVESTMENT ADVISORY AGREEMENT AND OTHER AFFILIATED TRANSACTIONS
Evergreen Investment Management Company ("EIMC"), a subsidiary of First Union,
is the investment advisor for the California Fund, Massachusetts Fund, Missouri
Fund, New York Fund and Pennsylvania Fund. In return for providing investment
management and administrative services, the Funds pay EIMC a management fee
that is calculated daily and paid monthly. The management fee is computed by
applying percentage rates starting at 0.55% and declining to 0.25% per annum,
as net assets increase, to the average daily net assets of each Fund.
First Union National Bank ("FUNB"), a subsidiary of First Union, serves as the
investment advisor to the Connecticut Fund and New Jersey Fund and is paid a
management fee that is computed daily and paid monthly. The Connecticut Fund
pays FUNB an annual fee for its services equal to 0.60% of the average daily
net assets of the Fund. The New Jersey Fund pays FUNB a fee for its services
which is computed by applying percentage rates, which start at 0.50% and de-
cline to 0.35% per annum, as net assets increase, to the average daily net as-
sets of the Fund.
54
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Combined Notes to Financial Statements (continued)
During the year ended March 31, 1999, the amount of investment advisory fees
waived by each investment advisor and the impact on each Fund's expense ratio
represented as a percentage of its average daily net assets were as follows:
<TABLE>
<CAPTION>
% of Average
Fees Daily
Waived Net Assets
-----------------------
<S> <C> <C>
California Fund........................... $ 20,292 0.08%
Connecticut Fund.......................... 116,474 0.18%
Massachusetts Fund........................ 36,054 0.38%
Missouri Fund............................. 32,169 0.13%
New Jersey Fund........................... 343,449 0.21%
New York Fund............................. 39,788 0.18%
</TABLE>
Evergreen Investment Services ("EIS"), a subsidiary of First Union, serves as
the administrator and The BISYS Group, Inc. ("BISYS") serves as the sub-admin-
istrator to the Funds. As administrator, EIS provides the Funds with facili-
ties, equipment and personnel. As sub-administrator to the Funds, BISYS pro-
vides the officers of the Funds. Officers of the Funds and affiliated Trustees
receive no compensation directly from the Funds.
For the Connecticut Fund and New Jersey Fund, the administrator and sub-admin-
istrator for each Fund is entitled to an annual fee based on the average daily
net assets of the funds administered by EIS for which First Union or its in-
vestment advisory subsidiaries are also the investment advisors. The adminis-
tration 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 assets of each Fund. The sub-administration 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 assets of each Fund.
During the year ended March 31, 1999, the Connecticut Fund and New Jersey Fund
paid or accrued the following amounts for administrative and sub-administrative
services:
<TABLE>
<CAPTION>
Administration Sub-administration
Fee Fee
------------------------------
<S> <C> <C>
Connecticut Fund.............. $15,105 $3,800
New Jersey Fund............... 35,092 8,827
</TABLE>
During the year ended March 31, 1999, the California Fund, Massachusetts Fund,
Missouri Fund, New York Fund and Pennsylvania Fund reimbursed EIMC for certain
administration and accounting expenses as follows:
<TABLE>
<S> <C>
California Fund.......................................... $ 4,568
Massachusetts Fund....................................... 1,463
Missouri Fund............................................ 3,292
New York Fund............................................ 3,223
Pennsylvania Fund........................................ 35,246
</TABLE>
Evergreen Service Company ("ESC"), an indirectly, wholly owned subsidiary of
First Union, serves as the transfer and dividend disbursing agent for the
Funds.
4. DISTRIBUTION PLANS
Evergreen Distributor, Inc. ("EDI"), a wholly owned subsidiary of BISYS, serves
as principal underwriter to the Funds.
Each Fund has adopted Distribution Plans, as allowed by Rule 12b-1 of the 1940
Act, for each class of shares, except Class Y. Distribution plans permit a Fund
to compensate 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 "Distribution Plan expenses". Each class, except
Class Y, currently pays a service fee equal to 0.25% of the average daily net
assets of the class. Class B and Class C also pay distribution fees equal to
0.75% of the average daily net assets of the class. Distribution Plan expenses
are calculated daily and paid at least quarterly.
55
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Combined Notes to Financial Statements (continued)
During the year ended March 31, 1999, amounts paid or accrued to EDI pursuant
to each Fund's Class A, Class B and Class C Distribution Plans, distribution
fees waived and the impact of the waiver on each Fund's expense ratio repre-
sented as a percentage of average daily net assets were as follows:
<TABLE>
<CAPTION>
Distribution Fees Accrued Distribution % of Average
--------------------------- Fees Waived Daily
Class A Class B Class C Class A Net Assets
------------------------------------
<S> <C> <C> <C> <C> <C>
California Fund........... $ 16,950 $ 183,656 $ 14,549 0 0
Connecticut Fund.......... 897 6,287 0 0 0
Massachusetts Fund........ 5,246 58,021 16,723 0 0
Missouri Fund............. 11,818 189,041 8,061 0 0
New Jersey Fund........... 83,206 166,889 0 $53,252 0.16%
New York Fund............. 9,275 162,407 14,148 0 0
Pennsylvania Fund......... 67,908 372,707 64,587 0 0
</TABLE>
With respect to Class B and Class C shares, the principal underwriter may pay
distribution fees greater than the allowable annual amounts each Fund is 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.
5. ACQUISITIONS
On November 24, 1997, as a result of the conversion of common trust funds man-
aged by FUNB, the Connecticut Fund commenced operations of its Class Y shares.
Also, as a result of this conversion, the New Jersey Fund and Pennsylvania Fund
each acquired substantially all of the net assets of comparable common trusts
in exchange for Class Y shares of the respective Funds.
Effective on the close of business on July 27, 1998, the New Jersey Fund ac-
quired substantially all the assets and assumed certain liabilities of CoreFund
New Jersey Municipal Bond Fund in an exchange for Class A and Class Y shares of
New Jersey Fund. Also, the Pennsylvania Fund acquired substantially all the as-
sets and assumed certain liabilities of CoreFund Pennsylvania Municipal Bond
Fund in an exchange for Class A and Class Y shares of Pennsylvania 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>
Connecticut Fund....... Common trust fund $ 65,325,420 10,328,861 $1,892,387 $ 65,325,420
New Jersey Fund........ Common trust fund 93,692,061 8,501,660 2,874,242 147,179,376
New Jersey Fund........ CoreFund New Jersey Municipal Bond Fund 2,289,213 205,813 104,332 160,691,863
Pennsylvania Fund...... Common trust fund 147,227,043 12,689,439 4,980,000 216,012,549
CoreFund Pennsylvania Municipal Bond
Pennsylvania Fund...... Fund 19,628,667 1,676,246 443,113 242,223,339
</TABLE>
56
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Combined Notes to Financial Statements (continued)
6. CAPITAL SHARE TRANSACTIONS
The Funds have an unlimited number of shares of beneficial interest with $0.001
par value authorized. Shares of beneficial interest of the Funds are currently
divided into Class A, Class B, Class C and/or Class Y. Transactions in shares
of the Funds were as follows:
California Fund
<TABLE>
<CAPTION>
Year Ended Year Ended
March 31, 1999 March 31, 1998
--------------------- ---------------------
Shares Amount Shares Amount
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
Shares sold..................... 161,452 $ 1,607,229 271,096 $ 2,691,837
Shares issued in reinvestment of
distributions.................. 11,028 110,694 7,540 73,883
Shares redeemed................. (192,866) (1,929,433) (79,526) (784,304)
- -------------------------------------------------------------------------------
Net increase (decrease)......... (20,386) $ (211,510) 199,110 $ 1,981,416
- -------------------------------------------------------------------------------
Class B
Shares sold..................... 151,941 $ 1,521,260 153,832 $ 1,498,219
Shares issued in reinvestment of
distributions.................. 42,133 421,177 38,537 374,672
Shares redeemed................. (368,779) (3,684,771) (603,156) (5,920,355)
- -------------------------------------------------------------------------------
Net decrease.................... (174,705) $(1,742,334) (410,787) $(4,047,464)
- -------------------------------------------------------------------------------
Class C
Shares sold..................... 51,134 $ 511,471 18,602 $ 182,006
Shares issued in reinvestment of
distributions.................. 3,541 35,361 2,804 27,207
Shares redeemed................. (64,612) (642,583) (43,562) (422,698)
- -------------------------------------------------------------------------------
Net decrease.................... (9,937) $ (95,751) (22,156) $ (213,485)
</TABLE>
- --------------------------------------------------------------------------------
Connecticut Fund
<TABLE>
<CAPTION>
December 30, 1997
(Commencement of
Year Ended Class Operations) to
March 31, 1999 March 31, 1998
------------------ ---------------------
Shares Amount Shares Amount
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
Shares sold......................... 134,138 $ 866,051 22,857 $ 145,836
Shares issued in reinvestment of
distributions...................... 1,796 11,544 68 433
Shares redeemed..................... (69,560) (447,872) 0 0
- ------------------------------------------------------------------------------
Net increase........................ 66,374 $ 429,723 22,925 $ 146,269
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
January 9, 1998
(Commencement of
Year Ended Class Operations) to
March 31, 1999 March 31, 1998
---------------- ---------------------
Shares Amount Shares Amount
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class B
Shares sold............................ 130,130 $839,983 51,780 $ 331,966
Shares issued in reinvestment of
distributions......................... 2,852 18,307 153 980
Shares redeemed........................ 0 0 0 0
- ------------------------------------------------------------------------------
Net increase........................... 132,982 $858,290 51,933 $ 332,946
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
November 24, 1997
(Commencement of
Year Ended Class Operations) to
March 31, 1999 March 31, 1998
----------------------- -----------------------
Shares Amount Shares Amount
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class Y
Shares sold................. 2,378,864 $15,261,511 948,480 $ 6,098,589
Shares issued in
reinvestment of
distributions.............. 100,241 642,559 101 644
Shares redeemed............. (1,511,719) (9,702,396) (661,430) (4,232,114)
Shares issued in acquisition
of Common trust fund....... 0 0 10,328,861 65,325,420
- -------------------------------------------------------------------------------
Net increase................ 967,386 $ 6,201,674 10,616,012 $67,192,539
</TABLE>
- --------------------------------------------------------------------------------
57
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Combined Notes to Financial Statements (continued)
Massachusetts Fund
<TABLE>
<CAPTION>
Year Ended Year Ended
March 31, 1999 March 31, 1998
--------------------- ---------------------
Shares Amount Shares Amount
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
Shares sold..................... 73,484 $ 705,517 48,781 $ 474,420
Shares issued in reinvestment of
distributions.................. 9,729 93,903 5,660 53,489
Shares redeemed................. (67,758) (658,313) (65,265) (628,762)
- -------------------------------------------------------------------------------
Net increase (decrease)......... 15,455 $ 141,107 (10,824) $ (100,853)
- -------------------------------------------------------------------------------
Class B
Shares sold..................... 33,327 $ 323,351 64,229 $ 606,090
Shares issued in reinvestment of
distributions.................. 23,133 222,351 19,310 182,827
Shares redeemed................. (136,224) (1,311,034) (276,117) (2,637,724)
- -------------------------------------------------------------------------------
Net decrease.................... (79,764) $ (765,332) (192,578) $(1,848,807)
- -------------------------------------------------------------------------------
Class C
Shares sold..................... 30,861 $ 301,032 4,224 $ 39,616
Shares issued in reinvestment of
distributions.................. 7,279 69,929 4,814 45,678
Shares redeemed................. (27,563) (266,772) (65,364) (620,541)
- -------------------------------------------------------------------------------
Net increase (decrease)......... 10,577 $ 104,189 (56,326) $ (535,247)
</TABLE>
- --------------------------------------------------------------------------------
Missouri Fund
<TABLE>
<CAPTION>
Year Ended Year Ended
March 31, 1999 March 31, 1998
--------------------- ---------------------
Shares Amount Shares Amount
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
Shares sold..................... 122,783 $ 1,221,002 262,047 $ 2,625,674
Shares issued in reinvestment of
distributions.................. 14,971 149,142 6,523 65,281
Shares redeemed................. (170,801) (1,757,149) (61,382) (621,096)
- -------------------------------------------------------------------------------
Net increase (decrease)......... (33,047) $ (387,005) 207,188 $ 2,069,859
- -------------------------------------------------------------------------------
Class B
Shares sold..................... 80,211 $ 806,921 366,631 $ 3,635,733
Shares issued in reinvestment of
distributions.................. 62,770 620,537 36,382 359,093
Shares redeemed................. (242,042) (2,418,554) (577,779) (5,726,750)
- -------------------------------------------------------------------------------
Net decrease.................... (99,061) $ (991,096) (174,766) $(1,731,924)
- -------------------------------------------------------------------------------
Class C
Shares sold..................... 5,526 $ 54,176 33,594 $ 335,601
Shares issued in reinvestment of
distributions.................. 4,071 40,316 3,210 31,677
Shares redeemed................. (42,999) (430,418) (75,805) (757,230)
- -------------------------------------------------------------------------------
Net decrease.................... (33,402) $ (335,926) (39,001) $ (389,952)
</TABLE>
- --------------------------------------------------------------------------------
58
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Combined Notes to Financial Statements (continued)
New Jersey Fund
<TABLE>
<CAPTION>
Year Ended Year Ended
March 31, 1999 March 31, 1998
------------------------ ----------------------
Shares Amount Shares Amount
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
Shares sold................. 471,657 $ 5,285,409 252,683 $ 2,784,238
Shares issued in
reinvestment of
distributions.............. 93,355 1,046,688 96,743 1,066,743
Shares redeemed............. (469,865) (5,263,660) (431,044) (4,741,631)
Shares issued in acquisition
of CoreFund New Jersey
Municipal Bond Fund........ 74,925 833,392 0 0
- --------------------------------------------------------------------------------
Net increase (decrease)..... 170,072 $ 1,901,829 (81,618) $ (890,650)
- --------------------------------------------------------------------------------
Class B
Shares sold................. 708,495 $ 7,932,617 559,918 $ 6,159,394
Shares issued in
reinvestment of
distributions.............. 46,484 521,268 35,078 387,261
Shares redeemed............. (173,473) (1,935,932) (97,634) (1,079,382)
- --------------------------------------------------------------------------------
Net increase................ 581,506 $ 6,517,953 497,362 $ 5,467,273
- --------------------------------------------------------------------------------
Class Y
Shares sold................. 2,736,002 $ 30,644,967 700,533 $ 7,785,638
Shares reinvestment of
distributions.............. 68,267 765,428 9,734 107,650
Shares redeemed............. (1,358,173) (15,227,926) (611,893) (6,802,856)
Shares issued in acquisition
of:
Common trust fund........... 0 0 8,501,660 93,692,061
CoreFund New Jersey
Municipal Bond Fund........ 130,888 1,455,821 0 0
- --------------------------------------------------------------------------------
Net increase................ 1,576,984 $ 17,638,290 8,600,034 $94,782,493
</TABLE>
- --------------------------------------------------------------------------------
New York Fund
<TABLE>
<CAPTION>
Year Ended Year Ended
March 31, 1999 March 31, 1998
--------------------- ---------------------
Shares Amount Shares Amount
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
Shares sold..................... 190,605 $ 1,918,219 101,515 $ 1,028,467
Shares issued in reinvestment of
distributions.................. 17,453 174,886 10,952 109,667
Shares redeemed................. (146,183) (1,479,314) (143,942) (1,442,196)
- -------------------------------------------------------------------------------
Net increase (decrease)......... 61,875 $ 613,791 (31,475) $ (304,062)
- -------------------------------------------------------------------------------
Class B
Shares sold..................... 132,527 $ 1,321,225 139,740 $ 1,373,251
Shares issued in reinvestment of
distributions.................. 72,716 721,252 53,507 527,679
Shares redeemed................. (305,810) (3,061,376) (469,593) (4,681,031)
- -------------------------------------------------------------------------------
Net decrease.................... (100,567) $(1,018,899) (276,346) $(2,780,101)
- -------------------------------------------------------------------------------
Class C
Shares sold..................... 8,313 $ 84,441 11,612 $ 114,699
Shares issued in reinvestment of
distributions.................. 8,005 79,423 5,472 54,065
Shares redeemed................. (20,890) (208,796) (66,958) (654,993)
- -------------------------------------------------------------------------------
Net decrease.................... (4,572) $ (44,932) (49,874) $ (486,229)
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
October 29, 1998
(Commencement of
Class Operations) to
March 31, 1999
---------------------
Shares Amount
- --------------------------------------------------------------------------------
<S> <C> <C>
Class Y
Shares sold.............................................. 132,389 $ 1,335,775
Shares issued in reinvestment of distributions........... 2,525 25,116
Share redeemed........................................... (679) (6,773)
- --------------------------------------------------------------------------------
Net increase............................................. 134,235 $ 1,354,118
</TABLE>
- --------------------------------------------------------------------------------
59
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Combined Notes to Financial Statements (continued)
Pennsylvania Fund
<TABLE>
<CAPTION>
Year Ended Year Ended
March 31, 1999 March 31, 1998
--------------------- ---------------------
Shares Amount Shares Amount
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
Shares sold..................... 422,289 $ 4,962,719 216,700 $ 2,503,060
Shares issued in reinvestment of
distributions.................. 73,831 866,664 52,116 598,085
Shares redeemed................. (617,772) (7,248,653) (410,639) (4,743,895)
Shares issued in acquisition of
CoreFund Pennsylvania Municipal
Bond Fund...................... 517,010 6,054,216 0 0
- -------------------------------------------------------------------------------
Net increase (decrease)......... 395,358 $ 4,634,946 (141,823) $(1,642,750)
- -------------------------------------------------------------------------------
Class B
Shares sold..................... 599,763 $ 6,993,005 365,986 $ 4,145,693
Shares issued in reinvestment of
distributions.................. 94,274 1,092,986 82,460 937,245
Shares redeemed................. (617,387) (7,159,590) (627,854) (7,165,289)
- -------------------------------------------------------------------------------
Net increase (decrease)......... 76,650 $ 926,401 (179,408) $(2,082,351)
- -------------------------------------------------------------------------------
Class C
Shares sold..................... 82,623 $ 962,589 47,797 $ 554,828
Shares issued in reinvestment of
distributions.................. 18,631 216,583 16,198 184,137
Shares redeemed................. (53,731) (622,506) (129,911) (1,487,976)
- -------------------------------------------------------------------------------
Net increase (decrease)......... 47,523 $ 556,666 (65,916) $ (749,011)
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
November 24, 1997
(Commencement of
Year Ended Class Operations) to
March 31, 1999 March 31, 1998
------------------------ ------------------------
Shares Amount Shares Amount
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class Y
Shares sold............... 3,324,052 $ 39,001,752 848,662 $ 9,954,796
Shares issued in
reinvestment of
distributions............ 195,060 2,281,245 2 26
Shares redeemed........... (2,151,154) (25,261,831) (466,040) (5,479,065)
Shares issued in
acquisition of:
Common trust fund......... 0 0 12,689,439 147,227,043
CoreFund Pennsylvania
Municipal Bond Fund...... 1,159,236 13,574,451 0 0
- --------------------------------------------------------------------------------
Net increase.............. 2,527,194 $ 29,595,617 13,072,063 $151,702,800
</TABLE>
- --------------------------------------------------------------------------------
7. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of investment securities (excluding
short-term securities) were as follows for the year ended March 31, 1999:
<TABLE>
<CAPTION>
Cost of Purchases Proceeds from Sales
--------------------------------
<S> <C> <C>
California Fund........... $ 8,711,955 $ 10,708,520
Connecticut Fund.......... 37,743,980 28,740,917
Massachusetts Fund........ 10,835,006 11,626,060
Missouri Fund............. 20,541,864 23,069,995
New Jersey Fund........... 88,744,983 63,676,407
New York Fund............. 16,030,105 16,247,872
Pennsylvania Fund......... 194,721,303 160,912,432
</TABLE>
On March 31, 1999, the composition of unrealized appreciation and depreciation
on securities based on the aggregate cost of securities for federal income tax
purposes were as follows:
<TABLE>
<CAPTION>
Gross Gross
Unrealized Unrealized Net Unrealized
Tax Cost Appreciation Depreciation Appreciation
--------------------------------------------------
<S> <C> <C> <C> <C>
California
Fund........... $ 23,571,236 $1,439,312 $ (2,197) $1,437,115
Connecticut
Fund........... 75,384,604 2,252,744 (93,525) 2,159,219
Massachusetts
Fund........... 9,013,497 347,091 (13,804) 333,287
Missouri Fund... 21,991,043 808,845 (71,242) 737,603
New Jersey
Fund........... 174,650,468 6,338,936 (204,813) 6,134,123
New York Fund... 21,451,322 1,094,865 (33,872) 1,060,993
Pennsylvania
Fund........... 245,395,764 8,778,021 (333,630) 8,444,391
</TABLE>
As of March 31, 1999, the Funds had no capital loss carryforwards for federal
income tax purposes.
60
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Combined Notes to Financial Statements (continued)
8. EXPENSE OFFSET ARRANGEMENTS
The Funds have entered into expense offset arrangements with ESC and their cus-
todian whereby credits realized as a result of uninvested cash balances were
used to reduce a portion of each Fund's related expenses. The assets deposited
with ESC and the custodian under these expense offset arrangements could have
been invested in income-producing assets. The amount of fee credits received by
each Fund and the impact on each Fund's expense ratio represented as a percent-
age of its average daily net assets were as follows:
<TABLE>
<CAPTION>
Total % of Average
Fee Credits Daily
Received Net Assets
-----------------------
<S> <C> <C>
California Fund........................ $ 816 0.00%
Connecticut Fund....................... 3,671 0.01%
Massachusetts Fund..................... 346 0.00%
Missouri Fund.......................... 1,004 0.00%
New Jersey Fund........................ 5,606 0.00%
New York Fund.......................... 756 0.00%
Pennsylvania Fund...................... 9,302 0.00%
</TABLE>
9. DEFERRED TRUSTEES' FEES
Each Independent Trustee of each Fund may defer any or all compensation related
to performance of their duties as Trustees. The Trustees' deferred balances are
allocated to deferral accounts, which are included in the accrued expenses for
the Fund. The investment performance of the deferral accounts are based on the
investment performance of certain Evergreen Funds. Any gains earned or losses
incurred in the deferral accounts are reported in 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.
10. FINANCING AGREEMENTS
Certain Evergreen Funds and State Street Bank and Trust Company ("State
Street") and a group of banks (collectively, the "Banks") entered into a fi-
nancing agreement dated December 22, 1997, as amended on November 20, 1998. Un-
der this agreement, the Banks provided an unsecured credit facility in the ag-
gregate amount of $400 million ($275 million committed and $125 million uncom-
mitted). The credit facility was allocated, under the terms of the financing
agreement, among the Banks. The credit facility was accessed by the Funds for
temporary or emergency purposes only and was subject to each Fund's borrowing
restrictions. Borrowings under this facility bear interest at 0.50% per annum
above the Federal Funds rate. A commitment fee of 0.065% per annum will be in-
curred on the unused portion of the committed facility, which was allocated to
all funds. For its assistance in arranging this financing agreement, the Capi-
tal 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 administra-
tive agent is entitled to a fee of $20,000 per annum which is allocated to all
of the funds.
This agreement was amended and renewed on December 22, 1998. The amended fi-
nancing agreement became effective on December 22, 1998 among all of the Ever-
green Funds, State Street and The Bank of New York ("BONY"). Under this agree-
ment, State Street and BONY provide an unsecured credit facility in the aggre-
gate amount of $150 million ($125 million committed and $25 million uncommit-
ted). The remaining terms and conditions of the agreement are unaffected.
During the year ended March 31, 1999, the Funds had no borrowings under these
agreements.
11. CONCENTRATION OF CREDIT RISK
Each Fund invests a substantial portion of its assets in issuers of municipal
debt securities located in a single state, therefore, it may be more affected
by economic and political developments in that state or region than would be a
comparable general tax-exempt mutual fund.
61
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Combined Notes to Financial Statements (continued)
12. SUBSEQUENT EVENTS (Unaudited)
On May 13, 1999, California Fund and New York Fund filed an Agreement and Plan
of Reorganization with the Securities and Exchange Commission ("SEC") which
provides for the acquisition of all the assets of each Fund and the assumption
of identified liabilities by Evergreen High Grade Municipal Bond Fund, a series
of the Evergreen Municipal Trust. A special meeting of shareholders to vote on
the above proposals is scheduled for July 23, 1999. Materials for this meeting
will be mailed, to shareholders of record on May 5, 1999 on or about June 2,
1999.
On May 13, 1999, Massachusetts Fund and Missouri Fund filed an Agreement and
Plan of Reorganization with the Securities and Exchange Commission which pro-
vides for the acquisition of all the assets of each Fund and the assumption of
identified liabilities by Evergreen Municipal Bond Fund, a series of the Ever-
green Municipal Trust. A special meeting of shareholders to vote on the above
proposals is scheduled for July 23, 1999. Materials for this meeting will be
mailed, to shareholders of record on May 5, 1999, on or about June 2, 1999.
62
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Independent Auditors' Report
Board of Trustees and Shareholders
Evergreen Municipal Trust
We have audited the accompanying statements of assets and liabilities, includ-
ing the schedules of investments of the Evergreen California Municipal Bond
Fund, Evergreen Connecticut Municipal Bond Fund, Evergreen Massachusetts Munic-
ipal Bond Fund, Evergreen Missouri Municipal Bond Fund, Evergreen New Jersey
Municipal Bond Fund, Evergreen New York Municipal Bond Fund and Evergreen Penn-
sylvania Municipal Bond Fund, portfolios of Evergreen Municipal Trust, as of
March 31, 1999, and the related statements of operations for the year then end-
ed, statements of changes in net assets for each of the years or periods in the
two year period then ended and financial highlights for each of the years or
periods as described on pages 16 to 29. These financial statements and finan-
cial highlights are the responsibility of the Funds' management. Our responsi-
bility is to express an opinion on these financial 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. Our procedures included confirmation of securities owned as of
March 31, 1999 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 financial statement pre-
sentation. We believe that our audits provide a reasonable basis for our opin-
ion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Ever-
green California Municipal Bond Fund, Evergreen Connecticut Municipal Bond
Fund, Evergreen Massachusetts Municipal Bond Fund, Evergreen Missouri Municipal
Bond Fund, Evergreen New Jersey Municipal Bond Fund, Evergreen New York Munici-
pal Bond Fund and Evergreen Pennsylvania Municipal Bond Fund as of March 31,
1999, the results of their operations, changes in their net assets and finan-
cial highlights for each of the years or periods described above in conformity
with generally accepted accounting principles.
Boston, Massachusetts
April 30, 1999
63
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Additional Information (Unaudited)
FEDERAL INCOME TAX STATUS OF DISTRIBUTIONS
For the fiscal period ended March 31, 1999, the following percentages represent
the portion of dividends from net investment income which are exempt from fed-
eral income tax, other than alternative minimum tax:
California Fund................................99.95%
Connecticut Fund...............................99.78%
Massachusetts Fund.............................99.76%
Missouri Fund..................................99.59%
New Jersey Fund................................99.80%
New York Fund..................................99.82%
Pennsylvania Fund..............................99.89%
Pursuant to section 852 of the Internal Revenue Code, the Funds have designated
the following amounts as long-term capital gain distributions for the fiscal
year ended March 31, 1999:
<TABLE>
<CAPTION>
Aggregate Per Share
------------------------------------------------------------------
<S> <C> <C>
California Fund................................. $ 245,762 $0.094
Connecticut Fund................................ 560,539 0.051
Massachusetts Fund.............................. 182,707 0.186
Missouri Fund................................... 880,836 0.375
New Jersey Fund................................. 733,300 0.049
New York Fund................................... 652,593 0.310
Pennsylvania Fund............................... 2,425,758 0.110
</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 presented above.
YEAR 2000
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.
64
<PAGE>
Evergreen Funds
Money Market
Treasury Money Market Fund
Money Market Fund
Municipal Money Market Fund
Florida Municipal Money Market Fund
New Jersey Municipal Money Market Fund
Pennsylvania Municipal Money Market Fund
Tax Advantaged
Short Intermediate Municipal Fund
High Grade Municipal Bond Fund
Municipal Bond Fund
California Municipal Bond Fund
Connecticut Municipal Bond Fund
Florida Municipal Bond Fund
Florida High Income Municipal Bond Fund
Georgia Municipal Bond Fund
Maryland Municipal Bond Fund
Massachusetts Municipal Bond Fund
Missouri Municipal Bond Fund
New Jersey Municipal Bond Fund
New York Municipal Bond Fund
North Carolina Municipal Bond Fund
Pennsylvania Municipal Bond 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
Equity Income Fund
Value Fund
Blue Chip Fund
Growth and Income Fund
Small Cap Value Fund
Domestic Growth
Tax Strategic Equity Fund
Strategic Growth Fund
Stock Selector Fund
Evergreen Fund
Masters 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
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