<PAGE>
Annual Report
as of August 31, 1999
Evergreen
Southern State
Municipal Bond Funds
[LOGO OF EVERGREEN FUNDS APPEAR HERE]
<PAGE>
Table of Contents
Letter to Shareholders..................................................... 1
Evergreen Florida High Income Municipal Bond Fund
Fund at a Glance........................................................ 2
Evergreen Florida Municipal Bond Fund
Fund at a Glance........................................................ 4
Evergreen Georgia Municipal Bond Fund
Fund at a Glance........................................................ 6
Evergreen Maryland Municipal Bond Fund
Fund at a Glance........................................................ 8
Evergreen North Carolina Municipal Bond Fund
Fund at a Glance........................................................ 10
Evergreen South Carolina Municipal Bond Fund
Fund at a Glance........................................................ 12
Evergreen Virginia Municipal Bond Fund
Fund at a Glance........................................................ 14
Financial Highlights
Evergreen Florida High Income Municipal Bond Fund....................... 16
Evergreen Florida Municipal Bond Fund................................... 18
Evergreen Georgia Municipal Bond Fund................................... 20
Evergreen Maryland Municipal Bond Fund.................................. 22
Evergreen North Carolina Municipal Bond Fund............................ 24
Evergreen South Carolina Municipal Bond Fund............................ 26
Evergreen Virginia Municipal Bond Fund.................................. 28
Schedule of Investments
Evergreen Florida High Income Municipal Bond Fund....................... 30
Evergreen Florida Municipal Bond Fund................................... 34
Evergreen Georgia Municipal Bond Fund................................... 39
Evergreen Maryland Municipal Bond Fund.................................. 42
Evergreen North Carolina Municipal Bond Fund............................ 44
Evergreen South Carolina Municipal Bond Fund............................ 47
Evergreen Virginia Municipal Bond Fund.................................. 49
Statements of Assets and Liabilities....................................... 53
Statements of Operations................................................... 54
Statements of Changes in Net Assets........................................ 55
Combined Notes to Financial Statements..................................... 58
Independent Auditors Report................................................ 70
Additional Information..................................................... 71
Evergreen Funds
Evergreen Funds is one of the nation's fastest growing investment companies with
over $70 billion in assets under management.
With over 80 mutual funds to choose among and acclaimed service and operations
capabilities, investors enjoy a broad range of quality investment products and
services designed to meet their needs.
The Evergreen Funds employ intensive, research-driven investment strategies
executed by over 90 research analysts and portfolio managers. The fund company
remains dedicated to meeting the needs of investors and their advisors in a
global economy. Look to the Evergreen Funds to provide a distinctive level of
service and excellence in investment management.
This annual report must be preceded or accompanied by a prospectus of an
Evergreen fund contained herein. The prospectus contains more complete
information, including fees and expenses, and should be read carefully before
investing or sending money.
---------------------------------------------------------------
Mutual Funds: ARE NOT FDIC INSURED May lose value . Are not bank guaranteed
---------------------------------------------------------------
Evergreen Distributor, Inc.
Evergreen(SM)is a Service Mark of Evergreen Investment Services, Inc.
<PAGE>
Letter to Shareholders
----------------------
October 1999
[PHOTO]
William M. Ennis
President and CEO
Dear Shareholders:
We are pleased to provide the Evergreen Southern State Municipal Bond Funds
annual report, which covers the twelve-month period ended August 31, 1999.
Continued Strength in the Domestic Economy
During the first quarter of 1999, a handful of large capitalization growth
stocks, technology stocks in particular, continued to dominate market
performance. Early in the second quarter, participation broadened to include
both value stocks and small company stocks: two areas which had disappointed
investors for several years. By the end of the period, however, the overall
market began to correct down.
Inflation fears persist, and the Federal Reserve increased interest rates in
June and again in late August in an effort to contain stock and bond prices.
Investors will watch carefully to see whether there will be a third rate
increase later this year. Despite the anxiety over interest rates, many experts
agree that the economy is still fundamentally strong, and we remain cautiously
optimistic about the prospects for continued growth in the markets.
Year 2000 Preparation/1/
We continue to progress with our preparations for Year 2000. Our aim is to
provide uninterrupted service and communication with shareholders through the
end of December 1999 and into January 2000. As of the end of October, when this
report was finalized, we have completed all the regulatory requirements for
testing and certification of our systems. In March, we participated in the
industry's "Street Test" with the Securities Industry Association, which helped
us evaluate the readiness of one of the industry's critical trading networks. We
are confident that our long-term approach to planning and preparation will
enable us to continue to deliver the high quality products and services that you
have come to expect.
Once again, we remind you to take advantage of your financial advisor's
expertise and work together to develop an asset allocation strategy that will
help you to meet your investment goals and objectives. Evergreen Funds offers a
wide range of funds that includes multiple investment styles to help you find
those that will be appropriate for your portfolio.
Thank you for your continued investment in Evergreen Funds.
Sincerely,
/s/ William M. Ennis
William M. Ennis
President and CEO
Evergreen Investment Company, Inc.
/1/ The information above constitutes Year 2000 readiness disclosure.
1
<PAGE>
EVERGREEN
Florida High Income Municipal Bond Fund
Fund at a Glance as of August 31, 1999
Portfolio
Characteristics
---------------
Total Net Assets $460,248,683
Average Credit Quality* BBB-
Effective Maturity* 19.8 years
Average Duration* 8.4 years
*unaudited based on 9/30/99 portfolio assets
Performance and Returns3
Portfolio Inception Date 6/17/92 Class A Class B Class C Class Y
Class Inception Date 6/17/92 7/10/95 3/6/98 9/20/95
Average Annual Returns*
1 year with sales charge -4.89% -5.65% -1.86% n/a
1 year w/o sales charge -0.16% -0.91% -0.91% 0.09%
3 years 4.69% 4.71% 6.01% 6.67%
5 years 5.88% 5.94% 6.68% 7.13%
Since Portfolio Inception 6.49% 6.75% 7.04% 7.36%
Maximum Sales Charge 4.75% 5.00% 1.00% n/a
Front End CDSC CDSC
30-day SEC Yield 5.36% 4.75% 4.89% 5.92%
Taxable Equivalent Yield** 8.87% 7.86% 8.10% 9.80%
12-month income dividends
per share $0.57 $0.48 $0.48 $0.60
12-month capital gain distributions
per share n/a n/a n/a n/a
Lipper Ranking out of 63 Florida
Municipal Debt Funds1
(for the 1 year period ended 8/31/99) 3 14 14 2
* Adjusted for maximum applicable sales charge.
** Assumes maximum 39.6% federal tax rate. Results for investors subject to
lower tax rates would not be as advantageous.
1 Source: Lipper Inc., an independent mutual fund rating company. The
rankings are based on total return and do not include the effect of a sales
charge. For the 5-year period ended 8/31/99, the Fund's Class A shares
ranked 2 out of 40 Florida Municipal Debt funds tracked by Lipper Inc. Past
performance is no guarantee of future results.
CURRENT INVESTMENT STYLE2
[GRAPHIC]
Morningstar's Style Box is based on a portfolio date as of 8/31/99.
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.
2 Source: 1999 Morningstar, Inc.
3 Past performance is no guarantee of future results. The performance of each
class may vary based on differences in loads and fees paid by the shareholders
investing in each class. The investment return and principal value will
fluctuate so that an investor's shares, when redeemed, may be worth more or less
than original cost. The LBMBI is an unmanaged index. The index does not include
transaction costs associated with buying and selling securities nor any
management fees. The CPI is a commonly used measure of inflation and does not
represent an investment return. It is not possible to invest directly in an
index.
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.
LONG TERM GROWTH
[GRAPH]
Lehman Brothers Consumer Price Evergreen FL
Municipals Index - US High Income Muni A
6/30/92 10,000 10,000 9,525
8/31/92 10,176 10,050 9,636
8/31/93 11,444 10,328 10,997
8/31/94 11,460 10,628 11,218
8/31/95 12,476 10,906 12,223
8/31/96 13,129 11,218 13,009
8/31/97 14,342 11,469 14,409
8/31/98 15,583 11,655 15,698
8/31/99 15,668 11,926 15,672
Comparison of a $10,000 investment in Evergreen Florida High Income Municipal
Bond Fund, Class A, versus a similar investment in the Lehman Brothers Municipal
Bond Index (LBMBI) and the Consumer Price Index (CPI).
2
<PAGE>
EVERGREEN
Florida High Income Municipal Bond Fund
Portfolio
Management
-------------------
[PHOTO]
Richard K. Marrone
Tenure: January 1995
The Evergreen Florida High Income Municipal Bond Fund (Class A Shares) posted a
- -0.16% total return for the fiscal year ended August 31, 1999, unadjusted for
any sales charges. This performance ranked in the top 5% (3 out of 63) of
Florida municipal bond funds tracked by Lipper Inc., an independent mutual fund
rating company.
During the fiscal year, portfolio transactions focused on our two primary
objectives: strong yield and price stability. Purchases emphasized
higher-yielding securities in order to bolster the Fund's yield. A consequence
of this, however, was that we were forced to extend out along the yield curve to
get this higher yield. Since there were not a lot of non-rated new issues this
summer, we bought long maturities of lower-rated paper to achieve our yield
requirements. These securities with long maturities dropped in price as interest
rates rose during most of 1999. The net result was more NAV volatility than we
normally exhibit and more than we would like. As the late summer progressed, we
took steps to correct this as more new issues came to the market. Given the
above-average NAV volatility, the Fund still performed well on a relative basis
as noted above. We anticipate these adjustments to reflect our shareholders'
investment objectives by attempting to construct a portfolio with higher yield,
more stable net asset value and a slightly lower duration.
PORTFOLIO COMPOSITION
(unaudited based on 9/30/99 portfolio assets)
[PIE CHART]
Community Development -- 26.0%
Housing -- 23.9%
Hospital -- 9.7%
Continuing Care Retirement
Community -- 9.3%
Other -- 8.2%
Industrial Development -- 7.6%
Sales Tax -- 6.5%
Education -- 3.6%
Water & Sewer -- 3.2%
Recreational Facility -- 2.0%
PORTFOLIO QUALITY
(unaudited based on 9/30/99 portfolio assets)
[PIE CHART]
Not Rated -- 55.1%
BBB -- 22.1%
AAA -- 12.7%
A -- 10.0%
B -- 0.1%
3
<PAGE>
EVERGREEN
Florida Municipal Bond Fund
Fund at a Glance as of August 31, 1999
Portfolio
Characteristics
---------------
Total Net Assets $613,469,422
Average Credit Quality* AA+
Effective Maturity* 14.0 years
Average Duration* 7.6 years
*unaudited based on 9/30/99 portfolio assets
Performance and Returns/3/
Portfolio Inception Date 5/11/88 Class A Class B Class C Class Y
Class Inception Date 5/11/88 6/30/95 1/26/98 6/30/95
Average Annual Returns*
1 year with sales charge -5.80% -6.58% -2.90% n/a
1 year w/o sales charge -1.07% -1.97% -1.97% -0.99%
3 years 3.86% 3.69% 5.03% 5.62%
5 years 5.01% 4.94% 5.73% 6.11%
10 years 6.59% 6.70% 6.95% 7.14%
Since Portfolio Inception 6.82% 6.92% 7.14% 7.31%
Maximum Sales Charge 4.75% 5.00% 1.00% n/a
Front End CDSC CDSC
30-day SEC Yield 4.84% 4.16% 4.16% 5.16%
Taxable Equivalent Yield** 8.01% 6.89% 6.89% 8.54%
12-month income dividends
per share $0.46 $0.37 $0.37 $0.47
12-month capital gain distributions
per share $0.23 $0.23 $0.23 $0.23
Lipper Ranking out of 63 Florida
Municipal Debt Funds1
(for the 1 year period ended 8/31/99) 21 42 42 18
* Adjusted for maximum applicable sales charge.
** Assumes maximum 39.6% federal tax rate. Results for investors subject to
lower tax rates would not be as advantageous.
1 Source: Lipper 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. For the 5-year
period ended 8/31/99, the Fund's Class A Shares ranked 9 out of 40 Florida
Municipal Dept funds tracked by Lipper Inc. For the 10-year period ended
8/31/99, the Fund's Class A Shares ranked 1 out of 4 Florida Municipal Debt
funds tracked by Lipper Inc.
CURRENT INVESTMENT STYLE/2/
[GRAPHIC]
Morningstar's Style Box is based on a portfolio date as of 8/31/99.
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.
/2/ Source: 1999 Morningstar, Inc.
/3/ Past performance is no guarantee of future results. The performance of each
class may vary based on differences in loads and fees paid by the shareholders
investing in each class. The investment return and principal value will
fluctuate so that an investor's shares, when redeemed, may be worth more or less
than original cost. The LBMBI is an unmanaged index. The index does not include
transaction costs associated with buying and selling securities nor any
management fees. The CPI is a commonly used measure of inflation and does not
represent an investment return. It is not possible to invest directly in an
index.
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.
LONG TERM GROWTH
[GRAPH]
Lehman Brothers Consumer Price Evergreen FL
Municipals Index - US Muni Bond A
8/31/89 10,000 10,000 9,525
8/31/90 10,643 10,562 9,922
8/31/91 11,898 10,963 11,226
8/31/92 13,197 11,308 12,548
8/31/93 14,840 11,621 14,111
8/31/94 14,861 11,958 14,116
8/31/95 16,179 12,271 15,310
8/31/96 17,026 12,622 16,098
8/31/97 18,600 12,905 17,556
8/31/98 20,208 13,114 19,129
8/31/99 20,319 13,419 18,924
Comparison of a $10,000 investment in Evergreen Florida Municipal Bond Fund,
Class A, versus a similar investment in the Lehman Brothers Municipal Bond Index
(LBMBI) and the Consumer Price Index (CPI).
4
<PAGE>
EVERGREEN
Florida Municipal Bond Fund
Portfolio
Management
-------------------
[PHOTO]
Richard K. Marrone
Tenure: January 1997
The Evergreen Florida Municipal Bond Fund (class A shares) posted a -1.07% total
return for the twelve month period ended August 31, 1999, unadjusted for any
sales charges. It was a difficult period for most fixed income investments as
rising interest rates pushed bond prices lower during the period. However, the
Fund's 12-month total return ranked in the top 32% of Florida municipal bond
funds tracked by Lipper Inc., an independent mutual fund rating company.
Adjustments made to the portfolio during the fiscal year focused on the Fund's
two primary objectives: strong yield and price stability. As a result, we sold
zero-coupon bonds, while trimming exposure to securities with higher volatility
and lower coupon structures. Conversely, we purchased municipal bonds with
higher yields, typically securities with intermediate-range maturities. Simply
put, these adjustments resulted in a portfolio with higher yield, more stable
net asset value and a slightly lower duration.
PORTFOLIO COMPOSITION
(unaudited based on 9/30/99 portfolio assets)
[PIE CHART]
Other -- 22.7%
Hospital -- 19.2%
Housing -- 15.5%
Escrow -- 11.1%
Water & Sewer -- 9.2%
Continuing Care Retirement Center -- 5.3%
Public Facility -- 5.0%
Education -- 4.9%
Electric Revenue -- 3.7%
Industrial Development -- 3.4%
PORTFOLIO QUALITY
(unaudited based on 9/30/99 portfolio assets)
[PIE CHART]
AAA -- 57.2%
BBB -- 17.4%
AA -- 14.6%
A -- 9.5%
Not Rates -- 1.3%
5
<PAGE>
EVERGREEN
Georgia Municipal Bond Fund
Fund at a Glance as of August 31, 1999
Portfolio
Characteristics
---------------
Total Net Assets $90,593,487
Average Credit Quality* AA
Effective Maturity* 12.2 years
Average Duration* 7.7 years
*unaudited based on 9/30/99 portfolio assets
PERFORMANCE AND RETURNS3
Portfolio Inception Date 7/2/93 Class A Class B Class Y
Class Inception Date 7/2/93 7/2/93 2/28/94
Average Annual Returns*
1 year with sales charge -5.26% -5.96% n/a
1 year w/o sales charge -0.50% -1.24% -0.25%
3 years 4.15% 4.17% 6.13%
5 years 5.26% 5.17% 6.55%
Since Portfolio Inception 3.90% 4.00% 4.96%
Maximum Sales Charge 4.75% 5.00% n/a
Front End CDSC
30-day SEC Yield 4.63% 4.03% 5.09%
Taxable Equivalent Yield** 7.67% 6.67% 8.43%
12-month income dividends
per share $0.49 $0.41 $0.51
12-month capital gain distributions
per share $0.04 $0.04 $0.04
Lipper Ranking out of 34 Georgia
Municipal Debt Funds1
(for the 1 year period ended 8/31/99) 5 18 2
* Adjusted for maximum applicable sales charge.
** Assumes maximum 39.6% federal tax rate. Results for investors subject to
lower tax rates would not be as advantageous.
1 Source: Lipper 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. For the 5-year
period ended 8/31/99, the Fund's Class A, B and Y Shares ranked 4, 12 and 2
respectively, out of 24 Georgia Municipal Debt funds tracked by Lipper Inc.
CURRENT INVESTMENT STYLE2
[GRAPHIC]
Morningstar's Style Box is based on a portfolio date as of 8/31/99.
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.
2 Source: 1999 Morningstar, Inc.
3 Past performance is no guarantee of future results. The performance of each
class may vary based on differences in loads and fees paid by the shareholders
investing in each class. The investment return and principal value will
fluctuate so that an investor's shares, when redeemed, may be worth more or less
than original cost. The LBMBI is an unmanaged index. The index does not include
transaction costs associated with buying and selling securities nor any
management fees. The CPI is a commonly used measure of inflation and does not
represent an investment return. It is not possible to invest directly in an
index.
Historical performance shown for Class Y prior to its inception is based on the
performance of Class A, one of the original classes offered along with Class B.
The historical returns for Class Y include the effect of the 0.25% 12b-1 fee
applicable to Class A. Class Y does not pay a 12b-1 fee. If these fees had not
been reflected, returns for Class Y would have been higher. Class B pays a 12b-1
fee of 1.00%.
LONG TERM GROWTH
[GRAPH]
Lehman Brothers Consumer Price Evergreen GA
Municipals Index - US Muni Bond A
7/31/93 10,000 10,000 9,524
8/31/93 10,208 10,028 9,689
8/31/94 10,223 10,319 9,325
8/31/95 11,129 10,589 10,033
8/31/96 11,712 10,891 10,657
8/31/97 12,794 11,136 11,588
8/31/98 13,901 11,316 12,709
8/31/99 13,977 11,579 12,645
Comparison of a $10,000 investment in Evergreen Georgia Municipal Bond Fund,
Class A, versus a similar investment in the Lehman Brothers Municipal Bond Index
(LBMBI) and the Consumer Price Index (CPI).
6
<PAGE>
EVERGREEN
Georgia Municipal Bond Fund
Portfolio
Management
----------------
[PHOTO]
Charles Jeanne
Tenure: November 1997
The Evergreen Georgia Municipal Bond Fund (Class A shares) posted a total return
of -0.50% for the twelve month period ended August 31, 1999, unadjusted for any
sales charges. This performance ranked 5 out of 34 Georgia municipal bond funds
tracked by Lipper Inc., an independent mutual fund rating company.
Adjustments made during the fiscal year supported our primary strategy of
bolstering the Fund's yield. Our income-oriented strategy is also designed to
potentially provide a greater degree of price and income stability going
forward. The portfolio's duration was strategically reduced during the twelve
months as we anticipated--correctly--that interest rates would rise. A shorter
duration--7.7 years from 8.3 years--was accomplished primarily by selling
longer, higher-duration bonds and replacing them with bonds that have a more
defensive structure, with higher coupons and shorter maturities. This duration
strategy fueled performance as interest rates rose and allowed us to outperform
over 95% of funds in our peer group.
PORTFOLIO COMPOSITION
(unaudited based on 9/30/99 portfolio assets)
[PIE CHART]
Hospital -- 18.1%
General Obligation-Local -- 17.2%
Industrial Development -- 15.8%
Other -- 12.3%
Water & Sewer -- 9.3%
Public Facility -- 7.6%
Electric Revenue -- 6.0%
Continuing Care Retirement Center -- 5.6%
Housing -- 4.4%
Airport -- 3.7%
PORTFOLIO QUALITY
(unaudited based on 9/30/99 portfolio assets)
[PIE CHART]
AAA -- 56.1%
BBB -- 18.8%
AA -- 11.7%
Not Rated -- 6.8%
A -- 6.6%
7
<PAGE>
EVERGREEN
Maryland Municipal Bond Fund
Fund at a Glance as of August 31, 1999
Portfolio
Characteristics
---------------
Total Net Assets $39,773,055
Average Credit Quality* AA
Effective Maturity* 13.2 years
Average Duration* 7.8 years
*unaudited based on 9/30/99 portfolio assets
- --------------------------------------------------------------------------------
CURRENT INVESTMENT STYLE/2/
- --------------------------------------------------------------------------------
[GRAPHIC]
Morningstar's Style Box is based on a portfolio date as of 8/31/99.
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.
/2/Source: 1999 Morningstar, Inc.
/3/Past performance is no guarantee of future results. The performance of each
class may vary based on differences in loads and fees paid by the shareholders
investing in each class. The investment return and principal value will
fluctuate so that an investor's shares, when redeemed, may be worth more or less
than original cost. The LBM10Y is an unmanaged index. The index does not include
transaction costs associated with buying and selling securities nor any
management fees. The CPI is a commonly used measure of inflation and does not
represent an investment return. It is not possible to invest directly in an
index.
Historical performance shown for Classes B and C prior to their inception is
based on the performance of Class Y, one of the original classes offered along
with Class A. These historical returns for Classes B and C 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%, and 1.00%, respectively. Class Y does not pay a
12b-1 fee. If these fees had been reflected, returns for Classes Band C would
have been lower.
- --------------------------------------------------------------------------------
Performance and Returns/3/
- --------------------------------------------------------------------------------
Portfolio Inception Date 10/30/90 Class A Class B Class C Class Y
Class Inception Date 10/30/90 3/27/98 12/23/98 10/30/90
Average Annual Returns*
1 year with sales charge -5.06% -5.78% -1.74% n/a
1 year w/o sales charge -0.29% -1.04% -0.79% -0.04%
3 years 2.67% 3.15% 4.27% 4.59%
5 years 3.38% 4.00% 4.46% 4.65%
Since Portfolio Inception 4.72% 5.31% 5.38% 5.49%
Maximum Sales Charge 4.75% 5.00% 1.00% n/a
Front End CDSC CDSC
30-day SEC Yield 4.34% 3.80% 3.82% 4.81%
Taxable Equivalent** 7.19% 6.29% 6.32% 7.96%
12-month dividends
per share $ 0.47 $ 0.39 $ 0.26 $ 0.50
12-month capital gain distributions
per share $ 0.09 $ 0.09 $ 0.09 $ 0.09
Lipper Ranking out of 37
Maryland Municipal Debt Funds/1/
(for the 1 year period
ended 8/31/99) 9 22 n/a 4
* Adjusted for maximum applicable sales charge.
** Assumes maximum 39.6% federal tax rate. Results for investors subject to
lower tax rates would not be as advantageous.
/1/ Source: Lipper 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. For the 5-year
period ended 8/31/99, the Fund's Class A and Y Shares ranked 24 and 20
respectively, out of 24 Maryland Municipal Debt funds tracked by Lipper
Inc.
- --------------------------------------------------------------------------------
LONG TERM GROWTH
- --------------------------------------------------------------------------------
[GRAPH]
Lehman Brothers Consumer Price Evergreen MD
Municipals Index - US Muni Bd A
10/31/90 10,000 10,000 9,524
8/31/91 10,974 10,232 10,026
8/31/92 12,171 10,554 10,914
8/31/93 13,687 10,846 12,224
8/31/94 13,707 11,161 12,134
8/31/95 14,922 11,453 13,012
8/31/96 15,703 11,781 13,247
8/31/97 17,155 12,045 14,167
8/31/98 18,638 12,240 15,172
8/31/99 18,740 12,524 15,128
Comparison of a $10,000 investment in Evergreen Maryland Municipal Bond Fund,
Class A, versus a similar investment in the Lehman Brothers Municipal 10-year
Bond Index (LBM10Y) and the Consumer Price Index (CPI).
8
<PAGE>
EVERGREEN
Maryland Municipal Bond Fund
[PHOTOGRAPH OF CHARLES JEANNE]
Portfolio
Management
------------
Charles Jeanne
Tenure: March 1998
For the twelve month period ended August 31, 1999, the Evergreen Maryland
Municipal Bond Fund (Class A shares) posted a -0.29% total return, unadjusted
for any sales charges. This performance ranked 9 out of 37 Maryland municipal
bond funds tracked by Lipper Inc., an independent mutual fund rating company.
Adjustments made during the fiscal year supported our primary strategy of
bolstering the Fund's yield. Our income-oriented strategy is also designed to
potentially provide a greater degree of price and income stability going
forward. The portfolio's duration was strategically reduced during the twelve
months as we anticipated-- correctly--that interest rates would rise. A shorter
duration was accomplished primarily by selling longer, higher-duration bonds and
replacing them with bonds that have a more defensive structure, with higher
coupons and shorter maturities. This duration strategy fueled performance as
interest rates rose and allowed us to outperform over 75% of funds in our peer
group.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
(unaudited based on 9/30/99 portfolio assets)
[PIE CHART]
. Other--19.5%
. General Obligation-Local--14.1%
. Housing--11.3%
. Water & Sewer--10.4%
. Education--9.4%
. Lease Revenue--9.0%
. Resource Recovery--7.7%
. Hospital--7.3%
. General Obligation-State--5.7%
. Industrial Development--5.6%
- --------------------------------------------------------------------------------
PORTFOLIO QUALITY
- --------------------------------------------------------------------------------
(unaudited based on 9/30/99 portfolio assets)
[PIE CHART]
. AAA--33.3%
. AA--28.0%
. A--20.1%
. BBB--11.1%
. Not Rated--7.5%
9
<PAGE>
EVERGREEN
North Carolina Municipal Bond Fund
Fund at a Glance as of August 31, 1999
Portfolio
Characteristics
---------------
Total Net Assets $311,507,560
Average Credit Quality* AA
Effective Maturity* 13.0 years
Average Duration* 7.6 years
*unaudited based on 9/30/99 portfolio assets
- --------------------------------------------------------------------------------
CURRENT INVESTMENT STYLE/2/
- --------------------------------------------------------------------------------
[GRAPHIC]
Morningstar's Style Box is based on a portfolio date as of 8/31/99.
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.
/2/Source: 1999 Morningstar, Inc.
/3/Past performance is no guarantee of future results. The performance of each
class may vary based on differences in loads and fees paid by the shareholders
investing in each class. The investment return and principal value will
fluctuate so that an investor's shares, when redeemed, may be worth more or less
than original cost. The LBMBI is an unmanaged index. The index does not include
transaction costs associated with buying and selling securities nor any
management fees. The CPI is a commonly used measure of inflation and does not
represent an investment return. It is not possible to invest directly in an
index.
Historical performance shown for Class Y prior to its inception is based on the
performance of Class A, one of the original classes offered along with Class B.
The historical returns for Class Y include the effect of the 0.25% 12b-1 fee
applicable to Class A. Class Y does not pay a 12b-1 fee. If these fees had not
been reflected, returns for Class Y would have been higher. Class B pays a 12b-1
fee of 1.00%.
- --------------------------------------------------------------------------------
Performance and Returns/3/
- --------------------------------------------------------------------------------
Portfolio Inception Date 1/11/93 Class A Class B Class Y
Class Inception Date 1/11/93 1/11/93 2/28/94
Average Annual Returns*
1 year with sales charge -5.62% -6.36% n/a
1 year w/o sales charge -0.92% -1.66% -0.68%
3 years 4.12% 4.13% 6.10%
5 years 5.31% 5.22% 6.60%
Since Portfolio Inception 4.62% 4.68% 5.61%
Maximum Sales Charge 4.75% 5.00% n/a
Front End CDSC
30-day SEC Yield 4.67% 4.15% 5.16%
Taxable Equivalent Yield** 7.73% 6.87% 8.54%
12-month dividends
per share $ 0.50 $ 0.42 $ 0.53
12-month capital gain distributions
per share $ 0.06 $ 0.06 $ 0.06
Lipper Ranking out of 40 North
Carolina Municipal Debt Funds/1/
(for the 1 year period ended 8/31/99) 10 21 7
* Adjusted for maximum applicable sales charge.
** Assumes maximum 39.6% federal tax rate. Results for investors subject to
lower tax rates would not be as advantageous.
/1/ Source: Lipper 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. For the 5-year
period ended 8/31/99, the Fund's Class A, B and Y Shares ranked 3, 1 and 11
respectively, out of 28 North Carolina Municipal Debt funds tracked by
Lipper Inc.
- --------------------------------------------------------------------------------
LONG TERM GROWTH
- --------------------------------------------------------------------------------
Lehman Brothers Consumer Price Evergreen NC
Municipals Index - US Muni Bond A
1/31/93 10,000 10,000 9,526
8/31/93 10,822 10,154 10,251
8/31/94 10,837 10,449 9,879
8/31/95 11,798 10,722 10,770
8/31/96 12,416 11,029 11,331
8/31/97 13,564 11,276 12,363
8/31/98 14,737 11,459 13,557
8/31/99 14,817 11,725 13,432
Comparison of a $10,000 investment in Evergreen North Carolina Municipal Bond
Fund, Class A, versus a similar investment in the Lehman Brothers Municipal Bond
Index (LBMBI) and the Consumer Price Index (CPI).
10
<PAGE>
EVERGREEN
North Carolina Municipal Bond Fund
Portfolio
Management
--------------
[PHOTOGRAPH OF RICHARD K. MARRONE]
Richard K. Marrone
Tenure: January 1993
For the twelve month period ended August 31, 1999, the Evergreen North Carolina
-------------------
Municipal Bond Fund (Class A shares) posted a -0.92% total return, unadjusted
for any sales charges. This performance ranked in the top 20% of North Carolina
municipal bond funds tracked by Lipper Inc., an independent mutual fund rating
---
company. Returns were due, in part, to our decision to reduce duration--from 8.8
years to 7.6 years--during a period in which rates rose.
Adjustments made to the portfolio during the fiscal year focused on the Fund's
two primary objectives: strong yield and price stability. As a result, we sold
all zero-coupon bonds, while trimming exposure to securities with higher
volatility and lower coupon structures. Conversely, we purchased municipal bonds
with higher yields, typically securities with intermediate-range maturities.
Simply put, these adjustments resulted in a portfolio with higher yield, more
stable net asset value and a slightly lower duration.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
(unaudited based on 9/30/99 portfolio assets)
[PIE CHART]
. Hospital--21.6%
. Electric--15.7%
. Other--14.3%
. General Obligation-Local--11.4%
. Housing--9.5%
. Industrial Development--6.9%
. Airlines--6.6%
. Continuing Care Retirement Center--5.8%
. Lease Revenue--4.2%
. Pre-refunded Bonds--4.0%
- --------------------------------------------------------------------------------
PORTFOLIO QUALITY
- --------------------------------------------------------------------------------
(unaudited based on 9/30/99 portfolio assets)
[PIE CHART]
. AAA--41.6%
. A--21.3%
. Not Rated--13.6%
. BBB--12.0%
. AA--11.6%
11
<PAGE>
EVERGREEN
South Carolina Municipal Bond Fund
Fund at a Glance as of August 31, 1999
Portfolio
Characteristics
---------------
Total Net Assets $69,030,798
Average Credit Quality* AA
Effective Maturity* 12.7 years
Average Duration* 7.9 years
*unaudited based on 9/30/99 portfolio assets
- --------------------------------------------------------------------------------
CURRENT INVESTMENT STYLE/2/
- --------------------------------------------------------------------------------
[GRAPHIC]
Morningstar's Style Box is based on a portfolio date as of 8/31/99.
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.
/2/Source: 1999 Morningstar, Inc.
/3/Past performance is no guarantee of future results. The performance of each
class may vary based on differences in loads and fees paid by the shareholders
investing in each class. The investment return and principal value will
fluctuate so that an investor's shares, when redeemed, may be worth more or less
than original cost. The LBMBI is an unmanaged index. The index does not include
transaction costs associated with buying and selling securities nor any
management fees. The CPI is a commonly used measure of inflation and does not
represent an investment return. It is not possible to invest directly in an
index.
Historical performance shown for Class Y prior to its inception is based on the
performance of Class A, one of the original classes offered along with Class B.
The historical returns for Class Y include the effect of the 0.25% 12b-1 fee
applicable to Class A. Class Y does not pay a 12b-1 fee. If these fees had not
been reflected, returns for Class Y would have been higher. Class B pays a 12b-1
fee of 1.00%.
- --------------------------------------------------------------------------------
Performance and Returns/3/
- --------------------------------------------------------------------------------
Portfolio Inception Date 1/3/94 Class A Class B Class Y
Class Inception Date 1/3/94 1/3/94 2/28/94
Average Annual Returns*
1 year with sales charge -5.28% -6.01% n/a
1 year w/o sales charge -0.56% -1.30% -0.31%
3 years 4.00% 3.99% 5.96%
5 years 5.78% 5.71% 7.08%
Since Portfolio Inception 4.01% 4.02% 5.17%
Maximum Sales Charge 4.75% 5.00% n/a
Front End CDSC
30-day SEC Yield 4.40% 3.46% 4.88%
Taxable Equivalent Yield** 7.28% 5.73% 8.08%
12-month income dividends
per share $0.46 $0.38 $0.48
12-month capital gain distributions
per share $0.10 $0.10 $0.10
Lipper Ranking out of 15 South Carolina
Municipal Debt Funds/1/
(for the 1 year period ended 8/31/99) 2 7 1
* Adjusted for maximum applicable sales charge.
** Assumes maximum 39.6% federal tax rate. Results for investors subject to
lower tax rates would not be as advantageous.
1 Source: Lipper 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.
For the 5-year period ended 8/31/99, the Fund's Class A, B and Y Shares
ranked 2, 4 and 1 respectively, out of 13 South Carolina Municipal Debt
funds tracked by Lipper Inc.
- --------------------------------------------------------------------------------
LONG TERM GROWTH
- --------------------------------------------------------------------------------
[GRAPH]
Lehman Brothers Consumer Price Evergreen SC
Municipals Index - US Muni Bond A
1/31/94 10,000 10,000 9,521
8/31/94 9,654 10,192 8,847
8/31/95 10,509 10,458 9,810
8/31/96 11,060 10,757 10,421
8/31/97 12,082 10,999 11,393
8/31/98 13,127 11,176 12,373
8/31/99 13,199 11,436 12,304
Comparison of a $10,000 investment in Evergreen South Carolina Municipal Bond
Fund, Class A, versus a similar investment in the Lehman Brothers Municipal Bond
Index (LBMBI) and the Consumer Price Index (CPI).
12
<PAGE>
EVERGREEN
South Carolina Municipal Bond Fund
Portfolio
Management
--------------
[PHOTO]
Charles Jeanne
Tenure: January 1997
The Evergreen South Carolina Municipal Bond Fund (Class A shares) posted a total
return of -0.56% for the twelve month period ended August 31, 1999, unadjusted
for any sales charges. This performance ranked 2 out of 15 South Carolina
municipal bond funds tracked by Lipper Inc., an independent mutual fund rating
company.
Adjustments made during the fiscal year supported our primary strategy of
bolstering the Fund's yield. Our income-oriented strategy is also designed to
provide a greater degree of price and income stability going forward. The
portfolio's duration was strategically reduced during the twelve months as we
anticipated--correctly--that interest rates would rise. A shorter duration--7.9
years from 8.6 years--was accomplished primarily by selling longer,
higher-duration bonds and replacing them with bonds that have a more defensive
structure, with higher coupons and shorter maturities. This duration strategy
fueled performance as interest rates rose and allowed us to outperform all but
one of the funds in our peer group.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
(unaudited based on 9/30/99 portfolio assets)
[PIE CHART]
Hospital--21.9%
Other--17.5%
General Obligation-Local--14.7%
Electric Revenue--14.4%
Industrial Development--6.4%
Resource Recovery--7.4%
Housing--7.3%
Water & Sewer--4.8%
Port Authority--2.8%
Sale Tax--2.8%
- --------------------------------------------------------------------------------
PORTFOLIO QUALITY
- --------------------------------------------------------------------------------
(unaudited based on 9/30/99 portfolio assets)
[PIE CHART]
AAA--55.0%
AA--20.1%
A--10.8%
BBB--7.6%
Not Rated--6.5%
13
<PAGE>
EVERGREEN
Virginia Municipal Bond Fund
Fund at a Glance as of August 31, 1999
Portfolio
Characteristics
---------------
Total Net Assets $181,464,714
Average Credit Quality* AA
Effective Maturity* 12.8 years
Average Duration* 7.7 years
*unaudited based on 9/30/99 portfolio assets
- --------------------------------------------------------------------------------
CURRENT INVESTMENT STYLE/2/
- --------------------------------------------------------------------------------
[GRAPHIC]
Morningstar's Style Box is based on a portfolio date as of 8/31/99.
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.
/2/Source: 1999 Morningstar, Inc.
/3/Past performance is no guarantee of future results. The performance of each
class may vary based on differences in loads and fees paid by the shareholders
investing in each class. The investment return and principal value will
fluctuate so that an investor's shares, when redeemed, may be worth more or less
than original cost. The LBMBI is an unmanaged index. This index does not include
transaction costs associated with buying and selling securities nor any
management fees. The CPI is a commonly used measure of inflation and does not
represent an investment return. It is not possible to invest directly in an
index.
Historical performance shown for Class Y prior to its inception is based on the
performance of Class A, one of the original classes offered along with Class B.
The historical returns for Class Y include the effect of the 0.25% 12b-1 fee
applicable to Class A. Class Y does not pay a 12b-1 fee. If these fees had not
been reflected, returns for Class Y would have been higher. Class B pays a 12b-1
fee of 1.00%.
- --------------------------------------------------------------------------------
PERFORMANCE AND RETURNS/3/
- --------------------------------------------------------------------------------
Portfolio Inception Date 7/2/93 Class A Class B Class Y
Class Inception Date 7/2/93 7/2/93 2/28/94
Average Annual Returns*
1 year with sales charge -4.51% -5.26% n/a
1 year w/o sales charge 0.23% -0.52% 0.48%
3 years 4.35% 4.35% 6.31%
5 years 5.49% 5.40% 6.78%
Since Portfolio Inception 4.11% 4.22% 5.18%
Maximum Sales Charge 4.75% 5.00% n/a
FrontEnd CDSC
30-day SEC Yield 4.64% 4.11% 5.12%
Taxable Equivalent Yield** 7.68% 6.80% 8.48%
12-month income dividends per share $0.49 $0.41 $0.51
12-month capital gains distributions
per share $0.08 $0.08 $0.08
Lipper Ranking out of 35 Virginia
Municipal Debt Funds1
(for the 1 year period ended 8/31/99) 2 8 1
* Adjusted for maximum applicable sales charge.
** Assumes maximum 39.6% federal tax rate. Results for investors subject to
lower tax rates would not be as advantageous.
1 Source: Lipper 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.
For the 5-year period ended 8/31/99, the Fund's Class A, B and Y Shares
ranked 5, 14 and 4 respectively, out of 26 Virginia Municipal Debt funds
tracked by Lipper Inc.
- --------------------------------------------------------------------------------
LONG TERM GROWTH
- --------------------------------------------------------------------------------
[GRAPH]
Lehman Brothers Consumer Price Evergreen VA
Municipals Index - US Muni Bond A
---------- ---------- -----------
7/31/93 10,000 10,000 9,524
8/31/93 10,208 10,028 9,662
8/31/94 10,223 10,319 9,342
8/31/95 11,129 10,589 10,214
8/31/96 11,712 10,891 10,737
8/31/97 12,794 11,136 11,708
8/31/98 13,901 11,316 12,775
8/31/99 13,977 11,579 12,805
Comparison of a $10,000 investment in Evergreen Virginia Municipal Bond Fund,
Class A, versus a similar investment in the Lehman Brothers Municipal Bond Index
(LBMBI) and the Consumer Price Index (CPI).
14
<PAGE>
EVERGREEN
South Carolina Municipal Bond Fund
Portfolio
Management
--------------
[PHOTO]
Charles Jeanne
Tenure: July 1993
For the twelve month period ended August 31, 1999, the Evergreen Virginia
-------------------
Municipal Bond Fund (Class A shares) posted a 0.23% total return, unadjusted for
any sales charges. This performance ranked 2 out of 35 Virginia municipal bond
funds tracked by Lipper Inc., an independent mutual fund rating company.
---
Adjustments made during the fiscal year supported our primary strategy of
bolstering the Fund's yield. Our income-oriented strategy is also designed to
provide a greater degree of price and income stability going forward. The
portfolio's duration was strategically reduced during the twelve months as we
anticipated correctly -- that interest rates would rise. A shorter duration --
7.7 years from 8.3 years was accomplished primarily by selling longer, higher-
duration bonds and replacing them with bonds that have a more defensive
structure, with higher coupons and shorter maturities. This duration strategy
fueled performance as interest rates rose and allowed us to outperform all but
one of the funds in our peer group.
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
(unaudited based on 9/30/99 portfolio assets)
[PIE CHART]
Other--20.1%
General Obligation-Local--16.1%
Housing--14.0%
Public Facility--11.8%
Hospital--8.8%
Transportation--7.3%
Education--7.0%
Water & Sewer--5.8%
Industrial Development--5.2%
Lease Revenue--3.9%
- --------------------------------------------------------------------------------
PORTFOLIO QUALITY
- --------------------------------------------------------------------------------
(unaudited based on 9/30/99 portfolio assets)
[PIE CHART]
AA--39.4%
AAA--33.7%
BBB--9.6%
Not Rated--9.0%
A--8.3%
15
<PAGE>
EVERGREEN
Florida High Income Municipal Bond Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended August 31,
------------------------------------------------ Year Ended
1999 1998 1997 1996 1995 (a) April 30, 1995
<S> <C> <C> <C> <C> <C> <C>
CLASS A SHARES
Net asset value,
beginning of period $ 11.26 $ 10.89 $ 10.42 $ 10.40 $ 10.16 $ 10.08
-------- -------- -------- ------- ------- -------
Income from investment
operations
Net investment income 0.57 0.58 0.62 0.63 0.21 0.65
Net realized and
unrealized gains or
losses on securities (0.58) 0.37 0.47 0.02 0.24 0.08
-------- -------- -------- ------- ------- -------
Total from investment
operations (0.01) 0.95 1.09 0.65 0.45 0.73
-------- -------- -------- ------- ------- -------
Less distributions to
shareholders from
Net investment income (0.57) (0.58) (0.62) (0.63) (0.21) (0.65)
Net realized gains 0++ 0 0 0 0 0
-------- -------- -------- ------- ------- -------
Total distributions to
shareholders (0.57) (0.58) (0.62) (0.63) (0.21) (0.65)
-------- -------- -------- ------- ------- -------
Net asset value, end of
period $ 10.68 $ 11.26 $ 10.89 $ 10.42 $ 10.40 $ 10.16
-------- -------- -------- ------- ------- -------
Total return* (0.16%) 8.94% 10.77% 6.42% 4.43% 7.56%
Ratios and supplemental
data
Net assets, end of
period (thousands) $269,616 $279,079 $119,942 $76,267 $59,551 $65,043
Ratios to average net
assets
Expenses# 0.86% 0.89% 0.88% 0.85% 1.07%+ 0.60%
Net investment income 5.10% 5.15% 5.86% 6.02% 5.92%+ 6.52%
Portfolio turnover rate 29% 70% 32% 42% 14% 28%
</TABLE>
<TABLE>
<CAPTION>
Year Ended August 31,
-----------------------------------------------
1999 1998 1997 1996 1995 (b)
<S> <C> <C> <C> <C> <C>
CLASS B SHARES
Net asset value, beginning
of period $ 11.26 $ 10.89 $ 10.42 $ 10.40 $10.41
-------- -------- ------- ------- ------
Income from investment
operations
Net investment income 0.48 0.50 0.54 0.55 0.08
Net realized and unrealized
gains or losses on
securities (0.58) 0.37 0.47 0.02 (0.01)
-------- -------- ------- ------- ------
Total from investment
operations (0.10) 0.87 1.01 0.57 0.07
-------- -------- ------- ------- ------
Less distributions to
shareholders from
Net investment income (0.48) (0.50) (0.54) (0.55) (0.08)
Net realized gains 0++ 0 0 0 0
-------- -------- ------- ------- ------
Total distributions to
shareholders (0.48) (0.50) (0.54) (0.55) (0.08)
-------- -------- ------- ------- ------
Net asset value, end of
period $ 10.68 $ 11.26 $ 10.89 $ 10.42 $10.40
-------- -------- ------- ------- ------
Total return* (0.91%) 8.13% 9.95% 5.63% 0.64%
Ratios and supplemental data
Net assets, end of period
(thousands) $130,259 $103,309 $63,475 $19,219 $3,137
Ratios to average net assets
Expenses# 1.61% 1.64% 1.63% 1.59% 1.09%+
Net investment income 4.34% 4.46% 5.09% 5.27% 3.40%+
Portfolio turnover rate 29% 70% 32% 42% 14%
</TABLE>
(a) For the four months ended August 31, 1995. The Fund changed its fiscal year
end from April 30 to August 31, effective August 31, 1995.
(b) For the period from July 10, 1995 (commencement of class operations) to
August 31, 1995
* Excluding applicable sales charges.
+ Annualized.
++ Represents an amount less than $0.01 per share.
# The ratio of expenses to average net assets excludes fee credits and
includes fee waivers.
See Combined Notes to Financial Statements.
16
<PAGE>
EVERGREEN
Florida High Income Municipal Bond Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended August 31,
-------------------------
1999 1998 (a)
<S> <C> <C>
CLASS C SHARES
Net asset value, beginning of period $ 11.26 $ 11.11
---------- ----------
Income from investment operations
Net investment income 0.48 0.24
Net realized and unrealized gains or losses on
securities (0.58) 0.15
---------- ----------
Total from investment operations (0.10) 0.39
---------- ----------
Less distributions to shareholders from
Net investment income (0.48) (0.24)
Net realized gains 0++ 0
---------- ----------
Total distributions to shareholders (0.48) (0.24)
---------- ----------
Net asset value, end of period $ 10.68 $ 11.26
---------- ----------
Total return* (0.91%) 3.50%
Ratios and supplemental data
Net assets, end of period (thousands) $ 6,749 $ 1,098
Ratios to average net assets
Expenses# 1.61% 1.65%+
Net investment income 4.31% 4.21%+
Portfolio turnover rate 29% 70%
</TABLE>
<TABLE>
<CAPTION>
Year Ended August 31,
-----------------------------------
1999 1998 1997 1996 (b)
<S> <C> <C> <C> <C>
CLASS Y SHARES
Net asset value, beginning of period $ 11.26 $ 10.89 $10.42 $10.48
------- ------- ------ ------
Income from investment operations
Net investment income 0.60 0.61 0.65 0.63
Net realized and unrealized gains or
losses on securities (0.58) 0.37 0.47 (0.06)
------- ------- ------ ------
Total from investment operations 0.02 0.98 1.12 0.57
------- ------- ------ ------
Less distributions to shareholders from
Net investment income (0.60) (0.61) (0.65) (0.63)
Net realized gains 0++ 0 0 0
------- ------- ------ ------
Total distributions to shareholders (0.60) (0.61) (0.65) (0.63)
------- ------- ------ ------
Net asset value, end of period $ 10.68 $ 11.26 $10.89 $10.42
------- ------- ------ ------
Total return 0.09% 9.22% 11.04% 5.54%
Ratios and supplemental data
Net assets, end of period (thousands) $53,624 $29,152 $6,326 $1,970
Ratios to average net assets
Expenses# 0.62% 0.65% 0.63% 0.59%+
Net investment income 5.38% 5.47% 6.08% 6.27%+
Portfolio turnover rate 29% 70% 32% 42%
</TABLE>
(a) For the period from March 6, 1998 (commencement of class operations) to
August 31, 1998.
(b) For the period from September 20, 1995 (commencement of class operations)
to August 31, 1996.
* Excluding applicable sales charges.
+ Annualized.
++ Represents an amount less than $0.01 per share.
# The ratio of expenses to average net assets excludes fee credits and
includes fee waivers.
See Combined Notes to Financial Statements.
17
<PAGE>
EVERGREEN
Florida Municipal Bond Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended August 31,
----------------------------------------------------- Year Ended
1999 1998 1997 1996 1995 (a) (b) April 30, 1995 (a)
<S> <C> <C> <C> <C> <C> <C>
CLASS A SHARES
Net asset value,
beginning of period $ 10.15 $ 9.98 $ 9.70 $ 9.74 $ 9.61 $ 9.52
-------- -------- -------- -------- -------- --------
Income from investment
operations
Net investment income 0.46 0.48 0.51 0.54 0.19 0.54
Net realized and
unrealized gains or
losses on securities (0.56) 0.38 0.35 (0.04) 0.22 0.11
-------- -------- -------- -------- -------- --------
Total from investment
operations (0.10) 0.86 0.86 0.50 0.41 0.65
-------- -------- -------- -------- -------- --------
Less distributions to
shareholders from
Net investment income (0.46) (0.48) (0.52) (0.54) (0.22) (0.54)
Net realized gains (0.23) (0.21) (0.06) 0 (0.06) (0.02)
-------- -------- -------- -------- -------- --------
Total distributions to
shareholders (0.69) (0.69) (0.58) (0.54) (0.28) (0.56)
-------- -------- -------- -------- -------- --------
Net asset value, end of
period $ 9.36 $ 10.15 $ 9.98 $ 9.70 $ 9.74 $ 9.61
-------- -------- -------- -------- -------- --------
Total return* (1.07%) 8.96% 9.06% 5.15% 4.20% 7.05%
Ratios and supplemental
data
Net assets, end of
period (thousands) $137,101 $164,255 $105,673 $115,723 $136,449 $168,542
Ratios to average net
assets
Expenses# 0.34% 0.46% 0.74% 0.63% 0.82%+ 0.61%
Net investment income 4.71% 4.79% 5.22% 5.46% 4.89%+ 5.73%
Portfolio turnover rate 57% 64% 41% 30% 29% 53%
</TABLE>
<TABLE>
<CAPTION>
Year Ended August 31,
---------------------------------------------
1999 1998 1997 1996 1995 (c)
<S> <C> <C> <C> <C> <C>
CLASS B SHARES
Net asset value, beginning of
period $ 10.15 $ 9.98 $ 9.70 $ 9.74 $ 9.67
------- ------- ------- ------- -------
Income from investment
operations
Net investment income 0.37 0.38 0.42 0.44 0.07
Net realized and unrealized
gains or losses on securities (0.56) 0.39 0.35 (0.04) 0.10
------- ------- ------- ------- -------
Total from investment
operations (0.19) 0.77 0.77 0.40 0.17
------- ------- ------- ------- -------
Less distributions to
shareholders from
Net investment income (0.37) (0.39) (0.43) (0.44) (0.07)
Net realized gains (0.23) (0.21) (0.06) 0 (0.03)
------- ------- ------- ------- -------
Total distributions to
shareholders (0.60) (0.60) (0.49) (0.44) (0.10)
------- ------- ------- ------- -------
Net asset value, end of period $ 9.36 $ 10.15 $ 9.98 $ 9.70 $ 9.74
------- ------- ------- ------- -------
Total return* (1.97%) 7.97% 8.06% 4.17% 1.49%
Ratios and supplemental data
Net assets, end of period
(thousands) $59,783 $66,142 $31,281 $28,849 $27,351
Ratios to average net assets
Expenses# 1.26% 1.36% 1.66% 1.56% 1.44%+
Net investment income 3.79% 3.88% 4.29% 4.52% 3.22%+
Portfolio turnover rate 57% 64% 41% 30% 29%
</TABLE>
(a) On June 30, 1995, ABT Florida Tax-Free Fund sold substantially all of its
net assets to Evergreen Florida Municipal Bond Fund. As ABT Florida Tax-
Free Fund is the accounting survivor, its basis of accounting for assets
and liabilities and its operating results for periods prior to June 30,
1995 have been carried forward in these financial highlights.
(b) For the four months ended August 31, 1995. The Fund changed its fiscal year
end from April 30 to August 31, effective August 31, 1995.
(c) For the period from June 30, 1995 (commencement of class operations) to
August 31, 1995.
* 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
Florida Municipal Bond Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended August 31,
-------------------------
1999 1998 (a)
<S> <C> <C>
CLASS C SHARES
Net asset value, beginning of period $ 10.15 $ 10.06
---------- ----------
Income from investment operations
Net investment income 0.37 0.23
Net realized and unrealized gains or losses on
securities (0.56) 0.09
---------- ----------
Total from investment operations (0.19) 0.32
---------- ----------
Less distributions to shareholders from
Net investment income (0.37) 0
Net realized gains (0.23) (0.23)
---------- ----------
Total distributions to shareholders (0.60) (0.23)
---------- ----------
Net asset value, end of period $ 9.36 $ 10.15
---------- ----------
Total return* (1.97%) 3.25%
Ratios and supplemental data
Net assets, end of period (thousands) $ 9,111 $ 8,963
Ratios to average net assets
Expenses# 1.26% 1.29%+
Net investment income 3.79% 3.86%+
Portfolio turnover rate 57% 64%
</TABLE>
<TABLE>
<CAPTION>
Year Ended August 31,
-----------------------------------------------
1999 1998 1997 1996 1995 (b)
<S> <C> <C> <C> <C> <C>
CLASS Y SHARES
Net asset value, beginning
of period $ 10.15 $ 9.98 $ 9.70 $ 9.74 $ 9.67
-------- -------- ------- ------- ------
Income from investment
operations
Net investment income 0.47 0.48 0.52 0.53 0.09
Net realized and unrealized
gains or losses on
securities (0.56) 0.39 0.35 (0.03) 0.10
-------- -------- ------- ------- ------
Total from investment
operations (0.09) 0.87 0.87 0.50 0.19
-------- -------- ------- ------- ------
Less distributions to
shareholders from
Net investment income (0.47) (0.49) (0.53) (0.54) (0.09)
Net realized gains (0.23) (0.21) (0.06) 0 (0.03)
-------- -------- ------- ------- ------
Total distributions to
shareholders (0.70) (0.70) (0.59) (0.54) (0.12)
-------- -------- ------- ------- ------
Net asset value, end of
period $ 9.36 $ 10.15 $ 9.98 $ 9.70 $ 9.74
-------- -------- ------- ------- ------
Total return (0.99%) 9.05% 9.14% 5.22% 1.67%
Ratios and supplemental data
Net assets, end of period
(thousands) $407,474 $418,847 $24,850 $12,259 $3,602
Ratios to average net assets
Expenses# 0.26% 0.33% 0.67% 0.57% 0.59%+
Net investment income 4.79% 4.85% 5.27% 5.55% 4.93%+
Portfolio turnover rate 57% 64% 41% 30% 29%
</TABLE>
(a) For the period from January 26, 1998 (commencement of class operations) to
August 31, 1998.
(b) For the period from June 30, 1995 (commencement of class operations) to
August 31, 1995.
* 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.
19
<PAGE>
EVERGREEN
Georgia Municipal Bond Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended August 31,
----------------------------------------- Year Ended
1999 1998 1997 1996 1995 (a) December 31, 1994
<S> <C> <C> <C> <C> <C> <C>
CLASS A SHARES
Net asset value,
beginning of period $10.35 $ 9.90 $ 9.57 $ 9.47 $ 8.74 $10.19
------ ------ ------ ------ ------ ------
Income from investment
operations
Net investment income 0.49 0.49 0.49 0.48 0.33 0.48
Net realized and
unrealized gains or
losses on securities (0.53) 0.45 0.33 0.10 0.73 (1.45)
------ ------ ------ ------ ------ ------
Total from investment
operations (0.04) 0.94 0.82 0.58 1.06 (0.97)
------ ------ ------ ------ ------ ------
Less distributions to
shareholders from
Net investment income (0.49) (0.49) (0.49) (0.48) (0.33) (0.48)
Net realized gains (0.04) 0 0 0 0 0
------ ------ ------ ------ ------ ------
Total distributions to
shareholders (0.53) (0.49) (0.49) (0.48) (0.33) (0.48)
------ ------ ------ ------ ------ ------
Net asset value, end of
period $ 9.78 $10.35 $ 9.90 $ 9.57 $ 9.47 $ 8.74
------ ------ ------ ------ ------ ------
Total return* (0.50%) 9.67% 8.73% 6.22% 12.28% (9.64%)
Ratios and supplemental
data
Net assets, end of
period (thousands) $4,358 $3,932 $2,201 $1,954 $2,098 $1,387
Ratios to average net
assets
Expenses# 0.51% 0.57% 0.94% 0.88% 0.71%+ 0.53%
Net investment income 4.76% 4.81% 5.00% 4.96% 5.39%+ 5.26%
Portfolio turnover rate 34% 50% 32% 21% 91% 147%
</TABLE>
<TABLE>
<CAPTION>
Year Ended August 31,
-------------------------------------------- Year Ended
1999 1998 1997 1996 1995 (a) December 31, 1994
<S> <C> <C> <C> <C> <C> <C>
CLASS B SHARES
Net asset value,
beginning of period $ 10.35 $ 9.90 $ 9.57 $ 9.47 $ 8.74 $ 10.19
------- ------- ------- ------ ------ -------
Income from investment
operations
Net investment income 0.41 0.41 0.41 0.41 0.28 0.43
Net realized and
unrealized gains or
losses on securities (0.53) 0.45 0.33 0.10 0.73 (1.45)
------- ------- ------- ------ ------ -------
Total from investment
operations (0.12) 0.86 0.74 0.51 1.01 (1.02)
------- ------- ------- ------ ------ -------
Less distributions to
shareholders from
Net investment income (0.41) (0.41) (0.41) (0.41) (0.28) (0.43)
Net realized gains (0.04) 0 0 0 0 0
------- ------- ------- ------ ------ -------
Total distributions to
shareholders (0.45) (0.41) (0.41) (0.41) (0.28) (0.43)
------- ------- ------- ------ ------ -------
Net asset value, end of
period $ 9.78 $ 10.35 $ 9.90 $ 9.57 $ 9.47 $ 8.74
------- ------- ------- ------ ------ -------
Total return* (1.24%) 8.86% 7.93% 5.44% 11.72% (10.15%)
Ratios and supplemental
data
Net assets, end of
period (thousands) $14,244 $12,559 $10,870 $9,271 $7,538 $ 6,912
Ratios to average net
assets
Expenses# 1.26% 1.34% 1.69% 1.63% 1.46%+ 1.13%
Net investment income 4.01% 4.06% 4.25% 4.21% 4.64%+ 4.66%
Portfolio turnover rate 34% 50% 32% 21% 91% 147%
</TABLE>
(a) For the eight months ended August 31, 1995. The Fund changed its fiscal
year end from December 31 to August 31, effective August 31, 1995.
* 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.
20
<PAGE>
EVERGREEN
Georgia Municipal Bond Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended August 31,
------------------------------------------- Period Ended
1999 1998 1997 1996 1995(a) December 31, 1994(b)
<S> <C> <C> <C> <C> <C> <C>
CLASS Y SHARES
Net asset value,
beginning of period $ 10.35 $ 9.90 $ 9.57 $ 9.47 $ 8.74 $ 9.83
------- ------- ------ ------ ------ ------
Income from investment
operations
Net investment income 0.51 0.51 0.51 0.50 0.35 0.42
Net realized and
unrealized gains or
losses on securities (0.53) 0.45 0.33 0.10 0.73 (1.09)
------- ------- ------ ------ ------ ------
Total from investment
operations (0.02) 0.96 0.84 0.60 1.08 (0.67)
------- ------- ------ ------ ------ ------
Less distributions to
shareholders from
Net investment income (0.51) (0.51) (0.51) (0.50) (0.35) (0.42)
Net realized gains (0.04) 0 0 0 0 0
------- ------- ------ ------ ------ ------
Total distributions to
shareholders (0.55) (0.51) (0.51) (0.50) (0.35) (0.42)
------- ------- ------ ------ ------ ------
Net asset value, end of
period $ 9.78 $ 10.35 $ 9.90 $ 9.57 $ 9.47 $ 8.74
------- ------- ------ ------ ------ ------
Total return (0.25%) 9.94% 9.00% 6.48% 12.47% (6.86%)
Ratios and supplemental
data
Net assets, end of
period (thousands) $71,992 $67,630 $1,180 $1,620 $1,339 $ 284
Ratios to average net
assets
Expenses# 0.26% 0.24% 0.69% 0.63% 0.46%+ 0.31%+
Net investment income 5.02% 5.09% 5.25% 5.21% 5.64%+ 5.68%+
Portfolio turnover rate 34% 50% 32% 21% 91% 147%
</TABLE>
(a) For the eight months ended August 31, 1995. The Fund changed its fiscal
year end from December 31 to August 31, effective August 31, 1995.
(b) For the period from February 28, 1994, (commencement of class operations)
to December 31, 1994.
+ Annualized.
# The ratio of expenses to average net assets excludes fee credits and
includes fee waivers.
See Combined Notes to Financial Statements.
21
<PAGE>
EVERGREEN
Maryland Municipal Bond Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended August 31, Year Ended September 30,
--------------------------- --------------------------------------
1999 1998(a)(b) 1997(a) 1996(a) 1995(a) 1994(a)
<S> <C> <C> <C> <C> <C> <C>
CLASS A SHARES
Net asset value,
beginning of period $ 11.16 $ 10.91 $ 10.56 $ 10.69 $ 10.17 $ 11.24
---------- ---------- ------- ------- ------- -------
Income from investment
operations
Net investment income 0.47 0.36 0.37 0.38 0.40 0.45
Net realized and
unrealized gains or
losses on securities (0.49) 0.25 0.35 (0.13) 0.54 (0.97)
---------- ---------- ------- ------- ------- -------
Total from investment
operations (0.02) 0.61 0.72 0.25 0.94 (0.52)
---------- ---------- ------- ------- ------- -------
Less distributions to
shareholders from
Net investment income (0.47) (0.36) (0.37) (0.38) (0.40) (0.45)
Net realized gains (0.09) 0 0 0 (0.02) (0.10)
---------- ---------- ------- ------- ------- -------
Total distributions to
shareholders (0.56) (0.36) (0.37) (0.38) (0.42) (0.55)
---------- ---------- ------- ------- ------- -------
Net asset value, end of
period $ 10.58 $ 11.16 $ 10.91 $ 10.56 $ 10.69 $ 10.17
---------- ---------- ------- ------- ------- -------
Total return* (0.29%) 5.70% 6.92% 2.36% 9.81% (4.74%)
Ratios and supplemental
data
Net assets, end of
period (thousands) $23,114 $24,754 $27,786 $31,284 $32,172 $34,580
Ratios to average net
assets
Expenses# 0.79% 1.52%+ 1.69% 1.43% 1.24% 1.17%
Net investment income 4.27% 3.56%+ 3.45% 3.57% 4.24% 4.22%
Portfolio turnover rate 40% 37% 13% 138% 21% 27%
</TABLE>
<TABLE>
<CAPTION>
Year Ended August 31,
-------------------------
1999 1998(c)
<S> <C> <C>
CLASS B SHARES
Net asset value, beginning of period $ 11.16 $ 10.99
---------- ----------
Income from investment operations
Net investment income 0.39 0.16
Net realized and unrealized gains or losses on
securities (0.49) 0.17
---------- ----------
Total from investment operations (0.10) 0.33
---------- ----------
Less distributions to shareholders from
Net investment income (0.39) (0.16)
Net realized gains (0.09) 0
---------- ----------
Total distributions to shareholders (0.48) (0.16)
---------- ----------
Net asset value, end of period $ 10.58 $ 11.16
---------- ----------
Total return* (1.04%) 2.99%
Ratios and supplemental data
Net assets, end of period (thousands) $ 3,440 $ 990
Ratios to average net assets
Expenses# 1.55% 1.49%+
Net investment income 3.49% 3.41%+
Portfolio turnover rate 40% 37%
</TABLE>
(a) On February 28, 1998, Virtus Maryland Municipal Bond Fund sold substan-
tially all of its net assets to Evergreen Maryland Municipal Bond Fund. As
Virtus Maryland Municipal Bond Fund is the accounting survivor, its basis
of accounting for assets and liabilities and its operating results for the
periods prior to February 28, 1998 have been carried forward in these fi-
nancial highlights.
(b) For the eleven months ended August 31, 1998. The Fund changed its fiscal
year end from September 30 to August 31, effective August 31, 1998.
(c) For the period from March 27, 1998 (commencement of class operations) to
August 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.
22
<PAGE>
EVERGREEN
Maryland Municipal Bond Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Period Ended
August 31, 1999 (c)
<S> <C>
CLASS C SHARES
Net asset value, beginning of period $11.11
------
Income from investment operations
Net investment income 0.26
Net realized and unrealized gains or losses on securities (0.53)
------
Total from investment operations (0.27)
------
Less distributions to shareholders from
Net investment income (0.26)
Net realized gains 0
------
Total distributions to shareholders (0.26)
------
Net asset value, end of period $10.58
------
Total return* (2.48%)
Ratios and supplemental data
Net assets, end of period (thousands) $ 30
Ratios to average net assets
Expenses# 1.55%+
Net investment income 3.51%+
Portfolio turnover rate 40%
</TABLE>
<TABLE>
<CAPTION>
Year Ended August 31, Year Ended September 30,
---------------------------- -----------------------------------
1999 1998 (a) (b) 1997 (a) 1996 (a) 1995 (a) 1994 (a)
<S> <C> <C> <C> <C> <C> <C>
CLASS Y SHARES
Net asset value,
beginning of period $ 11.16 $ 10.91 $10.56 $10.69 $10.17 $ 11.24
----------- ---------- ------ ------ ------ -------
Income from investment
operations
Net investment income 0.50 0.39 0.40 0.41 0.42 0.48
Net realized and
unrealized gains or
losses on securities (0.49) 0.25 0.35 (0.13) 0.54 (0.97)
----------- ---------- ------ ------ ------ -------
Total from investment
operations 0.01 0.64 0.75 0.28 0.96 (0.49)
----------- ---------- ------ ------ ------ -------
Less distributions to
shareholders from
Net investment income (0.50) (0.39) (0.40) (0.41) (0.42) (0.48)
Net realized gains (0.09) 0 0 0 (0.02) (0.10)
----------- ---------- ------ ------ ------ -------
Total distributions to
shareholders (0.59) (0.39) (0.40) (0.41) (0.44) (0.58)
----------- ---------- ------ ------ ------ -------
Net asset value, end of
period $ 10.58 $ 11.16 $10.91 $10.56 $10.69 $ 10.17
----------- ---------- ------ ------ ------ -------
Total return (0.04%) 5.94% 7.19% 2.61% 10.09% (4.50%)
Ratios and supplemental
data
Net assets, end of
period (thousands) $ 13,190 $ 5,229 $5,683 $8,889 $9,447 $11,301
Ratios to average net
assets
Expenses# 0.55% 1.25%+ 1.44% 1.18% 0.99% 0.92%
Net investment income 4.55% 3.83%+ 3.70% 3.82% 4.49% 4.46%
Portfolio turnover rate 40% 37% 13% 138% 21% 27%
</TABLE>
(a) On February 28, 1998, Virtus Maryland Municipal Bond Fund sold substan-
tially all of its net assets to Evergreen Maryland Municipal Bond Fund. As
Virtus Maryland Municipal Bond Fund is the accounting survivor, its basis
of accounting for assets and liabilities and its operating results for the
periods prior to February 28, 1998 have been carried forward in these fi-
nancial highlights.
(b) For the eleven months ended August 31, 1998. The Fund changed its fiscal
year end from September 30 to August 31, effective August 31, 1998.
(c) For the period from December 23, 1998 (commencement of class operations) to
August 31, 1999.
* 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.
23
<PAGE>
EVERGREEN
North Carolina Municipal Bond Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended August 31,
------------------------------------------- Year Ended
1999 1998 1997 1996 1995 (a) December 31, 1994
<S> <C> <C> <C> <C> <C> <C>
CLASS A SHARES
Net asset value,
beginning of period $ 10.84 $ 10.37 $ 9.98 $ 9.95 $ 9.16 $10.61
------- ------- ------ ------ ------ ------
Income from investment
operations
Net investment income 0.50 0.51 0.49 0.49 0.33 0.49
Net realized and
unrealized gains or
losses on securities (0.59) 0.47 0.40 0.02 0.79 (1.45)
------- ------- ------ ------ ------ ------
Total from investment
operations (0.09) 0.98 0.89 0.51 1.12 (0.96)
------- ------- ------ ------ ------ ------
Less distributions to
shareholders from
Net investment income (0.50) (0.51) (0.50) (0.48) (0.33) (0.49)
Net realized gains (0.06) 0 0 0 0 0
------- ------- ------ ------ ------ ------
Total distributions to
shareholders (0.56) (0.51) (0.50) (0.48) (0.33) (0.49)
------- ------- ------ ------ ------ ------
Net asset value, end of
period $ 10.19 $ 10.84 $10.37 $ 9.98 $ 9.95 $ 9.16
------- ------- ------ ------ ------ ------
Total return* (0.92%) 9.66% 9.11% 5.21% 12.34% (9.12%)
Ratios and supplemental
data
Net assets, end of
period (thousands) $17,990 $15,768 $8,115 $7,989 $8,279 $7,979
Ratios to average net
assets
Expenses# 0.49% 0.56% 1.11% 1.08% 0.92%+ 0.79%
Net investment income 4.72% 4.81% 4.77% 4.81% 5.09%+ 5.11%
Portfolio turnover rate 41% 53% 50% 86% 117% 126%
</TABLE>
<TABLE>
<CAPTION>
Year Ended August 31,
--------------------------------------------- Year Ended
1999 1998 1997 1996 1995 (a) December 31, 1994
<S> <C> <C> <C> <C> <C> <C>
CLASS B SHARES
Net asset value,
beginning of period $ 10.84 $ 10.37 $ 9.98 $ 9.95 $ 9.16 $ 10.61
------- ------- ------- ------- ------- -------
Income from investment
operations
Net investment income 0.42 0.43 0.41 0.42 0.28 0.44
Net realized and
unrealized gains or
losses on securities (0.59) 0.47 0.40 0.02 0.79 (1.45)
------- ------- ------- ------- ------- -------
Total from investment
operations (0.17) 0.90 0.81 0.44 1.07 (1.01)
------- ------- ------- ------- ------- -------
Less distributions to
shareholders from
Net investment income (0.42) (0.43) (0.42) (0.41) (0.28) (0.44)
Net realized gains (0.06) 0 0 0 0 0
------- ------- ------- ------- ------- -------
Total distributions to
shareholders (0.48) (0.43) (0.42) (0.41) (0.28) (0.44)
------- ------- ------- ------- ------- -------
Net asset value, end of
period $ 10.19 $ 10.84 $ 10.37 $ 9.98 $ 9.95 $ 9.16
------- ------- ------- ------- ------- -------
Total return* (1.66%) 8.85% 8.30% 4.42% 11.78% (9.64%)
Ratios and supplemental
data
Net assets, end of
period (thousands) $46,042 $49,320 $48,198 $49,382 $49,040 $44,616
Ratios to average net
assets
Expenses# 1.23% 1.33% 1.86% 1.83% 1.67%+ 1.37%
Net investment income 3.96% 4.07% 4.02% 4.06% 4.34%+ 4.53%
Portfolio turnover rate 41% 53% 50% 86% 117% 126%
</TABLE>
(a) For the eight months ended August 31, 1995. The Fund changed its fiscal
year end from December 31 to August 31, effective August 31, 1995.
* 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.
24
<PAGE>
EVERGREEN
North Carolina Municipal Bond Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended August 31,
--------------------------------------------- Period Ended
1999 1998 1997 1996 1995 (a) December 31, 1994 (b)
<S> <C> <C> <C> <C> <C> <C>
CLASS Y SHARES
Net asset value,
beginning of period $ 10.84 $ 10.37 $ 9.98 $ 9.95 $ 9.16 $10.31
-------- -------- ------ ------ ------ ------
Income from investment
operations
Net investment income 0.52 0.54 0.51 0.51 0.35 0.43
Net realized and
unrealized gains or
losses on securities (0.58) 0.47 0.41 0.03 0.79 (1.15)
-------- -------- ------ ------ ------ ------
Total from investment
operations (0.06) 1.01 0.92 0.54 1.14 (0.72)
-------- -------- ------ ------ ------ ------
Less distributions to
shareholders from
Net investment income (0.53) (0.54) (0.53) (0.51) (0.35) (0.43)
Net realized gains (0.06) 0 0 0 0 0
-------- -------- ------ ------ ------ ------
Total distributions to
shareholders (0.59) (0.54) (0.53) (0.51) (0.35) (0.43)
-------- -------- ------ ------ ------ ------
Net asset value, end of
period $ 10.19 $ 10.84 $10.37 $ 9.98 $ 9.95 $ 9.16
-------- -------- ------ ------ ------ ------
Total return (0.68%) 9.93% 9.39% 5.47% 12.52% (7.01%)
Ratios and supplemental
data
Net assets, end of
period (thousands) $247,475 $256,231 $4,042 $3,771 $1,006 $ 642
Ratios to average net
assets
Expenses# 0.23% 0.20% 0.86% 0.84% 0.67%+ 0.59%+
Net investment income 4.96% 5.04% 5.02% 5.05% 5.34%+ 5.58%+
Portfolio turnover rate 41% 53% 50% 86% 117% 126%
</TABLE>
(a) For the eight months ended August 31, 1995. The Fund changed its fiscal
year end from December 31 to August 31, effective August 31, 1995.
(b) For the period from February 28, 1994 (commencement of class operations) to
December 31, 1994.
+ Annualized.
# The ratio of expenses to average net assets excludes for credits and
includes fee waivers.
See Combined Notes to Financial Statements.
25
<PAGE>
EVERGREEN
South Carolina Municipal Bond Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended August 31,
----------------------------------------- Period Ended
1999 1998 1997 1996 1995 (a) December 31, 1994 (b)
<S> <C> <C> <C> <C> <C> <C>
CLASS A SHARES
Net asset value,
beginning of period $10.44 $10.08 $ 9.69 $ 9.59 $ 8.62 $10.00
------ ------ ------ ------ ------ ------
Income from investment
operations
Net investment income 0.46 0.46 0.48 0.49 0.34 0.46
Net realized and
unrealized gains or
losses on securities (0.50) 0.39 0.40 0.10 0.97 (1.38)
------ ------ ------ ------ ------ ------
Total from investment
operations (0.04) 0.85 0.88 0.59 1.31 (0.92)
------ ------ ------ ------ ------ ------
Less distributions to
shareholders from
Net investment income (0.46) (0.46) (0.48) (0.49) (0.34) (0.46)
Net realized gains (0.10) (0.03) (0.01) 0 0 0
------ ------ ------ ------ ------ ------
Total distributions to
shareholders (0.56) (0.49) (0.49) (0.49) (0.34) (0.46)
------ ------ ------ ------ ------ ------
Net asset value, end of
period $ 9.84 $10.44 $10.08 $ 9.69 $ 9.59 $ 8.62
------ ------ ------ ------ ------ ------
Total return* (0.56%) 8.60% 9.33% 6.23% 15.35% (9.32%)
Ratios and supplemental
data
Net assets, end of
period (thousands) $2,324 $1,744 $1,025 $ 841 $ 610 $ 312
Ratios to average net
assets
Expenses# 0.70% 0.77% 0.98% 0.86% 0.53%+ 0.25%+
Net investment income 4.43% 4.56% 4.87% 4.98% 5.41%+ 5.57%+
Portfolio turnover rate 35% 31% 62% 37% 66% 23%
</TABLE>
<TABLE>
<CAPTION>
Year Ended August 31,
----------------------------------------- Period Ended
1999 1998 1997 1996 1995 (a) December 31, 1994 (b)
<S> <C> <C> <C> <C> <C> <C>
CLASS B SHARES
Net asset value,
beginning of period $10.44 $10.08 $ 9.69 $ 9.59 $ 8.62 $10.00
------ ------ ------ ------ ------ ------
Income from investment
operations
Net investment income 0.38 0.38 0.41 0.41 0.29 0.41
Net realized and
unrealized gains or
losses on securities (0.50) 0.39 0.40 0.10 0.97 (1.38)
------ ------ ------ ------ ------ ------
Total from investment
operations (0.12) 0.77 0.81 0.51 1.26 (0.97)
------ ------ ------ ------ ------ ------
Less distributions to
shareholders from
Net investment income (0.38) (0.38) (0.41) (0.41) (0.29) (0.41)
Net realized gains (0.10) (0.03) (0.01) 0 0 0
------ ------ ------ ------ ------ ------
Total distributions to
shareholders (0.48) (0.41) (0.42) (0.41) (0.29) (0.41)
------ ------ ------ ------ ------ ------
Net asset value, end of
period $ 9.84 $10.44 $10.08 $ 9.69 $ 9.59 $ 8.62
------ ------ ------ ------ ------ ------
Total return* (1.30%) 7.79% 8.52% 5.43% 14.77% (9.83%)
Ratios and supplemental
data
Net assets, end of
period (thousands) $5,393 $4,542 $4,734 $4,282 $3,542 $2,456
Ratios to average net
assets
Expenses# 1.45% 1.53% 1.73% 1.61% 1.28%+ 0.87%+
Net investment income 3.68% 3.76% 4.13% 4.23% 4.66%+ 4.88%+
Portfolio turnover rate 35% 31% 62% 37% 66% 23%
</TABLE>
(a) For the eight months ended August 31, 1995. The Fund changed its fiscal
year end from December 31 to August 31, effective August 31, 1995.
(b) For the period from January 3, 1994 (commencement of class operations) to
December 31, 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.
26
<PAGE>
EVERGREEN
South Carolina Municipal Bond Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended August 31,
------------------------------------------- Period Ended
1999 1998 1997 1996 1995 (a) December 31, 1994 (b)
<S> <C> <C> <C> <C> <C> <C>
CLASS Y SHARES
Net asset value,
beginning of period $ 10.44 $ 10.08 $ 9.69 $ 9.59 $ 8.62 $ 9.74
------- ------- ------ ------ ------ ------
Income from investment
operations
Net investment income 0.48 0.48 0.51 0.51 0.35 0.43
Net realized and
unrealized gains or
losses on securities (0.50) 0.40 0.40 0.10 0.97 (1.12)
------- ------- ------ ------ ------ ------
Total from investment
operations (0.02) 0.88 0.91 0.61 1.32 (0.69)
------- ------- ------ ------ ------ ------
Less distributions to
shareholders from
Net investment income (0.48) (0.49) (0.51) (0.51) (0.35) (0.43)
Net realized gains (0.10) (0.03) (0.01) 0 0 0
------- ------- ------ ------ ------ ------
Total distributions to
shareholders (0.58) (0.52) (0.52) (0.51) (0.35) (0.43)
------- ------- ------ ------ ------ ------
Net asset value, end of
period $ 9.84 $ 10.44 $10.08 $ 9.69 $ 9.59 $ 8.62
------- ------- ------ ------ ------ ------
Total return (0.31%) 8.87% 9.60% 6.49% 15.54% (7.12%)
Ratios and supplemental
data
Net assets, end of
period (thousands) $61,314 $66,303 $7,012 $4,555 $1,673 $ 92
Ratios to average net
assets
Expenses# 0.45% 0.46% 0.73% 0.62% 0.28%+ 0.00%+
Net investment income 4.69% 4.71% 5.12% 5.22% 5.66%+ 5.92%+
Portfolio turnover rate 35% 31% 62% 37% 66% 23%
</TABLE>
(a) For the eight months ended August 31, 1995. The Fund changed its fiscal
year end from December 31 to August 31, effective August 31, 1995.
(b) For the period from February 28, 1994 (commencement of class operations) to
December 31, 1994.
+ Annualized.
# The ratio of expenses to average net assets excludes fee credits and
includes fee waivers.
See Combined Notes to Financial Statements.
27
<PAGE>
EVERGREEN
Virginia Municipal Bond Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended August 31,
------------------------------------------ Year Ended
1999 1998 1997 1996 1995 (a) December 31, 1994
<S> <C> <C> <C> <C> <C> <C>
CLASS A SHARES
Net asset value,
beginning of period $ 10.46 $ 10.05 $ 9.68 $ 9.67 $ 8.85 $10.19
------- ------- ------ ------ ------ ------
Income from investment
operations
Net investment income 0.49 0.48 0.50 0.48 0.33 0.47
Net realized and
unrealized gains or
losses on securities (0.45) 0.42 0.37 0.01 0.82 (1.34)
------- ------- ------ ------ ------ ------
Total from investment
operations 0.04 0.90 0.87 0.49 1.15 (0.87)
------- ------- ------ ------ ------ ------
Less distributions to
shareholders from
Net investment income (0.49) (0.49) (0.50) (0.48) (0.33) (0.47)
Net realized gains (0.08) 0 0 0 0 0
------- ------- ------ ------ ------ ------
Total distributions to
shareholders (0.57) (0.49) (0.50) (0.48) (0.33) (0.47)
------- ------- ------ ------ ------ ------
Net asset value, end of
period $ 9.93 $ 10.46 $10.05 $ 9.68 $ 9.67 $ 8.85
------- ------- ------ ------ ------ ------
Total return* 0.23% 9.12% 9.05% 5.12% 13.09% (8.60%)
Ratios and supplemental
data
Net assets, end of
period (thousands) $50,341 $54,298 $2,934 $2,892 $1,983 $1,606
Ratios to average net
assets
Expenses# 0.51% 0.50% 1.03% 0.93% 0.72%+ 0.53%
Net investment income 4.70% 4.71% 4.95% 4.83% 5.17%+ 5.11%
Portfolio turnover rate 31% 46% 72% 68% 87% 59%
</TABLE>
<TABLE>
<CAPTION>
Year Ended August 31,
------------------------------------------ Year Ended
1999 1998 1997 1996 1995 (a) December 31, 1994
<S> <C> <C> <C> <C> <C> <C>
CLASS B SHARES
Net asset value,
beginning of period $ 10.46 $10.05 $ 9.68 $ 9.67 $ 8.85 $10.19
------- ------ ------ ------ ------ ------
Income from investment
operations
Net investment income 0.41 0.41 0.41 0.41 0.28 0.42
Net realized and
unrealized gains or
losses on securities (0.45) 0.41 0.37 0.01 0.82 (1.34)
------- ------ ------ ------ ------ ------
Total from investment
operations (0.04) 0.82 0.78 0.42 1.10 (0.92)
------- ------ ------ ------ ------ ------
Less distributions to
shareholders from
Net investment income (0.41) (0.41) (0.41) (0.41) (0.28) (0.42)
Net realized gains (0.08) 0 0 0 0 0
------- ------ ------ ------ ------ ------
Total distributions to
shareholders (0.49) (0.41) (0.41) (0.41) (0.28) (0.42)
------- ------ ------ ------ ------ ------
Net asset value, end of
period $ 9.93 $10.46 $10.05 $ 9.68 $ 9.67 $ 8.85
------- ------ ------ ------ ------ ------
Total return* (0.52%) 8.31% 8.24% 4.34% 12.53% (9.13%)
Ratios and supplemental
data
Net assets, end of
period (thousands) $15,403 $8,935 $6,695 $5,963 $5,083 $3,817
Ratios to average net
assets
Expenses# 1.26% 1.35% 1.79% 1.68% 1.47%+ 1.12%
Net investment income 3.93% 3.99% 4.21% 4.09% 4.42%+ 4.54%
Portfolio turnover rate 31% 46% 72% 68% 87% 59%
</TABLE>
(a) For the eight months ended August 31, 1995. The Fund changed its fiscal
year end from December 31 to August 31, effective August 31, 1995.
* 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.
28
<PAGE>
EVERGREEN
Virginia Municipal Bond Fund
Financial Highlights
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Ended August 31,
--------------------------------------------- Period Ended
1999 1998 1997 1996 1995 (a) December 31, 1994 (b)
<S> <C> <C> <C> <C> <C> <C>
CLASS Y SHARES
Net asset value,
beginning of period $ 10.46 $ 10.05 $ 9.68 $ 9.67 $ 8.85 $9.83
-------- -------- ------ ------ ------ -----
Income from investment
operations
Net investment income 0.51++ 0.51 0.51 0.50 0.34 0.41
Net realized and
unrealized gains or
losses on securities (0.45) 0.41 0.37 0.01 0.82 (0.98)
-------- -------- ------ ------ ------ -----
Total from investment
operations 0.06 0.92 0.88 0.51 1.16 (0.57)
-------- -------- ------ ------ ------ -----
Less distributions to
shareholders from
Net investment income (0.51) (0.51) (0.51) (0.50) (0.34) (0.41)
Net realized gains (0.08) 0 0 0 0 0
-------- -------- ------ ------ ------ -----
Total distributions to
shareholders (0.59) (0.51) (0.51) (0.50) (0.34) (0.41)
-------- -------- ------ ------ ------ -----
Net asset value, end of
period $ 9.93 $ 10.46 $10.05 $ 9.68 $ 9.67 $8.85
-------- -------- ------ ------ ------ -----
Total return 0.48% 9.39% 9.32% 5.38% 13.28% (5.80%)
Ratios and supplemental
data
Net assets, end of
period (thousands) $115,720 $105,931 $6,195 $4,266 $ 965 $ 344
Ratios to average net
assets
Expenses# 0.26% 0.25% 0.79% 0.70% 0.47%+ 0.28%+
Net investment income 4.95% 4.98% 5.27% 5.05% 5.42%+ 5.54%+
Portfolio turnover rate 31% 46% 72% 68% 87% 59%
</TABLE>
(a) For the eight months ended August 31, 1995. The Fund changed its fiscal
year end from December 31 to August 31, effective August 31, 1995.
(b) For the period from February 28, 1994 (commencement of class operations) to
December 31, 1994.
+ 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.
29
<PAGE>
EVERGREEN
Florida High Income Municipal Bond Fund
Schedule of Investments
August 31, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - 97.4%
California - 1.8%
Heritage Pines, CA CDA RB:
$ 2,720,000 Ser. A,
6.10%, 5/1/2020.................................... $ 2,580,682
6,140,000 Ser. B,
5.50%, 5/1/2005.................................... 5,966,606
------------
8,547,288
------------
Florida - 88.0%
680,000 Alachua Cnty., FL Hlth. Facs.
Auth. RB,
10.125%, 4/1/2010................................. 703,875
Arbor Greene, FL CDD Spl. Assmt. RB:
1,580,000 5.75%, 5/1/2006.................................... 1,551,197
500,000 6.30%, 5/1/2019.................................... 483,285
735,000 7.60%, 5/1/2018.................................... 772,977
3,000,000 Baker Cnty., FL Hosp. Auth. Hlth. Care Facs. RB,
5.30%, 12/1/2023.................................. 2,741,730
Bayside, FL CDD Capital Impt. RB,
Communities Property, Inc.:
1,575,000 Ser. A,
5.95%, 5/1/2008.................................... 1,538,964
Ser. B:
1,430,000 6.05%, 5/1/2008.................................... 1,397,410
1,625,000 6.375%, 5/1/2018................................... 1,568,190
Bobcat Trail, FL CDD RB:
Ser. A:
1,480,000 6.60%, 5/1/2021.................................... 1,382,350
2,470,000 7.50%, 5/1/2019.................................... 2,530,070
Ser. B:
1,425,000 6.00%, 5/1/2006.................................... 1,379,699
3,585,000 6.75%, 5/1/2004.................................... 3,589,948
750,000 Boynton Beach, FL MHRB, Clipper Cove Apts.,
6.35%, 1/1/2016................................... 785,963
1,875,000 Brevard Cnty., FL Hlth. Facs. Auth. RB, Courtenay
Springs Vlg.,
7.50%, 11/15/2012................................. 2,151,712
1,000,000 Brevard Cnty., FL Tourist Dev.
Tax RB, Marlin Spring,
6.875%, 3/1/2013.................................. 1,051,680
780,000 Broward Cnty., FL HFA RB, Ser. A,
(GNMA),
7.35%, 3/1/2023................................... 808,033
Broward Cnty., FL MHRB:
1,770,000 Cross Keys Apts. Proj., Ser. A,
5.80%, 10/1/2033................................... 1,744,034
1,035,000 Pembroke Park Apts. Proj.,
5.70%, 10/1/2033................................... 1,003,360
Stirling Apts. Proj.:
2,090,000 5.65%, 10/1/2028................................... 2,029,223
1,580,000 5.70%, 10/1/2033................................... 1,531,699
9,395,000 Cape Canaveral, FL Hosp. Dist. RB,
5.25%, 1/1/2028................................... 8,021,733
Championsgate, FL CDD Capital Impt. RB:
2,840,000 Ser. A,
6.25%, 5/1/2020.................................... 2,711,518
3,030,000 Ser. B,
5.70%, 5/1/2005.................................... 2,966,007
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Florida - continued
$ 1,895,000 Clay Cnty., FL HFA SFHRB, Multi-Cnty. Program,
5.95%, 10/1/2019.................................. $ 1,928,106
2,590,000 Cory Lakes, FL CDD RB,
8.375%, 5/1/2017.................................. 2,670,937
1,080,000 Crossings at Fleming Island, FL CDD Util. RB,
7.375%, 10/1/2019................................. 1,117,487
Dade Cnty., FL MHRB, Golden Lakes Apts. Proj., Ser.
A:
1,370,000 5.90%, 11/1/2022................................... 1,372,055
500,000 6.00%, 11/1/2032................................... 508,705
2,310,000 Duval Cnty., FL HFA RB, Saint Augustine Apts.
Proj.,
6.00%, 3/1/2021................................... 2,349,963
1,425,000 Eastlake Oaks, FL CDD RB,
7.75%, 5/1/2017................................... 1,482,256
3,450,000 Escambia Cnty., FL HFA SFHRB, Multi-Cnty. Program,
6.85%, 10/1/2017.................................. 3,650,652
Escambia Cnty., FL Hlth. Facs. Auth. RB:
Azalea Trace Inc.:
2,905,000 6.00%, 1/1/2015.................................... 2,813,986
2,250,000 6.10%, 1/1/2019.................................... 2,202,323
1,500,000 Baptist Hosp., Inc., Ser. B,
6.00%, 10/1/2014................................... 1,515,870
14,895,000 Baptist Hosp., Inc. & Baptist Manor, 5.125%,
10/1/2019.......................................... 13,162,860
Escambia Cnty., FL PCRB, Champion Intl. Corp.
Proj.:
3,000,000 6.40%, 9/1/2030.................................... 3,059,550
2,000,000 6.90%, 8/1/2022.................................... 2,135,420
Florida HFA RB:
1,600,000 Glen Oaks Apts. Proj.,
5.80%, 8/1/2017.................................... 1,624,016
2,945,000 Mar Logo Vlg. Apts. Proj., Ser. F,
6.00%, 6/1/2039.................................... 3,007,964
St. Cloud Vlg. Proj.:
4,905,000 Ser. D,
5.95%, 2/1/2030.................................... 4,929,280
1,395,000 Ser. E,
8.00%, 2/1/2030.................................... 1,402,156
1,000,000 The Vineyards Proj., Ser. H,
6.50%, 11/1/2025................................... 1,044,260
2,090,000 Florida HFA SFHRB, Ser. A,
6.65%, 1/1/2024................................... 2,185,806
2,345,000 Florida Hsg. Fin. Corp. RB, Wentworth Apts., Ser.
A,
5.375%, 11/1/2029................................. 2,172,244
Grand Haven, FL CDD, Spl. Assmt. RB, Ser. A:
10,965,000 6.30%, 5/1/2002.................................... 11,052,391
3,850,000 6.90%, 5/1/2019.................................... 3,891,388
</TABLE>
30
<PAGE>
EVERGREEN
Florida High Income Municipal Bond Fund
Schedule of Investments(continued)
August 31, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Florida - continued
$ 3,000,000 Heritage Harbor, FL CDD RB,
7.75%, 5/1/2019................................... $ 2,909,940
Heritage Isles, FL CDD RB:
4,000,000 7.10%, 10/1/2022................................... 3,740,520
2,600,000 Ser. A,
5.75%, 5/1/2005.................................... 2,563,418
2,600,000 Heritage Isles, FL CDD Spl. Assmt. RB, Ser. B,
6.00%, 5/1/2020................................... 2,468,596
Heritage Oak Park, FL CDD Spl. Assmt. RB:
2,950,000 Ser. A,
6.50%, 5/1/2020.................................... 2,834,802
5,885,000 Ser. B,
6.00%, 5/1/2005.................................... 5,694,091
6,000,000 Heritage Springs, FL CDD BAN,
6.25%, 12/15/1999................................. 5,986,620
3,610,000 Hernando Cnty., FL IDA RB, Crushed Stone Co.,
8.50%, 12/1/2014.................................. 3,959,701
3,680,000 Hialeah Gardens, FL Hsg. Auth. RB, GNMA Affordable
Hsg. Program,
5.80%, 6/20/2033.................................. 3,663,403
1,490,000 Hialeah Gardens, FL IDA RB,
Waterford Convalescent, Ser. A, 7.875%,
12/1/2007......................................... 1,579,266
3,800,000 Highlands Cnty., FL Hlth. Facs. Auth. RB, Hosp.
Adventist Hlth. Sys., 5.25%, 11/15/2028........... 3,301,516
600,000 Hillsborough Cnty., FL Aviation Auth. RB, US Air
Proj., Ser. 2,
8.60%, 1/15/2022.................................. 646,938
1,000,000 Hillsborough Cnty., FL HFA SFHRB,
5.875%, 10/1/2030................................. 1,008,650
4,550,000 Hillsborough Cnty., FL IDA RB, Hlth. Facs. Proj.
Univ. Community Hosp.,
5.625%, 8/15/2023................................. 4,225,585
Hillsborough Cnty., FL IDRB,
Lakeshore Villas Proj., Sr. Ser. A:
2,000,000 6.50%, 7/1/2029.................................... 1,977,420
6,590,000 6.70%, 7/1/2021.................................... 6,412,663
8,410,000 6.75%, 7/1/2029.................................... 8,157,364
3,115,000 Homestead, FL IDA RB, Community Rehabilitation
Providers Program, Ser. A,
7.95%, 11/1/2018.................................. 3,291,527
2,500,000 Indian Trace, FL Community Wtr. Mgmt., Spl. Benefit
GO, Subser. B,
8.25%, 5/1/2011................................... 2,773,225
5,000,000 Indigo, FL CDD BAN,
6.25%, 12/1/1999.................................. 4,997,800
Jacksonville, FL Hlth. Facs. Auth. RB, Natl.
Benevolent Assn., Cypress Vlg. Proj.:
750,000 7.00%, 12/1/2014................................... 790,163
1,020,000 7.00%, 12/1/2022................................... 1,080,853
500,000 8.00%, 12/1/2015................................... 558,200
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Florida - continued
$ 2,380,000 Lake Bernadette, FL CDD Spl. Assmt. RB, Ser. A,
8.00%, 5/1/2017................................... $ 2,478,675
3,200,000 Lake Cnty., FL Resource Recovery IDRB, NRG/Recovery
Group Inc., Ser. 1993A,
5.85%, 10/1/2009.................................. 3,180,576
1,500,000 Lakeside Plantation CDA BAN,
6.25%, 5/1/2000................................... 1,495,800
Lee Cnty., FL HFA SFHRB:
2,010,000 Multi-Cnty. Program, Ser. A,
7.20%, 3/1/2027.................................... 2,200,689
2,170,000 Ser. A6,
6.45%, 3/1/2031.................................... 2,301,112
Subser. 2,:
2,275,000 7.45%, 9/1/2027.................................... 2,540,333
2,475,000 Step Bond (Eff. Yield 4.80%) (a),
6.85%, 3/1/2029.................................... 2,699,804
Subser. 3,
5,010,000 7.50%, 9/1/2027.................................... 5,647,873
Lee Cnty., FL IDA Hlth. Care Facs. RB, Shell Point
Vlg. Proj. Ser. A:
4,550,000 5.50%, 11/15/2021.................................. 4,072,568
5,000,000 5.50%, 11/15/2029.................................. 4,377,250
Lee Cnty., FL IDA RB:
Class A:
3,290,000 6.25%, 10/1/2017................................... 3,260,621
6,575,000 6.375%, 10/1/2025.................................. 6,550,541
1,155,000 Class B,
5.875%, 10/1/2027.................................. 1,148,682
780,000 Encore Nursing Ctr.,
8.125%, 12/1/2007.................................. 835,676
2,625,000 Leon Cnty., FL Edl. Facs. RB, Ser. A, (GNMA),
8.25%, 5/1/2014................................... 2,720,182
Lexington Oaks, FL CDD RB:
1,045,000 Ser. A,
6.125%, 5/1/2019................................... 990,096
8,015,000 Ser. B,
5.50%, 5/1/2005.................................... 7,788,656
1,125,000 Manatee Cnty., FL HFA MHRB, Conquistador, Ser. A,
6.25%, 10/1/2022.................................. 1,184,096
2,375,000 Manatee Cnty., FL HFA SFHRB,
Subser. 1,
7.45%, 5/1/2027................................... 2,627,462
1,220,000 Meadow Point II, FL CDD, Capital Impt. RB,
7.75%, 5/1/2018................................... 1,270,972
4,500,000 Miami Beach, FL Hlth. Facs. Auth. Hosp. RB, So.
Shore Hosp., Ser. A,
5.45%, 8/1/2018................................... 4,214,340
Miami Beach, FL Redev. Agcy. Tax Increment RB, City
Ctr. Historic Convention, Ser. B:
1,000,000 6.25%, 12/1/2016................................... 1,015,310
500,000 6.35%, 12/1/2022................................... 509,030
</TABLE>
31
<PAGE>
EVERGREEN
Florida High Income Municipal Bond Fund
Schedule of Investments(continued)
August 31, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Florida - continued
North Springs, FL Impt. Dist. Spl. Assmt. RB:
$ 300,000 Ser. A,
7.00%, 5/1/2019..................................... $ 303,939
1,950,000 Heron Bay Proj.,
7.00%, 5/1/2019..................................... 2,014,253
7,145,000 Parkland Isles Proj., Ser. B,
6.25%, 5/1/2005..................................... 7,124,708
1,255,000 Wtr. Mgmt., Ser. A,
8.20%, 5/1/2024..................................... 1,419,593
Northern Palm Beach Cnty., FL Wtr. Ctl. & Impt.
Dist. RB:
2,015,000 Unit Dev. No. 5B,
6.00%, 8/1/2025..................................... 1,956,908
500,000 Unit Dev. No. 5D,
5.50%, 8/1/2015..................................... 462,500
3,800,000 Unit Dev. No. 9A, Ser. A,
7.20%, 8/1/2016..................................... 4,063,720
Unit Dev. Number 9B:
1,000,000 5.90%, 8/1/2019..................................... 966,450
1,500,000 6.00%, 8/1/2029..................................... 1,450,410
500,000 Northern Palm Beach Cnty., FL Wtr. Ctl. Dist., Spl.
Assmt. RB,
7.00%, 8/1/2015.................................... 529,580
1,430,000 Northwood, FL CDD RB,
7.60%, 5/1/2017.................................... 1,479,807
2,605,000 Ocean Hwy. & Port Auth., FL PCRB, Solid Wst.,
Jefferson Smurfit Corp.,
6.50%, 11/1/2006................................... 2,633,186
Orange Cnty., FL HFA MHRB:
10,140,000 Brentwood Park Apts., Ser. G,
6.40%, 7/1/2032..................................... 9,802,135
2,845,000 Hsg. Buena Vista Place II Ser. I,
6.90%, 7/1/2039..................................... 2,765,795
2,900,000 Hsg. Palm West Apts. Proj. Ser. B,
6.50%, 3/1/2034..................................... 2,759,002
14,925,000 Hsg. Palms At Brentwood, Ser. K,
6.50%, 12/1/2034.................................... 14,025,023
Orange Cnty., FL HFA SFHRB, Ser. B, (GNMA/FNMA):
855,000 5.80%, 9/1/2017..................................... 854,051
2,160,000 5.875%, 3/1/2028.................................... 2,179,656
1,095,000 6.85%, 10/1/2027.................................... 1,145,425
Orange Cnty., FL Hlth. Facs. Auth. RB:
1,040,000 Lakeside Apts., Inc.,
6.50%, 7/1/2013..................................... 1,066,634
Orlando Lutheran Tower:
395,000 8.40%, 7/1/2014..................................... 438,833
370,000 8.75%, 7/1/2026..................................... 414,219
Orange Cnty., FL Hsg. Fin. Mtge. RB, Hsg. Loma Vista
Proj. Ser. G:
1,000,000 5.20%, 9/1/2014..................................... 959,770
1,000,000 5.45%, 9/1/2024..................................... 941,550
Orlando, FL Spl. Assmt. RB, Conroy Rd. Interchange
Proj., Ser. A:
1,000,000 5.50%, 5/1/2010..................................... 953,740
2,000,000 5.80%, 5/1/2026..................................... 1,850,840
1,050,000 Osceola Cnty., FL HFA RB, Tierra Vista Apts. Proj.,
Ser. A,
5.75%, 12/1/2022................................... 1,039,269
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Florida - continued
$ 565,000 Overoaks, FL CDD Capital Impt. RB,
8.25%, 5/1/2017................................... $ 603,646
Palm Beach Cnty., FL HFA RB:
3,460,000 Daughters of Charity, Ser. A, (GNMA),
7.60%, 3/1/2023.................................... 3,601,549
1,100,000 Winsor Park Apts. Proj., Ser. A,
5.85%, 12/1/2033.................................. 1,087,053
665,000 Palm Beach Cnty., FL HFA SFHRB, Ser. A, (GNMA),
6.50%, 10/1/2021.................................. 689,452
Palm Beach Cnty., FL Hlth. Facs. Auth. RB, Abbey
Delray So. Proj.:
2,750,000 5.50%, 10/1/2011................................... 2,685,430
2,500,000 5.50%, 10/1/2015................................... 2,363,175
1,500,000 Palm Beach Cnty., FL IDA RB, Geriatric Care, Inc.
Proj.,
6.55%, 12/1/2016.................................. 1,565,310
8,200,000 Pasco Cnty., FL HFA MHRB, Park Richey Apts., Ser.
A,
5.95%, 9/1/2031................................... 8,212,710
Pinellas Cnty., FL Edl. Facs. Auth. RB:
4,870,000 Barry Univ. Proj.,
5.375%, 10/1/2028.................................. 4,379,591
3,300,000 Clearwater Christian College,
8.00%, 2/1/2011.................................... 3,588,420
685,000 Eckerd College,
7.75%, 7/1/2014.................................... 726,853
Pinellas Cnty., FL Hlth. Facs. Auth. RB:
150,000 6.75%, 10/1/2000................................... 150,283
100,000 7.00%, 10/1/2001................................... 100,817
200,000 7.25%, 10/1/2002................................... 204,534
1,100,000 8.00%, 10/1/2008................................... 1,159,356
510,000 Polk Cnty., FL HFA SFHRB, Ser. A,
7.00%, 9/1/2015................................... 521,827
5,000,000 Polk Cnty., FL IDA RB, IMC Fertilizer, Inc., Ser.
A,
7.525%, 1/1/2015.................................. 5,199,900
1,570,000 Quantum, FL CDD Spl. Assmt. RB,
7.75%, 3/1/2014................................... 1,653,791
4,300,000 River Ridge, FL CDD RB,
5.75%, 5/1/2008................................... 4,172,720
Sarasota Cnty., FL Hlth. Fac. Auth. RB:
5,540,000 Family Ext. Care,
6.25%, 11/15/2028.................................. 5,154,748
1,000,000 Sunnyside Properties,
6.00%, 5/15/2010................................... 976,700
1,830,000 Seminole, FL Wtr. Ctl. Dist. Spl. Assmt. RB, Unit
of Dev. No. 2,
7.25%, 8/1/2022.................................... 1,883,491
St. John's Cnty., FL IDA RB, Bayview Proj., Ser. A:
1,125,000 7.00%, 10/1/2012................................... 1,163,047
2,500,000 7.10%, 10/1/2026................................... 2,598,025
2,510,000 Vicars Landing Proj., Ser. A,
6.75%, 2/15/2012................................... 2,583,769
9,630,000 Stoneybrook, FL CDD Golf Course RB, 7.00%,
10/1/2022......................................... 9,009,732
</TABLE>
32
<PAGE>
EVERGREEN
Florida High Income Municipal Bond Fund
Schedule of Investments(continued)
August 31, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Florida - continued
Volusia Cnty., FL Edl. Facs. Auth. RB, Embry-Riddle
Aero, Ser. A:
$ 2,000,000 5.75%, 10/15/2029.................................. $ 1,895,980
1,025,000 6.125%, 10/15/2016................................. 1,043,173
5,000,000 6.125%, 10/15/2026................................. 5,018,600
2,000,000 Volusia Cnty., FL IDA, First Mtge. RB, 7.625%,
11/1/2026......................................... 2,363,460
Westchase East, FL CDD Capital Impt. RB:
1,350,000 7.30%, 5/1/2018.................................... 1,398,262
1,685,000 7.50%, 5/1/2017.................................... 1,751,878
1,000,000 Winter Garden, FL IDA RB, Beverly Enterprises,
8.75%, 7/1/2012................................... 1,083,200
Winter Haven, FL Hsg. Auth. MHRB, Abbey Lane Apts.,
Ser. C, (FNMA):
1,040,000 7.00%, 7/1/2012.................................... 1,094,777
2,000,000 7.00%, 7/1/2024.................................... 2,105,340
------------
404,848,532
------------
Puerto Rico - 0.5%
980,000 Cmnwlth. of Puerto Rico Indl., Tourist, Edl., Med.
& Env. Ctl. Facs. RB, Mennonite General Hosp.
Proj.,
Ser. A,
6.50%, 7/1/2012................................... 1,000,325
1,475,000 Cmnwlth. of Puerto Rico Port Auth. RB, American
Airlines Proj.,
6.25%, 6/1/2026................................... 1,508,615
------------
2,508,940
------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
U.S. Virgin Islands - 7.1%
Virgin Islands Pub. Fin. Auth. RB, Sr. Lien, Ser.
A:
$ 2,950,000 5.30%, 7/1/2021.................................... $ 2,746,008
6,000,000 5.50%, 10/1/2018................................... 5,727,000
15,000,000 5.50%, 10/1/2022................................... 14,157,750
10,500,000 5.625%, 10/1/2025.................................. 10,023,405
------------
32,654,163
------------
Total Municipal Obligations
(cost $456,883,223)............................... 448,558,923
------------
<CAPTION>
Shares
<C> <S> <C>
MUTUAL FUND SHARES - 0.7% (cost $3,173,000)
3,173,000 Federated Municipal Obligations Fund............... 3,173,000
------------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments -(cost $460,056,223)....... 98.1% 451,731,923
Other Assets and Liabilities - net........... 1.9 8,516,760
----- ------------
Net Assets -................................. 100.0% $460,248,683
===== ============
</TABLE>
The Fund invests primarily in debt securities issued by municipalities.
The ability of the issuers of debt securities to meet their obligations
may be affected by economic developments in a specific industry or munic-
ipality. In order to reduce risk associated with such economic develop-
ments, at August 31, 1999, 3.3% of the securities, as a percentage of net
assets, are backed by bond insurance of various financial institutions
and financial guaranty assurance agencies.
(a) Effective Yield (calculated at the date of purchase) is the yield at
which the bond accretes on an annual basis until maturity date.
Summary of Abbreviations:
BAN Bond Anticipation Note
CDA Community Development Authority
CDD Community Development District
FNMA Insured by Federal National Mortgage Association
GNMA Insured by Government National Mortgage Association
GO General Obligation
HFA Housing Finance Authority
IDA Industrial Development Authority
IDRB Industrial Development Revenue Bond
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
Florida Municipal Bond Fund
Schedule of Investments
August 31, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - 95.5%
Florida - 90.9%
$ 4,000,000 Alachua Cnty., FL Hlth. Facs. Auth. RB, Shands
Teaching Hosp., Ser. A, (MBIA),
6.25%, 12/1/2016.................................. $ 4,331,080
Baker Cnty., FL Hosp. Auth. Hlth. Care Facs. RB:
285,000 4.10%, 12/1/2001................................... 281,660
320,000 4.40%, 12/1/2004................................... 308,774
200,000 4.60%, 12/1/2006................................... 190,906
380,000 4.70%, 12/1/2008................................... 356,478
1,810,000 Baker Cnty., FL Hosp. Auth. Hlth. RB, 5.10%,
12/1/2013......................................... 1,674,865
3,750,000 Brevard Cnty., FL HFA MHRB, Windover Oaks, Ser. A,
(FNMA), 6.90%, 2/1/2027 .......................... 4,133,737
725,000 Brevard Cnty., FL Hlth. Facs. Auth. RB, Courtenay
Springs Vlg.,
7.38%, 11/15/2004................................. 776,830
4,000,000 Broward Cnty., FL Expressway Auth. GO,
9.88%, 7/1/2009................................... 5,310,400
3,000,000 Broward Cnty., FL GO, Ser. C, 6.00%, 1/1/2004...... 3,153,870
1,230,000 Broward Cnty., FL HFA RB, Ser. B, (GNMA),
7.13%, 3/1/2017................................... 1,272,804
Broward Cnty., FL MHRB:
500,000 Cross Keys Apts. Proj. Ser. A, 5.75%, 10/1/2028.... 489,600
2,500,000 Pembroke Park Apts. Proj., 5.65%, 10/1/2028........ 2,427,300
Broward Cnty., FL Port Facs. RB, Ser. C:
9,205,000 5.38%, 9/1/2010.................................... 9,336,539
3,700,000 5.38%, 9/1/2011.................................... 3,727,047
2,220,000 5.38%, 9/1/2012.................................... 2,220,844
3,000,000 Broward Cnty., FL Sch. Dist. GO, 5.40%, 2/15/2005.. 3,124,830
5,545,000 Cape Canaveral, FL Hosp. Dist. RB, 5.25%,
1/1/2018.......................................... 4,938,821
1,350,000 Clearwater, FL Hsg. Auth. RB, Hamptons at
Clearwater, 5.40%, 5/1/2013....................... 1,346,018
500,000 Collier Cnty., FL Hlth. Facs. Auth. RB, The
Moorings Inc. Proj., 7.00%, 12/1/2019............. 538,650
Dade Cnty., FL Edl. Facs. Auth. RB, St. Thomas
Univ., (LOC: Sun Bank Miami):
2,000,000 6.00%, 1/1/2010.................................... 2,110,600
2,000,000 6.00%, 1/1/2014.................................... 2,068,880
1,000,000 6.13%, 1/1/2019.................................... 1,046,540
Dade Cnty., FL SFHRB:
3,600,970 Ser. B,
6.10%, 4/1/2027.................................... 3,665,643
185,000 Ser. E,
7.00%, 3/1/2024.................................... 190,998
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Florida - continued
$ 5,000,000 Dade Cnty., FL Solid Wst. Sys., Spl. Obl., (AMBAC),
6.00%, 10/1/2006.................................. $ 5,384,450
820,000 Duval Cnty., FL HFA SFHRB, (GNMA), 7.35%,
7/1/2024.......................................... 855,973
3,000,000 Duval Cnty., FL Sch. Dist. GO, (AMBAC),
5.90%, 8/1/2002................................... 3,124,290
60,000 Duval Cnty., FL SFHRB, 7.30%, 7/1/2011............. 62,594
Escambia Cnty., FL Hlth. Facs. Auth. RB.:
Azalea Trace Inc.:
2,560,000 6.00%, 1/1/2015.................................... 2,479,795
1,310,000 6.10%, 1/1/2019.................................... 1,282,241
Baptist Hosp. & Baptist Manor:
1,075,000 5.00%, 10/1/2005................................... 1,066,067
1,210,000 5.00%, 10/1/2007................................... 1,182,448
7,605,000 5.13%, 10/1/2014................................... 6,922,071
2,950,000 Baptist Hosp. Inc., Ser. B, 6.00%, 10/1/2014 ...... 2,981,211
Escambia Cnty., FL PCRB, Champion Intl. Corp.
Proj.:
5,455,000 5.88%, 6/1/2022.................................... 5,172,976
2,650,000 6.40%, 9/1/2030.................................... 2,702,603
2,500,000 Flagler Cnty., FL Sch. Dist. GO, 5.85%, 9/1/2002... 2,578,150
Florida Board of Ed. Capital Outlay, Pub. Ed. GO:
5,850,000 Ser. A,
5.75%, 6/1/2010.................................... 6,185,965
1,250,000 Ser. C,
7.00%, 6/1/2004.................................... 1,265,825
Florida Division Bond Fin. Dept., Dept. of Env.
Preservation 2000:
Ser. A, (MBIA):
8,555,000 5.25%, 7/1/2007.................................... 8,831,498
5,600,000 6.00%, 7/1/2006.................................... 6,037,808
Ser. B, (AMBAC):
6,500,000 6.00%, 7/1/2009.................................... 7,020,520
9,600,000 6.00%, 7/1/2010.................................... 10,353,024
Florida Hsg. Fin. Agcy. RB:
1,715,000 (GNMA),
6.35%, 5/1/2026.................................... 1,799,807
1,895,000 Ser. A,
6.88%, 10/1/2012................................... 1,934,397
100,000 Homeownership Mtge., 7.50%, 9/1/2014............... 103,192
Landings at Sea Forest, (AMBAC):
555,000 5.85%, 12/1/2018................................... 560,866
805,000 6.05%, 12/1/2036................................... 826,703
2,000,000 Multifamily Hsg., Ser. C, 6.20%, 8/1/2016 ......... 2,093,220
5,200,000 Multifamily Park Colony Ser. D, 5.10%, 4/1/2013.... 5,229,796
2,115,000 Florida Hsg. Fin. Corp. RB, Homeowner Mtge., Ser.
2,
4.75%, 7/1/2019................................... 2,111,912
</TABLE>
34
<PAGE>
EVERGREEN
Florida Municipal Bond Fund
Schedule of Investments(continued)
August 31, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Florida - continued
Florida Turnpike Auth., Turnpike RB:
$ 2,000,000 Dept. of Trans., Ser. A, (AMBAC), 6.90%, 7/1/2002.. $ 2,129,340
4,370,000 Ser. B,
5.25%, 7/1/2012.................................... 4,382,979
Gainesville, FL Util. Sys. RB, Ser. B:
4,800,000 6.50%, 10/1/2013................................... 5,386,608
3,000,000 7.50%, 10/1/2008................................... 3,564,210
3,000,000 7.50%, 10/1/2009................................... 3,588,150
3,000,000 Greater Orlando, FL Aviation Auth., Arpt Facs. RB,
(FGIC),
5.75%, 10/1/2010.................................. 3,127,260
Halifax, FL Hosp. Med. Ctr. Hlth. Care Facs. RB,
Mgmt. Sys., Ser. A:
1,080,000 4.40%, 4/1/2004.................................... 1,053,022
1,240,000 4.50%, 4/1/2005.................................... 1,203,023
1,300,000 4.50%, 4/1/2006.................................... 1,246,271
5,170,000 5.20%, 4/1/2018.................................... 4,756,865
Hialeah, FL Hsg. Auth. RB:
1,880,000 Affordable Hsg. Program, 4.60%, 12/20/2008......... 1,857,478
12,505,000 Muni. Hsg.,
9.50%, 11/1/2021................................... 16,290,138
Highlands Cnty., FL Hlth. Facs. Auth. RB, Adventist
Hlth. Sys.:
3,735,000 5.25%, 11/15/2011.................................. 3,525,541
3,935,000 5.25%, 11/15/2012.................................. 3,681,704
3,140,000 5.25%, 11/15/2013.................................. 2,932,635
6,470,000 Hillsborough Cnty., FL Aviation RB, Tampa Int'l
Arpt., Ser. A,
5.50%, 10/1/2008.................................. 6,655,883
Hillsborough Cnty., FL IDRB, Health Facs. Proj.
Univ. Community Hosp. A:
500,000 4.90%, 8/15/2007................................... 476,250
5,560,000 5.50%, 8/15/2014................................... 5,319,586
5,425,000 5.63%, 8/15/2019................................... 5,076,335
Jacksonville, FL Hlth. Facs. Auth. Hosp. RB:
Charity Obligation Group, Ser. C:
4,300,000 5.75%, 8/15/2012................................... 4,438,847
4,550,000 5.75%, 8/15/2013................................... 4,680,722
2,810,000 5.75%, 8/15/2014................................... 2,880,784
2,090,000 5.75%, 8/15/2015................................... 2,133,430
3,000,000 St. Luke's Hosp. Association Proj., 7.125%,
11/15/2020......................................... 3,198,450
1,245,000 Jacksonville, FL Hlth. Indl. Dev., Natl.
Benevolent-Cypress Vlg., Ser. A, 6.25%,
12/1/2026......................................... 1,261,857
Lakeland, FL Elec. & Wtr. RB:
4,670,000 6.25%, 1/1/2004.................................... 5,001,430
4,000,000 Ser. B,
6.55%, 10/1/2007................................... 4,467,640
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Florida - continued
Lakeland, FL Elec. & Wtr. RB - continued
$ 5,000,000 Energy Sys. First Lien, (FSA), Ser. C,
6.05%, 10/1/2010................................... $ 5,420,150
Lee Cnty., FL Hsg. Fin. Auth. SFHRB:
2,760,000 Multi-Cnty. Program Ser. A-4, 7.00%, 9/1/2031 ..... 2,971,361
Ser. A-7:
1,330,000 5.05%, 9/1/2029.................................... 1,286,855
2,520,000 6.40%, 3/1/2029.................................... 2,672,535
1,505,000 Lee Cnty., FL Hsg. Fin. Auth. Single
Family, Multi-Cnty. Program Ser. A, Subser. 2,
6.50%, 3/1/2031................................... 1,588,573
Lee Cnty., FL IDA Auth. Hlth. Care RB, Shell Point
Vlg. Proj., Ser. A:
1,000,000 5.50%, 11/15/2008.................................. 987,490
1,015,000 5.75%, 11/15/2011.................................. 1,004,211
1,500,000 5.75%, 11/15/2013.................................. 1,459,590
1,535,000 5.75%, 11/15/2014.................................. 1,486,954
425,000 5.75%, 11/15/2015.................................. 406,661
4,890,000 Leesburg, FL Hosp. RB, Leesburg Regl. Med. Ctr.
Proj., Ser. B, 5.70%, 7/1/2018.................... 4,698,703
Leon Cnty., FL Edl. Facs. Auth. COP:
1,145,000 8.50%, 9/1/2017.................................... 1,535,147
1,045,000 9.00%, 9/1/2004.................................... 1,251,921
1,140,000 9.00%, 9/1/2005.................................... 1,398,392
1,245,000 9.00%, 9/1/2006.................................... 1,558,678
1,355,000 9.00%, 9/1/2007.................................... 1,726,284
1,475,000 9.00%, 9/1/2008.................................... 1,904,638
1,610,000 9.00%, 9/1/2009.................................... 2,106,009
1,755,000 9.00%, 9/1/2010.................................... 2,322,321
1,915,000 9.00%, 9/1/2011.................................... 2,556,563
2,085,000 9.00%, 9/1/2012.................................... 2,812,644
2,275,000 9.00%, 9/1/2013.................................... 3,094,137
2,480,000 9.00%, 9/1/2014.................................... 3,399,286
645,000 Leon Cnty., FL HFA SFHRB, Multi-Cnty. Program, Ser.
B, (GNMA), 6.25%, 7/1/2019........................ 662,538
Manatee Cnty., FL HFA Mtge. RB, Single Family,
Subser. 1:
3,015,000 6.25%, 11/1/2028................................... 3,078,526
1,675,000 7.20%, 5/1/2028.................................... 1,835,432
Miami Beach, FL Hlth. Facs. Auth.
Hosp. RB, South Shore Hosp., Ser. A:
1,660,000 4.30%, 8/1/2003.................................... 1,613,205
2,305,000 4.80%, 8/1/2008.................................... 2,168,820
2,185,000 5.25%, 8/1/2013.................................... 2,029,778
Miami Beach, FL Redev. Agcy. Tax Increment RB, City
Ctr. Historic Convention Vlg.:
2,000,000 5.63%, 12/1/2009................................... 2,008,660
3,000,000 5.80%, 12/1/2013................................... 2,925,930
2,000,000 5.88%, 12/1/2022................................... 1,913,180
</TABLE>
35
<PAGE>
EVERGREEN
Florida Municipal Bond Fund
Schedule of Investments(continued)
August 31, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Florida - continued
$ 4,930,000 Miami Dade Cnty., FL Aviation RB, Ser. C, (MBIA),
5.25%, 10/1/2011.................................. $ 4,877,643
Miami Dade Cnty., FL Hsg. Fin. Mtge. RB:
11,710,000 Ser. A-1,
5.20%, 10/1/2031................................... 11,572,525
805,000 Villa Esperanza Apts. Proj., 4.90%, 10/1/2011...... 770,956
5,000,000 Miami, FL Hlth. Facs. Auth. RB, (AMBAC),
5.25%, 8/15/2015.................................. 4,837,300
1,000,000 North Miami, FL Hlth. Fac. Auth. RB, Catholic Hlth.
Svcs. Obl. Group, 6.00%, 8/15/2016................ 1,013,090
1,335,000 North Springs, FL Wtr. & Swr. RB, Ser. B, (MBIA),
6.50%, 10/1/2016.................................. 1,432,148
1,000,000 North Tampa, FL Hsg. Dev. Corp. RB, Country Oaks
Apt., Ser. A, (FNMA), 6.90%, 1/1/2024............. 1,038,190
Northern Palm Beach Cnty., FL Impt., Wtr. Ctl. &
Impt. Unit Dev.:
1,195,000 Number 5B,
5.75%, 8/1/2014.................................... 1,157,178
1,000,000 Number 9B,
5.85%, 8/1/2013.................................... 976,260
Orange Cnty., FL Hlth. Facs. Auth. RB:
3,000,000 Lakeside Alternatives Inc., 6.50%, 7/1/2013........ 3,076,830
Ser. 3:
5,225,000 5.30%, 10/1/2006................................... 5,421,356
5,785,000 5.50%, 10/1/2008................................... 6,041,044
2,000,000 5.70%, 10/1/2011................................... 2,097,940
Orlando & Orange Cnty., FL Expressway Auth. RB,
(AMBAC):
10,000,000 5.38%, 7/1/2010.................................... 10,171,800
4,550,000 6.50%, 7/1/2011.................................... 5,097,410
40,000 8.25%, 7/1/2015.................................... 52,102
4,000,000 Orlando, FL Util. Commission,
Wtr. & Elec. RB,
6.00%, 10/1/2010................................... 4,319,320
1,500,000 Osceola Cnty., FL Spl. Assmt., West 192
Redevelopment Area Phase IIB, 5.63%, 11/1/2029 ... 1,389,900
3,000,000 Palm Beach Cnty., FL Criminal Justice Facs. RB,
(FGIC),
7.20%, 6/1/2015................................... 3,577,530
1,880,000 Palm Beach Cnty., FL GO, Ser. B, 6.50%, 7/1/2010... 2,115,188
Palm Beach Cnty., FL Hlth. Facs. Auth. RB:
975,000 Abbey Delray South Proj., 5.20%, 10/1/2006......... 962,081
Good Samaritan Hlth. Sys.:
3,695,000 6.20%, 10/1/2011................................... 3,978,333
6,000,000 6.30%, 10/1/2022................................... 6,482,160
Hosp. Impt. Corp. Obl. Ser. A:
930,000 4.00%, 12/1/2003................................... 902,342
970,000 4.00%, 12/1/2004................................... 929,095
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Florida - continued
Palm Beach Cnty., FL Hlth. Facs. Auth. RB - continued
Waterford Proj.:
$ 795,000 4.80%, 10/1/2002..................................... $ 791,510
635,000 5.00%, 10/1/2003..................................... 632,289
875,000 5.00%, 10/1/2004..................................... 867,650
920,000 5.10%, 10/1/2005..................................... 909,650
965,000 5.20%, 10/1/2006..................................... 952,214
990,000 5.30%, 10/1/2007..................................... 976,407
6,750,000 5.50%, 10/1/2015..................................... 6,380,572
2,000,000 Palm Beach Cnty., FL Indl. Dev. RB, Resource,
Geriatric Care Inc. Proj., 6.55%, 12/1/2016......... 2,087,080
3,695,000 Pasco Cnty., FL HFA RB, Multifamily Hsg., Oak Trail
Apts. Proj., Ser. A, 5.35%, 6/1/2027................ 3,751,423
5,000,000 Pasco Cnty., FL Hlth. Facs. Auth., Hosp. RB, Ser. 2,
5.60%, 10/1/2010.................................... 5,114,200
2,500,000 Pembroke Pines, FL Cons. Util. Sys. RB, (FGIC),
6.25%, 9/1/2004..................................... 2,645,825
Pinellas Cnty., FL Edl. Facs. Auth. RB, Barry Univ.
Proj.:
410,000 4.65%, 10/1/2004..................................... 401,562
470,000 4.90%, 10/1/2007..................................... 455,049
495,000 4.95%, 10/1/2008..................................... 476,403
7,685,000 5.38%, 10/1/2023..................................... 7,022,169
2,890,000 5.50%, 10/1/2013..................................... 2,796,393
3,240,000 Pinellas Cnty., FL HFA MHRB, Emerald Bay Apts., Ser.
A,
5.00%, 4/1/2028..................................... 3,210,905
Pinellas Cnty., FL HFA:
SFHRB, Ser. C 1:
1,790,000 5.40%, 9/1/2022...................................... 1,673,865
5,455,000 6.30%, 3/1/2029...................................... 5,622,196
Multi-Cnty. Program:
5,000,000 Ser. A 1,
5.95%, 3/1/2030..................................... 5,203,800
9,000,000 Ser. B 1,
6.20%, 3/1/2031..................................... 9,459,450
1,000,000 Plantation, FL Hlth. Facs. Auth. RB, Covenant Vlg.
Inc.,
5.00%, 12/1/2014.................................... 891,710
8,350,000 Polk Cnty., FL, IDA Tampa Elec. Co. Proj.,
5.85%, 12/1/2030.................................... 8,366,867
5,500,000 Reedy Creek, FL Impt. Dist., RB, Ser. A, (MBIA),
6.15%, 6/1/2003.................. .................. 5,718,078
2,000,000 Saint Petersburg, FL Pub. Util. RB, 6.40%, 10/1/2001
.................................................... 2,044,400
1,800,000 Sarasota Cnty., FL Impt. Dist., RB, Sunnyside
Property,
6.00%, 5/15/2010.................................... 1,758,060
Sarasota Cnty., FL Util. Sys. RB,
Capital Appreciation, Ser. A:
2,345,000 (Eff. Yield 3.54%) (a), (AMBAC),
0.00%, 6/1/2019...................................... 596,240
2,725,000 (Eff. Yield 3.55%) (a), (AMBAC),
0.00%, 6/1/2016...................................... 862,898
</TABLE>
36
<PAGE>
EVERGREEN
Florida Municipal Bond Fund
Schedule of Investments(continued)
August 31, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Florida - continued
$ 3,000,000 Seminole Cnty., FL GO, Sch. Dist., (MBIA),
6.00%, 8/1/2003................................... $ 3,181,920
6,135,000 South Lake Cnty., FL Hosp. RB, South Lake Hosp.
Inc.,
6.00%, 10/1/2022.................................. 6,134,632
St. John's Cnty., FL IDA RB:
1,250,000 Ser. A,
5.25%, 3/1/2011.................................... 1,244,950
2,000,000 Professional Golf Hall of Fame, Ser. A,
5.50%, 3/1/2017.................................... 1,987,640
Suwannee Cnty., FL Hlth. Care Facs. RB, Advent
Christian Vlg. Inc.:
1,360,000 4.25%, 4/1/2004.................................... 1,313,230
1,310,000 5.00%, 4/1/2008.................................... 1,275,193
1,160,000 5.00%, 4/1/2011.................................... 1,096,478
1,345,000 5.00%, 4/1/2014.................................... 1,235,033
200,000 Tallahassee, FL Hlth. Facs. RB, Tallahassee Mem.
Regl. Med. Ctr., (MBIA),
6.63%, 12/1/2013.................................. 218,358
Tampa, FL Hosp. RB, Capital Impt. Lee Moffitt, Ser.
A:
7,030,000 5.75%, 7/1/2019.................................... 6,882,933
20,610,000 5.75%, 7/1/2029.................................... 19,676,779
Tampa, FL Solid Wst. Sys. RB, McKay Bay Refuse To
Energy:
5,935,000 5.25%, 10/1/2012................................... 5,868,409
9,405,000 5.25%, 10/1/2013................................... 9,203,169
5,000,000 5.25%, 10/1/2014................................... 4,857,800
Volusia Cnty., FL Edl. Facs. Auth. RB, Embry-Riddle
Aero, Ser. A:
3,500,000 6.13%, 10/15/2016.................................. 3,562,055
2,600,000 6.13%, 10/15/2026.................................. 2,609,672
------------
557,681,563
------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Illinois - 1.1%
$ 7,500,000 Chicago, IL O'Hare Intl. Arpt. Spl. Fac. RB, United
Air Lines Inc. Proj.,
Ser. A,
5.35%, 9/1/2016................................... $ 6,876,450
------------
Puerto Rico - 0.2%
870,000 Comnwlth. of Puerto Rico Indl. Tourist Edl. RB,
Med. and Env. Ctl. Facs. Hosp. Auxilio Mutuo Obl.,
Ser. A,
6.25%, 7/1/2024................................... 919,607
------------
U.S. Virgin Islands - 3.3%
Virgin Islands, Pub. Fin. Auth. RB,
Ser. A:
5,335,000 5.20%, 10/1/2010................................... 5,165,400
6,250,000 5.50%, 10/1/2018................................... 5,965,625
6,550,000 Virgin Islands, Wtr. & Pwr. Auth. Elec. Sys. RB,
5.13%, 7/1/2012................................... 6,267,368
2,945,000 Virgin Islands, Wtr. & Pwr. Auth. RB,
5.375%, 7/1/2010.................................. 2,926,152
------------
20,324,545
------------
Total Municipal Obligations (cost $591,027,181).... 585,802,165
------------
<CAPTION>
Shares
<C> <S> <C>
MUTUAL FUND SHARES - 4.3% (cost $26,502,000)
26,502,000 Federated Municipal Obligations Fund............... 26,502,000
------------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments - (cost $617,529,181)..... 99.8% 612,304,165
Other Assets and Liabilities - net........... 0.2 1,165,257
----- ------------
Net Assets - ................................ 100.0% $613,469,422
===== ============
</TABLE>
37
<PAGE>
EVERGREEN
Florida Municipal Bond Fund
Schedule of Investments(continued)
August 31, 1999
The Fund invests primarily in debt securities issued by municipalities.
The ability of the issuers of debt securities to meet their obligations
may be affected by economic developments in a specific industry or munic-
ipality. In order to reduce risk associated with such economic develop-
ments, at August 31, 1999, 18.7% of the securities, as a percentage of
net assets, are backed by bond insurance of various financial institu-
tions and financial guaranty assurance agencies. At August 31, 1999, the
Fund had securities backed by bond insurance of the following financial
institutions representing more than 5% of net assets:
AMBAC 8.3%
MBIA 5.6%
(a) Effective Yield (calculated at the date of purchase) is the yield at
which the bond accretes on an annual basis until maturity date.
Summary of Abbreviations:
AMBAC Insured by American Municipal Bond Assurance Corporation
COP Certificate of Participation
FGIC Insured by Financial Guaranty Insurance Company
FNMA Insured by Federal National Mortgage Association
FSA Insured by Financial Security Assurance, Incorporated
GNMA Insured by Government National Mortgage Association
GO General Obligation
HFA Housing Finance Authority
IDA Industrial Development Authority
IDRB Industrial Development Revenue Bond
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
See Combined Notes to Financial Statements.
38
<PAGE>
EVERGREEN
Georgia Municipal Bond Fund
Schedule of Investments
August 31, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
Municipal Obligations - 94.1%
Georgia - 83.8%
$1,000,000 Albany Dougherty, GA Solid Wst. Disp. RB, Procter &
Gamble Paper Products,
5.30%, 5/15/2026.................................... $ 926,050
2,000,000 Americus Sumpter Cnty., GA Hosp., RB, Reg'l. Sumpter
Hosp. Proj. (AMBAC),
5.25%, 12/1/2014.................................... 1,958,760
Appling Cnty., GA Dev. Auth. PCRB, Oglethorpe Pwr.
Corp., Hatch Proj., (MBIA):
1,055,000 7.13%, 1/1/2015...................................... 1,149,792
500,000 7.15%, 1/1/2021...................................... 544,390
Atlanta, GA Airport Facs. RB, Ser. A, (AMBAC):
2,000,000 6.50%, 1/1/2006...................................... 2,188,200
1,000,000 6.50%, 1/1/2010...................................... 1,107,040
1,000,000 Atlanta, GA Urban Residential Fin. Auth. MHRB,
5.10%, 10/1/2014.................................... 961,290
Baldwin Cnty., GA Hosp. Auth. RB, Oconee Reg'l Med.
Ctr.:
1,465,000 5.25%, 12/1/2012..................................... 1,373,804
565,000 5.35%, 12/1/2014..................................... 524,212
630,000 5.40%, 12/1/2015..................................... 582,303
2,000,000 Brunswick & Glynn Cnty., GA Dev. Auth. RB, Georgia
Pacific Corp. Proj.,
5.55%, 3/1/2026..................................... 1,834,560
300,000 Butts Cnty., GA COP, (MBIA),
6.75%, 12/1/2014.................................... 328,872
300,000 Camden Cnty., GA Joint Dev. Auth. PCRB, Union Carbide
Corp. Proj.,
5.00%, 1/1/2012..................................... 283,104
1,820,000 Cartersville, GA Dev. Auth. RB, Wtr. & Wst. Facs.,
7.40%, 11/1/2010.................................... 2,094,310
120,000 Cartersville, GA GO,
6.70%, 1/1/2012..................................... 133,778
500,000 Clayton Cnty., GA Hsg. Auth. Mtge. RB, (FHA & FNMA),
7.13%, 12/1/2025.................................... 536,725
Coffee Cnty., GA Hosp. Auth., RB, Ser. A:
500,000 6.25%, 12/1/2006..................................... 498,675
1,600,000 6.75%, 12/1/2016..................................... 1,629,488
College Park, GA Business & IDA, Civic Ctr. Proj. RB,
Ser. A, (FSA):
1,435,000 5.70%, 9/1/2009...................................... 1,506,377
1,470,000 5.75%, 9/1/2010...................................... 1,534,754
2,000,000 Columbus, GA Reg'l Healthcare Sys. RB, Medical Ctr.
Hosp. Auth., (MBIA),
6.10%, 8/1/2014..................................... 2,114,540
1,055,000 Columbus, GA Wtr. & Swr. RB, (FGIC),
5.63%, 5/1/2013..................................... 1,076,606
1,000,000 Conyers, GA Wtr. & Swr. RB, Ser. A, (AMBAC),
6.60%, 7/1/2015..................................... 1,094,010
DeKalb Cnty., GA Hsg. Auth. MHRB:
1,445,000 North Hill Apts. Proj., (FNMA),
6.63%, 1/1/2005...................................... 1,538,318
500,000 The Lakes at Indian Creek Proj., (FSA), 7.15%,
1/1/2025............................................. 535,045
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
Municipal Obligations - continued
Georgia - continued
$ 500,000 DeKalb Cnty., GA Sch. Dist. GO, Ser. A, 6.25%,
7/1/2011.............................................. $ 547,775
3,000,000 Effingham Cnty., GA Dev. Auth., Solid Wst. Disp. RB,
Fort James Proj.,
5.63%, 7/1/2018....................................... 2,828,640
Effingham Cnty., GA Sch. Dist. GO (MBIA):
1,260,000 6.25%, 2/1/2007........................................ 1,374,459
1,160,000 6.25%, 2/1/2008........................................ 1,268,564
500,000 6.25%, 2/1/2009........................................ 547,640
Fayette Cnty., GA Sch. Dist. GO:
600,000 6.13%, 3/1/2015........................................ 648,888
2,200,000 6.25%, 3/1/2006........................................ 2,385,262
1,000,000 Forsyth Cnty., GA Sch. Dist. GO,
6.75%, 7/1/2016........................................ 1,143,390
3,000,000 Fulton Cnty., GA Dev. Auth., Special Facs. RB, Delta
Airlines Inc. Proj.,
5.45%, 5/1/2023....................................... 2,679,750
1,500,000 Fulton Cnty., GA Residential Care RB,
6.90%, 7/1/2019........................................ 1,440,450
Fulton Cnty., GA Wtr. & Swr. RB, (FGIC):
1,420,000 6.25%, 1/1/2006........................................ 1,540,871
1,500,000 6.25%, 1/1/2009........................................ 1,641,870
390,000 6.38%, 1/1/2014........................................ 430,860
2,340,000 Gainesville & Hall Cnty., GA Hosp. Auth. RB, Northeast
GA Hlth. Sys. Inc. Proj., (MBIA),
6.00%, 5/15/2014...................................... 2,451,478
Gainesville, GA Wtr. & Swr. RB, (FGIC):
1,000,000 5.25%, 11/15/2010...................................... 1,013,460
1,000,000 Prerefunded, Ser. B, 7.20%, 11/15/2010................. 1,058,640
500,000 George L. Smith II, GA World Congress Ctr. Auth. RB,
Domed Stadium Proj., (MBIA),
7.88%, 7/1/2020....................................... 523,865
395,000 Georgia Hsg. & Fin. Auth. RB, Ser. A-2, (FHA/VA),
6.55%, 12/1/2027...................................... 406,265
Georgia Muni. Elec. Auth. Pwr. RB, Ser. B:
500,000 6.20%, 1/1/2010........................................ 534,175
1,000,000 (MBIA-IBC),
6.25%, 1/1/2017........................................ 1,081,860
400,000 Ser. EE, (AMBAC),
7.25%, 1/1/2024........................................ 485,248
1,000,000 Proj. One Subser. A, (MBIA),
6.00%, 1/1/2007 ,...................................... 1,069,540
1,000,000 Georgia State GO, Ser. B,
7.00%, 11/1/2008...................................... 1,055,320
2,050,000 Glynn-Brunswick, GA Memorial Hosp. Auth., RB, (MBIA),
6.00%, 8/1/2016....................................... 2,085,240
500,000 Griffin Spaulding Cnty., GA Sch. Sys., GO, (FSA),
7.50%, 2/1/2002....................................... 535,875
2,500,000 Gwinnett Cnty., GA Wtr. & Swr. COP,
8.60%, 8/1/2003....................................... 2,872,675
</TABLE>
39
<PAGE>
EVERGREEN
Georgia Municipal Bond Fund
Schedule of Investments(continued)
August 31, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Georgia - continued
Hall Cnty., GA Sch. Dist. GO, (AMBAC):
$1,210,000 6.45%, 12/1/2009..................................... $ 1,340,099
500,000 6.70%, 12/1/2014..................................... 559,550
Metro Atlanta, GA Rapid Transit Auth. Sales Tax RB:
830,000 Ser. D, (FGIC),
7.00%, 7/1/2011...................................... 963,115
1,000,000 Ser. P, (AMBAC),
6.25%, 7/1/2011...................................... 1,093,690
1,000,000 Middle, GA Coliseum Auth., RB, GA Coliseum Proj.,
Ser. A,
5.38%, 7/1/2014..................................... 991,350
Monroe Cnty., GA Dev. Auth., PCRB, Oglethorpe Power
Corp., Ser. A, (MBIA-IBC):
1,000,000 6.45%, 1/1/2005...................................... 1,082,710
1,000,000 6.70%, 1/1/2009...................................... 1,119,930
525,000 Peach Cnty., GA Sch. Dist. GO, (MBIA),
6.50%, 2/1/2006..................................... 577,106
1,000,000 Rome, GA Wtr. & Swr. RB, (AMBAC),
5.10%, 1/1/2013..................................... 978,170
Savannah, GA EDA RB, Mighty Eighth Air Force:
1,000,000 5.88%, 1/1/2012...................................... 1,028,890
860,000 5.88%, 1/1/2015...................................... 876,512
Savannah, GA Hosp. Auth. RB, Saint Joseph's Hosp.
Proj.:
1,500,000 6.13%, 7/1/2012...................................... 1,611,225
500,000 6.20%, 7/1/2023...................................... 538,385
1,300,000 Washington, GA Cnty. Sch. Dist. GO, (AMBAC),
6.88%, 1/1/2014..................................... 1,459,419
-----------
75,927,214
-----------
Maryland - 0.8%
750,000 Frederick Cnty., MD Spl. Oblig., Urban CDA,
6.63%, 7/1/2025..................................... 727,830
-----------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C> <C>
MUNICIPAL OBLIGATIONS - continued
South Carolina - 1.0%
$1,000,000 Georgetown Cnty., SC PCRB, Ser. A,
5.13%, 2/1/2012................................. $ 939,190
-----------
Virginia - 3.0%
1,000,000 Charles City Cnty., VA IDA RB,
4.88%, 2/1/2009................................. 918,560
1,750,000 James City Cnty., NC Residential Care Facs. RB,
First Mtge., Williamsburg Landing,
6.63%, 3/1/2019................................. 1,789,813
-----------
2,708,373
-----------
Puerto Rico - 1.2%
1,000,000 Cmnwlth. of Puerto Rico, GO, (MBIA),
6.25%, 7/1/2008................................. 1,105,590
-----------
U. S. Virgin Islands - 4.3%
2,000,000 Virgin Islands, Pub. Fin. Auth. Sr. Lien RB, Ser.
A,
5.50%, 10/1/2022................................ 1,887,700
2,000,000 Virgin Islands, Wtr. & Pwr. Auth., Elec. Sys. RB,
5.25%, 7/1/2009................................. 1,982,440
-----------
3,870,140
-----------
Total Municipal Obligations
(cost $84,394,118).............................. 85,278,337
-----------
<CAPTION>
Shares
<C> <S> <C> <C>
MUTUAL FUND SHARES - 7.3%
4,489,000 Federated Municipal Obligations
Fund............................................ 4,489,000
2,072,000 Federated Tax Free Obligations Fund.............. 2,072,000
-----------
Total Mutual Fund Shares
(cost $6,561,000)............................... 6,561,000
-----------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments -
(cost $90,955,118)........................... 101.4% 91,839,337
Other Assets and Liabilities - net............ (1.4) (1,245,850)
----- -----------
Net Assets - ................................. 100.0% $90,593,487
===== ===========
</TABLE>
40
<PAGE>
EVERGREEN
Georgia Municipal Bond Fund
Schedule of Investments(continued)
August 31, 1999
The Fund invests primarily in debt securities issued by municipalities.
The ability of the issuers of debt securities to meet their obligations
may be affected by economic developments in a specific industry or munic-
ipality. In order to reduce risk associated with such economic develop-
ments, at August 31, 1999, 6.3% of the securities, as a percentage of net
assets, are backed by bond insurance of various financial institutions
and financial guaranty assurance agencies.
Summary of Abbreviations:
AMBAC Insured by American Municipal Assurance Corporation
CDA Community Development Authority
COP Certificate of Participation
EDA Economic Development Authority
FGIC Insured by Financial Guaranty Insurance Company
FHA Insured by Federal Housing Authority
FNMA Insured by Federal National Mortgage Association
FSA Insured by Financial Security Assurance, Incorporated
GO General Obligation
IBC Insured Bond Certification
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
VA Guaranteed by Veteran's Authority
See Combined Notes to Financial Statements.
41
<PAGE>
EVERGREEN
Maryland Municipal Bond Fund
Schedule of Investments
August 31, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - 96.1%
District of Columbia - 1.3%
$ 500,000 District of Columbia Metro. Area
Transit Auth. RB, (FGIC),
6.00%, 7/1/2008..................................... $ 539,015
-----------
Georgia - 1.2%
500,000 Fulton Cnty., GA Residential Care
RB, Sr. Lien, RHA Asstd. Living,
6.90%, 7/1/2019..................................... 480,150
-----------
Maryland - 87.5%
1,230,000 Annapolis, MD EDRB, St. John's College Fac.,
5.50%, 10/1/2018.................................... 1,171,329
200,000 Anne Arundel Cnty., MD PCRB, Baltimore Gas & Electric
Co. Proj.,
6.00%, 4/1/2024..................................... 203,902
250,000 Anne Arundel Cnty., MD Wtr. & Swr. RB,
5.25%, 4/15/2010.................................... 252,528
1,000,000 Baltimore Cnty., MD Auto Pkg. RB,
5.25%, 7/1/2008..................................... 1,012,950
1,000,000 Baltimore Cnty., MD Refunding Metro. Dist. GO,
5.00%, 8/1/2011..................................... 993,750
200,000 Baltimore, MD Wtr. Proj. RB, Ser. A,
5.38%, 7/1/2015..................................... 200,066
2,015,000 Calvert Cnty., MD PCRB, Baltimore
Gas & Elec. Co. Proj.,
5.55%, 7/15/2014.................................... 2,018,949
1,400,000 Carroll Cnty., MD GO, Cnty. Commissioners, Cons. Pub.
Impt.,
5.35%, 12/1/2016.................................... 1,388,674
250,000 Frederick Cnty., MD GO,
5.20%, 5/1/2008..................................... 254,398
1,000,000 Frederick Cnty., MD Spl. Obl. RB, Urbana CDA,
6.63%, 7/1/2025..................................... 970,440
275,000 Hagerstown, MD GO,
5.50%, 9/1/2009..................................... 282,549
1,000,000 Harford Cnty. MD MHRB, Perkins
Place Proj., Ser. A, (Eff. Yield
5.00%) (a),
0.00%, 9/1/2028..................................... 956,950
Howard Cnty., MD Cons. Pub. Impt. GO:
575,000 5.25%, 8/15/2011..................................... 578,197
1,200,000 Ser. A,
5.00%, 2/15/2011..................................... 1,191,708
150,000 Maryland CDA Dept. of Hsg. & Cmnty. Dev. RB, (AMBAC),
6.88%, 6/1/2006..................................... 159,461
Maryland CDA Dept. of Hsg. & Cmnty. Dev. SFHRB:
100,000 Ser. 3,
6.90%, 4/1/2005...................................... 104,169
1,470,000 Ser. 5,
5.40%, 4/1/2008...................................... 1,485,009
1,000,000 Maryland Cmnty. Dev. Admin. Dept. Hsg. & Cmnty. Dev.
RB, Ser. F,
5.90%, 9/1/2019..................................... 1,001,500
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Maryland - continued
Maryland GO, State & Local Facs. Loan:
$1,000,000 Ser. 1,
5.70%, 3/15/2010..................................... $ 1,048,690
500,000 Ser. 2,
5.00%, 7/15/2010..................................... 499,970
Maryland Hlth. & Higher Edl. Facs., Auth. RB:
Calvert Memorial Hosp.:
450,000 4.80%, 7/1/2010...................................... 422,694
500,000 5.00%, 7/1/2019...................................... 452,640
500,000 Doctors Cmnty. Hosp. Inc.,
5.50%, 7/1/2024...................................... 444,915
1,000,000 Francis Scott Key Med. Ctr.,
5.30%, 7/1/2008...................................... 1,017,980
200,000 Memorial Hosp. at Easton, (MBIA),
5.25%, 7/1/2012...................................... 198,512
600,000 Pickersgill,
5.85%, 1/1/2010...................................... 614,238
225,000 Union Hosp. of Cecil Cnty.,
4.60%, 7/1/2009...................................... 210,118
500,000 Upper Chesapeake Hosp., (FSA),
5.50%, 1/1/2020...................................... 493,935
1,800,000 Maryland Stadium Auth. Lease RB, Convention Ctr.
Expansion Proj., (AMBAC),
5.88%, 12/15/2011................................... 1,887,228
850,000 Maryland Trans. Facs. Auth. RB,
5.80%, 7/1/2006..................................... 906,091
Montgomery Cnty., MD GO, Cons. Pub. Impt., Ser. A:
1,000,000 5.38%, 5/1/2012...................................... 1,015,370
500,000 5.75%, 7/1/2006...................................... 533,050
1,250,000 Northeast MD Wst. Disp. Auth.
Resource Recovery RB, Baltimore
Resco Retrofit Proj.,
5.00%, 1/1/2012..................................... 1,114,937
1,855,000 Northeast MD Wst. Disp. Auth. Solid
Wst. RB, Montgomery Cnty. Resource Recovery Proj.,
6.30%, 7/1/2016..................................... 1,919,610
1,000,000 Ocean City, MD GO, (MBIA),
5.50%, 3/15/2009.................................... 1,029,820
250,000 Prince Georges Cnty., MD COP, Real Estate Acquisition
Program,
5.90%, 9/15/2009.................................... 262,995
1,300,000 Prince Georges Cnty., MD IDA Lease
RB, Hyattsville Dist. Court. Facs.,
Ser. A,
6.00%, 7/1/2009..................................... 1,375,140
250,000 Prince Georges Cnty., MD Stormwater Mgt. RB,
5.40%, 3/15/2007.................................... 257,950
Univ. of MD, Sys. Auxilliary Fac. &
Tuition RB, Ser. A:
1,400,000 5.40%, 4/1/2009...................................... 1,438,472
50,000 6.30%, 2/1/2009...................................... 52,424
Washington, MD Suburban Sanitation
Dist., Wtr. Supply RB:
1,600,000 5.38%, 6/1/2011...................................... 1,618,384
1,700,000 5.50%, 6/1/2010...................................... 1,744,132
-----------
34,785,824
-----------
</TABLE>
42
<PAGE>
EVERGREEN
Maryland Municipal Bond Fund
Schedule of Investments(continued)
August 31, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Virginia - 1.9%
$ 750,000 Chesapeake, VA Redev. & Hsg. Auth. MHRB, Residential
Rental, Ser. A,
6.20%, 4/1/2028..................................... $ 739,087
-----------
U. S. Virgin Islands - 4.2%
1,000,000 Virgin Islands, Pub. Fin. Auth. RB,
Sr. Lien, Ser. A,
5.63%, 10/1/2025.................................... 954,610
750,000 Virgin Islands, Wtr. & Pwr. Auth.
Elec. Sys. RB,
5.30%, 7/1/2018..................................... 704,445
-----------
1,659,055
-----------
Total Municipal Obligations
(cost $38,475,542).................................. 38,203,131
-----------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
SHORT-TERM MUNICIPAL SECURITIES - 2.5% (cost $1,000,000)
$1,000,000 Maryland Econ. Dev. Corp. RB,
Erickson Foundation Inc. Proj.,
3.35%, 5/1/2024 (b)................................. $ 1,000,000
-----------
</TABLE>
<TABLE>
<CAPTION>
Shares
<C> <S> <C>
MUTUAL FUND SHARES - 0.3% (cost $116,000)
116,000 Federated Municipal Obligations Fund ................. 116,000
-----------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments -
(cost $39,591,542)............................ 98.9% 39,319,131
Other Assets and
Liabilities - net............................. 1.1 453,924
----- -----------
Net Assets - .................................. 100.0% $39,773,055
===== ===========
</TABLE>
The Fund invests primarily in debt securities issued by municipalities.
The ability of the issuers of debt securities to meet their obligations
may be affected by economic developments in a specific industry or munic-
ipality. In order to reduce risk associated with such economic develop-
ments, at August 31, 1999, 10.8% of the securities, as a percentage of
net assets, are backed by bond insurance of various financial institu-
tions and financial guaranty assurance agencies. At August 31, 1999, the
Fund had securities backed by bond insurance of the following financial
institutions representing more than 5% of net assets:
AMBAC 5.1%
(a) Effective Yield (calculated at the date of purchase) is the yield at
which the bond accretes on an annual basis until maturity date.
(b) Security is a variable 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.
Summary of Abbreviations:
AMBAC Insured by American Municipal Bond Assurance Corporation
CDA Community Development Authority
COP Certificate of Participation
EDRB Economic Development Revenue Bond
FGIC Insured by Federal Guaranty Insurance Company
FSA Insured by Financial Security Assurance, Incorporated
GO General Obligation
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
RHA Residential Housing Association
SFHRB Single Family Housing Revenue Bond
See Combined Notes to Financial Statements.
43
<PAGE>
EVERGREEN
North Carolina Municipal Bond Fund
Schedule of Investments
August 31, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - 94.0%
Illinois - 2.3%
$ 3,775,000 Chicago, IL RB, O'Hare Int'l. Arpt. Spl. Facs.,
United Air Lines Inc. Proj., Ser. B,
5.20%, 4/1/2011................................... $ 3,532,721
4,000,000 Illinois Dev. Fin. Auth. Solid Wst., Disposal RB,
Wst. Mgmt. Inc. Proj., 5.05%, 1/1/2010............ 3,733,520
------------
7,266,241
------------
Louisiana - 0.3%
1,000,000 Saint Charles Parish, LA PCRB, Union Carbide Corp.
Proj., 5.10%, 1/1/2012............................ 943,990
------------
North Carolina - 86.7%
1,435,000 Asheville, NC Hsg. Auth. MHRB, Woodridge Apts.,
(GNMA),
5.80%, 11/20/2039................................. 1,417,220
1,165,000 Burlington, NC Burlington Homes RB, Section 8, Ser.
A,
6.00%, 8/1/2009................................... 1,202,245
2,480,000 Cabarrus Cnty., NC GO, (MBIA),
5.30%, 2/1/2011................................... 2,513,827
6,000,000 Catawba Cnty., NC Hosp. RB, Catawba Mem. Hosp.
Proj., 5.25%, 10/1/2014........................... 5,835,300
1,000,000 Chapel Hill, NC Parking Facs. RB, COP, 6.35%,
12/1/2018......................................... 1,042,680
Charlotte, NC COP:
1,735,000 Cityfair Parking Fac. Proj., Ser. A, 6.125%,
6/1/2010........................................... 1,837,347
1,000,000 Convention Fac. Proj., (AMBAC),
6.65%, 12/1/2003,.................................. 1,066,190
Stadium Parking Fac. Proj., Ser. C:
1,245,000 6.00%, 6/1/2010.................................... 1,301,697
1,475,000 6.00%, 6/1/2014.................................... 1,529,428
5,000,000 Charlotte, NC GO,
5.00%, 2/1/2010................................... 5,003,800
1,410,000 Charlotte, NC Hsg. Dev. Corp., RB, Mtge. Vantage 78
Apts.,
6.60%, 7/15/2021.................................. 1,454,626
Charlotte, NC Mecklenberg Hosp. RB:
1,050,000 5.75%, 1/1/2012.................................... 1,073,698
1,000,000 6.00%, 1/1/2005.................................... 1,049,460
18,000,000 Charlotte, NC Spl. Facs. RB, Charlotte Douglas
Intl. Arpt., 5.60%, 7/1/2027...................... 15,873,660
4,000,000 Craven Cnty., NC, Indl. Facs. & Pollution Ctl. Fin.
Auth. RB, Weyerhaeuser Co. Proj.,
6.35%, 1/1/2010................................... 4,200,680
2,000,000 Craven Cnty., NC GO,
6.40%, 6/1/2000................................... 2,039,960
2,390,000 Cumberland Cnty., NC COP, Civic Ctr., Proj., Ser.
A, (AMBAC),
6.40%, 12/1/2024.................................. 2,642,623
Cumberland Cnty., NC GO:
2,100,000 5.90%, 2/1/2010.................................... 2,239,650
2,100,000 5.90%, 2/1/2011.................................... 2,239,650
2,100,000 5.90%, 2/1/2012.................................... 2,239,650
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
North Carolina - continued
Cumberland Cnty., NC Hosp. Facs. RB, Cumberland Cnty.
Hosp. Sys. Inc.:
$ 3,520,000 5.00%, 10/1/2006..................................... $ 3,495,008
3,360,000 5.25%, 10/1/2012..................................... 3,239,712
3,000,000 5.25%, 10/1/2013..................................... 2,873,130
4,830,000 5.25%, 10/1/2014..................................... 4,588,355
Durham Cnty., NC, Pub. Impt. Bonds, Ser. 95:
2,400,000 5.80%, 2/1/2010...................................... 2,542,968
2,400,000 5.80%, 2/1/2011...................................... 2,542,968
Durham Cnty., NC COP, New Durham Corp.:
1,160,000 Ser. A,
5.25%, 12/1/2010..................................... 1,174,662
1,485,000 Ser. B,
5.25%, 12/1/2011..................................... 1,490,198
2,750,000 Durham Cnty., NC MHRB, Ivy Commons Proj.,
8.00%, 3/1/2029..................................... 2,769,387
Fayetteville, NC Pub. Works Commission RB, Ser. A
(FSA):
2,000,000 6.00%, 3/1/2012...................................... 2,082,160
1,360,000 6.75%, 3/1/2003...................................... 1,462,626
1,025,000 Franklin Cnty., NC COP, Jail & Sch. Proj., (FGIC),
6.20%, 6/1/2004..................................... 1,100,502
910,000 Fremont, NC Hsg. Dev. Corp. RB, Torhunta
Apts., (FHA), 6.75%, 7/15/2022...................... 943,661
Gastonia, NC Combined Util. Sys. RB, (MBIA):
1,000,000 6.00%, 5/1/2014...................................... 1,080,440
1,505,000 6.10%, 5/1/2019...................................... 1,632,338
Greensboro, NC Combined Enterprise Sys. RB, Ser. A:
1,615,000 5.20%, 6/1/2010...................................... 1,627,161
880,000 6.50%, 6/1/2002...................................... 930,107
1,050,000 6.50%, 6/1/2003...................................... 1,126,125
Greensboro, NC COP, Colliseum Arena Expansion Proj.:
1,000,000 6.40%, 12/1/2001..................................... 1,047,740
1,100,000 6.65%, 12/1/2004..................................... 1,169,146
1,000,000 Harnett Cnty., NC COP, (AMBAC), 6.40%, 12/1/2014..... 1,082,420
Haywood Cnty., NC Indl. Facs. & Pollution Ctl. Fin.
RB, Champion Intl. Corp. Proj.:
2,500,000 6.00%, 3/1/2020...................................... 2,449,525
1,750,000 6.25%, 9/1/2025...................................... 1,769,180
4,750,000 Martin Cnty., NC, Indl. Facs. & Pollution Ctl. Fin.
Auth. RB, Weyerhaeuser Co. Proj., 6.80%, 5/1/2024... 5,049,155
6,500,000 Mecklenburg Cnty., NC GO, 5.00%, 4/1/2009............ 6,553,885
Mecklenburg Cnty., NC Pub. Impt. RB:
4,095,000 5.40%, 4/1/2008...................................... 4,248,522
5,000,000 5.40%, 4/1/2009...................................... 5,165,950
</TABLE>
44
<PAGE>
EVERGREEN
North Carolina Municipal Bond Fund
Schedule of Investments(continued)
August 31, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
North Carolina - continued
$ 1,000,000 North Carolina Coastal Regl. Solid Wst. Mgmt. Auth.,
RB Solid Wst. Disposal Sys.,
6.50%, 6/1/2008..................................... $ 1,074,200
7,850,000 North Carolina Eastern Muni. Pwr. Agcy., Pwr. Sys.
RB, Ser. A, 5.625%, 1/1/2014........................ 7,880,458
North Carolina Eastern Muni. Pwr. Agcy., Pwr. Sys.
RB, (MBIA):
3,400,000 7.00%, 1/1/2013...................................... 3,897,998
1,845,000 7.50%, 1/1/2010...................................... 2,163,779
Ser. A:
5,000,000 5.00%, 1/1/2021...................................... 4,684,250
5,000,000 5.70%, 1/1/2013...................................... 5,066,700
3,750,000 6.50%, 1/1/2018...................................... 3,926,475
5,440,000 Ser. B
6.00%, 1/1/2022...................................... 5,308,842
6,500,000 Ser. C, (AMBAC),
6.00%, 1/1/2018...................................... 6,817,915
North Carolina Hsg. Fin. & Dev. Auth., SFHRB:
1,045,000 Ser. EE,
5.90%, 9/1/2013...................................... 1,072,369
3,640,000 Ser. JJ,
6.15%, 3/1/2011...................................... 3,761,503
1,030,000 Ser. T,
7.05%, 9/1/2020...................................... 1,072,107
920,000 Ser. W,
6.20%, 9/1/2009...................................... 954,794
2,000,000 North Carolina Hsg. Fin. Agcy., Ser. 5, 4.90%,
1/1/2024............................................ 1,985,540
North Carolina Med. Care Commission Hosp. RB:
920,000 Carolina Medicorp Proj.
6.30%, 5/1/2001...................................... 951,114
Deerfield Episcopal:
11,595,000 5.30%, 11/1/2004..................................... 11,546,069
3,550,000 5.85%, 7/1/2027...................................... 3,312,186
2,630,000 Gaston Hlth. Care
5.375%, 2/15/2011.................................... 2,585,816
Grace Hosp. Inc.:
3,825,000 5.25%, 10/1/2013..................................... 3,731,938
1,110,000 6.50%, 10/1/2005..................................... 1,203,606
1,180,000 6.50%, 10/1/2006..................................... 1,287,368
1,465,000 Halifax Regional Med. Ctr.,
5.00%, 8/15/2018..................................... 1,309,564
High Point Regional Hlth. Sys. (AMBAC):
1,345,000 5.25%, 10/1/2012,.................................... 1,334,886
1,440,000 5.25%, 10/1/2013,.................................... 1,414,641
1,605,000 5.50%, 10/1/2008..................................... 1,662,940
1,445,000 5.50%, 10/1/2009..................................... 1,488,914
3,100,000 Hlth. Care Facs.,
5.75%, 7/1/2019...................................... 2,931,918
2,320,000 Northeast Med. Ctr. Proj.,
5.00%, 11/1/2010..................................... 2,284,759
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
North Carolina - continued
North Carolina Med. Care Commission Hosp. RB -
continued
PA Mem. Hosp.:
$ 1,000,000 5.25%, 1/1/2012..................................... $ 907,600
2,350,000 5.375%, 1/1/2022.................................... 2,068,118
5,035,000 Pitt Cnty. Mem. Hosp. Ser. A, 5.25%, 12/1/2010...... 5,047,285
Presbyterian Hlth. Svcs. Co. Proj.:
900,000 6.125%, 10/1/2014................................... 962,568
925,000 7.30%, 10/1/2015.................................... 977,115
Rex Hosp. Proj.:
2,500,000 6.125%, 6/1/2010.................................... 2,689,850
3,700,000 6.25%, 6/1/2017..................................... 3,996,814
5,000,000 Stanley Mem. Hosp. Proj. (AMBAC),
5.375%, 10/1/2014................................... 4,951,400
Transylvania Community Hosp. Inc.:
1,130,000 5.50%, 10/1/2012.................................... 1,073,816
1,090,000 5.75%, 10/1/2019.................................... 1,023,096
11,500,000 North Carolina Muni. Pwr. Agcy., Elec. RB, Catawba
Elec.
7.25%, 1/1/2007..................................... 12,809,435
North Carolina Student Edl. Assistance Auth. RB:
Ser. A:
1,000,000 6.05%, 7/1/2010..................................... 1,014,840
2,000,000 6.30%, 7/1/2015..................................... 2,048,140
2,375,000 Ser. C,
6.35%, 7/1/2016..................................... 2,437,652
1,000,000 Pitt Cnty., NC COP Pub. Facs., Ser. A, (MBIA),
5.55%, 4/1/2012..................................... 1,019,300
Raleigh, NC Hsg. Auth. Multifamily RB:
Hsg. Mtge. Cedar Point Apts., Ser. A:
3,170,000 5.10%, 11/1/2010.................................... 3,111,609
5,000,000 5.80%, 11/1/2019.................................... 4,838,050
3,600,000 Subordinated Housing Mtge. Cedar Point, Ser. C,
7.00%, 11/1/2030.................................... 3,452,508
1,835,000 Univ. of NC Chapel Hill Pkg. Sys. RB, Ser. A,
5.60%, 5/15/2017................................... 1,839,844
3,865,000 Winston Salem, NC GO 8.875%, 6/1/2000............... 4,010,595
-----------
270,032,706
-----------
West Virginia - 0.9%
3,000,000 Kanawha Cnty., WV PCRB, Union Carbide Corp. Proj.,
5.10%, 1/1/2012.................................... 2,831,970
-----------
Puerto Rico - 2.2%
2,535,000 Cmnwlth. of Puerto Rico GO, (MBIA) 6.25%, 7/1/2009.. 2,803,482
1,000,000 Cmnwlth. of Puerto Rico Muni. GO, Fin. Agcy., Ser.
A, 5.70%, 7/1/2003................................. 1,043,540
1,400,000 Cmnwlth. of Puerto Rico Port Auth. RB, American
Airlines Proj., Ser. A, 6.25%, 6/1/2026............ 1,431,906
</TABLE>
45
<PAGE>
EVERGREEN
North Carolina Municipal Bond Fund
Schedule of Investments(continued)
August 31, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Puerto Rico - continued
Cmnwlth. of Puerto Rico RB, Indl. Tourist Edl.
Auth., Mennonite General Hosp. Proj., Ser. A:
$ 1,380,000 5.625%, 7/1/2017................................... $ 1,283,717
500,000 5.625%, 7/1/2027................................... 449,295
------------
7,011,940
------------
U. S. Virgin Islands - 1.6%
5,000,000 Virgin Islands Pub. Fin. Auth., Refunding Sr. Lien,
Ser. A 5.20%, 10/1/2010........................... 4,841,050
------------
Total Municipal Obligations (cost $292,851,182).... 292,927,897
------------
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
MUTUAL FUND SHARES - 4.8% (cost $14,953,000)
14,953,000 Federated Municipal Obligations Fund................. $ 14,953,000
------------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments -
(cost $307,804,182).......................... 98.8% 307,880,897
Other Assets and
Liabilities - net............................ 1.2 3,626,663
----- ------------
Net Assets - ................................. 100.0% $311,507,560
===== ============
</TABLE>
The Fund invests primarily in debt securities issued by municipalities.
The ability of the issuers of debt securities to meet their obligations
may be affected by economic developments in a specific industry or munic-
ipality. In order to reduce risk associated with such economic develop-
ments, at August 31, 1999, 13.8% of the securities, as a percentage of
net assets, are backed by bond insurance of various financial institu-
tions and financial guaranty assurance agencies. At August 31, 1999, the
Fund had securities backed by bond insurance of the following financial
institutions representing more than 5% of net assets:
AMBAC 7.2%
Summary of Abbreviations:
AMBAC Insured by American Municipal Bond Assurance Corporation
COP Certificate of Participation
FGIC Insured by Financial Guaranty Insurance Company
FHA Insured by Federal Housing Authority
FSA Insured by Financial Security Assurance, Incorporated
GNMA Insured by Government National Mortgage Association
GO General Obligation
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.
46
<PAGE>
EVERGREEN
South Carolina Municipal Bond Fund
Schedule of Investments
August 31, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - 95.1%
Georgia - 1.4%
$ 1,000,000 Fulton Cnty., GA Residential Care RB,
6.90%, 7/1/2019.................................... $ 960,300
-----------
Maryland - 1.1%
750,000 Frederick Cnty., MD Spl. Oblig. RB, Urbana Community
Dev. Auth.,
6.625%, 7/1/2025................................... 727,830
-----------
South Carolina - 81.5%
400,000 Calhoun Cnty., SC Solid Wst. Disposal Facs. RB,
Eastman Kodak Co. Proj.,
6.75%, 5/1/2017.................................... 452,108
400,000 Camden, SC Pub. Util. RB, Refunding & Impt., (MBIA),
5.50%, 3/1/2017.................................... 397,780
Charleston Cnty., SC Hlth. Facs. RB, First Mtge.
Episcopal Church Proj.:
300,000 7.125%, 4/1/2020.................................... 307,074
750,000 Ser. A,
6.25%, 4/1/2019..................................... 755,910
Charleston Cnty., SC Resource Recovery RB, Foster
Wheeler (AMBAC):
3,000,000 5.10%, 1/1/2008..................................... 3,011,910
2,000,000 5.25%, 1/1/2010..................................... 2,006,180
675,000 Charleston, SC GO,
7.00%, 4/1/2011.................................... 700,920
3,250,000 Columbia, SC Wtrwks. & Swr. Sys. RB,
5.70%, 2/1/2010.................................... 3,413,962
Darlington Cnty., SC IDRB:
500,000 Nucor Corp. Proj., Ser. A,
5.75%, 8/1/2023.................................... 496,760
750,000 Sonoco Products Co. Proj.,
6.00%, 4/1/2026.................................... 753,443
Florence Cnty., SC GO,
Sch. Dist. No. 001 (FGIC):
1,150,000 5.80%, 5/1/2007..................................... 1,200,474
1,200,000 5.80%, 5/1/2009..................................... 1,252,668
1,500,000 Georgetown Cnty., SC PCRB, Int'l. Paper Co. Proj.,
Ser. A,
5.125%, 2/1/2012................................... 1,408,785
200,000 Georgetown Cnty., SC Wtr. & Swr. Dist. RB, Refunding
& Impt. Jr. Lien,
6.50%, 6/1/2017.................................... 220,572
750,000 Grand Strand, SC Wtrwrks. & Swr. Sys. Auth. RB,
(MBIA),
6.375%, 6/1/2012................................... 829,845
1,110,000 Greenville Cnty, SC University Center Pub. Facs. RB,
5.50%, 4/1/2012.................................... 1,127,749
Greenville, SC Hosp. Facs. RB:
1,000,000 Ser. A,
5.40%, 5/1/2007..................................... 1,021,310
Ser. B:
3,500,000 5.60%, 5/1/2010..................................... 3,564,610
600,000 5.70%, 5/1/2012..................................... 609,540
400,000 Greenville, SC Mem. Auditorium Dist. GO, Bi-Lo Ctr.
Proj., (AMBAC),
5.75%, 4/1/2018.................................... 430,128
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
South Carolina - continued
$ 1,000,000 Greenwood, SC Combined Pub. Util. RB, Refunding &
Impt., (AMBAC),
5.50%, 12/1/2008..................................... $ 1,032,970
300,000 Horry Cnty., SC Arpt. RB, Ser. A, (FSA),
5.60%, 7/1/2017...................................... 295,257
1,000,000 Horry Cnty., SC GO, Sch. Dist.,
Ser. B, (FGIC),
5.50%, 1/1/2012...................................... 1,009,110
Laurens County, SC Dist. No. 055, (FGIC):
1,075,000 5.25%, 3/1/2009....................................... 1,097,575
500,000 5.50%, 3/1/2013....................................... 507,240
1,475,000 5.50%, 3/1/2015....................................... 1,483,747
1,500,000 Loris, SC Community Hosp. RB, Ser. A,
5.50%, 1/1/2016...................................... 1,392,825
500,000 Loris, SC Community Sch. Hosp. Dist. RB,
5.625%, 1/1/2020..................................... 458,880
2,000,000 Medical University South Carolina Hosp. Facs. RB,
6.00%, 7/1/2014...................................... 2,009,300
Myrtle Beach, SC GO:
500,000 5.40%, 3/1/2012....................................... 503,540
525,000 5.40%, 3/1/2013....................................... 526,139
Piedmont, SC Muni. Pwr. Agcy.,
Elec. RB, (MBIA):
1,000,000 6.10%, 1/1/2006....................................... 1,077,550
1,150,000 6.25%, 1/1/2009....................................... 1,259,664
1,175,000 Scorence Cnty., SC GO, Sch. Dist. No. 001, (FGIC),
5.80%, 5/1/2008...................................... 1,226,571
250,000 South Carolina Edl. Assistance Auth. RB, Gtd. Student
Loans, Ser. C,
5.875%, 9/1/2007..................................... 255,095
South Carolina Hsg. Fin. & Dev. Auth. MHRB:
100,000 Ser. A, (FNMA & FHA),
6.80%, 11/15/2011..................................... 104,762
265,000 Hunting Ridge Apts.,
6.75%, 6/1/2025....................................... 277,007
300,000 Runaway Bay Apts. Proj.,
6.125%, 12/1/2015..................................... 305,304
South Carolina Hsg. Fin. & Dev. Auth. Mtge. RB:
Ser. A, (AMBAC & FHA):
500,000 5.95%, 7/1/2029....................................... 508,405
660,000 6.35%, 7/1/2025....................................... 677,609
100,000 6.55%, 7/1/2015....................................... 103,860
Heritage Ct. Apts., Ser. A, (FHA):
680,000 5.85%, 7/1/2010....................................... 700,577
595,000 6.15%, 7/1/2025....................................... 611,237
200,000 Homeownership Mortgage, Ser. A,
7.55%, 7/1/2011....................................... 204,516
South Carolina Jobs EDA Hosp. Facs. RB:
1,600,000 6.00%, 11/1/2014...................................... 1,645,808
200,000 Oconee Mem. Hosp. Inc.,
6.15%, 3/1/2015....................................... 207,654
</TABLE>
47
<PAGE>
EVERGREEN
South Carolina Municipal Bond Fund
Schedule of Investments(continued)
August 31, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
South Carolina - continued
South Carolina Jobs EDA-IDRB, Plasti Line Inc. Proj.
(LOC: Keybank, N.A.):
$ 220,000 5.50%, 7/1/2006...................................... $ 223,806
200,000 5.65%, 7/1/2008...................................... 202,934
200,000 5.70%, 7/1/2009...................................... 202,540
190,000 5.80%, 7/1/2010...................................... 192,455
230,000 5.90%, 7/1/2011...................................... 232,962
400,000 6.25%, 7/1/2017...................................... 401,444
South Carolina Med. Univ., Hosp.
Facs. RB, (MBIA):
1,000,000 5.50%, 7/1/2008...................................... 1,041,800
1,000,000 5.50%, 7/1/2009...................................... 1,036,820
2,000,000 South Carolina Port Auth. RB, (FSA), 5.375%,
7/1/2015............................................ 1,940,740
South Carolina, Pub. Svc. Auth. RB:
Ser. A, (MBIA):
500,000 5.75%, 1/1/2022...................................... 496,230
1,000,000 6.25%, 1/1/2005...................................... 1,076,690
Ser. B, (FGIC):
1,000,000 5.70%, 1/1/2008...................................... 1,053,420
1,250,000 6.50%, 1/1/2006...................................... 1,368,337
1,755,000 Spartanburg Cnty., SC Hlth. Svcs. Dist. Income RB,
Ser. B, (MBIA),
6.00%, 4/15/2007.................................... 1,871,848
Three Rivers, SC Solid Wst. Disposal Facs. Auth. RB,
(MBIA):
600,000 5.15%, 1/1/2004...................................... 611,610
870,000 5.25%, 1/1/2005...................................... 889,401
-----------
56,286,967
-----------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Virginia - 2.1%
$1,500,000 Chesapeake, VA Redev. & Hsg. Auth. MHRB, Residential
Rental,
Chesapeake Crossing Services, Ser. A,
6.20%, 4/1/2028..................................... $ 1,478,175
-----------
Puerto Rico - 4.5%
3,000,000 Cmnwlth. of Puerto Rico GO, (MBIA), 5.65%, 7/1/2015.. 3,098,310
-----------
U.S. Virgin Islands - 4.5%
2,000,000 Virgin Islands Pub. Fin. Auth.
RB, Senior Lien, Ser. A,
5.625%, 10/1/2025................................... 1,909,220
1,250,000 Virgin Islands Wtr. & Pwr.
Auth., Elec. Sys. RB,
5.30%, 7/1/2018..................................... 1,174,075
-----------
3,083,295
-----------
Total Municipal Obligations
(cost $65,145,124).................................. 65,634,877
-----------
</TABLE>
<TABLE>
<CAPTION>
Shares
<S> <C> <C> <C>
MUTUAL FUND SHARES - 6.4%
3,327,000 Federated Municipal Obligations Fund.. 3,327,000
1,118,000 Federated Tax Free Obligations Fund... 1,118,000
---------
Total Mutual Fund Shares
(cost $4,445,000).................... 4,445,000
---------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments -
(cost $69,590,124)........................... 101.5% 70,079,877
Other Assets and
Liabilities - net............................ (1.5) (1,049,079)
----- -----------
Net Assets -.................................. 100.0% $69,030,798
===== ===========
</TABLE>
The Fund invests primarily in debt securities issued by municipalities.
The ability of the issuers of debt securities to meet their obligations
may be affected by economic developments in a specific industry or munic-
ipality. In order to reduce risk associated with such economic develop-
ments, at August 31, 1999, 53.3% of the securities, as a percentage of
net assets, are backed by bond insurance of various financial institu-
tions and financial guaranty assurance agencies. At August 31, 1999, the
Fund had securities backed by bond insurance of the following financial
institutions representing more than 5% of net assets:
AMBAC 9.4%
FGIC 14.8%
MBIA 19.8%
Summary of Abbreviations:
AMBAC Insured by American Municipal Bond Assurance Corporation
EDA Economic Development Authority
FGIC Insured by Financial Guaranty Insurance Company
FHA Insured by Federal Housing Authority
FNMA Insured by Federal National Mortgage Association
FSA Insured by Financial Security Assurance, Incorporated
GO General Obligation
IDRB Industrial Development Revenue Bond
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
See Combined Notes to Financial Statements.
48
<PAGE>
EVERGREEN
Virginia Municipal Bond Fund
Schedule of Investments
August 31, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - 94.6%
District of Columbia - 1.8%
District of Columbia, Metropolitan Area Transit
Auth. RB, (FGIC):
$ 2,500,000 6.00%, 7/1/2007.................................... $ 2,693,775
600,000 6.00%, 7/1/2009.................................... 645,630
------------
3,339,405
------------
Georgia - 0.5%
1,000,000 Fulton Cnty., GA Residential Care RB, Sr. Lien RHA
Asstd. Living, Ser. A,
6.90%, 7/1/2019................................... 960,300
------------
Maryland - 0.8%
Frederick Cnty., MD Spl. Obl. RB, Urbana CDA:
1,000,000 6.25%, 7/1/2010.................................... 968,970
500,000 6.625%, 7/1/2025................................... 485,220
------------
1,454,190
------------
Virginia - 86.4%
Albemarle Cnty., VA IDA RB:
1,000,000 Martha Jefferson Hosp.,
5.75%, 10/1/2008................................... 1,022,050
Residential Care Fac., Our Lady of Peace Inc.:
500,000 5.75%, 7/1/2019.................................... 469,055
100,000 6.45%, 7/1/2015.................................... 99,989
145,000 6.625%, 7/1/2021................................... 146,472
Alexandria, VA Redev. & Hsg. Auth. MHRB, Buckingham
Vlg. Apts.:
1,000,000 5.45%, 7/1/2018.................................... 945,900
1,000,000 5.50%, 1/1/2029.................................... 933,900
1,000,000 Amherst, VA IDA RB, Georgia Pacific Corp. Proj.,
5.25%, 2/1/2011................................... 962,560
1,000,000 Arlington Cnty., VA GO,
5.90%, 8/1/2010................................... 1,079,010
Arlington Cnty., VA IDA MHRB, Woodbury Park Apts.:
1,000,000 Ser. A,
5.35%, 7/1/2018.................................... 956,480
1,600,000 Ser. B,
6.50%, 7/1/2024.................................... 1,526,080
5,305,000 Arlington Cnty., VA IDA Resource Recovery RB, Ogden
Martin Sys. Of
Alexandria/Arlington, Inc. Proj., (FSA),
5.375%, 1/1/2013.................................. 5,208,131
3,000,000 Bedford Cnty., VA IDA RB, Nekoosa Packaging Corp.
Proj., & Georgia Pacific Corp.,
5.60%, 12/1/2025.................................. 2,767,800
3,675,000 Big Stone Gap, VA Redev. & Hsg. Auth. Correctional
Fac. Lease RB, Wallens Ridge Dev. Proj.,
6.00%, 9/1/2007................................... 3,941,915
Brunswick (City of), VA IDA Correctional Fac. Lease
RB, (MBIA):
1,000,000 5.50%, 7/1/2007.................................... 1,046,510
2,215,000 5.65%, 7/1/2009.................................... 2,319,858
200,000 5.75%, 7/1/2011.................................... 207,984
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Virginia - continued
$ 390,000 Buena Vista, VA IDA RB Wtr. & Swr. Fac., Route 60
Proj.,
6.25%, 7/15/2011.................................. $ 389,641
4,750,000 Charles City Cnty., VA IDA RB,
4.875%, 2/1/2009.................................. 4,363,160
250,000 Charlottesville-Albemarle, VA Arpt. Auth. RB,
6.125%, 12/1/2013................................. 251,273
2,890,000 Chesapeake Bay, VA Dist. RB Bridge & Tunnel
Commission, (FGIC),
5.875%, 7/1/2010.................................. 3,036,725
1,000,000 Chesapeake, VA Arpt. Auth. RB,
5.30%, 8/1/2019................................... 931,300
3,000,000 Chesapeake, VA Pub. Impt. GO,
5.375%, 5/1/2010.................................. 3,065,430
Chesapeake, VA Redev. & Hsg. Auth. MHRB,
Residential Rental, Chesapeake Crossing, Sr. Ser.
A:
570,000 5.75%, 4/1/2009.................................... 565,417
250,000 6.00%, 4/1/2013.................................... 247,470
2,250,000 6.20%, 4/1/2028.................................... 2,217,263
1,000,000 Chesapeake, VA Wtr. & Swr. Fac.,
GO, Ser. A,
7.00%, 12/1/2004.................................. 1,115,650
Chesterfield Cnty., VA GO:
2,000,000 5.25%, 3/1/2010.................................... 2,025,700
1,000,000 Ser. B,
6.70%, 1/1/2006.................................... 1,052,410
500,000 Chesterfield Cnty., VA Hlth. Ctr. Community Mtge.
RB, Lucy Nursing Home Proj., (GNMA),
5.875%, 12/1/2021................................. 504,025
500,000 Chesterfield Cnty., VA Wtr. & Swr. RB,
6.375%, 11/1/2007................................. 535,570
2,545,000 Danville, VA IDA Hosp. RB, Danville Reg'l. Med.
Ctr., (FGIC),
6.20%, 10/1/2009.................................. 2,759,823
3,000,000 Dulles Town, VA CDA RB, Dulles
Town Ctr. Proj.,
6.25%, 3/1/2026................................... 2,941,050
370,000 Fairfax Cnty., VA IDA RB, Inova Hlth. Sys. Proj.,
5.875%, 8/15/2016................................. 377,078
3,000,000 Fairfax Cnty., VA Pub. Impt. GO, Ser. A,
5.25%, 6/1/2009................................... 3,057,780
Fairfax Cnty., VA Redev. & Hsg. Auth. Mtge. RB:
500,000 Elderly Hsg., (FHA),
6.00%, 9/1/2016.................................... 512,570
250,000 Mott & Gum Springs Community Ctrs.,
5.35%, 6/1/2006.................................... 256,957
2,605,000 Fairfax Cnty., VA Swr. RB,
5.625%, 7/15/2011................................. 2,686,458
1,695,000 Fairfax Cnty., VA Wtr. Auth. RB,
6.00%, 4/1/2022................................... 1,747,189
</TABLE>
49
<PAGE>
EVERGREEN
Virginia Municipal Bond Fund
Schedule of Investments(continued)
August 31, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Virginia - continued
$ 250,000 Greensville Cnty., VA IDA RB, Georgia Pacific Corp.
Proj.,
5.30%, 8/1/2014..................................... $ 237,143
Halifax Cnty., VA IDA RB, Halifax Reg'l. Hosp., Inc.:
300,000 4.80%, 9/1/2009...................................... 282,426
1,000,000 5.00%, 9/1/2011...................................... 944,740
400,000 5.25%, 9/1/2017...................................... 368,904
500,000 Hampton, VA GO,
6.00%, 1/15/2008.................................... 540,535
Hanover Cnty., VA IDA RB:
960,000 Bon Secours Hlth. Sys. Proj., (MBIA),
6.00%, 8/15/2008..................................... 1,030,743
1,360,000 Mem. Reg'l. Med. Ctr. Proj., (MBIA),
6.50%, 8/15/2008..................................... 1,512,007
500,000 Harrisonburg, VA Redev. & Hsg. Auth. MHRB, Greens of
Salem Run Proj., (LOC: PNC Bank & FSA),
6.20%, 4/1/2017..................................... 514,885
1,000,000 Henrico Cnty., VA Wtr. & Swr. RB
5.70%, 5/1/2008..................................... 1,060,963
Henrico Cnty., VA IDA Lease RB:
2,000,000 Bon Secours Hlth. Sys. Proj.,
5.60%, 8/15/2010.................................... 2,050,880
700,000 Pub. Fac.,
7.00%, 8/1/2013...................................... 780,591
535,000 Isle Wright Cnty., VA IDA RB, Solid Wst. Disposal
Fac., Union Camp Corp. Proj.,
6.55%, 4/1/2024..................................... 563,532
2,105,000 James City Cnty., VA IDA RB, Residential Care Fac.,
Williamsburg Landing, Inc.,
6.625%, 3/1/2023.................................... 2,147,753
1,000,000 King & Queen Cnty., VA IDA Lease RB, King & Queen
Cts. Complex, Ser. A,
5.625%, 7/15/2017................................... 996,020
700,000 King George Cnty., VA IDA Lease RB, King George Cnty.
Sch. Proj.,
6.40%, 8/1/2016..................................... 704,767
1,000,000 Loudoun Cnty., VA GO, Ser. A,
5.50%, 10/1/2007.................................... 1,038,640
1,550,000 Loudoun Cnty., VA Sanitation Auth., Wtr. & Swr. RB,
(FGIC),
6.25%, 1/1/2010..................................... 1,650,750
4,440,000 Newport News, VA GO,
5.75%, 1/15/2017.................................... 4,503,892
Norfolk, VA GO:
3,000,000 5.25%, 6/1/2011...................................... 3,013,020
2,000,000 5.70%, 6/1/2008...................................... 2,096,700
1,000,000 Refunding & Capital Impt., (FGIC),
5.00%, 7/1/2008...................................... 1,010,610
Norfolk, VA Redev. & Hsg. Auth. RB, Merrimack Landing
Proj.:
275,000 5.00%, 12/1/2005..................................... 274,978
340,000 5.10%, 12/1/2006..................................... 339,850
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Virginia - continued
$ 1,300,000 Northampton Cnty., VA GO, Ser. A, (FSA),
5.30%, 7/15/2018.................................. $ 1,229,358
2,885,000 Peninsula Ports Auth., VA Hlth. Sys. RB, Riverside
Hlth. Sys. Proj.,
5.25%, 7/1/2013................................... 2,783,073
1,300,000 Peumansend Creek, VA Reg'l. Jail Auth. RB, (MBIA),
5.75%, 6/1/2017................................... 1,318,265
640,000 Portsmouth, VA Redev. & Hsg. Auth. MHRB, January
16th Assn., Ser. A, (FNMA),
6.30%, 9/1/2026................................... 669,498
500,000 Portsmouth, VA Redev. & Hsg. Auth. RB, Chowan
Apts., Ser. A, (GNMA), 5.85%, 12/20/2030.......... 501,860
700,000 Prince William Cnty., VA GO, Impt. & Refunding,
Ser. A,
6.20%, 12/1/2011.................................. 733,082
1,000,000 Prince William Cnty., VA IDA, Refunding, Prince
William Hosp., 5.625%, 4/1/2012................... 1,012,110
Prince William Cnty., VA IDA RB: ATCC Proj.,
500,000
6.00%, 2/1/2014.................................... 503,415
Melrose Apts. Proj.:
1,000,000 Ser. A,
5.25%, 7/1/2018.................................... 958,380
4,000,000 Ser. C,
7.00%, 7/1/2029.................................... 3,821,800
500,000 Potomac Hosp. Corp.,
6.75%, 10/1/2015.................................. 564,895
Prince William Cnty., VA RB, Park Auth. Rev.:
500,000 6.30%, 10/15/2006.................................. 538,905
1,300,000 6.875%, 10/15/2016................................. 1,411,800
Riverside, VA Reg'l. Jail Auth. RB, (MBIA):
3,375,000 5.625%, 7/1/2007................................... 3,559,275
1,000,000 5.875%, 7/1/2014................................... 1,029,930
400,000 6.00%, 7/1/2025.................................... 408,980
1,185,000 Roanoke, VA IDA RB, Roanoke Mem. Hosp., Ser. B,
(AMBAC),
6.00%, 7/1/2007................................... 1,228,027
Suffolk, VA GO, (AMBAC):
250,000 5.70%, 6/1/2010.................................... 261,717
750,000 5.90%, 6/1/2013.................................... 783,885
Virginia Beach, VA GO:
1,575,000 5.40%, 7/15/2009................................... 1,629,731
1,000,000 6.00%, 9/1/2009.................................... 1,082,510
1,385,000 Virginia Beach, VA Refunding & Pub. Impt. GO,
5.25%, 8/1/2007................................... 1,428,350
1,540,000 Virginia Biotechnology Research Park RB, Biotech
Five Proj. Ser. A,
5.25%, 10/1/2014.................................. 1,449,633
</TABLE>
50
<PAGE>
EVERGREEN
Virginia Municipal Bond Fund
Schedule of Investments(continued)
August 31, 1999
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
MUNICIPAL OBLIGATIONS - continued
Virginia - continued
Virginia College, VA Edl. Fac. Bldg. Auth. RB:
$ 3,510,000 21st Century College Program,
5.40%, 8/1/2015...................................... $ 3,489,817
750,000 Hampton Univ. Proj.,
5.75%, 4/1/2014...................................... 761,385
Virginia Hsg. Dev. Auth. MHRB:
1,430,000 Ser. B,
4.95%, 11/1/2010..................................... 1,386,943
Ser. H:
500,000 6.00%, 5/1/2010...................................... 517,000
1,000,000 6.10%, 11/1/2011..................................... 1,040,200
300,000 6.35%, 11/1/2011..................................... 315,270
1,000,000 Ser. I,
5.45%, 5/1/2018...................................... 977,030
400,000 Ser. K,
5.90%, 5/1/2011...................................... 416,516
500,000 Ser. O,
6.05%, 11/1/2017..................................... 516,870
Virginia Hsg. Dev. Auth. RB, Cmnwlth. Mtge.:
1,000,000 Ser. A, Subser. A-1,
6.20%, 7/1/2011...................................... 1,028,170
1,000,000 Ser. C, Subser. C-2,
5.75%, 7/1/2007...................................... 1,031,050
500,000 Ser. C, Subser. C-6,
6.25%, 1/1/2015...................................... 510,190
1,300,000 Ser. D, Subser. D-1,
6.10%, 1/1/2019...................................... 1,331,538
1,180,000 Ser. E, Subser. E-3,
4.80%, 7/1/2009...................................... 1,162,666
300,000 Ser. F, Subser. F-1,
6.25%, 7/1/2012...................................... 309,135
480,000 Virginia IDA RB, Small Business Fin., Hodges Farm
Associates II,
4.75%, 11/1/2012.................................... 479,270
Virginia Port Auth. Cmnwlth. Port Fac. RB:
1,500,000 5.375%, 7/1/2011..................................... 1,502,715
1,260,000 5.55%, 7/1/2012...................................... 1,272,159
400,000 5.60%, 7/1/2027...................................... 385,772
750,000 5.90%, 7/1/2016...................................... 760,230
Virginia Pub. Bldg. Auth. RB:
7,000,000 5.20%, 8/1/2010...................................... 7,049,350
1,020,000 Ser. A,
5.375%, 8/1/2011..................................... 1,034,433
Virginia Pub. Sch. Auth. RB:
1,550,000 Refunding Sch. Fin., Ser. A,
5.125%, 8/1/2010..................................... 1,558,308
1,000,000 Sch. Fin.
5.40%, 6/1/2008...................................... 1,034,450
Ser. A:
200,000 6.20%, 8/1/2014...................................... 213,204
1,000,000 5.625%, 8/1/2009..................................... 1,043,720
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C> <C>
MUNICIPAL OBLIGATIONS - continued
Virginia - continued
$ 850,000 Virginia Pub. Sch. Auth. Spl. Obl.,
York Cnty.,
5.90%, 7/15/2013.............................. $ 874,854
1,000,000 Virginia State GO,
6.10%, 6/1/2006............................... 1,072,960
Virginia Trans. Board RB, Northern VA Trans.
Dist. Ser. A:
2,030,000 6.00%, 5/15/2008............................... 2,153,749
2,160,000 6.75%, 5/15/2005............................... 2,387,124
Virginia Univ., Cmnwlth. Univ. RB:
Ser. A:
350,000 5.625%, 5/1/2016............................... 351,278
2,325,000 5.75%, 5/1/2021................................ 2,327,929
1,000,000 Ser. B,
5.35%, 5/1/2009................................ 1,025,710
550,000 West Point, VA IDA Solid Wst. Disposal, RB,
Chesapeake Corp. Proj., Ser. B,
6.25%, 3/1/2019............................... 556,721
------------
156,724,157
------------
Puerto Rico - 1.6%
1,000,000 Cmnwlth. of Puerto Rico Hwy. & Trans., Ser. A,
5.50%, 7/1/2011............................... 1,037,840
500,000 Cmnwlth. of Puerto Rico Elec. Pwr. Auth.,
Refunding, Ser. F,
5.25%, 7/1/2010............................... 511,165
1,200,000 Cmnwlth. of Puerto Rico GO, (MBIA),
6.25%, 7/1/2013............................... 1,320,588
------------
2,869,593
------------
U. S. Virgin Islands - 3.5%
Virgin Islands, Pub. Fin. Auth. RB,
Sr. Lien, Ser. A:
1,000,000 5.20%, 10/1/2009............................... 978,630
2,000,000 5.50%, 10/1/2013............................... 1,946,440
250,000 5.625%, 10/1/2025.............................. 238,653
Virgin Islands, Wtr. & Pwr. Auth. RB:
2,585,000 5.25%, 7/1/2008................................ 2,583,010
620,000 5.25%, 7/1/2009................................ 614,555
------------
6,361,288
------------
Total Municipal Obligations
(cost $171,122,120)........................... 171,708,933
------------
<CAPTION>
Shares
<C> <S> <C> <C>
MUTUAL FUND SHARES - 3.8% (cost $6,785,000)
6,785,000 Federated Municipal Obligations Fund........... 6,785,000
------------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments -
(cost $177,907,120)......................... 98.4% 178,493,933
Other Assets and
Liabilities - net........................... 1.6 2,970,781
----- ------------
Net Assets - ................................ 100.0% $181,464,714
===== ============
</TABLE>
51
<PAGE>
EVERGREEN
Virginia Municipal Bond Fund
Schedule of Investments(continued)
August 31, 1999
The Fund invests primarily in debt securities issued by municipalities.
The ability of the issuers of debt securities to meet their obligations
may be affected by economic developments in a specific industry or munic-
ipality. In order to reduce risk associated with such economic develop-
ments, at August 31, 1999, 20.4% of the securities, as a percentage of
net assets, are backed by bond insurance of various financial institu-
tions and financial guaranty assurance agencies. At August 31, 1999, the
Fund had securities backed by bond insurance of the following financial
institutions representing more than 5% of net assets:
FGIC 6.5%
MBIA 7.6%
Summary of Abbreviations:
AMBAC Insured by American Municipal Bond Assurance Corporation
CDA Community Development Authority
FGIC Insured by Financial Guaranty Insurance Company
FHA Insured by Federal Housing Authority
FNMA Insured by Federal National Mortgage Association
FSA Insured by Financial Security Assurance, Incorporated
GNMA Insured by Government National Mortgage Association
GO General Obligation
IDA Industrial Development Authority
LOC Letter of Credit
MBIA Insured by Municipal Bond Investors Assurance Corporation
MHRB Multifamily Housing Revenue Bond
RB Revenue Bond
RHA Residential Housing Association
See Combined Notes to Financial Statements.
52
<PAGE>
EVERGREEN
Southern State Municipal Bond Funds
Statements of Assets and Liabilities
August 31, 1999
<TABLE>
<CAPTION>
Florida High North South
Income Florida Georgia Maryland Carolina Carolina Virginia
Fund Fund Fund Fund Fund Fund Fund
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Assets
Identified cost of
securities............. $460,056,223 $617,529,181 $90,955,118 $39,591,542 $307,804,182 $69,590,124 $177,907,120
Net unrealized gains or
losses on securities... (8,324,300) (5,225,016) 884,219 (272,411) 76,715 489,753 586,813
- -----------------------------------------------------------------------------------------------------------------------
Market value of
securities............. 451,731,923 612,304,165 91,839,337 39,319,131 307,880,897 70,079,877 178,493,933
Cash.................... 558 2,175 165 120 552 836 127
Receivable for
securities sold........ 0 0 0 0 0 3,031,565 977,182
Receivable for Fund
shares sold............ 2,103,553 218,613 29,166 30,000 546,791 170,208 295,850
Interest receivable..... 9,294,441 10,263,345 1,182,849 526,657 4,487,465 839,996 2,305,926
Deferred organization
expenses............... 7,355 0 0 0 0 0 0
Prepaid expenses and
other assets........... 30,884 24,824 14,400 3,818 15,845 12,992 27,198
- -----------------------------------------------------------------------------------------------------------------------
Total assets........... 463,168,714 622,813,122 93,065,917 39,879,726 312,931,550 74,135,474 182,100,216
- -----------------------------------------------------------------------------------------------------------------------
Liabilities
Distributions payable... 1,139,928 2,084,698 321,198 73,710 1,069,947 243,366 529,066
Payable for securities
purchased.............. 0 6,865,424 2,120,998 0 0 4,749,963 0
Payable for Fund shares
redeemed............... 1,276,130 94,569 0 0 237,135 64,000 20,892
Advisory fee payable.... 172,002 87,420 10,732 7,780 52,779 15,265 18,987
Distribution Plan
expenses payable....... 191,175 69,606 5,682 11,686 29,232 3,497 28,695
Due to other related
parties................ 8,885 9,173 1,753 789 6,012 1,520 3,379
Accrued expenses and
other liabilities...... 131,911 132,810 12,067 12,706 28,885 27,065 34,483
- -----------------------------------------------------------------------------------------------------------------------
Total liabilities...... 2,920,031 9,343,700 2,472,430 106,671 1,423,990 5,104,676 635,502
- -----------------------------------------------------------------------------------------------------------------------
Net assets.............. $460,248,683 $613,469,422 $90,593,487 $39,773,055 $311,507,560 $69,030,798 $181,464,714
- -----------------------------------------------------------------------------------------------------------------------
Net assets represented
by
Paid-in capital......... $470,241,078 $618,662,549 $90,201,994 $40,199,409 $309,632,228 $68,071,717 $180,533,436
Undistributed net
investment income...... 59,045 61,209 1,786 3,780 699 7,458 6,935
Accumulated net realized
gains or losses on
securities............. (1,727,140) (29,320) (494,512) (157,723) 1,797,918 461,870 337,530
Net unrealized gains or
losses on securities... (8,324,300) (5,225,016) 884,219 (272,411) 76,715 489,753 586,813
- -----------------------------------------------------------------------------------------------------------------------
Total net assets........ $460,248,683 $613,469,422 $90,593,487 $39,773,055 $311,507,560 $69,030,798 $181,464,714
- -----------------------------------------------------------------------------------------------------------------------
Net assets consists of
Class A................. $269,616,308 $137,101,134 $ 4,357,927 $23,114,241 $ 17,990,360 $ 2,323,649 $ 50,341,142
Class B................. 130,258,562 59,782,860 14,243,852 3,439,606 46,041,732 5,392,965 15,403,082
Class C................. 6,749,371 9,111,428 0 29,689 0 0 0
Class Y................. 53,624,442 407,474,000 71,991,708 13,189,519 247,475,468 61,314,184 115,720,490
- -----------------------------------------------------------------------------------------------------------------------
Total net assets........ $460,248,683 $613,469,422 $90,593,487 $39,773,055 $311,507,560 $69,030,798 $181,464,714
- -----------------------------------------------------------------------------------------------------------------------
Shares outstanding
Class A................. 25,242,553 14,640,487 445,547 2,184,015 1,766,116 236,221 5,070,366
Class B................. 12,195,452 6,383,858 1,456,245 325,002 4,519,787 548,140 1,551,400
Class C................. 631,973 972,960 0 2,805 0 0 0
Class Y................. 5,020,659 43,511,819 7,360,112 1,246,263 24,294,211 6,233,195 11,655,346
- -----------------------------------------------------------------------------------------------------------------------
Net asset value per
share
Class A................. $ 10.68 $ 9.36 $ 9.78 $ 10.58 $ 10.19 $ 9.84 $ 9.93
- -----------------------------------------------------------------------------------------------------------------------
Class A--Offering price
(based on sales charge
of 4.75%).............. $ 11.21 $ 9.83 $ 10.27 $ 11.11 $ 10.69 $ 10.33 $ 10.42
- -----------------------------------------------------------------------------------------------------------------------
Class B................. $ 10.68 $ 9.36 $ 9.78 $ 10.58 $ 10.19 $ 9.84 $ 9.93
- -----------------------------------------------------------------------------------------------------------------------
Class C................. $ 10.68 $ 9.36 -- $ 10.58 -- -- --
- -----------------------------------------------------------------------------------------------------------------------
Class Y................. $ 10.68 $ 9.36 $ 9.78 $ 10.58 $ 10.19 $ 9.84 $ 9.93
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
53
<PAGE>
EVERGREEN
Southern State Municipal Bond Funds
Statements of Operations
Year Ended August 31, 1999
<TABLE>
<CAPTION>
Florida High North South
Income Florida Georgia Maryland Carolina Carolina Virginia
Fund Fund Fund Fund Fund Fund Fund
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income
Interest............... $ 26,883,117 $ 32,905,530 $ 4,701,745 $ 1,807,252 $ 16,579,778 $ 3,664,021 $ 9,216,899
- ------------------------------------------------------------------------------------------------------------------------
Expenses
Advisory fee........... 2,705,467 3,259,378 445,776 178,243 1,599,039 356,291 884,882
Distribution Plan
expenses.............. 1,949,603 1,141,771 145,420 86,010 532,114 54,716 254,022
Administrative services
fees.................. 113,805 164,939 22,511 8,995 80,696 18,051 44,961
Transfer agent fee..... 230,037 211,380 16,308 34,803 50,629 3,213 83,727
Trustees' fees and
expenses.............. 9,126 13,194 1,971 777 6,454 1,427 3,581
Printing and postage
expenses.............. 36,981 57,013 16,741 9,997 25,112 15,291 20,011
Custodian fee.......... 155,558 224,582 30,891 10,958 111,121 24,171 61,535
Registration and filing
fees.................. 100,967 132,161 23,252 38,679 18,643 53,934 36,665
Professional fees...... 23,923 25,400 16,408 15,078 18,566 16,003 17,620
Organization expenses.. 3,544 0 0 0 0 0 0
Other.................. 24,140 21,051 5,262 3,370 10,050 4,267 5,950
- ------------------------------------------------------------------------------------------------------------------------
Total expenses........ 5,353,151 5,250,869 724,540 386,910 2,452,424 547,364 1,412,954
Less: Fee credits..... (19,799) (29,019) (4,091) (1,704) (15,391) (2,909) (8,427)
Fee waivers......... (613,106) (2,648,100) (343,984) (104,448) (1,157,575) (168,760) (692,114)
- ------------------------------------------------------------------------------------------------------------------------
Net expenses.......... 4,720,246 2,573,750 376,465 280,758 1,279,458 375,695 712,413
- ------------------------------------------------------------------------------------------------------------------------
Net investment income.. 22,162,871 30,331,780 4,325,280 1,526,494 15,300,320 3,288,326 8,504,486
- ------------------------------------------------------------------------------------------------------------------------
Net realized and
unrealized gains or
losses on securities
Net realized gains or
losses on securities.. (1,454,705) 4,098,226 (342,891) (28,872) 2,778,803 485,621 561,384
Net change in
unrealized gains or
losses on securities.. (22,959,831) (40,892,322) (4,556,607) (1,714,219) (20,720,906) (3,989,123) (8,663,058)
- ------------------------------------------------------------------------------------------------------------------------
Net realized and
unrealized gains or
losses on securities.. (24,414,536) (36,794,096) (4,899,498) (1,743,091) (17,942,103) (3,503,502) (8,101,674)
- ------------------------------------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets
resulting from
operations............ $ (2,251,665) $ (6,462,316) $ (574,218) $ (216,597) $ (2,641,783) $ (215,176) $ 402,812
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
54
<PAGE>
EVERGREEN
Southern State Municipal Bond Funds
Statements of Changes in Net Assets
Year Ended August 31, 1999
<TABLE>
<CAPTION>
Florida High North South
Income Florida Georgia Maryland Carolina Carolina Virginia
Fund Fund Fund Fund Fund Fund Fund
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Operations
Net investment income... $ 22,162,871 $ 30,331,780 $ 4,325,280 $ 1,526,494 $ 15,300,320 $ 3,288,326 $ 8,504,486
Net realized gains or
losses on securities... (1,454,705) 4,098,226 (342,891) (28,872) 2,778,803 485,621 561,384
Net change in unrealized
gains or losses on
securities............. (22,959,831) (40,892,322) (4,556,607) (1,714,219) (20,720,906) (3,989,123) (8,663,058)
- --------------------------------------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets
resulting from
operations............ (2,251,665) (6,462,316) (574,218) (216,597) (2,641,783) (215,176) 402,812
- --------------------------------------------------------------------------------------------------------------------------
Distributions to
shareholders from
Net investment income
Class A................ (14,558,947) (7,418,545) (193,687) (1,060,735) (803,944) (93,636) (2,486,425)
Class B................ (5,192,345) (2,468,347) (541,679) (83,056) (1,937,764) (181,807) (477,398)
Class C................ (170,088) (365,115) 0 (479) 0 0 0
Class Y................ (2,239,772) (20,079,560) (3,589,179) (382,791) (12,558,183) (3,011,122) (5,539,677)
Net realized gains
Class A................ (74,973) (3,780,397) (14,381) (193,505) (91,582) (18,366) (389,919)
Class B................ (29,464) (1,534,947) (53,890) (13,002) (267,867) (41,464) (72,121)
Class C................ (462) (218,806) 0 0 0 0 0
Class Y................ (9,770) (9,607,708) (281,334) (40,003) (1,390,200) (621,078) (807,303)
- --------------------------------------------------------------------------------------------------------------------------
Total distributions to
shareholders.......... (22,275,821) (45,473,425) (4,674,150) (1,773,571) (17,049,540) (3,967,473) (9,772,843)
- --------------------------------------------------------------------------------------------------------------------------
Capital share
transactions
Proceeds from shares
sold................... 163,835,903 111,607,259 22,972,969 16,923,916 46,838,306 12,457,133 48,705,756
Net asset value of
shares issued in
reinvestment of
distributions.......... 10,168,812 13,431,089 893,299 1,076,205 3,643,355 665,466 3,294,738
Payment for shares
redeemed............... (101,866,559) (117,840,327) (12,144,895) (7,210,171) (40,601,876) (12,497,770) (30,328,911)
- --------------------------------------------------------------------------------------------------------------------------
Net increase in net
assets resulting from
capital share
transactions.......... 72,138,156 7,198,021 11,721,373 10,789,950 9,879,785 624,829 21,671,583
- --------------------------------------------------------------------------------------------------------------------------
Total increase
(decrease) in net
assets............... 47,610,670 (44,737,720) 6,473,005 8,799,782 (9,811,538) (3,557,820) 12,301,552
Net assets
Beginning of period..... 412,638,013 658,207,142 84,120,482 30,973,273 321,319,098 72,588,618 169,163,162
- --------------------------------------------------------------------------------------------------------------------------
End of period........... $460,248,683 $613,469,422 $90,593,487 $39,773,055 $311,507,560 $69,030,798 $181,464,714
- --------------------------------------------------------------------------------------------------------------------------
Undistributed net
investment income...... $ 59,045 $ 61,209 $ 1,786 $ 3,780 $ 699 $ 7,458 $ 6,935
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Combined Notes to Financial Statements.
55
<PAGE>
EVERGREEN
Southern State Municipal Bond Funds
Statements of Changes in Net Assets
Year Ended August 31, 1998
<TABLE>
<CAPTION>
Florida High North South
Income Florida Georgia Maryland Carolina Carolina Virginia
Fund Fund Fund Fund (a) Fund Fund Fund
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Operations
Net investment income.. $ 14,404,889 $ 23,704,595 $ 3,189,698 $ 1,012,744 $ 12,552,875 $ 2,605,376 $ 5,474,175
Net realized gains on
securities............ 1,107,906 12,984,133 798,034 473,737 4,283,776 665,438 1,255,000
Net change in
unrealized gains or
losses on securities.. 7,663,569 2,891,671 1,366,421 252,397 4,838,736 1,416,843 1,986,232
- ----------------------------------------------------------------------------------------------------------------------------
Net increase in net
assets resulting from
operations........... 23,176,364 39,580,399 5,354,153 1,738,878 21,675,387 4,687,657 8,715,407
- ----------------------------------------------------------------------------------------------------------------------------
Distributions to
shareholders from
Net investment income
Class A............... (9,795,895) (6,351,997) (126,250) (844,382) (497,824) (59,104) (1,390,153)
Class B............... (3,663,854) (2,070,906) (479,386) (5,731) (1,978,289) (170,455) (307,250)
Class C............... (16,057) (203,430) 0 0 0 0 0
Class Y............... (929,083) (15,156,341) (2,584,062) (162,631) (10,076,762) (2,375,817) (3,781,622)
Net realized gains
Class A............... 0 (2,150,248) 0 0 0 (2,456) 0
Class B............... 0 (663,807) 0 0 0 (12,377) 0
Class Y............... 0 (621,250) 0 0 0 (21,740) 0
- ----------------------------------------------------------------------------------------------------------------------------
Total distributions to
shareholders......... (14,404,889) (27,217,979) (3,189,698) (1,012,744) (12,552,875) (2,641,949) (5,479,025)
- ----------------------------------------------------------------------------------------------------------------------------
Capital share
transactions
Proceeds from shares
sold.................. 252,388,854 136,308,252 15,601,172 4,430,552 150,840,381 19,131,622 25,373,266
Net asset value of
shares issued in
reinvestment of
distributions......... 6,665,061 4,934,697 485,610 595,369 1,925,293 267,827 1,324,197
Payment for shares
redeemed.............. (44,930,558) (76,976,941) (10,236,086) (8,247,563) (156,067,198) (13,218,458) (23,745,276)
Net asset value of
shares issued in
acquisition
Evergreen Florida Tax
Free Fund............ 0 72,741,942 0 0 0 0 0
Common trust funds.... 0 347,033,202 61,853,254 0 255,143,064 51,591,389 74,432,035
Virtus Virginia
Municipal Bond Fund.. 0 0 0 0 0 0 72,717,737
- ----------------------------------------------------------------------------------------------------------------------------
Net increase
(decrease) in net
assets resulting from
capital share
transactions......... 214,123,357 484,041,152 67,703,950 (3,221,642) 251,841,540 57,772,380 150,101,959
- ----------------------------------------------------------------------------------------------------------------------------
Total increase
(decrease) in net
assets.............. 222,894,832 496,403,572 69,868,405 (2,495,508) 260,964,052 59,818,088 153,338,341
Net assets
Beginning of period.... 189,743,181 161,803,570 14,252,077 33,468,781 60,355,046 12,770,530 15,824,821
- ----------------------------------------------------------------------------------------------------------------------------
End of period.......... $412,638,013 $658,207,142 $ 84,120,482 $30,973,273 $ 321,319,098 $ 72,588,618 $169,163,162
- ----------------------------------------------------------------------------------------------------------------------------
Undistributed net
investment income..... $ 71,519 $ 55,126 $ 3,588 $ 5,491 $ -- $ 2,439 $ 5,873
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) For the eleven months ended August 31, 1998. The Fund changed its fiscal
year end from September 30 to August 31 during the period.
See Combined Notes to Financial Statements.
56
<PAGE>
EVERGREEN
Southern State Municipal Bond Funds
Statement of Changes in Net Assets
Year Ended September 30, 1997
<TABLE>
<CAPTION>
Maryland
Fund (a)
- -------------------------------------------------------------------------------
<S> <C>
Operations
Net investment income.......................................... $ 1,275,863
Net realized gains on securities............................... 163,436
Net change in unrealized gains or losses on securities......... 982,703
- -------------------------------------------------------------------------------
Net increase in net assets resulting from operations........... 2,422,002
- -------------------------------------------------------------------------------
Distributions to shareholders from
Net investment income..........................................
Class A........................................................ (1,015,074)
Class Y........................................................ (261,815)
- -------------------------------------------------------------------------------
Total distributions to shareholders............................ (1,276,889)
- -------------------------------------------------------------------------------
Capital share transactions
Proceeds from shares sold...................................... 2,708,043
Net asset value of shares issued in reinvestment of
distributions................................................. 770,265
Payment for shares redeemed.................................... (11,327,459)
- -------------------------------------------------------------------------------
Net decrease in net assets resulting from capital share
transactions.................................................. (7,849,151)
- -------------------------------------------------------------------------------
Total decrease in net assets................................... (6,704,038)
Net assets
Beginning of year.............................................. 40,172,819
- -------------------------------------------------------------------------------
End of year.................................................... $ 33,468,781
- -------------------------------------------------------------------------------
Undistributed net investment income............................. $ 0
- -------------------------------------------------------------------------------
</TABLE>
(a) On February 28, 1998, in conjunction with the acquisition of the Virtus
Maryland Municipal Bond Fund by the Maryland Fund, shareholders of Invest-
ment Shares and Trust Shares in the Virtus Maryland Municipal Bond Fund be-
came owners of that number of full and fractional shares of Class A and
Class Y, respectively, of the Maryland Fund. See Note 5.
See Combined Notes to Financial Statements.
57
<PAGE>
Combined Notes to Financial Statements
1. ORGANIZATION
The Evergreen Southern State Municipal Bond Funds consist of Evergreen Florida
High Income Municipal Bond Fund ("Florida High Income Fund"), Evergreen Florida
Municipal Bond Fund ("Florida Fund"), Evergreen Georgia Municipal Bond Fund
("Georgia Fund"), Evergreen Maryland Municipal Bond Fund ("Maryland Fund"), Ev-
ergreen North Carolina Municipal Bond Fund ("North Carolina Fund"), Evergreen
South Carolina Municipal Bond Fund ("South Carolina Fund") and Evergreen Vir-
ginia Municipal Bond Fund ("Virginia Fund"), (collectively, the "Funds"). Each
Fund, except for Florida High Income Fund which is diversified, is a non-diver-
sified series of Evergreen Municipal Trust (the "Trust"), a Delaware business
trust organized on September 18, 1997. The Trust is an open-end management in-
vestment company registered under the Investment Company Act of 1940, as
amended (the "1940 Act").
The Florida High Income Fund, Florida Fund and Maryland Fund offer Class A,
Class B, Class C and Class Y shares. The Georgia Fund, North Carolina Fund,
South Carolina Fund and Virginia Fund offer Class A, Class B and Class Y
shares. Class A shares are sold with a maximum front-end sales charge of 4.75%.
Class B and Class C shares are sold without a front-end sales charge, but pay a
higher ongoing distribution fee than Class A. Class B shares are sold subject
to a contingent deferred sales charge that is payable upon redemption and de-
creases depending on how long the shares have been held. Class B shares pur-
chased 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 ex-
isting conversion rights. Class C shares are sold subject to a contingent de-
ferred 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. When-issued and Delayed Delivery Transactions
The Funds record when-issued or delayed delivery transactions on the trade date
and will segregate with the custodian qualifying assets having a value suffi-
cient to make payment for the securities purchased. Securities purchased on a
when-issued or delayed delivery basis are marked-to-market daily and the Fund
begins earning interest on the settlement date. Losses may arise due to changes
in the market value of the underlying securities or if the counterparty does
not perform under the contract.
C. Security Transactions and Investment Income
Securities transactions are accounted for no later than one business day after
the trade date. Realized gains and losses are computed on the identified cost
basis. Interest income is recorded on the accrual basis and includes accretion
of discounts and amortization of premiums.
58
<PAGE>
Combined Notes to Financial Statements(continued)
D. Federal Taxes
The Funds have qualified and intend to continue to qualify as regulated invest-
ment companies under the Internal Revenue Code of 1986, as amended (the
"Code"). Thus, the Funds will not incur any federal income tax liability since
they are expected to distribute all of their net investment company net tax-ex-
empt income and net capital gains, if any, to their shareholders. The Funds
also intend to avoid any excise tax liability by making the required distribu-
tions 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. The significant differences between financial statement
amounts available for distributions and distributions made in accordance with
income tax regulations are primarily due to differing treatments of certain
losses incurred from November 1, 1998 through August 31, 1999 and market dis-
count on securities. For the Florida Fund, these significant differences are
primarily due to differing treatment for the capital loss carryforward acquired
by Florida Fund in its January 26, 1998 acquisition of Evergreen Florida Tax
Free Fund.
F. Class Allocations
Income, expenses (other than class specific expenses) and realized and
unrealized gains and losses are prorated among the classes based on the rela-
tive net assets of each class. Currently, class specific expenses are limited
to expenses incurred under the Distribution Plans for each class.
G. Organization Expenses
Organization expenses for Florida High Income Fund are amortized to operations
over a five-year period beginning on June 30, 1995 on a straight-line basis. In
the event any of the initial shares of the Fund are redeemed by any holder dur-
ing the five-year amortization period, redemption proceeds will be reduced by
any unamortized organization expenses in the same proportion as the number of
initial shares being redeemed bears to the number of initial shares outstanding
at the time of the redemption.
3. INVESTMENT ADVISORY AGREEMENT AND OTHER AFFILIATED TRANSACTIONS
First Union National Bank ("FUNB"), a subsidiary of First Union, serves as the
investment advisor to each Fund and is paid a management fee that is computed
daily and paid monthly. FUNB is paid at an annual rate of 0.50% of the Fund's
average daily net assets of the Florida Fund, Georgia Fund, Maryland Fund,
North Carolina Fund, South Carolina Fund and Virginia Fund. FUNB is paid at an
annual rate of 0.60% of the average daily net assets of the Florida High Income
Fund.
During the year ended August 31, 1999, the amount of investment advisory fees
waived by the investment advisor and the impact on each Fund's expense ratio
represented as a percentage of its average net assets were as follows:
<TABLE>
<CAPTION>
Fees % of Average
Waived Net Assets
-----------------------
<S> <C> <C>
Florida High Income Fund................ $ 613,106 0.14%
Florida Fund............................ 2,380,329 0.36%
Georgia Fund............................ 343,984 0.39%
Maryland Fund........................... 104,448 0.29%
North Carolina Fund..................... 1,157,575 0.36%
South Carolina Fund..................... 168,760 0.24%
Virginia Fund........................... 692,114 0.39%
</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
59
<PAGE>
Combined Notes to Financial Statements(continued)
with facilities, equipment and personnel. As sub-administrator to the Funds,
BISYS provides the officers of the Funds. Officers of the Funds and affiliated
Trustees receive no compensation directly from the Funds.
The administrator and sub-administrator for the Funds are entitled to an annual
fee based on the average daily net assets of the funds administered by EIS for
which First Union or its investment advisory subsidiaries are also the invest-
ment advisors. The administration fee is calculated by applying percentage
rates, which start at 0.05% and decline to 0.01% per annum as net assets in-
crease, 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 de-
cline to 0.004% per annum as net assets increase, to the average daily net as-
sets of each Fund.
During the year ended August 31, 1999, the Funds paid or accrued the following
amounts for administrative and sub-administrative services:
<TABLE>
<CAPTION>
Administration Sub-administration
Fee Fee
---------------------------------
<S> <C> <C>
Florida High Income Fund...... $ 90,486 $23,319
Florida Fund.................. 131,184 33,755
Georgia Fund.................. 17,899 4,612
Maryland Fund................. 7,153 1,842
North Carolina Fund........... 64,177 16,519
South Carolina Fund........... 14,357 3,694
Virginia Fund................. 35,803 9,158
</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.
During the year ended August 31, 1999, amounts paid or accrued to EDI pursuant
to each Fund's Class A, Class B, and Class C Distribution Plans were as fol-
lows:
<TABLE>
<CAPTION>
Fees % of Class A
Waived Average
Class A Class B Class C Class A Net Assets
-------------------------------------------------
<S> <C> <C> <C> <C> <C>
Florida High
Income Fund.... $714,257 $1,195,986 $39,360 -- --
Florida Fund.... 393,781 651,563 96,427 $267,771 0.17%
Georgia Fund.... 10,184 135,236 -- -- --
Maryland Fund... 62,114 23,760 136 -- --
North Carolina
Fund........... 42,617 489,497 -- -- --
South Carolina
Fund........... 5,288 49,428 -- -- --
Virginia Fund... 132,447 121,575 -- -- --
</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.
60
<PAGE>
Combined Notes to Financial Statements(continued)
5. ACQUISITIONS
On November 24, 1997, as a result of the conversion of common trust funds man-
aged by FUNB, the Florida Fund, Georgia Fund, North Carolina Fund, South Caro-
lina Fund and Virginia Fund each acquired substantially all of the net assets
of comparable common trusts in exchange for Class Y shares of the respective
Funds.
On January 26, 1998, the Florida Fund acquired substantially all the assets and
assumed certain liabilities of Evergreen Florida Tax Free Fund in exchange for
Class A, Class B and Class C shares of Florida Fund.
On February 28, 1998, the Maryland Fund acquired substantially all the assets
and assumed certain liabilities of the Virtus Maryland Municipal Bond Fund (the
"Virtus Maryland Fund"). Shareholders of Investment Shares and Trust Shares in
the Virtus Maryland Fund became owners of that number of full and fractional
shares of Class A and Class Y, respectively, of the Maryland Fund having an ag-
gregate net asset value equal to the aggregate net asset value of their shares
of the Virtus Maryland Fund immediately prior to the close of business on Feb-
ruary 28, 1998. The Maryland Fund had no operations prior to the merger. Since
both the Maryland Fund and the Virtus Maryland Fund were similar funds, and the
Virtus Maryland Fund contributed the majority of the net assets and sharehold-
ers, its basis of accounting for assets and liabilities and its operating re-
sults for prior periods are carried forward as the accounting survivor.
Also on February 28, 1998, the Virginia Fund acquired all of the assets and
certain liabilities of the Virtus Virginia Municipal Bond Fund in exchange for
Class A and Class Y shares of the Virginia Fund.
These conversions and acquisitions were accomplished by a tax-free exchange of
the respective shares of each Fund. The value of net assets acquired, number of
shares issued, unrealized appreciation acquired and the aggregate net assets of
each Fund immediately after the acquisition are as follows:
<TABLE>
<CAPTION>
Value of Net Number of Unrealized Net Assets
Acquiring Fund Acquired Fund Assets Acquired Shares Issued Appreciation After Acquisition
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Florida Fund............ Common trust funds* $347,033,202 34,976,141 $19,854,472 $511,659,015
Florida Fund............ Evergreen Florida Tax Free Fund 72,741,942 7,227,293 4,750,737 594,416,755
Georgia Fund............ Common trust funds* 61,853,254 6,111,899 3,242,590 76,999,760
Maryland Fund........... Virtus Maryland Fund 30,432,133 2,755,733 1,454,944 30,432,133
North Carolina Fund..... Common trust funds* 255,143,064 24,134,747 12,288,139 317,434,059
South Carolina Fund..... Common trust fund 51,591,389 5,075,749 2,534,925 59,786,494
Virginia Fund........... Common trust funds* 74,432,035 7,286,001 2,846,313 81,525,759
Virginia Fund........... Virtus Virginia Municipal Bond Fund 72,717,737 7,026,874 3,850,319 167,168,666
</TABLE>
- -------
* The Acquiring Fund may have acquired net assets of more than one common trust
fund or portion of a common trust fund.
61
<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 Class Y. Transactions in shares of
the Funds were as follows:
Florida High Income Fund
<TABLE>
<CAPTION>
Year Ended August 31,
--------------------------------------------------
1999 1998
------------------------ ------------------------
Shares Amount Shares Amount
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
Shares sold............... 6,022,065 $ 67,119,861 15,959,354 $177,761,562
Shares issued in
reinvestment of
distributions............ 634,153 7,055,563 418,144 4,657,114
Shares redeemed........... (6,206,580) (68,781,003) (2,598,089) (28,920,489)
- ------------------------------------------------------------------------------
Net increase.............. 449,638 $ 5,394,421 13,779,409 $153,498,187
- ------------------------------------------------------------------------------
Class B
Shares sold............... 4,429,234 $ 49,368,416 4,149,563 $ 46,073,049
Shares issued in
reinvestment of
distributions............ 247,877 2,753,042 168,013 1,869,633
Shares redeemed........... (1,659,509) (18,418,450) (968,277) (10,761,818)
- ------------------------------------------------------------------------------
Net increase.............. 3,017,602 $ 33,703,008 3,349,299 $ 37,180,864
- ------------------------------------------------------------------------------
<CAPTION>
March 6, 1998
(Commencement of Class
Year Ended Operations) through
August 31, 1999 August 31, 1998
------------------------ ------------------------
Shares Amount Shares Amount
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class C
Shares sold............... 640,928 $ 7,135,431 96,347 $ 1,073,544
Shares issued in
reinvestment of
distributions............ 9,404 103,941 1,202 13,443
Shares redeemed........... (115,908) (1,287,087) 0 0
- ------------------------------------------------------------------------------
Net increase.............. 534,424 $ 5,952,285 97,549 $ 1,086,987
- ------------------------------------------------------------------------------
<CAPTION>
Year Ended August 31,
--------------------------------------------------
1999 1998
------------------------ ------------------------
Shares Amount Shares Amount
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class Y
Shares sold............... 3,610,375 $ 40,212,195 2,468,047 $ 27,480,699
Shares issued in
reinvestment of
distributions............ 23,071 256,266 11,222 124,871
Shares redeemed........... (1,202,544) (13,380,019) (470,406) (5,248,251)
- ------------------------------------------------------------------------------
Net increase.............. 2,430,902 $ 27,088,442 2,008,863 $ 22,357,319
- ------------------------------------------------------------------------------
</TABLE>
62
<PAGE>
Combined Notes to Financial Statements(continued)
Florida Municipal Fund
<TABLE>
<CAPTION>
Year Ended August 31,
--------------------------------------------------
1999 1998
------------------------ ------------------------
Shares Amount Shares Amount
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
Shares sold............... 2,166,801 $ 21,480,810 5,507,078 $ 54,971,741
Shares issued in
reinvestment of
distributions............ 526,975 5,201,492 321,220 3,210,363
Shares redeemed........... (4,237,683) (41,508,980) (2,683,254) (26,904,074)
Shares issued in
connection with the
acquisition of Evergreen
Florida Tax Free Fund.... 0 0 2,449,486 24,653,786
- ------------------------------------------------------------------------------
Net increase (decrease)... (1,543,907) $(14,826,678) 5,594,530 $ 55,931,816
- ------------------------------------------------------------------------------
Class B
Shares sold............... 1,015,953 $ 10,084,761 551,773 $ 5,530,645
Shares issued in
reinvestment of
distributions............ 208,178 2,053,007 134,648 1,345,190
Shares redeemed........... (1,357,332) (13,327,563) (1,191,215) (11,944,047)
Shares issued in
connection with the
acquisition of Evergreen
Florida Tax Free Fund.... 0 0 3,887,072 39,122,963
- ------------------------------------------------------------------------------
Net increase (decrease)... (133,201) $ (1,189,795) 3,382,278 $ 34,054,751
- ------------------------------------------------------------------------------
<CAPTION>
January 26, 1998
(Commencement of Class
Year Ended Operations) through
August 31, 1999 August 31, 1998
------------------------ ------------------------
Shares Amount Shares Amount
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class C
Shares sold............... 171,468 $ 1,716,585 68,683 $ 690,529
Shares issued in
reinvestment of
distributions............ 29,587 291,797 6,601 66,138
Shares redeemed........... (111,271) (1,080,242) (82,843) (830,261)
Shares issued in
connection with the
acquisition of Evergreen
Florida Tax Free Fund.... 0 0 890,735 8,965,193
- ------------------------------------------------------------------------------
Net increase.............. 89,784 $ 928,140 883,176 $ 8,891,599
- ------------------------------------------------------------------------------
<CAPTION>
Year Ended August 31,
--------------------------------------------------
1999 1998
------------------------ ------------------------
Shares Amount Shares Amount
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class Y
Shares sold............... 7,963,457 $ 78,325,103 7,493,445 $ 75,115,337
Shares issued in
reinvestment of
distributions............ 594,102 5,884,793 31,324 313,006
Shares redeemed........... (6,315,912) (61,923,542) (3,720,951) (37,298,559)
Shares issued in
connection with the
acquisition of Common
trust funds.............. 0 0 34,976,141 347,033,202
- ------------------------------------------------------------------------------
Net increase.............. 2,241,647 $ 22,286,354 38,779,959 $385,162,986
</TABLE>
- --------------------------------------------------------------------------------
63
<PAGE>
Combined Notes to Financial Statements(continued)
Georgia Fund
<TABLE>
<CAPTION>
Year Ended August 31,
----------------------------------------------
1999 1998
---------------------- ----------------------
Shares Amount Shares Amount
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
Shares sold................... 305,966 $ 3,123,180 215,335 $ 2,200,069
Shares issued in reinvestment
of distributions............. 13,683 139,514 8,134 83,109
Shares redeemed............... (253,867) (2,575,284) (66,115) (669,683)
- ------------------------------------------------------------------------------
Net increase.................. 65,782 $ 687,410 157,354 $ 1,613,495
- ------------------------------------------------------------------------------
Class B
Shares sold................... 381,699 $ 3,892,607 284,927 $ 2,895,888
Shares issued in reinvestment
of distributions............. 42,933 438,417 33,988 346,944
Shares redeemed............... (181,382) (1,848,612) (204,318) (2,088,089)
- ------------------------------------------------------------------------------
Net increase.................. 243,250 $ 2,482,412 114,597 $ 1,154,743
- ------------------------------------------------------------------------------
Class Y
Shares sold................... 1,554,435 $15,957,182 1,025,227 $10,505,215
Shares issued in reinvestment
of distributions............. 30,615 315,368 5,439 55,557
Shares redeemed............... (757,013) (7,720,999) (729,756) (7,478,314)
Shares issued in connection
with the acquisition of
Common trust funds........... 0 0 6,111,899 61,853,254
- ------------------------------------------------------------------------------
Net increase.................. 828,037 $ 8,551,551 6,412,809 $64,935,712
</TABLE>
- --------------------------------------------------------------------------------
64
<PAGE>
Combined Notes to Financial Statements(continued)
Maryland Fund
<TABLE>
<CAPTION>
Year Ended Eleven Months Ended Year Ended
August 31, 1999 August 31, 1998 September 30, 1997
----------------------- ----------------------- ---------------------
Shares Amount Shares Amount Shares Amount
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Class A*
Shares sold............. 293,892 $ 3,264,960 200,179 $ 2,197,755 192,865 $ 2,067,713
Shares issued in
reinvestment of
distributions.......... 87,231 962,253 53,687 590,817 71,862 770,265
Shares redeemed......... (414,785) (4,586,001) (584,040) (6,428,043) (679,110) (7,269,728)
- -------------------------------------------------------------------------------------------------
Net decrease............ (33,662) $ (358,788) (330,174) $ (3,639,471) (414,383) $(4,431,750)
- -------------------------------------------------------------------------------------------------
<CAPTION>
March 27, 1998
(Commencement of Class
Year Ended Operations) through
August 31, 1999 August 31, 1998
----------------------- -----------------------
Shares Amount Shares Amount
- -------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class B
Shares sold............. 264,441 $ 2,922,980 88,301 $ 972,888
Shares issued in
reinvestment of
distributions.......... 6,593 72,249 411 4,552
Shares redeemed......... (34,744) (376,172) 0 0
- -------------------------------------------------------------------------
Net increase............ 236,290 $ 2,619,057 88,712 $ 977,440
- -------------------------------------------------------------------------
<CAPTION>
December 23, 1998
(Commencement of Class
Operations) through
August 31, 1999
-----------------------
Shares Amount
- -------------------------------------------------------------------------
<S> <C> <C>
Class C
Shares sold............. 3,217 $ 35,602
Shares issued in
reinvestment of
distributions.......... 43 469
Shares redeemed......... (455) (4,992)
- ---------------------------------------------------------------------------
Net increase............ 2,805 $ 31,079
- ---------------------------------------------------------------------------
<CAPTION>
Year Ended Eleven Months Ended Year Ended
August 31, 1999 August 31, 1998 September 30, 1997
----------------------- ----------------------- ---------------------
Shares Amount Shares Amount Shares Amount
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Class Y*
Shares sold............. 978,698 $ 10,700,374 114,329 $ 1,259,909 59,419 $ 640,330
Shares issued in
reinvestment of
distributions.......... 3,715 41,234 0 0 0 0
Shares redeemed......... (204,492) (2,243,006) (167,074) (1,819,520) (380,036) (4,057,731)
- -------------------------------------------------------------------------------------------------
Net increase
(decrease)............. 777,921 $ 8,498,602 (52,745) $ (559,611) (320,617) $(3,417,401)
- -------------------------------------------------------------------------------------------------
</TABLE>
* On February 28, 1998, in conjunction with the acquisition of the Virtus Mary-
land Municipal Bond Fund by the Maryland Fund, shareholders of Investment
Shares and Trust Shares in the Virtus Maryland Municipal Bond Fund became
owners of that number of full and fractional shares of Class A and Class Y,
respectively, of the Maryland Fund. See Note 5.
65
<PAGE>
Combined Notes to Financial Statements(continued)
North Carolina Fund
<TABLE>
<CAPTION>
Year Ended August 31,
----------------------------------------------------
1999 1998
------------------------ --------------------------
Shares Amount Shares Amount
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
Shares sold.............. 548,243 $ 5,825,507 906,792 $ 9,704,553
Shares issued in
reinvestment of
distributions........... 57,810 615,583 32,895 351,292
Shares redeemed.......... (294,568) (3,140,795) (267,487) (2,855,066)
- -------------------------------------------------------------------------------
Net increase............. 311,485 $ 3,300,295 672,200 $ 7,200,779
- -------------------------------------------------------------------------------
Class B
Shares sold.............. 424,453 $ 4,543,408 411,810 $ 4,390,935
Shares issued in
reinvestment of
distributions........... 153,483 1,635,617 138,795 1,480,873
Shares redeemed.......... (608,158) (6,461,589) (647,645) (6,889,422)
- -------------------------------------------------------------------------------
Net decrease............. (30,222) $ (282,564) (97,040) $ (1,017,614)
- -------------------------------------------------------------------------------
Class Y
Shares sold.............. 3,440,359 $ 36,469,391 12,832,868 $ 136,744,893
Shares issued in
reinvestment of
distributions........... 129,785 1,392,155 8,699 93,128
Shares redeemed.......... (2,914,981) (30,999,492) (13,727,028) (146,322,710)
Shares issued in
connection with the
acquisition of Common
trust funds............. 0 0 24,134,747 255,143,064
- -------------------------------------------------------------------------------
Net increase............. 655,163 $ 6,862,054 23,249,286 $ 245,658,375
</TABLE>
- --------------------------------------------------------------------------------
South Carolina Fund
<TABLE>
<CAPTION>
Year Ended August 31,
--------------------------------------------------
1999 1998
------------------------ ------------------------
Shares Amount Shares Amount
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
Shares sold............... 106,193 $ 1,089,296 91,036 $ 940,429
Shares issued in
reinvestment of
distributions............ 7,645 78,365 3,523 36,197
Shares redeemed........... (44,615) (454,257) (29,261) (298,275)
- ------------------------------------------------------------------------------
Net increase.............. 69,223 $ 713,404 65,298 $ 678,351
- ------------------------------------------------------------------------------
Class B
Shares sold............... 177,649 $ 1,816,333 61,561 $ 634,986
Shares issued in
reinvestment of
distributions............ 15,297 156,799 12,822 131,600
Shares redeemed........... (79,709) (816,909) (109,281) (1,123,248)
- ------------------------------------------------------------------------------
Net increase (decrease)... 113,237 $ 1,156,223 (34,898) $ (356,662)
- ------------------------------------------------------------------------------
Class Y
Shares sold............... 934,454 $ 9,551,504 1,713,385 $ 17,556,207
Shares issued in
reinvestment of
distributions............ 41,643 430,302 9,773 100,030
Shares redeemed........... (1,091,620) (11,226,604) (1,145,988) (11,796,935)
Shares issued in
connection with the
acquisition of Common
trust funds.............. 0 0 5,075,749 51,591,389
- ------------------------------------------------------------------------------
Net income (decrease)..... (115,523) $ (1,244,798) 5,652,919 $ 57,450,691
</TABLE>
- --------------------------------------------------------------------------------
66
<PAGE>
Combined Notes to Financial Statements(continued)
Virginia Fund
<TABLE>
<CAPTION>
Year Ended August 31,
--------------------------------------------------
1999 1998
------------------------ ------------------------
Shares Amount Shares Amount
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
Shares sold................ 856,960 $ 8,865,581 532,512 $ 5,479,932
Shares issued in
reinvestment of
distributions............. 199,536 2,060,558 99,072 1,023,118
Shares redeemed............ (1,178,483) (12,163,094) (918,424) (9,485,982)
Shares issued in connection
with the acquisition of
Virtus Virginia Municipal
Bond Fund................. 0 0 5,187,357 53,681,427
- --------------------------------------------------------------------------------
Net increase (decrease).... (121,987) $ (1,236,955) 4,900,517 $ 50,698,495
- --------------------------------------------------------------------------------
Class B
Shares sold................ 836,344 $ 8,632,698 239,158 $ 2,460,495
Shares issued in
reinvestment of
distributions............. 41,468 426,711 22,646 233,301
Shares redeemed............ (180,842) (1,855,222) (73,319) (755,073)
- --------------------------------------------------------------------------------
Net increase............... 696,970 $ 7,204,187 188,485 $ 1,938,723
- --------------------------------------------------------------------------------
Class Y
Shares sold................ 3,026,297 $ 31,207,477 1,691,800 $ 17,432,839
Shares issued in
reinvestment of
distributions............. 77,779 807,469 6,584 67,778
Shares redeemed............ (1,578,685) (16,310,595) (1,310,177) (13,504,221)
Shares issued in connection
with the acquisition of:
Common trust funds......... 0 0 7,286,001 74,432,035
Virtus Virginia Municipal
Bond Fund................. 0 0 1,839,517 19,036,310
- --------------------------------------------------------------------------------
Net increase............... 1,525,391 $ 15,704,351 9,513,725 $ 97,464,741
- --------------------------------------------------------------------------------
</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 August 31, 1999:
<TABLE>
<CAPTION>
Cost of Proceeds
Purchases from Sales
---------------------------
<S> <C> <C>
Florida High Income Fund.............. $193,679,446 $126,967,194
Florida Fund.......................... 357,658,065 388,701,849
Georgia Fund.......................... 36,993,624 29,104,995
Maryland Fund......................... 24,506,912 13,704,089
North Carolina Fund................... 125,126,700 129,584,038
South Carolina Fund................... 24,479,698 26,999,230
Virginia Fund......................... 65,989,356 54,022,121
</TABLE>
On August 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 Net Unrealized
Unrealized Unrealized Gains
Tax Cost Gains Losses (Losses)
-------------------------------------------
<S> <C> <C> <C> <C>
Florida High Income
Fund................... $460,057,482 $ 4,981,916 $13,307,475 $(8,325,559)
Florida Fund............ 617,529,181 10,396,586 15,621,602 (5,225,016)
Georgia Fund............ 90,955,118 2,483,130 1,598,911 884,219
Maryland Fund........... 39,598,020 415,325 694,214 (278,889)
North Carolina Fund..... 307,804,182 6,828,008 6,751,293 76,715
South Carolina Fund..... 69,590,124 1,208,129 718,376 489,753
Virginia Fund........... 177,907,120 3,027,845 2,441,032 586,813
</TABLE>
As of August 31, 1999, the Florida Fund had a capital loss carryforward for
federal income tax purposes of approximately $1,899,000 which expires as fol-
lows: $810,000 expiring in 2001 and $1,089,000 expiring in 2004. Florida Fund's
capital loss carryforward was created as a result of the January 26, 1998 ac-
quisition of substantially all the assets and assumption of certain liabilities
of Evergreen Florida Tax Free Fund in exchange for Florida Fund shares. In ac-
cordance with income tax regulations, certain Florida Fund gains may not be
used to offset this capital loss carryforward.
Capital losses incurred after October 31 within a Fund's fiscal year are deemed
to arise on the first business day of the Fund's following fiscal year. For the
fiscal year ended August 31, 1999, Florida High Income Fund,
67
<PAGE>
Combined Notes to Financial Statements(continued)
Georgia Fund and Maryland Fund have incurred and elected to defer $1,725,881,
$494,512 and $151,245 of such capital losses, respectively.
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 net assets were as follows:
<TABLE>
<CAPTION>
Total
Fee Credits % of Average
Received Net Assets
-----------------------
<S> <C> <C>
Florida High Income Fund............... $19,799 0.00%
Florida Fund........................... 29,019 0.00%
Georgia Fund........................... 4,091 0.00%
Maryland Fund.......................... 1,704 0.00%
North Carolina Fund.................... 15,391 0.00%
South Carolina Fund.................... 2,909 0.00%
Virginia Fund.......................... 8,427 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 each Fund's Trustees' fees
and expenses. Trustees will be paid either in one lump sum or in quarterly in-
stallments 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 was incurred
on the unused portion of the committed facility, which was allocated to all
funds. For its assistance in arranging this financing agreement, the Capital
Market Group of First Union was paid a one-time arrangement fee of $27,500.
State Street served 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 provided 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 were unaffected. This
agreement was terminated on July 27, 1999.
On July 27, 1999, all of the Evergreen Funds and a group of banks (the "Lend-
ers") entered into a credit agreement. Under this agreement, the Lenders pro-
vide an unsecured revolving credit commitment in the aggregate amount of $1.050
billion. The credit facility is allocated, under the terms of the financing
agreement, among the Lenders. The credit facility is accessed by the Funds for
temporary or emergency purposes to fund the redemption of their shares or as
general working capital as permitted by each Fund's borrowing restrictions.
Borrowings under this facility bear interest at 0.75% per annum above the Fed-
eral Funds rate (1.50% per
68
<PAGE>
Combined Notes to Financial Statements(continued)
annum above the Federal Funds rate during the period from and including Decem-
ber 1, 1999 through and including January 31, 2000). A commitment fee of 0.10%
per annum is incurred on the average daily unused portion of the revolving
credit commitment. The commitment fee is allocated to all funds. For its assis-
tance in arranging this financing agreement, First Union Capital Markets Corp.
was paid a one-time arrangement fee of $250,000. State Street serves as paying
agent for the funds and as paying agent is entitled to a fee of $20,000 per an-
num which is allocated to all of the funds.
During the year ended August 31, 1999, the Florida High Income Fund had average
borrowings outstanding of $142,195 at a rate of 5.86% and paid interest of
$8,335.
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.
12. CHANGE IN INDEPENDENT AUDITORS
Based on the recommendation of the Audit Committee of the Florida High Income
Fund, the Board of Trustees has determined not to retain PricewaterhouseCoopers
LLP as the Fund's independent auditor and voted to appoint KPMG LLP for the
Fund's fiscal year ended August 31, 1999. During the two most recent fiscal
years, PricewaterhouseCoopers LLP audit reports contained no adverse opinion or
disclaimer of opinion; nor were its reports qualified or modified as to uncer-
tainty, audit scope, or accounting principle. Further, in connection with its
audits for the two most recent fiscal years and through June 18, 1999, there
were no disagreements between the Florida High Income Fund and
PricewaterhouseCoopers LLP on any matter of accounting principles or practices,
financial statement disclosure or auditing scope or procedure, which if not re-
solved to the satisfaction of PricewaterhouseCoopers LLP would have caused it
to make reference to the disagreements in its report on the financial state-
ments for such years.
69
<PAGE>
Independent Auditors' Report
The 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 Evergreen Florida High Income Municipal
Bond Fund, Evergreen Florida Municipal Bond Fund, Evergreen Georgia Municipal
Bond Fund, Evergreen Maryland Municipal Bond Fund, Evergreen North Carolina Mu-
nicipal Bond Fund, Evergreen South Carolina Municipal Bond Fund, and Evergreen
Virginia Municipal Bond Fund, portfolios of the Evergreen Municipal Trust, as
of August 31, 1999, and the related statements of operations for the year then
ended, the statements of changes in net assets for each of the years or periods
in the two year period then ended and the financial highlights for each of the
years or periods as described on pages 16 to 29, except the Evergreen Florida
High Income Municipal Bond Fund for the year ended August 31, 1998 and the Ev-
ergreen Maryland Municipal Bond Fund for the years or periods ended September
30, 1997 and prior, see below. These financial statements and financial high-
lights are the responsibility of the Funds' management. Our responsibility is
to express an opinion on these financial statements and financial highlights
based on our audits. For the Evergreen Florida High Income Municipal Bond Fund,
the statement of changes in net assets and financial highlights for each of the
years of periods ended prior to the year ended August 31, 1999 were audited by
other auditors, whose report dated October 14, 1998, expressed an unqualified
opinion on the financial statement and financial highlights. For the Evergreen
Maryland Municipal Bond Fund, the statement of changes in net assets and finan-
cial highlights for each of the years or periods ended prior to the eleven-
month period ended August 31, 1998 were audited by other auditors, whose report
dated November 7, 1997, expressed an unqualified opinion on the financial
statement and financial highlights.
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 Au-
gust 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 each
of the portfolios of the Evergreen Municipal Trust as of August 31, 1999, the
results of their operations, changes in their net assets and financial high-
lights for each of the years or periods described above in conformity with gen-
erally accepted accounting principles.
[KPMG Signature Appears Here]
Boston, Massachusetts
October 8, 1999
70
<PAGE>
Additional Information (Unaudited)
FEDERAL INCOME TAX STATUS OF DISTRIBUTIONS
For the fiscal year ended August 31, 1999, the following percentages
represent the portion of dividends from net investment income which
are exempt from federal income tax, other than alternative minimum
tax:
<TABLE>
<S> <C>
Florida High Income Fund.................................. 99.95%
Florida Fund.............................................. 99.65%
Georgia Fund.............................................. 99.89%
Maryland Fund............................................. 99.99%
North Carolina Fund....................................... 99.53%
South Carolina Fund....................................... 99.79%
Virginia Fund............................................. 99.82%
</TABLE>
Pursuant to section 852 of the Internal Revenue Code, the Funds have
designated the following amounts as long-term capital gain distribu-
tions for the fiscal year ended August 31, 1999:
<TABLE>
<CAPTION>
Aggregate Per Share
--------------------
<S> <C> <C>
Florida High Income Fund.................. $ 99,893 $0.003
Florida Fund.............................. 14,880,791 0.228
Georgia Fund.............................. 229,076 0.028
Maryland Fund............................. 189,600 0.066
North Carolina Fund....................... 1,631,029 0.055
South Carolina Fund....................... 651,481 0.092
Virginia Fund............................. 1,183,139 0.072
</TABLE>
YEAR 2000
Like other investment companies, the Funds could be adversely af-
fected 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 po-
tential year 2000 problem with respect to the computer systems that
they use and to obtain satisfactory assurances that comparable steps
are being taken by the Funds' other major service providers. At this
time, however, there can be no assurance that these steps will be
sufficient to avoid any adverse impact on the Funds from this prob-
lem.
71
<PAGE>
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